SEC Filing | MKS Instruments, Inc.

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 14, 1997

REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------

MKS INSTRUMENTS, INC.
(Exact name of registrant as specified in its charter)
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MASSACHUSETTS 3823 04-2277512
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)

Six Shattuck Road
Andover, MA 01810
(978) 975-2350
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)

JOHN R. BERTUCCI
Chairman, President and Chief Executive Officer
MKS Instruments, Inc.
Six Shattuck Road
Andover, MA 01810
(978) 975-2350
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
------------------------

COPIES TO:

MARK G. BORDEN, ESQ. DAVID C. CHAPIN, ESQ.
HALE AND DORR LLP ROPES & GRAY
60 State Street One International Place
Boston, Massachusetts 02109 Boston, Massachusetts 02110
(617) 526-6000 (617) 951-7000

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:

As soon as practicable after the effective date hereof.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
------------------------

CALCULATION OF REGISTRATION FEE

========================================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------

Common Stock, no par value per share.... 4,600,000 shares $15.00 $69,000,000 $20,909.10
========================================================================================================================

(1) Includes 600,000 shares which the Underwriters have the option to purchase
from the Company to cover over-allotments, if any. See "Underwriting."
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(a) under the Securities Act of 1933.
------------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.

================================================================================
2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED NOVEMBER , 1997

4,000,000 SHARES

[LOGO]
MKS INSTRUMENTS

COMMON STOCK

All of the 4,000,000 shares of Common Stock offered hereby are being sold
by the Company. Prior to this offering, there has been no public market for the
Common Stock of the Company. It is currently estimated that the initial public
offering price per share will be between $ and $ . See "Underwriting"
for a discussion of factors to be considered in determining the initial public
offering price.

Application has been made for quotation of the Common Stock on the Nasdaq
National Market under the symbol "MKSI."

SEE "RISK FACTORS" COMMENCING ON PAGE 5 FOR CERTAIN FACTORS THAT SHOULD BE
CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
================================================================================

Price to Underwriting Proceeds to
Public Discount(1) Company(2)
- ---------------------------------------------------------------------------------------------

Per Share....................................... $ $ $
Total(3)........................................ $ $ $

================================================================================
(1) See "Underwriting" for information concerning indemnification of the
Underwriters and other matters.
(2) Before deducting estimated expenses payable by the Company, estimated at
$ .
(3) The Company has granted to the Underwriters a 30-day option to purchase up
to 600,000 additional shares of Common Stock solely to cover
over-allotments, if any. If the Underwriters exercise this option in full,
the Price to Public will total $ , the Underwriting Discount will
total $ and the Proceeds to the Company will total $ . See
"Underwriting."

The shares of Common Stock are offered by the several Underwriters named
herein, subject to receipt and acceptance by them and subject to their right to
reject any order in whole or in part. It is expected that certificates
representing such shares will be made against payment therefor at the offices of
NationsBanc Montgomery Securities, Inc. on or about , 1998.

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

NATIONSBANC MONTGOMERY SECURITIES, INC.

DONALDSON, LUFKIN & JENRETTE

SECURITIES CORPORATION
PAINEWEBBER INCORPORATED

, 1998.
3
MKS INSTRUMENTS, INC.
PROSPECTUS COVER
NOVEMBER 14, 1997

INSIDE FRONT COVER (PG. 2):

This page is produced in four-color process. Amidst a dark background, the MKS
logo appears at the top of the page, and underneath is the phrase "A wide range
of products made using MKS Process Control Instruments." Two paragraphs
describing the role MKS plays in complex advanced materials manufacturing
processes, such as semiconductor, also appear on this page, and are as follows:

(first paragraph) "MKS Surrounds the Process. In semiconductor and other
industries involving advanced materials processing, products such as
semiconductor devices, CD ROMS, flat panel displays, and fiber optic cables are
the result of complex manufacturing processes. These processes build up very
thin layers of materials, step by step, through the interaction of specific
gases and materials inside tightly controlled process chambers. Maintaining
control of these complex steps throughout the entire manufacturing process is
critical to performance and yield. (second paragraph) MKS Process Control
Instruments are integrated into almost every step of gas-related
processes--managing the flow rates of gases entering and exiting the process
chamber, controlling the gas composition and pressure inside the chamber,
analyzing and monitoring the composition of the gases, and isolating the gases
from the outside environment."

In the center of the page is a photo montage, displaying images of semiconductor
devices, flat panel displays, magnetic and optical storage media, fiberoptic
cables, solar panels, and gas lasers. Each of these images has a text label
adjacent to it.

INSIDE SPREAD (PGS. 3 AND 4):

These pages are produced in four-color process. The main focus of the spread is
the illustration of a typical process chamber, with numerous MKS products
surrounding the chamber. At the top of the illustration, centered across the two
pages, is the title "MKS Instruments...Surrounding the Process." Each product is
described in a brief paragraph, and the paragraphs appear on both sides of the
illustration--left and right columns. The paragraphs are as follows:

DIRECT LIQUID INJECTION SUBSYSTEMS
For use in the delivery of a wide variety of new materials to the process
chamber that cannot be delivered using conventional thermal-based mass flow
controllers.

AUTOMATIC PRESSURE CONTROLLERS WITH INTEGRATED BARATRON(R) PRESSURE TRANSDUCERS
A compact, integrated measurement and control package for use in controlling
upstream or downstream process chamber pressure.

ULTRACLEAN MINI-BARATRON(R) PRESSURE TRANSDUCERS
For use in gas cabinets to feed ultra-pure gases to critical process systems.

ULTRACLEAN MASS FLOW CONTROLLERS
For the precise measurement and control of mass flow rates of inert or corrosive
gases and vapors into the process chamber.

IN SITU FLOW VERIFIERS
For fast verification of mass flow controller accuracy and repeatability during
a process.

PRESSURE CONTROL VALVES
To precisely control the flow of gases to a process chamber in a wide range of
flow rates.

DIGITAL COLD CATHODE IONIZATION AND CONVECTION VACUUM GAUGES
A variety of indirect pressure gauges for measuring very low chamber pressures
and conveying information digitally to host computers.

HEATED PUMPING LINES
For the reduction of contaminants in the vacuum pump and pump exhaust stream.

ORION(R) PROCESS MONITORS AND RESIDUAL GAS ANALYZERS
For the analysis of the composition of background and process gases inside a
process chamber.

PRESSURE SWITCHES
Provide protection of vacuum equipment and processes by signaling when
atmospheric pressure has been reached.

IN SITU DIAGNOSTICS ACCESS VALVE
Allows for accurate calibration and diagnostics of vacuum gauges and pressure
transducers while directly mounted on the process chamber.

BARATRON(R) PRESSURE MEASURING INSTRUMENTS
For the accurate measurement and control of a wide range of process pressures.

EXHAUST THROTTLE VALVES AND AUTOMATIC PRESSURE CONTROLLERS
For isolation and downstream control of process chamber pressures, and pressure
control within the exhaust systems.

HIGH VACUUM VALVES
To isolate the process chamber from both the pumps and from atmosphere.

VAPOR SUBLIMATION TRAP
To collect by-products and particulates that could otherwise contaminate devices
in the process chambers and damage vacuum pumps.
Lines are drawn from each paragraph section to its corresponding part on the
illustration. The MKS logo appears in color above the left column of text.
Underneath the illustration at the bottom of the page spread is a sentence that
reads as follows: 'The above graphic depicts a typical process chamber and
surrounding equipment used in semiconductor manufacturing.'
At the bottom of the right column (on pg. 4) is a sentence in smaller type that
reads: 'Prices of products shown above range from $400 to $80,000.'

[PICTURES]

MKS, MKS Instruments, Baratron and Orion are trademarks of the Company. This
Prospectus contains trade marks, service marks and trade names of companies and
organizations other than MKS.

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK OFFERED
HEREBY, INCLUDING THE ENTRY OF STABILIZING BIDS, SYNDICATE COVERING TRANSACTIONS
OR THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."

2
5

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information, including "Risk Factors" and the Consolidated Financial Statements
and the Notes thereto appearing elsewhere in this Prospectus. Except as
otherwise noted herein, all information in this Prospectus (i) gives effect to a
2,110-for-1 stock split, to be effected prior to the closing of this offering,
of each share of Class A Common Stock and Class B Common Stock of the Company
and the conversion of such shares upon the closing of this offering into an
aggregate of 12,035,440 shares of Common Stock of the Company (the
"Recapitalization") and (ii) assumes no exercise of the Underwriters'
over-allotment option. See "Description of Capital Stock," "Underwriting" and
Note 2 of Notes to Consolidated Financial Statements.

THE COMPANY

MKS Instruments, Inc. ("MKS" or the "Company") is a leading worldwide
supplier of instruments and components used to measure, control, analyze and
isolate gases in semiconductor and other manufacturing processes. The Company
offers a comprehensive line of products which are used around the process
chamber in both semiconductor front-end manufacturing processes and other
advanced thin-film and vacuum-based processes used in the manufacture of, among
other things, flat panel displays, magnetic and optical storage media, solar
cells, fiber optic cables and gas lasers. The Company's products include: (i)
pressure and flow measurement and control instruments; (ii) vacuum gauges,
valves and components; and (iii) gas analysis instruments.

The trend toward semiconductor devices with smaller geometries and enhanced
functionality has resulted in higher value per wafer and more complex
manufacturing processes. This has led to the need for increasingly sophisticated
semiconductor manufacturing equipment, a heightened emphasis on uptime, yield
and throughput, and the need for more precise process controls. As a result, the
design and performance of instruments that control pressure or the flow of
gases, or analyze the mixture of gases, are becoming even more critical to the
semiconductor manufacturing process. In addition, the number and diversity of
components and subassemblies used in the manufacturing process has grown as the
number and complexity of process steps and sophistication of process equipment
has increased. These trends in the semiconductor industry have led semiconductor
equipment manufacturers to seek to establish relationships with a smaller group
of suppliers that provide broad and integrated product lines, worldwide sales
and support and advanced technological capabilities for critical process
technology areas.

The Company believes that it offers the widest range of pressure and vacuum
measurement and control products serving the semiconductor industry. The
Company's objective is to be the leading worldwide supplier of instruments and
components used to measure, control, analyze and isolate gases in semiconductor
and other advanced thin-film processing applications. The Company's strategies
to accomplish this objective include extending its technology leadership,
providing a comprehensive product line, building upon its close customer
relationships in the semiconductor industry, expanding the application of its
existing technologies to related markets and leveraging its global
infrastructure.

For over 20 years the Company has been focused on serving the needs of
semiconductor device manufacturers and semiconductor equipment OEMs and has
established long-term relationships with many of its customers. The Company has
over 4,000 customers worldwide including most major semiconductor equipment
OEMs, semiconductor device manufacturers, a broad range of industrial companies
and university, government and industrial research laboratories. The Company's
customers in its principal market, the semiconductor market, include Applied
Materials, Eaton, Hitachi, Lam Research, Tokyo Electron, Ltd. ("TEL") and ULVAC.
The Company sells its products primarily through its direct sales force in 22
offices in Canada, France, Germany, Japan, Korea, the Netherlands, the United
Kingdom and the United States.

MKS Instruments, Inc. is a Massachusetts corporation organized in June
1961. The Company's principal executive offices are located at Six Shattuck
Road, Andover, MA 01810, and its telephone number is (978)975-2350.

3
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THE OFFERING

Common Stock offered by the Company......... 4,000,000 shares
Common Stock to be outstanding after the
offering.................................. 16,035,440 shares(1)
Use of proceeds............................. For distributions to current stockholders
and general corporate purposes.
Proposed Nasdaq National Market symbol...... MKSI

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

(1) Based on shares of Common Stock outstanding as of September 30, 1997.
Excludes (i) 1,042,361 shares of Common Stock issuable upon exercise of
stock options outstanding as of such date at an exercise price of $6.64 per
share and (ii) 1,978,139 additional shares reserved for future grants or
issuances under the Company's stock option and stock purchase plans.

SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------- -------------------
1992 1993 1994 1995 1996 1996 1997
------- ------- -------- -------- -------- -------- --------

STATEMENT OF INCOME DATA:
Net sales......................................... $73,260 $80,852 $106,829 $157,164 $170,862 $136,097 $134,629
Gross profit...................................... 30,628 34,068 47,016 69,461 68,854 55,019 56,173
Income from operations............................ 4,593 6,365 12,087 24,106 16,068 12,990 15,088
Net income........................................ $ 2,646 $ 4,351 $ 10,003 $ 21,658 $ 12,503 $ 10,291 $ 12,892
PRO FORMA STATEMENT OF INCOME DATA:
Pro forma net income(1)........................... $ 8,248 $ 8,731
Pro forma net income per share(2)................. $ 0.59 $ 0.62
Pro forma weighted average common shares
outstanding(2).................................. 13,994 14,134

SEPTEMBER 30, 1997
-----------------------------------------------
PRO FORMA
ACTUAL PRO FORMA(3) AS ADJUSTED(3)(4)
-------- ------------ -----------------

BALANCE SHEET DATA:
Working capital..................................................... $ 29,479 $ (704)
Total assets........................................................ 106,685 106,685
Short-term obligations.............................................. 16,372 16,372
Long-term obligations, less current portion......................... 16,348 16,348
Stockholders' equity................................................ 51,756 21,573

- ---------------
(1) Effective July 1, 1987, the Company elected to be treated as an S
corporation. As an S corporation, the Company has not been subject to
federal, and certain state, income taxes. The pro forma net income reflects
the provision for income taxes that would have been recorded had the Company
been a C corporation, assuming an effective tax rate of 38.0%. As a result
of terminating its S corporation status upon the closing of this offering,
the Company will record a one-time non-cash credit to historical earnings
for additional deferred taxes. If this credit to earnings had occurred at
September 30, 1997, the amount would have been approximately $2.8 million.
This amount is expected to change through the closing of this offering and
is excluded from pro forma net income. See Notes 2 and 9 of Notes to
Consolidated Financial Statements.

(2) In accordance with a regulation of the Securities and Exchange Commission,
the pro forma net income per share and weighted average common shares
outstanding reflect the effect of an assumed issuance of sufficient shares
to fund the S Corporation Distribution, as of January 1, 1997, to be made
out of the proceeds of this offering. See "S Corporation and Termination of
S Corporation Status" and Note 2 of Notes to Consolidated Financial
Statements.

(3) Pro forma balance sheet data reflects the distribution of an estimated $30.2
million, calculated as of September 30, 1997, of cumulative undistributed S
corporation taxable income for which stockholders of record prior to the
closing of this offering have been or will be taxed. The actual amount to be
distributed is expected to increase based upon taxable earnings for the
period October 1, 1997 through the closing of the offering, subject to
certain limitations. See "S Corporation and Termination of S Corporation
Status."

(4) Adjusted to reflect the sale of 4,000,000 shares of Common Stock at an
assumed initial public offering price of $ per share, after deducting the
estimated underwriting discount and offering expenses payable by the
Company.

4
7

RISK FACTORS

In addition to the other information in this Prospectus, prospective
purchasers of the Common Stock offered hereby should consider carefully the
following factors in evaluating the Company and its business.

CYCLICALITY OF THE SEMICONDUCTOR INDUSTRY

For the past three years and the first nine months of 1997, the Company
estimates that approximately two-thirds of the Company's sales were to
semiconductor equipment OEMs and semiconductor device manufacturers and the
Company expects that sales to such customers will continue to account for a
substantial majority of its sales. The Company's business depends substantially
upon the capital expenditures of semiconductor device manufacturers, which in
turn depend upon the demand for semiconductors and other products utilizing
semiconductors. Historically, the semiconductor market has been highly cyclical
and has experienced periods of overcapacity, resulting in significantly reduced
demand for capital equipment. In 1996, the semiconductor industry experienced a
significant decline, which caused a number of the Company's customers to reduce
their orders from the Company. Although there have been indications that the
semiconductor and semiconductor equipment industries have begun to recover from
the 1996 downturn, there can be no assurance that such industries will continue
to improve or that there will not be further downturns or slowdowns in any of
the markets that the Company serves. More recently, the financial markets in
Asia, one of the Company's principal international markets, have experienced
significant turmoil. There can be no assurance that such turmoil in the
financial markets will not negatively impact the growth of the semiconductor
industry in the region. Also, the requirement that the Company continue to
invest in research and development, marketing and customer support will
constrain the Company's ability to reduce expenses in response to any such
downturn or slowdown. In addition, the Company's future sales will depend in
part on the sale of products for new large fabrication facilities that are
either planned or under construction and there can be no assurance that such
fabrication facilities will be completed or, if completed, will operate at full
capacity. Any reduction in orders resulting from a downturn or slowdown in the
semiconductor industry, together with the Company's inability to quickly adjust
expenses, would have a material adverse impact on the Company's revenues,
financial condition and results of operations.

FLUCTUATIONS IN OPERATING RESULTS

The Company has experienced and expects to continue to experience
significant fluctuations in its quarterly and annual operating results. A
substantial and increasing proportion of the Company's shipments are made on a
just-in-time basis in which the shipment of products occurs shortly after an
order is received. Due to the short time between receipt of orders and
shipments, the Company operates with a low level of backlog. Moreover, this
backlog at any point in time is not sufficient to meet the Company's revenue
expectations for a particular quarter. As a consequence of the just-in-time
basis of the Company's shipments and the low level of backlog, a decrease in
demand for the Company's products from one or more customers could occur with
limited advanced notice and could have an adverse effect on the Company's
results of operations in a particular period. The Company's revenues and
operating results are also affected by a variety of other factors, including
specific economic conditions in the industries in which the Company's customers
operate, particularly the semiconductor industry; the timing of the receipt of
orders from major customers; customer cancellations or shipment delays; price
competition; disruption in sources of supply; seasonal variations of capital
spending by customers; production capacity constraints; specific features
requested by customers; exchange rate fluctuations; the introduction or
announcement of new products by the Company or its competitors; and other
factors, many of which are beyond the Company's control.

The Company's results of operations for a particular period would be
adversely affected if an anticipated significant order were not received in time
to permit shipment during that period, as a significant portion of the Company's
operating expenses are fixed in nature and planned expenditures are based in
part on anticipated orders. In addition, the need for continued expenditures for
research and development would make it difficult to reduce expenses in a
particular period if the Company's sales goals for that period were not met. The
inability to adjust spending quickly enough to compensate for any revenue
shortfall would magnify the adverse impact of such revenue shortfall on the
Company's results of operations. For example, the Company was in

5
8

the process of increasing its production capacity when the semiconductor capital
equipment market began to experience a significant downturn in 1996. This
downturn had a material adverse effect on the Company's operating results in the
second half of 1996 and the first half of 1997. As a result of the factors
discussed above, it is likely that the Company will in the future experience
quarterly or annual fluctuations and that, in one or more future quarters, the
Company's operating results will fall below the expectations of public market
analysts or investors. In any such event, the price of the Company's common
stock could decline significantly.

CUSTOMER CONCENTRATION

While the Company sold products to more than 4,000 customers in 1996, the
Company's five largest customers in 1994, 1995 and 1996 accounted for
approximately 18%, 24% and 26%, respectively, of the Company's net sales. During
the first nine months of 1997, the five largest customers accounted for
approximately 31% of the Company's net sales, and one customer, Applied
Materials, accounted for approximately 21% of the Company's net sales. While the
Company has entered into a purchase contract with Applied Materials that expires
in 2002, no significant customer of the Company, including Applied Materials,
has entered into an agreement requiring it to purchase any minimum quantity of
the Company's products. The demand for the Company's products from its customers
depends in part on orders received by such customers from their own
semiconductor device manufacturer customers.

The Company sells its products primarily to semiconductor equipment OEMs
and, to a lesser extent, semiconductor device manufacturers. The number of the
Company's potential customers in its primary market is limited. The loss of a
major customer or any reduction in orders by such customers, including
reductions due to market or competitive conditions, would likely have a material
adverse effect on the Company's business and results of operations. Attempts to
mitigate the adverse impact of any such loss or reduction through the rapid
addition of new customers could be difficult because prospective customers
typically require lengthy qualification periods prior to placing volume orders
with a new supplier. The Company's future success will continue to depend upon
its ability to maintain its relationships with its existing key customers and to
attract new customers, as well as the success of the Company's OEM customers in
creating demand for their capital equipment products incorporating the Company's
products.

COMPETITION

The market for the Company's products is highly competitive. The Company
encounters substantial competition in each of its product lines from a number of
competitors, although no one competitor competes with the Company across all
product lines. Certain of the Company's competitors have greater financial and
other resources than the Company. Other competitors are smaller than the Company
but well established in specific product niches. In some cases, particularly
with respect to mass flow controllers, end-user semiconductor device
manufacturers may direct semiconductor equipment OEMs to use a specified
supplier's product in their equipment. Accordingly, for such products, the
Company's success will depend in part on its ability to have semiconductor
device manufacturers specify that its products be used at their fabrication
facilities and the Company may encounter difficulties in changing established
relationships of competitors with a large installed base of products at such
customers' fabrication facilities. There can be no assurance that competitors
will not develop products that offer price or performance features superior to
those of the Company's products. To the extent that the Company's products do
not achieve performance or other advantages over products offered by
competitors, the Company is likely to experience greater price competition or
loss of market share with respect to such products. Also, certain of the
Company's customers may develop in-house products that serve the functions of
and replace the Company's products. The Company believes that the worldwide
competitive pressures in the Company's markets could result in a decline in the
prices of its products in the future. Declines in the selling prices of the
Company's products, if not offset by reductions in the cost of producing such
products and increased unit volume sales or by sales of products with higher
gross margins, could have a material adverse effect on the Company's business
and results of operations.

6
9

TECHNOLOGICAL CHANGES

The semiconductor equipment industry is subject to rapid technological
change and new product introductions and enhancements. The Company's success
depends in part upon its ability to develop enhanced and new products that keep
pace with technological developments, achieve market acceptance and respond to
evolving customer requirements. New product introductions may contribute to
fluctuations in quarterly operating results, as customers may defer ordering
products from the Company's existing product lines or may purchase products from
competitors. Any new product reliability or quality problems could result in
reduced orders, higher manufacturing costs and additional service and warranty
expense. Responding to rapid technological change and the need to develop and
introduce new products to meet customers' needs and evolving industry standards
will require the Company to make substantial investments in research and product
development. Any failure by the Company to anticipate or respond adequately to
technological developments and customer requirements or any significant delays
in product development or introduction could result in a loss of competitiveness
and could materially adversely affect the Company's operating results. There can
be no assurance that the Company will successfully develop and manufacture new
products or that any product enhancements or new products developed by the
Company will gain market acceptance.

The semiconductor device manufacturing industry is currently undergoing an
evolution from 200mm to 300mm wafers and from .35 micron to .25 and .18 micron
line-widths. Device manufacturers are beginning to establish pilot production
lines and specifications for the use of 300mm wafers and the production of .25
and .18 micron devices. The Company has developed, and is developing, new
products and product enhancements to address the expected increasing demand for
equipment capable of handling these new wafer sizes and line-widths. There can
be no assurance that the Company will be able to develop these new products and
enhancements successfully or in time to meet emerging demand or that the new
products and enhancements developed by the Company will be accepted by the
Company's customers. Failure by the Company to develop such products or
enhancements in a timely manner would have a material adverse effect on the
Company's business, financial condition and results of operations.

EXPANSION INTO NEW MARKETS

The Company plans to build upon its experience in manufacturing and selling
gas management products used by the semiconductor industry by designing and
selling gas management products for applications in other industries which use
production processes similar to those used in the semiconductor industry. The
Company's future success will depend in part on its ability to identify new
applications for its products, adapt its products for such applications and then
market and sell such products to customers. The Company has limited experience
selling its products in certain markets outside the semiconductor industry.
There can be no assurance that the Company will be successful in further
expanding its business outside the semiconductor industry. Any failure to
penetrate additional markets would limit the Company's ability to reduce its
vulnerability to downturns in the semiconductor industry and could have a
material adverse effect upon its business and results of operations.

EXPANSION OF MANUFACTURING CAPACITY

The Company plans in 1998 to add manufacturing facilities to its Austin,
Texas and United Kingdom operations and further equip its cleanroom facilities
in Andover and Methuen, Massachusetts. The Company's ability to continue to
increase sales of certain of its products depends in part upon its ability to
expand its manufacturing capacity for such products in a timely manner. If the
Company is unable to expand its manufacturing capacity on a timely basis or to
manage such expansion effectively, the Company's rate of growth and market share
could be reduced and its business and results of operations could be adversely
affected. The Company's market share and results of operations could also be
adversely affected if it is unable to adjust to a rapid demand increase in the
highly cyclical semiconductor industry. Additionally, any capacity expansion by
the Company will increase its fixed operating expenses and if sales levels do
not increase to offset the additional expense levels associated with any such
expansion, the Company's operating results would likely be adversely affected.

7
10

INTERNATIONAL OPERATIONS AND SALES

The Company has production, sales and service facilities in Germany, Japan,
Korea and the United States and sales and service facilities in Canada, France,
the Netherlands and the United Kingdom. In addition, the Company has
established, through agents and representatives, sales and service facilities in
China, India, Israel, Italy, Singapore and Taiwan. International sales (which
include sales by the Company's foreign subsidiaries, but exclude export sales
made directly by the Company, which were less than 10% of the Company's total
net sales) accounted for approximately 32%, 30% and 28% of net sales in 1995,
1996, and the first nine months of 1997, respectively. The Company anticipates
that international sales will continue to account for a significant portion of
its net sales. As a result, the Company's operations are subject to risks
inherent in international business activities, including, in particular, general
economic conditions in each country, the overlap of different tax structures,
management of a large organization spread over various countries, unexpected
changes in regulatory requirements, compliance with a variety of foreign laws
and regulations and longer accounts receivables payment cycles in certain
countries. The Company's international sales are also subject to certain
governmental restrictions including the Export Administration Act and the
regulations promulgated thereunder. Other risks associated with international
operations include import and export licensing requirements, trade restrictions
and changes in tariff and freight rates. A number of these risks also apply to
sales to U.S. based semiconductor equipment OEMs that incorporate the Company's
products into systems delivered outside the United States. Additionally, the
Company denominates in local currencies the prices for products sold to and by
its foreign subsidiaries, and, therefore, the Company's operating results
attributable to these sales are exposed to fluctuations in the value of the U.S.
dollar versus other currencies. While the Company seeks to mitigate its exposure
to currency fluctuations by entering into forward exchange contracts and local
currency purchased options to reduce currency exposure arising from foreign
denominated sales associated with intercompany purchases of inventory, there can
be no assurance that exchange rate fluctuations will not have an adverse effect
on the Company's results of operations and financial condition or that the
Company will not realize losses with respect to its hedging activities. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

NEED TO RETAIN AND ATTRACT KEY PERSONNEL

The Company's success depends to a large extent upon the efforts and
abilities of a number of key employees and officers. The loss of key employees
or officers could materially and adversely affect the Company. The Company
believes that its future success will depend in part on its ability to attract
and retain highly skilled technical, financial, managerial and marketing
personnel. Competition for such personnel is intense and there can be no
assurance that the Company will be successful in attracting and retaining such
personnel.

CONCENTRATION OF STOCK OWNERSHIP

Upon consummation of this offering, John R. Bertucci, Chairman of the Board
of Directors, Chief Executive Officer and President of the Company, and members
of his family will, in the aggregate, beneficially own approximately 72% of the
Company's outstanding Common Stock. As a result, these stockholders, acting
together, would be able to control all matters requiring stockholder approval,
including the election of directors and approval of significant corporate
transactions. See "Principal Stockholders."

INTELLECTUAL PROPERTY MATTERS

Although the Company seeks to protect its intellectual property rights
through patents, copyrights, trade secrets and other measures, there can be no
assurance that the Company will be able to protect its technology adequately,
that competitors will not be able to develop similar technology independently,
that any of the Company's pending patent applications will be issued or that
intellectual property laws will protect the Company's intellectual property
rights. In addition, litigation may be necessary in order to enforce the
Company's patents, copyrights or other intellectual property rights, to protect
the Company's trade secrets, to determine the validity and scope of the
proprietary rights of others or to defend against claims of infringement. Such
litigation could result in substantial costs and diversion of resources and
could have a material adverse effect on the Company's business and results of
operations. There can be no assurance that any patent issued

8
11

to the Company will not be challenged, invalidated or circumvented, that the
rights granted thereunder will provide competitive advantages to the Company or
that third parties may not assert that the Company's products infringe patent,
copyright or trade secrets of such parties. Furthermore, there can be no
assurance that others will not independently develop similar products or
duplicate the Company's products.

ENVIRONMENTAL REGULATIONS

The Company's operations are subject to a variety of extensive and changing
federal, state and local environmental and safety laws, regulations and
ordinances. Such laws, regulations or ordinances may impose liability for the
cost of remediating, and for certain damages resulting from, releases, including
past releases, of hazardous materials. The Company believes that it currently
conducts and in the past has conducted its activities and operations in
substantial compliance with applicable environmental laws and believes that
costs arising from existing environmental laws will not have a material adverse
effect on the Company's financial condition or results of operations. There can
be no assurance, however, that environmental laws will not become more stringent
in the future or that the Company will not incur significant costs in the future
in order to comply with such laws.

NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to this offering there has been no public market for the Company's
Common Stock and there can be no assurance that an active public market for the
Common Stock will develop or continue after the offering. The initial public
offering price will be determined by negotiation between the Company and the
representatives of the Underwriters. See "Underwriting." The trading price of
the Company's Common Stock could be subject to wide fluctuations in response to
quarterly variations in operating results, announcements of technological
innovations or new products by the Company or its competitors or other events or
factors. In addition, the stock market has experienced extreme price and volume
fluctuations which have particularly affected the market prices for many high
technology companies. These broad market fluctuations may materially and
adversely affect the market price of the Company's Common Stock.

DILUTION

Purchasers of Common Stock offered hereby will incur immediate and
substantial dilution in the net tangible book value per share of Common Stock
from the assumed initial public offering price. See "Dilution."

ANTITAKEOVER PROVISIONS

Certain provisions of the Company's Articles of Organization, By-Laws and
Massachusetts law could discourage potential acquisition proposals and could
delay or prevent a change in control of the Company. Such provisions could
diminish the opportunities for stockholders to participate in tender offers
including tender offers at a price above the then current market value of the
Common Stock. Such provisions may also inhibit increases in the market price of
the Common Stock that could result from takeover attempts. In addition, the
Board of Directors, without further stockholder approval, may issue preferred
stock that could have the effect of delaying, deterring or preventing a change
in control of the Company. The issuance of preferred stock could adversely
affect the voting power of the holders of Common Stock including the loss of
voting control to others. The Company has no present plans to issue any
preferred stock. See "Description of Capital Stock."

SHARES ELIGIBLE FOR FUTURE SALE

Sales of substantial amounts of Common Stock in the public market following
this offering could adversely effect the market price of the Common Stock. All
of the outstanding shares of Common Stock are subject to lock-up agreements with
the representatives of the Underwriters ("Lock-up Agreements") for a period of
180 days after the date of this Prospectus. Upon expiration of the Lock-up
Agreements 180 days after the date of this Prospectus, 12,035,440 shares of
Common Stock will be eligible for sale in the public market, subject to the
provisions of Rule 144 under the Securities Act of 1933, as amended (the
"Securities Act"). In addition, the Company intends to register approximately
3,020,500 shares of Common Stock issuable under its stock option and purchase
plans upon the closing of this offering. See "Shares Eligible for Future Sale,"
"Description of Capital Stock" and "Underwriting."

9
12

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 4,000,000 shares of
Common Stock offered hereby are estimated to be $ ($ if
the Underwriters' over-allotment option is exercised in full), assuming an
initial public offering price of $ per share, after deducting the
estimated underwriting discount and offering expenses. The principal purposes of
this offering are to increase the Company's working capital and equity base, to
provide a public market for the Company's Common Stock and to facilitate future
access by the Company to public equity markets.

The Company expects to use a portion of the net proceeds to pay to current
stockholders the undistributed S corporation earnings of the Company through the
closing of this offering. Such undistributed S corporation earnings were
approximately $30.2 million at September 30, 1997 and are expected to increase
from October 1, 1997 to the closing of this offering. See "S Corporation and
Termination of S Corporation Status." The Company expects to use the remainder
of the net proceeds for general corporate purposes, including working capital,
product development and capital expenditures. The Company plans in 1998 to make
capital expenditures totaling approximately $10 million, primarily for additions
of capital equipment and for expansion of its manufacturing facilities and the
Company expects to use a portion of the net proceeds for such purposes.

A portion of the net proceeds may also be used for the acquisition of
businesses, products and technologies that are complementary to those of the
Company. The Company has no commitments or understandings for any acquisitions
and no portion of the net proceeds has been allocated for any specific
acquisition. Pending such uses, the Company intends to invest the net proceeds
from this offering in short-term, investment-grade, interest-bearing securities.

10
13

S CORPORATION AND TERMINATION OF S CORPORATION STATUS

In 1996 and in the first nine months of 1997, the Company distributed $14.5
million and $6.4 million, respectively, of undistributed S corporation earnings
to its stockholders. The Company expects to make additional distributions of
approximately $5.5 million prior to the closing of this offering.

As soon as practicable following the closing of the offering, the Company
intends to make a distribution (the "S Corporation Distribution") to the holders
of record on the day prior to the closing of this offering (the "Existing
Stockholders") in an amount equivalent to the "accumulated adjustments account,"
as defined in Section 1368(a)(1) of the Code (the "AA Account"). As of September
30, 1997, the outstanding balance of the AA Account was approximately $30.2
million, and such balance is expected to increase in the period from October 1,
1997 through the closing of the offering. The AA Account is cumulatively equal
to financial reporting income, adjusted for differences between the methods of
accounting used for financial accounting and for federal income tax purposes
from the effective date of the Company's election to be treated as an S
corporation through the date of termination of the Company's S corporation
status, that has not been previously distributed. Investors purchasing shares in
this offering will not receive any portion of the S Corporation Distribution.

The Company expects to enter into a Tax Indemnification and S Corporation
Distribution Agreement (the "Existing Stockholders Agreement") with the Existing
Stockholders providing for, among other things, the indemnification of the
Company by such stockholders for any federal and state income taxes (including
interest) incurred by the Company if for any reason the Company is deemed to be
treated as a C corporation during any period which it reported its taxable
income as an S corporation. The tax indemnification obligation of the Existing
Stockholders is limited to the amount of any reduction in their tax liability as
a result of any such determination. The Existing Stockholders Agreement also
provides for the cross-indemnification by the Company of each Existing
Stockholder for any losses or liabilities with respect to certain additional
taxes (including interest and penalties) resulting from the Company's operations
during the period in which it was an S corporation. The Existing Stockholders
Agreement further provides for the payment, with interest, by the Existing
Stockholders or the Company, as the case may be, for the difference between the
S Corporation Distribution amount and the actual amount of the AA Account on the
day immediately preceding the closing of the offering. The actual amount of the
AA Account on the day prior to the closing of the offering cannot be determined
until the Company calculates the amount of its taxable income for the year
ending December 31, 1998. Purchasers of Common Stock in this offering will not
be parties to the Existing Stockholders Agreement.

The termination date of the Company's S corporation status will occur on
the closing date of this offering. Subsequent to the termination date, the
Company will no longer be an S corporation and, accordingly, will be subject to
federal and state income taxes. The pro forma Statement of Income set forth in
this Prospectus has been adjusted to include pro forma federal income tax
provisions as if the Company had been a C corporation under Subchapter C of the
Code during the relevant periods.

DIVIDEND POLICY

The Company anticipates that following the completion of this offering and
the S Corporation Distribution, subject to the Company's contractual obligations
under the Existing Stockholders Agreement, all earnings will be retained for
development of its business and will not be distributed to stockholders as
dividends. Restrictions or limitations on the payment of dividends may be
imposed in the future under the terms of credit agreements or under other
contractual provisions. In the absence of such restrictions or limitations, the
payment of any dividends will be at the discretion of the Company's Board of
Directors.

11
14

CAPITALIZATION

The following table sets forth the capitalization of the Company (i) as of
September 30, 1997, (ii) on a pro forma basis to reflect distributions and
adjustments in connection with the Company's S corporation status and (iii) as
adjusted to reflect the sale of 4,000,000 shares of Common Stock by the Company
at an assumed initial public offering price of $ per share and the
application of the net proceeds therefrom. See "Use of Proceeds."

SEPTEMBER 30, 1997
------------------------------------------
PRO FORMA
ACTUAL PRO FORMA(1) AS ADJUSTED(1)(2)
------- ------------ -----------------
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE
DATA)

Long-term obligations, less current portion............. $16,348 $ 16,348 $
Stockholders' equity:
Preferred stock, $.01 par value; 2,000,000 shares
authorized; no shares issued or outstanding...... -- -- --
Common Stock, no par value; 50,000,000 shares
authorized, 12,035,440 shares issued and
outstanding (actual and pro forma); 16,035,440
shares issued and outstanding (pro forma as
adjusted)(3)..................................... 113 113
Additional paid-in capital......................... 48 48
Unrealized gain on investments..................... 562 562
Retained earnings.................................. 50,045 19,862
Cumulative translation adjustment.................. 988 988
-------- ------ ------
Total stockholders' equity.................... 51,756 21,573
-------- ------ ------
Total capitalization........................ $68,104 $ 37,921 $
======== ====== ======

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

(1) Pro forma data reflects the distribution of an estimated $30.2 million,
calculated as of September 30, 1997, of cumulative undistributed S
corporation taxable income for which stockholders of record prior to the
closing of the offering have been or will be taxed. The actual amount to be
distributed is expected to increase based upon taxable earnings for the
period from October 1, 1997 through the closing of the offering, subject to
certain limitations. See "S Corporation and Termination of S Corporation
Status" and Notes 2 and 9 of Notes to Consolidated Financial Statements.

(2) As adjusted to reflect the issuance of 4,000,000 shares of Common Stock at
an assumed initial public offering price of $ per share, after deducting
the estimated underwriting discount and offering expenses payable by the
Company.

(3) Gives effect to (i) a 2,110-for-1 stock split to be effected prior to the
closing of this offering and the conversion upon the closing of this
offering, of the 2,454 shares of Class A Common Stock and 3,250 shares of
Class B Common Stock outstanding at September 30, 1997 into an aggregate of
12,035,440 shares of Common Stock and (ii) the filing of an amendment to the
Company's Restated Articles of Organization to increase the number of
authorized shares of Common Stock to 50,000,000 and to authorize 2,000,000
shares of Preferred Stock prior to the closing of this offering.

12
15

DILUTION

As of September 30, 1997, the Company had a net tangible book value of
$51,756,000, or $4.30 per share of Common Stock. Without taking into account any
changes in such net tangible book value subsequent to September 30, 1997, other
than to give effect to the sale by the Company of 4,000,000 shares of Common
Stock offered hereby at an assumed initial public offering price of $ per
share (after deducting the estimated underwriting discount and offering
expenses) and the application of the estimated proceeds therefrom, including the
distribution of an estimated $30.2 million of cumulative undistributed S
corporation taxable income for which stockholders have been or will be taxed, as
of September 30, 1997, the pro forma net tangible book value of the Company as
of September 30, 1997 would have been $ , or $ per share. This
represents an immediate increase in net tangible book value of $ per share
to current shareholders and the immediate dilution of $ per share to new
investors. The following table illustrates this per share dilution:

Assumed initial public offering price per share.......................... $
Net tangible book value per share at September 30, 1997............. $4.30
Decrease per share attributable to the S Corporation Distribution...
Increase per share attributable to new investors....................
-----
Pro forma net tangible book value per share after the offering...........
------
Dilution per share to new investors...................................... $
======

The following table summarizes, on a pro forma basis as of September 30,
1997, the number of shares of Common Stock purchased from the Company, the total
consideration paid to the Company, and the average price per share paid by the
existing stockholders and by the investors purchasing shares of Common Stock in
this offering at an assumed initial offering price of $ per share:

SHARES PURCHASED TOTAL CONSIDERATION
---------------------- ----------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ----------- ------- -------------

Existing stockholders.......... 12,035,440 75.1% $ 161,000 % $ 0.013
New investors.................. 4,000,000 24.9
---------- ----- ----------- -----
Total..................... 16,035,440 100.0% $ 100.00%
========== ===== =========== =====

As of September 30, 1997, there were options outstanding to purchase a
total of 1,042,361 shares of Common Stock, at an exercise price of $6.64 per
share. To the extent that any of these options are exercised, there will be
further dilution to new investors.

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16

SELECTED CONSOLIDATED FINANCIAL DATA

The following selected financial data as of December 31, 1995 and 1996 and
September 30, 1997 and for the years ended December 31, 1994, 1995 and 1996, and
the nine month period ending September 30, 1997, have been derived from the
Company's financial statements, included elsewhere in this Prospectus, which
have been audited by Coopers & Lybrand L.L.P., independent accountants, as
indicated in their report. The selected financial data as of and for the nine
month period ended September 30, 1996 have been derived from unaudited financial
statements that have been prepared on the same basis as the Company's audited
financial statements and which, in the opinion of management, included all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the Company's financial position and results of operations.
The selected financial data as of December 31, 1992, 1993 and 1994 and for the
years ended December 31, 1992 and 1993 are derived from financial statements,
which were also audited by Coopers & Lybrand L.L.P., not included herein.
Operating results for the nine months ended September 30, 1997 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1997. The data should be read in conjunction with the Consolidated
Financial Statements, including the Notes thereto, and with "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included elsewhere herein.

STATEMENT OF INCOME DATA:
Net sales....................................... $73,260 $80,852 $106,829 $157,164 $170,862 $136,097 $134,629
Cost of sales................................... 42,632 46,784 59,813 87,703 102,008 81,078 78,456
-------- -------- --------- --------- --------- --------- ---------
Gross profit.................................... 30,628 34,068 47,016 69,461 68,854 55,019 56,173
Research and development........................ 5,836 6,244 8,036 10,935 14,195 11,220 10,336
Selling, general and administrative............. 20,199 21,459 26,893 34,420 37,191 29,409 30,749
Restructuring................................... 0 0 0 0 1,400 1,400 0
-------- -------- --------- --------- --------- --------- ---------
Income from operations.......................... 4,593 6,365 12,087 24,106 16,068 12,990 15,088
Interest expense, net........................... 1,784 1,421 1,284 1,448 2,286 1,811 1,466
Other income (expense), net..................... -- -- -- -- (479) (230) 460
-------- -------- --------- --------- --------- --------- ---------
Income before income taxes...................... 2,809 4,944 10,803 22,658 13,303 10,949 14,082
Provision for income taxes(1)................... 163 593 800 1,000 800 658 1,190
-------- -------- --------- --------- --------- --------- ---------
Net income...................................... $ 2,646 $ 4,351 $ 10,003 $ 21,658 $ 12,503 $ 10,291 $ 12,892
======== ======== ========= ========= ========= ========= =========
PRO FORMA STATEMENT OF INCOME DATA (UNAUDITED)(2):
Income before income taxes, as reported......... $ 13,303 $ 14,082
Pro forma provision for income taxes............ 5,055 5,351
--------- ---------
Pro forma net income............................ $ 8,248 $ 8,731
========= =========
Pro forma net income per common share........... $ 0.59 $ 0.62
========= =========

DECEMBER 31, SEPTEMBER 30, 1997
------------------------------------------------ -----------------------
1992 1993 1994 1995 1996 ACTUAL PRO FORMA(3)
------- ------- ------- -------- ------- -------- ------------
(IN THOUSANDS)

BALANCE SHEET DATA:
Working capital.............................. $19,293 $18,420 $25,078 $ 32,202 $22,404 $ 29,479 $ (704)
Total assets................................. 60,697 59,261 72,320 104,511 95,000 106,685 106,685
Short-term obligations....................... 9,141 6,229 9,246 15,192 16,124 16,372 16,372
Long-term obligations, less current
portion.................................... 15,761 15,326 14,948 20,462 18,899 16,348 16,348
Stockholders' equity......................... 29,593 28,965 37,272 48,392 45,498 51,756 21,573

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

(1) Effective July 1, 1987, the Company elected to be treated as an S
corporation under the applicable provisions of the Internal Revenue Code of
1986. As an S corporation, the Company has not been subject to federal, and
certain state, income taxes. The pro forma net income reflects the provision
for income taxes that would have been recorded had the Company been a C
corporation, assuming an effective tax rate of 38.0%. As a result of
terminating its S corporation status upon the closing of this offering, the
Company will record a one-time non-cash credit to historical earnings for
additional deferred taxes. If this credit to earnings had occurred at
September 30, 1997, the amount would have been approximately

14
17

$2.8 million. This amount is expected to change through the closing of the
offering and is excluded from pro forma net income. See Notes 2 and 9 of
Notes to Consolidated Financial Statements.

(3) Pro forma balance sheet data reflects the distribution of an estimated $30.2
million, calculated as of September 30, 1997, of cumulative undistributed S
corporation taxable income for which stockholders of record prior to the
closing of this offering have been or will be taxed. The actual amount to be
distributed is expected to increase based upon taxable earnings for the
period October 1, 1997 through the closing of the offering, subject to
certain limitations. See "Use of Proceeds," "S Corporation and Termination
of S Corporation Status" and Notes 2 and 9 of Notes to Consolidated
Financial Statements.

15
18

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the results of operations and financial
condition should be read in conjunction with the Company's Consolidated
Financial Statements and Notes thereto included elsewhere in this Prospectus.
With the exception of historical matters and statements of current status,
certain matters discussed below are forward-looking statements that involve
substantial risks and uncertainties that could cause actual results to differ
materially from targets or projected results. Factors that could cause actual
results to differ materially include, among others, those factors described in
"Risk Factors." Many of these factors are beyond the Company's ability to
predict or control. Prospective investors are cautioned not to put undue
reliance on forward-looking statements, which statements have been made as of
the date of this Prospectus, and prospective investors should not infer that
there has been no change in the affairs of the Company since the date hereof
that would warrant any modification of any forward-looking statement made
herein. The Company disclaims any intent or obligation to update publicly these
forward-looking statements, whether as a result of new information, future
events or otherwise.

OVERVIEW

MKS was founded in 1961. The Company sells instruments and components to
OEMs and end-users in the semiconductor and other advanced thin-film processing
industries. For the past three years and the first nine months of 1997, the
Company estimates that approximately two-thirds of its net sales were to
semiconductor equipment OEMs and semiconductor device manufacturers. The Company
expects that sales to such customers will continue to account for a substantial
majority of its sales. The Company typically enters into contracts with its
semiconductor equipment OEM customers that provide for quantity discounts. The
Company recognizes revenues, and accrues for anticipated returns and warranty
costs, upon shipment.

In the third quarter of 1996, as a result of the downturn in the
semiconductor industry, the Company recorded a restructuring charge of $1.4
million. The charge was primarily related to a reduction of personnel and the
closure of certain facilities and included the cost of severance, lease
commitments and the write-off of leasehold improvements.

A significant portion of the Company's sales are to operations in
international markets. International sales by the Company's foreign subsidiaries
were 30.1% and 27.9% of net sales for 1996 and for the nine months ended
September 30, 1997, respectively. The Company does not classify export sales
made directly by the Company as international sales. Such sales were less than
10% of net sales. The Company's foreign subsidiaries conduct their business in
local currencies and the Company derives a significant portion of its cash flows
from foreign denominated revenues. The Company plans to enter into forward
exchange contracts and local currency purchased options to reduce currency
exposure arising from foreign denominated sales associated with the intercompany
purchases of inventory. Gains and losses on derivative financial instruments
that qualify for hedge accounting are classified in cost of sales. Gains and
losses on derivative financial instruments that do not qualify for hedge
accounting are marked-to-market and recognized immediately in other income. See
Note 2 to Notes to Consolidated Financial Statements.

Effective July 1, 1987, the Company elected to be treated as an S
corporation for federal income tax purposes. The Company's S corporation status
will terminate upon the closing of this offering, at which time the Company will
become subject to federal, and certain state, income taxation as a C
corporation. The pro forma net income reflects a pro forma effective tax rate of
38.0% to reflect federal and state income taxes which would have been payable
for 1996 and the first nine months of 1997 had the Company been taxed as a C
corporation.

16
19

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated the percentage of
total sales of certain line items included in the Company's consolidated
statement of income data:

NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------- ---------------
1994 1995 1996 1996 1997
----- ----- ----- ----- -----

Net sales.......................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales...................................... 56.0 55.8 59.7 59.6 58.3
----- ----- ----- ----- -----
Gross profit....................................... 44.0 44.2 40.3 40.4 41.7
Research and development........................... 7.5 7.0 8.3 8.3 7.7
Selling, general and administrative................ 25.2 21.9 21.8 21.6 22.8
Restructuring...................................... 0.0 0.0 0.8 1.0 0.0
----- ----- ----- ----- -----
Income from operations............................. 11.3 15.3 9.4 9.5 11.2
Interest expense, net.............................. 1.2 0.9 1.3 1.3 1.1
Other income (expense), net........................ 0.0 0.0 (0.3) (0.2) 0.4
----- ----- ----- ----- -----
Income before income taxes......................... 10.1 14.4 7.8 8.0 10.5
Provision for income taxes......................... 0.7 0.6 0.5 0.4 0.9
----- ----- ----- ----- -----
Net income......................................... 9.4% 13.8% 7.3% 7.6% 9.6%
===== ===== ===== ===== =====
Pro forma data:
Historical income before income taxes.............. 7.8% 10.5%
Pro forma provision for income taxes............... 3.0 4.0
----- -----
Pro forma net income............................... 4.8% 6.5%
===== =====

NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1996

Net Sales. Net sales decreased 1.1% to $134.6 million for the nine months
ended September 30, 1997 from $136.1 million for the same period of 1996.
International net sales decreased 5.9% to $37.5 million (27.9% of net sales) for
the first nine months of 1997 from $39.9 million (29.3% of net sales) for the
first nine months of 1996. The decrease in net sales and international net sales
was primarily due to the downturn in the semiconductor industry that began in
1996 and adversely affected the third quarter of 1996, as well as the first and
second quarters of 1997.

Gross Profit. Gross profit as a percentage of sales increased to 41.7% for
the nine months ended September 30, 1997 from 40.4% for the same period of 1996.
The change was due primarily to the reduction in fixed costs resulting from the
restructuring effected in the third quarter of 1996.

Research and Development. Research and development expenses decreased 7.9%
to $10.3 million (7.7% of net sales) for the nine months ended September 30,
1997 from $11.2 million (8.2% of net sales) for the same period of 1996. The
decrease was primarily due to lower staffing levels and project cost reductions
during the first nine months of 1997 as a result of the restructuring effected
in the third quarter of 1996. The Company expects research and development
expenses to continue to increase as the Company continues to work to develop
products to address advances in the semiconductor industry, such as the trend
toward smaller device geometries and larger wafer sizes.

Selling, General and Administrative. Selling, general and administrative
expense increased 4.6% to $30.7 million (22.8% of net sales) for the nine months
ended September 30, 1997 from $29.4 million (21.6% of net sales) for the same
period of 1996. The increase was due primarily to increased staffing levels and
compensation expense, and the write-off of certain assets.

Restructuring. In the third quarter of 1996, as a result of the downturn
in the semiconductor industry, the Company recorded a restructuring charge of
$1.4 million. The charge was primarily related to a reduction of personnel and
the closure of certain facilities and included the cost of severance, lease
commitments and the write-off of leasehold improvements.

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20

Interest Expense, Net. Net interest expense decreased 19.1% to $1.5
million for the nine months ended September 30, 1997 from $1.8 million for the
same period of 1996 primarily due to lower debt outstanding during 1997.

Other Income (Expense), Net. Other expense of $0.2 million for the nine
months ended September 30, 1996 and other income of $0.5 million for the nine
months ended September 30, 1997 reflect losses and gains, respectively, from
foreign exchange contracts that did not qualify for hedge accounting.

Provision for Income Taxes. Effective July 1, 1987, the Company elected to
be treated as an S corporation under the applicable provisions of the Code, and
as a result has not been subject to federal income taxes, but it has been
subject to certain state income taxes. The provision for income taxes is
comprised of foreign income taxes and certain state income taxes. The provision
increased to $1.2 million for the nine months ended September 30, 1997 from $0.7
million for the same period of 1996 primarily due to increased income.

Pro Forma Provision for Income Taxes. The pro forma provision for income
taxes for the nine months ended September 30, 1997 reflects the estimated tax
expense the Company would have incurred had it been subject to federal and state
income taxes as a C corporation under the Code. The pro forma provision reflects
a pro forma effective tax rate of 38.0%, which differs from the federal
statutory rate due primarily to the effects of state and foreign taxes and
certain tax credits.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

Net Sales. Net sales increased 8.7% to $170.9 million for 1996 from $157.2
million for 1995. International net sales were $51.4 million for 1996 (30.1% of
net sales) and $50.2 million for 1995 (31.9% of net sales). In the fourth
quarter of 1995 the Company purchased UTI Instruments Company ("UTI"), a
designer and manufacturer of gas monitoring instrumentation, for $4.4 million in
cash. The increase in net sales was due primarily to the inclusion of sales by
UTI as well as increased worldwide sales of the Company's existing products.

Gross Profit. Gross profit as a percentage of net sales decreased to 40.3%
for 1996 from 44.2% for 1995. The decrease was primarily due to higher fixed
costs resulting from manufacturing capacity expansion and lower margins
initially earned on certain new products.

Research and Development. Research and development expenses increased
29.8% to $14.2 million (8.3% of net sales) for 1996 from $10.9 million (7.0% of
net sales) for 1995. The increase was primarily due to the inclusion of a full
year of costs associated with UTI and costs associated with the development of
new products.

Selling, General and Administrative. Selling, general and administrative
expenses increased 8.1% to $37.2 million (21.8% of net sales) for 1996 from
$34.4 million (21.9% of net sales) for 1995. The increase was primarily due to
the inclusion of a full year of costs associated with UTI.

Restructuring. In the third quarter of 1996 the Company recorded a
restructuring charge of $1.4 million. The charge was primarily related to a
reduction of personnel and the closure of certain facilities and included the
cost of severance, lease commitments and the write-off of leasehold
improvements.

Interest Expense, Net. Net interest expense increased to $2.3 million in
1996 from $1.4 million in 1995 primarily due to increased debt outstanding
during 1996.

Other Income (Expense), Net. Other expense of $0.5 million in 1996
represents losses from foreign exchange contracts that did not qualify for hedge
accounting.

Provision for Income Taxes. The provision for income taxes is comprised of
foreign income taxes and certain state income taxes. The provision decreased to
$0.8 million in 1996 from $1.0 million in 1995 primarily due to lower income.

Pro Forma Provision for Income Taxes. The pro forma provision for income
taxes in 1996 reflects the estimated tax expense the Company would have incurred
had it been subject to federal and state income taxes

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21

as a C corporation under the Code. The pro forma provision reflects a pro forma
effective tax rate of 38.0%, which differs from the federal statutory rate due
primarily to the effects of state and foreign taxes and certain tax credits.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Net Sales. Net sales increased 47.1% to $157.2 million for 1995 from
$106.8 million in 1994. International net sales increased 44.0% to $50.2 million
(31.9% of net sales) for 1995 from $34.8 million (32.6% of net sales) in 1994.
These increases were due primarily to increased worldwide sales volume to
customers in the semiconductor industry.

Gross Profit. Gross profit as a percentage of net sales was substantially
the same for 1995 (44.2%) and 1994 (44.0%).

Research and Development. Research and development expenses increased
36.1% to $10.9 million (7.0% of net sales) for 1995 from $8.0 million (7.5% of
net sales) in 1994. The increase in the dollar amount of the expenses was
primarily due to increased staffing levels and other costs associated with
continued development of new products.

Selling, General and Administrative. Selling, general and administrative
expenses increased 28.0% to $34.4 million (21.9% of net sales) for 1995 from
$26.9 million (25.2% of net sales) for 1994. The increase in expenses during
1995 was primarily due to the establishment of sales and service subsidiaries in
Europe and Korea, increased selling costs, higher staffing levels and other
general and administrative costs incurred to support the Company's increased
sales volume.

Interest Expense, Net. Net interest expense increased to $1.4 million for
1995 from $1.3 million for 1994, primarily due to increased debt outstanding
during 1995.

Provision for Income Taxes. The provision for income taxes is comprised of
foreign income taxes and certain state income taxes. The provision increased to
$1.0 million for 1995 from $0.8 million for 1994 primarily due to increased
income.

SELECTED QUARTERLY OPERATING RESULTS

The following tables present unaudited consolidated financial information
for the seven quarters ended September 30, 1997. In the opinion of management
this information has been presented on the same basis as the audited
Consolidated Financial Statements appearing elsewhere in this Prospectus and all
adjustments (consisting only of normal recurring adjustments) which management
considers necessary for a fair presentation of the results of such periods have
been included in the amounts stated below to present fairly the unaudited
quarterly results when read in conjunction with the Company's Consolidated
Financial Statements and Notes thereto. The results for any quarter are not
necessarily indicative of future quarterly results of operations.

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QUARTER ENDED
------------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30, SEPT. 30,
1996 1996 1996 1996 1997 1997 1997
--------- -------- --------- -------- --------- -------- ---------
(IN THOUSANDS)

STATEMENT OF INCOME DATA:
Net sales........................ $49,811 $ 48,278 $38,008 $ 34,765 $40,520 $ 45,749 $48,360
Cost of sales.................... 29,610 29,235 22,233 20,930 24,277 26,413 27,766
------- ------- ------- ------- ------- ------- -------
Gross profit..................... 20,201 19,043 15,775 13,835 16,243 19,336 20,594
Research and development......... 3,560 4,031 3,629 2,975 2,994 3,563 3,779
Selling, general and
administrative................. 10,113 10,595 8,701 7,782 9,612 10,321 10,816
Restructuring.................... 0 0 1,400 0 0 0 0
------- ------- ------- ------- ------- ------- -------
Income from operations........... 6,528 4,417 2,045 3,078 3,637 5,452 5,999
Interest expense, net............ 475 675 661 475 494 527 445
Other income (expense), net...... (12) (9) (209) (249) 275 (447) 632
------- ------- ------- ------- ------- ------- -------
Income before income taxes....... 6,041 3,733 1,175 2,354 3,418 4,478 6,186
Provision for income taxes....... 363 224 71 142 289 378 523
------- ------- ------- ------- ------- ------- -------
Net income....................... $ 5,678 $ 3,509 $ 1,104 $ 2,212 $ 3,129 $ 4,100 $ 5,663
======= ======= ======= ======= ======= ======= =======

PERCENTAGE OF NET SALES:
Net sales........................ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales.................... 59.4 60.6 58.5 60.2 59.9 57.7 57.4
--------- -------- --------- -------- --------- -------- ---------
Gross profit..................... 40.6 39.4 41.5 39.8 40.1 42.3 42.6
Research and development......... 7.2 8.4 9.5 8.5 7.4 7.8 7.8
Selling, general and
administrative................. 20.3 21.9 22.9 22.4 23.7 22.6 22.4
Restructuring.................... 0.0 0.0 3.7 0.0 0.0 0.0 0.0
--------- -------- --------- -------- --------- -------- ---------
Income from operations........... 13.1 9.1 5.4 8.9 9.0 11.9 12.4
Interest expense, net............ 1.0 1.4 1.7 1.4 1.2 1.1 0.9
Other income (expense), net...... 0.0 0.0 (0.6) (0.7) 0.6 (1.0) 1.3
--------- -------- --------- -------- --------- -------- ---------
Income before income taxes....... 12.1 7.7 3.1 6.8 8.4 9.8 12.8
Provision for income taxes....... 0.7 0.4 0.2 0.4 0.7 0.8 1.1
--------- -------- --------- -------- --------- -------- ---------
Net income....................... 11.4% 7.3% 2.9% 6.4% 7.7% 9.0% 11.7%
========= ======== ======== ======== ========= ======== ========

The Company's quarterly operating results have varied significantly and are
likely to continue to vary significantly due to a number of factors including
specific economic conditions in the industries in which the Company's customers
operate, particularly the semiconductor industry; the timing of the receipt of
orders from major customers; customer cancellations or shipment delays; price
competition; disruption in sources of supply; seasonal variations of capital
spending by customers; production capacity constraints; specific features
requested by customers; exchange rate fluctuations; the introduction or
announcement of new products by the Company or its competitors; and other
factors, many of which are beyond the Company's control. See "Risk
Factors -- Fluctuations in Operating Results."

The Company's net sales have fluctuated over the past seven quarters
primarily due to the decline in the semiconductor industry in 1996 that
adversely affected sales of the Company's products in the third and fourth
quarters of 1996 and the first and second quarters of 1997.

Gross profit as a percentage of net sales decreased for the second quarter
of 1996 primarily due to higher fixed costs resulting from manufacturing
capacity expansion. Gross profit as a percentage of net sales improved in the
third quarter of 1996 primarily due to reduced overhead costs as a result of the
Company's restructuring. Gross profit as a percentage of net sales decreased in
the fourth quarter of 1996 primarily as a result of lower net sales relative to
fixed costs. Gross profit as a percentage of net sales increased in the first,
second and third quarters of 1997 primarily as a result of fuller utilization of
existing manufacturing capacity as a result of increased net sales.

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23

Research and development expenses increased in the second quarter of 1996
primarily as a result of increased staffing levels and costs related to product
development support. The reduction in research and development expenses in the
third and fourth quarters of 1996 was primarily due to lower staffing levels and
project cost reductions. The increase in research and development expenses for
the second and third quarters of 1997 was primarily due to increased staffing
levels.

Selling, general and administrative expenses decreased in the third and
fourth quarters of 1996 primarily due to a reduction of general and
administrative staffing levels as a result of the restructuring effected in the
third quarter of 1996 and other cost reductions, and increased in the first
quarter of 1997 primarily due to increased staffing levels and increased
compensation expense. The increase in selling, general and administrative
expenses in the second and third quarter of 1997 was primarily due to increased
compensation expense and the write-off of certain assets with no remaining
value.

Other income primarily represents gains and losses on foreign exchange
contracts.

LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its operations and capital requirements through a
combination of cash provided by operations, long-term real estate financing,
capital lease financing and short-term lines of credit.

Operations provided cash of $7.7 million, $13.2 million, $26.3 million and
$11.7 million for 1994, 1995, 1996 and the first nine months of 1997,
respectively, primarily impacted in each period by net income, depreciation and
changes in the levels of inventory and accounts receivable. Investing activities
utilized cash of $4.0 million, $13.2 million, $10.2 million, and $2.6 million in
1994, 1995, 1996 and the first nine months of 1997, respectively, primarily for
the purchase of property and equipment in each period and, in 1994, for the
purchase of investments and, in 1995, the acquisition of UTI. Financing
activities utilized cash of $2.3 million, $0.4 million, $15.6 million and $7.9
million in 1994, 1995, 1996 and the first nine months of 1997, respectively,
primarily for stockholder distributions in each period. Cash flows from
financing activities for each period were primarily from short-term and
long-term borrowings.

Working capital was $29.5 million as of September 30, 1997. The Company has
a combined $20.0 million unsecured revolving line of credit with two domestic
financial institutions, expiring June 30, 1999. The unused balance under this
revolving line of credit was $17.5 million at September 30, 1997. The Company
also has lines of credit through its foreign subsidiaries with several financial
institutions, totaling $13.3 million at September 30, 1997. The total unused
balance under these lines of credit was $2.6 million at September 30, 1997.
These lines generally expire and are renewed at six month intervals. In
addition, the Company has outstanding term loans and mortgage loans from banks
totaling $14.4 million (net of the current portion) at September 30, 1997. See
Note 6 of Notes to Consolidated Financial Statements.

The Company believes that the net proceeds from this offering, together
with the cash anticipated to be generated from operations and funds available
from existing credit facilities, will be sufficient to satisfy its estimated
working capital and planned capital expenditure requirements through at least
the next 12 months.

EFFECT OF CURRENCY EXCHANGE RATES AND EXCHANGE RATE RISK MANAGEMENT.

A significant portion of the Company's business is conducted outside of the
United States through its foreign subsidiaries. The foreign subsidiaries
maintain their accounting records in their local currencies. Consequently,
period to period comparability of results of operations is affected by
fluctuations in exchange rates. The Company derives a significant portion of its
cash flows from foreign denominated revenue. To the extent the dollar value of
foreign denominated revenue is diminished as a result of a strengthening dollar,
the Company's results of operations and cash flows could be adversely affected.
To mitigate the risks associated with foreign currency rate fluctuations, the
Company has entered into forward exchange contracts and local currency purchased
options on a continuing basis in amounts and timing consistent with the
underlying currency exposures. Gains on forward exchange contracts and local
currency purchased options, qualifying for hedge accounting, amounted to $0.9
million, $1.9 million and $2.5 million for the years ended December 31, 1994,
1995 and 1996, respectively, and $1.6 million and $1.0 million for the nine
months ended September 30, 1996 and 1997, respectively, and are classified in
cost of sales. Losses of $0.5 million, $0.2 million and gains of

21
24

$0.5 million on forward exchange contracts that did not qualify for hedge
accounting were recognized in earnings for 1996 and the nine months ended
September 30, 1996 and 1997, respectively, and are classified in other income
(expense), net. While the Company does not issue or hold derivative financial
instruments for trading purposes, there can be no assurance that any losses
realized on such instruments will be fully offset by gains on the underlying
exposure. Prospectively, the Company plans to use local currency purchased
options, and to a lesser extent forward exchange contracts, to seek to mitigate
the impact of exchange rate fluctuations. See Notes 2 and 3 of Notes to
Consolidated Financial Statements.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

See Note 2 of Notes to Consolidated Financial Statements for a discussion
of the impact of recently issued accounting pronouncements.

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25

BUSINESS

The Company is a leading worldwide supplier of instruments and components
used to measure, control, analyze and isolate gases in semiconductor and other
manufacturing processes. The Company offers a comprehensive line of products
which are used around the process chamber in both semiconductor front-end
manufacturing processes and other advanced thin-film and vacuum-based processes
used in the manufacture of, among other things, flat panel displays, magnetic
and optical storage media, solar cells, fiber optic cables and gas lasers. The
Company's products include: (i) pressure and flow measurement and control
instruments; (ii) vacuum gauges, valves and components; and (iii) gas analysis
instruments.

For over 20 years the Company has been focused on serving the needs of
semiconductor device manufacturers and semiconductor equipment OEMs and has
established long-term relationships with many of its customers. The Company has
over 4,000 customers worldwide including most major semiconductor equipment
OEMs, semiconductor device manufacturers, a broad range of industrial companies
and university, government and industrial research laboratories. The Company's
customers in its principal market, the semiconductor market, include Applied
Materials, Eaton, Hitachi, Lam Research, TEL and ULVAC. The Company sells its
products primarily through its direct sales force in 22 offices in Canada,
France, Germany, Japan, Korea, the Netherlands, the United Kingdom and the
United States.

INDUSTRY BACKGROUND

In the past 35 years, significant advances in materials science and
processing technologies have enabled the manufacture of products ranging from
highly complex microprocessor chips to simple but effective impervious coatings
for food packaging. In many materials processing applications, specific gas
mixtures at precisely controlled pressures are used to create and maintain the
required process atmosphere, serve as a medium to deposit source material on a
substrate and provide the etchant media for removing materials from a substrate.
The largest commercial application of materials science technology processes is
in the manufacture of semiconductor devices.

Worldwide semiconductor sales have increased as the use of semiconductors
has expanded beyond personal computer and computer systems to a wide array of
additional applications such as telecommunications and data communications
systems, automotive products, consumer goods, medical products and household
appliances. In large part, this growth has been facilitated by the ability of
semiconductor manufacturers to produce increasingly fast, more complex, higher
performance semiconductors while steadily reducing cost per function, power
consumption requirements and size of these products to meet end-user and system
designer requirements. These improvements in the ratio of price to performance
have been enabled by advancements in semiconductor process technology, which
have facilitated the ability to reduce circuit geometries and subsequently
increase transistor densities, or the number of transistors on a silicon wafer.
These trends have driven the need for increasingly complex and sophisticated
semiconductor device manufacturing processes, process equipment and process
controls.

SEMICONDUCTOR MANUFACTURING PROCESS

The front-end of the semiconductor manufacturing process, or wafer
processing, requires hundreds of process steps involving the controlled
application of materials on silicon wafers. These process steps take place
within a process chamber, which provides a controlled environment for the
fabrication of semiconductor devices. Most of the key front-end processes used
in the production of semiconductors require precise control of gas pressure,
flow and composition in the process chamber.

To ensure the integrity and performance of the manufacturing process,
semiconductor device manufacturers require sophisticated instruments that can
provide precise automated control of all major process variables within the
process chamber. The process steps required to produce device features involve
the control of multiple gases flowing into the process chamber at specified
intervals, and at controlled pressure and vacuum levels. In a typical process
step, the process chamber is evacuated to a base pressure established by a
vacuum pumping system and measured with vacuum gauges. Automatic shut-off valves
are sequenced to protect pumps and process instruments from exposure to
atmospheric pressure. Chamber leak integrity may

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26

be checked by gas analyzers scanning for the presence of undesirable atmospheric
gases or water vapor. Mass flow controllers automatically control the flow rates
of multiple gases into the process chamber. Simultaneously, the automatic
pressure control system for the process chamber measures the pressure in the
chamber and controls it at the desired level by electronically adjusting the
position of a control valve located between the process chamber and the vacuum
pump. Downstream of the process chamber, heated lines and vacuum valves and
switches are used to prevent contamination of the devices as a result of
backstreaming of particles and exhaust gases into the process chamber.

The front-end process steps involving gaseous media include deposition,
etch, ion implantation, plasma stripping and cleaning, rapid thermal processing,
diffusion and epitaxy. The most frequently employed front-end process steps
requiring gaseous media are deposition, etch and ion implantation.

Deposition involves the formation of several layers of conducting,
semiconducting and insulating thin films on the surface of a wafer. The two
principal methods of film deposition are physical vapor deposition ("PVD"),
which is used primarily to deposit conductive metal layers, and chemical vapor
deposition ("CVD"), which is used primarily to deposit semiconducting and
insulating thin films. In the PVD process, wafers are typically placed in a
process chamber where solid sources of film materials mounted in the chamber are
sputtered onto the wafer surface at precisely controlled pressures and
temperatures. In the CVD process, a specially designed gas or vaporized liquid
material is introduced into a pressure and temperature controlled process
chamber containing the wafers. The gases interact with the wafer surface to form
a semiconducting or insulating layer. The pressure in the process chamber during
the deposition process and the mixture of deposition gases must be tightly
controlled to achieve uniform film thickness and composition.

The etching process creates the line-widths and other feature sizes on
integrated circuits. To produce specified line-widths manufacturers typically
employ plasma etching techniques, which use ionized gases that chemically react
with unprotected portions of the wafer to create the thinly etched features that
form the patterns of the device. The pressure in the etch chamber and the
mixture of etchant gases must be precisely controlled to achieve the specified
side wall angle and ratio of line-widths to depths. Plasma stripping and
cleaning are etching processes used to prepare the wafer surface for further
processing steps.

In the ion implantation process, ions of certain materials are formed in
minuscule quantities from gases introduced into a chamber on the implantation
tool. The ions are generated in the chamber and are accelerated into the silicon
wafer. The ions are implanted beneath the surface of the silicon, altering its
electrical characteristics. The flow rates of the gases into the ion chamber and
the pressure in the ion chamber must be precisely controlled to create and
maintain the ion density required to achieve desired electrical characteristics.

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The pressures used in semiconductor manufacturing processes range from as
low as one trillionth of atmospheric pressure (10(-9) Torr) to as high as 200
times atmospheric pressure. The following table shows the wide range of
pressures required for typical semiconductor manufacturing processes:

[This table graphically depicts, using graybars, the gas pressure ranges
(10(-D)Torr to 152,000 Torr) used in various typical semiconductor process steps
(Gas distribution, Atmosharic CVD, Sub-atmospheric CVD, Low Pressure CVD, Plasma
Etching & Cleaning, PVD and Implant).]

[CHART]

Etching and deposition steps are repeated many times in the fabrication of
a semiconductor device and require varying flow rates, pressures and gases. A
typical process step uses from three to five different gases. The uptime, yield
and throughput of the process depends on precise repeatable measurement and
control of the specific gas pressure and flow rates, as well as the maintenance
of the vacuum integrity of the process chamber and the prevention of wafer
contamination from particles entering the chamber. Pressure variations of as
little as one-hundred-thousandth of atmospheric pressure can change process
yields significantly and errors in gas composition may impair device
performance. Particle contamination can produce defects that significantly
reduce device yields.

TRENDS IN SEMICONDUCTOR MANUFACTURING

The ability of semiconductor manufacturers to offer integrated circuits
with greater functionality at higher speeds requires continuous improvements in
semiconductor process equipment and process controls. The transition to smaller
device geometries, such as .25 micron and smaller line-widths, may require
shorter process steps and is also leading to the introduction of new materials
such as copper and parylene for conductors and insulators which in turn require
new technologies for delivery of gases and vapors to the process chamber. In
addition, the introduction of advanced processes such as high density plasma is
leading to a need for lower pressures, which are more difficult to measure and
control than higher pressures. These trends, along with increased wafer sizes,
which result in higher device value per wafer, are leading to the need for
increased sophistication of semiconductor processing equipment, a heightened
emphasis on uptime, yield and throughput and the need for more precise process
controls. As a result, the design and performance of instruments that control
pressure or the flow of gases, or analyze the mixture of gases, are becoming
even more critical to the semiconductor manufacturing process.

At the same time, the accelerating pace of technological change and the
increasing sophistication of semiconductor manufacturing equipment have led to
an increase in the number of components and subsystems used in the semiconductor
manufacturing process. To help address this increased complexity, semiconductor
equipment manufacturers are increasingly seeking to establish relationships with
a smaller group of broad-based suppliers that provide (i) value-added,
integrated component solutions that address multiple steps in the semiconductor
manufacturing process, (ii) a worldwide sales and support infrastructure and
(iii) advanced technological capabilities to meet their needs on a worldwide
basis.

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MKS STRATEGY

The Company's objective is to be the leading worldwide supplier of
instruments and components used to measure, control, analyze and isolate gases
in semiconductor and other advanced thin-film materials processing applications.
The principal elements of the Company's strategy to achieve this objective are
set forth below:

Extend Technology Leadership. The Company seeks to apply its expertise in
vacuum, pressure and flow measurement and control technologies to develop
advanced products that meet the critical gas-related process requirements of
semiconductor and advanced thin-film materials manufacturers. The Company has
introduced technological innovations including corrosion-resistant pressure and
vacuum sensors, closed-loop low pressure and vacuum control systems, and
transducer-configured residual gas analyzers. The Company has developed, and
continues to develop, new products to address emerging industry trends such as
the transition from the use of 200mm wafers to 300mm wafers and the shrinking of
integrated circuit line-widths from .35 micron to .25 and .18 micron and
smaller. The Company has developed and, continues to develop materials delivery
systems for new classes of materials, such as copper and parylene, that are
beginning to be used in small geometry manufacturing technologies. In addition,
the Company has been a leader in making its products compatible with emerging
digital network standards, such as DeviceNet, for enabling components used in
semiconductor manufacturing processes to transmit self-diagnostic and other
information on a digital host network while reducing system complexity and space
requirements.

Offer Comprehensive Product Lines. The Company believes that it offers the
widest range of pressure and vacuum measurement and control products serving the
semiconductor industry. The Company offers a full line of products including
pressure and flow measurement and control instrumentation products; vacuum
gauges, valves and components; and gas analysis instruments. Since the
development of its original Baratron laboratory-based instrument in 1961, the
Company has continuously enhanced and expanded its product offerings in response
to the evolving needs of its customers. In 1997, for example, the Company
introduced various new products and enhancements to existing products, including
the Micro Baratron instrument, a significantly smaller version of its pressure
measurement product, and a new low vapor pressure material delivery system. The
Company plans to introduce new products in 1998, including a line of mass flow
calibrators and process monitoring hardware and software for residual gas
analysis. The Company plans to continue to expand its product lines through both
internal development and acquisitions of complementary businesses, products and
technologies.

Build Upon Close Working Relationships with Customers. The Company has
been focused on serving the needs of semiconductor device manufacturers and
semiconductor equipment OEMs for over 20 years and has established long-term
relationships with many of its customers. The Company works closely with its OEM
customers on future generation designs to provide products that are tailored for
their specific needs. The Company works with its customers at the pre-design and
design stage to identify and respond to their requests for current and future
generations of products. These close working relationships also allow the
Company to understand and address the cost and performance expectations of its
customers. The Company plans to enhance its relationships with its major
customers and identify opportunities to develop similar relationships with
additional semiconductor equipment OEMs and device manufacturers.

Pursue Applications in Related Markets. The Company is leveraging its
accumulated expertise in the semiconductor industry by developing products for
applications that employ production processes similar to semiconductor
fabrication processes in their reliance upon gases and vacuum-based production
technologies. Applications served by the Company outside the semiconductor
industry include vacuum freeze-drying of pharmaceuticals and foods,
sterilization of medical appliances, and applications that involve advanced
thin-film manufacturing such as flat panel displays, magnetic and optical
storage media, solar cells, fiber optic cables and optical coatings. The Company
plans to continue to identify and develop products that address advanced
materials processing applications where gas management plays a critical role.

Leverage Global Infrastructure. As semiconductor device manufacturers have
become increasingly sensitive to the significant costs of system downtime, they
have required that suppliers offer comprehensive local repair service and close
customer support. Manufacturers require close support to enable them to repair,

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29

modify, upgrade and retrofit their equipment to improve yields and adapt to new
materials or processes. To meet these market requirements, MKS maintains a
worldwide sales and support organization with offices in 22 locations. The
Company currently manufactures its products at nine facilities in the United
States and abroad. The Company continues to devote significant resources to
expand and maintain its worldwide production and service capabilities to meet
the global demand for gas management instruments and components. The Company
believes that the ability to manufacture reliable instruments and components in
a cost-effective manner is critical to meet the demanding "just-in-time"
delivery requirements of its OEM and end-user customers. In 1998, the Company
plans to add manufacturing capabilities to its Austin, Texas and United Kingdom
facilities and further equip its cleanroom facilities in Andover and Methuen,
Massachusetts. The Company intends to open a sales and support facility in
Singapore in 1998.

PRODUCTS

MKS offers a full line of instruments and components that are used to
measure, control, analyze and isolate gases in semiconductor and other advanced
thin-film manufacturing processes. The Company supplies products in three
principal areas: (i) pressure and flow measurement and control instrumentation
products; (ii) vacuum gauges, valves and components; and (iii) gas analysis
instruments.

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The following schematic shows where MKS products are used in a typical
semiconductor manufacturing process.

[MANUFACTURING SCHEMATIC]
1. Ultraclean
Mini-Baratron
Pressure Transducer
and Local Display
Module
2. Automatic Pressure
Controller/
Regulator
3. Thermal Mass Flow
Controller or
Pressure-based Mass
Flow Controller
4. Gas Box Rate-of-Rise
In-situ Calibrator
5. Control and Shut-off
Valves
6. Direct Liquid
Injection --
Controller
7. Direct Liquid
Injection --
Micropump
8. Direct Liquid
Injection --
Vaporizer
9. RGA Mass
Spectrometer with
Software
10. Baratron Pressure
Switch
11. In Situ Diagnostics
Access Valve
12. Baratron Pressure
Transducer
13. Automatic
Downstream valve
Controller
14. Vacuum Foreline
15. In-line Valve
16. Convection Pirani
Gauge
17. Throttle Valve
18. Cold Cathode High
Vacuum Gauge or Hot
Cathode High Vacuum
Gauge
19. In-line Trap
20. Foreline/Exhaust
Line Heaters

[The schematic is the illustration of a typical process chamber, with
numerous MKS products surrounding the chamber. The products are as those listed
to the right of the schematic.]

PRESSURE AND FLOW MEASUREMENT AND CONTROL INSTRUMENTATION PRODUCTS

The Company designs and manufactures a wide range of pressure and flow
measurement and control instrumentation. Each product line consists of products
which are designed for a variety of pressure and flow ranges and accuracies.

Baratron Pressure Measurement Products. The Company's Baratron pressure
measurement products are high-resolution, variable capacitance pressure
measurement instruments and consist of five product lines that range from high
accuracy digital output instruments to simple electronic switches. These
products are typically used to measure the pressure of the gases being
distributed upstream of the process chamber, to measure process chamber pressure
and to measure pressures between the process chamber and the pump. Baratron
instruments measure pressures at ranges from two hundred times atmospheric
pressure to 10(-6) Torr. The Company believes it offers the widest range of
variable capacitance gas pressure measurement instruments in the semiconductor
and advanced thin-film materials processing industries.

A key feature of Baratron instruments is that they measure pressure
independent of gas composition, which is critical for precise pressure control
of semiconductor processes that involve gas mixtures. In these processes, there
is a need to control both pressure and gas mixture, but the pressure measurement
instrument must measure only the pressure of the sum of the gases in the
chamber, independent of gas composition. The Baratron line of instruments
enables users to achieve a highly accurate and repeatable measurement of gas
pressure. Pressure measurement, independent of gas composition, is also useful
in evacuation (removal of atmospheric gases) and backfilling (introduction of
specific amounts of several gases) applications, such as fluorescent bulb
manufacturing and gas laser fabrication.

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31

The following table shows the Company's principal Baratron pressure
measurement product lines:

BARATRON PRESSURE MEASUREMENT PRODUCTS
- --------------------------------------------------------------------------------

RANGES OF LIST
PRODUCT LINES TYPICAL APPLICATIONS DESCRIPTION PRICES
----------------------------- --------------------- ---------------------- ------------------

High accuracy pressure and CVD Instruments with $ 2,125 - $6,125
vacuum measurement PVD built-in temperature
instruments Etch stabilization
Pressure calibration features, for high
accuracy and high
temperature operation
- ----------------------------------------------------------------------------------------------------------
General purpose pressure and CVD Rugged instruments $450 - $3,600
vacuum measurement PVD with and without
instruments Etch built-in temperature
stabilization
features, for
reliable, accurate,
process measurement
- ----------------------------------------------------------------------------------------------------------
Ultra-clean high pressure and Gas Distribution Instruments with $650 - $950
vacuum measurement CVD ultra- clean surfaces
instruments Etch exposed to gas, for
high purity
applications
- ----------------------------------------------------------------------------------------------------------
General purpose "MINI" CVD Small footprint $625 - $1,700
pressure and vacuum Etch instruments for
measurement instruments accurate, general
purpose process
measurement
- ----------------------------------------------------------------------------------------------------------
Electronic switches ranging PVD Economical, stable $375 - $650
from atmosphere to vacuum CVD instrument providing
Etch "go/no-go" output for
pressure trip-points
and alarms
- ----------------------------------------------------------------------------------------------------------

The Company's list prices for its Baratron measurement products vary
depending upon accuracy, pressure range, operating temperature range, stability,
resolution and gas purity specifications.

Pressure Control Products. The Company's pressure control products consist
of analog and digital automatic pressure and vacuum control electronic
instruments and valves. These products enable precise control of process
pressure by electronically actuating valves which control the flow of gases in
and out of the process chamber to minimize the difference between desired and
actual pressure in the chamber. The electronic controllers vary from simple
analog units with precise manual tuning capability to state-of-the-art
self-tuning, digital signal processing controllers. The valve products vary from
small gas inlet valves to large exhaust valves.

In most cases, the Company's Baratron pressure measurement instruments
provide the pressure input to the pressure control device, providing the user
with an integrated closed-loop pressure control system. The Company's pressure
control products can also accept inputs from other measurement instruments,
enabling the control of gas input or exhaust based on parameters other than
pressure.

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32

PRESSURE AND VACUUM CONTROL PRODUCTS
- --------------------------------------------------------------------------------

RANGES OF LIST
PRODUCT LINES TYPICAL APPLICATIONS DESCRIPTION PRICES
----------------------------- --------------------- ---------------------- ------------------

Downstream automatic valve CVD Analog controllers, $850 - $2,000
controllers Etch self- tuning digital
controllers and
displayless self-
tuning controllers
- ----------------------------------------------------------------------------------------------------------
Downstream exhaust control CVD Non-sealing valves, $ 1,250 - $8,200
throttle valves Etch sealing valves, high
speed sealing valves,
microprocessor-based
smart throttle valves
and vane-type valves
- ----------------------------------------------------------------------------------------------------------
Upstream or downstream CVD Integrated sensor, $ 1,400 - $3,000
automatic controllers Etch valve and control
Implant electronics package
Backside wafer
cooling
- ----------------------------------------------------------------------------------------------------------
Upstream control valves Etch Elastomer and $450 - $1,500
Implant all-metal- sealed
Backside wafer valves
cooling
- ----------------------------------------------------------------------------------------------------------

The Company has recently introduced a line of integrated pressure
controllers that combine the functions of its Baratron pressure measurement
instrument, control electronics and valve into a three-inch footprint instrument
which can be placed directly on a gas line to control pressure either upstream
or downstream of the instrument. This addresses the need for smaller components,
saving valuable clean room space.

Flow Measurement and Control Products. The Company's flow measurement
products include gas, vapor and liquid flow measurement products based upon
thermal conductivity, pressure and direct liquid injection technologies. The
flow control products combine the flow measuring device with valve control
elements based upon solenoid, piezo-electric and piston pump technologies. The
products measure and control the mass flow rate of gases and vapors into the
process chamber. The Company's broad product lines include products that allow
the precise flow control of inert or corrosive gases, the control of low vapor
pressure gases, and heated liquid source materials, and the control of delicate,
advanced technology liquid sources and dissolved solid sources for next
generation devices.

The Company's line of thermal-based mass flow controllers includes
all-metal-sealed designs and ultra-clean designs for semiconductor applications
and general purpose controllers for applications where all-metal-sealed
construction is not required. The Company has also developed pressure-based mass
flow controllers, based on Baratron pressure instrument measurement and control
technology, which use flow restrictors in the gas line to transform pressure
control into mass flow control.

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33

FLOW MEASUREMENT AND CONTROL PRODUCTS
- --------------------------------------------------------------------------------

RANGES OF LIST
PRODUCT LINES TYPICAL APPLICATIONS DESCRIPTION PRICES
----------------------------- --------------------- ---------------------- ------------------

Direct liquid injection CVD Pumps and vaporizes $8,500 - $24,900
system liquid metal and
dielectric precursers
into process chamber
- ----------------------------------------------------------------------------------------------------------
Gas box rate of rise In situ calibration Measures pressure $7,500
calibrator of mass flow increase with time in
controllers a known volume
- ----------------------------------------------------------------------------------------------------------
Pressure-based vapor delivery CVD Measures and controls $4,600 - $12,400
systems flow of low pressure
vapors into chamber
- ----------------------------------------------------------------------------------------------------------
Pressure-based mass flow CVD Gas flow controller $2,700
controllers Implant consisting of Baratron
sensor, control valve,
orifice, and
electronics
- ----------------------------------------------------------------------------------------------------------
Ultra-clean all-metal-sealed CVD Gas flow controller $1,400 - $13,850
thermal mass flow controllers PVD consisting of sensor,
Etch control valve and
electronics
- ----------------------------------------------------------------------------------------------------------
General purpose elastomer- CVD Gas flow controller $875 - $2,000
sealed mass flow controllers Etch consisting of sensor,
control valve and
electronics
- ----------------------------------------------------------------------------------------------------------

Certain new materials required for the next generation of semiconductor
devices are difficult to control using traditional thermal mass flow technology.
To control these new materials, the Company has designed a direct liquid
injection subsystem ("DLI") which pumps a precise volume of liquid into a
vaporizer, which in turn supplies a controlled flow of vapor into the process
chamber. The DLI pump and vaporizer are presently used principally for research
and development applications for next generation semiconductor device conductors
and insulators, such as copper and parylene.

The Company's flow measurement products also include an in situ calibration
system which independently measures mass flow and compares this measurement to
that of the process chamber mass flow controller. The demand for the Company's
calibration system is driven by the increasingly stringent process control needs
of the semiconductor industry and the need to reduce costly downtime resulting
from stopping operations to address mass flow controller problems.

VACUUM GAUGES, VALVES AND COMPONENTS

The Company is a leading supplier of vacuum gauges, valves and components.
The Company offers a wide range of vacuum instruments consisting of vacuum
measurement sensors and associated power supply and readout units. These vacuum
gauges measure phenomena that are related to the level of pressure in the
process chamber and downstream of the process chamber between the chamber and
the pump, but, unlike Baratron pressure measurement instruments, do not measure
pressure directly. These gauges are used to measure vacuum at pressures lower
than those measurable with a Baratron pressure measurement instrument or to
measure vacuum in the Baratron pressure measurement instrument range where less
accuracy is required. The Company's indirect pressure gauges use thermal
conductivity and ionization gauge technologies to measure pressure from
atmospheric pressure to 10(-9)Torr. The Company's Baratron pressure measurement
instruments, together with its vacuum gauges are capable of measuring the full
range of pressures used in semiconductor and other thin-film manufacturing
processes from 200 times atmospheric pressure to 10(-9)Torr.

31
34

The Company also manufactures a wide range of vacuum gauge instruments in
which the associated electronics are packaged with the vacuum sensor, reducing
panel space and installation cost. The Company offers both analog and digital
versions of these vacuum gauge transducers.

VACUUM GAUGES, VALVES AND COMPONENT PRODUCTS
- --------------------------------------------------------------------------------

TYPICAL RANGES OF LIST
PRODUCT LINES APPLICATIONS DESCRIPTION PRICES
----------------------------- ---------------- --------------------------- ------------------

Cold cathode and hot filament PVD Electronic gauges to $600 - $6,200
vacuum gauges Etch measure pressure down to
10(-9) Torr
- ---------------------------------------------------------------------------------------------------------
Convection gauges PVD Electronic gauges to $200 - $725
CVD measure from atmosphere
Etch down to 10(-3) Torr
- ---------------------------------------------------------------------------------------------------------
Right-angle and in-line shut- PVD High vacuum rapid action $275 - $4,500
off valves CVD poppet valves
Etch
Implant
- ---------------------------------------------------------------------------------------------------------
Vacuum traps CVD Contaminant particle trap $1,800 - $2,500
Etch
- ---------------------------------------------------------------------------------------------------------
Other vacuum components PVD Flanges, fittings and $325 - $1,650
CVD heated lines
Etch
Implant
- ---------------------------------------------------------------------------------------------------------

The Company's vacuum valves are used on the gas lines between the process
chamber and the pump downstream of the process chamber for CVD, PVD, implant and
etch processes. The Company's vacuum components consist of fittings, flanges,
traps and heated lines that are used downstream from the process chamber to
provide leak free connections and to prevent condensable materials from
depositing particles near or back into the chamber. The manufacture of small
geometry devices cannot tolerate contamination from atmospheric pressure or
particles. The Company's vacuum components are designed to minimize such
contamination and thus increase yields and uptimes.

GAS ANALYSIS INSTRUMENTS

The Company's gas analysis instruments are sold primarily to the
semiconductor industry. The residual gas analysis product lines include a
quadrapole mass spectrometer sensor with built-in electronics to analyze the
composition of background and process gases in the process chamber. The
Company's ORION process monitoring system is a sophisticated quadrapole mass
spectrometer process analyzer for statistical process monitoring of
manufacturing processes operating from very low pressures to atmospheric
pressure. These instruments are provided both as portable laboratory systems and
as process gas monitoring systems used in the diagnosis of semiconductor
manufacturing process systems. The gas monitoring systems can indicate out-
of-bounds conditions, such as the presence of undesirable atmospheric gases,
water vapor or out-of-tolerance amounts of specific gases in the process
chamber, enabling operators to diagnose and repair faulty equipment. The
Company's gas sampling systems provide a turn-key solution for withdrawing gases
from chambers at relatively high pressures for introduction into the low
pressure gas analyzers. Next generation, smaller geometry and larger wafer size
device manufacturing processes are expected to require sophisticated gas
analysis instruments and or monitoring equipment to ensure tighter process
control and earlier diagnosis of equipment failures.

MARKETS AND APPLICATIONS

The Company estimates that approximately two-thirds of its sales in the
first nine months of 1997 were made to the semiconductor industry. The Company's
products are also used in other markets and applications

32
35

including the manufacture of flat panel displays, magnetic and optical storage
media, solar cells, fiber optic cables and optical coatings. The major markets
for the Company's products include:

Semiconductor Manufacturing

The Company's products are sold to semiconductor device manufacturers and
semiconductor equipment OEMs. The Company's products are used in the major
front-end process technologies such as PVD, CVD, etch and ion implantation and
for process facility applications such as gas distribution, clean room pressure
control and vacuum distribution. The Company anticipates that the semiconductor
manufacturing market will continue to account for a substantial portion of its
sales. While the semiconductor device manufacturing market is global, the major
semiconductor equipment OEMs are concentrated in the U.S., Japan and Europe.

Flat Panel Display Manufacturing

The Company's products are used in the manufacture of flat panel displays,
which require the same or similar fabrication processes as semiconductor
manufacturing. The dominant fabrication process is CVD, which uses the same or
similar Company products as CVD for semiconductor manufacturing. The Company
sells its products both to OEMs and to end-users in the flat panel display
market. The transition to larger panel size and higher definition is driving the
need for defect reduction which requires tighter process controls.

Magnetic and Optical Storage Media

The Company's products are used in the manufacture of CD-ROMs, CDs, hard
disks, and DVDs (digital video disks), typically in PVD applications. The
Company's products are also used in the production of thin-film heads where ion
beam technology is typically used. The transition to higher density storage
capacity requires manufacturing processes incorporating tighter process
controls. While storage media manufacturing is global, the major manufacturers
are concentrated in Japan and the Asia-Pacific region and equipment OEMs are
concentrated in the U.S., Japan and Europe.

Optical Fiber and Optical Coating

The Company's products are used in optical fiber and optical coating film
processes. The Company's products are sold both to coating equipment OEMs and to
manufacturers of products made using optical thin-films processes. Optical
fibers used for data transmission are manufactured using CVD processes similar
to those used in semiconductor manufacturing. The requirement for greater data
transmission is driving the need for tighter control of optical fiber coating
processes. Optical thin films for eyeglasses, solar panels and architectural
glass are deposited using evaporation, CVD or PVD in processes similar to those
used in semiconductor manufacturing. Optical fiber manufacturing and optical
thin-film processing are concentrated in the U.S., Japan and Europe.

Other Markets

The Company's pressure and flow measurement and control instruments are
also used in CVD and PVD processes for the application of thin films to harden
tool bit surfaces, in the production of diamond thin films, in plasma processes
used to sterilize medical instruments, in vacuum freeze drying of
pharmaceuticals, foods and beverages and in vacuum processes involved in light
bulb and gas laser manufacturing. The major OEMs and manufacturers are
concentrated in the U.S., Japan and Europe.

CUSTOMERS

The Company has more than 4,000 active customers worldwide (having
purchased products during the past year), including most major semiconductor
device manufacturers, semiconductor equipment OEMs and industrial and research
laboratories. The Company's largest customers consist primarily of leading
semiconductor equipment OEMs and semiconductor device manufacturers, including
Applied Materials, Eaton, Hitachi, Lam Research, TEL and ULVAC. In 1995 and 1996
and the first nine months of 1997, sales to the Company's top five customers
accounted for approximately 24%, 26% and 31%, respectively, of the Company's

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36

net sales. During the same periods, international sales represented
approximately 32%, 30% and 28% of total net sales, respectively. During the
first nine months of 1997, Applied Materials accounted for approximately 21% of
the Company's net sales. Applied Materials purchases products from the Company
under the terms of an agreement, with no minimum purchase requirements, that
expires in 2002.

SALES, MARKETING AND SUPPORT

The Company's worldwide sales, marketing and support organization is
critical to its strategy of maintaining close relationships with semiconductor
equipment OEMs and device manufacturers. The Company sells its products
primarily through its direct sales force which consists of 134 employees in 22
offices in Canada, France, Germany, Japan, Korea, the Netherlands, the United
Kingdom and the United States. This direct sales force is supplemented by sales
representatives and agents in China, India, Israel, Italy, Singapore and Taiwan
and in selected domestic cities. The Company maintains a marketing staff of 24
employees to identify customer requirements, assist in product planning and
specifications and to focus on future trends in the semiconductor and other
markets.

As semiconductor device manufacturers have become increasingly sensitive to
the significant costs of system downtime they have required that suppliers offer
comprehensive local repair service and close customer support. Manufacturers
require close support to enable them to repair, modify, upgrade and retrofit
their equipment to improve yields and adapt new materials or processes. To meet
these market requirements, the Company maintains a worldwide sales and support
organization with offices in 22 locations. Technical support is provided by
applications engineers located at offices in Arizona, California, Colorado,
Massachusetts, Oregon and Texas, as well as Canada, France, Germany, India,
Israel, Italy, Japan, Korea, the Netherlands, Singapore, Taiwan and the United
Kingdom. Repair and calibration services are provided at 14 service depots
located both in the United States and abroad. The Company provides warranties
from one to three years, depending upon the type of product. In addition, the
Company offers training programs for its customers in a wide range of vacuum and
gas handling technologies.

MANUFACTURING

The Company believes that the ability to manufacture reliable gas
management instruments and components in a cost-effective manner is critical to
meeting the demanding requirements of its OEM and end-user customers. The
Company monitors and analyzes product lead times, warranty data, process yields,
supplier performance, field data on mean time between failures, inventory turns,
repair response time and other indicators so that it may continuously improve
its manufacturing processes. The Company has adopted a total quality management
process. Certain of the Company's major manufacturing and service operations are
ISO 9001 certified and the Company is planning to implement ISO 9000 for the
remainder of its U.S. and European operations by the end of 1998.

The Company is devoting significant financial and management resources to
maintain and expand its worldwide production and service capabilities to meet
the global demand for gas management instruments and components. The Company
believes that the ability to manufacture reliable instruments and components in
a cost-effective manner is critical to meet the demanding "just-in-time"
delivery requirements of its OEM and end-user customers. Due to the short time
between the receipt of orders and shipments, the Company normally operates with
a level of backlog that is not significant. The Company currently manufactures
its products at nine facilities in the United States and abroad. The Company
plans in 1998 to add manufacturing capabilities to its Austin, Texas and United
Kingdom facilities and further equip its cleanroom facilities in Andover and
Methuen, Massachusetts.

The Company's principal manufacturing activities consist of precision
assembly, test, calibration, welding and machining activities. The Company
subcontracts a portion of its assembly, machining and printed circuit board
assembly and testing. All other assembly, test and calibration functions are
performed by the Company. Critical assembly activities are performed in
cleanroom environments at the Company's facilities.

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37

RESEARCH AND DEVELOPMENT

The Company's research and development efforts are directed toward
developing and improving the Company's gas management instruments and components
for semiconductor and advanced thin-film processing applications and identifying
and developing products for new applications for which gas management plays a
critical role. The Company has undertaken an initiative to involve its
marketing, engineering, manufacturing and sales personnel in the concurrent
development of new products in order to reduce the time to market for new
products. The Company's employees also work closely with its customers'
development personnel. These relationships help the Company identify and define
future technical needs on which to focus its research and development efforts.
In addition, the Company participates in SEMI/SEMATECH, a consortium of
semiconductor equipment suppliers, to assist in product development and
standardization of product technology, and it supports research at academic
institutions targeted at advances in materials science and semiconductor process
development.

As of September 30, 1997, the Company employed a research and development
staff of 131 employees. In 1995, 1996 and the first nine months of 1997, the
Company's research and development expenditures were approximately $10.9
million, $14.2 million and $10.3 million, respectively, representing
approximately 7.0%, 8.3% and 7.7% of net sales.

COMPETITION

The market for the Company's products is highly competitive. Principal
competitive factors include historical customer relationships; product quality,
performance and price; breadth of product line; manufacturing capabilities; and
customer service and support. While the Company believes that it competes
favorably with respect to these factors, there can be no assurance that it will
continue to do so.

The Company encounters substantial competition in each of its product lines
from a number of competitors, although no one competitor competes with the
Company across all product lines. Certain of the Company's competitors have
greater financial and other resources than the Company. In some cases, the
competitors are smaller than the Company, but well established in specific
product niches. Millipore offers products that compete with the Company's
pressure and flow products. AERA, STEC and Unit Instruments each offer products
that compete with the Company's mass flow control products. NOR-CAL and MDC each
offer products that compete with the Company's vacuum components.
Leybold-Inficon offers products that compete with the Company's vacuum measuring
and gas analysis products. Spectra Instruments offers products that compete with
the Company's gas analysis products. In some cases, particularly with respect to
mass flow controllers, end-user semiconductor device manufacturers may direct
semiconductor equipment OEMs to use a specified supplier's product in their
equipment. Accordingly, the Company's success depends in part on its ability to
have semiconductor device manufacturers specify that its products be used at
their fabrication facilities and the Company may encounter difficulties in
changing established relationships of competitors with a large installed base of
products at such customers' fabrication facilities. In addition, the Company's
competitors can be expected to continue to improve the design and performance of
their products. There can be no assurance that competitors will not develop
products that offer price or performance features superior to those of the
Company's products.

PATENTS AND OTHER INTELLECTUAL PROPERTY RIGHTS

The Company relies on a combination of patent, copyright, trademark and
trade secret laws and license agreements to establish and protect its
proprietary rights. The Company has 37 U.S. patents and 22 U.S. patent
applications pending. Foreign counterparts of certain of these applications have
been filed or may be filed at the appropriate time. While the Company believes
that certain patents may be important for certain aspects of its business, the
Company believes that its success depends more upon close customer contact,
innovation, technological expertise, responsiveness and worldwide distribution.

The Company requires each of its employees, including its executive
officers, to enter into standard agreements pursuant to which the employee
agrees to keep confidential all proprietary information of the Company and to
assign to the Company all inventions made while in the employ of the Company.

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38

EMPLOYEES

As of September 30, 1997, the Company employed 1,126 persons, including 711
in manufacturing, 131 in research and development, 284 in marketing, sales,
support and general and administrative activities. Management believes that the
Company's ongoing success depends upon its continued ability to attract and
retain highly skilled employees.

FACILITIES

The Company's corporate headquarters are located in Andover, Massachusetts.
Manufacturing and other operations are conducted in a number of locations
worldwide. The following table provides information concerning the Company's
principal owned and leased facilities:

LOCATION SQ. FT. ACTIVITY PRODUCTS MANUFACTURED
----------------------- ---------- --------------------------------- -----------------------

Andover, Massachusetts 82,000 Headquarters, Manufacturing, Baratron pressure
Customer Support and Research & measurement products
Development

Boulder, Colorado 86,000 Manufacturing, Customer Support, Vacuum gauges, valves
Service and Research & and components
Development

Methuen, Massachusetts 85,000 Manufacturing, Customer Support, Pressure control and
Service and Research & flow measurement and
Development control products

Lawrence, Massachusetts 40,000 Manufacturing Baratron pressure
measurement products

Tokyo, Japan 20,700 Manufacturing, Sales, Customer Mass flow measurement
Support, Service and Research & and control products
Development

Walpole, Massachusetts 20,000 Manufacturing, Customer Support, Gas analysis
Service and Research & instruments
Development

Munich, Germany 14,100 Manufacturing, Sales, Customer Mass flow measurement
Support, Service and Research & and control products
Development

Le Bourget, France 13,700 Sales, Customer Support and
Service

Santa Clara, California 13,000 Sales, Customer Support and
Service

Richardson, Texas 11,000 Manufacturing, Sales, Customer Subassemblies
Support and Service

Austin, Texas 8,200 Sales, Customer Support and
Service

Seoul, Korea 4,760 Manufacturing, Sales, Customer Mass flow measurement
Support and Service and control products

Liverpool, U.K. 2,500 Sales, Customer Support and
Service

Ottawa, Canada 2,095 Sales, Customer Support and
Service

LEGAL PROCEEDINGS

The Company is not a party to any material legal proceedings.

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39

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of the Company as of October 31, 1997
are as follows:

NAME AGE POSITION
- ----------------------------------- --- ----------------------------------------------------

John R. Bertucci................... 56 Chairman of the Board of Directors, President and
Chief Executive Officer
Ronald C. Weigner.................. 52 Vice President and Chief Financial Officer
John J. Sullivan................... 62 Executive Vice President of Technology
William D. Stewart................. 53 President, HPS
Leo Berlinghieri................... 44 Vice President, Customer Support Operations
Richard S. Chute(1)................ 59 Director
Owen W. Robbins(2)................. 68 Director
Robert J. Therrien(1).............. 63 Director
Louis P. Valente(1)(2)............. 67 Director

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

(1) Member of Compensation Committee.

(2) Member of Audit Committee.

Mr. Bertucci has served as President of the Company since 1974 and has been
Chief Executive Officer and Chairman of the Board of Directors since November
1995. From 1970 to 1974, he was Vice President and General Manager of the
Company. Mr. Bertucci has an M.S. in Industrial Administration and a B.S. in
Metallurgical Engineering from Carnegie-Mellon University. Mr. Bertucci is also
a director of Applied Science and Technology Corporation.

Mr. Weigner has served as Vice President and Chief Financial Officer of the
Company since November 1995. From September 1991 until November 1995, he was
Vice President and Corporate Controller of the Company and from 1980 to 1993 he
was Corporate Controller. Mr. Weigner is a certified public accountant and has a
B.S. in Business Administration from Boston University.

Mr. Sullivan has served as Executive Vice President of Technology of the
Company since March 1995. From 1982 to March 1995, Mr. Sullivan was Vice
President of Marketing of the Company and from 1975 to 1982 he was Vice
President of Sales and Marketing of the Company. Mr. Sullivan has an M.S. and a
B.S. in physics from Northeastern University.

Mr. Stewart has served as President of HPS, the Company's Vacuum Gauges,
Valves and Components product group since the Company's acquisition of HPS
Corporation in 1986. Mr. Stewart co-founded HPS in 1976. Mr. Stewart has an
M.B.A. from Northwestern University and a B.S. in Business Administration from
the University of Colorado. Mr. Stewart also serves on the Board of Directors of
the Janus Fund.

Mr. Berlinghieri has served as Vice President of Customer Support
Operations for the Company since November 1995. From 1980 to November 1995, Mr.
Berlinghieri served in various management positions for the Company, including
Manufacturing Manager, Production & Inventory Control Manager, and Director of
Customer Support Operations. Mr. Berlinghieri is also Treasurer of the TQM-Base
Council, Inc., (a non-profit quality management consortium comprised of
Boston-area semiconductor and capital equipment manufacturers).

Mr. Chute has served as a director of the Company since 1974. Mr. Chute has
been a member of the law firm of Hill & Barlow, a professional corporation,
since November 1971.

Mr. Robbins has served as a director of the Company since February 1996.
Mr. Robbins was Executive Vice President of Teradyne, Inc., a manufacturer of
electronic test systems and backplane connection systems used in the electronics
and telecommunications industries from March 1992 to May 1997, and its Chief
Financial Officer from February 1980 to May 1997. Mr. Robbins has served on the
Board of Directors of Teradyne since March 1992 and was Vice Chairman from
January 1996 to May 1997.

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40

Mr. Therrien has served as a director of the Company since February 1996.
Mr. Therrien has been President and Chief Executive Officer of Brooks
Automation, Inc., a manufacturer of semiconductor processing equipment, since
1989.

Mr. Valente has served as a director of the Company since February 1996.
Mr. Valente was a Senior Vice President of Acquisitions, Mergers and Investments
of EG&G, Inc. from 1991 until July 1995. Mr. Valente has been President and
Chief Executive Officer of Palomar Medical Technologies, Inc. ("PMT"), a company
which designs, manufactures and markets cosmetic lasers, from May 1997 to
September 1997, its Chairman of the Board of Directors and Chief Executive
Officer from September 1997 to present and a director of PMT since February
1997. Mr. Valente is also a director of Micrion Corporation.

Executive officers of the Company are elected by the Board of Directors on
an annual basis and serve until their successors are duly elected and qualified.
There are no family relationships among any of the executive officers of the
Company.

COMMITTEES OF THE BOARD OF DIRECTORS

The Compensation Committee consists of Messrs. Chute, Therrien and Valente.
The Compensation Committee reviews and evaluates the salaries, supplemental
compensation and benefits of all officers of the Company, reviews general policy
matters relating to compensation and benefits of employees of the Company and
makes recommendations concerning these matters to the Board of Directors. The
Compensation Committee also administers the Company's stock option and stock
purchase plans. See "-- Stock Plans."

The Audit Committee consists of Messrs. Robbins and Valente. The Audit
Committee reviews with the Company's independent auditors the scope and timing
of their audit services, the auditor's report on the Company's financial
statements following completion of their audit and the Company's policies and
procedures with respect to internal accounting and financial controls. In
addition, the Audit Committee will make annual recommendations to the Board of
Directors for the appointment of independent auditors for the ensuing year.

DIRECTOR COMPENSATION

Directors of the Company are reimbursed for expenses incurred in connection
with their attendance at Board and committee meetings. Directors who are not
employees of the Company are paid an annual fee of $10,000 and $1,000 for each
Board meeting they attend and $500 for each committee meeting they attend which
is not held on the same day as a Board meeting. Messrs. Chute, Robbins, Therrien
and Valente, the Company's four non-employee directors, have each been granted
options, under the Company's 1996 Director Stock Option Plan, to purchase 5,125
shares of Common Stock at an exercise price of $6.64 per share and will be
eligible for future grants under the Company's 1997 Director Stock Option Plan.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee is currently comprised of Messrs. Chute,
Therrien and Valente. No member of the Compensation Committee was at any time
during the fiscal year ended December 31, 1996 or at any other time an employee
of the Company. No executive officer of the Company serves as a member of the
board of directors or compensation committee of any other entity which has one
or more executive officers serving as a member of the Company's Board of
Directors or Compensation Committee.

EXECUTIVE COMPENSATION

The following table sets forth information with respect to the compensation
of the Company's Chief Executive Officer and each of the four other most highly
compensated executive officers for the year ended December 31, 1996 (the "Named
Executive Officers").

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SUMMARY COMPENSATION TABLE

LONG-TERM
COMPENSATION
------------------
ANNUAL COMPENSATION AWARDS
------------------------------------ ---------------------
OTHER ANNUAL SECURITIES UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION OPTIONS COMPENSATION(2)
- --------------------------- -------- -------- ------------ --------------------- ---------------

John R. Bertucci........... $319,712 -- -- $15,942
President and Chief
Executive Officer
Ronald C. Weigner.......... 153,555 -- 53,031 12,000
Vice President and Chief
Financial Officer
John J. Sullivan........... 135,962 $ 30,959(1) -- 11,957
Executive Vice President
of Technology
William D. Stewart......... 166,250 -- 32,098 12,000
President, HPS
Leo Berlinghieri........... 121,755 -- 30,338 7,500
Vice President, Customer
Support Operations

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

(1) Includes a transportation allowance of $21,127.

(2) Includes a premium of $3,942 paid on a life insurance policy, and payments
of $12,000 paid into a 401(k) plan for Mr. Bertucci and payments paid into a
401(k) plan for Messrs. Weigner, Sullivan, Stewart and Berlinghieri.

OPTION GRANTS

The following table contains information concerning the stock option grants
made to each of the Named Executive Officers for the year ended December 31,
1996.

OPTION GRANTS IN LAST FISCAL YEAR

POTENTIAL
REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
----------------------------------------------------------- ANNUAL RATES OF
NUMBER OF PERCENT OF STOCK
SECURITIES TOTAL PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED EXERCISE OR FOR OPTION TERM (2)
OPTIONS TO EMPLOYEES BASE PRICE -------------------
NAME GRANTED(1) IN FISCAL YEAR PER SHARE EXPIRATION DATE 5% 10%
- --------------------------- --------- --------------- ----------- --------------- -------- --------

John R. Bertucci........... -- -- -- -- -- --
Ronald C. Weigner.......... 53,031 9.82% $6.64 11/30/05 $200,965 $498,926
John J. Sullivan........... -- -- -- -- -- --
William D. Stewart......... 32,098 5.94 6.64 11/30/05 121,642 301,994
Leo Berlinghieri........... 30,338 5.62 6.64 11/30/05 114,972 285,435

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

(1) These options become exercisable on a quarterly basis over a four year
period.

(2) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock price appreciation of 5% and 10%
compounded annually from the date the respective options were granted to
their expiration date. These numbers are calculated based on rules
promulgated by the Securities and Exchange Commission and do not reflect the
Company's estimate of future stock price growth. Actual gains, if any, on
stock option exercises and Common Stock are dependent on the timing of such
exercise and the future performance of the Common Stock.

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OPTION EXERCISES AND HOLDINGS

The following table sets forth information concerning option exercises and
option holdings for the fiscal year ended December 31, 1996 with respect to each
of the Named Executive Officers.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES

NUMBER OF SHARES
UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT YEAR-END AT YEAR-END(1)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------------- ----------- ------------- ----------- -------------

John R. Bertucci................................. -- -- -- --
Ronald C. Weigner................................ 10,607 42,424 -- --
John J. Sullivan................................. -- -- -- --
William D. Stewart............................... 6,420 25,678 -- --
Leo Berlinghieri................................. 6,068 24,270 -- --

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

(1) Values are based on the difference between the fair market value of the
underlying securities at December 31, 1996 ($6.64 per share) and the
exercise price of each option listed (in each case, $6.64 per share).

In January 1997, the Company granted options to purchase 31,369, 52,302 and
54,062 shares of Common Stock to Messrs. Weigner, Stewart and Berlinghieri,
respectively, at an exercise price of $6.64 per share.

STOCK PLANS

1995 Stock Incentive Plan

The Company's Amended and Restated 1995 Stock Incentive Plan (the "1995
Stock Plan") provides for the grant of incentive stock options, nonstatutory
stock options, stock appreciation rights, performance shares and awards of
restricted stock and unrestricted stock ("Awards"). An aggregate of 2,500,000
shares of Common Stock may be issued pursuant to the 1995 Stock Plan (subject to
adjustment for certain changes in the Company's capitalization). No Award may be
made under the 1995 Stock Plan after November 30, 2005.

The 1995 Stock Plan is administered by the Board of Directors and the
Compensation Committee. The Board has the authority to grant Awards under the
1995 Stock Plan and to accelerate, waive or amend certain provisions of
outstanding Awards. The Board has authorized the Compensation Committee to
administer certain aspects of the 1995 Stock Plan and has authorized the Chief
Executive Officer of the Company to grant Awards to non-executive officer
employees. The maximum number of shares represented by such Awards may not
exceed 300,000 shares in the aggregate or 20,000 shares to any one employee.

Incentive Stock Options and Nonstatutory Options. Optionees receive the
right to purchase a specified number of shares of Common Stock at some time in
the future at an option price and subject to such terms and conditions as are
specified at the time of the grant. Incentive Stock Options and options that the
Board of Directors or Compensation Committee intends to qualify as
performance-based compensation under Section 162(m) of the Code may not be
granted at an exercise price less than the fair market value of the Common Stock
on the date of grant (or less than 110% of the fair market value in the case of
incentive stock options granted to optionees holding 10% or more of the voting
stock of the Company). All other options may be granted at an exercise price
that may be less than, equal to or greater than the fair market value of the
Common Stock on the date of grant.

Stock Appreciation Rights and Performance Shares. A stock appreciation
right ("SAR") is based on the value of Common Stock and entitles the SAR holder
to receive consideration to the extent that the fair market value on the date of
exercise of the shares of Common Stock underlying the SAR exceeds the fair

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43

market value of the underlying shares on the date the SAR was granted. A
performance share award entitles the recipient to acquire shares of Common Stock
upon the attainment of specified performance goals.

Restricted and Unrestricted Stock. Restricted stock awards entitle
recipients to acquire shares of Common Stock, subject to the right of the
Company to repurchase all or part of such shares at their purchase price from
the recipient in the event that the conditions specified in the applicable stock
award are not satisfied prior to the end of the applicable restriction period
established for such award. The Company may also grant (or sell at a purchase
price not less than 85% of the fair market value on the date of such sale) to
participants shares of Common Stock free of any restrictions under the 1995
Stock Plan.

All of the employees, officers, directors, consultants and advisors of the
Company and its subsidiaries who are expected to contribute to the Company's
future growth and success are eligible to participate in the 1995 Stock Plan.

Section 162(m) of the Code disallows a tax deduction to public companies
for certain compensation in excess of $1 million paid to a company's chief
executive officer or to any of the four other most highly compensated executive
officers. Certain compensation, including "performance-based compensation," is
not included in compensation subject to the $1 million limitation. The 1995
Stock Plan limits to 900,000 the maximum number of shares of Common Stock with
respect to which Awards may be granted to any employee in any calendar year.
This limitation is intended to preserve the tax deductions to the Company that
might otherwise be unavailable under Section 162(m) with respect to certain
Awards.

Prior to the date of this Prospectus, the Company plans to grant options
(to vest 20% after one year and 5% per quarter thereafter) to purchase
approximately 350,000 shares of Common Stock to employees of the Company, at an
exercise price equal to the initial public offering price.

1997 Employee Stock Purchase Plan

The Company's 1997 Employee Stock Purchase Plan (the "Purchase Plan")
authorizes the issuance of up to an aggregate of 300,000 shares of Common Stock
to participating employees. The Company will make one or more offerings
("Offerings") to employees to purchase Common Stock under the Purchase Plan.
Offerings under the Purchase Plan commence on June 1 and December 1 and
terminate, respectively on November 30 and May 31. During each Offering, the
maximum number of shares which may be purchased by a participating employee is
determined on the first day of the Offering period under a formula whereby 85%
of the market value of a share of Common Stock on the first day of the Offering
period is divided into an amount equal to 10% of the employee's annualized
compensation (or such lower percentage as may be established by the Compensation
Committee) for the immediately preceding six-month period. An employee may elect
to have up to 10% deducted from his or her regular salary (or such lower
percentage as may be established by the Compensation Committee) for this
purpose. The price at which an employee's option is exercised is the lower of
(i) 85% of the closing price of the Common Stock on the Nasdaq National Market
on the day that the Offering commences or (ii) 85% of the closing price on the
day that the Offering terminates.

The Purchase Plan is administered by the Board of Directors and the
Compensation Committee. With certain exceptions, all eligible employees,
including directors and officers, regularly employed by the Company for at least
six months on the applicable Offering commencement date are eligible to
participate in the Purchase Plan. The Purchase Plan is intended to qualify as an
"employee stock purchase plan" as defined in Section 423 of the Code.

1997 Director Stock Option Plan

The Company's 1997 Director Stock Option Plan (the "1997 Director Plan")
authorizes the issuance of up to an aggregate of 200,000 shares of Common Stock.
The 1997 Director Plan is administered by the Company's Board of Directors.
Options are granted under the 1997 Director Plan only to directors of the
Company who are not employees of the Company ("eligible directors"). Under the
1997 Director Plan, prior to the date of this Prospectus each existing eligible
director will receive an option to purchase 7,000 shares of Common Stock at an
exercise price equal to the initial public offering price and future
non-employee directors will receive an option to purchase 7,500 shares of Common
Stock upon their initial election to the Board of

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44

Directors ("Initial Options"). Each Initial Option shall vest in twelve equal
quarterly installments following the date of grant. On the date of each annual
meeting of the stockholders, options will be automatically granted to each
eligible director then in office ("Annual Options"). Each Annual Option will
entitle the holder to purchase 4,000 shares of Common Stock. Each Annual Option
will become exercisable on the day prior to the first annual meeting of
stockholders following the date of grant (or if no such meeting is held within
13 months after the date of grant, on the 13-month anniversary of the date of
grant). The exercise price of all options granted under the 1997 Director Plan
is equal to the fair market value of the Common Stock on the date of grant.
Options granted under the 1997 Director Plan terminate upon the earlier of three
months after the optionee ceases to be a director of the Company or ten years
after the grant date. In the event of a Change in Control (as defined in the
1997 Director Plan), the vesting of all options then outstanding would be
accelerated in full and any restrictions on exercising outstanding options would
terminate.

The Company's 1996 Director Stock Option Plan, under which options have
been granted to four non-employee directors of the Company, has been terminated.
See "-- Director Compensation."

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45

CERTAIN TRANSACTIONS

Mr. Chute a director of the Company, the Company's Clerk, and a co-trustee
of certain of the Bertucci Family Trusts (See "Principal Stockholders") and Mr.
Thomas H. Belknap, a co-trustee of certain of the Bertucci Family Trusts, are
attorneys at the law firm of Hill & Barlow, a professional corporation. Hill &
Barlow has provided legal services to the Company during the fiscal year ended
December 31, 1996 for which it was compensated by the Company in the aggregate
amount of $189,000.

Mr. Stewart, the President of HPS, is the general partner of Aspen
Industrial Park Partnership ("Aspen"). On October 12, 1989 the Company entered
into a lease with Aspen for certain facilities occupied by the Company's Vacuum
Gauges, Valves and Components product group in Boulder, Colorado. The Company
pays Aspen approximately $342,000 annually to lease such facilities.

Effective July 1, 1987, the Company elected to be treated as an S
corporation for federal income tax purposes. As a result, the Company currently
pays no federal, and certain state, income tax and all of the earnings of the
Company are subject to federal, and certain state, income taxation directly at
the stockholder level. The Company's S corporation status will terminate upon
the closing of this offering, at which time the Company will become subject to
corporate income taxation under Subchapter C of the Code. In 1996 and in the
first nine months of 1997, the Company distributed $14.5 million and $6.4
million, respectively, of undistributed S corporation earnings to its
stockholders. The Company expects to make additional distributions of
approximately $5.5 million prior to the closing of this offering. As soon as
practicable following the closing of the offering, the Company intends to make a
distribution to the holders of record on the day prior to the closing of this
offering in an amount equivalent to the AA Account. As of September 30, 1997,
the outstanding balance of the AA Account was approximately $30.2 million and
such balance is expected to increase in the period from October 1, 1997 through
the closing of the offering. See "S Corporation And Termination of S Corporation
Status."

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PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of September 30, 1997, and as
adjusted to reflect the sale of shares offered hereby, by (i) each of the
directors of the Company, (ii) each of the Named Executive Officers, (iii) each
person or entity known to the Company to own beneficially more than 5% of the
Company's Common Stock and (iv) all directors and executive officers as a group.
Except as indicated below, none of these entities has a relationship with the
Company or, to the knowledge of the Company, any Underwriters of this offering
or their respective affiliates. Unless otherwise indicated, each person or
entity named in the table has sole voting power and investment power (or shares
such power with his or her spouse) with respect to all shares of capital stock
listed as owned by such person or entity.

PERCENTAGE OF COMMON STOCK
NUMBER SHARES OUTSTANDING(1)(2)
BENEFICIALLY -----------------------------------
NAME OF BENEFICIAL OWNER OWNED(1) BEFORE OFFERING AFTER OFFERING
- -------------------------------------------- ---------------- --------------- --------------

John R. Bertucci(3)......................... 11,507,940 95.62% 71.77%
Ronald C. Weigner(4)........................ 29,540 * *
John J. Sullivan(5)......................... 409,340 3.40 2.55
William D. Stewart(4)....................... 29,540 * *
Leo Berlinghieri(4)......................... 29,540 * *
Richard S. Chute(6)......................... 1,430,731 11.89 8.92
Owen W. Robbins(4).......................... 2,261 * *
Robert J. Therrien(4)....................... 2,261 * *
Louis P. Valente(4)......................... 2,261 * *
Thomas H. Belknap(7)........................ 1,280,770 10.64 7.99
All executive officers and directors as a
group..................................... 12,014,944 99.03% 74.47%

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

* Less than 1% of outstanding Common Stock.

(1) The number of shares beneficially owned by each stockholder is determined
under rules promulgated by the Securities and Exchange Commission and the
information is not necessarily indicative of beneficial ownership for any
other purpose. Under such rules, beneficial ownership includes any shares as
to which the individual has sole or shared voting power or investment power
and also any shares which the individual has the right to acquire within 60
days of September 30, 1997 through the exercise of any stock option or other
right. The inclusion herein of such shares, however, does not constitute an
admission that the named stockholder is a direct or indirect beneficial
owner of such shares.

(2) Assumes no exercise of the Underwriters' over-allotment option.

(3) Includes 4,441,550 shares held directly by Mr. Bertucci, 4,357,150 shares
held directly by Mrs. Claire R. Bertucci, wife of Mr. Bertucci, and
2,709,240 shares held by trusts (collectively, the "Bertucci Family Trusts")
for which either Mr. or Mrs. Bertucci serves as a co-trustee.

(4) Comprised solely of options exercisable within 60 days of September 30,
1997.

(5) Includes 211,000 shares held in a grantor retained annuity trust.

(6) Includes 1,428,470 shares held by certain of the Bertucci Family Trusts for
which Mr. Chute serves as a co-trustee and 2,261 shares subject to options
held by Mr. Chute exercisable within 60 days of September 30, 1997.

(7) Represents shares held by certain of the Bertucci Family Trusts for which
Mr. Belknap serves as a co-trustee.

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DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 50,000,000 shares
of Common Stock, no par value per share, and 2,000,000 shares of Preferred
Stock, $.01 par value per share, after giving effect to the amendment and
restatement of the Company's Restated Articles of Organization (the "Articles of
Organization") which will be filed with the Secretary of State of The
Commonwealth of Massachusetts prior to the closing of this offering.

COMMON STOCK

As of September 30, 1997, there were 12,035,440 shares of Common Stock
outstanding and held of record by seventeen stockholders, after giving effect to
a 2,110-for-1 stock split, to be effected prior to the closing of this offering,
of shares of Class A Common Stock and Class B Common Stock and the conversion of
such shares into shares of Common Stock upon the closing of this offering.

Upon the closing of this offering, all holders of Common Stock shall be
entitled to one vote for each share held on all matters submitted to a vote of
stockholders and will not have cumulative voting rights. Accordingly, holders of
a majority of the shares of Common Stock entitled to vote in any election of
directors may elect all of the directors standing for election. Holders of
Common Stock are entitled to receive ratably such dividends, if any, as may be
declared by the Board of Directors out of funds legally available therefor,
subject to any preferential dividend rights of outstanding Preferred Stock. Upon
the liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to receive ratably the net assets of the Company available
after the payment of all debts and other liabilities, subject to the prior
rights of any outstanding Preferred Stock. Holders of the Common Stock have no
preemptive, subscription, redemption or conversion rights. The outstanding
shares of Common Stock are, and the shares offered by the Company in the
offering made by this Prospectus will be, when issued and paid for, fully paid
and nonassessable. The rights, preferences and privileges of holders of Common
Stock are subject to, and may be adversely affected by, the rights of the
holders of shares of any series of Preferred Stock that the Company may
designate and issue in the future. There are no shares of Preferred Stock
outstanding.

PREFERRED STOCK

The Articles of Organization authorize the Board of Directors, subject to
certain limitations prescribed by law, without further stockholder approval,
from time to time to issue up to an aggregate of 2,000,000 shares of Preferred
Stock in one or more series and to fix or alter the designations, preferences
and rights, and any qualifications, limitations or restrictions thereof, of the
shares of each such series, including the number of shares constituting any such
series and the dividend rights, dividend rates, conversion rights, voting
rights, terms of redemption (including sinking fund provisions), redemption
price or prices and liquidation preferences thereof. The issuance of Preferred
Stock may have the effect of delaying, deferring or preventing a change in
control of the Company. The Company has no present plans to issue any shares of
Preferred Stock.

MASSACHUSETTS LAW AND CERTAIN PROVISIONS OF THE COMPANY'S RESTATED ARTICLES OF
ORGANIZATION AND BY-LAWS

The Company intends to amend and restate its bylaws (the "By-Laws") prior
to the closing of the offering. The By-Laws will include a provision excluding
the Company from the applicability of Massachusetts General Laws Chapter 110D,
entitled "Regulation of Control Share Acquisitions." In general, this statute
provides that any stockholder of a corporation subject to this statute who
acquires 20% or more of the outstanding voting stock of a corporation may not
vote such stock unless the stockholders of the corporation so authorize. The
Board of Directors will be able to amend the By-Laws at any time to subject the
Company to this statute prospectively.

Massachusetts General Laws Chapter 156B, Section 50A generally requires
that publicly-held Massachusetts corporations have a classified board of
directors consisting of three classes as nearly equal in size as possible,
unless the corporation elects to opt out of the statute's coverage. The By-Laws,
will contain provisions which give effect to Section 50A.

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48

The By-Laws will require that nominations for the Board of Directors made
by a stockholder of a planned nomination must be given not less than 30 and not
more than 90 days prior to a scheduled meeting, provided that if less than 40
days' notice is given of the date of the meeting, a stockholder will have ten
days within which to give such notice. The stockholder's notice of nomination
must include particular information about the stockholder, the nominee and any
beneficial owner on whose behalf the nomination is made. The Company may require
any proposed nominee to provide such additional information as is reasonably
required to determine the eligibility of the proposed nominee.

The By-Laws will also require that a stockholder seeking to have any
business conducted at a meeting of stockholders give notice to the Company not
less than 60 and not more than 90 days prior to the scheduled meeting, provided
in certain circumstances that a ten-day notice rule applies. The notice from the
stockholder will be required to describe the proposed business to be brought
before the meeting and include information about the stockholder making the
proposal, any beneficial owner on whose behalf the proposal is made, and any
other stockholder known to be supporting the proposal. The By-Laws will require
the Company to call a special stockholders meeting at the request of
stockholders holding at least 40% of the voting power of the Company.

The Articles of Organization will provide that the directors and officers
of the Company shall be indemnified by the Company to the fullest extent
authorized by Massachusetts law, as it now exists or may in the future be
amended, against all expenses and liabilities reasonably incurred in connection
with service for or on behalf of the Company. In addition, the Articles of
Organization will provide that the directors of the Company will not be
personally liable for monetary damages to the Company for breaches of their
fiduciary duty as directors, unless they violated their duty of loyalty to the
Company or its stockholders, acted in bad faith, knowingly or intentionally
violated the law, authorized illegal dividends or redemptions or derived an
improper personal benefit from their action as directors.

The Articles of Organization will provide that any amendment to the
Articles of Organization, the sale, lease or exchange of all or substantially
all of the Company's property and assets, or the merger or consolidation of the
Company into or with any corporation may be authorized by the approval of the
holders of a majority of the shares of each class of stock entitled to vote
thereon, rather than by two-thirds as otherwise provided by statute, provided
that the transactions have been authorized by a majority of the members of the
Board of Directors and the requirements of any other applicable provisions of
the Articles of Organization have been met.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is Boston EquiServe
LP.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering, there has been no public market for the securities
of the Company. Upon completion of this offering, based upon the number of
shares outstanding at September 30, 1997, there will be 16,035,440 shares of
Common Stock of the Company outstanding (assuming no exercise of the
Underwriters' over-allotment option or options outstanding under the Company's
stock option plans). Of these shares, the 4,000,000 shares sold in this offering
will be freely tradeable without restriction or further registration under the
Securities Act of 1933, as amended (the "Securities Act"), except that any
shares purchased by "affiliates" of the Company, as that term is defined in Rule
144 ("Rule 144") under the Securities Act ("Affiliates"), may generally only be
sold in compliance with the limitations of Rule 144 described below.

SALES OF RESTRICTED SHARES

The remaining 12,035,440 shares of Common Stock are deemed "restricted
securities" under Rule 144. All of these shares are subject to 180-day lock-up
agreements (the "Lock-Up Agreements") with the Representatives of the
Underwriters. Upon expiration of the Lock-Up Agreements 180 days after the date
of this Prospectus (and assuming no exercise of any outstanding options), all
such shares will be available for sale in the public market, subject to the
provisions of Rule 144 under the Securities Act.

Stockholders who are parties to the Lock-Up Agreement have agreed that for
a period of 180 days after the date of this Prospectus, they will not sell,
offer, contract or grant any option to sell, pledge, transfer, establish an open
put equivalent position or otherwise dispose of any shares of Common Stock, any
options to purchase shares of Common Stock or any shares convertible into or
exchangeable for shares of Common Stock, owned directly by such persons or with
respect to which they have the power of disposition, without the prior written
consent of NationsBanc Montgomery Securities, Inc.

In general, Rule 144 as currently in effect, beginning 90 days after the
effective date of the Registration Statement of which this Prospectus is a part,
a stockholder, including an Affiliate, who has beneficially owned his or her
restricted securities (as that term is defined in Rule 144) for at least one
year from the later of the date such securities were acquired from the Company
or (if applicable) the date they were acquired from an Affiliate is entitled to
sell, within any three-month period, a number of such shares that does not
exceed the greater of 1% of the then outstanding shares of Common Stock (160,354
shares immediately after this offering) or the average weekly trading volume in
the Common Stock during the four calendar weeks preceding the date on which
notice of such sale was filed under Rule 144, provided certain requirements
concerning availability of public information, manner of sale and notice of sale
are satisfied. In addition, under Rule 144(k), if a period of at least two years
has elapsed between the later of the date restricted securities were acquired
from the Company or (if applicable) the date they were acquired from an
Affiliate of the Company, a stockholder who is not an Affiliate of the Company
at the time of sale and has not been an Affiliate of the Company for at least
three months prior to the sale is entitled to sell the shares immediately
without compliance with the foregoing requirements under Rule 144.

Securities issued in reliance on Rule 701 (such as shares of Common Stock
acquired pursuant to the exercise of certain options granted under the Company's
stock plans) are also restricted and, beginning 90 days after the effective date
of the Registration Statement of which this Prospectus is a part, may be sold by
stockholders other than Affiliates of the Company subject only to the manner of
sale provisions of Rule 144 and by Affiliates under Rule 144 without compliance
with its one-year holding period requirement.

OPTIONS

The Company has granted options to purchase an aggregate of 1,042,361
shares of which options to purchase an aggregate of 282,516 were exercisable as
of September 30, 1997. Of these, [ ] shares were subject to the Lock-Up
Agreements. The Company intends to file registration statements on Form S-8
under the Securities Act to register all shares of Common Stock issuable under
each of the 1995 Stock Plan, Purchase Plan and the 1997 Director Plan promptly
following the consummation of this offering. Shares issued pursuant to such
plans shall be, after the effective date of the Form S-8 registration
statements, eligible for resale in the public market without restriction,
subject to Rule 144 limitations applicable to Affiliates and the Lock-up
Agreements noted above, if applicable.

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50

UNDERWRITING

The underwriters named below (the "Underwriters"), represented by
NationsBanc Montgomery Securities, Inc., Donaldson, Lufkin & Jenrette Securities
Corporation and PaineWebber Incorporated (the "Representatives"), have severally
agreed, subject to the terms and conditions set forth in the Underwriting
Agreement, to purchase from the Company the number of shares of Common Stock
indicated below opposite their respective names at the initial public offering
price less the underwriting discount set forth on the cover page of this
Prospectus. The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain terms and conditions precedent and that the
Underwriters are committed to purchase all of such shares, if any are purchased.

NUMBER OF
UNDERWRITER SHARES
------------------------------------------------------------------------ ---------

NationsBanc Montgomery Securities, Inc. ................................
Donaldson, Lufkin & Jenrette Securities Corporation.....................
PaineWebber Incorporated................................................
-------
Total.............................................................. 4,000,000
=======

The Representatives have advised the Company that the Underwriters
initially propose to offer the Common Stock to the public on the terms set forth
on the cover page of this Prospectus. The Underwriters may allow to selected
dealers a concession of not more than $ per share, and the Underwriters may
allow, and any other dealers may reallow, a concession of not more than $ per
share to certain other dealers. After the initial public offering, the offering
price and other selling terms may be changed by the Representatives. The Common
Stock is offered subject to receipt and acceptance by the Underwriters and to
certain other conditions, including the right to reject orders in whole or in
part.

The Company has granted an option to the Underwriters, exercisable during
the 30-day period after the date of this Prospectus, to purchase up to a maximum
of 600,000 additional shares of Common Stock to cover over-allotments, if any,
at the same price per share as the initial shares to be purchased by the
Underwriters. To the extent the Underwriters exercise this option, each of the
Underwriters will be committed, subject to certain conditions, to purchase such
additional shares in approximately the same proportion as set forth in the above
table. The Underwriters may purchase such shares only to cover overallotments
made in connection with this offering.

All stockholders prior to this offering, as well as certain holders of
options to purchase Common Stock, have agreed not to directly or indirectly
sell, offer, contract or grant any option to sell, pledge, transfer, establish
an open put equivalent position or otherwise dispose of any rights with respect
to any shares of Common Stock, any options or warrants to purchase Common Stock,
or any securities convertible or exchangeable for Common Stock, owned directly
by such holders or with respect to which they have the power of disposition for
a period of 180 days after the period of this Prospectus without the prior
written consent of NationsBanc Montgomery Securities, Inc. NationsBanc
Montgomery Securities, Inc. may, in its sole discretion and at any time without
notice, release all or any portion of the securities subject to these lock-up
agreements. In addition, the Company has agreed not to sell, offer to sell,
contract to sell or otherwise sell or dispose of any shares of Common Stock or
any rights to acquire Common Stock, other than pursuant to its stock plans or
upon the exercise of outstanding options, for a period of 180 days after the
date of this Prospectus without the prior consent of NationsBanc Montgomery
Securities, Inc. See "Shares Eligible for Future Sale."

The Underwriting Agreement provides that the Company will indemnify the
Underwriters against certain liabilities, including civil liabilities, under the
Securities Act, or will contribute to payments the Underwriters may be required
to make in respect thereof.

In connection with this offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Common Stock, including over-allotment, stabilization, syndicate covering
transactions and imposition of penalty bids. In an over-allotment, the
Underwriters would allot more shares of

48
51

Common Stock to their customers in the aggregate than are available for purchase
by the Underwriters under the Underwriting Agreement. Stabilizing means the
placing of any bid, or the effecting of any purchase, for the purpose of
pegging, fixing or maintaining the price of a security. In a syndicate covering
transaction, the Underwriters would place a bid or effect a purchase to reduce a
short position created in connection with this offering. Pursuant to a penalty
bid, NationsBanc Montgomery Securities, Inc. on behalf of the Underwriters,
would be able to reclaim a selling concession from an Underwriter if shares of
Common Stock originally sold by such Underwriter are purchased in syndicate
covering transactions. These transactions may result in the price of the Common
Stock being higher than the price that might otherwise prevail in the open
market. These transactions may be effected on the Nasdaq National Market, in the
over-the-counter market or otherwise, and, if commenced, may be discontinued at
any time.

The Representatives have informed the Company that they do not expect to
make sales to accounts over which they exercise discretionary authority in
excess of 5% of the number of shares of Common Stock offered hereby.

Prior to this offering, there has been no public market for the Common
Stock of the Company. Consequently, the initial public offering price has been
determined through negotiations among the Company and the Representatives. Among
the factors considered in such negotiations were the history of, and prospects
for, the Company and the industry in which it competes, an assessment of the
Company's management, the present state of the Company's development, the
prospects for future earnings of the Company, the prevailing market conditions
at the time of this offering, market valuations of publicly traded companies
that the Company and the Representatives believe to be comparable to the
Company, and other factors deemed relevant.

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company by Hale and Dorr LLP, Boston, Massachusetts. Certain legal matters in
connection with this offering will be passed upon for the Underwriters by Ropes
& Gray, Boston, Massachusetts.

EXPERTS

The consolidated balance sheets of MKS Instruments, Inc. as of December 31,
1995, 1996 and September 30, 1997 and the consolidated statements of income,
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1996 and for the nine month period ended September 30, 1997
included in this Prospectus have been included herein in reliance on the report
of Coopers & Lybrand L.L.P., independent accountants, given upon the authority
of that firm as experts in accounting and auditing.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement (which
term shall include all amendments, exhibits, schedules and supplements thereto)
on Form S-1 under the Securities Act with respect to the shares of Common Stock
offered hereby. This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission, to which Registration Statement reference is
hereby made. Statements made in this Prospectus as to the contents of any
contract, agreement or other document referred to are not necessarily complete.
With respect to each such contract, agreement or other document filed as an
exhibit to the Registration Statement, reference is made to the exhibit for a
more complete description of the matter involved, and each such statement shall
be deemed qualified in its entirety by such reference. The Registration
Statement and the exhibits thereto may be inspected and copied at prescribed
rates at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
regional offices of the Commission located at Seven World Trade Center, 13th
Floor, New York, New York 10048 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. In addition, the Company is required to file

49
52

electronic versions to these documents with the Commission through the
Commission's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.
The Commission maintains a World Wide Web site at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.

The Company intends to distribute to its stockholders annual reports
containing audited consolidated financial statements. The Company also intends
to make available to its stockholders, within 45 days after the end of each
fiscal quarter, reports for the first three quarters of each fiscal year
containing interim unaudited financial information.

50
53

MKS INSTRUMENTS, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Accountants................................................. F-2
Consolidated Balance Sheets as of December 31, 1995 and 1996, and September 30,
1997............................................................................ F-3
Consolidated Statements of Income for the Years Ended December 31, 1994, 1995, and
1996, and for the Nine Months Ended September 30, 1996 (unaudited) and 1997..... F-4
Consolidated Statements of Stockholders' Equity for the Years Ended December 31,
1994, 1995, and 1996, and the Nine Months Ended September 30, 1997.............. F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 1994, 1995,
and 1996, and for the Nine Months Ended September 30, 1996 (unaudited) and
1997............................................................................ F-6
Notes to Consolidated Financial Statements........................................ F-7

F-1
54

This is the form of the report that we expect to issue upon the filing of
an amendment to the Company's Articles of Organization effecting the 2,110-for-1
stock split of the Company's outstanding Common Stock and increase in the number
of authorized shares of Common Stock and the authorization of Preferred Stock as
discussed in Note 2 of Notes to Consolidated Financial Statements:

COOPERS & LYBRAND L.L.P.

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
MKS Instruments, Inc.:

We have audited the accompanying consolidated balance sheets of MKS
Instruments, Inc. as of December 31, 1995 and 1996, and September 30, 1997, and
the related consolidated statements of income, stockholders' equity, and cash
flows for the years ended December 31, 1994, 1995 and 1996, and the nine month
period ended September 30, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of MKS
Instruments, Inc. as of December 31, 1995 and 1996, and September 30, 1997, and
the consolidated results of its operations and its cash flows for the years
ended December 31, 1994, 1995 and 1996, and the nine month period ended
September 30, 1997, in conformity with generally accepted accounting principles.

Boston, Massachusetts
October 28, 1997

F-2
55

MKS INSTRUMENTS, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)

DECEMBER 31, SEPTEMBER 30, 1997
-------------------- ------------------------
1995 1996 ACTUAL PRO FORMA
-------- ------- -------- -----------
(NOTE 2)
(UNAUDITED)

ASSETS
Current assets:
Cash and cash equivalents.................... $ 3,650 $ 3,815 $ 5,421 $ 5,421
Marketable equity securities................. 563 391 918 918
Trade accounts receivable, net of allowance
for doubtful accounts of $542 and $482 at
December 31, 1995 and 1996, respectively,
and $618 at September 30, 1997............ 28,804 21,734 32,018 32,018
Inventories.................................. 29,960 25,500 28,081 28,081
Deferred tax asset........................... 348 513 658 658
Other current assets......................... 3,755 541 462 462
-------- ------- -------- --------
Total current assets................. 67,080 52,494 67,558 67,558
Property, plant and equipment, net............. 33,210 38,007 34,343 34,343
Other assets................................... 4,221 4,499 4,784 4,784
-------- ------- -------- --------
Total assets......................... $104,511 $95,000 $106,685 $ 106,685
======== ======= ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings........................ $ 12,264 $12,825 $ 13,171 $ 13,171
Current portion of long-term debt............ 2,203 2,258 2,153 2,153
Current portion of capital lease
obligations............................... 725 1,041 1,048 1,048
Accounts payable............................. 8,895 4,776 7,999 7,999
Accrued compensation......................... 5,133 5,115 7,597 7,597
Other accrued expenses....................... 5,372 3,466 5,228 5,228
Income taxes payable......................... 286 609 883 883
Distribution payable......................... -- -- -- 30,183
-------- ------- -------- --------
Total current liabilities............ 34,878 30,090 38,079 68,262
Long-term debt................................. 18,617 16,278 14,436 14,436
Long-term portion of capital lease
obligations.................................. 1,845 2,621 1,912 1,912
Deferred tax liability......................... 214 109 126 126
Other liabilities.............................. 565 404 376 376
Commitments and contingencies (Note 7)
Stockholders' equity:
Preferred stock, $.01 par value; 2,000,000
shares authorized, no shares issued or
outstanding............................... -- -- -- --
Common Stock, Class A, no par value;
25,000,000 shares authorized, 5,177,940
issued and outstanding.................... 40 40 40 40
Common Stock, Class B (non voting) no par
value; 25,000,000 shares authorized,
6,857,500 issued and outstanding.......... 73 73 73 73
Additional paid-in capital................... 48 48 48 48
Unrealized gain on investments............... 246 115 562 562
Retained earnings............................ 45,550 43,553 50,045 19,862
Cumulative translation adjustment............ 2,435 1,669 988 988
-------- ------- -------- --------
Total stockholders' equity................ 48,392 45,498 51,756 21,573
-------- ------- -------- --------
Total liabilities and stockholders'
equity............................. $104,511 $95,000 $106,685 $ 106,685
======== ======= ======== ========

The accompanying notes are an integral part of the consolidated financial
statements.

F-3
56

MKS INSTRUMENTS, INC.

CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)

NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------- ---------------------------
1994 1995 1996 1996 1997
-------- -------- ----------- ----------- -----------
(UNAUDITED)

Net sales..................... $106,829 $157,164 $ 170,862 $ 136,097 $ 134,629
Cost of sales................. 59,813 87,703 102,008 81,078 78,456
-------- -------- ----------- -------- -----------
Gross profit.................. 47,016 69,461 68,854 55,019 56,173
Research and development...... 8,036 10,935 14,195 11,220 10,336
Selling, general and
administrative.............. 26,893 34,420 37,191 29,409 30,749
Restructuring................. -- -- 1,400 1,400 --
-------- -------- ----------- -------- -----------
Income from operations........ 12,087 24,106 16,068 12,990 15,088
Interest expense.............. 1,330 1,576 2,378 1,963 1,610
Interest income............... 46 128 92 152 144
Other income (expense), net... -- -- (479) (230) 460
-------- -------- ----------- -------- -----------
Income before income taxes.... 10,803 22,658 13,303 10,949 14,082
Provision for income taxes.... 800 1,000 800 658 1,190
-------- -------- ----------- -------- -----------
Net income.................... $ 10,003 $ 21,658 $ 12,503 $ 10,291 $ 12,892
======== ======== =========== ======== ===========
Pro forma data (unaudited):
Historical income before
income taxes............. $ 13,303 $ 14,082
Pro forma provision for
income taxes............. 5,055 5,351
----------- -----------
Pro forma net income........ $ 8,248 $ 8,731
=========== ===========
Pro forma net income per
share.................... $ 0.59 $ 0.62
=========== ===========
Pro forma weighted average
common shares
outstanding.............. 13,994 14,134
=========== ===========

The accompanying notes are an integral part of the consolidated financial
statements.

F-4
57

MKS INSTRUMENTS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996 AND THE NINE MONTHS ENDED
SEPTEMBER 30, 1997
(IN THOUSANDS, EXCEPT SHARE DATA)

COMMON STOCK
---------------------------------------
PREFERRED STOCK CLASS A CLASS B ADDITIONAL
----------------- ------------------ ------------------ PAID-IN
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT CAPITAL
------- ------- --------- ------ --------- ------ ----------

Balance at December 31,1993.................... 5,177,940 $ 40 6,857,500 $ 73 $ 48
Capital contribution...........................
Distributions to stockholders..................
Foreign currency translation adjustment........
Net income.....................................
------- ------- ---------- --- ---------- --- ---
Balance at December 31, 1994................... -- -- 5,177,940 40 6,857,500 73 48
Distributions to stockholders..................
Foreign currency translation adjustment........
Unrealized gain on investments.................
Net income.....................................
------- ------- ---------- --- ---------- --- ---
Balance at December 31, 1995................... -- -- 5,177,940 40 6,857,500 73 48
Distributions to stockholders..................
Foreign currency translation adjustment........
Unrealized loss on investments.................
Net income.....................................
------- ------- ---------- --- ---------- --- ---
Balance at December 31, 1996................... -- -- 5,177,940 40 6,857,500 73 48
Distributions to stockholders..................
Foreign currency translation adjustment........
Unrealized gain on investments.................
Net income.....................................
------- ------- ---------- --- ---------- --- ---
Balance at September 30, 1997.................. -- -- 5,177,940 $ 40 6,857,500 $ 73 $ 48
======= ======= ========== === ========== === ===

UNREALIZED CUMULATIVE TOTAL
GAIN ON RETAINED TRANSLATION STOCKHOLDERS'
INVESTMENTS EARNINGS ADJUSTMENT EQUITY
----------- -------- ---------- -------------

Balance at December 31,1993.................... $27,200 $1,604 $ 28,965
Capital contribution........................... 14 14
Distributions to stockholders.................. (2,575) (2,575)
Foreign currency translation adjustment........ 865 865
Net income..................................... 10,003 10,003
---- ------- ------ -------
Balance at December 31, 1994................... -- 34,642 2,469 37,272
Distributions to stockholders.................. (10,750) (10,750)
Foreign currency translation adjustment........ (34) (34)
Unrealized gain on investments................. $ 246 246
Net income..................................... 21,658 21,658
---- ------- ------ -------
Balance at December 31, 1995................... 246 45,550 2,435 48,392
Distributions to stockholders.................. (14,500) (14,500)
Foreign currency translation adjustment........ (766) (766)
Unrealized loss on investments................. (131) (131)
Net income..................................... 12,503 12,503
---- ------- ------ -------
Balance at December 31, 1996................... 115 43,553 1,669 45,498
Distributions to stockholders.................. (6,400) (6,400)
Foreign currency translation adjustment........ (681) (681)
Unrealized gain on investments................. 447 447
Net income..................................... 12,892 12,892
---- ------- ------ -------
Balance at September 30, 1997.................. $ 562 $50,045 $ 988 $ 51,756
==== ======= ====== =======

The accompanying notes are an integral part of the consolidated financial
statements.

F-5
58

MKS INSTRUMENTS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
---------------------------------- ------------------------
1994 1995 1996 1996 1997
-------- -------- -------- ----------- --------
(UNAUDITED)

Cash flows from operating activities:
Net income.................................. $ 10,003 $ 21,658 $ 12,503 $ 10,291 $ 12,892
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization of property,
plant, and equipment.................... 3,027 3,925 5,920 4,339 4,267
Loss on disposal of assets................ -- -- -- -- 574
Deferred taxes............................ (178) (91) (277) (228) (235)
Provision for doubtful accounts........... 241 133 (20) 8 255
Unrealized loss (gain) on investments..... 37 (37) -- -- --
Forward exchange contract loss............ -- -- 302 44 431
Stock option compensation................. -- -- -- -- 40
Changes in operating assets and
liabilities:
(Increase) decrease in trade accounts
receivable............................ (5,637) (6,771) 6,119 2,624 (11,432)
(Increase) decrease in inventories...... (2,137) (10,956) 4,145 (1,956) (3,129)
(Increase) decrease in other current
assets................................ (188) (2,752) 3,239 2,075 294
Increase (decrease) in accrued
compensation.......................... 305 1,466 (220) 360 2,482
Increase (decrease) in other accrued
expenses.............................. 970 3,135 (1,520) (447) 1,724
Increase (decrease) in accounts
payable............................... 1,636 3,571 (4,221) (4,398) 3,192
Increase (decrease) in income taxes
payable............................... (365) (111) 331 212 387
------- -------- -------- -------- --------
Net cash provided by operating activities..... 7,714 13,170 26,301 12,924 11,742
------- -------- -------- -------- --------
Cash flows from investing activities:
Purchase of investments..................... (1,231) -- -- -- --
Proceeds from maturity of investments....... -- 1,000 -- -- --
Purchases of property, plant and
equipment................................. (1,922) (9,194) (9,417) (7,274) (1,904)
Proceeds from sale of property, plant and
equipment................................. -- -- -- -- 145
Increase in other assets.................... (824) (1,047) (443) (1,009) (368)
Cash used to settle forward exchange
contracts................................. -- -- (302) (44) (431)
Acquisition of business, net of cash
acquired.................................. -- (3,926) -- -- --
------- -------- -------- -------- --------
Net cash used in investing activities......... (3,977) (13,167) (10,162) (8,327) (2,558)
------- -------- -------- -------- --------
Cash flows from financing activities:
Net (payments) borrowings on demand notes
payable................................... (336) 1,407 224 6,510 625
Proceeds from short-term borrowings......... 5,020 7,819 11,025 11,173 12,714
Payments on short-term borrowings........... (2,670) (4,150) (9,628) (9,135) (12,698)
Proceeds from long-term debt................ -- 7,000 400 138 --
Principal payments on long-term debt........ (1,037) (1,156) (2,093) (1,530) (1,406)
Capital contributions....................... 14 -- -- -- --
Cash distributions to stockholders.......... (2,575) (10,750) (14,500) (11,500) (6,400)
Principal payments under capital lease
obligations............................... (722) (587) (982) (704) (702)
------- -------- -------- -------- --------
Net cash used in financing activities......... (2,306) (417) (15,554) (5,048) (7,867)
------- -------- -------- -------- --------
Effect of exchange rate changes on cash and
cash equivalents............................ 240 5 (420) 30 289
------- -------- -------- -------- --------
Increase (decrease) in cash and cash
equivalents................................. 1,671 (409) 165 (421) 1,606
Cash and cash equivalents at beginning of
period...................................... 2,388 4,059 3,650 3,650 3,815
------- -------- -------- -------- --------
Cash and cash equivalents at end of period.... $ 4,059 $ 3,650 $ 3,815 $ 3,229 $ 5,421
======= ======== ======== ======== ========
Supplemental disclosure of cash flow
information:
Cash paid during the period for:
Interest.................................. $ 1,313 $ 1,535 $ 2,363 $ 1,713 $ 1,385
======= ======== ======== ======== ========
Income taxes.............................. $ 1,339 $ 1,194 $ 770 $ 936 $ 1,016
======= ======== ======== ======== ========
Noncash transactions during the period:
Equipment acquired under capital leases... $ 626 $ 1,612 $ 2,074 $ 1,852 $ 89
======= ======== ======== ======== ========

The accompanying notes are an integral part of the consolidated financial
statements.

F-6
59

MKS INSTRUMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(TABLES IN THOUSANDS EXCEPT PER SHARE DATA)
INFORMATION FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 IS UNAUDITED.

1. DESCRIPTION OF BUSINESS:

MKS Instruments, Inc. (the "Company") operates in one business segment. The
Company is a worldwide supplier of instruments and components used to measure,
control, analyze and isolate gases in semiconductor manufacturing processes, and
in the manufacture of flat panel displays, magnetic and optical storage media,
solar cells, fiber optic cables, optical coatings and other devices made
possible through advances in materials science. The Company is subject to risks
common to companies in the semiconductor industry including, but not limited to,
the highly cyclical nature of the semiconductor industry leading to recurring
periods of over supply, development by the Company or its competitors of new
technological innovations, dependence on key personnel and the protection of
proprietary technology.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation

The consolidated financial statements include the accounts of the Company
and its subsidiaries. All significant intercompany accounts and transactions
have been eliminated in consolidation. The Company has reflected the
approximately 77.5% owned foreign subsidiaries as wholly-owned subsidiaries as
the ownership interests are the same at the ultimate stockholder level. Upon the
closing of the offering for which these financial statements are being prepared,
the shares of the foreign subsidiaries owned directly by the ultimate
stockholders will be contributed to the Company. Prior to the effectiveness of a
registration statement relating to the initial public offering of the Common
Stock of the Company, the Company will effect a 2,110-for-one stock split of its
Common Stock, increase the number of authorized shares of Common Stock to
50,000,000 and authorize 2,000,000 shares of Preferred Stock. Accordingly, all
share and per share amounts have been adjusted to reflect the stock split as
though it had occurred at the beginning of the initial period presented.

Interim Financial Information

The consolidated financial statements of the Company as of and for the nine
months ended September 30, 1996, and the related footnote information are
unaudited. All adjustments (consisting only of normal recurring adjustments)
have been made, which in the opinion of management, are necessary for a fair
presentation. Results of operations for the nine months ended September 30, 1997
are not necessarily indicative of the results that may be expected for any
future period.

Pro Forma Balance Sheet Presentation (Unaudited)

The Company intends to distribute the balance of its accumulated and
undistributed S Corporation earnings (the "S Corporation Distribution") from the
proceeds of the offering for which this registration statement is being
prepared. The unaudited pro forma balance sheet has been prepared assuming an
estimated $30,183,000 distribution was payable as of September 30, 1997. The
remaining balance in retained earnings represents accumulated earnings prior to
the Company converting from a C Corporation to an S Corporation in 1987.

Pro Forma Net Income Per Share (Unaudited)

Pro forma net income per share is based upon the weighted average number of
common and common equivalent shares (using the treasury stock method)
outstanding. Common equivalent shares are included in the per share calculations
where the effect of their inclusion would be dilutive. Common equivalent shares
consist of outstanding stock options. Pursuant to Securities and Exchange
Commission Staff Accounting

F-7
60

MKS INSTRUMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(TABLES IN THOUSANDS EXCEPT PER SHARE DATA)
INFORMATION FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 IS UNAUDITED.

Bulletin No. 83, all common and common equivalent shares issued at prices less
than the mid-point of the estimated initial public offering price range during
the twelve-month period prior to the initial filing of the Registration
Statement have been included in the calculation as if they were outstanding for
all periods using the treasury stock method and the mid-point of the estimated
initial public offering price.

Historical net income has been adjusted for the pro forma provision for
income taxes calculated assuming the Company was subject to income taxation as a
C Corporation, at a pro forma tax rate of 38%. In accordance with a regulation
of the Securities and Exchange Commission, pro forma net income per share has
been presented for the year ended December 31, 1996 and the nine months ended
September 30, 1997 to reflect the affect of the assumed issuance of that number
of shares of Common Stock of the Company necessary to be sold at the mid-point
of the estimated initial public offering price in order to fund the intended
distribution in the amount of the accumulated and undistributed S corporation
earnings as of January 1, 1997. Pro forma fully diluted net income per share is
not presented as it does not differ materially from pro forma net income per
share.

Historical net income per share is not presented as it is not meaningful
based upon the Company's planned conversion from an S Corporation to a C
Corporation upon the closing of the offering for which these financial
statements are being prepared.

Foreign Exchange

The functional currency of the Company's foreign subsidiaries is the
applicable local currency. For those subsidiaries, assets and liabilities are
translated to U.S. dollars at year-end exchange rates. Income and expense
accounts are translated at the average exchange rates prevailing for the year.
The resulting translation adjustments are accumulated in a separate component of
consolidated stockholders' equity.

The Company enters into forward exchange contracts and local currency
purchased options to mitigate its foreign currency exposures. Realized and
unrealized gains and losses on forward exchange contracts and local currency
purchased options that qualify for hedge accounting are recognized in earnings
in the same period as the underlying hedged item. Realized and unrealized gains
and losses on forward exchange contracts and local currency purchased option
contract that do not qualify for hedge accounting are recognized immediately in
earnings. The cash flows resulting from forward exchange contracts and local
currency purchased options that qualify for hedge accounting are classified in
the statement of cash flows as part of cash flows from operating activities.
Cash flows resulting from forward exchange contracts and local currency
purchased options that do not qualify for hedge accounting are classified in the
statement of cash flows as investing activities.

Revenue Recognition

The Company recognizes revenue upon shipment. The Company accrues for
anticipated returns and warranty costs upon shipment.

Cash and Cash Equivalents

All highly liquid investments with an original maturity of three months or
less at the date of purchase are considered to be cash equivalents. Cash
equivalents consist of money market instruments.

Investments

The appropriate classification of investments in debt and equity securities
is determined at the time of purchase. Debt securities that the Company has both
the intent and ability to hold to maturity are carried at

F-8
61

MKS INSTRUMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(TABLES IN THOUSANDS EXCEPT PER SHARE DATA)
INFORMATION FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 IS UNAUDITED.

amortized cost. Debt securities that the Company does not have the intent and
ability to hold to maturity or equity securities are classified either as
"available-for-sale" or as "trading" and are carried at fair value. Marketable
equity securities are carried at fair value and classified either as available
for sale or trading. Unrealized gains and losses on securities classified as
available-for-sale are carried as a separate component of stockholders' equity.
Unrealized gains and losses on securities classified as trading are reported in
earnings.

Inventories

Inventories are stated at the lower of cost or market. Cost is determined
on the first-in, first-out method.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Equipment acquired under
capital leases is recorded at the present value of the minimum lease payments
required during the lease period. Expenditures for major renewals and
betterments that extend the useful lives of property, plant and equipment are
capitalized. Expenditures for maintenance and repairs are charged to expense as
incurred. When assets are sold or otherwise disposed of, the cost and related
accumulated depreciation are eliminated from the accounts and any resulting gain
or loss is recognized in earnings.

Depreciation is provided on the straight-line method over the estimated
useful lives of 20 years for buildings and three to five years for machinery and
equipment. Leasehold improvements are amortized over the shorter of the lease
term or the estimated useful life of the lease.

Research and Development

Research and development costs are expensed as incurred.

New Accounting Pronouncements

In February 1997, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards No. 128, "Earnings Per
Share." This statement specifies the computation, presentation and disclosure
requirements for earnings per share ("EPS"), to simplify the existing
computational guidelines and increase comparability on an international basis.
The statement will be effective for interim and annual reporting periods ending
after December 15, 1997, and the Company will adopt its provisions during the
fourth quarter of 1997. This statement will replace "primary" EPS with "basic"
EPS, the principal difference being the exclusion of common stock equivalents in
the computation of basic EPS. In addition, this statement will require the dual
presentation of basic and diluted EPS on the face of the consolidated statements
of income. The Company does not expect this statement to have a material impact
on its net income per share as presented.

In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income." This statement requires that changes
in comprehensive income be shown in a financial statement that is displayed with
the same prominence as other financial statements. The statement will be
effective for fiscal years beginning after December 15, 1997 and the Company
will adopt its provisions in 1998. Reclassification for earlier periods is
required for comparative purposes. The Company is currently evaluating the
impact this statement will have on its financial statements; however, because
the statement requires only additional disclosure, the Company does not expect
the statement to have a material impact on its financial position or results of
operations.

F-9
62

MKS INSTRUMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(TABLES IN THOUSANDS EXCEPT PER SHARE DATA)
INFORMATION FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 IS UNAUDITED.

In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprise and Related Information."
This statement supersedes Statement of Financial Accounting Standards No. 14,
"Financial Reporting for Segments of a Business Enterprise." This statement
includes requirements to report selected segment information quarterly and
entity-wide disclosures about products and services, major customers, and the
material countries in which the entity holds assets and reports revenues. The
statement will be effective for fiscal years beginning after December 15, 1997
and the Company will adopt its provisions in 1998. Reclassification for earlier
periods is required, unless impracticable, for comparative purposes. The Company
is currently evaluating the impact this statement will have on its financial
statements; however, because the statement requires only additional disclosure,
the Company does not expect the statement to have a material impact on its
financial position or results of operations.

Reclassification of Prior Year Balances

Certain reclassifications have been made to prior years' consolidated
financial statements to conform to the current presentation.

3. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT:

Foreign Exchange Risk Management

The Company uses forward exchange contracts and local currency purchased
options in an effort to reduce its exposure to currency fluctuations on future
U.S. dollar cash flows derived from foreign currency denominated sales
associated with the intercompany purchases of inventory. The Company has entered
into forward exchange contracts, and to a lesser extent, local currency
purchased options to hedge a portion of its probable anticipated, but not firmly
committed transactions. The Company plans to use local currency purchased
options prospectively to hedge probable anticipated, but not firmly committed
transactions. The Company has also used forward exchange contracts to hedge firm
commitments. Market value gains and losses on forward exchange contracts are
recognized immediately in earnings unless a firm commitment exists. Market value
gains and premiums on local currency purchased options on probable anticipated
transactions and market value gains and losses on forward exchange contracts
hedging firm commitments are recognized when the hedged transaction occurs.
These contracts, which relate primarily to Japanese and European currencies
generally have terms of eighteen months or less. The Company does not hold or
issue derivative financial instruments for trading purposes.

Forward exchange contracts with notional amounts totaling $25,700,000,
none, and $8,200,000 to exchange foreign currencies for U.S. dollars, were
outstanding at December 31, 1995 and 1996, and September 30, 1997, respectively.
Local currency purchased options with notional amounts totaling none, $3,722,000
and none to exchange foreign currencies for U.S. dollars were outstanding at
December 31, 1995 and 1996 and September 30, 1997, respectively.

Foreign exchange losses of $479,000 and foreign exchange gains of $460,000
on forward exchange contracts that did not qualify for hedge accounting were
recognized in earnings during 1996, and the nine months ended September 30,
1997, respectively, and are classified in other income. Gains on forward
exchange contracts that qualify for hedge accounting of $3,061,000 and $978,000
were deferred and classified in other accrued expenses at December 31, 1995 and
1996, respectively. Gains of local currency purchased options deferred at
December 31, 1996 that qualify for hedge accounting of $200,000 were deferred in
other accrued expenses. Gains on forward exchange contracts and local currency
purchased options that qualify for hedge accounting are classified in cost of
goods sold and totaled $927,000, $1,928,000, $2,476,000, and $1,554,000, and
$978,000 for the years ended December 31, 1994, 1995, 1996, and the nine months
ended

F-10
63

MKS INSTRUMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(TABLES IN THOUSANDS EXCEPT PER SHARE DATA)
INFORMATION FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 IS UNAUDITED.

September 30, 1996 and 1997, respectively. There are no forward exchange
contracts outstanding at September 30, 1997 which qualify for hedge accounting.

The fair value of forward exchange contracts at September 30, 1997,
determined by applying period end currency exchange rates to the notional
contract amounts, amounted to $525,000. The fair value of local currency
purchased options at December 31, 1996, obtained through dealer quotes, totaled
approximately $200,000.

The market risk exposure from forward exchange contracts is assessed in
light of the underlying currency exposures and is controlled by the initiation
of additional or offsetting foreign currency contracts. The market risk exposure
from options is limited to the cost of such investments. Credit risk exposure
from forward exchange contract and local currency purchased option are minimized
as these instruments are contracted with a major financial institution. The
Company monitors the credit worthiness of this financial institution and full
performance is anticipated.

Interest Rate Risk Management

The Company utilizes an interest rate swap to fix the interest rate on
certain variable rate term loans in order to minimize the effect of changes in
interest rates on earnings. In 1993, the Company entered into a five-year
interest rate swap agreement with a major financial institution for the notional
amount of $5,000,000 equal to one half of the term loan described in Note 6.
Under the agreement, the Company pays a fixed rate of 5.1% on the notional
amount and receives the London Interbank Offering Rate ("LIBOR"). The interest
differential paid or received on the swap agreement is recognized as an
adjustment to interest expense. At September 30, 1997 the fair value of this
interest rate swap, which represents the amount the Company would receive or pay
to terminate the agreement, is a net receivable of $15,000, based on dealer
quotes.

The market risk exposure from the interest rate swap is assessed in light
of the underlying interest rate exposures. Credit risk exposure from the swap is
minimized as the agreement is with a major financial institution. The Company
monitors the creditworthiness of this financial institution and full performance
is anticipated.

Concentrations of Credit Risk

The Company's significant concentrations of credit risk consist principally
of cash and cash equivalents and trade accounts receivable. The Company
maintains cash and cash equivalents with financial institutions including the
bank it has borrowings with. Concentrations of credit risk with respect to trade
accounts receivable are limited due to the large number of geographically
dispersed customers. Credit is extended for all customers based on financial
condition and, collateral is not required.

Fair Value of Financial Instruments

The fair value of the term loans, including the current portion,
approximates its carrying value given its variable rate interest provisions. The
fair value of mortgage notes is based on borrowing rates for similar instruments
and approximates its carrying value. For all other balance sheet financial
instruments, the carrying amount approximates fair value because of the short
period to maturity of these instruments.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and

F-11
64

MKS INSTRUMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(TABLES IN THOUSANDS EXCEPT PER SHARE DATA)
INFORMATION FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 IS UNAUDITED.

disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.

4. INVENTORIES:

Inventories consist of the following:

DECEMBER 31,
--------------------- SEPTEMBER 30,
1995 1996 1997
-------- -------- -------------

Raw material..................................... $ 10,839 $ 10,337 $ 10,292
Work in process.................................. 8,833 6,177 7,066
Finished goods................................... 10,288 8,986 10,723
------- ------- -------
$ 29,960 $ 25,500 $ 28,081
======= ======= =======

5. PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consist of the following:

DECEMBER 31,
--------------------- SEPTEMBER 30,
1995 1996 1997
-------- -------- -------------

Land............................................. $ 7,923 $ 8,295 $ 8,581
Buildings........................................ 22,728 26,885 26,387
Machinery and equipment.......................... 22,202 24,711 24,025
Furniture and fixtures........................... 5,412 8,046 9,372
Leasehold improvements........................... 816 1,184 896
-------- -------- --------
59,081 69,121 69,261
Less: accumulated depreciation and
amortization................................... 25,871 31,114 34,918
-------- -------- --------
$ 33,210 $ 38,007 $ 34,343
======== ======== ========

6. DEBT:

Credit Agreements and Short-term Borrowings

In February 1996, the Company entered into a loan agreement with a bank
which provides access to a revolving credit loan and term loan. This agreement
has since been amended. The revolving credit facility provides for
uncollateralized borrowings up to $20,000,000, which expires on June 30, 1999.
Interest on borrowings is payable quarterly at varying rates based, subject to
the Company's option, at the bank's base rate, or money market rate, or LIBOR.
At December 31, 1995 and 1996 and September 30, 1997, the interest rate in
effect was the bank's base rate of 8.5%, 8.25%, and 8.5%, respectively. At
December 31, 1995 and 1996 and September 30, 1997, the Company had $1,525,000,
$1,875,000, and $2,500,000, respectively, of borrowings, under this revolving
credit loan.

Additionally, certain of the Company's foreign subsidiaries have lines of
credit and short-term borrowing arrangements with various financial institutions
which provide for aggregate borrowings as of September 30, 1997 of up to
$13,300,000, which generally expire and are renewed at six month intervals. At
December 31, 1995 and 1996 and September 30, 1997, total borrowings outstanding
under these arrangements were $10,739,000, $10,950,000, and $10,671,000,
respectively, at interest rates ranging from 1.3% to 13.7%, 1.3% to

F-12
65

MKS INSTRUMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(TABLES IN THOUSANDS EXCEPT PER SHARE DATA)
INFORMATION FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 IS UNAUDITED.

15.5%, and 1.3% to 14.5%, respectively. Foreign short-term borrowings are
generally collateralized by certain trade accounts receivable and are guaranteed
by a domestic bank.

Long-Term Debt

Long-term debt consists of the following:

DECEMBER 31,
------------------- SEPTEMBER 30,
1995 1996 1997
------- ------- -------------

Term loans......................................... $15,528 $13,861 $12,611
Mortgage notes..................................... 5,292 4,675 3,978
------- ------- -------
Total long-term debt............................... 20,820 18,536 16,589
Less: current portion.............................. 2,203 2,258 2,153
------- ------- -------
Long-term debt less current portion................ $18,617 $16,278 $14,436
======= ======= =======

The term loan facility of the loan agreement entered into on November 1,
1993, provided for borrowings of $10,000,000. Principal payments are payable in
equal monthly installments of $56,000 through October 1, 2000, with the
remaining principal payment due on November 1, 2000. The loan is collateralized
by certain land, buildings, and equipment.

On October 31, 1995, the Company entered a loan agreement with the same
bank which provided additional uncollateralized term loan borrowings of
$7,000,000. Principal payments on the additional term loan borrowings are
payable in equal monthly installments of $83,000 through June 1, 2002, with the
remaining principal payment due on June 30, 2002.

Interest on the term loan borrowings is payable monthly at varying rates
based, subject to the Company's option, at the bank's base rate, or money market
rate, or LIBOR. At December 31, 1995 and 1996 and September 30, 1997, the
interest rates in effect for these borrowings were 7.1%, 7.375%, and 6.925%,
respectively.

The terms of the loan agreements, as amended, contain, among other
provisions, requirements for maintaining certain levels of tangible net worth
and other financial ratios. The agreement also contains restrictions with
respect to acquisitions. Under the most restrictive covenant, the operating cash
flow to debt service ratio for a fiscal quarter shall not be less than 1.25 to
1.0. In the event of default of these covenants or restrictions, any obligation
then outstanding under the loan agreement shall become payable upon demand by
the bank. The Company was in compliance with these covenants and restrictions at
September 30, 1997.

The Company has loans outstanding from various foreign banks in the form of
mortgage notes at interest rates ranging from 2.1% to 10.75%. Principal and
interest are payable in monthly installments through 2010. The loans are
collateralized by mortgages on certain of the Company's foreign properties.

F-13
66

MKS INSTRUMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(TABLES IN THOUSANDS EXCEPT PER SHARE DATA)
INFORMATION FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 IS UNAUDITED.

Aggregate maturities of long-term debt over the next five years are as
follows:

AGGREGATE
MATURITIES
---------

October 1, 1997 to December 31, 1997............................... $ 577
Year ending December 31, 1998...................................... 2,095
Year ending December 31, 1999...................................... 2,037
Year ending December 31, 2000...................................... 7,322
Year ending December 31, 2001...................................... 1,384
Year ending December 31, 2002...................................... 1,307
Thereafter......................................................... 1,867
-------
$ 16,589
=======

7. LEASE COMMITMENTS:

The Company leases certain of its facilities and machinery and equipment
under capital and operating leases expiring in various years through 2002 and
thereafter. Generally, the facility leases require the Company to pay
maintenance, insurance and real estate taxes. Rental expense under operating
leases totaled $1,506,000, $1,985,000 and $2,487,000, for the years ended
December 31, 1994, 1995 and 1996, respectively, and $1,919,000 and $1,876,000
for the nine month period ended September 30, 1996 and 1997, respectively.

Minimum lease payments under operating and capital leases are as follows:

CAPITAL
OPERATING LEASES LEASES
------------------------- ---------
REAL ESTATE EQUIPMENT EQUIPMENT
----------- --------- ---------

October 1, 1997 to December 31, 1997............... $ 523 $ 149 $ 313
Year ending December 31, 1998...................... 1,073 447 1,187
Year ending December 31, 1999...................... 362 268 915
Year ending December 31, 2000...................... 78 82 691
Year ending December 31, 2001...................... 9 33 209
Year ending December 31, 2002...................... -- 19 9
Thereafter......................................... -- 29 --
------ ------ -------
Total minimum lease payments....................... $ 2,045 $ 1,027 3,324
====== ======
Less: amounts representing interest................ 364
-------
Present value of minimum lease payments............ 2,960
Less: current portion.............................. 1,048
-------
Long-term portion.................................. $ 1,912
=======

8. STOCKHOLDERS' EQUITY:

Prior to the effectiveness of a registration statement relating to the
initial public offering of Common Stock of the Company, the Company will effect
a 2,110 to one stock split of its common stock, increase the
number of authorized shares of common stock to 50,000,000 and will authorize
2,000,000 shares of $0.01 par value Preferred Stock. Accordingly, all share data
has been restated to reflect the Common Stock split.

F-14
67

MKS INSTRUMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(TABLES IN THOUSANDS EXCEPT PER SHARE DATA)
INFORMATION FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 IS UNAUDITED.

Common Stock

The Company has two classes of Common Stock. Stockholders of Class A Common
Stock are entitled to voting rights with one vote for each share of Common
Stock. Stockholders of Class B Common Stock are not entitled to voting rights.

Upon the closing of the offering for which this Registration Statement is
being prepared each outstanding share of Class A and Class B Common Stock of the
Company will be converted into an aggregate of 12,035,440 shares of Common
Stock.

Stock Option Plans

The Company grants options to employees under the 1995 Stock Incentive Plan
(the "Plan") and to Directors under the 1996 Directors' Stock Plan (the
"Directors' Plan").

Under the Plan, options to purchase 1,804,050 shares of the Company's
authorized but unissued Common Stock may be granted. Under the Director's Plan,
42,200 such options may be granted. Stock options are granted at 100% of the
fair value of the Company's Common Stock as determined by the Board of Directors
on the date of grant. In reaching the determination of fair value at the time of
each grant, the Board considered a range of factors, including the Company's
current financial position, its recent revenues, results of operations and cash
flows, its assessment of the Company's competitive position in its markets and
prospects for the future, the status of the Company's product development and
marketing efforts, current valuations for comparable companies and the
illiquidity of an investment in the Company's common stock. Generally, stock
options under the Plan vest 20% after one year and 5% per quarter thereafter,
and expire 10 years after the grant date. Under the Directors' Plan, the options
granted in 1996 vest over three years and options granted in 1997 and later vest
at the earlier of (a) the next annual meeting, (b) 13 months from date of grant
or (c) the effective date of an acquisition as defined in the Directors' Plan.

The following table presents the activity for options under the Plan.

YEAR ENDED YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, 1995 DECEMBER 31, 1996 SEPTEMBER 30, 1997
------------------ ------------------- --------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
OPTIONS PRICE OPTIONS PRICE OPTIONS PRICE
------- -------- -------- -------- --------- --------

Outstanding -- beginning of period.... -- -- 405,513 $16.59 540,292 $ 6.64
Granted............................... 405,513 $16.59 540,292 6.64 502,669 6.64
Exercised............................. -- -- -- -- -- --
Forfeited or Expired.................. -- -- (405,513) 16.59 (21,100) 6.64
------- ------ ------- ------ ------- ------
Outstanding -- end of period.......... 405,513 $16.59 540,292 $ 6.64 1,021,861 $ 6.64
Exercisable at end of period.......... -- -- 76,521 $ 6.64 274,980 $ 6.64

At September 30, 1997, Plan options for 1,021,861 shares were outstanding
at an exercise price of $6.64. The weighted average remaining contractual life
of these options was 8.5 years.

During 1996, 18,088 options were granted at an exercise price of $6.64 per
share under the Directors' Plan and were outstanding at December 31, 1996. Of
these options, 3,016 were exercisable. During 1997, options for 2,412 shares
were granted at an exercise price of $6.64 per share. At September 30, 1997,
20,500 options were outstanding with 7,536 exercisable at the $6.64 per share
price.

F-15
68

MKS INSTRUMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(TABLES IN THOUSANDS EXCEPT PER SHARE DATA)
INFORMATION FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 IS UNAUDITED.

The Company has adopted the disclosure-only provisions of Statement of
Financial Accounting Standards No. 123 (SFAS No. 123), "Accounting for
Stock-Based Compensation" for the year ended December 31, 1996. The Company has
chosen to continue to account for stock-based compensation using the intrinsic
value method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" and related interpretations.
Accordingly, compensation cost for stock options is measured as the excess, if
any, of the fair value of the Company's stock at the date of grant over the
amount an employee must pay to acquire the stock.

The disclosures required under SFAS No. 123 have been omitted as they are
not meaningful based upon the Company's planned conversion from an S Corporation
to a C Corporation upon the closing of the offering for which these financial
statements are being prepared.

9. INCOME TAXES:

The Company has elected to be taxed as an S Corporation for federal and
certain states income tax purposes and, as a result, is not subject to Federal
taxation but is subject to state taxation on income in certain states. The
stockholders are liable for individual Federal and certain state income taxes on
their allocated portions of the Company's taxable income.

The components of income before income taxes and the historical related
provision for income taxes consist of the following:

YEAR ENDED DECEMBER 31, NINE MONTHS ENDED
------------------------------- SEPTEMBER 30,
1994 1995 1996 1997
------- ------- ------- -----------------

Income before income taxes:
United States............................. $ 9,888 $21,183 $11,953 $13,101
Foreign................................... 915 1,475 1,350 981
------- ------- ------- -------
$10,803 $22,658 $13,303 $14,082
======= ======= ======= =======
Current taxes:
State..................................... $ 368 $ 434 $ 285 $ 853
Foreign................................... 610 657 792 572
------- ------- ------- -------
978 1,091 1,077 1,425
------- ------- ------- -------
Deferred taxes:
State..................................... (55) (88) (156) (128)
Foreign................................... (123) (3) (121) (107)
------- ------- ------- -------
(178) (91) (277) (235)
------- ------- ------- -------
Provision for income taxes.................. $ 800 $ 1,000 $ 800 $ 1,190
======= ======= ======= =======

As the Company is not subject to Federal income taxes, a reconciliation of
the effective tax rate to the Federal statutory rate is not meaningful.

F-16
69

MKS INSTRUMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(TABLES IN THOUSANDS EXCEPT PER SHARE DATA)
INFORMATION FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 IS UNAUDITED.

At December 31, 1995, 1996, and September 30, 1997 the components of the
deferred tax asset and deferred tax liability were as follows:

DECEMBER 31,
------------- SEPTEMBER 30,
1995 1996 1997
---- ---- -------------

Deferred tax assets (liabilities):
Inventory............................................. $143 $234 $ 314
Intercompany profits.................................. 125 160 193
Compensation.......................................... 62 72 103
Investment booked under the equity method............. (17) (28) (41)
Other................................................. (179) (34) (37)
---- ---- ----
Total......................................... $134 $404 $ 532
==== ==== ====

10. EMPLOYEE BENEFIT PLANS:

The Company has a 401(k) profit-sharing plan for U.S. employees meeting
certain requirements in which eligible employees may contribute from 1% up to
12% of their compensation. The Company, at its discretion, may provide a
matching contribution which will generally match up to the first 2% of each
participant's compensation, plus 25% of the next 4% of compensation. At the
discretion of the Board of Directors, the Company may also make additional
contributions for the benefit of all eligible employees. The Company's
contributions are generally paid annually, and were $1,324,000, $1,850,000, and
$2,170,000 for the years ended December 31, 1994, 1995, and 1996. Approximately
$2,100,000 has been accrued as the Company's contribution for the nine month
period ended September 30, 1997 and is included in accrued compensation.

The Company maintains a bonus plan which provides cash awards to key
employees, at the discretion of the Board of Directors, based upon operating
results and employee performance. Bonus expense to key employees was $1,231,000,
$764,000, and none, for the years ended December 31, 1994, 1995, and 1996,
respectively, and none and $956,000 for the nine months ended September 30, 1996
and 1997, respectively.

On September 30, 1995, the Board of Directors voted to terminate the
Company's stock appreciation plan covering certain key employees. Performance
shares awarded under the Plan entitled the employee to a pro rata share increase
in the adjusted net book value of the Company. The Company recorded compensation
expense of $160,000 and $199,000 under this plan for the years ended December
31, 1994 and 1995, respectively.

11. RESTRUCTURING:

In 1996, the Company recorded a restructuring charge of $1,400,000,
primarily related to reduction of personnel and the closure of facilities in
Phoenix, AZ and San Jose, CA. These charges include $425,000 of severance pay,
$710,000 of lease commitments, and $265,000 for the write-off of leasehold
improvements. The closure concluded during fiscal year 1997. The remaining
balance of the restructuring charge of approximately $400,000 for lease
commitments is included in "Other Accrued Expenses" in the accompanying balance
sheet as of September 30, 1997.

F-17
70

MKS INSTRUMENTS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(TABLES IN THOUSANDS EXCEPT PER SHARE DATA)
INFORMATION FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996 IS UNAUDITED.

12. GEOGRAPHIC FINANCIAL INFORMATION AND SIGNIFICANT CUSTOMER:

NINE
MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER
---------------------------------- 30,
1994 1995 1996 1997
-------- -------- -------- ------------

Net sales to unaffiliated customers:
United States...................... $ 72,006 $107,003 $119,423 $ 97,080
Europe............................. 12,076 17,696 18,735 13,505
Asia............................... 21,140 30,987 31,066 22,848
Canada............................. 1,607 1,478 1,638 1,196
-------- -------- -------- --------
Total net sales...................... $106,829 $157,164 $170,862 $134,629
======== ======== ======== ========
Transfers between geographic areas
(eliminated in consolidation):
United States...................... $ 18,543 $ 28,420 $ 34,100 $ 25,925
Europe............................. 983 1,700 1,426 577
Asia............................... 118 233 199 204
-------- -------- -------- --------
Total transfers...................... $ 19,644 $ 30,353 $ 35,725 $ 26,706
======== ======== ======== ========
Income from operations:
United States...................... $ 10,680 $ 22,013 $ 14,406 $ 14,312
Europe............................. 337 974 881 284
Asia............................... 934 1,062 653 255
Canada............................. 136 57 128 237
-------- -------- -------- --------
Income from operations............... $ 12,087 $ 24,106 $ 16,068 $ 15,088
======== ======== ======== ========

AS OF
AS OF DECEMBER 31, SEPTEMBER
------------------------------------ 30,
1994 1995 1996 1997
------- ------------ ------- ------------

Identifiable assets:
United States...................... $43,521 $ 71,171 $65,957 $ 76,616
Europe............................. 8,812 10,174 9,883 9,502
Asia............................... 19,344 22,678 18,524 20,162
Canada............................. 643 488 636 405
------- -------- ------- --------
Total assets......................... $72,320 $104,511 $95,000 $106,685
======= ======== ======= ========

Export sales were less than 10% for all periods presented. Net sales to
unaffiliated customers is based on the location of the operation which generated
the sale. Transfers between geographic areas are at negotiated transfer prices
and have been eliminated from consolidated net sales. Income from operations
consists of total net sales less operating expenses, and does not include either
interest income, interest expense, or income taxes. United States income from
operations is net of corporate expenses. Identifiable assets of geographic areas
are those assets related to the Company's operations in each area.

The Company had one customer comprising 9%, 14%, 15%, and 21% of net sales
for the years ended December 31, 1994, 1995 and 1996 and for the nine month
period ended September 30, 1997, respectively.

F-18
71
INSIDE BACK COVER (PG.5):

The inside back cover graphically depicts MKS Instruments' message of being a
worldwide provider of process control solutions. It is produced in four-color
process. In the center of the page is a photo of the Earth, with the tag line
"Providing Solutions Around the Process, Around the World" wrapping around the
photo. The background of the page is dark, with the MKS logo appearing at the
top, knocking out to white. Photos of MKS products surround the globe
image--above, below, left, and right--and include MKS Baratron Capacitance
Manometers, a Throttling Poppet Valve, a Pressure Controller, Mass Flow
Controllers, an In Situ Flow Verifier, a Direct Liquid Injection Subsystem, and
a Residual Gas Analyzer.

======================================================

No dealer, sales representative or any other person has been authorized to
give any information or to make any representations in connection with this
Offering other than those contained in this Prospectus, and, if given or made,
such information or representation must not be relied upon as having been
authorized by the Company or the Underwriters. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any of the
securities other than the shares of Common Stock to which it relates or an offer
to, or a solicitation of, any person in any jurisdiction in which such an offer
or solicitation is unlawful. Neither the delivery of this Prospectus nor any
sale made hereunder shall, under any circumstances, create any implication that
there has been no change in the affairs of the Company or that the information
contained herein is correct as of any time subsequent to the date hereof.

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

TABLE OF CONTENTS
----------------------------

PAGE
----

Prospectus Summary................... 3
Risk Factors......................... 5
Use of Proceeds...................... 10
S Corporation and Termination of
S Corporation Status............... 11
Dividend Policy...................... 11
Capitalization....................... 12
Dilution............................. 13
Selected Consolidated Financial
Data............................... 14
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 16
Business............................. 23
Management........................... 37
Certain Transactions................. 43
Principal Stockholders............... 44
Description of Capital Stock......... 45
Shares Eligible for Future Sale...... 47
Underwriting......................... 48
Legal Matters........................ 49
Experts.............................. 49
Additional Information............... 49
Index to Consolidated Financial
Statements......................... F-1

Until , 1998 (25 days after the date of this Prospectus), all
dealers effecting transactions in the Common Stock, whether or not participating
in this distribution, may be required to deliver a Prospectus. This is in
addition to the obligation of dealers to deliver a Prospectus when acting as
Underwriters and with respect to their unsold allotments or subscriptions

======================================================

======================================================
4,000,000 SHARES
MKS INSTRUMENTS, INC.
COMMON STOCK
------------------------
PROSPECTUS
------------------------
NATIONSBANC MONTGOMERY
SECURITIES, INC.

DONALDSON, LUFKIN & JENRETTE

SECURITIES CORPORATION

PAINEWEBBER INCORPORATED

, 1998
======================================================
73

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Estimated expenses payable in connection with the sale of the Common Stock
offered hereby are as follows:

SEC Registration Fee...................................................... $20,209
NASD Filing Fee........................................................... 7,400
Printing, Engraving and Mailing Expenses.................................. *
Nasdaq Listing Fee........................................................ *
Legal Fees and Expenses................................................... *
Accounting Fees and Expenses.............................................. *
Blue Sky Fees and Expenses................................................ *
Transfer Agent and Registrar Fees......................................... *
Miscellaneous............................................................. *
-------
Total........................................................... $ *
=======

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

* To be filed by amendment

The Company will bear all expenses shown above.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 67 of Chapter 156B of the Massachusetts General Laws provides that
a corporation may indemnify its directors and officers to the extent specified
in or authorized by (i) the articles of organization; (ii) a by-law adopted by
the stockholders; or (iii) a vote adopted by the holders of a majority of the
shares of stock entitled to vote on the election of directors. In all instances,
the extent to which a corporation provides indemnification to its directors and
officers under Section 67 is optional. In its Amended and Restated Articles of
Organization (the "Articles of Organization"), the Registrant has elected to
commit to provide indemnification to its directors and officers in specified
circumstances. Generally, Article 6 of the Registrant's Articles of Organization
provides that the Registrant shall indemnify directors and officers of the
Registrant against liabilities and expenses arising out of legal proceedings
brought against them by reason of their status as directors or officers or by
reason of their agreeing to serve, at the request of the Registrant, as a
director or officer with another organization. Under this provision, a director
or officer of the Registrant shall be indemnified by the Registrant for all
costs and expenses (including attorneys' fees), judgments, liabilities and
amounts paid in settlement of such proceedings, even if he is not successful on
the merits, if he acted in good faith in the reasonable belief that his action
was in the best interests of the Registrant. The Board of Directors may
authorize advancing litigation expenses to a director or officer at his request
upon receipt of an undertaking by any such director of officer to repay such
expenses if it is ultimately determined that he is not entitled to
indemnification for such expenses.

Article 6 of the Registrant's Articles of Organization eliminates the
personal liability of the Registrant's directors to the Registrant or its
stockholders for monetary damages for breach of a director's fiduciary duty,
except to the extent Chapter 156B of the Massachusetts General Laws prohibits
the elimination or limitation of such liability.

The Underwriting Agreement, a form of which is filed at Exhibit 1.1 to this
Registration Statement on Form S-1 (the "Underwriting Agreement"), provides that
the Underwriters are obligated under certain circumstances to indemnify
directors, officers and controlling persons of the Registrant against certain
liabilities, including liabilities under the Securities Act of 1933, as amended
(the "Securities Act"). Reference is made to the form of Underwriting Agreement.

II-1
74

The Company has obtained directors and officers liability insurance for the
benefit of its directors and certain of its officers.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

In the three years preceding the filing of this Registration Statement, the
Registrant has not sold any securities. The registrant has awarded to employees
and directors options to purchase 1,042,361 shares of Common Stock. The grant of
options were exempt from registration under the Securities Act by virtue of the
provisions of Section 4(2) of the Securities Act or Rule 701 thereunder.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits:

EX. NO. DESCRIPTION
------- ---------------------------------------------------------------------------------

1.1 Form of Underwriting Agreement
3.1 Restated Articles of Organization, as amended
*3.2 Form of Amended and Restated Articles of Organization
3.3 By-laws, as amended
*3.4 Form of Amended and Restated By-laws
*4.1 Specimen certificate representing the Common Stock
*5.1 Opinion of Hale and Dorr LLP
*10.1 Amended and Restated 1995 Incentive Stock Option Plan
*10.2 1996 Director Stock Option Plan, as amended
*10.3 1997 Director Stock Option Plan
*10.4 1997 Employee Stock Purchase Plan
10.5 Amended and Restated Employment Agreement dated as of December 15, 1995 between
Leo Berlinghieri and the Registrant
10.6 Amended and Restated Employment Agreement dated as of December 15, 1995 between
John J. Sullivan and the Registrant
10.7 Amended and Restated Employment Agreement dated as of December 15, 1995 between
Ronald C. Weigner and the Registrant
10.8 Amended and Restated Employment Agreement dated as of December 15, 1995 between
William D. Stewart and the Registrant
10.9 Loan Agreement dated as of October 31, 1995, as amended February 23, 1996, by and
between the First National Bank of Boston and the Registrant
10.10 Lease Agreement dated as of October 12, 1989, as extended October 14, 1994, by
and between Aspen Industrial Park Partnership and HPS, a division of MKS
Instruments, Inc.
10.11 Loan Agreement dated as of November 1, 1993, as last amended February 4, 1997
between the First National Bank of Boston and the Registrant
10.12 Lease dated as of September 21, 1995 by and between General American Life
Insurance Company and the Registrant
10.13 Loan Agreement dated as of February 23, 1996, as last amended February 4, 1997
between the First National Bank of Boston, Chemical Bank and the Registrant
10.14 Revolving Credit Note ($8,000,000) dated February 23, 1996 between Chemical Bank,
The First National Bank of Boston and the Registrant
10.15 Revolving Credit Note ($12,000,000) dated February 23, 1996 between Chemical
Bank, The First National Bank of Boston and the Registrant

II-2
75

EX. NO. DESCRIPTION
------- ---------------------------------------------------------------------------------

10.16 Promissory Note dated as of August 1990 between Jefferson National Life Insurance
Company and the Registrant
**10.17 Purchase Agreement dated June 1, 1996 by and between Applied Materials, Inc. and
the Registrant
10.18 Management Incentive Program
10.19 Lease dated as of December 21, 1989, as last amended December 1996, between the
Registrant and Walpole Park South II Trust
10.20 Lease dated as of January 1, 1996 between MKS Japan, Inc., a subsidiary of the
Registrant, and MiFuji Kanzai Co. Ltd. (covering Floor 5)
10.21 Lease dated as of April 21, 1997 between MKS Japan, Inc., a subsidiary of the
Registrant, and MiFuji Kanzai Co. Ltd. (covering Floors 1 and 2)
10.22 Split-Dollar Agreement dated as of September 12, 1991 between the Registrant,
John R. Bertucci and Claire R. Bertucci and Richard S. Chute, Trustees of the
John R. Bertucci Insurance Trust of January 10, 1986
10.23 Split-Dollar Agreement dated as of September 12, 1991 between the Registrant,
John R. Bertucci and John R. Bertucci and Thomas H. Belknap, Trustees of the
Claire R. Bertucci Insurance Trust of January 10, 1986
*10.24 Tax Indemnification and S Corporation Distribution Agreement
11.1 Statement re Computation of Per Share Earnings
21.1 Subsidiaries of the Registrant
*23.1 Consent of Hale and Dorr LLP (contained in Exhibit 5.1)
23.2 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney (included on Page II-4)
27 Financial Data Schedule

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

* To be filed by amendment.
** Confidential materials omitted and filed separately with the Securities and
Exchange Commission.

(b) FINANCIAL STATEMENTS SCHEDULES

Report of Independent Accountants on Schedule II -- Valuation and
Qualifying Accounts

Schedule II -- Valuation and Qualifying Accounts

ITEM 17. UNDERTAKINGS.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer and controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the questions whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offer
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-3
76

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Andover, Commonwealth of
Massachusetts, on this 14 day of November, 1997.

MKS INSTRUMENTS, INC.

By: /s/ JOHN R. BERTUCCI
------------------------------------
JOHN R. BERTUCCI
CHAIRMAN OF THE BOARD, PRESIDENT AND
CHIEF EXECUTIVE OFFICER

POWER OF ATTORNEY

We, the undersigned officers and directors of MKS Instruments, Inc., hereby
severally constitute and appoint John R. Bertucci, Ronald C. Weigner and Robert
F. O'Brien and each of them singly, our true and lawful attorneys with full
power to them, and each of them singly, to sign for us and in our names, in the
capacities indicated below, the Registration Statement field herewith, and any
and all amendments (including post-effective amendments) to said Registration
Statement (or any other registration statement for the same offering that is to
be effective upon filing pursuant to Rule 462(b) under the Securities Act of
1933) and generally to do all such things in our names and behalf in our
capacities as officers and directors to enable MKS Instruments, Inc. to comply
with the Securities Act of 1933, and all requirements of the Securities and
Exchange Commission, hereby ratifying and confirming our signatures as they may
be signed by our said attorneys, or any of them, to any such registration
statement and any and all amendments thereto.

Witness our hands and common seal on the date set forth below.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

SIGNATURES TITLE DATE
- ------------------------------------------ ------------------------------ ------------------

/s/ JOHN R. BERTUCCI Chairman of the Board of November 14, 1997
- ------------------------------------------ Directors, President and Chief
JOHN R. BERTUCCI Executive Officer (Principal
Executive Officer)

/s/ RONALD C. WEIGNER Vice President and Chief November 14, 1997
- ------------------------------------------ Financial Officer (Principal
RONALD C. WEIGNER Financial and Accounting
Officer)

/s/ RICHARD S. CHUTE Director November 14, 1997
- ------------------------------------------
RICHARD S. CHUTE

/s/ OWEN W. ROBBINS Director November 14, 1997
- ------------------------------------------
OWEN W. ROBBINS

/s/ ROBERT J. THERRIEN Director November 14, 1997
- ------------------------------------------
ROBERT J. THERRIEN

/s/ LOUIS P. VALENTE Director November 14, 1997
- ------------------------------------------
LOUIS P. VALENTE

II-4
77

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
of MKS Instruments, Inc.:

In connection with our audits of the consolidated financial statements of
MKS Instruments, Inc. as of December 31, 1995 and 1996, and September 30, 1997,
and for each of the years ended December 31, 1994, 1995 and 1996 and the nine
month period ended September 30, 1997, we have also audited the consolidated
financial statement schedule listed in Item 16(b) herein.

In our opinion, the consolidated financial statement schedule, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.

COOPERS & LYBRAND L.L.P.

Boston, Massachusetts
October 28, 1997
78

SCHEDULE II

MKS INSTRUMENTS, INC.

VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)

BALANCE
BALANCE AT PROVISION AT END
BEGINNING CHARGED TO ACCOUNTS OF
OF PERIOD EXPENSE WRITTEN OFF PERIOD
---------- ---------- ----------- -------

YEAR ENDED DECEMBER 31, 1994
Allowance for Doubtful Accounts..................... $261 241 83 $ 419
YEAR ENDED DECEMBER 31, 1995
Allowance for Doubtful Accounts..................... $419 133 10 $ 542
YEAR ENDED DECEMBER 31, 1996
Allowance for Doubtful Accounts..................... $542 (20) 40 $ 482
NINE MONTHS ENDED SEPTEMBER 30, 1997
Allowance for Doubtful Accounts..................... $482 255 119 $ 618

S-2
79

EXHIBIT 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the inclusion in this registration statement on Form S-1
(File No. ) of our reports dated October 28, 1997, on our audits of
the consolidated financial statements and financial statement schedule of MKS
Instruments, Inc. We also consent to the reference to our firm under the caption
"Experts" and "Selected Consolidated Financial Data."

COOPERS & LYBRAND L.L.P.

Boston, Massachusetts
November 12, 1997

   1
                                                                     EXHIBIT 1.1


                     NATIONSBANC MONTGOMERY SECURITIES, INC.
                           FORM UNDERWRITING AGREEMENT
                            Draft of October 29, 1997
                                [Execution Copy]
                                [Conformed Copy]



                             _______________ Shares




                              MKS Instruments, Inc.



                                  Common Stock





                             Underwriting Agreement

                                   dated [___]
   2
                               ____________ Shares

                              MKS INSTRUMENTS, INC.

                                  Common Stock

                             UNDERWRITING AGREEMENT


                                                                       ___, 1998



NATIONSBANC MONTGOMERY SECURITIES, INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
PAINE WEBBER
As Representatives of the several Underwriters
c/o NATIONSBANC MONTGOMERY SECURITIES, INC.
600 Montgomery Street
San Francisco, California  94111

Ladies and Gentlemen:

         Introductory. MKS Instruments, Inc., a Massachusetts corporation (the
"Company), proposes to issue and sell to the several underwriters named in
Schedule A (the "Underwriters") an aggregate of [___] shares (the "Firm Common
Shares") of its Common Stock, no par value per share (the "Common Stock"). In
addition, the Company has granted to the Underwriters an option to purchase up
to an additional [___] shares (the "Optional Common Shares") of Common Stock, as
provided in Section 2. The Firm Common Shares and, if and to the extent such
option is exercised, the Optional Common Shares are collectively called the
"Common Shares". NationsBanc Montgomery Securities, Inc. ("NMSI"), Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJ") and Paine Webber have agreed to
act as representatives of the several Underwriters (in such capacity, the
"Representatives") in connection with the offering and sale of the Common
Shares.

         The Company has prepared and filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-1 (File No.
333-[___]), which contains a form of prospectus to be used in connection with
the public offering and sale of the Common Shares. Such registration statement,
as amended, including the financial statements, exhibits and schedules thereto,
in the form in which it was declared effective by the Commission under the
Securities Act of 1933 and the rules and regulations promulgated thereunder
(collectively, the "Securities Act"), including any information deemed to be a
part thereof at the time of effectiveness pursuant to Rule 430A or Rule 434
under the Securities Act, is called the "Registration Statement". Any
registration statement filed by the Company pursuant to Rule 462(b) under the
Securities Act is called the "Rule 462(b) Registration Statement", and from and
after the date and time of filing of the Rule 462(b) Registration Statement the
term "Registration Statement" shall include the Rule 462(b) Registration
Statement. Such prospectus, in the form first used by the Underwriters to
confirm sales of the Common Shares, is called the "Prospectus"; provided,
however, if the Company has, with the consent of NMSI, elected to rely upon Rule
434 under the Securities Act, the term "Prospectus" shall mean the Company's
prospectus subject


                                        1
   3
to completion (each, a "preliminary prospectus") dated [___] (such preliminary
prospectus is called the "Rule 434 preliminary prospectus"), together with the
applicable term sheet (the "Term Sheet") prepared and filed by the Company with
the Commission under Rules 434 and 424(b) under the Securities Act and all
references in this Agreement to the date of the Prospectus shall mean the date
of the Term Sheet. All references in this Agreement to the Registration
Statement, the Rule 462(b) Registration Statement, a preliminary prospectus, the
Prospectus or the Term Sheet, or any amendments or supplements to any of the
foregoing, shall include any copy thereof filed with the Commission pursuant to
its Electronic Data Gathering, Analysis and Retrieval System ("EDGAR").

         The Company hereby confirms its agreements with the Underwriters as
follows:

Section 1. Representations and Warranties of the Company. The Company hereby
represents, warrants and covenants to each Underwriter as follows:

         (a) Compliance with Registration Requirements. The Registration
Statement and any Rule 462(b) Registration Statement have been declared
effective by the Commission under the Securities Act. The Company has complied
to the Commission's satisfaction with all requests of the Commission for
additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement is in effect and no proceedings for such purpose have been instituted
or are pending or, to the best knowledge of the Company, are contemplated or
threatened by the Commission.

Each preliminary prospectus and the Prospectus when filed complied in all
material respects with the Securities Act and, if filed by electronic
transmission pursuant to EDGAR (except as may be permitted by Regulation S-T
under the Securities Act), was identical to the copy thereof delivered to the
Underwriters for use in connection with the offer and sale of the Common Shares.
Each of the Registration Statement, any Rule 462(b) Registration Statement and
any post-effective amendment thereto, at the time it became effective and at all
subsequent times up to and including the Closing Date, complied and will comply
in all material respects with the Securities Act and did not and will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading. The Prospectus, as amended or supplemented, as of its date and at
all subsequent times up to and including the Closing Date, did not and will not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The representations
and warranties set forth in the two immediately preceding sentences do not apply
to statements in or omissions from the Registration Statement, any Rule 462(b)
Registration Statement, or any post-effective amendment thereto, or the
Prospectus, or any amendments or supplements thereto, made in reliance upon and
in conformity with information relating to any Underwriter furnished to the
Company in writing by the Representatives expressly for use therein. There are
no contracts or other documents required to be described in the Prospectus or to
be filed as exhibits to the Registration Statement which have not been described
or filed as required.

         (b) Offering Materials Furnished to Underwriters. The Company has
delivered to the Representatives one complete manually signed copy of the
Registration Statement and of each consent and certificate of experts filed as a
part thereof, and conformed copies of the Registration Statement (without
exhibits) and preliminary prospectuses and the Prospectus, as amended or
supplemented, in such quantities and at such places as the Representatives have
reasonably requested for each of the Underwriters.


                                        2
   4
         (c) Distribution of Offering Material By the Company. The Company has
not distributed and will not distribute, prior to the later of the Second
Closing Date (as defined below) and the completion of the Underwriters'
distribution of the Common Shares, any offering material in connection with the
offering and sale of the Common Shares other than a preliminary prospectus, the
Prospectus or the Registration Statement.

         (d) The Underwriting Agreement. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding agreement of,
the Company, enforceable in accordance with its terms, except as rights to
indemnification hereunder may be limited by applicable law and except as the
enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles.

         (e) Authorization of the Common Shares. The Common Shares to be
purchased by the Underwriters from the Company have been duly authorized for
issuance and sale pursuant to this Agreement and, when issued and delivered by
the Company pursuant to this Agreement, will be validly issued, fully paid and
nonassessable.

         (f) No Applicable Registration or Other Similar Rights. There are no
persons with registration or other similar rights to have any equity or debt
securities registered for sale under the Registration Statement or included in
the offering contemplated by this Agreement, except for such rights as have been
duly waived.

         (g) No Material Adverse Change. Except as otherwise disclosed in the
Prospectus, subsequent to the respective dates as of which information is given
in the Prospectus: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries, considered as
one entity (any such change is called a "Material Adverse Change"); (ii) the
Company and its subsidiaries, considered as one entity, have not incurred any
material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business nor entered into any material transaction or
agreement not in the ordinary course of business; and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company or other subsidiaries, any of its
subsidiaries on any class of capital stock or repurchase or redemption by the
Company or any of its subsidiaries of any class of capital stock.

         (h) Independent Accountants. Coopers & Lybrand L.L.P., who have
expressed their opinion with respect to the financial statements (which term as
used in this Agreement includes the related notes thereto) filed with the
Commission as a part of the Registration Statement and included in the
Prospectus, are independent public or certified public accountants as required
by the Securities Act.

         (i) Preparation of the Financial Statements. The financial statements
filed with the Commission as a part of the Registration Statement and included
in the Prospectus present fairly the consolidated financial position of the
Company and its subsidiaries as of and at the dates indicated and the results of
their operations and cash flows for the periods specified. Such financial
statements [and supporting schedules] have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved, except as may be expressly stated in the


                                        3
   5


related notes thereto. No other financial statements or supporting schedules are
required to be included in the Registration Statement. The financial data set
forth in the Prospectus under the captions "Prospectus Summary--Summary Selected
Financial Data", "Selected Financial Data" and "Capitalization" fairly present
the information set forth therein on a basis consistent with that of the audited
financial statements contained in the Registration Statement.

         (j) Incorporation and Good Standing of the Company and its
Subsidiaries. Each of the Company and its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation and has corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and, in the case of the Company, to enter into
and perform its obligations under this Agreement. Each of the Company and each
subsidiary is duly qualified as a foreign corporation to transact business and
is in good standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions where the failure to so
qualify or to be in good standing would not, individually or in the aggregate,
result in a Material Adverse Change. All of the issued and outstanding capital
stock of each subsidiary has been duly authorized and validly issued, is fully
paid and nonassessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance or claim. The Company does not own or control, directly or
indirectly, any corporation, association or other entity other than the
subsidiaries listed in Exhibit 21.1 to the Registration Statement.

         (k) Capitalization and Other Capital Stock Matters. After giving effect
to the assumptions set forth in the Prospectus, (i) the authorized, issued and
outstanding capital stock of the Company is as set forth in the Prospectus under
the caption "Capitalization" (other than for subsequent issuances, if any,
pursuant to employee benefit plans described in the Prospectus or upon exercise
of outstanding options described in the Prospectus), (ii) the Common Stock
(including the Common Shares) conforms in all material respects to the
description thereof contained in the Prospectus. All of the issued and
outstanding shares of Common Stock have been duly authorized and validly issued,
are fully paid and nonassessable and have been issued in compliance with federal
and state securities laws. None of the outstanding shares of Common Stock were
issued in violation of any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase securities of the Company. There are
no authorized or outstanding options, warrants, preemptive rights, rights of
first refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock of the
Company or any of its subsidiaries other than those accurately described in the
Prospectus. The description of the Company's stock option, stock bonus and other
stock plans or arrangements, and the options or other rights granted thereunder,
set forth in the Prospectus accurately and fairly presents the information
required to be shown with respect to such plans, arrangements, options and
rights.

         (l) Stock Exchange Listing. The Common Shares have been approved for
listing on the Nasdaq National Market, subject only to official notice of
issuance.

         (m) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws or is in default (or,
with the giving of notice or lapse of time, would be in default) ("Default")
under any indenture, mortgage, loan or credit agreement, note, contract,
franchise, lease or other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any of its subsidiaries is
subject (each, an "Existing Instrument"), except for such Defaults as would not,
individually or in the aggregate, result in


                                        4
   6


a Material Adverse Change. The Company's execution, delivery and performance of
this Agreement and consummation of the transactions contemplated hereby and by
the Prospectus (i) have been duly authorized by all necessary corporate action
and will not result in any violation of the provisions of the charter or by-laws
of the Company or any subsidiary, (ii) will not conflict with or constitute a
breach of, or Default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
its subsidiaries pursuant to, or require the consent of any other part to, any
Existing Instrument, except for such conflicts, breaches, Defaults, liens,
charges or encumbrances as would not, individually or in the aggregate, result
in a Material Adverse Change and (iii) will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to
the Company or any subsidiary. No consent, approval, authorization or other
order of, or registration or filing with, any court or other governmental or
regulatory authority or agency, is required for the Company's execution,
delivery and performance of this Agreement and consummation of the transactions
contemplated hereby and by the Prospectus, except such as have been obtained or
made by the Company and are in full force and effect under the Securities Act,
applicable state securities or blue sky laws and from the National Association
of Securities Dealers, Inc. (the "NASD").

         (n) No Material Actions or Proceedings. There are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company's knowledge, threatened (i) against or affecting the Company or any of
its subsidiaries, (ii) which has as the subject thereof any officer or director
of, or property owned or leased by, the Company or any of its subsidiaries or
(iii) relating to environmental or discrimination matters, where in any such
case (A) there is a reasonable possibility that such action, suit or proceeding
might be determined adversely to the Company or such subsidiary and (B) any such
action, suit or proceeding, if so determined adversely, would reasonably be
expected to result in a Material Adverse Change or adversely affect the
consummation of the transactions contemplated by this Agreement. No material
labor dispute with the employees of the Company or any of its subsidiaries
exists or, to the best of the Company's knowledge, is threatened or imminent.

         (o) Intellectual Property Rights. The Company and its subsidiaries own
or possess sufficient trademarks, trade names, patent rights, copyrights,
licenses, approvals, trade secrets and other similar rights (collectively,
"Intellectual Property Rights") reasonably necessary to conduct their businesses
as now conducted; and the expected expiration of any of such Intellectual
Property Rights would not result in a Material Adverse Change. Neither the
Company nor any of its subsidiaries has received any notice of infringement or
conflict with asserted Intellectual Property Rights of others, which
infringement or conflict, if the subject of an unfavorable decision, would
result in a Material Adverse Change.

         (p) All Necessary Permits, etc. The Company and each subsidiary possess
such valid and current certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct their respective businesses (other than any the absence of which would
not, singly or in the aggregate, result in a Material Adverse Change, and
neither the Company nor any subsidiary has received any notice of proceedings
relating to the revocation or modification of, or non-compliance with, any such
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could result in a
Material Adverse Change.

         (q) Title to Properties. The Company and each of its subsidiaries has
good and marketable title to all the properties and assets reflected as owned in
the financial statements referred to in Section (i) above (or elsewhere in the
Prospectus), in each case, except as disclosed in the Prospectus, free and clear
of any security interests, mortgages, liens, encumbrances, equities, claims and
other defects, except


                                        5
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such as do not materially and adversely affect the value of such property and do
not materially interfere with the use made or proposed to be made of such
property by the Company or such subsidiary. The real property, improvements,
equipment and personal property held under lease by the Company or any
subsidiary are held under valid and enforceable leases, with such exceptions as
are not material and do not materially interfere with the use made or proposed
to be made of such real property, improvements, equipment or personal property
by the Company or such subsidiary.

         (r) Tax Law Compliance. The Company and its subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns or have
properly requested extensions thereof and have paid all taxes required to be
paid by any of them and, if due and payable, any related or similar assessment,
fine or penalty levied against any of them except as may be being contested in
good faith and by appropriate proceedings. The Company has made adequate
charges, accruals and reserves in the applicable financial statements referred
to in Section 1(i) above in respect of all federal, state and foreign income and
franchise taxes for all periods as to which the tax liability of the Company or
any of its subsidiaries has not been finally determined.

         (s) Company Not an "Investment Company". The Company has been advised
of the rules and requirements under the Investment Company Act of 1940, as
amended (the "Investment Company Act"). The Company is not, and after receipt of
payment for the Common Shares will not be, an "investment company" within the
meaning of Investment Company Act and will conduct its business in a manner so
that it will not become subject to the Investment Company Act.

         (t) Insurance. Each of the Company and its subsidiaries are insured by
recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as the Company has
reasonably deemed adequate and customary for their businesses including, but not
limited to, policies covering real and personal property owned or leased by the
Company and its subsidiaries against theft, damage, destruction, and acts of
vandalism. The Company has no reason to believe that it or any subsidiary will
not be able (i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from similar institutions
as may be necessary or appropriate to conduct its business as now conducted and
at a cost that would not result in a Material Adverse Change. Neither of the
Company nor any subsidiary has been denied any insurance coverage which it has
sought or for which it has applied.

         (u) No Price Stabilization or Manipulation. The Company has not taken
and will not take, directly or indirectly, any action designed to or that might
be reasonably expected to cause or result in stabilization or manipulation of
the price of the Common Stock to facilitate the sale or resale of the Common
Shares.

         (v) Related Party Transactions. There are no business relationships or
related-party transactions involving the Company or any subsidiary or any other
person required to be described in the Prospectus which have not been described
as required.

         (w) No Unlawful Contributions or Other Payments. Neither the Company
nor any of its subsidiaries nor, to the best of the Company's knowledge, any
employee or agent of the Company or any subsidiary, has made any contribution or
other payment to any official of, or candidate for, any federal, state or
foreign office in violation of any law or of the character required to be
disclosed in the Prospectus.

                                        6
   8

                  Any certificate signed by an officer of the Company and
delivered to the Representatives or to counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to each Underwriter as
to the matters set forth therein.

Section 2.  Purchase, Sale and Delivery of the Common Shares.

                  The Firm Common Shares. The Company agrees to issue and sell
to the several Underwriters the Firm Common Shares upon the terms herein set
forth. On the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth,
the Underwriters agree, severally and not jointly, to purchase from the Company
the respective number of Firm Common Shares set forth opposite their names on
Schedule A. The purchase price per Firm Common Share to be paid by the several
Underwriters to the Company shall be $[___] per share.

         The First Closing Date. Delivery of certificates for the Firm Common
Shares to be purchased by the Underwriters and payment therefor shall be made at
the offices of NMSI, 600

                                        7
   9


Montgomery Street, San Francisco, California (or such other place as may be
agreed to by the Company and the Representatives) at 6:00 a.m. San Francisco
time, on [___], or such other time and date not later than 10:30 a.m. San
Francisco time, on [___] as the Representatives shall designate by notice to the
Company (the time and date of such closing are called the "First Closing Date").
The Company hereby acknowledges that circumstances under which the
Representatives may provide notice to postpone the First Closing Date as
originally scheduled include, but are in no way limited to, any determination by
the Company or the Representatives to recirculate to the public copies of an
amended or supplemented Prospectus or a delay as contemplated by the provisions
of Section 10.

                  The Optional Common Shares; the Second Closing Date. In
addition, on the basis of the representations, warranties and agreements herein
contained, and upon the terms but subject to the conditions herein set forth,
the Company hereby grants an option to the several Underwriters to purchase,
severally and not jointly, up to an aggregate of [___] Optional Common Shares
from the Company at the purchase price per share to be paid by the Underwriters
for the Firm Common Shares. The option granted hereunder is for use by the
Underwriters solely in covering any over-allotments in connection with the sale
and distribution of the Firm Common Shares. The option granted hereunder may be
exercised at any time (but not more than once) upon notice by the
Representatives to the Company, which notice may be given at any time within 30
days from the date of this Agreement. Such notice shall set forth (i) the
aggregate number of Optional Common Shares as to which the Underwriters are
exercising the option, (ii) the names and denominations in which the
certificates for the Optional Common Shares are to be registered and (iii) the
time, date and place at which such certificates will be delivered (which time
and date may be simultaneous with, but not earlier than, the First Closing Date;
and in such case the term "First Closing Date" shall refer to the time and date
of delivery of certificates for the Firm Common Shares and the Optional Common
Shares). Such time and date of delivery, if subsequent to the First Closing
Date, is called the "Second Closing Date" and shall be determined by the
Representatives and shall not be earlier than three nor later than five full
business days after delivery of such notice of exercise. If any Optional Common
Shares are to be purchased, each Underwriter agrees, severally and not jointly,
to purchase the number of Optional Common Shares (subject to such adjustments to
eliminate fractional shares as the Representatives may determine) that bears the
same proportion to the total number of Optional Common Shares to be purchased as
the number of Firm Common Shares set forth on Schedule A opposite the name of
such Underwriter bears to the total number of Firm Common Shares. The
Representatives may cancel the option at any time prior to its expiration by
giving written notice of such cancellation to the Company.

                  Public Offering of the Common Shares. The Representatives
hereby advise the Company that the Underwriters intend to offer for sale to the
public, as described in the Prospectus, their respective portions of the Common
Shares as soon after this Agreement has been executed and the Registration
Statement has been declared effective as the Representatives, in their sole
judgment, have determined is advisable and practicable.

                  Payment for the Common Shares. Payment for the Common Shares
shall be made at the First Closing Date (and, if applicable, at the Second
Closing Date) by wire transfer of immediately available funds to the order of
the Company.

                  It is understood that the Representatives have been
authorized, for their own account and the accounts of the several Underwriters,
to accept delivery of and receipt for, and make payment of the purchase price
for, the Firm Common Shares and any Optional Common Shares the Underwriters have
agreed to purchase. NMSI, individually and not as the Representatives of the
Underwriters, may (but

                                        8
   10


shall not be obligated to) make payment for any Common Shares to be purchased by
any Underwriter whose funds shall not have been received by the Representatives
by the First Closing Date or the Second Closing Date, as the case may be, for
the account of such Underwriter, but any such payment shall not relieve such
Underwriter from any of its obligations under this Agreement.

                  Delivery of the Common Shares. The Company shall deliver, or
cause to be delivered, to the Representatives for the accounts of the several
Underwriters certificates for the Firm Common Shares at the First Closing Date,
against the irrevocable release of a wire transfer of immediately available
funds for the amount of the purchase price therefor. The Company shall also
deliver, or cause to be delivered, to the Representatives for the accounts of
the several Underwriters, certificates for the Optional Common Shares the
Underwriters have agreed to purchase at the First Closing Date or the Second
Closing Date, as the case may be, against the irrevocable release of a wire
transfer of immediately available funds for the amount of the purchase price
therefor. The certificates for the Common Shares shall be in definitive form and
registered in such names and denominations as the Representatives shall have
requested at least two full business days prior to the First Closing Date (or
the Second Closing Date, as the case may be) and shall be made available for
inspection on the business day preceding the First Closing Date (or the Second
Closing Date, as the case may be) at a location in New York City as the
Representatives may designate. Time shall be of the essence, and delivery at the
time and place specified in this Agreement is a further condition to the
obligations of the Underwriters.

                  Delivery of Prospectus to the Underwriters. Not later than
12:00 p.m. on the second business day following the date the Common Shares are
released by the Underwriters for sale to the public, the Company shall delivery
or cause to be delivered copies of the Prospectus in such quantities and at such
places as the Representatives shall request.

Section 3. Additional Covenants of the Company. The Company further covenants
and agrees with each Underwriter as follows:

         (a) Representatives' Review of Proposed Amendments and Supplements.
During such period beginning on the date hereof and ending on the later of the
First Closing Date or such date, as in the opinion of counsel for the
Underwriters, the Prospectus is no longer required by law to be delivered in
connection with sales by an Underwriter or dealer (the "Prospectus Delivery
Period"), prior to amending or supplementing the Registration Statement
(including any registration statement filed under Rule 462(b) under the
Securities Act) or the Prospectus, the Company shall furnish to the
Representatives for review a copy of each such proposed amendment or supplement,
and the Company shall not file any such proposed amendment or supplement to
which the Representatives reasonably object.

         (b) Securities Act Compliance. After the date of this Agreement, the
Company shall promptly advise the Representatives in writing (i) of the receipt
of any comments of, or requests for additional or supplemental information from,
the Commission, (ii) of the time and date of any filing of any post-effective
amendment to the Registration Statement or any amendment or supplement to any
preliminary prospectus or the Prospectus, (iii) of the time and date that any
post-effective amendment to the Registration Statement becomes effective and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment
thereto or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus, or of any proceedings to remove, suspend or
terminate from listing or quotation the Common Stock from any securities
exchange upon which it is listed for trading or included or designated for
quotation, or of

                                        9
   11


the threatening or initiation of any proceedings for any of such purposes. If
the Commission shall enter any such stop order at any time, the Company will use
its best efforts to obtain the lifting of such order at the earliest possible
moment. Additionally, the Company agrees that it shall comply with the
provisions of Rules 424(b), 430A and 434, as applicable, under the Securities
Act and will use its reasonable efforts to confirm that any filings made by the
Company under such Rule 424(b) were received in a timely manner by the
Commission.

         (c) Amendments and Supplements to the Prospectus and Other Securities
Act Matters. If, during the Prospectus Delivery Period, any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if in the opinion of the Representatives or counsel for the Underwriters it
is otherwise necessary to amend or supplement the Prospectus to comply with law,
the Company agrees to promptly prepare (subject to Section 3(a) hereof), file
with the Commission and furnish at its own expense to the Underwriters and to
dealers, amendments or supplements to the Prospectus so that the statements in
the Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus, as amended or supplemented, will comply with law.

         (d) Copies of any Amendments and Supplements to the Prospectus. The
Company agrees to furnish the Representatives, without charge, during the
Prospectus Delivery Period, as many copies of the Prospectus and any amendments
and supplements thereto as the Representatives may request.

         (e) Blue Sky Compliance. The Company shall cooperate with the
Representatives and counsel for the Underwriters to qualify or register the
Common Shares for sale under (or obtain exemptions from the application of) the
state securities or blue sky laws or Canadian provincial Securities laws of
those jurisdictions designated by the Representatives, shall comply with such
laws and shall continue such qualifications, registrations and exemptions in
effect so long as required for the distribution of the Common Shares. The
Company shall not be required to qualify as a foreign corporation or to take any
action that would subject it to general service of process in any such
jurisdiction where it is not presently qualified or where it would be subject to
taxation as a foreign corporation. The Company will advise the Representatives
promptly of the suspension of the qualification or registration of (or any such
exemption relating to) the Common Shares for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such purpose,
and in the event of the issuance of any order suspending such qualification,
registration or exemption, the Company shall use its best efforts to obtain the
withdrawal thereof at the earliest possible moment.

         (f) Use of Proceeds. The Company shall apply the net proceeds from the
sale of the Common Shares sold by it in the manner described under the caption
"Use of Proceeds" in the Prospectus.

         (g) Transfer Agent. The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the Common Stock.

         (h) Earnings Statement. As soon as practicable, the Company will make
generally available to its security holders and to the Representatives an
earnings statement (which need not be audited) covering the twelve-month period
ending [___] that satisfies the provisions of Section 11(a) of the Securities
Act.

                                       10
   12


         (i) Periodic Reporting Obligations. During the Prospectus Delivery
Period the Company shall file, on a timely basis, with the Commission and the
Nasdaq National Market all reports and documents required to be filed under the
Exchange Act.

         (j) Agreement Not To Offer or Sell Additional Securities During the
period of 180 days following the date of the Prospectus, the Company will not,
without the prior written consent of NMSI (which consent may be withheld at the
sole discretion of NMSI), directly or indirectly, sell, offer, contract or grant
any option to sell, pledge, transfer or establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Exchange Act, or
otherwise dispose of or transfer, or announce the offering of, or file any
registration statement under the Securities Act in respect of, any shares of
Common Stock, options or warrants to acquire shares of the Common Stock or
securities exchangeable or exercisable for or convertible into shares of Common
Stock (other than as contemplated by this Agreement with respect to the Common
Shares); provided, however, that the Company may issue shares of its Common
Stock or options to purchase its Common Stock, or Common Stock upon exercise of
options, pursuant to any stock option, stock bonus or other stock plan or
arrangement described in the Prospectus, (ii) file one or more Registration
Statements on Form S-8, and (iii) issue shares in connection with any
acquisition if recipients agree in writing not to sell, offer, dispose of or
otherwise transfer any such shares during such 180 day period without the prior
written consent of NMSI (which consent may be withheld at the sole discretion of
the NMSI).

         (k) Future Reports to the Representatives. During the period of five
years hereafter the Company will furnish to the Representatives at [600
Montgomery Street, San Francisco, CA 94111] [9 West 57th Street, New York, NY
10022] [Two International Place, Boston, MA 02110] Attention:[ ]: (i) as soon as
practicable after the end of each fiscal year, copies of the Annual Report of
the Company containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, stockholders' equity and cash flows for
the year then ended and the opinion thereon of the Company's independent public
or certified public accountants; (ii) as soon as practicable after the filing
thereof, copies of each proxy statement, Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other report filed by the
Company with the Commission, the NASD or any securities exchange; and (iii) as
soon as available, copies of any report or communication of the Company mailed
generally to holders of its capital stock.

Section 4. Payment of Expenses. The Company agrees to pay all costs, fees and
expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Common Stock, (iii) all
necessary issue, transfer and other stamp taxes in connection with the issuance
and sale of the Common Shares to the Underwriters, (iv) all fees and expenses of
the Company's counsel, independent public or certified public accountants and
other advisors, (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and
certificates of experts), each preliminary prospectus and the Prospectus, and
all amendments and supplements thereto, and this Agreement, (vi) all filing
fees, attorneys' fees and expenses incurred by the Company or the Underwriters
in connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Common Shares for offer
and sale under the state securities or blue sky laws or the provincial
securities laws of Canada, and, if requested by the Representatives, preparing
and printing a "Blue Sky Survey" or memorandum, and any supplements thereto,
advising the Underwriters of such qualifications, registrations and exemptions,

                                       11
   13


(vii) the filing fees incident to, and the reasonable fees and expenses of
counsel for the Underwriters in connection with, the NASD's review and approval
of the Underwriters' participation in the offering and distribution of the
Common Shares, (viii) the fees and expenses associated with [listing] the Common
Shares on the Nasdaq National Market, and (ix) all other fees, costs and
expenses referred to in Item 13 of Part II of the Registration Statement. Except
as provided in this Section 4, Section 6, Section 8 and Section 9 hereof, the
Underwriters shall pay their own expenses, including the fees and disbursements
of their counsel.

Section 5. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Common Shares as provided
herein on the First Closing Date and, with respect to the Optional Common
Shares, the Second Closing Date, shall be subject to the accuracy of the
representations and warranties on the part of the Company set forth in Section 1
hereof as of the date hereof and as of the First Closing Date as though then
made and, with respect to the Optional Common Shares, as of the Second Closing
Date as though then made, to the timely performance by the Company of its
covenants and other obligations hereunder, and to each of the following
additional conditions:

         (a) Accountants' Comfort Letter. On the date hereof, the
Representatives shall have received from Coopers & Lybrand LLP, independent
public or certified public accountants for the Company, a letter dated the date
hereof addressed to the Underwriters, in form and substance satisfactory to the
Representatives, containing statements and information of the type ordinarily
included in accountant's "comfort letters" to underwriters, delivered according
to Statement of Auditing Standards No. 72 (or any successor bulletin), with
respect to the audited and unaudited financial statements and certain financial
information contained in the Registration Statement and the Prospectus (and the
Representatives shall have received an additional [___] conformed copies of such
accountants' letter for each of the several Underwriters).

         (b) Compliance with Registration Requirements; No Stop Order; No
Objection from NASD. For the period from and after effectiveness of this
Agreement and prior to the First Closing Date and, with respect to the Optional
Common Shares, the Second Closing Date:

                  (i) the Company shall have filed the Prospectus with the
Commission (including the information required by Rule 430A under the Securities
Act) in the manner and within the time period required by Rule 424(b) under the
Securities Act; or the Company shall have filed a post-effective amendment to
the Registration Statement containing the information required by such Rule
430A, and such post-effective amendment shall have become effective; or, if the
Company elected to rely upon Rule 434 under the Securities Act and obtained the
Representatives' consent thereto, the Company shall have filed a Term Sheet with
the Commission in the manner and within the time period required by such Rule
424(b);

                  (ii) no stop order suspending the effectiveness of the
Registration Statement, any Rule 462(b) Registration Statement, or any
post-effective amendment to the Registration Statement, shall be in effect and
no proceedings for such purpose shall have been instituted or threatened by the
Commission; and

                  (iii) the NASD shall have raised no objection to the fairness
and reasonableness of the underwriting terms and arrangements.

                                       12
   14


         (c) No Material Adverse Change or Ratings Agency Change. For the period
from and after the date of this Agreement and prior to the First Closing Date
and, with respect to the Optional Common Shares, the Second Closing Date:

                  (i) in the judgment of the Representatives there shall not
have occurred any Material Adverse Change; and

                  (ii) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any securities of the Company or any of
its subsidiaries by any "nationally recognized statistical rating organization"
as such term is defined for purposes of Rule 436(g)(2) under the Securities Act.

         (d) Opinion of Counsel for the Company. On each of the First Closing
Date and the Second Closing Date the Representatives shall have received the
favorable opinion of Hale and Dorr, counsel for the Company, dated as of such
Closing Date, reasonably satisfactory to the Representatives with respect to the
matters set forth in attached as Exhibit A-1. On each of the First Closing Date
and the Second Closing Date the Representatives shall have received the
favorable opinion of Hill & Barlow, counsel for the Company, dated as of such
Closing Date, reasonably satisfactory to the Representatives with respect to the
matters set forth attached as Exhibit A-2. In each case, the Representatives
shall have received an additional [___] conformed copies of such counsel's legal
opinions for each of the several Underwriters.

         (e) Opinion of Counsel for the Underwriters. On each of the First
Closing Date and the Second Closing Date the Representatives shall have received
the favorable opinion of Ropes & Gray, counsel for the Underwriters, dated as of
such Closing Date, with respect to the matters set forth in paragraphs (i),
(viii) (ix) and the next-to-last paragraph of Exhibit A (and the Representatives
shall have received an additional [___] conformed copies of such counsel's legal
opinion for each of the several Underwriters).

         (f) Officers' Certificate. On each of the First Closing Date and the
Second Closing Date the Representatives shall have received a written
certificate executed by the Chairman of the Board, Chief Executive Officer or
President of the Company and the Chief Financial Officer or Chief Accounting
Officer of the Company, dated as of such Closing Date, to the effect set forth
in subsections (b)(ii) and (c)(ii) of this Section 5, and further to the effect
that:

                  (i) for the period from and after the date of this Agreement
and prior to such Closing Date, there has not occurred any Material Adverse
Change;

                  (ii) the representations, warranties and covenants of the
Company set forth in Section 1 of this Agreement are true and correct with the
same force and effect as though expressly made on and as of such Closing Date;
and

                  (iii) the Company has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to such Closing Date.

         (g) Bring-down Comfort Letter. On each of the First Closing Date and
the Second Closing Date the Representatives shall have received from Coopers &
Lybrand, independent public or certified public accountants for the Company, a
letter dated such date, in form and substance satisfactory to the

                                       13
   15


Representatives, to the effect that they reaffirm the statements made in the
letter furnished by them pursuant to subsection (a) of this Section 5, except
that the specified date referred to therein for the carrying out of procedures
shall be no more than three business days prior to the First Closing Date or
Second Closing Date, as the case may be (and the Representatives shall have
received an additional [___] conformed copies of such accountants' letter for
each of the several Underwriters).

         (h) Lock-Up Agreement from Stockholders and Optionholders of the
Company. On the date hereof, the Company shall have furnished to the
Representatives an agreement in the form of Exhibit B hereto from those
stockholders and optionholders of the Company as agreed among the Company and
the Representatives, and such agreement shall be in full force and effect on
each of the First Closing Date and the Second Closing Date.

         (i) Additional Documents. On or before each of the First Closing Date
and the Second Closing Date, the Representatives and counsel for the
Underwriters shall have received such information, documents and opinions as
they may reasonably require for the purposes of enabling them to pass upon the
issuance and sale of the Common Shares as contemplated herein, or in order to
evidence the accuracy of any of the representations and warranties, or the
satisfaction of any of the conditions or agreements, herein contained.

         If any condition specified in this Section 5 is not satisfied when and
as required to be satisfied, this Agreement may be terminated by the
Representatives by notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Optional Common Shares, at any time prior
to the Second Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 4, Section 6, Section
8 and Section 9 shall at all times be effective and shall survive such
termination.

Section 6. Reimbursement of Underwriters' Expenses. If this Agreement is
terminated by the Representatives pursuant to Section 5, Section 7, or Section
11 (iv) or 11(v), or if the sale to the Underwriters of the Common Shares on the
First Closing Date is not consummated because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or to comply
with any provision hereof, the Company agrees to reimburse the Representatives
and the other Underwriters (or such Underwriters as have terminated this
Agreement with respect to themselves), severally, upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by the
Representatives and the Underwriters in connection with the proposed purchase
and the offering and sale of the Common Shares, including but not limited to
fees and disbursements of counsel, printing expenses, travel expenses, postage,
facsimile and telephone charges.

Section 7.  Effectiveness of this Agreement.

                  This Agreement shall not become effective until the later of
(i) the execution of this Agreement by the parties hereto and (ii) notification
by the Commission to the Company and the Representatives of the effectiveness of
the Registration Statement under the Securities Act.

                  Prior to such effectiveness, this Agreement may be terminated
by any party by notice to each of the other parties hereto, and any such
termination shall be without liability on the part of (a) the Company to any
Underwriter, except that the Company shall be obligated to reimburse the
expenses of the Representatives and the Underwriters pursuant to Sections 4 and
6 hereof, (b) of any Underwriter to

                                       14
   16
the Company, or (c) of any party hereto to any other party except that the
provisions of Section 8 and Section 9 shall at all times be effective and shall
survive such termination.


Section 8.  Indemnification.

         (a) Indemnification of the Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter, its officers and employees, and
each person, if any, who controls any Underwriter within the meaning of the
Securities Act and the Exchange Act against any loss, claim, damage, liability
or expense, as incurred, to which such Underwriter or such controlling person
may become subject, under the Securities Act, the Exchange Act or other federal
or state statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with the written
consent of the Company), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based (i) upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, or any amendment thereto,
including any information deemed to be a part thereof pursuant to Rule 430A or
Rule 434 under the Securities Act, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading; or (ii) upon any untrue statement or alleged
untrue statement of a material fact contained in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; or (iii) in whole or in part upon any inaccuracy in the
representations and warranties of the Company contained herein; or (iv) in whole
or in part upon any failure of the Company to perform its obligations hereunder
or under law; or (v) any act or failure to act or any alleged act or failure to
act by any Underwriter in connection with, or relating in any manner to, the
Common Stock or the offering contemplated hereby, and which is included as part
of or referred to in any loss, claim, damage, liability or action arising out of
or based upon any matter covered by clause (i) or (ii) above, provided that the
Company shall not be liable under this clause (v) to the extent that a court of
competent jurisdiction shall have determined by a final judgment that such loss,
claim, damage, liability or action resulted directly from any such acts or
failures to act undertaken or omitted to be taken by such Underwriter through
its bad faith or willful misconduct; and to reimburse each Underwriter and each
such controlling person for any and all expenses (including the fees and
disbursements of counsel chosen by NMSI) as such expenses are reasonably
incurred by such Underwriter or such controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action; provided, however, that the foregoing
indemnity agreement shall not apply to any loss, claim, damage, liability or
expense to the extent, but only to the extent, arising out of or based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with written information furnished to
the Company by the Representatives expressly for use in the Registration
Statement, any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); and provided, further, that with respect to any preliminary
prospectus, the foregoing indemnity agreement shall not inure to the benefit of
any Underwriter from whom the person asserting any loss, claim, damage,
liability or expense purchased Common Shares, or any person controlling such
Underwriter, if copies of the Prospectus were timely delivered to the
Underwriter pursuant to Section 2 and a copy of the Prospectus (as then amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Common Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim,

                                       15
   17


damage, liability or expense. The indemnity agreement set forth in this Section
8(a) shall be in addition to any liabilities that the Company may otherwise
have.

         (b) Indemnification of the Company, its Directors and Officers. Each
Underwriter agrees, severally and not jointly, to indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Securities Act or the Exchange Act, against any loss, claim,
damage, liability or expense, as incurred, to which the Company, or any such
director, officer or controlling person may become subject, under the Securities
Act, the Exchange Act, or other federal or state statutory law or regulation, or
at common law or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of such Underwriter), insofar as
such loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or arises out of or is based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement, any preliminary
prospectus, the Prospectus (or any amendment or supplement thereto), in reliance
upon and in conformity with written information furnished to the Company by the
Representatives expressly for use therein; and to reimburse the Company, or any
such director, officer or controlling person for any legal and other expense
reasonably incurred by the Company, or any such director, officer or controlling
person in connection with investigating, defending, settling, compromising or
paying any such loss, claim, damage, liability, expense or action. The Company
hereby acknowledges that the only information that the Underwriters have
furnished to the Company expressly for use in the Registration Statement, any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) are the statements set forth (A) as the last [two] paragraphs on the
inside front cover page of the Prospectus concerning stabilization [and passive
market making] by the Underwriters and (B) in the table in the first paragraph
and as the second paragraph [second and [_] (1) paragraphs] under the caption
"Underwriting" in the Prospectus; and the Underwriters confirm that such
statements are correct. The indemnity agreement set forth in this Section 8(b)
shall be in addition to any liabilities that each Underwriter may otherwise
have.

         (c) Notifications and Other Indemnification Procedures. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 8 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or

                                       16
   18


additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of such indemnifying party's election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 8 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with local counsel), approved by the indemnifying
party (NMSI in the case of Section 8(b) and Section 9), representing the
indemnified parties who are parties to such action) or (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action, in each of which cases the fees and expenses of
counsel shall be at the expense of the indemnifying party.

         (d) Settlements. The indemnifying party under this Section 8 shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
against any loss, claim, damage, liability or expense by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by Section
8(c) hereof, the indemnifying party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall not have
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or consent
to the entry of judgment in any pending or threatened action, suit or proceeding
in respect of which any indemnified party is or could have been a party and
indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent includes an unconditional release
of such indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.

Section 9.  Contribution.

                  If the indemnification provided for in Section 8 is for any
reason held to be unavailable to or otherwise insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages, liabilities or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount paid or payable by such indemnified party, as incurred, as
a result of any losses, claims, damages, liabilities or expenses referred to
therein (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Underwriters, on the
other hand, from the offering of the Common Shares pursuant to this Agreement or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and the Underwriters, on the other hand, in
connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand,
and the Underwriters, on the other hand, in

                                       17
   19


connection with the offering of the Common Shares pursuant to this Agreement
shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Common Shares pursuant to this Agreement
(before deducting expenses) received by the Company, and the total underwriting
discount received by the Underwriters, in each case as set forth on the front
cover page of the Prospectus (or, if Rule 434 under the Securities Act is used,
the corresponding location on the Term Sheet) bear to the aggregate initial
public offering price of the Common Shares as set forth on such cover. The
relative fault of the Company, on the one hand, and the Underwriters, on the
other hand, shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact or any such inaccurate or alleged
inaccurate representation or warranty relates to information supplied by the
Company, on the one hand, or the Underwriters, on the other hand, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.

                  The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 8(c), any
legal or other fees or expenses reasonably incurred by such party in connection
with investigating or defending any action or claim. The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this Section 9; provided, however,
that no additional notice shall be required with respect to any action for which
notice has been given under Section 8(c) for purposes of indemnification.

                  The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in this Section 9.

                  Notwithstanding the provisions of this Section 9, no
Underwriter shall be required to contribute any amount in excess of the
underwriting commissions received by such Underwriter in connection with the
Common Shares underwritten by it and distributed to the public. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 9 are several, and not joint, in proportion
to their respective underwriting commitments as set forth opposite their names
in Schedule A. For purposes of this Section 9, each officer and employee of an
Underwriter and each person, if any, who controls an Underwriter within the
meaning of the Securities Act and the Exchange Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company with the meaning of the Securities Act and the Exchange
Act shall have the same rights to contribution as the Company.

Section 10. Default of One or More of the Several Underwriters. If, on the First
Closing Date or the Second Closing Date, as the case may be, any one or more of
the several Underwriters shall fail or refuse to purchase Common Shares that it
or they have agreed to purchase hereunder on such date, and the aggregate number
of Common Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase does not exceed 10% of the aggregate number of the
Common Shares to be purchased on such date, the other Underwriters shall be
obligated, severally, in the proportions that the number of Firm Common Shares
set forth opposite their respective names on Schedule A bears to the aggregate
number of Firm Common Shares set forth opposite the names of all such
non-defaulting

                                       18
   20


Underwriters, or in such other proportions as may be specified by the
Representatives with the consent of the non-defaulting Underwriters, to purchase
the Common Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date. If, on the First Closing Date or the
Second Closing Date, as the case may be, any one or more of the Underwriters
shall fail or refuse to purchase Common Shares and the aggregate number of
Common Shares with respect to which such default occurs exceeds 10% of the
aggregate number of Common Shares to be purchased on such date, and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Common Shares are not made within 48 hours after such default, this Agreement
shall terminate without liability of any party to any other party except that
the provisions of Section 4, Section [__] and Section 9 shall at all times be
effective and shall survive such termination. In any such case either the
Representatives or the Company shall have the right to postpone the First
Closing Date or the Second Closing Date, as the case may be, but in no event for
longer than seven days in order that the required changes, if any, to the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected.

                  As used in this Agreement, the term "Underwriter" shall be
deemed to include any person substituted for a defaulting Underwriter under this
Section 10. Any action taken under this Section 10 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.

Section 11. Termination of this Agreement. Prior to the First Closing Date this
Agreement may be terminated by the Representatives by notice given to the
Company if at any time (i) trading or quotation in any of the Company's
securities shall have been suspended or limited by the Commission or by the
Nasdaq Stock Market, or trading in securities generally on either the Nasdaq
Stock Market or the New York Stock Exchange shall have been suspended or
limited, or minimum or maximum prices shall have been generally established on
any of such stock exchanges by the Commission or the NASD; (ii) a general
banking moratorium shall have been declared by any of federal, New York or
California authorities; (iii) there shall have occurred any outbreak or
escalation of national or international hostilities or any crisis or calamity,
or any change in the United States or international financial markets, or any
substantial change or development involving a prospective substantial change in
United States' or international political, financial or economic conditions, as
in the judgment of the Representatives is material and adverse and makes it
impracticable to market the Common Shares in the manner and on the terms
described in the Prospectus or to enforce contracts for the sale of securities;
(iv) in the judgment of the Representatives there shall have occurred any
Material Adverse Change; or (v) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as
in the judgment of the Representatives may interfere materially with the conduct
of the business and operations of the Company regardless of whether or not such
loss shall have been insured. Any termination pursuant to this Section 11 shall
be without liability on the part of (a) the Company to any Underwriter, except
that the Company shall be obligated to reimburse the expenses of the
Representatives and the Underwriters pursuant to Sections 4 and 6 hereof, (b)
any Underwriter to the Company, or (c) of any party hereto to any other party
except that the provisions of Section 8 and Section 9 shall at all times be
effective and shall survive such termination.

Section 12. Representations and Indemnities to Survive Delivery. The respective
indemnities, agreements, representations, warranties and other statements of the
Company, of its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter or the Company or any
of its or their partners, officers or directors or any controlling person, as
the case may be, and will survive delivery of and payment for the Common Shares
sold hereunder and any termination of this Agreement.

                                       19
   21



Section 13. All communications hereunder shall be in writing and shall be
mailed, hand delivered or telecopied and confirmed to the parties hereto as
follows:

If to the Representatives:

NationsBanc Montgomery Securities, Inc.
600 Montgomery Street
San Francisco, California 94111
Facsimile:  415-249-5558
Attention:  Richard A. Smith

   with copies to:

NationsBanc Montgomery Securities, Inc.
600 Montgomery Street
San Francisco, California  94111
Facsimile:  (415) 249-5553
Attention:  David A. Baylor, Esq.

         and

Ropes & Gray
One International Place
Boston, MA 02110
Facsimile: (617) 951-7050
Attention: David C. Chapin

If to the Company:

MKS Instruments, Inc.
Six Shattuck Road
Andover, MA 01810
Facsimile:  (978) 975-2350
Attention:  President

         with a copy to:

Hale and Dorr
60 State Street
Boston, MA 02109
Facsimile: (617) 526-5000
Attention: Mark G. Borden

Section 14. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Underwriters pursuant
to Section 10 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 8 and Section 9, and in
each case their respective successors, and no other person will have any right
or obligation hereunder.

                                       20
   22


The term "successors" shall not include any purchaser of the Common Shares as
such from any of the Underwriters merely by reason of such purchase.

Section 15. Partial Unenforceability. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.

Section 16. (a) Governing Law Provisions. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.

Section 17. General Provisions. This Agreement constitutes the entire agreement
of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with
respect to the subject matter hereof. This Agreement may be executed in two or
more counterparts, each one of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement may not be amended or modified unless in writing by all of the parties
hereto, and no condition herein (express or implied) may be waived unless waived
in writing by each party whom the condition is meant to benefit. The Table of
Contents and the Section headings herein are for the convenience of the parties
only and shall not affect the construction or interpretation of this Agreement.

                  Each of the parties hereto acknowledges that it is a
sophisticated business person who was adequately represented by counsel during
negotiations regarding the provisions hereof, including, without limitation, the
indemnification provisions of Section 8 and the contribution provisions of
Section 9, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 8 and 9 hereto
fairly allocate the risks in light of the ability of the parties to investigate
the Company, its affairs and its business in order to assure that adequate
disclosure has been made in the Registration Statement, any preliminary
prospectus and the Prospectus (and any amendments and supplements thereto), as
required by the Securities Act and the Exchange Act.

         If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.

                                Very truly yours,

                                MKS INSTRUMENTS, INC.


                                By:__________________________
                                         President


         The foregoing Underwriting Agreement is hereby confirmed and accepted
by the Representatives in San Francisco, California as of the date first above
written.

                                       21
   23


NATIONSBANC MONTGOMERY SECURITIES, INC.
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
PAINE WEBBER

Acting as Representatives of the several Underwriters named in the attached
Schedule A.

By NATIONSBANC MONTGOMERY SECURITIES, INC.



 By:________________________
    Partner


                                       22
   24


                                   SCHEDULE A



              Underwriters                                    Number of Firm Common Shares to be Purchased
              ------------                                    --------------------------------------------
                                                           
NationsBanc Montgomery Securities, Inc.
  Donaldson, Lufkin & Jenrette Securities Corporation
  Paine Webber


                                       23
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                                   EXHIBIT A-1

The final opinion in draft form should be attached as Exhibit A at the time this
Agreement is executed.

         Opinion of counsel for the Company to be delivered pursuant to Section
5(e) of the Underwriting Agreement.

         References to the Prospectus in this Exhibit A include any supplements
thereto at the Closing Date.

         (i) The Company is validly existing as a corporation in good standing
under the laws of The Commonwealth of Massachusetts.

         (ii) The authorized, issued and outstanding capital stock of the
Company (including the Common Stock) conform to the descriptions thereof set
forth [or incorporated by reference] in the Prospectus. All of the outstanding
shares of Common Stock have been duly authorized and validly issued, are fully
paid and nonassessable. The form of certificate used to evidence the Common
Stock is in due and proper form and complies with all applicable requirements of
the charter and by-laws of the Company and The Commonwealth of Massachusetts.
The description of the Company's stock option, stock bonus and other stock plans
or arrangements, and the options or other rights granted and exercised
thereunder, set forth in the Prospectus accurately and fairly presents the
information required to be shown with respect to such plans, arrangements,
options and rights.

         (iii) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.

         (iv) The Common Shares to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale pursuant to the
Underwriting Agreement and, when issued and delivered by the Company pursuant to
the Underwriting Agreement against payment of the consideration set forth
therein, will be validly issued, fully paid and nonassessable.

         (v) Based upon the advice of the staff of the SEC, each of the
Registration Statement and the Rule 462(b) Registration Statement, if any, has
been declared effective by the Commission under the Securities Act. To the
knowledge of such counsel, no stop order suspending the effectiveness of either
of the Registration Statement or the Rule 462(b) Registration Statement, if any,
has been issued under the Securities Act and no proceedings for such purpose
have been instituted or are pending or are contemplated or threatened by the
Commission. Any required filing of the Prospectus and any supplement thereto
pursuant to Rule 424(b) under the Securities Act has been made in the manner and
within the time period required by such Rule 424(b).

         (vi) The Registration Statement, including any Rule 462(b) Registration
Statement, the Prospectus, and each amendment or supplement to the Registration
Statement and the Prospectus, as of their respective effective or issue dates
(other than the financial statements and supporting schedules included therein
or in exhibits to or excluded from the Registration Statement, as to which no
opinion need be rendered) comply as to form in all material respects with the
applicable requirements of the Securities Act.

         (vii) The Common Shares have been approved for listing on the Nasdaq
National Market.


                                       24
   26
         (viii) The statements (i) in the Prospectus under the captions "Certain
Transactions" and "Shares Eligible for Future Sale" and (ii) in Item 14 and Item
15 of the Registration Statement, insofar as such statements constitute matters
of law, summaries of legal matters, the Company's charter or by-law provisions,
documents or legal proceedings, or legal proceedings, has been reviewed by such
counsel and accurately summarize, in all material respects, the matters referred
to therein.

         (ix) To the knowledge of such counsel, there are no legal or
governmental actions, suits or proceedings pending or overtly threatened which
are required to be disclosed in the Registration Statement, other than those
disclosed therein.

         (x) To the best knowledge of such counsel, there are no Existing
Instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto;
and the descriptions thereof and references thereto are correct in all material
respects.

         (xi) No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental authority or
agency, is required for the Company's execution, delivery and performance of the
Underwriting Agreement and consummation of the transactions contemplated thereby
and by the Prospectus, except as required under the Securities Act, applicable
state securities or blue sky laws and from the NASD.

         (xii) The execution and delivery of the Underwriting Agreement by the
Company and the performance by the Company of its obligations thereunder (other
than performance by the Company of its obligations under the indemnification
section of the Underwriting Agreement, as to which no opinion need be rendered)
(i) have been duly authorized by all necessary corporate action on the part of
the Company; (ii) will not result in any violation of the provisions of the
charter or by-laws of the Company or any subsidiary; (iii) will not constitute a
breach of, or Default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company pursuant
to any Existing Instrument filed as an exhibit to the Registration Statement; or
(iv) to the knowledge of such counsel, will not result in any violation of any
law, administrative regulation or administrative or court decree applicable to
the Company.

         (xiii) The Company is not, and after receipt of payment for the Common
Shares will not be, an "investment company" within the meaning of Investment
Company Act.

In addition, such counsel shall state that they have participated in conferences
with officers and other representatives of the Company, representatives of the
independent public or certified public accountants for the Company and with
representatives of the Underwriters at which the contents of the Registration
Statement and the Prospectus, and any supplements or amendments thereto, and
related matters were discussed and, although such counsel is not passing upon
and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus (other than as specified above), and any supplements or amendments
thereto, on the basis of the foregoing, nothing has come to their attention
which would lead them to believe that either the Registration Statement or any
amendments thereto, at the time the Registration Statement or such amendments
became effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as of its date or at
the First Closing Date or the Second Closing Date, as the case may be, contained
an untrue statement

                                       25
   27


of a material fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (it being understood that such counsel need express no
belief as to the financial statements or schedules or other financial or
statistical data derived therefrom, included in the Registration Statement or
the Prospectus or any amendments or supplements thereto).

                  In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than the
General Corporation Law of the State of Delaware, laws of the Commonwealth of
Massachusetts or the federal law of the United States, to the extent they deem
proper and specified in such opinion, upon the opinion (which shall be dated the
First Closing Date or the Second Closing Date, as the case may be, shall be
satisfactory in form and substance to the Underwriters, shall expressly state
that the Underwriters may rely on such opinion as if it were addressed to them
and shall be furnished to the Representatives) of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the
Underwriters; provided, however, that such counsel shall further state that they
believe that they and the Underwriters are justified in relying upon such
opinion of other counsel, and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials.


                                        1
   28



                                   EXHIBIT A-2

The final opinion in draft form should be attached as Exhibit A at the time this
Agreement is executed.

         Opinion of counsel for the Company to be delivered pursuant to Section
5(e) of the Underwriting Agreement.

         References to the Prospectus in this Exhibit A include any supplements
thereto at the Closing Date.

         (xiv) The Company has been duly incorporated.

         (xv) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the Underwriting
Agreement.

         (xvi) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required by reason of the ownership or leasing of property,
except for such jurisdictions where the failure to so qualify or to be in good
standing would not, individually or in the aggregate, result in a Material
Adverse Change.

         (xvii) Each significant subsidiary incorporated in the United States
(as defined in Rule 405 under the Securities Act) has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus and, to the best knowledge of such counsel, is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property , except for such jurisdictions where the
failure to so qualify or to be in good standing would not, individually or in
the aggregate, result in a Material Adverse Change.

         (xviii) All of the issued and outstanding capital stock of each such
significant subsidiary incorporated in the United States has been duly
authorized and validly issued, is fully paid and non-assessable and is owned by
the Company, directly or through subsidiaries, to such counsel's knowledge, free
and clear of any security interest, mortgage, pledge, lien, encumbrance or any
pending or threatened claim.

         (xix) No stockholder of the Company or any other person has any
preemptive right, right of first refusal or other similar right to subscribe for
or purchase securities of the Company arising (i) by operation of the charter or
by-laws of the Company or (ii) to the best knowledge of such counsel, otherwise.

         (xx) Except as disclosed in the Prospectus, to the knowledge of such
counsel, there are no persons with registration or other similar rights to have
any equity or debt securities registered for sale under the Registration
Statement or included in the offering contemplated by the Underwriting
Agreement, except for such rights as have been duly waived.

         (xxi) To the knowledge of such counsel, the Company is not in violation
of its charter or by-laws, except for such violations as would not, individually
or in the aggregate, result in a Material Adverse Change.

                                        2
   29


In addition, such counsel shall state that they have participated in conferences
with officers and other representatives of the Company, representatives of the
independent public or certified public accountants for the Company and with
representatives of the Underwriters at which the contents of the Registration
Statement and the Prospectus, and any supplements or amendments thereto, and
related matters were discussed and, although such counsel is not passing upon
and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus (other than as specified above), and any supplements or amendments
thereto, on the basis of the foregoing, nothing has come to their attention
which would lead them to believe that either the Registration Statement or any
amendments thereto, at the time the Registration Statement or such amendments
became effective, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, as of its date or at
the First Closing Date or the Second Closing Date, as the case may be, contained
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no belief as to the financial statements or
schedules or other financial or statistical data derived therefrom, included [or
incorporated by reference] in the Registration Statement or the Prospectus or
any amendments or supplements thereto).

         In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the General
Corporation Law of the State of Delaware, laws of the Commonwealth of
Massachusetts or the federal law of the United States, to the extent they deem
proper and specified in such opinion, upon the opinion (which shall be dated the
First Closing Date or the Second Closing Date, as the case may be, shall be
satisfactory in form and substance to the Underwriters, shall expressly state
that the Underwriters may rely on such opinion as if it were addressed to them
and shall be furnished to the Representatives) of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the
Underwriters; provided, however, that such counsel shall further state that they
believe that they and the Underwriters are justified in relying upon such
opinion of other counsel, and (B) as to matters of fact, to the extent they deem
proper, on certificates of responsible officers of the Company and public
officials.


                                        3
   30
                                    EXHIBIT B
                                                               November __, 1997

NationsBanc Montgomery Securities, Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Paine Webber

         As Representatives of the Several Underwriters
c/o NationsBanc Montgomery Securities, Inc.
600 Montgomery Street
San Francisco, California 94111

RE:      MKS Instruments Inc. (the "Company")

Ladies & Gentlemen:

The undersigned is an owner of record or beneficially of certain shares of
Common Stock of the Company ("Common Stock") or securities convertible into or
exchangeable or exercisable for Common Stock. The Company proposes to carry out
a public offering of Common Stock (the "Offering") for which you will act as the
representatives of the underwriters. The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company [by,
among other things, raising additional capital for its operations]. The
undersigned acknowledges that you and the other underwriters are relying on the
representations and agreements of the undersigned contained in this letter in
carrying out the Offering and in entering into underwriting arrangements with
the Company with respect to the Offering.

In consideration of the foregoing, the undersigned hereby agrees that the
undersigned will not, without the prior written consent of NMSI (which consent
may be withheld in its sole discretion), directly or indirectly, sell, offer,
contract or grant any option to sell (including without limitation any short
sale), pledge, transfer, establish an open "put equivalent position" within the
meaning of Rule 16a-1(h) under the Securities Exchange Act of 1934, or otherwise
dispose of any shares of Common Stock, options or warrants to acquire shares of
Common Stock, or securities exchangeable or exercisable for or convertible into
shares of Common Stock currently or hereafter owned either of record or
beneficially (as defined in Rule 13d-3 under Securities Exchange Act of 1934, as
amended) by the undersigned, or publicly announce the undersigned's intention to
do any of the foregoing, for a period commencing on the date hereof and
continuing through the close of trading on the date 180 days after the date of
the Prospectus. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.

With respect to the Offering only, the undersigned waives any registration
rights relating to registration under the Securities Act of any Common Stock
owned either of record or beneficially by the undersigned, including any rights
to receive notice of the Offering.

This agreement is irrevocable and will be binding on the undersigned and the
respective successors, heirs, personal representatives, and assigns of the
undersigned.

B-1

                                        1
   31
Printed Name of Holder


By:
       Signature



Printed Name of Person Signing (and indicate
capacity of person signing if signing as
custodian, trustee, or on behalf of an
entity)


                                        1

   1
                                   EXHIBIT A
    LM
- ------------           The Commonwealth of Massachusetts            EXHIBIT 3.1
  Examiner
                            MICHAEL JOSEPH CONNOLLY
                               Secretary of State
                    ONE ASHBURTON PLACE, BOSTON, MASS. 02108

                                           FEDERAL IDENTIFICATION No. 04-2277512

                       RESTATED ARTICLES OF ORGANIZATION

                     General Laws, Chapter 156B, Section 74

     This certificate must be submitted to the Secretary of the Commonwealth
within sixty days after the date of the vote of stockholders adopting the
restated articles of organization. The fee for filing this certificate is
prescribed by General Laws, Chapter 156B, Section 114. Make check payable to the
Commonwealth of Massachusetts.

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

     We,  John R. Bertucci, President, and
          Richard S. Chute, Clerk of


          MKS Instruments, Inc.
- -------------------------------------------------------------------------------
                             (Name of Corporation)


located at 34 Third Avenue, Burlington, Massachusetts 01803
           --------------------------------------------------------------------

do hereby certify that the following restatement of the articles of organization
of the corporation was duly adopted and authorized by unanimous written consent
of all the Directors dated January 15, 1982.

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

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

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

     1.   The name by which the corporation shall be known is:

          MKS Instruments, Inc.

     2.   The purposes for which the corporation is formed are as follows:

          See Continuation Sheets 2A and 2B.




    12
- ----------
   P.C.
     
     Note: If the space provided under any article or item on this form is
     insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of
     paper leaving a left hand margin of at least 1 inch for binding. Additions
     to more than one article may be continued on a single sheet so long as each
     article requiring each such addition is clearly indicated.
   2
      3. The total number of shares and the par value, if any, of each class of
         stock which the corporation is authorized to issue is as follows: 



                         WITHOUT PAR VALUE                  WITH PAR VALUE
                         -----------------                  --------------
CLASS OF STOCK           NUMBER OF SHARES         NUMBER OF SHARES    PAR VALUE
- --------------           ----------------         ----------------    ---------
                                                             
Preferred                     None                     None             None
Class A Common              10,000                     None             None
Class B Common              10,000                     None             None


     *4. If more than one class is authorized, a description of each of the
         different classes of stock with, if any, the preferences, voting
         powers, qualifications, special or relative rights or privileges as to
         each class thereof and any series now established:

         See Continuation Sheet 4A.    

     *5. The restrictions, if any, imposed by the articles of organization upon
         the transfer of shares of stock of any class are as follows:

         See Continuation Sheets 5A, 5B, 5C and 5D.

     *6. Other lawful provisions, if any, for the conduct and regulation of the
         business and affairs of the corporation, for its voluntary dissolution,
         or for limiting, defining, or regulating the powers of the corporation,
         or of its directors or stockholders, or of any class of stockholders:

         See Continuation Sheet 6A.

*If there are no such provisions state "None".

   3
                             Continuation Sheet 2A

2. The purposes for which the corporation is formed are as follows:

     To design, manufacture, sell, lease and license instruments of all kinds,
including electromechanical, electronic and mechanical gauges for the
measurement of pressure, temperature, acceleration, flow and level of liquids
and gases; to design, manufacture, sell, lease and license control systems
incorporating measuring devices, and control systems separate from measuring
devices, for the control of production processes and operations of all kinds; to
design, manufacture, sell, lease and license instrumentation for military use;
to design, manufacture, sell, lease and license instrumentation for use in
research laboratories, in industry, in educational institutions, for medical
purposes and for use elsewhere and for other purposes; and in general to design,
manufacture, sell, lease and license electro-mechanical, electronic and
mechanical devices of all kinds.

     To buy and sell at wholesale and retail, or otherwise, to manufacture,
produce, adapt, repair, dispose of, export, import and in any other manner to
deal in goods, wares, merchandise, articles and things of manufacture or
otherwise of all materials, supplies and other articles and things necessary or
convenient for use in connection with any of said businesses or any other
business or any part thereof; and to manufacture, repair, purchase, sell, lease,
dispose of and otherwise deal in machinery, tools, and appliances which are or
may be used in connection with the purchase, sale, production, adaption, repair,
disposition of, export, import or other dealings in said goods, wares, 
merchandise, articles and things.

     To purchase, lease or otherwise acquire as a going concern or otherwise all
or any part of the franchises, rights, property, assets, business, good will or
capital stock of any persons, firm, corporation, trust or association engaged in
whole or in part in any business in which this corporation is empowered to
engage, or in any other business; to pay for the same in whole or in part in
cash, stock, bonds, notes, securities or other evidence of indebtedness of this
corporation or in any other manner; to assume as part of the consideration or
otherwise any and all debts, contracts or liabilities, matured or unmatured,
fixed or contingent, of any such person, firm or corporation, trust or
association; and to operate, manage, develop and generally to carry on the whole
or any part of any such business under any name or names which it may select or
designate.
   4
                             Continuation Sheet 2B

      To construct, lease, hire, purchase or otherwise acquire and hold or
maintain, and to rebuild, enlarge, improve, furnish, equip, alter, operate and
dispose of warehouses, factories, offices and other buildings, real estate,
structures or parts thereof, and appliances for the preparation, manufacture,
purchase, sale and distribution of goods, wares, merchandise, things, and
articles of all kinds.

      To acquire, hold, use, sell, assign, lease, grant licenses in respect of,
mortgage, or otherwise dispose of franchises, letters patent of the United
States or of any foreign country, patent rights, licenses and privileges,
inventions, improvements and processes, systems, copyrights, trade-marks and
trade names, relating to, or useful in connection with, any business of this
corporation.

      To buy or otherwise acquire, to sell, assign, pledge, or otherwise
dispose of and deal in stocks, bonds, securities, notes and other obligations
of any person, firm or corporation, including this corporation, organized for
or engaged in similar or cognate purposes; also stocks, bonds, securities,
notes, and other obligations of any person, firm, or corporation, including
this corporation, which it may be found or deemed necessary, valuable, or
convenient for this corporation to acquire and deal in, in pursuance or
furtherance of or in connection with the businesses herein specified, or any
other business.

      To borrow money and contract indebtedness for all proper corporate
purposes, to issue bonds, notes, and other evidences of indebtedness, to secure
the same by pledge, mortgage, or lien on all or any part of the property of the
corporation, tangible or intangible; and to assume or guarantee or secure in
like manner or otherwise, the leases, contracts, or other obligations, fixed or
contingent, or the payment of any dividends on any stock or shares or of the
principal or interest on any bonds, notes, or other evidences of indebtedness
of any person, firm, corporation, trust, or association in which this
corporation has a financial interest.

      To enter into, make, and perform contracts of every name, nature, and
kind with any person, firm, association, or corporation which may be deemed
valuable, expedient, or convenient for this corporation in pursuance of or in
furtherance of or in connection with any of the objects of incorporation of
this corporation or in connection with any of the businesses or purposes herein
specified.

      The enumeration of specific powers herein shall not be construed as
limiting or restricting in any way the general powers herein set forth, but
nothing herein contained shall be construed as authorizing the business of
banking.
   5
                             Continuation Sheet 4A

4. If more than one class is authorized, a description of each of the
different classes of stock with, if any, the preferences, voting powers,
qualifications, special or relative rights or privileges as to each class
thereof and any series now established:

      The holders of shares of Class B Common stock of the corporation shall
not be entitled to vote for the election of Officers or Directors or with
respect to any other aspect of the business of the corporation, or any matter
or thing which may come or be brought before any meeting of the Stockholders of
the corporation; and said Class B Common stock shall not be deemed to be a
class of stock entitled to vote for any purpose whatsoever. In all other
respects, however, the Class B Common stock and the Class A Common stock of the
corporation, and the respective rights and preferences thereof shall be equal,
and neither class shall have any priority over the other with respect to the
payment of dividends or to distributions in liquidation.
   6
                             Continuation Sheet 5A

         5.  The restrictions, if any, imposed by the articles of organization
         upon the transfer of shares of stock of any class are as follows:

             Section 5.  Restrictions. None of the corporation's stock, of any
         class, may be transferred except as hereinafter provided:

             (a)  Before making any proposed disposition of any of the
         corporation's stock, the holder of the stock shall give written notice
         to the Board of Directors specifying in detail the nature of the
         proposed disposition and its terms, the class and number of the shares
         involved, and the consideration for the proposed disposition, if any.
         Such notice shall constitute an offer by the holder to sell the shares
         involved to the corporation at their Agreed Value, as determined
         hereunder, or, if such proposed disposition is one for a pecuniary
         consideration less than the Agreed Value of the shares involved, such
         notice shall constitute an offer to sell the shares to the corporation
         for such proposed pecuniary consideration.

             (b)  Within thirty days after receipt of such notice, the Board of
         Directors shall give written notice to the offering holder stating
         whether the corporation accepts or rejects the holder's offer. If the
         offer is accepted, such notice by the corporation shall state the price
         to be paid for the shares and shall specify whether the corporation
         elects to pay a part of the purchase price by means of the
         corporation's note, as provided for in subsection (d) hereof. The
         offering holder of such shares shall deliver the shares to the
         corporation, suitably endorsed, within ten days after receipt of the
         corporation's notice of acceptance, and upon receipt of the shares, the
         corporation shall make payment therefor in the manner hereinafter
         provided.

             If such offer is rejected by the corporation, the Directors shall
         transmit forthwith such offer to the record owners of the Class A
         Common Stock of the corporation who shall, subject to the provisions of
         this subsection (b), have the right to purchase the offered shares, in
         amounts proportionate to their respective holdings of said Class A
         Common stock, upon all of the same terms and conditions upon which the
         corporation might have purchased said offered shares, except that
         payment for offered shares shall be made in cash unless otherwise
         agreed upon between the parties. Each such owner to whom such shares
         are offered shall have the right within thirty (30) days of such offer
         to purchase the entire number of shares apportioned to him as above or
         to purchase none, and such acceptance shall be extended by written
         notice to the Board of Directors given within such time. If any owner
         of Class A Common stock shall 

   7
                              Continuation Sheet 5B

not accept such offer, the Board of Directors shall forthwith notify the
remaining shareholders of Class A Common stock that they may purchase in
proportion to their respective holdings of such stock the shares which such
owner was entitled to purchase. Each such shareholder to whom such shares are
offered shall have the right within ten (10) days of such offer to purchase the
entire number of shares apportioned to him as above or to purchase none. Within
three days after the expiration of said ten-day period the Board of Directors
shall give written notice to the offering holder advising him in detail of the
elections made with respect to the offered shares by the owners of the Class A
Common stock. If the offer has been accepted with respect to all of the offered
shares, then the offering holder of such shares shall deliver the same to the
corporation, suitably endorsed, for the account of the accepting owners, within
ten days after receipt of said last-mentioned notice from the Board of Directors
and upon receipt of the shares by the corporation the accepting owners of the
Class A Common stock shall make payment therefor in accordance with the terms of
their respective acceptances.

     If such offer is rejected by the corporation and if such offer to the
holders of the Class A Common stock is rejected, in whole or in part, the
offering shareholder, at any time within six months after receipt of any such
notice of rejection, may effect the disposition of the shares which was set
forth in such offering shareholder's notice to the Board.

     (c) The Agreed Value of the stock of the corporation shall be such as may
from time to time be determined by the unanimous agreement in writing of the
holders of the corporation's Class A Common stock, such determination to be
reviewed and either confirmed or adjusted at reasonable intervals. The Agreed
Value of the Class B Common stock shall be ninety (90) percent of the Agreed
Value of the Class A Common stock, to reflect the fact that the Class B Common
stock is not entitled to vote.

     The Agreed Value of the stock of the corporation shall be reviewed as
herein provided at six-month intervals following the adoption of this by-law and
at the expiration of any such six-month period, if no agreement is arrived at,
any owner of stock may demand from the owners of Class A Common stock that an
agreement be reached and in the absence of such agreement within ten days
thereafter, such value shall be determined by an arbitrator appointed by the
President, or by some other appropriate official, of the American Arbitration
Association, upon written request for such appointment made by any owner of
stock of the corporation. The decision of such arbitrator shall be binding upon
the parties, and may be enforced by any court having jurisdiction, but each
owner of stock of the corporation shall
   8
                             Continuation Sheet 5c


be entitled to appear before such arbitrator, to be represented by counsel, and
to present evidence. The expenses of arbitration, other than expenses for
counsel and witnesses, shall be borne pro rata, according to the number of
shares held, by the owners of the stock of the corporation.

     (d) In the event the corporation shall elect to accept the offer of the
holder of its stock, as herein provided, the corporation may pay the full
purchase price for such stock in cash at the time of the delivery of the stock
to the corporation or, at the corporation's sole election, it may pay said
purchase price partly in cash and partly in the form of an unsecured note of
the corporation. If the corporation shall make the latter election, then in
such event the corporation shall pay at least one-third (1/3) of the purchase
price for the stock at the time the stock is delivered to the corporation, and
the corporation shall then deliver to the selling shareholder the note of the
corporation for the unpaid balance of the purchase price for the stock, bearing
interest at the rate of 6% per annum on the unpaid principal balance and
payable in or within two years from its date.

     (e) Each share of stock of the corporation is subject to the requirements
and restrictions upon the transfer of such shares set forth in this Section 5,
and the same shall constitute a contract of each shareholder with the
corporation, shall be binding upon each shareholder and his heirs, assigns,
executors, administrators, or other legal representatives and upon all other
persons succeeding to or standing in the place of or holding under the
shareholder, whether by act of the shareholder or by operation of law. These
provisions shall not be discharged by any transfer of shares which may be made
in compliance with the provisions hereof, but shall apply anew to such shares in
the hands of the new holder thereof. These provisions shall not restrict the
making of a bona fide pledge of any shares to secure an indebtedness, but shall
apply fully with respect to any proposed transfer from the name of the
shareholder pursuant to such pledge, whether upon foreclosure or otherwise and
whether to the pledgee or to any other person. These provisions shall not
restrict the transfer of shares, without consideration, to the transferor's
spouse or to the transferor's issue or to the spouses or the transferor's issue,
or any of them (or to a form of joint ownership between the transferor and the
transferees described next above, or any of them, or to a trust for the sole
benefit of the transferor and the transferees described next above or any of
them), but shall apply fully with respect to any proposed disposition by any
such transferee, except as provided in this and the preceding sentence.
   9

                             Continuation Sheet 5D

     (f) The determination of the Board of Directors under the provisions of
this Section 5 shall be made by majority vote except that no waiver of the
provisions of this Section 5 in the case of any proposed disposition of stock
shall be granted by the vote of less than eighty (80) percent of the members
of the Board of Directors. No Director shall be disqualified from voting on any
matter arising under the provisions of this Section 5 by reason of such
Director's ownership of stock of the corporation which might, directly or
indirectly, be affected by such vote.

     (g) In the event of any breach of any of the provisions of this Section 5
by any holder of any of the corporation's stock, none of the rights or
privileges attaching to such stock (including, without limitation, voting
rights and rights to dividends) may be exercised or enjoyed with respect to
such stock by such holder or by any purported transferee from such holder while
such breach shall continue, but nothing herein contained shall be deemed to
preclude lawful action by the corporation to enforce the provisions of this
Section 5.
   10
                             Continuation Sheet 6A


6. Other lawful provisions, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution, or for
limiting, defining, or regulating the powers of the corporation, or of its
directors or stockholders, or of any class of stockholders:

     Pre-Emptive Rights. No stockholder shall, by reason of ownership of stock
of the corporation, have any pre-emptive right to purchase unissued stock of
the corporation, or to subscribe to stock of the corporation, or to purchase
stock of the corporation previously issued and held in the treasury of the
corporation, and, subject to the provisions of applicable law, the authorized
and unissued stock of the corporation shall be issued to such person, firm,
corporation or other legal entity, in such amounts, at such times, and for such
consideration as a majority of the Board of Directors may from time to time
determine.
   11
     *We further certify that the foregoing restated articles of organization
effect no amendments to the articles of organization of the corporation as
heretofore amended,

                None
- -----------------------------------------------------------------------------
     (*If there are no such amendments, state "None".)

                                 Briefly describe amendments in space below:

                None












IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed
our names this 15th day of January in the year 1982.


/s/ John R. Bertucci                                
- --------------------------------------------------- President
John R. Bertucci

/s/ Richard S. Chute
- --------------------------------------------------- Clerk
Richard S. Chute
   12
                       THE COMMONWEALTH OF MASSACHUSETTS


                       RESTATED ARTICLES OF ORGANIZATION

                    (General Laws, Chapter 156B, Section 74)


               I hereby approve the within restated articles of
          organization and, the filing fee in the amount of
          $15.00 having been paid, said articles are deemed to 
          have been filed with me this 19th day of January, 1982.

                                        /s/ Michael Joseph Connolly
                                        ----------------------------
                                           MICHAEL JOSEPH CONNOLLY
                                              Secretary of State



                         TO BE FILLED IN BY CORPORATION
           PHOTOCOPY OF RESTATED ARTICLES OF ORGANIZATION TO BE SENT

           TO: Richard S. Chute, Esquire
               Hill & Barlow
               225 Franklin Street
               Boston, Massachusetts 02110
           Telephone 617/423-6200

    



                                   [SEAL OF WILLIAM FRANCIS GALVIN
                    Copy Mailed    SECRETARY OF THE COMMONWEALTH
                                   DATED 2/20/96]
   13
                       THE COMMONWEALTH OF MASSACHUSETTS

                            MICHAEL JOSEPH CONNOLLY
   CG                         SECRETARY OF STATE
- --------                      ONE ASHBURTON PLACE         FEDERAL IDENTIFICATION
EXAMINER                      BOSTON, MASS. 02108         NO. 04-2277512


                                  ARTICLES OF
                  MERGER OF PARENT AND SUBSIDIARY CORPORATIONS
               PURSUANT TO GENERAL LAWS, CHAPTER 156B, SECTION 82

                     The fee for filing this certificate is
             prescribed by General Laws, Chapter 156B, Section 114.
            Make check payable to the Commonwealth of Massachusetts.

We, John R. Bertucci and Richard S. Chute, President*/and Clerk*/         of
                        MKS Instruments, Inc. 042277512
                        --------------------------------
                              name of corporation
organized under the laws of the Commonwealth of Massachusetts and herein called
the parent corporation, do hereby certify as follows:

1.  That the subsidiary corporation(s) to be merged into the parent
corporations is as follows*:



Name                             State of                         Date of 
                                 Organization                     Organization
                                                            
MKS Disc, Inc. 046311363         Massachusetts                    10/31/72



2. That the parent corporation owns at least ninety per cent of the outstanding
shares of each class of the stock of each subsidiary corporation to be merged
into the parent corporation.

3.  



______________
*Delete the inapplicable words. In case the parent corporation is organized
 under the laws of a state other than Massachusetts these articles are to be
 signed by officers having corresponding powers and duties.
   14
     4.   That at a meeting of the directors of the parent corporation the
following vote, pursuant to subsection (a) of General Laws, Chapter 156B,
Section 82, was duly adopted:

               VOTED:    That MKS Disc, Inc., a Massachusetts corporation and a
                         wholly-owned subsidiary corporation of the Corporation,
                         be merged with and into the Corporation in accordance
                         with the provisions of Section 82 of the Massachusetts
                         Business Corporation Law, the effective date of the
                         merger to be the date of filing of the Articles of
                         Merger of Parent and Subsidiary Corporations with the
                         State Secretary of the Commonwealth of Massachusetts;
                         that the President and Clerk of the Corporation be and
                         hereby are authorized in the name and on behalf of
                         the Corporation to execute the Articles of Merger of
                         Parent and Subsidiary Corporations attached hereto (the
                         "Articles of Merger") and to file the Articles of
                         Merger with the State Secretary of the Commonwealth of
                         Massachusetts; and in furtherance thereof that the
                         President, any Vice President, Treasurer, Clerk, and
                         Assistant Clerk of the Corporation or any one or more
                         of them be and hereby are authorized in the name and on
                         behalf of the Corporation to execute and deliver any
                         and all documents and instruments and to take any and
                         all action as they or any one or more of them may deem
                         necessary or appropriate to effectuate the merger of
                         MKS Disc, Inc. with and into the Corporation.
   15
     5.   The effective date of the merger as specified in the vote set out
under Paragraph 4 is the date of filing of these articles of merger of parent
and subsidiary corporations.

     6.


     IN WITNESS WHEREOF and under the penalties of perjury we have hereto signed
our names this 15th day of December, 1986.


                                       /s/ John R. Burtucci           President*
                                       -----------------------------------------




                                       /s/ Richard S. Chute               Clerk*
                                       -----------------------------------------

*Delete the inapplicable words. In case the parent corporation is organized
 under the laws of a state other than Massachusetts these articles are to be
 signed by officers having corresponding powers and duties.
   16
                         COMMONWEALTH OF MASSACHUSETTS

            ARTICLES OF MERGER OF PARENT AND SUBSIDIARY CORPORATIONS
                    (General Laws, Chapter 156B, Section 82)



     I hereby approve the within articles of merger of parent and subsidiary
corporations and, the filing fee in the amount of $200.00 having been paid, said
articles are deemed to have been filed with me this 15th day of December, 1986.



                                             /s/ Michael J. Connolly
                                             -----------------------------------
                                             MICHAEL JOSEPH CONNOLLY
                                             Secretary of State










                         TO BE FILLED IN BY CORPORATION
                        Photo Copy of Merger To Be Sent

               TO:     Richard S. Chute, Esquire

                       Hill & Barlow
               -----------------------------------------------
                       225 Franklin Street
               -----------------------------------------------
                       Boston, MA  02110
               -----------------------------------------------
               Telephone      617-423-6200
                        --------------------------------------



                                   [SEAL OF WILLIAM FRANCIS GALVIN
                    Copy Mailed    SECRETARY OF THE COMMONWEALTH
                                   DATED 2/20/96]
   17
                       THE COMMONWEALTH OF MASSACHUSETTS

                            MICHAEL JOSEPH CONNOLLY
                                                        FEDERAL IDENTIFICATION
                               Secretary of State
                                                        NO. 04-2277512

                    ONE ASHBURTON PLACE, BOSTON, MASS. 02108

                             ARTICLES OF AMENDMENT

                     GENERAL LAWS, CHAPTER 156B, SECTION 72


                 This certificate must be submitted to the Secretary of the 
            Commonwealth within sixty days after the date of the vote of 
            stockholders adopting the amendment. The fee for filing this 
            certificate is prescribed by General Laws, Chapter 156B, Section 
            114. Make check payable to the Commonwealth of Massachusetts. 

                                 -------------
 
            We, John R. Bertucci                                , President and
                Richard S. Chute                                     , Clerk of

                             MKS Instruments, Inc.
       ---------------------------------------------------------------------
                             (Name of Corporation)

           located at 34 Third Avenue, Burlington, Massachusetts 01803  
- ------     do hereby certify that the following amendment to the restated   
Name       articles of organization of the corporation was duly adopted by
Approved   written consent dated December 15, 1986, by vote of 
           2454 shares of Class A Common out of 2454 shares outstanding,
                                (Class of Stock)


CROSS OUT   being all of each class outstanding and entitled to vote thereon.(2)
INAPPLICABLE
CLAUSE

C /  /

P /  /

M /  /

           (1)For amendments adopted pursuant to Chapter 156B, Section 70.
           (2)For amendments adopted pursuant to Chapter 156B, Section 71.

           Note: If the space provided under any Amendment or item on this form
    4      is insufficient, additions shall be set forth on separate 8 1/2 - 11 
- ---------- sheets of paper leaving a left hand margin of at least 1 inch for
   P.C.    binding. Additions to more than one Amendment may be continued on a 
           single sheet so long as each Amendment requiring each such addition
           is clearly indicated.
   18
FOR INCREASE IN CAPITAL FILL IN THE FOLLOWING:


                                 (------shares preferred   ) with par value
                                 (------shares common      )
The total amount of capital stock                         :
 already authorized is           (------shares preferred   ) without par value
                                 (------shares common      )

                                 (------shares preferred   ) with par value
                                 (------shares common      ) 
The amount of additional capital                          :
 stock authorized is             (------shares preferred   ) without par value
                                 (------shares common      )


   19
      Voted: That the Restated Articles of Organization of the Corporation be
             and hereby are amended by deleting and striking in their entirety
             the restrictions upon the transfer of shares of stock contained in
             article 5. of the Restated Articles of Organization of the
             Corporation so that there are no restrictions imposed by the
             articles of organization of the Corporation upon the transfer of
             shares of stock of any class of the Corporation; that the President
             and Clerk of the Corporation be and hereby are authorized in the
             name and on behalf of the Corporation to execute Articles of
             Amendment to effectuate such amendment of the Restated Articles of
             Organization of the Corporation, a copy of which is attached hereto
             (the "Articles of Amendment"), and to file the Articles of
             Amendment with the State Secretary of the Commonwealth of
             Massachusetts; and in furtherance thereof that the President, any
             Vice President, Treasurer, Clerk, and Assistant Clerk of the
             Corporation or any one or more of them be and hereby are
             authorized in the name and on behalf of the Corporation to execute
             and deliver any and all documents and instruments and to take any
             and all action as they or any one or more of them may deem
             necessary or appropriate to effectuate such amendment of the
             Restated Articles of Organization of the Corporation.

     The foregoing amendment will become effective when these articles of
amendment are filed in accordance with Chapter 156B, Section 6 of The General
Laws unless these articles specify, in accordance with the vote adopting the
amendment, a later effective date not more than thirty days after such filing,
in which event the amendment will become effective on such later date.

IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our
names this 15th day of December, in the year 1986


  /s/  John R. Bertucci                                President
- -----------------------------------------------------
       John R. Bertucci

  /s/  Richard S. Chute                                    Clerk
- -----------------------------------------------------
       Richard S. Chute
   20
                       THE COMMONWEALTH OF MASSACHUSETTS
                                        
                             ARTICLES OF AMENDMENT
                    (General Laws, Chapter 156B, Section 72)
              I hereby approve the within articles of amendment
                  and, the filing fee in the amount of $75.00
               having been paid, said articles are deemed to have
                          been filed with me this 16th
                             day of December, 1986.




                          /s/ Michael Joseph Connolly
                          ----------------------------
                            MICHAEL JOSEPH CONNOLLY
                              Secretary of State


                         TO BE FILLED IN BY CORPORATION
                       PHOTO COPY OF AMENDMENT TO BE SENT
                                        
                             TO:  Richard S. Chute
                                  Hill & Sarlow
                          ---------------------------
                                  225 Franklin Street
                          ---------------------------
                                  Boston, MA 02110
                          ---------------------------
                            Telephone  617-423-6200
                          ---------------------------

                                          Copy Mailed


                                                             [STATE SEAL]
   21
                       THE COMMONWEALTH OF MASSACHUSETTS
                 OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
                      MICHAEL JOSEPH CONNOLLY, Secretary
                    ONE ASHBURTON PLACE, BOSTON, MASS. 02180



- ----------                                               FEDERAL IDENTIFICATION
 EXAMINER                                                        NO. 04-2277512
                                                             ------------------


   N/A
- ----------
   Name
 Approved



C [ ]
P [ ]
M [ ]



    4
- ----------
   P.C.





                             ARTICLES OF AMENDMENT

                     General Laws, Chapter 156B, Section 72


     This certificate must be submitted to the Secretary of the Commonwealth
within sixty days after the date of the vote of stockholders adopting the
amendment. The fee for filing this certificate is prescribed by General Laws,
Chapter 156B, Section 114. Make check payable to the Commonwealth of
Massachusetts.

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


We, John R. Bertucci                                            ,  President and
    Richard S. Chute                                                  , Clerk of

                             MKS Instruments, Inc.
- --------------------------------------------------------------------------------
                             (Name of Corporation)

located at      Six Shattuck Road, Andover, Massachusetts 01810
- --------------------------------------------------------------------------------

do hereby certify that the following amendment to the restated articles of
organization of the corporation was duly adopted by written consent dated
January 8, 1987, by vote of

  2454   shares of      Class A Common      out of   2454   shares outstanding,
- --------           ------------------------        --------
                       (Class of Stock)


  3250   shares of      Class B Common      out of   3250   shares outstanding,
- --------           ------------------------        --------
                       (Class of Stock)


being all of each class outstanding and entitled to vote thereon and of each
class of series of stock whose rights are adversely affected thereby:

(1) for amendments adopted pursuant in Chapter 156B, Section 70.
(2) for amendments adopted pursuant to Chapter 156B, Section 71.

Note: If the space provided under any Amendment or item on this form is
insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of
paper leaving a left hand margin of at least 1 inch for binding. Additions to
more than one Amendment may be continued on a single sheet so long as each
Amendment requiring each such addition is clearly indicated

   22
TO CHANGE the number of shares and the par value, if any, of each class of
stock within the corporation fill in the following:

The total presently authorized is:



- ------------------------------------------------------------------------
                            NO PAR VALUE        WITH PAR VALUE      PAR
KIND OF STOCK             NUMBER OF SHARES     NUMBER OF SHARES    VALUE
- ------------------------------------------------------------------------
                                                          
   COMMON
- ------------------------------------------------------------------------

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

- ------------------------------------------------------------------------
 PREFERRED
- ------------------------------------------------------------------------

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

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



CHANGE the total to:



- ------------------------------------------------------------------------
                            NO PAR VALUE        WITH PAR VALUE      PAR
KIND OF STOCK             NUMBER OF SHARES     NUMBER OF SHARES    VALUE
- ------------------------------------------------------------------------
                                                          
   COMMON
- ------------------------------------------------------------------------

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

- ------------------------------------------------------------------------
 PREFERRED
- ------------------------------------------------------------------------

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

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



VOTED:  That the Restated Articles of Organization of the Corporation be and
        hereby are amended by adding the following provision to article 6 of the
        Restated Articles of Organization of the Corporation so that article 6
        of the Restated Articles of Organization of the Corporation shall
        contain the following provision:

            "A director of the corporation shall not be personally liable to the
            corporation or its stockholders for monetary damages for breach of
            fiduciary duty as a director notwithstanding any provision of law
            imposing such liability, except for liability (i) for any breach of
            the director's duty of loyalty to the corporation or its
            stockholders, (ii) for acts or omissions not in good faith or which
            involve intentional misconduct or a knowing violation of law, (iii)
            under Section 61 or 62 of the Massachusetts Business Corporation
            Law, or (iv) for any transaction from which the director derived an
            improper personal benefit.

   23
            If the Massachusetts Business Corporation Law is amended, after
            approval by the stockholders of the corporation of this provision,
            to authorize corporate action further eliminating or limiting the
            personal liability of directors, then the liability of a director of
            the corporation shall be eliminated or limited to the fullest extent
            permitted by the Massachusetts Business Corporation Law, as so
            amended. Any amendment, repeal, or modification of this provision by
            the stockholders of the corporation shall not adversely affect any
            right or protection of a director of the corporation existing at the
            time of such amendment, repeal, or modification."

    ; that the President and Clerk of the Corporation be and hereby are
    authorized in the name and on behalf of the Corporation to execute Articles
    of Amendment to effectuate such amendment of the Restated Articles of
    Organization of the Corporation, a copy of which is attached hereto (the
    "Articles of Amendment"), and to file the Articles of Amendment with the
    State Secretary of the Commonwealth of Massachusetts; and in furtherance
    thereof that the President, any Vice President, Treasurer, Clerk, and
    Assistant Clerk of the Corporation or any one or more of them be and hereby
    are authorized in the name and on behalf of the Corporation to execute and
    deliver any and all documents and instruments and to take any and all
    action as they or any one or more of them may deem necessary or appropriate
    to effectuate such amendment of the Restated Articles of Organization of
    the Corporation.


The foregoing amendment will become effective when these articles of amendment
are filed in accordance with Chapter 156B, Section 6 of The General Laws unless
these articles specify, in accordance with the vote adopting the amendment, a
later effective date not more than thirty days after such filing, in which
event the amendment will become effective on such later date.

IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed
our names this 9th day of February, in the year 1987.



/s/ John R. Bertucci                                            President
- ----------------------------------------------------------------
John R. Bertucci

/s/ Richard S. Chute                                                Clerk
- ----------------------------------------------------------------
Richard S. Chute


   24
                       THE COMMONWEALTH OF MASSACHUSETTS


                             ARTICLES OF AMENDMENT

                    (General Laws, Chapter 156B, Section 72)

     I hereby approve the within articles of amendment and, the filing fee in
the amount of $75.00 having been paid, said articles are deemed to have been
filed with me this 11th day of February, 1987.


                            /s/ Michael J. Connolly

                            MICHAEL JOSEPH CONNOLLY
                               Secretary of State


                         TO BE FILLED IN BY CORPORATION

                       PHOTO COPY OF AMENDMENT TO BE SENT

                       TO:  Richard S. Chute, Esq.
                            Hill & Barlow
                       ----------------------------------
                            225 Franklin Street
                            Boston, MA 02110
                       ----------------------------------


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

                       Telephone (617) 423-6200
                                -------------------------

                                              Copy Mailed


                                             [SEAL OF WILLIAM FRANCIS GALVIN,
                                               SECRETARY OF THE COMMONWEALTH
                                                        DATED 2/20/96]

        
   25

                       The Commonwealth of Massachusetts
                             WILLIAM FRANCIS GALVIN
- ------------             Secretary of the Commonwealth
  Examiner                    ONE ASHBURTON PLACE
                              BOSTON, MASS. 02108

                     FEDERAL IDENTIFICATION NO. 004-2277512

                                  ARTICLES OF
                  MERGER OF PARENT AND SUBSIDIARY CORPORATIONS
               PURSUANT TO GENERAL LAWS, CHAPTER 156B, SECTION 82

              The fee for filing this certificate is prescribed by
                    General Laws, Chapter 156B, Section 114.
            Make check payable to the Commonwealth of Massachusetts.


                                *    *    *    *

We, John R. Bertucci and Richard S. Chute, President*       and Clerk*       of
                             MKS Instruments, Inc.
- -------------------------------------------------------------------------------
                              name of corporation

organized under the laws of Massachusetts and herein called the parent
corporation, do hereby certify as follows:

     1.   That the subsidiary corporation(s) to be merged into the parent
corporations are/is as follows:

                                               State of           Date of
               Name                          Organization       Organization

          UTI Instruments Company                 CA              09/26/73


     2.   That the parent corporation owns at least ninety per cent of the
outstanding shares of each class of the stock of each subsidiary corporation to
be merged into the parent corporation.

     3.   That in the case of each of the above-named corporations the laws of
the state of its organization, if other than Massachusetts, permit the merger
herein provided for and that all action required under the laws of each such
state in connection with this merger has been duly taken. (If all the
corporations are organized under the laws of Massachusetts and if General Laws,
Chapter 156B is applicable to them, then Paragraph 3 may be deleted.)

* Delete the inapplicable words. In case the parent corporation is organized
  under the laws of a state other than Massachusetts these articles are to be
  signed by officers having corresponding powers and duties.
   26
     4. That at a meeting of the directors of the parent corporation the
following vote, pursuant to subsection (a) of General Laws, Chapter 156B,
Section 82, was duly adopted:


     VOTED:         That the Corporation merge into itself UTI
     -----          Instruments Company, a California corporation,
                    with the Corporation surviving the merger
                    (the "Merger"), in accordance with the
                    provisions of Section 82 of Chapter 156B of the
                    Massachusetts General Laws.

     FURTHER
     VOTED:         That the effective date of the Merger shall be
     -------        the date of filing of appropriate Articles of
                    Merger with the Secretary of State of Massachusetts.


     FURTHER
     VOTED:         That any officer of the Corporation, acting singly,
     -------        be and he hereby is, authorized and directed to
                    take any further actions, and to execute and deliver
                    any further documents and certificates, which may
                    be necessary or appropriate to effectuate the Merger
                    described herein.
   27
     5. The effective date of the merger as specified in the vote set out under
Paragraph 4 is

     IN WITNESS WHEREOF and under the penalties of perjury we have hereto signed
our names this 17th day of November, 1995.



                                   /s/ John R. Bertucci
                                   ------------------------ President*
                                   John R. Bertucci



                                   /s/ Richard S. Chute
                                   ------------------------ Clerk*
                                   Richard S. Chute








* Delete the inapplicable words. In case the parent corporation is organized
under the laws of a state other than Massachusetts these articles are to be
signed by officers having corresponding powers and duties.


     
   28
                         COMMONWEALTH OF MASSACHUSETTS
            ARTICLES OF MERGER OF PARENT AND SUBSIDIARY CORPORATIONS
                    (General Laws, Chapter 156B, Section 82)

      I hereby approve the within articles of merger of parent and subsidiary
corporations and, the filing fee in the amount of $250 having been paid, said
articles are deemed to have been filed with me this 17th day of November, 1995.

                                          /s/ William Francis Galvin
                                              William Francis Galvin
                                              Secretary of the Commonwealth




                 TO BE FILLED IN BY CORPORATION
                 Photo Copy of Merger To Be Sent

                 TO:  Terrence W. Mahoney, Esq.
                      Hill & Barlow
                 ------------------------------
                      One International Place
                 ------------------------------
                      Boston, MA 02110
                 ------------------------------
                 Telephone 617-428-3000
                           --------------------

   1

                                                                     EXHIBIT 3.3
                                                              As amended through
                                                                    May 17, 1996


                                     BY-LAWS

                                       OF

                              MKS INSTRUMENTS, INC.


                                    ARTICLE I

                  Name, Location, Corporate Seal, and Fiscal Year

                  Section 1. Name. The name of the corporation is MKS 
         Instruments, Inc.

                  Section 2. Location. The principal office of the corporation
         in Massachusetts shall be located at the place set forth on the form of
         the articles of organization or on a certificate filed with the State
         Secretary. The Board of Directors may change the location of the
         principal office in Massachusetts and establish such other offices as
         it deems appropriate.

                  Section 3. Corporate Seal. The Board of Directors may adopt
         and alter the form of seal of the corporation.

                  Section 4. Fiscal Year. Except as otherwise determined from
         time to time by the Board of Directors, the fiscal year of the
         corporation shall in each year end on December 31.

                                     ARTICLE II

                                    Stockholders

                  Section 1. Annual Meeting. The annual meeting of stockholders
         shall be held within six months after the end of
   2
         each fiscal year of the corporation on a date to be fixed by the Board
         of Directors or the President (which date shall not be a legal holiday
         in the place where the meeting is to be held) at the time and place to
         be fixed by the Board of Directors or the President and stated in the
         notice of the meeting. The purposes for which the annual meeting is to
         be held, in addition to those prescribed by law, by the articles of
         organization or by these by-laws, may be specified by the Board of
         Directors or the President. If no annual meeting is held in accordance
         with the foregoing provisions, a special meeting may be held in lieu of
         the annual meeting, and any action taken at that special meeting shall
         have the same effect as if it had been taken at the annual meeting, and
         in such case all references in these by-laws to the annual meeting of
         stockholders shall be deemed to refer to such special meeting.

                  Section 2. Special Meetings. Special meetings of the
         stockholders may be called by the President or by the Board of
         Directors, who shall state the purposes for which the meeting is to be
         held. The Clerk, or, in the case of the death, absence, incapacity or
         refusal of the Clerk, any other officer, shall call a special meeting
         upon written application of one or more stockholders holding at least
         one-tenth part in interest of the capital stock entitled to vote at the
         meeting, which application shall state the time, place and purposes of
         the proposed meeting. If notice of a special meeting shall have been
         duly waived by every stockholder entitled to notice thereof, or by his
         attorney




                                     - 2 -
   3
         thereunto duly authorized, such meeting shall be deemed to have been
         duly called at the request of the stockholders.

                  Section 3. Time and Place of Meetings. All meetings of
         stockholders shall be held at a suitable time at the principal office
         of the corporation or at such other suitable place within Massachusetts
         or, to the extent permitted by the articles of organization, elsewhere
         in the United States, as shall be selected by the President or the
         Board of Directors in the case of an annual meeting and, in the case of
         a special meeting, by the President, the Board of Directors or the
         applying stockholders calling such meeting.

                  Section 4. Notice of Meetings. A written notice of each
         meeting of stockholders containing the place, date and hour, and the
         purposes for which it is to be held, shall be given by the Clerk or, in
         the case of the death, absence, incapacity, or refusal of the Clerk, by
         any other officer, at least seven days before the date of the meeting,
         to each stockholder entitled to vote at the meeting and to each
         stockholder who is otherwise entitled by law or by the articles of
         organization or these by-laws to such notice, by leaving such notice
         with him or at his residence or usual place of business or by mailing
         it postage prepaid and addressed to each stockholder at his address as
         it shall appear in the stock and transfer records of the corporation.
         Notice of a meeting need not be given to a stockholder if a written
         waiver of notice, executed before or after the meeting by such
         stockholder or his attorney thereunto authorized, is filed with the
         records of the meeting.



                                     - 3 -
   4
                  Section 5. Quorum. The holder or holders of a majority in
         interest of all stock issued, outstanding, and entitled to vote at a
         meeting, present in person or represented by proxy, shall constitute a
         quorum, but the majority of a lesser interest so present may, from time
         to time, postpone to a new time or place any meeting and the postponed
         meeting may be held without further notice.

                  Section 6. Voting and Proxies. Each stockholder entitled to
         vote shall have one vote, to be exercised in person or by proxy, for
         each share of stock held by him, and a proportionate vote for a
         fractional share. When a quorum is present at any meeting the vote of
         the holders of a majority in interest of the stock represented which is
         entitled to vote and voting shall decide any matter properly brought
         before the meeting, except in the case of elections by stockholders,
         which shall be decided by a plurality of the votes cast by stockholders
         entitled to vote at the election, and except when a larger vote is
         required by law, the articles of organization or these by-laws. No vote
         need be taken by ballot unless so requested by any stockholder entitled
         to vote thereon. Proxies must be in writing and filed with the clerk of
         the meeting before being voted. The person named in a proxy may vote at
         any adjournment of the meeting for which the proxy was given, but the
         proxy shall terminate after final adjournment of the meeting. No proxy
         dated more than six months before the meeting named in it shall be
         valid. A proxy purporting to be executed by or on behalf of a
         stockholder shall be deemed valid unless challenged at or prior to its
         exercise and



                                     - 4 -
   5
         the burden of proving invalidity shall rest on the challenger. A proxy
         with respect to stock held in the name of two or more persons shall be
         valid if executed by any one of them unless at or prior to the exercise
         of the proxy the corporation receives a specific notice to the contrary
         from any one of them. Inspectors of election, if any, shall be
         appointed by the Board of Directors or, in the absence of such
         appointment, by the officer presiding at any meeting of the
         stockholders.

                  Section 7. Action by Consent. Any action required or permitted
         to be taken by stockholders may be taken without a meeting if all
         stockholders entitled to vote on the matter consent in writing to the
         action and such written consents are filed with the records of the
         meetings of stockholders. Such consents shall be treated for all
         purposes as a vote at a meeting.

                                   ARTICLE III

                             The Board of Directors

                  Section 1. Composition. The number of directors which shall
         constitute the whole Board of Directors shall be determined by vote of
         the stockholders or the Board of Directors, but shall consist of not
         less than three directors (except that whenever there shall be only two
         stockholders the number of directors shall be not less than two and
         whenever there shall be only one stockholder or prior to the issuance
         of any stock, there shall be at least one director). The number of
         directors may be decreased at any time and from time to time either by
         the stockholders or by a majority of the directors then in office, but
         only to



                                     - 5 -
   6
         eliminate vacancies existing by reason of the death, resignation,
         removal or expiration of the term of one or more directors.

                  Section 2. Election and Term. The directors, except as
         provided in the preceding section and Section 12 of this Article, shall
         be elected at the annual meeting of the stockholders. The directors,
         except as provided in Section 13 of this Article, shall hold office
         until the next annual meeting and until their successors are chosen and
         qualified. No director need be a stockholder.

                  Section 3. Powers. The business of the corporation shall be
         managed by the Board of Directors, which shall have and may exercise
         all the powers of the corporation except those powers reserved to the
         stockholders by these by-laws, by law or by the articles of
         organization.

                  Section 4. Annual Meeting. The annual meeting of the Board of
         Directors shall be held immediately after and at the same place as the
         annual meeting of stockholders, or any special meeting held in lieu
         thereof, without the necessity of notice. If such meeting is not then
         held, or if a quorum is not present, the annual meeting of the Board of
         Directors shall be called in the manner hereinafter provided for
         special meetings.

                  Section 5. Regular Meetings. Regular meetings of the Board of
         Directors may be held at such times and places as shall from time to
         time be fixed by vote of the Board of Directors and no notice need be
         given of regular meetings held at times and places so fixed, provided,
         however, that any vote relating to the holding of regular meetings
         shall remain in force only until the



                                     - 6 -
   7
         next annual meeting of the Board of Directors, and that if at any
         meeting of the Board of Directors, at which a vote is adopted fixing
         the times or place or places for any regular meetings any director is
         absent no meeting shall be held pursuant to such vote until either each
         such absent director has in writing or by telegram approved the vote or
         seven days have elapsed after a copy of such vote certified by the
         Clerk has been mailed, postage prepaid, addressed to each such absent
         director at his last known home or business address.

                  Section 6. Special Meetings. Special meetings of the Board of
         Directors may be called by the chairman of the Board of Directors, or
         the President, or by any two directors and shall be held at the time
         and place designated by the person or persons calling such meeting.

                  Section 7. Notices. The Clerk of the corporation or, in the
         case of his death, absence, incapacity, or refusal, any other officer,
         shall give notice of any special meeting to each director (i) by
         written notice delivered in person, or by telegram sent to his business
         or home address, at least twenty-four hours before such meeting or (ii)
         by written notice mailed to his last known business or home address at
         least seventy-two hours before such meeting. Notice of a meeting need
         not be given to any director if he executes a written waiver of notice
         before or after the meeting or if he attends the meeting without
         protesting either prior thereto or at its commencement the lack of
         notice to him. A notice or waiver of notice of a



                                     - 7 -
   8
         meeting of the Board of Directors need not specify the purposes of the
         meeting.

                  Section 8. Quorum and Voting. A majority of the directors then
         in office shall constitute a quorum. If a quorum is not present, a
         majority of those present at a meeting may, from time to time, postpone
         to a new time or place any meeting and the postponed meeting may be
         held without further notice. If a quorum is present, a majority of the
         directors present and voting may take any action unless a different
         vote is required by law, the articles of organization or these by-laws.

                  Section 9. Action by Consent. Any action required or permitted
         to be taken at any meeting of the Board of Directors may be taken
         without a meeting if all of the directors consent to the action in
         writing and such consents are filed with the records of the meetings of
         the Board of Directors. Such consents shall be treated for all purposes
         as a vote at a meeting.

                  Section 10. Chairman of Board of Directors. The Board of
         Directors may elect from its own number a chairman. If a chairman has
         been elected, he shall preside at all meetings of the stockholders and
         of the Board of Directors at which he is present and shall have such
         other duties and powers as the Board of Directors may decide.

                  Section 11. Executive and Other Committees. The Board of
         Directors may elect from its own number an executive committee and any
         other committees, and may delegate to the committees any or all of its
         powers except the power to (a) change the principal office of the
         corporation; (b) amend the by-laws; (c) issue



                                     - 8 -
   9
         stock; (d) establish and designate series of stock and fix and
         determine the relative rights and preferences of any series of stock;
         (e) elect officers required by law to be elected by the stockholders or
         directors and fill vacancies in any such offices; (f) change the number
         of the Board of Directors; (g) remove officers or directors from
         office; (h) authorize the payment of any dividend or distribution to
         stockholders; (i) authorize the reacquisition for value of stock of the
         corporation; or (j) authorize a merger. The Board of Directors may
         decide the manner in which any such committees shall conduct their
         business. The Board of Directors shall have power to rescind any action
         of any committee, but such rescission shall not be retroactive.

                  Section 12. Vacancies. Except as may be otherwise provided in
         the articles of organization, a vacancy in the Board of Directors may
         be filled by the Board of Directors by the election of a successor to
         hold office for the unexpired term of the director whose place is
         vacant and until his successor is chosen and qualified. Any vacancy in
         the Board of Directors may also be filled by the stockholders and the
         person so chosen shall displace any successor chosen by the Board of
         Directors.

                  Section 13. Removal. A director may be removed from office
         with or without cause by the stockholders, provided that the directors
         elected by a particular class of stockholders may be removed with or
         without cause only by the stockholders of such class. A director may be
         removed at any time for cause by the vote of a majority of the
         directors then in office. A director



                                     - 9 -
   10
         may be removed for cause only after reasonable notice and opportunity
         to be heard before the body proposing to remove him.

                  Section 14. Resignation. Any director may at any time resign
         his office by delivering a written resignation to the Board of
         Directors, the President or the Clerk. Such resignation, unless a later
         time is specified therein, shall take effect upon receipt by the
         addressee or at the principal office of the corporation, and acceptance
         thereof shall not be necessary to make it effective.

                                     ARTICLE IV

                                      Officers

                  Section 1. Designation and Qualification. The officers of the
         corporation shall consist of a President, a Treasurer, a Clerk, and
         such other officers including one or more Vice Presidents, Assistant
         Treasurers and Assistant Clerks as the Board of Directors may elect. No
         officer need be a stockholder or a director. The Clerk shall be a
         resident of the Commonwealth of Massachusetts unless the corporation
         has a resident agent appointed to accept service of process. A person
         may hold more than one office at the same time provided that the
         President and Clerk may not be the same person except when there is
         only one stockholder. Any officer may be required by the Board of
         Directors to give bond for the faithful performance of his duties to
         the corporation in such amount and with such sureties as the Board of
         Directors may determine.

                  Section 2. Election and Term. The President, Treasurer and
         Clerk shall be elected annually by the Board of Directors at the



                                     - 10 -
   11
         annual meeting of the Board of Directors and shall hold office until
         the next annual meeting of the Board of Directors and until their
         respective successors are chosen and qualified. All other officers may
         be elected by the Board of Directors at any time and shall hold office
         for such term as the Board of Directors determines.

                  Section 3. President. The President shall be the chief
         executive officer of the corporation, except as the Board of Directors
         may otherwise provide, and shall have general supervision and control
         of the business of the corporation subject to the direction of the
         Board of Directors. The President shall also have such other powers and
         duties as the Board of Directors may decide. It shall be his duty, and
         he shall have the power, to see that all orders and resolutions of the
         directors are carried into effect. In the absence of a chairman of the
         Board of Directors, the President shall preside at all meetings of the
         stockholders and at all meetings of the Board of Directors. Unless
         otherwise directed by the Board of Directors, the President may on
         behalf of the corporation vote or consent to any action with respect to
         or in connection with any interest that the corporation may hold or
         have in any other corporation or in any partnership, joint venture,
         association, trust, proprietorship, business entity or common
         undertaking whatsoever, and may appoint any other person or persons to
         act as proxy or attorney-in-fact for the corporation, with or without
         power of substitution. The Board of Directors may from time to time
         confer like powers upon any other officer.



                                     - 11 -
   12
                  Section 4. Vice President. The Vice President or Vice
         Presidents, if any, shall have such powers and perform such duties as
         may be assigned to them by the Board of Directors or the President. In
         the absence of the President or in the event of his inability to act,
         the Vice President, if any, or, if there is more than one Vice
         President, the First Vice President, or, if no First Vice President has
         been designated, the Vice President senior in office, shall have and
         may exercise all the powers and duties of the President.

                  Section 5. Treasurer and Assistant Treasurers. The Treasurer
         shall have, subject to the direction of the Board of Directors, general
         charge of the financial affairs of the corporation and shall keep full
         and accurate records thereof, which shall always be open to the
         inspection of the President or of any director. He shall render to the
         President or to the Board of Directors, whenever either may require it,
         a statement of the accounts of his transactions as Treasurer and of the
         financial condition of the corporation. The Treasurer shall perform
         such duties and have such powers additional to the foregoing as the
         directors may designate.

                  Any Assistant Treasurer shall have such powers and duties as
         the Board of Directors may decide.

                  Section 6. Clerk and Assistant Clerks. The Clerk shall record
         in books kept for that purpose all votes, consents, and the proceedings
         of all meetings of the stockholders and of the Board of Directors.
         Record books of stockholders' meetings shall be open at all reasonable
         times to the inspection of any



                                     - 12 -
   13
         stockholder. The Clerk shall notify the stockholders and directors of
         all meetings in accordance with the by-laws.

                  In the absence of the Clerk from any meeting of the
         stockholders or from any meeting of the directors, the Assistant Clerk,
         if one be elected, or, if there be more than one, the one designated
         for the purpose by the directors, and otherwise a temporary clerk
         designated by the person presiding at the meeting, shall perform the
         duties of the Clerk.

                  Any Assistant Clerks shall have such other powers and duties
         as the Board of Directors may decide.

                  Section 7. Vacancies. A vacancy in any office may be filled by
         the Board of Directors by the election of a successor to hold office
         for the unexpired term of the officer whose place is vacant and until
         his successor is chosen and qualified.

                  Section 8. Removal. All officers may be removed from their
         respective offices with or without cause by vote of a majority of the
         directors then in office. An officer may be removed for cause only
         after a reasonable notice and opportunity to be heard before the Board
         of Directors.

                  Section 9. Resignation. Any officer may at any time resign his
         office by delivering a written resignation to the Board of Directors,
         the President or the Clerk. Such resignation, unless a later date is
         specified therein, shall take effect upon receipt by the addressee or
         at the principal office of the corporation, and acceptance thereof
         shall not be necessary to make it effective.



                                     - 13 -
   14
                                     ARTICLE V

                                   Capital Stock

                  Section 1. Certificates of Stock. Each stockholder shall be
         entitled to a certificate in the form approved by the Board of
         Directors stating the number, class, and designation of series, if any,
         of the shares held by him. Such certificate shall be signed by the
         President or a Vice President and by the Treasurer or an Assistant
         Treasurer. Such signatures may be facsimiles if the certificate is
         countersigned by a transfer agent, or by a registrar of transfers,
         other than a director, officer or employee of the corporation.

                  Every certificate for shares of stock subject to any
         restriction on transfer pursuant to the articles of organization, these
         by-laws, or any agreement to which the corporation is a party shall
         have the restriction noted conspicuously on the certificate and shall
         also set forth on the face or back either the full text of the
         restriction or a statement of the existence of such restriction and a
         statement that the corporation will furnish a copy to the holder of
         such certificate upon written request and without charge. If the
         corporation is authorized to issue more than one class or series of
         stock, every certificate issued shall set forth on its face or back
         either the full text of the preferences, voting powers, qualifications
         and special and relative rights of the shares of each class and series
         authorized to be issued or a statement of the existence of such
         preferences, powers, qualification and rights, and a statement that the



                                     - 14 -
   15
         corporation will furnish a copy thereof to the holder of such
         certificate upon written request and without charge.

                  Section 2. Transfer. Shares of stock shall be transferred of
         record on the books of the corporation only upon the surrender to the
         corporation or its transfer agent of the certificate therefor properly
         endorsed for transfer (or accompanied by a written assignment and power
         of attorney properly executed for transfer), and only upon compliance
         with provisions, if any, respecting restrictions on transfer contained
         in the articles of organization, these by-laws or any agreement to
         which the corporation is a party. The corporation may require proof of
         the genuineness of the signature and the capacity of the party
         presenting the certificate for transfer.

                  Section 3. Interests Not Recognized. The corporation shall be
         entitled to treat the holder of record of any share or shares of stock
         as the holder in fact thereof and shall not be bound to recognize any
         other claim to or interest in such share or shares on the part of any
         other person except as may be otherwise expressly provided by law.

                  Section 4. Lost, Mutilated, or Destroyed Certificates. Subject
         to Section 8-405 of the Massachusetts Uniform Commercial Code, as
         amended from time to time, the Board of Directors may determine the
         conditions upon which a new certificate of stock may be issued in place
         of any certificate alleged to have been lost, mutilated or destroyed.
         It may, in its discretion, require the owner of a lost, mutilated or
         destroyed certificate, or his legal representative, to give a bond,
         with or without surety,



                                     - 15 -
   16
         sufficient in its opinion to indemnify the corporation against any
         loss, claim or expense which may arise by reason of the issuance of a
         new certificate in place of such lost, mutilated or destroyed stock
         certificate.

                  Section 5. Transfer Agent and Registrar. The Board of
         Directors may appoint a transfer agent or a registrar, or both, and
         require all stock certificates to bear the signature or facsimile
         thereof of any such transfer agent or registrar. Unless the Board of
         Directors shall appoint a transfer agent, registrar or other officer or
         officers for the purpose, the Clerk shall be charged with the duty of
         keeping, or causing to be kept, accurate records of all stock
         outstanding, stock certificates issued, and stock transfers. Subject to
         any other rules which may be adopted from time to time by the Board of
         Directors, such records may be kept solely in the stock certificate
         books.

                  Section 6. Setting Record Date and Closing Transfer Records.
         The Board of Directors may fix in advance a time not more than sixty
         days before (i) the date of any meeting of the stockholders or (ii) the
         date for the payment of any dividend or the making of any distribution
         to stockholders or (iii) the last day on which the consent or dissent
         of stockholders may be effectively expressed for any purpose, as the
         record date for determining the stockholders having the right to notice
         of, and to vote at such meeting or any adjournment thereof, or the
         right to receive such dividend or distribution, or the right to give
         such consent or dissent. If a record date is fixed by the Board of
         Directors, only stockholders of record on such date shall have




                                     - 16 -
   17
         such rights notwithstanding any transfer of stock on the records of the
         corporation after such date. Without fixing such record date, the Board
         of Directors may close the transfer records of the corporation for all
         or any part of such sixty-day period.

                  If no record date is fixed and the transfer books are not
         closed, then the record date for determining stockholders having the
         right to notice of or to vote at a meeting of stockholders shall be at
         the close of business on the day next preceding the day on which notice
         is given, and the record date for determining stockholders for any
         other purpose shall be at the close of business on the date on which
         the Board of Directors acts with respect thereto.

                  Section 7. Issue of Stock. The Board of Directors may, from
         time to time, issue any of the authorized capital stock of the
         corporation for cash, property, services or expenses, or as a stock
         dividend, and on any terms permitted by law and the articles of
         organization. No stock shall be issued unless the cash, so far as due,
         or the property, services or expenses for which it was authorized to be
         issued, has been actually received or incurred by, or conveyed or
         rendered to, the corporation, or is in its possession as surplus.

                                     ARTICLE VI

                               Inspection of Records

                  The original, or attested copies of the articles of
         organization, by-laws and records of all meetings of the incorporators
         and stockholders, and the stock and transfer records, which shall
         contain the names of all stockholders and



                                     - 17 -
   18
         the record address and the amount of stock held by each, shall be kept
         in the Commonwealth of Massachusetts at the principal office of the
         corporation, or at an office of its transfer agent or of the Clerk or
         of its resident agent. Said copies and records need not all be kept in
         the same office. They shall be available at all reasonable times to the
         inspection of any stockholder for any proper purpose but not to secure
         a list of stockholders for the purpose of selling said list or copies
         thereof or of using the same for a purpose other than in the interest
         of the applicant, as a stockholder, relative to the affairs of the
         corporation.

                                    ARTICLE VII

                    Checks, Notes, Drafts and Other Instruments

                  Checks, notes, drafts and other instruments for the payment of
         money drawn or endorsed in the name of the corporation may be signed by
         any officer or officers or person or persons authorized by the
         directors to sign the same. No officer or person shall sign any such
         instrument as aforesaid unless authorized by the directors to do so.

                                    ARTICLE VIII

                                     Amendments

                  These by-laws may at any time be amended by the stockholders,
         provided that notice of the substance of the proposed amendment is
         stated in the notice of any meeting at which action is to be taken on
         the amendment.



                                     - 18 -
   19
                                     ARTICLE IX

                                  Indemnification

                  Except as provided below, any director or officer of the
         corporation, and any person who serves at the request of the
         corporation as a director or officer of another organization or who
         serves at the request of the corporation in any capacity with respect
         to any employee benefit plan, shall be indemnified in full by the
         corporation against expenses, including attorneys' fees, and against
         the amount of any judgment, money decree, fine, or penalty, or against
         the amount of any settlement deemed reasonable by the Board of
         Directors, necessarily paid or incurred by such person in connection
         with or arising out of any claim made against such person, or any civil
         or criminal action, suit, or proceeding of whatever nature brought
         against such person or in which such person is made a party or in which
         such person is otherwise involved, by reason of being or having been a
         director or officer of the corporation or a director or officer of
         another organization at the request of the corporation or serving in
         any capacity with respect to any employee benefit plan at the request
         of the corporation. Such indemnification shall be provided although
         such person at the time of such claim, action, suit, or proceeding is
         no longer a director or officer of the corporation or of such other
         organization or no longer serves with respect to any such employee
         benefit plan.

                  No indemnification shall be provided for any person with
         respect to any matter as to which such person shall have been
         adjudicated in any proceeding not to have acted in good faith in



                                     - 19 -
   20
         the reasonable belief that such person's action was in the best
         interests of the corporation or, to the extent that such matter relates
         to service with respect to an employee benefit plan, in the best
         interests of the participants or beneficiaries of such employee benefit
         plan. If such person has not been so adjudicated, such person shall be
         entitled to indemnification unless the Board of Directors decides that
         such person did not act in good faith in the reasonable belief that
         such person's action was in the best interests of the corporation or,
         to the extent that such matter relates to service with respect to an
         employee benefit plan, in the best interests of the participants or
         beneficiaries of such employee benefit plan. Expenses reasonably
         incurred in defending any claim, action, suit, or proceeding of the
         character described in the preceding paragraph may, if the Board of
         Directors so decides, be advanced by the corporation in advance of the
         final disposition of such claim, action, suit, or proceeding, upon
         receipt of an undertaking by the recipient to repay all such advances
         in the event such person is adjudicated in any proceeding not to have
         acted, or the Board of Directors decides that such person did not act,
         in good faith in the reasonable belief that such person's action was in
         the best interests of the corporation or, to the extent that such
         matter relates to service with respect to an employee benefit plan, in
         the best interests of the participants or beneficiaries of such
         employee benefit plan, which undertaking may be accepted without
         reference to the financial ability of such person to make repayment.



                                     - 20 -
   21
                  Any rights of indemnification hereunder shall not be
         exclusive, shall be in addition to any other right which a director or
         officer of the corporation and any person serving at the request of the
         corporation as a director or officer of another organization or in any
         capacity with respect to any employee benefit plan may have or obtain,
         and shall accrue to such person's estate.

                  Any agent or employee of or for the corporation may be
         indemnified in such manner as the Board of Directors decides.




                                     - 21 -

   1
                                                                    EXHIBIT 10.5


                     AMENDED & RESTATED EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT dated December 15, 1995 (the "Employment Agreement") by and
between MKS Instruments, Inc., a Massachusetts Corporation (the "Corporation"),
and Leo Berlinghieri of Billerica, MA (the "Employee").

WHEREAS, the Corporation and the Employee entered into an Employment Agreement
dated August 24, 1981 (the "Original Employment Agreement"); and

WHEREAS, the Corporation has adopted a new Management Incentive Program and the
Employee desires to be eligible to participate in such Management Incentive
Program; and

WHEREAS, the Corporation and the Employee desire to make certain other
amendments to the Original Employment Agreement as more particularly set forth
herein; and

WHEREAS, for convenience of reference, the Corporation and the Employee desire
to amend and restate the Original Employment Agreement in its entirety:

NOW, THEREFORE, in consideration of the premises and the mutual promises
contained herein, and for other good and valuable considerations, the receipt
and sufficiency of which are hereby acknowledged, the Corporation and the
Employee hereby agree that the Original Employment Agreement is hereby amended
and restated to read in its entirety as follows:

         (1)  TERM OF EMPLOYMENT: The Corporation hereby employs the Employee,
and the Employee hereby accepts employment with the Corporation, for a period
commencing as of December 15, 1995 and continuing from month to month thereafter
until terminated as provided in this Section (1). Either the Corporation or the
Employee may terminate the employment of the Employee under this Employment
Agreement any time after December 15, 1995 by giving written notice to the other
party stating or his election to terminate the employment of the Employee under
this Employment Agreement. The employment of the Employee under this Employment
Agreement shall terminate thirty (30) days after the date of receipt by the
other party of such notice; provided, however, that the employment of the
Employee under this Employment Agreement is subject to prior termination as
hereinafter provided in Section (5).

         (2)  CAPACITY: The Employee shall serve in such capacity as may be
assigned to him consistent with his training and experience for the term of
employment under this Employment Agreement and shall have such authority as is
delegated to him by the President of the Corporation, or his designee.


   2


         (3)  EXTENT OF SERVICES: During the term of employment of the Employee
under this Employment Agreement, the Employee shall devote his full time to, and
use his best efforts in the furtherance of, the business of the Corporation and
shall not engage in any other business activity, whether or not such business
activity is pursued for gain or any other pecuniary advantage, without the prior
written consent of the Corporation.

         (4)  COMPENSATION: In consideration of the services to be rendered by
the Employee under this Employment Agreement, the Corporation agrees to pay, and
the Employee agrees to accept, the following compensation:

              (a)   BASE SALARY: A base salary at the rate of $125,000 per year
for the term of employment of the Employee under this Employment Agreement. The
base salary shall be payable in equal weekly, biweekly, or bimonthly
installments subject to usual withholding requirements. Base salary will be
reviewed according to the established practices of the corporation. No overtime
pay will be paid to the Employee by the Corporation.

              (b)   INCENTIVE: For each calendar year of the Corporation during
the term of employment of the Employee under this Employment Agreement, the
Employee shall be entitled to participate in a Management Incentive Program
pursuant to the terms of which the Employee may receive compensation in addition
to his base salary in an amount equal to a specified percentage of his base
salary if the Corporation attains its consolidated financial goals during such
calendar year of the Corporation. The Management Incentive Program, including
the consolidated financial goals established by the Corporation for the calendar
year and the formula to be used to determine the payment of amounts under the
Management Incentive Program. will be communicated to the Employee in writing
prior to the beginning of each calendar year of the Corporation The first
calendar year of the Corporation for purposes of the Management Incentive
Program will commence on January 1, 1996 and end on December 31, 1996. If the
term of employment of the Employee under this Employment Agreement shall include
a portion of a calendar year of the Corporation commencing after January 1,
1996, the Corporation shall not pay the Employee, and the Employee shall not be
entitled to receive, any amount under the Management Incentive Program.

         If there shall be any disagreement between the Corporation and the
Employee as to the calculation of the Management Incentive Bonus in any calendar
year of the Corporation during the term of employment of the Employee under this
Employment Agreement, the decision of the independent Public Accounting firm of
the Corporation as to the amount of the Management Incentive Bonus of the
Corporation shall be conclusive and binding on the Corporation and the Employee.
The Employee shall have no right to inspect any of the books, papers or records
of the


                                      -2-

   3


Corporation, except that the Employee shall be entitled to inspect any
certificate of such independent public accounting firm as to the calculation of
the Management Incentive Bonus of the Corporation in any calendar year of the
Corporation during the term of employment of the Employee under this Employment
Agreement.

         Incentive payments shall be payable to the Employee on or before 
March 31 after the end of each calendar year of the Corporation during the term
of employment of the Employee under this Employment Agreement.

              (c)  MKS INSTRUMENTS. INC. PROFIT SHARING AND RETIREMENT SAVINGS
PLAN: The Employee shall be eligible to participate in the MKS Instruments, Inc.
Profit Sharing and Retirement Savings Plan upon satisfaction of the conditions
set forth therein

              (d)  VACATION: The Employee shall be entitled to an annual
vacation leave of days at full pay during each calendar year during the term of
employment of the Employee under this Employment Agreement, subject to the
Employee arranging such vacation so as not to affect adversely the ability of
the Corporation to transact its necessary business.

              (e)  LIFE INSURANCE: The Corporation shall provide, and pay all of
the premiums for, term life insurance for the Employee during the term of
employment of the Employee under this Employment Agreement in accordance with
the term life insurance plan of the Corporation.

              (f)  MEDICAL/DENTAL INSURANCE: The Corporation shall provide group
medical/dental insurance for the Employee under the Plans of the Corporation
applicable to the Employee during the term of employment of the Employee under
this Employment Agreement.

              (g)  OTHER BENEFITS: The Corporation shall provide other benefits
for the employee under the Plans of the Corporation applicable to the Employee
during the term of employment of the Employee under this Employment Agreement.

         (5)  TERMINATION: The employment of the Employee under this Employment
Agreement shall terminate:

              (a)  On the expiration of the period of employment as provided in
Section (1)

              (b)  Upon the death of the Employee.

              (c)  At the election of the Corporation (i) if the Employee shall
fail, or refuse, to perform the services required of him under this Employment


                                      -3-

   4


Agreement, or (ii) if the Employee shall fail, or refuse, to perform the other
covenants and agreements required of him under this Employment Agreement, or
(iii) for "cause", which term shall mean acts or actions detrimental to the best
interests of the Corporation.

         (6)  PAYMENT UPON TERMINATION:

              (a)  If the employment of the Employee is terminated on the
expiration of the period of employment as provided in Section (1), the Employee
shall not be entitled to any compensation, and the Corporation shall have no
obligation to pay the Employee any compensation, except as is provided in this
Employment Agreement.

              (b)  If the employment of the Employee is terminated by death, the
Corporation shall pay to the estate of the Employee the compensation which would
otherwise be payable to the Employee at the end of the month in which his death
occurs.

              (c)  In the event the employment of the Employee is terminated at
the election of the Corporation pursuant to Section (5) (c) hereof, the Employee
shall only be entitled to his base salary through the last day of actual
employment or the date of termination, whichever is earlier.

         (7)  TRADE SECRETS: The Employee covenants and agrees that he will
communicate to the Corporation, and will not divulge or communicate to any other
person, partnership, corporation or other entity without the prior written
consent of the Corporation, any trade secrets of the Corporation or confidential
information relating to the business of the Corporation or any one connected
with the Corporation, and that such trade secrets and confidential information
shall not be used by the Employee either on his own behalf or for the benefit of
others or disclosed by the Employee to any one, except to the Corporation,
during or after the term of employment of the Employee under this Employment
Agreement. "Trade secrets of the Corporation" shall include, but not be limited
to, Inventions, trade secrets, files, records, drawings, specifications,
processes, lists of material, lists of customers, sales and marketing
strategies, product development plans, financial information, and information on
research and development.

         (8)  INVENTIONS AND PATENTS:

              (a)  The Employee shall make prompt full disclosure in writing to
the Corporation of all inventions, improvements and discoveries, whether or not
patentable, which the Employee conceives, devises, makes, discovers, develops,
perfects or first reduces to practice, either alone or jointly with others,
during the term of employment of the Employee under this Employment Agreement,
which


                                      -4-

   5


relate in any way to the fields, products or business of the Corporation,
including development and research, whether during or out of the usual hours of
work or on or off the premises of the Corporation or by use of the facilities of
the Corporation or otherwise and whether at the request or suggestion of the
Corporation or otherwise (all such inventions, improvements and discoveries
being hereinafter called the "Inventions"), including any Inventions, whether or
not patentable, conceived, devised, made, discovered, developed, perfected or
first reduced to practice by the Employee after the employment of the Employee
under this Employment Agreement is terminated if the Inventions were conceived
by the Employee during the term of employment of the Employee under this
Employment Agreement. Any Inventions, whether or not patentable, conceived,
devised, made, discovered, developed, perfected or first reduced to practice by
the Employee within six (6) months of the date of termination of the employment
of the Employee under this Employment Agreement shall be conclusively presumed
to have been conceived during the term of employment of the Employee under this
Employment Agreement.

              (b)  The Employee agrees that the Inventions shall be the sole and
exclusive property of the Corporation.

              (c)  The Employee agrees to assist the Corporation and its
nominees in every reasonable way (entirely at its or their expense) to obtain
for the benefit of the Corporation letters patent for the Inventions and
trademarks, trade names and copyrights relating to the Inventions, and any
renewals, extensions or reissues thereof, in any and all countries, and agrees
to make, execute, acknowledge and deliver, at the request of the Corporation,
all written applications for letters patent, trademarks, trade names and
copyrights relating to the Inventions and any renewals, extensions or reissues
thereof, in any and all countries, and all documents with respect thereto, and
all powers of attorney relating thereto and, without further compensation, to
assign to the Corporation or its nominees all the right, title and interest of
the Employee in and to such applications and to any patents, trademarks, trade
names or copyrights which shall thereafter issue on any such applications, and
to execute, acknowledge and deliver all other documents deemed necessary by the
Corporation to transfer to or vest in the Corporation all of the right, title
and interest of the Employee in and to the Inventions, and to such trademarks,
trade names, patents and copyrights together with exclusive rights to make, use,
license and sell them throughout the world.

              (d)  The Employee agrees that even though his employment is
terminated under this Employment Agreement he will, at any time after such
termination of employment, carry out and perform all of the agreements of
Subsections (8) (a) and (8) (c) above, and will at any time and at all times
cooperate with the Corporation in the prosecution and/or defense of any
litigation which may arise in connection with the Inventions, provided, however,
that should such services be rendered after termination of employment of the
Employee under this


                                      -5-

   6



Employment Agreement, the Employee shall be paid reasonable compensation on a
per diem basis.

              (e)  The Employee agrees to make and maintain adequate and current
written records of all Inventions in the form of notes, sketches, drawings, or
reports relating thereto, which records shall be and remain the property of, and
available to, the Corporation at all times.

              (f)  The Employee agrees that he will, upon leaving the employment
of the Corporation, promptly deliver to the Corporation all originals and copies
of disclosures, drawings, prints, letters, notes, and reports either typed,
handwritten or otherwise memorialized, belonging to the Corporation which are in
his possession or under his control and the Employee agrees that he will not
retain or give away or make copies of the originals or copies of any such
disclosures, drawings, prints, letters, notes or reports.

         (9)  PROPERTY OF CORPORATION: All files, records, reports, documents,
drawings, specifications, equipment, and similar items relating to the business
of the Corporation, whether prepared by the Employee or otherwise coming into
his possession, shall remain the exclusive property of the Corporation and shall
not be removed by the Employee from the premises of the Corporation under any
circumstances whatsoever without the prior written consent of the Corporation.

         (10) NON-COMPETITION:

              (a)  In order to protect the good will of the Corporation and in
order to protect the trade secrets of the Corporation referred to in Section (7)
of this Employment Agreement, the Employee hereby agrees that during the term of
employment of the Employee under this Employment Agreement, and during a period
of one (1) year after termination of employment of the Employee under this
Employment Agreement without regard to the cause of termination of employment
and whether or not such termination of employment was caused by the Employee or
by the Corporation, (i) the Employee shall not engage, either directly or
indirectly, in any manner or capacity, in any business or activity which is
competitive with any business or activity conducted by the Corporation; (ii) the
Employee shall not work for or employ, directly or indirectly, or cause to be
employed by another, any person who was an employee, officer or agent of the
Corporation or of any of its subsidiaries at any time during a period of twelve
(12) months prior to the termination of the employment of the Employee under
this Employment Agreement nor shall the Employee form any partnership with, or
establish any business venture in cooperation with, any such person which is
competitive with any business or activity of the Corporation; (iii) the Employee
shall not give, sell or lease any goods or services competitive with the goods
or services of the Corporation or its subsidiaries to any person, partnership,
corporation or other entity who purchased goods or


                                      -6-

   7



services from the Corporation or its subsidiaries within one (1) year before the
termination of the employment of the Employee under this Employment Agreement;
(iv) the Employee shall not have any financial interest, or participate as a
director, officer, stockholder, partner, employee, consultant or otherwise, in
any corporation, partnership or other entity which is competitive with any
business or activity conducted by the Corporation.

              (b)  The Corporation and the Employee agree that the services of
the Employee are of a personal, special, unique and extraordinary character, and
cannot be replaced by the Corporation without great difficulty, and that the
violation by the Employee of any of his agreements under this Section (10) would
damage the goodwill of the Corporation and cause the Corporation irreparable
harm which could not reasonably or adequately be compensated in damages in an
action at law, and that the agreements of the Employment under this Section (1)
may be enforced by the Corporation in equity by an injunction or restraining
order in addition to being enforced by the Corporation at law.

              (c)  In the event that this Section (10) shall be determined by
any court of competent jurisdiction to be unenforceable by reason of its
extending for too long a period of time or over too great a range of activities,
it shall be interpreted to extend only over the maximum period of time or range
of activities as to which it may be enforceable.

         (11) NOTICE: Any and all notices under this Employment Agreement shall
be in writing and, if to the Corporation, shall be duly given if sent to the
Corporation by registered or certified mail, postage prepaid, return receipt
requested, at the address of the Corporation set forth under its name below or
at such other address as the Corporation may hereafter designate to the Employee
in writing for the purpose, and if to the Employee, shall be duly given if
delivered to the Employee by hand or if sent to the Employee by registered or
certified mail, postage prepaid, return receipt requested, at the address of the
Employee set forth under his name below or at such other address as the Employee
may hereafter designate to the Corporation in writing for the purpose.

         (12) ASSIGNMENT: The rights and obligations of the Corporation under
this Employment Agreement shall inure to the benefit of, and shall be binding
upon, the successors and assigns of the Corporation. The rights and obligations
of the Employee under this Employment Agreement shall inure to the benefit of,
and shall be binding upon, the heirs, executors and legal representatives of the
Employee.

         (13) ENTIRE AGREEMENT AND SEVERABILITY:

              (a)  This Employment Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the


                                      -7-

   8


employment of the Employee by the Corporation and contains all of the covenants
and agreements between the parties with respect to such employment. Each party
to this Employment Agreement acknowledges that no representations, inducements,
promises or agreements, oral or otherwise, have been made by any party, or
anyone acting on behalf of any party, which are not embodied herein, and that no
other agreement, statement or promise not contained in this Employment Agreement
shall be valid and binding. Any modification of this Employment Agreement will
be effective only if it is in writing signed by both parties to this Employment
Agreement.

              (b) If any provision in this Employment Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force and effect
without being impaired or invalidated in any way.

              (c) All pronouns used herein shall include the masculine,
feminine, and neuter gender as the context requires.

         (14) GOVERNING LAW AND JURISDICTIONS: This Employment Agreement shall
be governed by, and construed in accordance with, the laws of The Commonwealth
of Massachusetts applicable to contracts made and to be performed entirely
within The Commonwealth of Massachusetts (without reference to conflict of laws
principles). Any action or proceeding arising from or in connection with this
Employment Agreement may be brought against the Employee in a court of record of
The Commonwealth of Massachusetts, Middlesex County, or in the United States
District Court for the District of Massachusetts, the Employee hereby consenting
to the jurisdiction thereof over its person; and service of process may be made
upon the Employee by mailing a copy of the summons and any complaint to the
Employee by registered or certified mail, postage prepaid, return receipt
requested, at the address to be used for the giving of notice to the Employee as
provided in this Employment Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
as a sealed instrument in the Commonwealth of Massachusetts, all as of the day,
month and year first written above.

                             MKS INSTRUMENTS, INC.

                             By: ___________________________
                                 John R. Bertucci, President
                                 Six Shattuck Road
                                 Andover, MA 01810




                                      -8-

   9









                             ------------------------
                             Employee Signature


                             Leo Berlinghieri
                             ------------------------
                             Employee Name

                             Address:

                             15 Olney Street
                             Billerica, MA 01821











                                      -9-

   1
                                                                    EXHIBIT 10.6

                     AMENDED & RESTATED EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT dated December 15, 1995 (the "Employment Agreement") by and
between MKS Instruments Inc., a Massachusetts Corporation (the "Corporation"),
and John J. Sullivan of Milton, MA (the "Employee").

WHEREAS, the Corporation and the Employee entered into an Employment Agreement
dated April 3, 1982 (the "Original Employment Agreement"); and

WHEREAS, the Corporation has adopted a new Management Incentive Program and the
Employee desires to be eligible to participate in such Management Incentive
Program; and

WHEREAS, the Corporation and the Employee desire to make certain other
amendments to the Original Employment Agreement as more particularly set forth
herein; and

WHEREAS, for convenience of reference, the Corporation and the Employee desire
to amend and restate the Original Employment Agreement in its entirety:

NOW, THEREFORE, in consideration of the premises and the mutual promises
contained herein, and for other good and valuable considerations, the receipt
and sufficiency of which are hereby acknowledged, the Corporation and the
Employee hereby agree that the Original Employment Agreement is hereby amended
and restated to read in its entirety as follows:


         (1)  TERM OF EMPLOYMENT: The Corporation hereby employs the Employee,
and the Employee hereby accepts employment with the Corporation, for a period
commencing as of December 15, 1995 and continuing from month to month thereafter
until terminated as provided in this Section (1). Either the Corporation or the
Employee may terminate the employment of the Employee under this Employment
Agreement at any time after December 15, 1995 by giving written notice to the
other party stating or his election to terminate the employment of the Employee
under this Employment Agreement. The employment of the Employee under this
Employment Agreement shall terminate thirty (30) days after the date of receipt
by the other party of such notice; provided, however, that the employment of the
Employee under this Employment Agreement is subject to prior termination as
hereinafter provided in Section (5).

         (2)  CAPACITY: The Employee shall serve in such capacity as may be
assigned to him consistent with his training and experience for the term of
employment under this Employment Agreement and shall have such authority as is
delegated to him by the President of the Corporation, or his designee.





   2


         (3)  EXTENT OF SERVICES: During the term of employment of the Employee
under this Employment Agreement, the Employee shall devote his full time to, and
use his best efforts in the furtherance of, the business of the Corporation and
shall not engage in any other business activity, whether or not such business
activity is pursued for gain or any other pecuniary advantage, without the prior
written consent of the Corporation.

         (4)  COMPENSATION: In consideration of the services to be rendered by
the Employee under this Employment Agreement, the Corporation agrees to pay, and
the Employee agrees to accept, the following compensation:

              (a)  BASE SALARY: A base salary at the rate of $140,000 per year
for the term of employment of the Employee under this Employment Agreement. The
base salary shall be payable in equal weekly, biweekly, or bimonthly
installments subject to usual withholding requirements. Base salary will be
reviewed according to the established practices of the corporation. No overtime
pay will be paid to the Employee by the Corporation.

              (b)  INCENTIVE: For each calendar year of the Corporation during
the term of employment of the Employee under this Employment Agreement, the
Employee shall be entitled to participate in a Management Incentive Program
pursuant to the terms of which the Employee may receive compensation in addition
to his base salary in an amount equal to a specified percentage of his base
salary if the Corporation attains its consolidated financial goals during such
calendar year of the Corporation. The Management Incentive Program, including
the consolidated financial goals established by the Corporation for the calendar
year and the formula to be used to determine the payment of amounts under the
Management Incentive Program, will be communicated to the Employee in writing
prior to the beginning of each calendar year of the Corporation. The first
calendar year of the Corporation for purposes of the Management Incentive
Program will commence on January 1, 1996 and end on December 31, 1996. If the
term of employment of the Employee under this Employment Agreement shall include
a portion of a calendar year of the Corporation commencing after January 1,
1996, the Corporation shall not pay the Employee, and the Employee shall not be
entitled to receive, any amount under the Management Incentive Program.

         If there shall be any disagreement between the Corporation and the
Employee as to the calculation of the Management Incentive Bonus in any calendar
year of the Corporation during the term of employment of the Employee under this
Employment Agreement, the decision of the independent Public Accounting firm of
the Corporation as to the amount of the Management Incentive Bonus of the
Corporation shall be conclusive and binding on the Corporation and the Employee.
The Employee shall have no right to inspect any of the books, papers or records
of the Corporation except that the Employee shall be entitled to inspect any
certificate of



                                      -2-

   3


such independent public accounting firm as to the calculation of the Management
Incentive Bonus of the Corporation in any calendar year of the Corporation
during the term of employment of the Employee under this Employment Agreement.

         Incentive payments shall be payable to the Employee on or before
March 31 after the end of each calendar year of the Corporation during the term
of employment of the Employee under this Employment Agreement.

              (c)  MKS INSTRUMENTS, INC. PROFIT SHARING AND RETIREMENT SAVINGS
PLAN: The Employee shall be eligible to participate in the MKS Instruments, Inc.
Profit Sharing and Retirement Savings Plan upon satisfaction of the conditions
set forth therein.

              (d)  VACATION: The Employee shall be entitled to an annual
vacation leave of 20 days at full pay during each calendar year during the term
of employment of the Employee under this Employment Agreement, subject to the
Employee arranging such vacation so as not to affect adversely the ability of
the Corporation to transact its necessary business.

              (e)  LIFE INSURANCE: The Corporation shall provide, and pay all of
the premiums for, term life insurance for the Employee during the term of
employment of the Employee under this Employment Agreement in accordance with
the term life insurance plan of the Corporation.

              (f)  MEDICAL/DENTAL INSURANCE: The Corporation shall provide group
medical/dental insurance for the Employee under the Plans of the Corporation
applicable to the Employee during the term of employment of the Employee under
this Employment Agreement.

              (g)  OTHER BENEFITS: The Corporation shall provide other benefits
for the employee under the Plans of the Corporation applicable to the Employee
during the term of employment of the Employee under this Employment Agreement.

         (5)  TERMINATION: The employment of the Employee under this Employment
Agreement shall terminate:

              (a)  On the expiration of the period of employment as provided in
Section (1).

              (b)  Upon the death of the Employee.

              (c)  At the election of the Corporation (i) if the Employee shall
fail, or refuse, to perform the services required of him under this Employment
Agreement, or (ii) if the Employee shall fail, or refuse, to perform the other
covenants and


                                      -3-

   4



agreements required of him under this Employment Agreement, or (iii) for
"cause," which term shall mean acts or actions detrimental to the best interests
of the Corporation

         (6)  PAYMENT UPON TERMINATION:

              (a)  If the employment of the Employee is terminated on the
expiration of the period of employment as provided in Section (1), the Employee
shall not be entitled to any compensation, and the Corporation shall have no
obligation to pay the Employee any compensation, except as is provided in this
Employment Agreement.

              (b)  If the employment of the Employee is terminated by death, the
Corporation shall pay to the estate of the Employee the compensation which would
otherwise be payable to the employee at the end of the month in which his death
occurs.

              (c)  In the event the employment of the Employee is terminated at
the election of the Corporation pursuant to Section (5) (c) hereof, the Employee
shall only be entitled to his base salary through the last day of actual
employment or the date of termination, whichever is earlier.

         (7)  TRADE SECRETS: The Employee covenants and agrees that he will
communicate to the Corporation, and will not divulge or communicate to any other
person, partnership, corporation or other entity without the prior written
consent of the Corporation, any trade secrets of the Corporation or confidential
information relating to the business of the Corporation or any one connected
with the Corporation, and that such trade secrets and confidential information
shall not be used by the Employee either on his own behalf or for the benefit of
others or disclosed by the Employee to any one, except to the Corporation,
during or after the term of employment of the Employee under this Employment
Agreement. "Trade secrets of the Corporation" shall include, but not be limited
to, Inventions, trade secrets, files, records, drawings, specifications,
processes, lists of material, lists of customers, sales and marketing
strategies, product development plans, financial information, and information on
research and development.

         (8)  INVENTIONS AND PATENTS:

              (a)  The Employee shall make prompt full disclosure in writing to
the Corporation of all inventions, improvements and discoveries, whether or not
patentable, which the Employee conceives, devises, makes, discovers, develops,
perfects or first reduces to practice, either alone or jointly with others,
during the term of employment of the Employee under this Employment Agreement,
which relate in any way to the fields, products or business of the Corporation,
including



                                      -4-

   5


development and research, whether during or out of the usual hours of work or on
or off the premises of the Corporation or by use of the facilities of the
Corporation or otherwise and whether at the request or suggestion of the
Corporation or otherwise (all such inventions, improvements and discoveries
being hereinafter called the "Inventions"), including any Inventions, whether or
not patentable, conceived, devised, made, discovered, developed, perfected or
first reduced to practice by the Employee after the employment of the Employee
under this Employment Agreement is terminated if the Inventions were conceived
by the Employee during the term of employment of the Employee under this
Employment Agreement. Any Inventions, whether or not patentable, conceived,
devised, made, discovered, developed, perfected or first reduced to practice by
the Employee within six (6) months of the date of termination of the employment
of the Employee under this Employment Agreement shall be conclusively presumed
to have been conceived during the term of employment of the Employee under this
Employment Agreement.

              (b)  The Employee agrees that the Inventions shall be the sole and
exclusive property of the Corporation.

              (c)  The Employee agrees to assist the Corporation and its
nominees in every reasonable way (entirely at its or their expense) to obtain
for the benefit of the Corporation letters patent for the Inventions and
trademarks, trade names and copyrights relating to the Inventions, and any
renewals, extensions or reissues thereof, in any and all countries, and agrees
to make, execute, acknowledge and deliver, at the request of the Corporation,
all written applications for letters patent, trademarks, trade names and
copyrights relating to the Inventions and any renewals, extensions or reissues
thereof, in any and all countries, and all documents with respect thereto, and
all powers of attorney relating thereto and, without further compensation, to
assign to the Corporation or its nominees all the right, title and interest of
the Employee in and to such applications and to any patents, trademarks, trade
names or copyrights which shall thereafter issue on any such applications, and
to execute, acknowledge and deliver all other documents deemed necessary by the
Corporation to transfer to or vest in the Corporation all of the right, title
and interest of the Employee in and to the Inventions, and to such trademarks,
trade names, patents and copyrights together with exclusive rights to make, use,
license and sell them throughout the world.

              (d)  The Employee agrees that even though his employment is
terminated under this Employment Agreement he will, at any time after such
termination of employment, carry out and perform all of the agreements of
Subsections (8) (a) and (8) (c) above, and will at any time and at all times
cooperate with the Corporation in the prosecution and/or defense of any
litigation which may arise in connection with the Inventions, provided however,
that should such services be rendered after termination of employment of the
Employee under this


                                      -5-

   6


Employment Agreement, the Employee shall be paid reasonable compensation on a
per diem basis.

              (e)  The Employee agrees to make and maintain adequate and current
written records of all Inventions in the form of notes, sketches, drawings, or
reports relating thereto, which records shall be and remain the property of, and
available to, the Corporation at all times.

              (f)  The Employee agrees that he will, upon leaving the employment
of the Corporation, promptly deliver to the Corporation all originals and copies
of disclosures, drawings, prints, letters, notes, and reports either typed,
handwritten or otherwise memorialized, belonging to the Corporation which are in
his possession or under his control and the Employee agrees that he will not
retain or give away or make copies of the originals or copies of any such
disclosures drawings prints, letters, notes or reports.

         (9)  PROPERTY OF CORPORATION: All files, records, reports, documents,
drawings, specifications, equipment, and similar items relating to the business
of the Corporation, whether prepared by the Employee or otherwise coming into
his possession, shall remain the exclusive property of the Corporation and shall
not be removed by the Employee from the premises of the Corporation under any
circumstances whatsoever without the prior written consent of the Corporation.

         (10)  NON-COMPETITION:

              (a)  In order to protect the good will of the Corporation and in
order to protect the trade secrets of the Corporation referred to in Section (7)
of this Employment Agreement, the Employee hereby agrees that during the term of
employment of the Employee under this Employment Agreement, and during a period
of one (1) year after termination of employment of the Employee under this
Employment Agreement without regard to the cause of termination of employment
and whether or not such termination of employment was caused by the Employee or
by the Corporation, (i) the Employee shall not engage, either directly or
indirectly, in any manner or capacity, in any business or activity which is
competitive with any business or activity conducted by the Corporation; (ii) the
Employee shall not work for or employ, directly or indirectly, or cause to be
employed by another, any person who was an employee officer or agent of the
Corporation or of any of its subsidiaries at any time during a period of twelve
(12) months prior to the termination of the employment of the Employee under
this Employment Agreement nor shall the Employee form any partnership with, or
establish any business venture in cooperation with, any such person which is
competitive with any business or activity of the Corporation; (iii) the Employee
shall not give sell or lease any goods or services competitive with the goods or
services of the Corporation or its subsidiaries to any person, partnership,
corporation or other entity who purchased goods or


                                      -6-

   7



services from the Corporation or its subsidiaries within one (1) year before the
termination of the employment of the Employee under this Employment Agreement;
(iv) the Employee shall not have any financial interest, or participate as a
director, officer, stockholder, partner, employee, consultant or otherwise, in
any corporation partnership or other entity which is competitive with any
business or activity conducted by the Corporation.

              (b)  The Corporation and the Employee agree that the services of
the Employee are of a personal, special, unique and extraordinary character, and
cannot be replaced by the Corporation without great difficulty, and that the
violation by the Employee of any of his agreements under this Section (10) would
damage the goodwill of the Corporation and cause the Corporation irreparable
harm which could not reasonably or adequately be compensated in damages in an
action at law, and that the agreements of the Employee under this Section (10)
may be enforced by the Corporation in equity by an injunction or restraining
order in addition to being enforced by the Corporation at law.

              (c)  In the event that this Section (10) shall be determined by
any court of competent jurisdiction to be unenforceable by reason of its
extending for too long a period of time or over too great a range of activities,
it shall be interpreted to extend only over the maximum period of time or range
of activities as to which it may be enforceable.

         (11) NOTICE: Any and all notices under this Employment Agreement shall
be in writing and, if to the Corporation, shall be duly given if sent to the
Corporation by registered or certified mail, postage prepaid, return receipt
requested, at the address of the Corporation set forth under its name below or
at such other address as the Corporation may hereafter designate to the Employee
in writing for the purpose, and if to the Employee, shall be duly given if
delivered to the Employee by hand or if sent to the Employee by registered or
certified mail, postage prepaid, return receipt requested, at the address of the
Employee set forth under his name below or at such other address as the Employee
may hereafter designate to the Corporation in writing for the purpose.

         (12) ASSIGNMENT: The rights and obligations of the Corporation under
this Employment Agreement shall inure to the benefit of, and shall be binding
upon, the successors and assigns of the Corporation. The rights and obligations
of the Employee under this Employment Agreement shall inure to the benefit of,
and shall be binding upon, the heirs, executors and legal representatives of the
Employee.

         (13) ENTIRE AGREEMENT AND SEVERABILITY:

              (a) This Employment Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the


                                      -7-

   8



employment of the Employee by the Corporation and contains all of the covenants
and agreements between the parties with respect to such employment. Each party
to this Employment Agreement acknowledges that no representations, inducements,
promises or agreements, oral or otherwise, have been made by any party or any
one acting on behalf of any party, which are not embodied herein, and that no
other agreement, statement or promise not contained in this Employment Agreement
shall be valid and binding. Any modification of this Employment Agreement will
be effective only if it is in writing signed by both parties to this Employment
Agreement.

              (b)  If any provision in this Employment Agreement is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions shall nevertheless continue in full force and effect
without being impaired or invalidated in any way.

              (c)  All pronouns used herein shall include the masculine,
feminine, and neuter gender as the context requires.

         (14) GOVERNING LAW AND JURISDICTIONS: This Employment Agreement shall
be governed by, and construed in accordance with, the laws of the Commonwealth
of Massachusetts applicable to contracts made and to be performed entirely
within the Commonwealth of Massachusetts (without reference to conflict of laws
principles). Any action or proceeding arising from or in connection with this
Employment Agreement may be brought against the Employee in a court of record of
the Commonwealth of Massachusetts, Middlesex County, or in the United States
District Court for the District of Massachusetts, the Employee hereby consenting
to the jurisdiction thereof over its person; and service of process may be made
upon the Employee by mailing a copy of the summons and any complaint to the
Employee by registered or certified mail, postage prepaid, return receipt
requested, at the address to be used for the giving of notice to the Employee as
provided in this Employment Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
as a sealed instrument in the Commonwealth of Massachusetts, all as of the day,
month and year first written above.



                                      -8-

   9




                                       MKS INSTRUMENTS, INC.



                                       By:______________________________________
                                           John R. Bertucci, President

                                           Six Shattuck Road
                                           Andover, MA 01810



                                       _________________________________________
                                       Employee Signature

                                       John J. Sullivan
                                       -----------------------------------------
                                       Employee Name

                                       Address:



                                       =========================================



                                      -9-

   1
                                                                    EXHIBIT 10.7

                     AMENDED & RESTATED EMPLOYMENT AGREEMENT

         EMPLOYMENT AGREEMENT dated December 15, 1995 (the "Employment
         Agreement") by and between MKS Instruments, Inc., a Massachusetts
         Corporation (the "Corporation"), and Ronald Weigner of Sudbury, MA (the
         "Employee").

         WHEREAS, the Corporation and the Employee entered into an Employment
         Agreement dated October 7, 1981 (the "Original Employment Agreement");
         and

         WHEREAS, the Corporation has adopted a new Management Incentive Program
         and the Employee desires to be eligible to participate in such
         Management Incentive Program; and

         WHEREAS, the Corporation and the Employee desire to make certain other
         amendments to the Original Employment Agreement as more particularly
         set forth herein; and

         WHEREAS, for convenience of reference, the Corporation and the Employee
         desire to amend and restate the Original Employment Agreement in its
         entirety:


         NOW, THEREFORE, in consideration of the premises and the mutual
         promises contained herein, and for other good and valuable
         considerations, the receipt and sufficiency of which are hereby
         acknowledged, the Corporation and the Employee hereby agree that the
         Original Employment Agreement is hereby amended and restated to read in
         its entirety as follows:

              (1)  TERM OF EMPLOYMENT: The Corporation hereby employs the
         Employee, and the Employee hereby accepts employment with the
         Corporation, for a period commencing as of December 15, 1995 and
         continuing from month to month thereafter until terminated as provided
         in this Section (1). Either the Corporation or the Employee may
         terminate the employment of the Employee under this Employment
         Agreement at any time after December 15, 1995 by giving written notice
         to the other party stating its or his election to terminate the
         employment of the Employee under this Employment Agreement. The
         employment of the Employee under this Employment Agreement shall
         terminate thirty (30) days after the date of receipt by the other party
         of such notice; provided, however, that the employment of the Employee
         under this Employment Agreement is subject to prior termination as
         hereinafter provided in Section (5).

              (2)  CAPACITY: The Employee shall serve in such capacity as may be
         assigned to him consistent with his training and experience for the
         term of employment under this Employment Agreement and shall have such
         authority as is delegated to him by the President of the Corporation,
         or his designee.


   2



              (3)  EXTENT OF SERVICES: During the term of employment of the
         Employee under this Employment Agreement, the Employee shall devote his
         full time to, and use his best efforts in the furtherance of, the
         business of the Corporation and shall not engage in any other business
         activity, whether or not such business activity is pursued for gain or
         any other pecuniary advantage, without the prior written consent of the
         Corporation.

              (4)  COMPENSATION: In consideration of the services to be rendered
         by the Employee under this Employment Agreement, the Corporation agrees
         to pay, and the Employee agrees to accept, the following compensation:

                   (a) BASE SALARY: A base salary at the rate of $155,000 per
         year for the term of employment of the Employee under this Employment
         Agreement. The base salary shall be payable in equal weekly, biweekly,
         or bimonthly installments subject to usual withholding requirements.
         Base salary will be reviewed according to the established practices of
         the corporation. No overtime pay will be paid to the Employee by the
         Corporation.

                   (b) INCENTIVE: For each calendar year of the Corporation
         during the term of employment of the Employee under this Employment
         Agreement, the Employee shall be entitled to participate in a
         Management Incentive Program pursuant to the terms of which the
         Employee may receive compensation in addition to his base salary in an
         amount equal to a specified percentage of his base salary if the
         Corporation attains its consolidated financial goals during such
         calendar year of the Corporation. The Management Incentive Program,
         including the consolidated financial goals established by the
         Corporation for the calendar year and the formula to be used to
         determine the payment of amounts under the Management Incentive
         Program, will be communicated to the Employee in writing prior to the
         beginning of each calendar year of the Corporation. The first calendar
         year of the Corporation for purposes of the Management Incentive
         Program will commence on January 1, 1996 and end on December 31, 1996.
         If the term of employment of the Employee under this Employment
         Agreement shall include a portion of a calendar year of the Corporation
         commencing after January 1, 1996, the Corporation shall not pay the
         Employee, and the Employee shall not be entitled to receive, any amount
         under the Management Incentive Program.

              If there shall be any disagreement between the Corporation and the
         Employee as to the calculation of the Management Incentive Bonus in any
         calendar year of the Corporation during the term of employment of the
         Employee under this Employment Agreement, the decision of the
         independent Public Accounting firm of the Corporation as to the amount
         of the Management Incentive Bonus of the Corporation shall be
         conclusive and binding on the Corporation and the Employee. The
         Employee shall have no right to inspect any of the books, papers or
         records of the Corporation, except that the Employee shall be entitled
         to inspect any certificate of


                                      -2-

   3



         such independent public accounting firm as to the calculation of the
         Management Incentive Bonus of the Corporation in any calendar year of
         the Corporation during the term of employment of the Employee under
         this Employment Agreement.

              Incentive payments shall be payable to the Employee on or before
         March 31 after the end of each calendar year of the Corporation during
         the term of employment of the Employee under this Employment Agreement.

                   (c) MKS INSTRUMENTS, INC. PROFIT SHARING AND RETIREMENT
         SAVINGS PLAN: The Employee shall be eligible to participate in the MKS
         Instruments, Inc. Profit Sharing and Retirement Savings Plan upon
         satisfaction of the conditions set forth therein.

                   (d) VACATION: The Employee shall be entitled to an annual
         vacation leave of 20 days at full pay during each calendar year during
         the term of employment of the Employee under this Employment Agreement,
         subject to the Employee arranging such vacation so as not to affect
         adversely the ability of the Corporation to transact its necessary
         business.

                   (e) LIFE INSURANCE: The Corporation shall provide, and pay
         all of the premiums for, term life insurance for the Employee during
         the term of employment of the Employee under this Employment Agreement
         in accordance with the term life insurance plan of the Corporation.

                   (f) MEDICAL/DENTAL INSURANCE: The Corporation shall provide
         group medical/dental insurance for the Employee under the Plans of the
         Corporation applicable to the Employee during the term of employment of
         the Employee under this Employment Agreement.

                   (g) OTHER BENEFITS: The Corporation shall provide other
         benefits for the employee under the Plans of the Corporation applicable
         to the Employee during the term of employment of the Employee under
         this Employment Agreement.

              (5)  TERMINATION: The employment of the Employee under this
         Employment Agreement shall terminate:

                   (a) On the expiration of the period of employment as provided
         in Section (1).

                   (b) Upon the death of the Employee.

                   (c) At the election of the Corporation (i) if the Employee
         shall fail, or refuse, to perform the services required of him under
         this Employment Agreement, or (ii) if the Employee shall fail, or
         refuse, to perform the other covenants and



                                      -3-
   4



         agreements required of him under this Employment Agreement, or (iii)
         for "cause," which term shall mean acts or actions detrimental to the
         best interests of the Corporation.

              (6)  PAYMENT UPON TERMINATION:

                   (a) If the employment of the Employee is terminated on the
         expiration of the period of employment as provided in Section (1), the
         Employee shall not be entitled to any compensation, and the Corporation
         shall have no obligation to pay the Employee any compensation, except
         as is provided in this Employment Agreement.

                   (b) If the employment of the Employee is terminated by death,
         the Corporation shall pay to the estate of the Employee the
         compensation which would otherwise be payable to the Employee at the
         end of the month in which his death occurs.

                   (c) In the event the employment of the Employee is terminated
         at the election of the Corporation pursuant to Section (5) (c) hereof,
         the Employee shall only be entitled to his base salary through the last
         day of actual employment or the date of termination, whichever is
         earlier.

              (7)  TRADE SECRETS: The Employee covenants and agrees that he will
         communicate to the Corporation, and will not divulge or communicate to
         any other person, partnership, corporation or other entity without the
         prior written consent of the Corporation, any trade secrets of the
         Corporation or confidential information relating to the business of the
         Corporation or any one connected with the Corporation, and that such
         trade secrets and confidential information shall not be used by the
         Employee either on his own behalf or for the benefit of others or
         disclosed by the Employee to any one, except to the Corporation, during
         or after the term of employment of the Employee under this Employment
         Agreement. "Trade secrets of the Corporation" shall include, but not be
         limited to, Inventions, trade secrets, files, records, drawings,
         specifications, processes, lists of material, lists of customers, sales
         and marketing strategies, product development plans, financial
         information, and information on research and development.

              (8)  INVENTIONS AND PATENTS:

                   (a) The Employee shall make prompt full disclosure in writing
         to the Corporation of all inventions, improvements and discoveries,
         whether or not patentable, which the Employee conceives, devises,
         makes, discovers, develops, perfects or first reduces to practice,
         either alone or jointly with others, during the term of employment of
         the Employee under this Employment Agreement, which relate in any way
         to the fields, products or business of the Corporation, including


                                      -4-

   5


         development and research, whether during or out of the usual hours of
         work or on or off the premises of the Corporation or by use of the
         facilities of the Corporation or otherwise and whether at the request
         or suggestion of the Corporation or otherwise (all such inventions,
         improvements and discoveries being hereinafter called the
         "Inventions"), including any Inventions, whether or not patentable,
         conceived, devised, made, discovered, developed, perfected or first
         reduced to practice by the employee after the employment of the
         Employee under this Employment Agreement is terminated if the
         Inventions were conceived by the Employee during the term of employment
         of the Employee under this Employment Agreement. Any Inventions,
         whether or not patentable, conceived, devised, made, discovered,
         developed, perfected or first reduced to practice by the Employee
         within six (6) months of the date of termination of the employment of
         the Employee under this Employment Agreement shall be conclusively
         presumed to have been conceived during the term of employment of the
         Employee under this Employment Agreement.

                   (b) The Employee agrees that the Inventions shall be the sole
         and exclusive property of the Corporation.

                   (c) The Employee agrees to assist the Corporation and its
         nominees in every reasonable way (entirely at its or their expense) to
         obtain for the benefit of the Corporation letters patent for the
         Inventions and trademarks, trade names and copyrights relating to the
         Inventions, and any renewals, extensions or reissues thereof, in any
         and all countries, and agrees to make, execute, acknowledge and
         deliver, at the request of the Corporation, all written applications
         for letters patent, trademarks, trade names and copyrights relating to
         the Inventions and any renewals, extensions or reissues thereof, in any
         and all countries, and all documents with respect thereto, and all
         powers of attorney relating thereto and, without further compensation,
         to assign to the Corporation or its nominees all the right, title and
         interest of the Employee in and to such applications and to any
         patents, trademarks, trade names or copyrights which shall thereafter
         issue on any such applications, and to execute, acknowledge and deliver
         all other documents deemed necessary by the Corporation to transfer to
         or vest in the Corporation all of the right, title and interest of the
         Employee in and to the Inventions, and to such trademarks, trade names,
         patents and copyrights together with exclusive rights to make, use,
         license and sell them throughout the world.

                   (d) The Employee agrees that even though his employment is
         terminated under this Employment Agreement he will, at any time after
         such termination of employment, carry out and perform all of the
         agreements of Subsections (8) (a) and (8) (c) above, and will at any
         time and at all times cooperate with the Corporation in the prosecution
         and/or defense of any litigation which may arise in connection with the
         Inventions, provided, however, that should such services be rendered
         after termination of employment of the Employee under this


                                      -5-

   6



         Employment Agreement, the Employee shall be paid reasonable
         compensation on a per diem basis.

                   (e) The Employee agrees to make and maintain adequate and
         current written records of all Inventions in the form of notes,
         sketches, drawings, or reports relating thereto, which records shall be
         and remain the property of, and available to, the Corporation at all
         times.

                   (f) The Employee agrees that he will, upon leaving the
         employment of the Corporation, promptly deliver to the Corporation all
         originals and copies of disclosures, drawings, prints, letters, notes,
         and reports either typed, handwritten or otherwise memorialized,
         belonging to the Corporation which are in his possession or under his
         control and the Employee agrees that he will not retain or give away or
         make copies of the originals or copies of any such disclosures,
         drawings, prints, letters, notes or reports.

              (9)  PROPERTY OF CORPORATION: All files, records, reports,
         documents, drawings, specifications, equipment, and similar items
         relating to the business of the Corporation, whether prepared by the
         Employee or otherwise coming into his possession, shall remain the
         exclusive property of the Corporation and shall not be removed by the
         Employee from the premises of the Corporation under any circumstances
         whatsoever without the prior written consent of the Corporation.

              (10) NON-COMPETITION:

                   (a) In order to protect the good will of the Corporation and
         in order to protect the trade secrets of the Corporation referred to in
         Section (7) of this Employment Agreement, the Employee hereby agrees
         that during the term of employment of the Employee under this
         Employment Agreement, and during a period of one (1) year after
         termination of employment of the Employee under this Employment
         Agreement without regard to the cause of termination of employment and
         whether or not such termination of employment was caused by the
         Employee or by the Corporation, (i) the Employee shall not engage,
         either directly or indirectly, in any manner or capacity, in any
         business or activity which is competitive with any business or activity
         conducted by the Corporation; (ii) the Employee shall not work for or
         employ, directly or indirectly, or cause to be employed by another any
         person who was an employee, officer or agent of the Corporation or of
         any of its subsidiaries at any time during a period of twelve (12)
         months prior to the termination of the employment of the Employee under
         this Employment Agreement nor shall the Employee form any partnership
         with, or establish any business venture in cooperation with, any such
         person which is competitive with any business or activity of the
         Corporation; (iii) the Employee shall not give, sell or lease any goods
         or services competitive with the goods or services of the Corporation
         or its subsidiaries to any person, partnership, corporation or other
         entity who purchased goods or


                                      -6-

   7



         services from the Corporation or its subsidiaries within one (1) year
         before the termination of the employment of the Employee under this
         Employment Agreement; (iv) the Employee all not have any financial
         interest, or participate as a director, officer, stockholder, partner,
         employee, consultant or otherwise, in any corporation, partnership or
         other entity which is competitive with any business or activity
         conducted by the Corporation.

                   (b) The Corporation and the Employee agree that the services
         of the Employee are of a personal, special unique and extraordinary
         character, and cannot be replaced by the Corporation without great
         difficulty, and that the violation by the Employee of any of his
         agreements under this Section (10) would damage the goodwill of the
         Corporation and cause the Corporation irreparable harm which could not
         reasonably or adequately be compensated in damages in an action at law,
         and that the agreements of the Employee under this Section (10) may be
         enforced by the Corporation in equity by an injunction or restraining
         order in addition to being enforced by the Corporation at law.

                   (c) In the event that this Section (10) shall be determined
         by any court of competent jurisdiction to be unenforceable by reason of
         its extending for too long a period of time or over too great a range
         of activities, it shall be interpreted to extend only over the maximum
         period of time or range of activities as to which it may be
         enforceable.

              (11) NOTICE: Any and all notices under this Employment Agreement
         shall be in writing and, if to the Corporation, shall be duly given if
         sent to the Corporation by registered or certified mail, postage
         prepaid, return receipt requested, at the address of the corporation
         set forth under its name below or at such other address as the
         Corporation may hereafter designate to the Employee in writing for the
         purpose, and if to the Employee, shall be duly given if delivered to
         the Employee by hand or if sent to the Employee by registered or
         certified mail, postage prepaid, return receipt requested, at the
         address of the Employee set forth under his name below or at such other
         address as the Employee may hereafter designate to the Corporation in
         writing for the purpose.

              (12) ASSIGNMENT: The rights and obligations of the Corporation
         under this Employment Agreement shall insure to the benefit of, and
         shall be binding upon, the successors and assigns of the Corporation.
         The rights and obligations of the Employee under this Employment
         Agreement shall insure to the benefit of, and shall be binding upon,
         the heirs, executors and legal representatives of the Employee.

              (13) ENTIRE AGREEMENT AND SEVERABILITY:

                   (a) This Employment Agreement supersedes any and all other
         agreements, either oral or in writing, between the parties hereto with
         respect to the



                                      -7-

   8



         employment of the Employee by the Corporation and contains all of the
         covenants and agreements between the parties with respect to such
         employment. Each party to this Employment Agreement acknowledges that
         no representations, inducements, promises or agreements, oral or
         otherwise, have been made by any party, or any one acting on behalf of
         any party, which are not embodied herein, and that no other agreement,
         statement or promise not contained in this Employment Agreement shall
         be valid and binding. Any modification of this Employment Agreement
         will be effective only if it is in writing signed by both parties to
         this Employment Agreement.

                   (b) If any provision in this Employment Agreement is held by
         a court of competent jurisdiction to be invalid, void or unenforceable,
         the remaining provisions shall nevertheless continue in full force and
         effect without being impaired or invalidated in any way.

                   (c) All pronouns used herein shall include the masculine,
         feminine, and neuter gender as the context requires.

              (14) GOVERNING LAW AND JURISDICTIONS: This Employment Agreement
         shall be governed by, and construed in accordance with, the laws of The
         Commonwealth of Massachusetts applicable to contracts made and to be
         performed entirely within The Commonwealth of Massachusetts (without
         reference to conflict of laws principles). Any action or proceeding
         arising from or in connection with this Employment Agreement may be
         brought against the Employee in a court of record of The Commonwealth
         of Massachusetts, Middlesex County, or in the United States District
         Court for the District of Massachusetts, the Employee hereby consenting
         to the jurisdiction thereof over its person; and service of process may
         be made upon the Employee by mailing a copy of the summons and any
         complaint to the Employee by registered or certified mall, postage
         prepaid, return receipt requested, at the address to be used for the
         giving of notice to the Employee as provided in this Employment
         Agreement.




                                      -8-

   9



         IN WITNESS WHEREOF, the parties hereto have executed this Employment
         Agreement as a sealed instrument in the Commonwealth of Massachusetts,
         all as of the day, month and year first written above.


                                          MKS INSTRUMENTS, INC.


                                          By: ___________________________
                                              John R. Bertucci, President



                                              Six Shattuck Road
                                              Andover, MA 01810



                                              ___________________________
                                              Employee Signature


                                              ___________________________
                                              Ronald Weigner

                                              Employee Name



                                              Address:


                                              ___________________________

                                              ___________________________




                                      -9-

   1
                                                                    EXHIBIT 10.8


                     AMENDED & RESTATED EMPLOYMENT AGREEMENT

         EMPLOYMENT AGREEMENT dated December 15, 1995 (the "Employment
         Agreement") by and between MKS Instruments, Inc., a Massachusetts
         Corporation (the "Corporation"), and William Stewart of Boulder, CO
         (the "Employee").

         WHEREAS, the Corporation and the Employee entered into an Employment
         Agreement dated October 31, 1986 (the "Original Employment Agreement");
         and

         WHEREAS, the Corporation has adopted a new Management Incentive Program
         and the Employee desires to be eligible to participate in such
         Management Incentive Program; and

         WHEREAS, the Corporation and the Employee desire to make certain other
         amendments to the Original Employment Agreement as more particularly
         set forth herein; and

         WHEREAS, for convenience of reference, the Corporation and the Employee
         desire to amend and restate the Original Employment Agreement in its
         entirety:


         NOW, THEREFORE, in consideration of the premises and the mutual
         promises contained herein, and for other good and valuable
         considerations, the receipt and sufficiency of which are hereby
         acknowledged, the Corporation and the Employee hereby agree that the
         Original Employment Agreement is hereby amended and restated to read in
         its entirety as follows:

              (1)  TERM OF EMPLOYMENT: The Corporation hereby employs the
         Employee, and the Employee hereby accepts employment with the
         Corporation, for a period commencing as of December 15, 1995 and
         continuing from month to month thereafter until terminated as provided
         in this Section (1). Either the Corporation or the Employee may
         terminate the employment of the Employee under this Employment
         Agreement at any time after December 15, 1995 by giving written notice
         to the other party stating its or his election to terminate the
         employment of the Employee under this Employment Agreement. The
         employment of the Employee under this Employment Agreement shall
         terminate thirty (30) days after the date of receipt by the other party
         of such notice; provided, however, that the employment of the Employee
         under this Employment Agreement is subject to prior termination as
         hereinafter provided in Section (5).

              (2)  CAPACITY: The Employee shall serve in such capacity as may be
         assigned to him consistent with his training and experience for the
         term of employment under this Employment Agreement and shall have such
         authority as is delegated to him by the President of the Corporation,
         or his designee.





   2


              (3)  EXTENT OF SERVICES: During the term of employment of the
         Employee under this Employment Agreement, the Employee shall devote his
         full time to, and use his best efforts in the furtherance of, the
         business of the Corporation and shall not engage in any other business
         activity, whether or not such business activity is pursued for gain or
         any other pecuniary advantage, without the prior written consent of the
         Corporation.

              (4)  COMPENSATION: In consideration of the services to be rendered
         by the Employee under this Employment Agreement, the Corporation agrees
         to pay, and the Employee agrees to accept, the following compensation:

                   (a) BASE SALARY: A base salary at the rate of $170,000 per
         year for the term of employment of the Employee under this Employment
         Agreement. The base salary shall be payable in equal weekly, biweekly,
         or bimonthly installments subject to usual withholding requirements.
         Base salary will be reviewed according to the established practices of
         the corporation. No overtime pay will be paid to the Employee by the
         Corporation.

                   (b) INCENTIVE: For each calendar year of the Corporation
         during the term of employment of the Employee under this Employment
         Agreement, the Employee shall be entitled to participate in a
         Management Incentive Program pursuant to the terms of which the
         Employee may receive compensation in addition to his base salary in an
         amount equal to a specified percentage of his base salary if the
         Corporation attains its consolidated financial goals during such
         calendar year of the Corporation. The Management Incentive Program,
         including the consolidated financial goals established by the
         Corporation for the calendar year and the formula to be used to
         determine the payment of amounts under the Management Incentive
         Program, will be communicated to the Employee in writing prior to the
         beginning of each calendar year of the Corporation. The first calendar
         year of the Corporation for purposes of the Management Incentive
         Program will commence on January 1, 1996 and end on December 31, 1996.
         If the term of employment of the Employee under this Employment
         Agreement shall include a portion of a calendar year of the Corporation
         commencing after January 1, 1996, the Corporation shall not pay the
         Employee, and the Employee shall not be entitled to receive, any amount
         under the Management Incentive Program.

                   If there shall be any disagreement between the Corporation
         and the Employee as to the calculation of the Management Incentive
         Bonus in any calendar year of the Corporation during the term of
         employment of the Employee under this Employment Agreement, the
         decision of the independent Public Accounting firm of the Corporation
         as to the amount of the Management Incentive Bonus of the Corporation
         shall be conclusive and binding on the Corporation and the Employee.
         The Employee shall have no right to inspect any of the books, papers or
         records of the Corporation, except that the Employee shall be entitled
         to inspect any certificate



                                      -2-

   3



         of such independent public accounting firm as to the calculation of the
         Management Incentive Bonus of the Corporation in any calendar year of
         the Corporation during the term of employment of the Employee under
         this Employment Agreement.

                   Incentive payments shall be payable to the Employee on or
         before March 31 after the end of each calendar year of the Corporation
         during the term of employment of the Employee under this Employment
         Agreement.

                   (c) MKS INSTRUMENTS, INC. PROFIT SHARING AND RETIREMENT
         SAVINGS PLAN: The Employee shall be eligible to participate in the MKS
         Instruments, Inc. Profit Sharing and Retirement Savings Plan upon
         satisfaction of the conditions set forth therein.

                   (d) VACATION: The Employee shall be entitled to an annual
         vacation leave of 20 days at pay during each calendar year during the
         term of employment of the Employee under this Employment Agreement in
         accordance with policy under plans of the Corporation applicable to the
         Employee, subject to the Employee arranging such vacation so as not to
         affect adversely the ability of the Corporation to transact its
         necessary business.

                   (e) LIFE INSURANCE: The Corporation shall provide, and pay
         all of the premiums for, term life insurance for the Employee during
         the term of employment of the Employee under this Employment Agreement
         in accordance with the term life insurance plan of the Corporation.

                   (f) MEDICAL/DENTAL INSURANCE: The Corporation shall provide
         group medical/dental insurance for the Employee under the Plans of the
         Corporation applicable to the Employee during the term of employment of
         the Employee under this Employment Agreement.

                   (g) OTHER BENEFITS: The Corporation shall provide other
         benefits for the employee under the Plans of the Corporation applicable
         to the Employee during the term of employment of the Employee under
         this Employment Agreement.

              (5)  TERMINATION: The employment of the Employee under this
         Employment Agreement shall terminate:

                   (a) On the expiration of the period of employment as provided
         in Section (1).

                   (b) Upon the death of the Employee.

                   (c) At the election of the Corporation (i) if the Employee
         shall fail, or refuse, to perform the services required of him under
         this Employment Agreement,



                                      -3-

   4



         or (ii) if the Employee shall fail, or refuse, to perform the other
         covenants and agreements required of him under this Employment
         Agreement, or (iii) for "cause," which term shall mean acts or actions
         detrimental to the best interests of the Corporation.

              (6)  PAYMENT UPON TERMINATION:

                   (a) If the employment of the Employee is terminated on the
         expiration of the period of employment as provided in Section (1), the
         Employee shall not be entitled to any compensation, and the Corporation
         shall have no obligation to pay the Employee any compensation, except
         as is provided in this Employment Agreement.

                   (b) If the employment of the Employee is terminated by death,
         the Corporation shall pay to the estate of the Employee the
         compensation which would otherwise be payable to the Employee at the
         end of the month in which his death occurs.

                   (c) In the event the employment of the Employee is terminated
         at the election of the Corporation pursuant to Section (5) (c) hereof,
         the Employee shall only be entitled to his base salary through the last
         day of actual employment or the date of termination, whichever is
         earlier.

              (7)  TRADE SECRETS: The Employee covenants and agrees that he will
         communicate to the Corporation, and will not divulge or communicate to
         any other person, partnership, corporation or other entity without the
         prior written consent of the Corporation, any trade secrets of the
         Corporation or confidential information relating to the business of the
         Corporation or any one connected with the Corporation, and that such
         trade secrets and confidential information shall not be used by the
         Employee either on his own behalf or for the benefit of others or
         disclosed by the Employee to any one, except to the Corporation, during
         or after the term of employment of the Employee under this Employment
         Agreement. "Trade secrets of the Corporation" shall include, but not be
         limited to, Inventions, trade secrets, files, records, drawings,
         specifications, processes, lists of material, lists of customers, sales
         and marketing strategies, product development plans, financial
         information, and information on research and development.

              (8)  INVENTIONS AND PATENTS:

                   (a) The Employee shall make prompt full disclosure in writing
         to the Corporation of all inventions, improvements and discoveries,
         whether or not patentable which the Employee conceives, devises, makes,
         discovers, develops, perfects or first reduces to practice, either
         alone or jointly with others, during the term of employment of the
         Employee under this Employment Agreement, which



                                      -4-
   5



         relate in any way to the fields, products or business of the
         Corporation, including development and research, whether during or out
         of the usual hours of work or on or off the premises of the Corporation
         or by use of the facilities of the Corporation or otherwise and whether
         at the request or suggestion of the Corporation or otherwise (all such
         inventions, improvements and discoveries being hereinafter called the
         "Inventions"), including any Inventions, whether or not patentable,
         conceived, devised, made, discovered, developed, perfected or first
         reduced to practice by the Employee after the employment of the
         Employee under this Employment Agreement is terminated if the
         Inventions were conceived by the Employee during the term of employment
         of the Employee under this Employment Agreement. Any Inventions,
         whether or not patentable, conceived, devised, made, discovered,
         developed, perfected or first reduced to practice by the Employee
         within six (6) months of the date of termination of the employment of
         the Employee under this Employment Agreement shall be conclusively
         presumed to have been conceived during the term of employment of the
         Employee under this Employment Agreement.

                   (b) The Employee agrees that the Inventions shall be the sole
         and exclusive property of the Corporation.

                   (c) The Employee agrees to assist the Corporation and its
         nominees in every reasonable way (entirely at its or their expense) to
         obtain for the benefit of the Corporation letters patent for the
         Inventions and trademarks, trade names and copyrights relating to the
         Inventions, and any renewals, extensions or reissues thereof, in any
         and all countries, and agrees to make, execute, acknowledge and
         deliver, at the request of the Corporation, all written applications
         for letters patent, trademarks, trade names and copyrights relating to
         the Inventions and any renewals, extensions or reissues thereof, in any
         and all countries, and all documents with respect thereto, and all
         powers of attorney relating thereto and, without further compensation,
         to assign to the Corporation or its nominees all the right, title and
         interest of the Employee in and to such applications and to any
         patents, trademarks, trade names or copyrights which shall thereafter
         issue on any such applications, and to execute, acknowledge and deliver
         all other documents deemed necessary by the Corporation to transfer to
         or vest in the Corporation all of the right, title and interest of the
         Employee in and to the Inventions, and to such trademarks, trade names,
         patents and copyrights together with exclusive rights to make, use,
         license and sell them throughout the world.

                   (d) The Employee agrees that even though his employment is
         terminated under this Employment Agreement he will, at any time after
         such termination of employment, carry out and perform all of the
         agreements of Subsections (8)(a) and (8)(c) above, and will at any time
         and at all times cooperate with the Corporation in the prosecution
         and/or defense of any litigation which may arise in connection with the
         Inventions, provided, however, that should such services be rendered
         after termination of employment of the Employee under this




                                      -5-

   6




         Employment Agreement, the Employee shall be paid reasonable
         compensation on a per diem basis.

                   (e) The Employee agrees to make and maintain adequate and
         current written records of all Inventions in the form of notes,
         sketches, drawings, or reports relating thereto, which records shall be
         and remain the property of, and available to, the Corporation at all
         times.

                   (f) The Employee agrees that he will, upon leaving the
         employment of the Corporation, promptly deliver to the Corporation all
         originals and copies of disclosures, drawings, prints, letters, notes,
         and reports either typed, handwritten or otherwise memorialized,
         belonging to the Corporation which are in his possession or under his
         control and the Employee agrees that he will not retain or give away or
         make copies of the originals or copies of any such disclosures,
         drawings, prints, letters, notes or reports.

              (9)  PROPERTY OF CORPORATION: All files, records, reports,
         documents, drawings, specifications, equipment, and similar items
         relating to the business of the Corporation, whether prepared by the
         Employee or otherwise coming into his possession, shall remain the
         exclusive property of the Corporation and shall not be removed by the
         Employee from the premises of the Corporation under any circumstances
         whatsoever without the prior written consent of the Corporation.

              (10) NON-COMPETITION:

                   (a) In order to protect the good will of the Corporation and
         in order to protect the trade secrets of the Corporation referred to in
         Section (7) of this Employment Agreement, the Employee hereby agrees
         that during the term of employment of the Employee under this
         Employment Agreement, and during a period of one (1) year after
         termination of employment of the Employee under this Employment
         Agreement without regard to the cause of termination of employment and
         whether or not such termination of employment was caused by the
         Employee or by the Corporation, (i) the Employee shall not engage,
         either directly or indirectly, in any manner or capacity, in any
         business or activity which is competitive with any business or activity
         conducted by the Corporation; (ii) the Employee shall not work for or
         employ, directly or indirectly, or cause to be employed by another, any
         person who was an employee, officer or agent of the Corporation or of
         any of its subsidiaries at any time during a period of twelve (12)
         months prior to the termination of the employment of the Employee under
         this Employment Agreement nor shall the Employee form any partnership
         with or establish any business venture in cooperation with, any such
         person which is competitive with any business or activity of the
         Corporation; (iii) the Employee shall not give, sell or lease any goods
         or services competitive with the goods or services of the Corporation
         or its subsidiaries to any person, partnership, corporation or other
         entity who purchased goods or services



                                       -6-

   7



         from the Corporation or its subsidiaries within one (1) year before the
         termination of the employment of the Employee under employment
         Agreement; (iv) the Employee shall not have any financial interest, or
         participate as a director, officer, stockholder, partner, employee,
         consultant or otherwise, in any corporation, partners or other entity
         which is competitive with any business or activity conducted by the
         Corporation.

                   (b) The Corporation and the Employee agree that the services
         of the Employee are of a personal, special, unique and extraordinary
         character, and cannot be replaced by the Corporation without great
         difficulty, and that the violation by the Employee of any of his
         agreements under this Section (10) would damage the goodwill of the
         Corporation and cause the Corporation irreparable harm which could not
         reasonably or adequately be compensated in damages in an action at law,
         and that the agreements of the Employee under this Section (10) may be
         enforced by the Corporation in equity by an injunction or restraining
         order in addition to being enforced by the Corporation at law.

                   (c) In the event that this Section (10) shall be determined
         by any court of competent jurisdiction to be unenforceable by reason of
         its extending for too long a period of time or over too great a range
         of activities, it shall be interpreted to extend only over the maximum
         period of time or range of activities as to which it may be
         enforceable.

              (11) NOTICE: Any and all notices under this Employment Agreement
         shall be in writing and, if to the Corporation, shall be duly given if
         sent to the Corporation by registered or certified mall, postage
         prepaid, return receipt requested, at the address of the Corporation
         set forth under its name below or at such other address as the
         Corporation may hereafter designate to the Employee in writing for the
         purpose, and if to the Employee, shall be duly given if delivered to
         the Employee by hand or if sent to the Employee by registered or
         certified mail, postage prepaid, return receipt requested, at the
         address of the Employee set forth under his name below or at such other
         address as the Employee may hereafter designate to the Corporation in
         writing for the purpose.

              (12) ASSIGNMENT: The rights and obligations of the Corporation
         under this Employment Agreement shall inure to the benefit of, and
         shall be binding upon, the successors and assigns of the Corporation.
         The rights and obligations of the Employee under this Employment
         Agreement shall inure to the benefit of, and shall be binding upon, the
         heirs, executors and legal representatives of the Employee.

              (13) ENTIRE AGREEMENT AND SEVERABILITY:

                   (a) This Employment Agreement supersedes any and all other
         agreements, either oral or in writing, between the parties hereto with
         respect to the


                                      -7-

   8



         employment of the Employee by the Corporation and contains all of the
         covenants and agreements between the parties with respect to such
         employment. Each party to this Employment Agreement acknowledges that
         no representations, inducements, promises or agreements, oral or
         otherwise, have been made by any party, or any one acting one half of
         any party, which are not embodied herein, and that no other agreement,
         statement or promise not contained in this Employment Agreement shall
         be valid and binding. Any modification of this Employment Agreement
         will be effective only if it is in writing signed by both parties to
         this Employment Agreement.

                   (b) If any provision in this Employment Agreement is held by
         a court of competent jurisdiction to be invalid, void or unenforceable,
         the remaining provisions shall nevertheless continue in full force and
         effect without being impaired or invalidated in any way.

                   (c) All pronouns used herein shall include the masculine,
         feminine, and neuter gender as the context requires.

              (14) GOVERNING LAW AND JURISDICTIONS: This Employment Agreement
         shall be governed by, and construed in accordance with, the laws of The
         Commonwealth of Massachusetts applicable to contracts made and to be
         performed entirely within The Commonwealth of Massachusetts (without
         reference to conflict of laws principles). Any action or proceeding
         arising from or in connection with this Employment Agreement may be
         brought against the Employee in a court of record of The Commonwealth
         of Massachusetts, Middlesex County, or in the United States District
         Court for the District of Massachusetts, the Employee hereby consenting
         to the jurisdiction thereof over its person; and service of process may
         be made upon the Employee by mailing a copy of the summons and any
         complaint to the Employee by registered or certified mall, postage
         prepaid, return receipt requested, at the address to be used for the
         giving of notice to the Employee as provided in this Employment
         Agreement.



                                      -8-

   9




         IN WITNESS WHEREOF, the parties hereto have executed this Employment
         Agreement as a sealed instrument in the Commonwealth of Massachusetts,
         all as of the day, month and year first written above.


                                        MKS INSTRUMENTS, INC.


                                        By: ______________________________
                                            John R. Bertucci, President

                                            Six Shattuck Road
                                            Andover, MA 01810


                                            ______________________________
                                            Employee Signature

                                            William Stewart
                                            ------------------------------
                                            Employee Name

                                            Address:

                                            ______________________________

                                            ______________________________


                                      -9-

   1
                                                                   EXHIBIT 10.9


                                 LOAN AGREEMENT


      This Loan Agreement (the "Agreement") is entered into as of the 31st day
of October, 1995, by and between The First National Bank of Boston ("Lender")
and MKS Instruments, Inc., a Massachusetts corporation ("Borrower").

                                    PREMISES:

      WHEREAS, the Borrower has requested that the Lender make loans to it; and

      WHEREAS, the Lender is willing to lend funds to the Borrower on the terms
and conditions hereinafter set forth;

      NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the adequacy and receipt of which are hereby
acknowledged, the parties hereto hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

      1.1 Definitions. In addition to terms defined elsewhere in this Agreement,
the following terms shall have the meanings indicated, which meanings shall be
equally applicable to both the singular and plural forms of such terms:

            1.1.1 "Affiliate" of any Person shall mean any other Person which,
directly or indirectly, controls, or is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" of any
Person shall mean the power, directly or indirectly, either to (i) vote 10% or
more of the securities having ordinary voting power for the election of
directors of such Person or (ii) direct the management and policies of such
Person, whether by contract or otherwise. As to the Borrower, the term
"Affiliate" shall include, without limitation, any partnership or joint venture
of which the Borrower or any Affiliate of the Borrower is a general partner or
is a limited partner with more than a ten percent (10%) interest, and any
director or executive officer of the Borrower.

            1.1.2 "Base Rate" shall mean the rate of interest announced by the
Lender at its head office from time to time as its "Base Rate".

            1.1.3 "Base Rate Loan" shall mean a portion of the Term Loan as to
which the Borrower elects to pay interest at the Base Rate as provided in
Section 2.2.


                                     - 1 -
   2
            1.1.4 "Business Day" shall mean a day on which commercial banks are
required to be open for business in Boston, Massachusetts.

            1.1.5 "Cash Flow Ratio" shall have the meaning set forth in Section
7.7(c).

            1.1.6 "Closing Date" shall mean the date of this Agreement.

            1.1.7 "Compliance Certificate" shall have the meaning set forth in
Section 6.1(c).

            1.1.8 "Consolidated Debt Service" shall mean for any period the sum
(without duplication) of Interest Expense, the interest portion of Financing
Lease Obligations and required principal payments on long-term debt of the
Borrower and its Subsidiaries, determined on a consolidated basis.

            1.1.9 "Consolidated Indebtedness" shall mean the Indebtedness of the
Borrower and its Subsidiaries, determined on a consolidated basis.

            1.1.10 "Consolidated Net Income" shall mean for any period the net
income (or loss) for such period (before extraordinary items and excluding the
net income of any business entity that is not a Subsidiary in which the Borrower
or one of its Subsidiaries has an ownership interest unless such net income
shall have actually been received by such company in the form of cash
distributions) of the Borrower and its Subsidiaries after deducting all
operating expenses, depreciation and amortization, Interest Expense, the
interest portion of Financing Lease Obligations, all taxes in respect of income
and profits paid or payable (including accrued Sub S distributions required to
make shareholder tax payments) and all other proper deductions, all determined
on a consolidated basis.

            1.1.11 "Consolidated Operating Cash Flow" shall mean for any period,
the net income (or loss) for such period (before extraordinary items and
excluding the net income of any business entity that is not a Subsidiary in
which the Borrower or one of its Subsidiaries has an ownership interest unless
such net income shall have actually been received by such company in the form of
cash distributions) of the Borrower and its Subsidiaries before deducting
Interest Expense and taxes and after restoring thereto depreciation of real and
personal property and leasehold improvements and amortization and after
deducting cash taxes paid, Sub S distributions required to make shareholder tax
payments, and capital expenditures incurred, provided that capital expenditures
shall not include real estate purchases funded by debt.


                                     - 2 -
   3
            1.1.12 "Consolidated Tangible Net Worth" shall mean, at any time,
net stockholders' equity of the Borrower and its Subsidiaries determined in
accordance with generally accepted accounting principles including the book
amount of all minority interests in MKS International, Inc. but excluding the
book amount of all minority interests in other Affiliates and any foreign
exchange translation adjustment, with no upward adjustments due to a
reevaluation of assets (other than any such upward adjustment as may be required
under generally accepted accounting principles in connection with the
acquisition by the Borrower or any Subsidiary of another company or entity)
minus the following items (without duplication of deductions) appearing on the
balance sheet of the Borrower and its Subsidiaries:

                  (a) the book amount of all assets (including, without
limitation, goodwill, patents, trademarks, copyrights, organizational expense
and unamortized debt discount) that would be treated as intangibles under
generally accepted accounting principles;

                  (b) treasury stock; and

                  (c) any write-up in the book amount of any asset or Investment
subsequent to the Closing Date, resulting from a reevaluation or reappraisal
thereof from the amount entered in accordance with generally accepted accounting
principles by the Borrower or any Subsidiary on its books with respect to its
acquisition of the asset or Investment.

            1.1.13 "Costs" shall have the meaning set forth in Section 9.4.

            1.1.14 "Debt-to-Net Worth Ratio" shall have the meaning set forth in
Section 7.7(b).

            1.1.15 "Default" shall mean any event that, with the lapse of time,
the giving of notice, or both, would become an Event of Default hereunder.

            1.1.16 "Event of Default" shall have the meaning set forth in
Section 8.1 hereof.

            1.1.17 "Financing Lease" shall mean any lease of the Borrower or a
Subsidiary, as lessee, that is shown or is required to be shown in accordance
with generally accepted accounting principles as a liability on the balance
sheet of the lessee thereunder.


                                     - 3 -
   4
            1.1.18 "Financing Lease Obligation" shall mean for any period the
monetary obligation of the lessee under a Financing Lease. The amount of a
Financing Lease Obligation at any date is the amount at which the lessee's
liability under the Financing Lease would be required to be shown on its balance
sheet at such date.

            1.1.19 "Hazardous Substances" shall mean any hazardous waste, as
defined by 42 U.S.C. Section 6903(5), any hazardous substances, as defined by 42
U.S.C. Section 9601(14), any pollutant or contaminant, as defined by 42 U.S.C. 
Section 9601(33), or any toxic substance, oil or hazardous materials or other 
chemicals or substances regulated by any laws or regulations relating to the 
discharge of air pollutants, water pollutants or processed wastewater.

            1.1.20 "Indebtedness" shall mean, for any Person, (a) all
obligations of such Person that in accordance with generally accepted accounting
principles would be reflected on the balance sheet of such Person as a
liability, (b) all obligations of any other Person the payment or collection of
which such Person has guaranteed (except by reason of endorsement for collection
in the ordinary course of business) or in respect of which such Person is
liable, contingently or otherwise, including, without limitation, liable by way
of agreement to purchase, to provide funds for payment, to supply funds to or
otherwise to invest in such other Person, or otherwise to assure a creditor
against loss, (c) all obligations of any other Person for borrowed money or for
the deferred purchase price of property or services secured by (or for which the
holder of such indebtedness has an existing right, contingent or otherwise, to
be secured by) any mortgage, or other encumbrance upon or in property
(including, without limitation, accounts and contract rights) owned by such
Person, whether or not such Person has assumed or become liable for the payment
of such indebtedness or obligations, and (d) Financing Lease Obligations of such
Person.

            1.1.21 "Interest Expense" shall mean for any period the aggregate
amount of interest recorded, in accordance with generally accepted accounting
principles, on the financial statements for that period by the Borrower and its
Subsidiaries in respect of Consolidated Indebtedness incurred for borrowed 
money.

            1.1.22 "Interest Period" shall mean the period designated by the
Borrower as such in the Interest Rate Change Notice for any portion of the Term
Loan pursuant to and subject to the limitations set forth in Section 2.2.

            1.1.23 "Interest Rate Change Notice" shall have the meaning set
forth in Section 2.2.

            1.1.24 "Interest Rate Determination Date" shall mean the third
Business Day prior to the first day of the related Interest Period for a LIBOR
Loan.


                                     - 4 -
   5
            1.1.25 "Interim Maturity Date" shall mean the last day of any
Interest Period.

            1.1.26 "Investments" shall have the meaning set forth in Section
7.4.

            1.1.27 "LIBOR Loan" shall mean a portion of the Term Loan as to
which the Borrower elects to pay interest using the LIBOR Rate as provided in
Section 2.2.

            1.1.28 "LIBOR Rate" shall mean for any Interest Rate Determination
Date, the rate obtained by dividing (i) the quotation offered by the Lender in
the interbank Eurodollar market for U.S. dollar deposits of amounts in
immediately available funds comparable to the portion of the Term Loan for which
the LIBOR Rate is being determined with a maturity comparable to the Interest
Period for which such LIBOR Rate will apply as of approximately noon (Boston
time) three Business Days prior to the commencement of such Interest Period by
(ii) a percentage equal to 100% minus the stated maximum rate of all reserves
required to be maintained against "Eurocurrency liabilities" as specified in
Regulation D (or against any other category of liabilities that includes
deposits by reference to which the interest rate on LIBOR Loans is determined)
as applicable on such date to any member bank of the Federal Reserve System.

            1.1.29 "Licenses" shall have the meaning set forth in Section 4.8.

            1.1.30 "Lien" shall mean any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner of the
property, whether the interest is based on common law, statute or contract
(including the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes). For the purposes of this Agreement, the Borrower or a
subsidiary shall be deemed to be the owner of any property that it has acquired
or holds subject to a Financing Lease or a conditional sale agreement or other
arrangement pursuant to which title to the property has been retained by or
vested in some other Person for security purposes, and such retention or vesting
shall be deemed to be a Lien.

            1.1.31 "Loan Documents" shall mean each of this Agreement, the Note,
and any other document or instrument executed by the Borrower in favor of the
Lender in connection with the transactions contemplated hereby.

            1.1.32 "Obligations" shall mean, without limitation, any and all
liabilities, debts, and obligations of the Borrower to the Lender, of each and
every kind, nature and description, including but not limited to those arising
under this Agreement, any other Loan Document, the Loan Agreement between the
Borrower and the Lender dated as of November 1, 1993, as amended, the Foreign
Exchange Agreement between the Lender and the Borrower dated June 14, 1991, and
any


                                     - 5 -
   6
interest rate swap agreement, whether now existing or hereafter incurred.
"Obligations" also means, without limitation, any and all obligations of the
Borrower to act or to refrain from acting in accordance with the terms,
provisions and covenants of this Agreement or of any other Loan Document.

            1.1.33 "Permitted Liens" shall have the meaning set forth in Section
7.2.

            1.1.34 "Person" shall mean any natural person, corporation,
unincorporated organization, trust, joint-stock company, joint venture,
association, company, partnership or government, or any agency or political
subdivision of any government.

            1.1.35 "Subsidiary" shall mean any Person of which the Borrower at
the time owns, directly or indirectly, through another Subsidiary or otherwise,
50% or more of the equity interests.

            1.1.36 "Term Loan" shall have the meaning set forth in Section 2.1.

            1.1.37 "Term Loan Maturity Date" shall mean June 30, 2002.

            1.1.38 "Term Note or Note" shall have the meaning set forth in
Section 2.1.

            1.1.39 "Term Loan Account" shall mean the account on the books of
the Lender in the name of the Borrower in which the following shall be recorded:
the principal outstanding and interest accrued under the Term Loan; all Costs
with respect to the Term Loan; all payments made by the Borrower on account of
indebtedness evidenced by the Term Note; and other appropriate debits and
credits.

      1.2 Accounting Terms. Accounting terms not specifically defined in this
Agreement shall have the meanings given to them under generally accepted
accounting principles.

      1.3 Other Definitional Provisions. The words "hereof," "herein" and
"hereunder," and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not any particular provision of this Agreement.
Any Article, Section, Exhibit or Schedule references are to this Agreement
unless otherwise specified.

                                   ARTICLE II

                                    TERM LOAN


                                     - 6 -
   7
      2.1 The Lender hereby agrees to make a seven-year term loan (the "Term
Loan") in the principal amount of $7,000,000 to the Borrower. The Term Loan
shall be evidenced by a term note (the "Term Note") payable to the Bank in the
form of Exhibit A hereto. Amortization of the Term Note shall be calculated on
the basis of a 7-year schedule of level monthly payments of principal with the
entire unpaid principal balance and all accrued and unpaid interest absolutely
due and payable on the Maturity Date.

      2.2 Interest.

            2.2.1 Borrower agrees to pay interest in respect of the unpaid
principal amount of the Term Loan from the date of this Agreement until paid in
full as follows. The Term Loan shall bear interest at the Base Rate unless the
Borrower desires to pay interest on all or a portion of the Term Loan at the
following rate:

                  (i) During any period in which the Borrower maintains a
            Debt-to-Net Worth Ratio not in excess of 1.35 to 1:

                        (a) and a Cash Flow Ratio of from 1.35 to 1 to and
                  including 1.75 to 1, the LIBOR Rate plus 1.60%;

                        (b) and a Cash Flow Ratio of from 1.76 to 1 to and
                  including 2.0 to 1, the LIBOR Rate plus 1.30%;

                        (c) and a Cash Flow Ratio of from 2.01 to 1 to and
                  including 3.0 to 1, the LIBOR Rate plus 1.10%; or

                        (d) and a Cash Flow Ratio in excess of 3.0 to 1, the
                  LIBOR Rate plus .90%; or

                  (ii) During any period in which the Borrower maintains a
            Debt-to-Net Worth Ratio of 1.35 to 1 or more or a Cash Flow Ratio of
            less than 1.35 to 1, the LIBOR Rate plus 2.00%.

            2.2.2 Whenever the Borrower desires to obtain the LIBOR Rate, it may
request that the Lender provide quotes as of any specified Interest Rate
Determination Date as to the LIBOR Rate for any or all Interest Periods, and the
Lender shall promptly provide such quotes. The Borrower shall give the Lender
prior telecopied or telephone notice (given not later than 10:00 a.m. (Boston
time)) at least three Business Days prior to the day the Interest Period is to
begin with respect to use of the LIBOR Rate. Each such notice (each an "Interest
Rate Change Notice") shall specify the desired interest rate, the amount of the
Term Loan to which such interest rate shall apply and the initial Interest
Period applicable thereto. If such notice is given by telephone, it shall be
immediately confirmed in writing.


                                     - 7 -
   8
            2.2.3 Upon the Interim Maturity Date of any LIBOR Loan, unless the
Borrower shall have given the Lender an Interest Rate Change Notice in
accordance with Section 2.2.2 requesting a new LIBOR Loan be made on such
Interim Maturity Date, the Borrower shall be deemed to have elected to pay
interest on such amount of the Term Loan at the Base Rate.

            2.2.4 At the time the Borrower gives any Interest Rate Change
Notice, the Borrower shall elect the Interest Period for which the interest rate
elected shall apply, which Interest Period shall, at the option of the Borrower,
be a period of one, two, three, four, five or six months (as to a LIBOR Loan).
Notwithstanding anything to the contrary contained herein:

                  (i) if any Interest Period begins on a day for which there is
            no numerically corresponding day in the calendar month at the end of
            such Interest Period, such Interest Period shall end on the last
            Business Day of such calendar month;

                  (ii) if any Interest Period would otherwise expire on a day
            that is not a Business Day, such Interest Period shall expire on the
            next succeeding Business Day; provided that if any Interest Period
            would otherwise expire on the day that is not a Business Day but is
            a day of the month after which no further Business Day occurs in
            such month, such Interest Period shall expire on the next preceding
            Business Day;

                  (iii) no Interest Period shall extend beyond the Term Loan
            Maturity Date.

      2.3 Term Loan Account. The principal and the amounts of all payments on
the Term Note shall be recorded by the Lender in the Term Loan Account of the
Borrower. All statements regarding the Term Loan Account shall be deemed to be
accurate absent manifest error or unless objected to by the Borrower within 30
days after receipt. The Borrower agrees to review each such statement promptly
after receipt and to bring any errors or discrepancies to the Lender's attention
promptly.

                                   ARTICLE III

                                ADDITIONAL TERMS

      3.1 Payments.


                                     - 8 -
   9
            3.1.1 The Borrower shall have the right to prepay the Note, in whole
at any time or in part from time to time, without premium or penalty, provided
that, except as set forth in Section 3.3, no portion of the Term Loan may be
prepaid on the first day of an Interest Period with respect thereto. The
Borrower shall give notice (by telex or telecopier, or by telephone (confirmed
in writing promptly thereafter)) to the Lender of each proposed prepayment
hereunder prior to 10:00 a.m. (Boston time), (x) with respect to Base Rate
Loans, upon the Business Day of the proposed prepayment and (y) with respect to
LIBOR Loans, at least three Business Days prior to the Business Day of the
proposed prepayment, which notice in each case shall specify the proposed
prepayment date (which shall be a Business Day), the aggregate principal amount
of the proposed prepayment and which portions of the Term Loan are to be
prepaid. LIBOR Loans that are voluntarily prepaid before the last day of the
applicable Interest Period shall be subject to the additional compensation
requirements set forth in Section 3.3, and each prepayment of a LIBOR Loan shall
be in an aggregate principal amount of not less than the total principal amount
outstanding at such time under such LIBOR Loan.

            3.1.2 All payments of principal and interest due under the Note
(including prepayments), and any other amounts owing to the Lender under this
Agreement, shall be made by the Borrower not later than 3:00 p.m., Boston time,
on the day due in lawful money of the United States of America, to the Lender at
its Boston, Massachusetts office in immediately available funds. The Borrower
hereby authorizes the Lender to charge such payments as they become due, if not
otherwise paid by the Borrower, to any account of the Borrower with the Lender
as the Lender may elect.

            3.1.3 Whenever any payment to be made hereunder or under any other
Loan Document shall be stated to be due on a day that is not a Business Day,
such payment may be made on the next succeeding Business Day, and such extension
of time shall in such case be included in computing interest or other fees or
charges provided for under this Agreement or any other Loan Document; provided,
however, that with respect to LIBOR Loans, if the next succeeding Business Day
falls in another calendar month, such payment shall be made on the next
preceding Business Day.

            3.1.4 All payments made by the Borrower on the Note shall be applied
by the Lender (a) first, to the payment of Costs with respect to the Note, (b)
second, to the payment of accrued and unpaid interest on the Note, in such order
as the Borrower shall direct, until all such accrued interest has been paid, and
(c) third, to the payment of the unpaid principal amount of the Note in such
order as the Borrower shall direct.

      3.2 Capital Adequacy.


                                     - 9 -
   10
            3.2.1 If, after the date of this Agreement, the Lender shall have
reasonably determined in good faith that the adoption or effectiveness after the
date hereof of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by the Lender with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of materially reducing the rate
of return on the Lender's capital or assets as a consequence of its commitments
or obligations hereunder to a level below that which the Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration the Lender's then current policies with respect to capital
adequacy), then from time to time, subject to Section 3.2.2, within 15 days
after demand by the Lender the Borrower shall pay to the Lender such additional
amount or amounts as will compensate the Lender for such reduction (after the
Lender shall have allocated the same fairly and equitably among all of its
customers or any class generally affected thereby).

            3.2.2 The Lender will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Lender to any additional
payment under this Section 3.2 as promptly as practicable and shall be entitled
to such payment (a) in the case of a Base Rate Loan, only for costs incurred
from and after the date that the Lender gives such notice, and (b) in the case
of a LIBOR Loan, only for costs incurred in connection with Loans made pursuant
to an Interest Rate Change Notice issued after the date that the Lender gives
such notice. The Lender will furnish to the Borrower with such notice a
certificate signed by an officer thereof certifying that the Lender is entitled
to payment under this Section 3.2 and setting forth the basis (in reasonable
detail) and the amount of each request by the Lender for any additional payment
pursuant to this Section 3.2.

      3.3 Special Provisions Governing LIBOR Loans. Notwithstanding any other
provisions of this Agreement, the following provisions shall govern with respect
to LIBOR Loans as to the matters covered:

            3.3.1 Increased Costs, Illegality etc. (a) In the event that the
Lender shall have determined (which determination shall, if made in good faith
and absent manifest error, be final, conclusive and binding upon all parties):

                  (i) on any Interest Rate Determination Date, that by reason of
            any changes arising after the date of this Agreement affecting the
            interbank Eurodollar market, adequate and fair means do not exist
            for ascertaining the applicable interest rate on the basis provided
            for in the definition of LIBOR Rate; or


                                     - 10 -
   11
                  (ii) at any time during any Interest Period, that the Lender
            shall incur increased costs or reductions in the amounts received or
            receivable hereunder with respect to a LIBOR Loan by reason of (x)
            any change since the Interest Rate Determination Date for the
            Interest Period in question in any applicable law or governmental
            rule, regulation, guideline or order (or any interpretation thereof
            and including the introduction of any new law or governmental rule,
            regulation, guideline or order) (such as, for example but not
            limited to, a change in official reserve requirements, but excluding
            reserve requirements that have been included in calculating the
            LIBOR Rate for such Interest Period) and/or (y) other circumstances
            affecting the Lender, the interbank Eurodollar market or the
            position of the Lender in the relevant market; or

                  (iii) at any time, that the making or continuance of any LIBOR
            Loan has become unlawful by compliance by the Lender in good faith
            with any law, governmental rule, regulation, guideline or order, or
            has become impracticable as a result of a contingency occurring
            after the date of this Agreement;

then and in any such event, the Lender shall promptly after making such
determination give notice (by telephone confirmed in writing) to the Borrower of
such determination. Thereafter (x) in the case of clause (i) above, any Interest
Rate Change Notice given by the Borrower with respect to a LIBOR Loan that has
not yet been incurred shall be deemed rescinded by the Borrower and LIBOR Loans
shall no longer be available until such time as the Lender notifies the Borrower
that the circumstances giving rise to such notice no longer exist or that,
notwithstanding such circumstances, LIBOR Loans will again be made available
hereunder, (y) in the case of clause (ii), the Borrower shall pay to the Lender,
upon written demand therefor (but only with respect to any LIBOR Loan made
pursuant to an Interest Rate Change Notice issued after the giving of the
written notice that LIBOR Loans will again be made available hereunder referred
to in clause (x) above), such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as the
Lender in its sole discretion shall determine) as shall be required to
compensate the Lender for such increased cost or reduction in amount received (a
written notice as to additional amounts owed the Lender, showing the basis for
such calculation thereof, shall be given to the Borrower by the Lender and
shall, absent manifest error, be final, conclusive and binding upon the parties
hereto), and (z) in the case of clause (iii), the Borrower shall take one of the
actions specified in Section 3.3.1(b) as promptly as possible and, in any event,
within the time period required by law.


                                     - 11 -
   12
                  (a) At any time that any LIBOR Loan is affected by the
circumstances described in Section 3.3.l(a)(ii) or (iii), the Borrower may (and
in the case of a LIBOR Loan affected pursuant to Section 3.3.1(a) (iii) shall)
either (x) if the affected LIBOR Loan is then being made, withdraw the related
Interest Rate Change Notice by giving the Lender telephonic (confirmed in
writing) notice thereof on the same date that the Borrower was notified by the
Lender pursuant to Section 3.3.l(a), or (y) if the affected LIBOR Loans are then
outstanding, upon at least three Business Days' written notice to the Lender,
require the Lender to convert each LIBOR Loan so affected into a Base Rate Loan.

            3.3.2 Compensation. The Borrower shall compensate the Lender, upon
its written request (which request shall set forth the basis for requesting such
amounts), for all reasonable losses, expenses and liabilities (including,
without limitation, any interest paid by the Lender to lenders of funds borrowed
by it to make or carry its LIBOR Loans to the extent not recovered by the Lender
in connection with the re-employment of such funds) and any loss sustained by
the Lender in connection with the re-employment of the funds (including, without
limitation, a return on such re-employment that would result in the Lender's
receiving less than it would have received had such LIBOR Loan remained
outstanding until the last day of the Interest Period applicable to such LIBOR
Loan) that the Lender may sustain: (i) if for any reason (other than a default
by or negligence of the Lender) a LIBOR Loan is not advanced on a date specified
therefor in an Interest Rate Change Notice (unless timely withdrawn pursuant to
Section 3.3.1(b)(x) above), (ii) if any payment or prepayment of any LIBOR Loans
occurs for any reason whatsoever (including, without limitation, by reason of
Section 3.3.1(b)) on a date that is prior to the last day of an Interest Period
applicable thereto, (iii) if any prepayment of any of its LIBOR Loans is not
made on the date specified in a notice of payment given by the Borrower pursuant
to Section 3.1 or (iv) as a consequence of an election made by the Borrower
pursuant to Section 3.3.1(b) (y) .

                                   ARTICLE IV

                 REPRESENTATIONS AND WARRANTIES OF THE BORROWER

      In order to induce the Lender to enter into this Agreement and to make the
loans provided for herein, the Borrower makes the following representations and
warranties to the Lender, all of Which shall survive the execution and delivery
of this Agreement and the Note.

      4.1 Organization, Existence and Power. The Borrower is duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation. The Borrower has the corporate power necessary to conduct the
business in which it is engaged, to own the properties owned by it and to


                                     - 12 -
   13
consummate the transactions contemplated by the Loan Documents. The Borrower is
duly qualified or licensed to transact business in all places where the nature
of the properties owned by it or the business conducted by it makes such
qualification necessary and where the failure to be so qualified or licensed
would have a material adverse effect upon the consolidated financial condition,
assets or results of operations of the Borrower and its Subsidiaries taken as a
whole.

      4.2 Authorization of Loan Documents; Binding Effect. The execution and
delivery of this Agreement and the other Loan Documents and the performance of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate actions of the Borrower. Each of the Loan Documents
constitutes the legal, valid and binding obligation of the Borrower that is a
party thereto, enforceable against the Borrower in accordance with its terms.

      4.3 Authority. The Borrower has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Loan
Documents. Neither the authorization, execution, delivery, or performance by the
Borrower of this Agreement or of any other Loan Document nor the performance of
the transactions contemplated hereby or thereby violates or will violate any
provision of the corporate charter or by-laws of the Borrower, or does or will,
with the passage of time or the giving of notice or both, result in a breach of
or a default under, or require any consent under or result in the creation of
any lien, charge or encumbrance upon any property or assets of the Borrower
pursuant to, any material instrument, agreement or other document to which the
Borrower is a party or by which the Borrower or any of its properties may be
bound or affected.

      4.4 Capital Structure. The number of shares of stock of which the
Borrower's authorized capital stock consists, the par value per share of such
stock, the number of shares of such stock that have been issued and are
outstanding and the number of shares that have been issued and are held by the
Borrower as treasury shares are all disclosed on the Disclosure Schedule. Set
forth in the Disclosure Schedule is a complete and accurate list of all
Subsidiaries of the Borrower. The Disclosure Schedule indicates the jurisdiction
of incorporation or organization of each of the Subsidiaries, the number of
shares or units of each class of capital stock or other equity of the
Subsidiaries authorized, and the number of such shares or units outstanding and
the percentage of each class of such equity owned (directly or indirectly) by
the Borrower. No shares of stock or units of equity interests of the Borrower or
any of its Subsidiaries are covered by outstanding options, warrants, rights of
conversion or purchase or similar rights granted or created by the Borrower
except as set forth on the Disclosure Schedule. All the outstanding capital
stock of the Borrower has been validly issued and is fully paid and
nonassessable. All the stock or units of equity interests of the Borrower's
Subsidiaries that are owned by the Borrower or any Subsidiary of the Borrower
are owned free and clear of all


                                     - 13 -
   14
mortgages, deeds of trust, pledges, liens, security interests and other charges
or encumbrances.

      4.5 Financial Condition. The audited consolidated balance sheet of the
Borrower and its Subsidiaries dated as of December 31, 1994 and the audited
statements of operations, cash flows and stockholders' equity of the Borrower
and its Subsidiaries for and as of the end of the period ending on that date,
including any related notes (the "Audited Financial Statements"), and the
unaudited consolidated financial statements of the Borrower and its Subsidiaries
(the "Unaudited Financial Statements") dated as of July 1, 1995 (the "Balance
Sheet Date"), all of which (collectively, the "Financial Statements") were
heretofore furnished to the Lender, are true, correct and complete in all
material respects and fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries as of the date of each such
statement and have been prepared in accordance with generally accepted
accounting principles (subject, in the case of the Unaudited Financial
Statements, to the addition of notes and to normal year-end adjustments that
individually and in the aggregate are not expected to be material) consistently
applied throughout the periods involved. Other than as reflected in such
Financial Statements and except for liabilities incurred in the ordinary course
of business since the date thereof, the Borrower has no Indebtedness that is or
would be material to the financial condition of the Borrower, nor any material
unrealized or unanticipated losses from any commitments. Since the Balance Sheet
Date there has been no material adverse change in the consolidated financial
condition (as set forth in the Unaudited Financial Statements) or results of
operations of the Borrower and its Subsidiaries taken as a whole.

      4.6 Pending Litigation. Except as set forth in the Disclosure Schedule,
there are no suits or proceedings pending or, to the knowledge of the Borrower,
threatened before any court or arbitration tribunal or by or before any
governmental or regulatory authority, commission, bureau or agency or public
regulatory body against the Borrower that if adversely determined would have a
material adverse effect on the consolidated financial condition, assets or
results of operations of the Borrower and its Subsidiaries taken as a whole.

      4.7 Certain Agreements; Material Contracts. The Borrower is not a party to
any agreement or instrument or subject to any court order or governmental decree
adversely affecting in any material respect the business, properties, assets or
financial condition of the Borrower and its Subsidiaries taken as a whole.

      4.8 Authorization, Etc. All authorizations, consents, approvals,
accreditations, certifications and licenses required under the corporate charter
or by-laws of the Borrower or under applicable law or regulation for the
ownership or operation of the property owned or operated by the Borrower or the
conduct of any business or activity conducted by the Borrower, including
provision of services for


                                     - 14 -
   15
which reimbursement is made by third party payors, other than authorizations,
consents, approvals, accreditations, certifications or licenses the failure to
obtain and/or maintain which would not have a material adverse effect on the
consolidated financial condition, assets or results of operations of the
Borrower and its Subsidiaries taken as a whole (collectively, "Licenses") have
been duly issued and are in full force and effect. The Borrower has fulfilled
and performed all of its material obligations with respect to such Licenses (to
the extent now required to be fulfilled or performed) and no event has occurred
that would allow, with or without the passage of time or the giving of notice or
both, revocation or termination thereof or would result in any other material
impairment of the rights of the holder of any such License. All filings or
registrations with any governmental or regulatory authority required for the
conduct of the business or activity conducted by the Borrower have been made,
other than any such filings or registrations as to which the failure to make
same would not have a material adverse effect on the consolidated financial
condition, assets or results of operations of the Borrower and its Subsidiaries,
taken as a whole. Except as expressly contemplated hereby, no approval, consent
or authorization of or filing or registration with any governmental commission,
bureau or other regulatory authority or agency is required with respect to the
execution, delivery or performance of any of the Loan Documents.

      4.9 No Violation. The execution, delivery and performance by the Borrower
of the Loan Documents do not and will not violate any provision of law or
regulation applicable to the Borrower, or any writ, order or decree of any court
or governmental or regulatory authority or agency applicable to the Borrower.
The Borrower is not in default, nor has any event occurred that with the passage
of time or the giving of notice, or both, would constitute a default, in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement, instrument or other document to which the
Borrower is a party, which default would have a material adverse effect on the
consolidated assets, financial condition or results of operations of the
Borrower and its Subsidiaries, taken as a whole. The Borrower is not in
violation of any applicable federal, state or local law, rule or regulation or
any writ, order or decree, which violation would have a material adverse effect
on the consolidated assets, financial condition or results of operations of the
Borrower and its Subsidiaries, taken as a whole. Except as otherwise set forth
in the Disclosure Schedule under the caption "Litigation," the Borrower has not
received notice of any violation of any federal, state or local environmental
law, rule or regulation or assertion that the Borrower has any obligation to
clean up or contribute to the cost of cleaning up any waste or pollutants.

      4.10 Payment of Taxes. The Borrower and its Subsidiaries have properly
prepared and filed or caused to be properly prepared and filed all federal tax
returns and all material state and local tax returns that are required to be
filed and have paid all taxes shown thereon to be due and all other taxes,
assessments and governmental charges or levies imposed upon the Borrower and its
Subsidiaries, their income or


                                     - 15 -
   16
profits or any properties belonging to the Borrower. No extensions of any
statute of limitations are in effect with respect to any tax liability of the
Borrower or any Subsidiary of the Borrower. No deficiency assessment or proposed
adjustment of the federal income taxes of the Borrower or any Subsidiary of the
Borrower is pending and the Borrower has no knowledge of any proposed liability
of a substantial nature for any tax to be imposed upon any of its properties or
assets.

      4.11 Transactions With Affiliates, Officers, Directors and 1%
Shareholders. Except as set forth on the Disclosure Schedule, the Borrower has
no Indebtedness to or material contractual arrangement or understanding with any
Affiliate, officer or director of the Borrower, nor any shareholder holding of
record at least 1% of the equity of the Borrower nor, to the best of the
Borrower's knowledge (without independent inquiry), any of their respective
relatives.

      4.12 ERISA. The Borrower has never established or maintained any funded
employee pension benefit plan as defined under Section 3(2) (A) of the Employee
Retirement Income Security Act of 1974, as amended and in effect on the date
hereof ("ERISA"), other than the plans described on the Disclosure Schedule. No
employee benefit plan established or maintained, or to which contributions have
been made, by the Borrower or any Subsidiary of the Borrower that is subject to
Part 3 of Title I-B of ERISA, had an accumulated funding deficiency (as such
term is defined in Section 302 of ERISA) as of the last day of the fiscal year
of such plan ended most recently prior to the date hereof, or would have had an
accumulated funding deficiency (as so defined) on such day if such year were the
first year of the plan to which Part 3 of Title I-B of ERISA applied. No
material liability to the Pension Benefit Guaranty Corporation has been incurred
or is expected by the Borrower to be incurred by it or any Subsidiary of the
Borrower with respect to any such plan or otherwise. The execution, delivery and
performance of this Agreement and the other Loan Documents will not involve on
the part of the Borrower any prohibited transaction within the meaning of ERISA
or Section 4975 of the Internal Revenue Code. The Borrower has never maintained,
contributed to or been obligated to contribute to any "multiemployer plan," as
defined in Section 3(37) of ERISA. The Borrower has never incurred any
"withdrawal liability" calculated under Section 4211 of ERISA, and there has
been no event or circumstance that would cause it to incur any such liability.

      4.13 Ownership of Properties; Liens. The Borrower has good and marketable
title to all its material properties and assets, real and personal, that are now
carried on its books, including, without limitation, those reflected in the
Financial Statements (except those disposed of in the ordinary course since the
date thereof), and has valid leasehold interests in its properties and assets,
real and personal, which it purports to lease, subject in either case to no
mortgage, security interest, pledge, lien, charge, encumbrance or title
retention or other security agreement or arrangement of any nature whatsoever
other than Permitted Liens and those specified in the Disclosure


                                     - 16 -
   17
Schedule. All of the Borrower's material leasehold interests and material
obligations with respect to real property are described on the Disclosure
Schedule.

      4.14 Employment Matters. Except as set forth on the Disclosure Schedule,
there are no material grievances, disputes or controversies pending or, to the
knowledge of the Borrower, threatened between the Borrower and its employees,
nor is any strike, work stoppage or slowdown pending or threatened against the
Borrower.

      4.15 Insurance. The Borrower maintains in force fire, casualty,
comprehensive liability and other insurance covering its properties and business
that is adequate and customary for the type and scope of its properties and
business.

      4.16 Indebtedness. Except as reflected in the Financial Statements or set
forth in the Disclosure Schedule, and other than Indebtedness incurred in the
ordinary course of business since the Balance Sheet Date, the Borrower has no
outstanding Indebtedness.

      4.17 Securities Law Compliance. The Borrower is not an "investment
company" as defined in the Investment Company Act of 1940, as amended. All of
the Borrower's outstanding stock was offered, issued and sold in compliance with
all applicable state and federal securities laws.

      4.18 Accuracy of Information. None of the information furnished to the
Lender by or on behalf of the Borrower for purposes of this Agreement or any
Loan Document or any transaction contemplated hereby or thereby contains, and
none of such information hereinafter furnished will contain, any material
misstatement of fact, nor does or will any such information omit any material
fact necessary to make such information not misleading at such time.

                                    ARTICLE V

                             CONDITIONS TO TERM LOAN

      The obligations of the Lender to fund the Term Loan are subject to the
following conditions precedent, each of which shall have been met or performed
on or before the Closing Date:

      5.1 No Default. No Default or Event of Default shall have occurred and be
continuing or will occur upon the making of the Term Loan.

      5.2 Correctness of Representations. The representations and warranties
made by the Borrower in this Agreement shall be true and correct with the same
force and effect as though such representations and warranties had been made on


                                     - 17 -
   18
and as of the Closing Date (i) except to the extent that the representations and
warranties set forth in Article IV of this Agreement are untrue as a result of
circumstances that have changed subsequent to the date hereof, which change has
caused no non-compliance by the Borrower with the covenants, conditions and
agreements in this Agreement and (ii) except that the references in Section 4.5
of this Agreement to the financial statements and the term "Balance Sheet Date"
are deemed to refer to the most recent financial statements (inclusive of
consolidated balance sheets and statements of operations, cash flows and
stockholders' equity of the Borrower and its Subsidiaries) furnished to the
Lender pursuant to Section 6.1(a) and (b) of this Agreement and the date of such
financial statements, respectively.

      5.3 No Litigation; Certain Other Conditions. There shall be no suit or
proceeding (other than suits or proceedings disclosed on the Disclosure Schedule
on the date of this Agreement) pending or threatened before any court or
arbitration tribunal or by or before any governmental or regulatory authority,
commission, bureau or agency or public regulatory body that, if determined
adversely to the Borrower or any Subsidiary of the Borrower, is reasonably
likely to have a material adverse effect on the consolidated financial condition
or results of operations of the Borrower and its Subsidiaries taken as a whole.

      5.4 No Material Adverse Change. There shall have been no material adverse
change in the consolidated financial condition or results of operations of the
Borrower and its Subsidiaries taken as a whole since the Balance Sheet Date.

      5.5 Loan Documents. All Loan Documents shall be in full force and effect.

      5.6 Opinion of Counsel. The Lender shall have received from independent
counsel to the Borrower an opinion or opinions, in form and substance
satisfactory to the Lender and its counsel.

      5.7 Certificates of Legal Existence and Authority to do Business. The
Borrower shall have delivered to the Lender certificates as to its legal
existence and good standing under the laws of The Commonwealth of Massachusetts,
and the Borrower shall have delivered to the Lender certificates as to its
authority to do business as a foreign corporation in the States of California,
Colorado, Connecticut, Florida, Illinois, Maryland, Michigan, New Jersey, New
Mexico, New York, Oregon, Pennsylvania, Texas, and Arizona, each dated as of a
recent date.

      5.8 Clerk's Certificate. The Borrower shall have delivered to the Lender a
certificate of its Clerk as to (i) its charter documents and by-laws, as
amended, (ii) corporate votes authorizing the execution and delivery of the Loan
Documents, and (iii) incumbency of the officers authorized to execute the Loan
Documents on behalf of the Borrower.


                                     - 18 -
   19
      5.9 Note. The Term Note, duly executed by the Borrower and otherwise
completed, shall have been delivered to the Lender.

      5.10 Borrower's Certificate. The Borrower shall have furnished to the
Lender a certificate duly executed by the Borrower's chief financial officer
dated the Closing Date to the effect that each of the conditions set forth in
this Article V has been met as of such date.

      5.11 Insurance. The Borrower shall have furnished to the Lender copies of
all its property insurance policies.

      5.12 Environmental Site Assessment. The Borrower shall have delivered to
the Lender an environmental site assessment, in form and substance acceptable to
the Lender, from a consulting firm acceptable to the Lender, in which the
consultant shall have certified and opined that for the foreseeable future the
condition of the property in Methuen, Massachusetts that the Borrower has
purchased poses no significant risk to human health or the environment and no
further remedial action or investigation is necessary in accordance with federal
and state laws.

      5.13 Merger Agreement. The Borrower shall have delivered to the Lender a
copy of a fully-executed Merger Agreement between the Borrower and UTI
Instruments Company.

      5.14 All Proceedings Satisfactory. All corporate and other proceedings
taken prior to or on the Closing Date in connection with the transactions
contemplated by this Agreement, and all documents and exhibits related thereto,
shall be reasonably satisfactory in form and substance to the Lender and its
counsel.

      5.15 Additional Documents. The Borrower shall have delivered to the Lender
all additional opinions, documents and certificates that the Lender or its
counsel may reasonably require.

                                   ARTICLE VI

                      AFFIRMATIVE COVENANTS OF THE BORROWER

      The Borrower covenants and agrees that from the date of execution of this
Agreement and until the payment in full of the principal of and interest upon
the Note and payment and performance of all other Obligations:

      6.1 Reporting Requirements. The Borrower shall, unless the Lender shall
otherwise consent in writing, furnish to the Lender:


                                     - 19 -
   20
                  (a) As soon as available and in any event within sixty days
after the end of each of the first three quarters of each fiscal year of the
Borrower and its Subsidiaries, (i) a consolidated and consolidating balance
sheet of the Borrower and its Subsidiaries as of the end of such quarter and
(ii) consolidated and consolidating statements of operations, cash flows and
stockholders' equity of the Borrower and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter, all in reasonable detail and duly certified by the chief financial
officer of the Borrower as having been prepared in accordance with generally
accepted accounting principles consistently applied (subject to addition of
notes and ordinary year-end audit adjustments), together with a certificate of
the chief financial officer of the Borrower stating that no Default or Event of
Default has occurred and is continuing or, if a Default or an Event of Default
has occurred and is continuing, a statement as to the nature thereof and the
action that the Borrower proposes to take with respect thereto;

                  (b) As soon as available and in any event within ninety days
after the end of each fiscal year of the Borrower, the audited consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of such fiscal
year and the audited consolidated statements of operations, cash flows and
stockholders' equity of the Borrower and its Subsidiaries for such fiscal year,
in each case accompanied by the unqualified opinion with respect thereto of the
Borrower's independent public accountants and a certification by such
accountants stating that they have reviewed this Agreement and whether, in
making their audit, they have become aware of any Default or Event of Default
and if so, describing its nature, along with the related unaudited consolidating
balance sheet of the Borrower and its Subsidiaries as of the end of such fiscal
year and the unaudited consolidating statements of operations, cash flows' and
stockholders' equity of the Borrower and its Subsidiaries for such fiscal year;

                  (c) Not later than sixty days following the end of each fiscal
quarter a certificate signed by the chief financial officer of the Borrower
substantially in the form of Exhibit 6.1(c) hereto (the "Compliance
Certificate");

                  (d) Not later than thirty days after the end of each fiscal
year of the Borrower, the Borrower's representative forecast for the next fiscal
year on a consolidated basis, including, at a minimum, projected statements of
profit and loss and projected cash flow, prepared in accordance with generally
accepted accounting principles consistently applied;

                  (e) Promptly upon receipt thereof, one copy of each other
report submitted to the Borrower or any Subsidiary by independent accountants in
connection with any annual, interim or special audit made by them of the books
of the Borrower or any Subsidiary;


                                     - 20 -
   21
                  (f) Promptly after the commencement thereof, notice of all
actions, suits and proceedings before any court, arbitration tribunal or
governmental regulatory authority, commission, bureau, agency or public
regulatory body that, if determined adversely to the Borrower or any Subsidiary
of the Borrower, would be reasonably likely to have a material adverse effect on
the consolidated financial condition or results of operations of the Borrower
and its Subsidiaries taken as a whole;

                  (g) As soon as possible, and in any event within five days
after the Borrower shall know of the occurrence of any Default or Event of
Default, the written statement of the chief financial officer of the Borrower
setting forth details of such Default or Event of Default and action that the
Borrower proposes to take with respect thereto;

                  (h) As soon as possible, and in any event within five days
after the occurrence thereof, written notice as to any other event of which the
Borrower becomes aware that with the passage of time, the giving of notice or
otherwise, is reasonably likely to result in a material adverse change in the
consolidated financial condition or results of operations of the Borrower and
its Subsidiaries taken as a whole; and

                  (i) Such other information respecting the business or
properties or the condition or operations, financial or otherwise, of the
Borrower as the Lender may from time to time reasonably request.

      6.2 Loan Proceeds. The Borrower shall use the proceeds of the Term Loan
only for general corporate purposes including, but not limited to, funding the
acquisition of UTI Instruments Company and refinancing the purchase of certain
real property located in Methuen, Massachusetts.

      6.3 Maintenance of Business and Properties; Insurance.

                  (a) The Borrower will continue to engage in business of the
same general nature as the business currently engaged in by the Borrower. The
Borrower will at all times maintain, preserve and protect all material
franchises and trade names and preserve all the Borrower's material tangible
property used or useful in the conduct of its business and keep the same in good
repair, working order and condition, ordinary wear and tear excepted, and from
time to time make all needful and proper repairs, renewals, replacements,
betterments, and improvements thereto so that the business carried on in
connection therewith may be conducted properly and advantageously at all times.

                  (b) The Borrower will keep all of its insurable properties now
or hereafter owned adequately Insured at all times against loss or damage by
fire or


                                     - 21 -
   22
other casualty to the extent customary with respect to like properties of
companies conducting similar businesses and to the extent available at
commercially reasonable rates; and will maintain public liability and workmen's
compensation insurance insuring the Borrower to the extent customary with
respect to companies conducting similar businesses and to the extent available
at commercially reasonable rates, all by financially sound and reputable
insurers. All property insurance policies shall name the Lender as a loss payee
and shall contain a provision requiring at least 15 days' written notice to the
Lender prior to the cancellation or modification of each such policy. The
Borrower shall furnish to the Lender from time to time at the Lender's request
copies of all such insurance policies and certificates evidencing such insurance
coverage. Notwithstanding the foregoing, the Borrower may self-insure workmen's
compensation to the extent permitted by law and may also self-insure other risks
to the extent reasonably deemed prudent by the Borrower.

      6.4 Payment of Taxes. The Borrower shall pay and discharge, or cause to be
paid and discharged, all material taxes, assessments, and governmental charges
or levies imposed upon the Borrower and its Subsidiaries or their income or
profits, or upon any other properties belonging to the Borrower prior to the
date on which penalties attach thereto, and all lawful claims that, if unpaid,
might become a lien or charge upon any material properties of the Borrower,
except for such taxes, assessments, charges, levies or claims as are being
contested by the Borrower in good faith by appropriate proceedings promptly
initiated and diligently prosecuted, for which adequate book reserves have been
established in accordance with generally accepted accounting principles, as to
which no foreclosure, distraint, sale or other similar proceedings shall have
been commenced, or, if commenced, have been effectively stayed.

      6.5 Compliance with Laws, etc. The Borrower shall comply with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority, and obtain or maintain all Licenses required under
applicable law or regulation for the operation of the Borrower's business, where
noncompliance or failure to obtain or maintain would have a material adverse
effect on the consolidated financial condition, assets, or results of operations
of the Borrower and its Subsidiaries taken as a whole; provided, however, that
such compliance or the obtaining of such Licenses may be delayed while the
applicability or validity of any such law, rule, regulation or order or the
necessity for obtaining any such License is being contested by the Borrower in
good faith by appropriate proceedings promptly initiated and diligently
prosecuted.

      6.6 Books, Records and Accounts. The Borrower shall keep true and correct
books, records and accounts, in which entries will be made in accordance with
generally accepted accounting principles consistently applied, and that shall
comply with the requirements of the Foreign Corrupt Practices Act of 1977 to the
extent applicable to the Borrower. The Lender or its representatives shall upon
reasonable


                                     - 22 -
   23
notice to the Borrower be afforded, during normal business hours, access to and
the right to examine and copy any such books, records and accounts and the right
to inspect the Borrower's premises and business operations. All financial and
other information with respect to the Borrower and/or any of its Subsidiaries
now or hereafter obtained by the Lender under this Agreement or otherwise in
connection with any of the transactions contemplated hereunder shall be held in
confidence and shall not be released or made available to any other Person,
except (i) to governmental agencies (and examiners employed by same) having
oversight over the affairs of the Lender, (ii) pursuant to subpoena or similar
process issued by a court or governmental agency of competent jurisdiction, or
(iii) as otherwise directed by order of any court or governmental agency of
competent jurisdiction.

      6.7 Further Assurances. The Borrower shall execute and deliver, at the
Borrower's expense, all notices and other instruments and documents and take all
actions, including, but not limited to, making all filings and recordings, that
the Lender shall reasonably request in order to assure to the Lender all rights
given to the Lender hereby or under any other Loan Document.

      6.8 Bank Accounts. The Borrower shall maintain with the Lender a deposit
account and, at the written request of the Lender, shall give the Lender written
notice of any other accounts maintained by the Borrower, including the types of
accounts and names and addresses of the institutions with which such accounts
are maintained.

                                   ARTICLE VII

                       NEGATIVE COVENANTS OF THE BORROWER

      The Borrower covenants and agrees that from the date of execution of this
Agreement and until the payment in full of the principal of and interest upon
the Note and payment and performance of all other Obligations:

      7.1 Sale of Assets; Mergers, Etc.

                  (a) Sale of Assets. The Borrower will not, except in the
ordinary course of business, sell, transfer, or otherwise dispose of, to any
Person any assets (including the securities of any Subsidiary).

                  (b) Mergers, Etc. Other than the merger of a Subsidiary into
UTI Instruments Company, neither the Borrower nor any Subsidiary will
consolidate with or merge into any other Person or permit any other Person to
consolidate with or merge into it, or acquire all or substantially all of the
assets of any Person, or sell, assign, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or substantially all of its
assets to any Person, except that


                                     - 23 -
   24
                        (1) a Subsidiary may consolidate with or merge into the
                  Borrower or another Subsidiary; and

                        (2) the Borrower or any of its Subsidiaries may acquire
                  all or substantially all of the assets of any Person provided
                  the aggregate purchase price liability, including all
                  contingent liabilities, when aggregated with all such
                  acquisitions and any Investments permitted under Section
                  7.4(2) shall not exceed a total of $5,000,000 in each calendar
                  year during the term of this Agreement beginning with calendar
                  year 1995.

      7.2 Liens and Encumbrances.

                  (a) Neither the Borrower nor any Subsidiary will (a) cause or
permit or (b) agree or consent to cause or permit in the future (upon the
happening of a contingency or otherwise), any of its real or personal property,
whether now owned or subsequently acquired, to be subject to any Lien other than
Liens described below (which may herein be referred to as "Permitted Liens"):

                        (1) Liens securing the payment of taxes, assessments or
                  governmental charges or levies or the demands of suppliers,
                  mechanics, carriers, warehousers, landlords and other like
                  Persons, which payments are not yet due and payable or (as to
                  taxes) may be paid without interest or penalty; provided,
                  that, if such payments are due and payable, such Liens shall
                  be permitted hereunder only to the extent that (A) all claims
                  that the Liens secure are being actively contested in good
                  faith and by appropriate proceedings, (B) adequate book
                  reserves have been established with respect thereto to the
                  extent required by generally accepted accounting principles,
                  and (C) such Liens do not in the aggregate materially
                  interfere with the owning company's use of property necessary
                  or material to the conduct of the business of the Borrower and
                  its Subsidiaries taken as a whole;

                        (2) Liens incurred or deposits made in the ordinary
                  course of business (A) in connection with worker's
                  compensation, unemployment insurance, social security and
                  other like laws, or (B) to secure the performance of letters
                  of credit, bids, tenders, sales contracts, leases, statutory
                  obligations, surety, appeal and performance bonds and other
                  similar obligations, in each case not incurred in connection
                  with the borrowing of money, the


                                     - 24 -
   25
                  obtaining of advances or the payment of the deferred purchase
                  price of property;

                        (3) Liens not otherwise described in Section 7.2(a)(l)
                  or (2) that are incurred in the ordinary course of business
                  and are incidental to the conduct of its business or ownership
                  of its property, were not incurred in connection with the
                  borrowing of money, the obtaining of advances or the payment
                  of the deferred purchase price of property and do not in the
                  aggregate materially detract from the value of, or materially
                  interfere with the owning company's use of, property necessary
                  or material to the conduct of the business of the Borrower and
                  its Subsidiaries taken as a whole;

                        (4) Liens in favor of the Lender or any of its
                  affiliates;

                        (5) Judgment liens or attachments that shall not have
                  been in existence for a period longer than 30 days after the
                  creation thereof, or if a stay of execution shall have been
                  obtained, for a period longer than 30 days after the
                  expiration of such stay or if such an attachment is being
                  actively contested in good faith and by appropriate
                  proceedings, for a period longer than 30 days after the
                  creation thereof;

                        (6) Liens existing as of the Closing Date and disclosed
                  on the Disclosure Schedule hereto;

                        (7) Liens provided for in equipment or Financing Leases
                  (including financing statements and undertakings to file
                  financing statements) provided that they are limited to the
                  equipment subject to such leases and the proceeds thereof;

                        (8) Leases or subleases with third parties or licenses
                  and sublicenses granted to third parties not interfering in
                  any material respect with the business of the Borrower or any
                  Subsidiary of the Borrower;

                        (9) Any Lien on any asset of any corporation existing at
                  the time such corporation is merged into or consolidated with
                  the Borrower or a Subsidiary of the Borrower and not created
                  in contemplation of such event;


                                     - 25 -
   26
                        (10) Any Lien existing on any asset prior to the
                  acquisition thereof by the Borrower or any Subsidiary of the
                  Borrower and not created in contemplation of such event;

                        (11) Liens in respect of any purchase money obligations
                  for tangible property used in its business that at any time
                  shall not exceed $2,000,000, provided that any such
                  encumbrances shall not extend to property and assets of the
                  Borrower or any Subsidiary not financed by such a purchase
                  money obligation;

                        (12) Easements, rights of way, restrictions and other
                  similar charges or Liens relating to real property and not
                  interfering in a material way with the ordinary conduct of its
                  business; and

                        (13) Liens on its property or assets created in
                  connection with the refinancing of Indebtedness secured by
                  Permitted Liens on such property, provided that the amount of
                  Indebtedness secured by any such Lien shall not be increased
                  as a result of such refinancing and no such Lien shall extend
                  to property and assets of the Borrower or any Subsidiary not
                  encumbered prior to any such refinancing.

                  (b) In case any property is subjected to a Lien in _______ of
Section 7.2(a), the Borrower will make or cause to ____________ provision
whereby the Note will be secured equally and _____________ with all other
obligations secured by such property, and _______________ case the Note shall
have the benefit, to the full extent ________________ holders may be entitled
thereto under applicable law, of _____ Lien equally and ratably securing the
Note. Such _____________ of Section 7.2(a) shall constitute an Event of Default
____________ whether or not any such provision is made pursuant to
________________ 7.2(b);

      7.3 Sales and Leasebacks. The Borrower and its __________ will not sell or
transfer any of their property and _______________ or indirectly, liable as the
lessee under a lease of such property (other than such transactions between
Subsidiaries).

      7.4 Investments. Neither the Borrower nor any Subsidiary will make or
maintain any investments, made in cash or by delivery of property or assets, (a)
in any Person, whether by acquisition of capital stock, Indebtedness, or other
obligations or securities, or by loan or capital contribution, or otherwise, or
(b) in any property, whether real or personal, (items (a) and (b) being herein
called "Investments"), except the following:


                                     - 26 -
   27
            (1) Investments in direct obligations of, or guaranteed by, the
      United States government, its agencies or any public instrumentality
      thereof and backed by the full faith and credit of the United States
      government with maturities not to exceed (or an unconditional right to
      compel purchase within) one year from the date of acquisition;

            (2) Investments in or to any Subsidiary or other Person provided any
      such Investment when aggregated with all such other Investments permitted
      under this Section 7.4(2) and any acquisitions permitted under Section
      7.1(b) shall not exceed a total of $5,000,000 in each calendar year during
      the term of this Agreement beginning with calendar year 1993;

            (3) Investments and obligations issued by any state of the United
      States or any political subdivision of any such state or any public
      instrumentality thereof with maturities not to exceed (or an unconditional
      right to compel purchase within) 180 days of the date of acquisition that
      are rated in one of the top two rating classifications by at least one
      nationally recognized rating agency;

            (4) Investments in demand and time deposits with, Eurodollar
      deposits with, certificates of deposit issued by, or obligations or
      securities fully backed by letters of credit issued by (x) any bank
      organized under the laws of the United States, any state thereof, the
      District of Columbia or Canada having combined capital and surplus
      aggregating at least $100,000,000, or (y) any other bank organized under
      the laws of a state that is a member of the European Economic Community
      (or any political subdivision thereof), Japan, the Cayman Islands, or
      British West Indies having as of any date of determination combined
      capital and surplus of not less than $500,000,000 or the equivalent
      thereof (determined in accordance with generally accepted accounting
      principles) ("Permitted Banks");

            (5) Shares of money market mutual funds registered under the
      Investment Company Act of 1940, as amended;

            (6) Foreign currency swaps and hedging arrangements entered into in
      the ordinary course of business to protect against currency losses, and
      interest rate swaps and caps entered into in the ordinary course of
      business to protect against interest rate exposure on Indebtedness bearing
      interest at a variable rate;

            (7) Investments in publicly traded companies and mutual funds (other
      than money market mutual funds) that in the aggregate shall not exceed
      $5,000,000; and


                                     - 27 -
   28
            (8) Other Investments existing on the Closing Date and listed on the
      Disclosure Schedule.

      7.5 Transactions with Affiliates. Neither the Borrower nor any Subsidiary
will enter into any transaction (including the purchase, sale or exchange of
property or the rendering of any service) with any Affiliate except upon fair
and reasonable terms that are at least as favorable to the Borrower or the
Subsidiary as would be obtained in a comparable arm's-length transaction with a
non-Affiliate.

      7.6 ERISA Compliance. Neither the Borrower nor any of its Subsidiaries
will at any time permit any employee pension benefit plan (as such term is
defined in Section 3 of ERISA) maintained the Borrower or any of its
Subsidiaries or in which employees of the Borrower or any of its Subsidiaries is
entitled to participate to:

                  (a) engage in any "prohibited transaction" as such term is
defined in Section 4975 of the Internal Revenue Code of 1986, as amended, or
described in Section 406 of ERISA;

                  (b) incur any "accumulated funding deficiency" as such term is
defined in Section 302 of ERISA, whether or not waived; or

                  (c) terminate under circumstances that could result in the
imposition of a Lien on the property of the Borrower or any Subsidiary of the
Borrower pursuant to Section 4068 of ERISA.

      7.7 Financial Covenants. The Borrower covenants and _____________ that:

                  (a) Consolidated Tangible Net Worth. The Consolidated Net
Worth as of the end of each fiscal quarter of the ______________ shall not be
less than the sum of (i) $30,777,703, and (ii) 50% of Consolidated Net Income
(excluding losses) for each consecutive fiscal quarter of the Borrower beginning
with the quarter ending September 30, 1995, on a cumulative basis.

                  (b) Consolidated Indebtedness. The ratio ("Debt-to-Net Worth
Ratio") of the Consolidated Indebtedness (excluding all guaranties except
guaranties with respect to borrowed money) as of the end of each fiscal quarter
of the Borrower beginning with the fiscal quarter ending September 30, 1995 to
its Consolidated Tangible Net Worth as of the end of each fiscal quarter of the
Borrower beginning with the fiscal quarter ending September 30, 1995 shall not
exceed 1.5 to 1.

                  (c) Consolidated Debt Service. The ratio (the "Cash Flow
Ratio") as of the end of each fiscal quarter of the Borrower of (i) Consolidated
Operating Cash Flow for the four consecutive fiscal quarters then ended to (ii)


                                     - 28 -
   29
Consolidated Debt Service determined for the four consecutive fiscal quarters
then ended shall not be less than 1.25 to 1.00.

      7.8 Contracts Prohibiting Compliance with Agreement. The Borrower will not
without the prior written consent of the Lender enter into any contract or other
agreement that would prohibit or in any way restrict the ability of the Borrower
to comply with any provision of this Agreement.

                                  ARTICLE VIII

                                EVENTS OF DEFAULT

      8.1 Default. If any one of the following events ("Events of Default")
shall occur:

                  (a) Any representation or warranty made by the Borrower herein
or in any other Loan Document, or in any certificate or report furnished by the
Borrower hereunder or thereunder, shall prove to have been incorrect in any
material respect when made;

                  (b) Payment of any principal or interest due under the Note
shall not be made on or before the date due;

                  (c) A final judgment in excess of $2,000,000 shall be rendered
against the Borrower or any of its Subsidiaries for the payment of money that,
after deducting the amount of any insurance proceeds paid or payable to or on
behalf of the Borrower or its Subsidiary in connection with such judgment, is in
excess of $2,000,000, and the same shall remain undischarged for a period of
thirty (30) days, during which period execution shall not effectively be stayed.
If a dispute exists with respect to the liability of any insurance underwriter
under any insurance policy of the Borrower or its Subsidiary, no deduction under
this subsection shall be made for the insurance proceeds that are the subject of
such dispute;

                  (d) The Borrower or any Subsidiary shall (1) voluntarily
terminate operations or apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator of such
Person or of all or a substantial part of the assets of such Person, (2) admit
in writing its inability, or be generally unable, to pay its debts as the debts
become due, (3) make a general assignment for the benefit of its creditors, (4)
commence a voluntary case under the Federal Bankruptcy Code (as now or hereafter
in effect), (5) file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding-up, or composition
or adjustment of debts, (6) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Federal Bankruptcy Code or applicable state
bankruptcy


                                     - 29 -
   30
laws or (7) take any corporate action for the purpose of effecting any of the
foregoing;

                  (e) Without its application, approval or consent, a proceeding
shall be commenced, in any court of competent jurisdiction, seeking in respect
of the Borrower or any Subsidiary: the liquidation, reorganization, dissolution,
winding-up, or composition or readjustment of debt, the appointment of a
trustee, receiver, liquidator or the like of such Person or of all or any
substantial part of the assets of such Person, or other like relief in respect
of such Person under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts; and, if the proceeding is
being contested in good faith by such Person, the same shall continue
undismissed, or unstayed and in effect for any period of 45 consecutive days, or
an order for relief against such Person shall be entered in any case under the
Federal Bankruptcy Code or applicable state bankruptcy laws;

                  (f) Any foreclosure or other proceedings shall be commenced to
enforce, execute or realize upon any lien, encumbrance, attachment, trustee
process, mortgage or security interest for payment of an amount in excess of
$250,000 against the Borrower or any Subsidiary;

                  (g) Default shall be made in the due observance or performance
of any covenant or agreement under Article VII;

                  (h) Default shall be made in the due observance or performance
of any covenant or agreement contained herein (and not constituting an Event of
Default under any other clause in this Article VIII) or in any other Loan
Document or in any other agreement between the Lender and the Borrower
evidencing or securing borrowed monies and such default shall continue and shall
not have been remedied within thirty days after the date on which such default
occurred;

                  (i) The Borrower or any of its Subsidiaries shall fail to make
any payment of principal or interest beyond the period of grace contained in any
instrument or agreement evidencing any indebtedness (other than to the Lender)
for money borrowed in excess of $100,000 (unless such default is the result of a
good faith dispute arising under such agreement or instrument and the other
party or parties thereto have not accelerated the maturity of such
indebtedness), or default shall be made by the Borrower or any of its
Subsidiaries in the performance of any other covenant or agreement contained in
any such agreement or instrument as a result of which the other party thereto
proceeds to accelerate the maturity of the indebtedness of such Person under
such agreement or instrument;

                  (j) There shall occur any material adverse change in the
financial condition of the Borrower;


                                     - 30 -
   31
                  (k) There shall occur any Event of Default under the Loan
Agreement between the Borrower and the Lender dated as of November 1, 1993;

then, in the case of any such event, other than an event described in subsection
(d) or (e) of this Section 8.1, the Lender may, at its option immediately
declare any Obligations to it not otherwise due and payable at such time to be
forthwith due and payable, whereupon the same shall become forthwith due and
payable without further presentment, demand, protest, or other notice of any
kind, all of which are hereby expressly waived, anything contained herein or in
the Note to the contrary notwithstanding; and, in the case of any event
described in subsection (d) or (e) of this Section 8.1, any Obligation not
otherwise due and payable at such time shall become immediately due and payable
without presentment, demand, protest, or other notice of any kind, all of which
are hereby expressly waived, anything contained herein or in the Note to the
contrary notwithstanding; and, further, in each and every such occurrence the
Lender may proceed to protect and enforce its rights by suit in equity, action
at law and/or other appropriate proceedings either for specific performance of
any covenant or condition contained in this Agreement or in any instrument
delivered to the Lender pursuant to this Agreement, or in aid of the exercise of
any power granted in this Agreement or any such instrument.

      8.2 Lender's Further Rights and Remedies. Upon the occurrence and during
the unremedied continuation of an Event of Default, the Lender shall have the
right to require the Borrower to provide the Lender with cash collateral or
other collateral of a type and value satisfactory to the Lender in an amount
equal to the Borrower's outstanding Obligations to the Lender. With respect to
such collateral (the "Collateral"), the Lender shall have the rights and
remedies of a secured party under the Uniform Commercial Code ("UCC") and the
Borrower agrees to execute and deliver to the Lender such security agreements
and financing statements under the UCC as the Lender may require, and to pay the
cost of filing the same. Any deposits or other sums at any time credited by or
due from the Lender to the Borrower shall at all times constitute Collateral for
the Obligations. The Lender may apply the net proceeds of any disposition of
Collateral or set-off to the Obligations in such order as the Lender may
determine, whether or not due. With respect to Obligations not yet due,
including contingent Obligations, the Lender may at its option hold Collateral
(including any proceeds thereof) until all such Obligations have been paid in
full.

                                   ARTICLE IX

                                  MISCELLANEOUS

      9.1 No Waiver, Remedies Cumulative. No failure on the part of the Lender
to exercise and no delay in exercising any right hereunder shall operate as a
waiver


                                     - 31 -
   32
thereof, nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and are not exclusive of any
remedies provided by law. Any condition or restriction imposed in this Agreement
with respect to the Borrower may be waived, modified or suspended by the Lender
but only on the Lender's prior action in writing and only as so expressed in
such writing and not otherwise.

      9.2 Survival of Representations, Etc. All representations, warranties and
covenants made herein or in any Loan Document shall survive the delivery of the
Note and the consummation of all other transactions contemplated hereby or
thereby.

      9.3 Right of Setoff. In addition to any rights now or hereafter granted
under applicable law or otherwise and not by way of limitation of any such
rights, upon the occurrence and during the unremedied continuation of an Event
of Default, the Lender is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to the Borrower
or to any other Person, any such notice being hereby expressly waived, to set
off and to appropriate and apply any and all deposits (general or special) and
any other indebtedness at any time held or owing by the Lender to or for the
credit or the account of the Borrower against and on account of the Obligations
and liabilities of the Borrower to the Lender under this Agreement or under any
of the other Loan Documents, and all other claims of any nature or description
arising out of or connected with this Agreement or any other Loan Document,
irrespective of whether or not the Lender shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.

      9.4 Indemnity; Costs, Expenses and Taxes. The Borrower hereby agrees to
indemnify the Lender and its legal representatives, successors, assigns and
agents against, and agrees to protect, save and keep harmless each of them from
and to pay upon demand, any and all liabilities, obligations, taxes (including
any and all stamp and other taxes payable or determined to be payable in
connection with the execution and delivery of any Loan Documents), liens,
charges, losses, damages, penalties, claims, actions, suits, costs, indemnities,
expenses and disbursements (including, without limitation, reasonable legal
fees, costs and expenses, including without limitation reasonable costs of
attending and preparing for depositions and other court proceedings), of
whatsoever kind and nature, imposed upon, incurred by or asserted against such
indemnified party in any way relating to or arising out of any of the
transactions contemplated hereunder or in any of the Loan Documents (all of the
foregoing, collectively, "Costs") except to the extent arising by reason of the
Lender's gross negligence, misconduct or breach hereof. Without limiting the
foregoing, the Borrower agrees to pay on demand (a) all out-of-pocket costs and
expenses of the Lender in connection with the preparation, execution and
delivery of this Agreement and any other Loan Documents, including without
limitation the reasonable fees and


                                     - 32 -
   33
out-of-pocket expenses of Foley, Hoag & Eliot, special counsel for the Lender,
with respect thereto, as well as (b) the reasonable fees and all out-of-pocket
expenses of legal counsel, independent public accountants and other outside
experts retained by the Lender in connection with any request by the Borrower
for consents, waivers or other action or forbearance by the Lender hereunder,
for the modification or amendment hereof, or other like matters relating to the
administration of this Agreement; and (c) all reasonable costs and expenses, if
any, of the Lender incurred after the occurrence of any Event of Default
hereunder in connection with the enforcement of any of the Loan Documents or the
protection of any of the Lender's rights thereunder, including, without
limitation, any internal costs, including personnel costs of the Lender incurred
in connection with such administration and enforcement or protection.

      9.5 Notices.

                  (a) Unless telephonic notice is specifically permitted
pursuant to the terms of this Agreement, any notice or other communication
hereunder to any party hereto shall be by telegram, telecopier, telex, delivery
in hand or by courier, or registered or certified mail (return receipt
requested) and shall be deemed to have been given or made when telegraphed,
telexed, telecopied (and confirmed received), delivered in hand or by courier,
or three days after being deposited in the mails, postage prepaid, registered or
certified, addressed to the party as follows (or at any other address that such
party may hereafter specify to the other parties in writing):

                             (a)  If to the Lender:

                                  The First National Bank of Boston
                                  100 Federal Street
                                  Boston, Massachusetts  02110
                                  Attn:  Ms. Sharon A. Stone, Director
                                  Telecopier No. (617) 434-4048

                                  with a copy to:

                                  Arlene L. Bender, Esq.
                                  Foley, Hoag & Eliot
                                  One Post Office Square
                                  Boston, Massachusetts  02109
                                  Telecopier No. (617) 832-7000


                                     - 33 -
   34
                             (b)  If to the Borrower:

                                  MKS Instruments, Inc.
                                  Six Shattuck Road
                                  Andover, Massachusetts 01810
                                  Attn: Mr. Robert F. O'Brien, Treasurer
                                  Telecopier No. (508) 975-3756

                                  with a copy to:

                                  Richard S. Chute, Esq.
                                  Hill & Barlow
                                  One International Place
                                  Boston, Massachusetts  02110
                                  Telecopier No. (617) 428-3500

      9.6 MASSACHUSETTS LAW. THIS AGREEMENT AND EACH OF THE LOAN DOCUMENTS SHALL
BE DEEMED A CONTRACT MADE UNDER THE LAW OF THE COMMONWEALTH OF MASSACHUSETTS AND
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF SAID STATE (WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICT OF
LAWS).

      9.7 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the Borrower and the Lender, and their respective legal
representatives, successors and assigns; provided that the Lender may assign its
rights hereunder, but the Borrower may not assign any of its rights hereunder.

      9.8 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original and all of
which when taken together shall constitute one and the same instrument.

      9.9 JURISDICTION, SERVICE OF PROCESS.

                  (a) ANY SUIT, ACTION OR PROCEEDING AGAINST THE BORROWER WITH
RESPECT TO ANY OF THE LOAN DOCUMENTS OR ANY JUDGMENT ENTERED BY ANY COURT IN
RESPECT OF ANY THEREOF SHALL BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS LOCATED IN SUFFOLK COUNTY OR IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MASSACHUSETTS, AS THE LENDER (IN ITS SOLE
DISCRETION) MAY ELECT, AND THE BORROWER HEREBY ACCEPTS THE EXCLUSIVE
JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ANY SUIT,


                                     - 34 -
   35
ACTION OR PROCEEDING AND AGREES NOT TO ASSERT ANY CLAIM THAT IT IS NOT
PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS.

                  (b) IN ADDITION, THE BORROWER HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY OF THE LOAN DOCUMENTS OR ANY JUDGMENT ENTERED BY ANY COURT IN
RESPECT THEREOF BROUGHT IN SUFFOLK COUNTY IN THE COMMONWEALTH OF MASSACHUSETTS,
AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUIT, ACTION OR
PROCEEDING BROUGHT IN SUFFOLK COUNTY IN THE COMMONWEALTH OF MASSACHUSETTS HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.

      9.10 Limit on Interest. It is the intention of the Lender and the Borrower
to comply strictly with all applicable usury laws; and, accordingly, in no event
and upon no contingency shall the Lender ever be entitled to receive, collect,
or apply as interest under the Note any interest, fees, charges or other
payments equivalent to interest, in excess of the maximum rate that the Lender
may lawfully charge under applicable statutes and laws from time to time in
effect; and, in the event that the Lender ever receives, collects or applies as
interest on the Note, any such excess, such amount that, but for this provision,
would be excessive interest shall be applied to the reduction of the principal
amount of the indebtedness evidenced by the Note; and, if the principal amount
of indebtedness evidenced by the Note, and all lawful interest thereon, is paid
in full, any remaining excess shall forthwith be paid to the Borrower, or other
party lawfully entitled thereto. In determining whether or not the interest paid
or payable, under any specific contingency exceeds the highest contract rate
permitted by applicable law from time to time in effect, the Borrower and the
Lender shall, to the maximum extent permitted under applicable law, characterize
any non-principal payment as a reasonable loan charge, rather than as interest.
Any provision of the Note, or of any other agreement between the Lender and the
Borrower, that operates to bind, obligate, or compel the Borrower to pay
interest in excess of such maximum lawful contract rate shall be construed to
require the payment of the maximum rate only. The provisions of this Section
9.10 shall be given precedence over any other provisions contained in the Note
or in any other agreement between the Lender and the Borrower that is in
conflict with the provisions of this Section 9.10.

      9.11 Amendments, Modifications, Waivers. Any term of this Agreement or of
the Note may be amended and the observance of any term of this Agreement or of
the Note may be waived (either generally or in a particular instance and either


                                     - 35 -
   36
retroactively or prospectively) only with the written consent of the Borrower
and the Lender.

      9.12 Headings. The headings of this Agreement are for convenience only and
are not to affect the construction of or to be taken into account in
interpreting the substance of this Agreement.

      9.13 WAIVER OF NOTICE, ETC. THE BORROWER WAIVES DEMAND, NOTICE, PROTEST,
NOTICE OF ACCEPTANCE OF THIS AGREEMENT, NOTICE OF LOANS MADE, CREDIT EXTENDED,
COLLATERAL RECEIVED OR DELIVERED OR OTHER ACTION TAKEN IN RELIANCE HEREON AND
ALL OTHER DEMANDS AND NOTICE OF ANY DESCRIPTION, EXCEPT AS REQUIRED HEREBY. WITH
RESPECT BOTH TO THE OBLIGATIONS AND COLLATERAL, THE BORROWER ASSENTS TO ANY
EXTENSION OR POSTPONEMENT OF THE TIME OF PAYMENT OR ANY OTHER INDULGENCE, TO ANY
SUBSTITUTION, EXCHANGE OR RELEASE OF COLLATERAL, TO THE ADDITION OR RELEASE OF
ANY PARTY OR PERSONS PRIMARILY OR SECONDARILY LIABLE, TO THE ACCEPTANCE OF
PRETRIAL PAYMENT THEREON AND THE SETTLEMENT, COMPROMISING OR ADJUSTING OF ANY
THEREOF, ALL IN SUCH MANNER AND AT SUCH TIME OR TIMES AS THE LENDER MAY DEEM
ADVISABLE. THE BORROWER AGREES THAT NO ACTIONS TAKEN BY ANY PERSON EXCEPT THE
LENDER SHALL IMPAIR OR OTHERWISE AFFECT ITS OBLIGATIONS HEREUNDER UNTIL ALL
OBLIGATIONS OF THE BORROWER HEREUNDER ARE SATISFIED IN FULL.

      9.14 WAIVER OF TRIAL BY JURY. THE BORROWER WAIVES ANY AND ALL RIGHTS THAT
IT MAY HAVE TO A TRIAL BY JURY ON ANY CLAIM OR ACTION, OF ANY NATURE WHATSOEVER,
RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.

      9.15 Severability. In the event that any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid, illegal or unenforceable provision had never
been contained herein.

      9.16 Entire Agreement. This Agreement and the other Loan Documents
constitute the full and entire understanding and agreement between the parties
with regard to the subject matter hereof and thereof and shall supersede all
prior agreements and understandings, whether written or oral, between the
parties with respect to the subject matter hereof and thereof.


                                     - 36 -
   37
      9.17 Compliance with Covenants. All computations determining compliance
with Sections 6 and 7 shall utilize accounting principles in conformity with
those used in the preparation of the financial statements referred to in Section
4.5. If any subsequent financial reports of the Borrower shall be prepared in
accordance with accounting principles different from those used in the
preparation of the financial statements referred to in Section 4.5, the Borrower
shall inform the Lender of the changes in accounting principles and shall
provide to the Lender with such reports, such supplemental reconciling financial
information as may be required to ascertain compliance by the Borrower with the
covenants contained in this document.

      9.18 Termination. This Agreement may be terminated by the Borrower at any
time upon written notice of such termination to Lender; provided, however, that,
unless and until the Term __________ made by the Lender hereunder and all other
obligations _________ of the Borrower to the Lender existing (whether or not
________ as of the time of the receipt of such notice by the Lender ___________
have been paid in full, such termination shall in no way ____________ the rights
and powers granted to the Lender in connection ______________ this Agreement,
and until such payment in full all rights ___________ hereby granted to the
Lender hereunder shall be and ___________ in full force and effect.

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as an agreement under seal as of the ____________________ above
written.

                              MKS INSTRUMENTS, INC.



    ____________________      By: __________________________________
                              Title:

                              THE FIRST NATIONAL BANK OF
                                BOSTON



                              By: __________________________________
                              Title:


                                     - 37 -
   38
                              MKS INSTRUMENTS, INC.

                                 FIRST AMENDMENT

                                TO LOAN AGREEMENT


      This First Amendment (the "Amendment") dated as of February 23, 1996
amends the Loan Agreement dated as of October 31, 1995, as amended (the "Loan
Agreement"), between MKS Instruments, Inc. (the "Borrower") and The First
National Bank of Boston (the "Lender"), capitalized terms used herein but not
otherwise defined shall have the meanings assigned to them in the Loan
Agreement.

      WHEREAS, the Borrower, the Lender and Chemical Bank shall enter into a
loan agreement (the "1996 Loan Agreement") on the date hereof; and

      WHEREAS, the Lender and the Borrower agree that certain terms of the Loan
Agreement should be made consistent with similar terms in the 1996 Loan
Agreement;

      NOW, THEREFORE, the Lender and the Borrower agree as follows:

      Section 1. Amendment to the Loan Agreement.

      (a) Section 3.2.2. of the Loan Agreement is hereby amended by deleting the
existing language and substituting the following:

            3.2.2. The Lender will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Lender to any additional
payment under this Section 3.2 as promptly as practicable. The Lender will
furnish to the Borrower with such notice a certificate signed by an officer of
the Lender certifying that the Lender is entitled to payment under this Section
3.2 and setting forth the basis (in reasonable detail) and the amount of each
request by the Lender for any additional payment pursuant to this Section 3.2.
Such certificate shall be conclusive in the absence of manifest error. The
Borrower shall not be obligated to compensate the Lender pursuant to this
Section for amounts accruing prior to the date that is 180 days before the
Lender notifies the Borrower of its obligations to compensate the Lender for
such amounts.

      (b) Sections 6.1(a) and 6.1(c) of the Loan Agreement are hereby amended by
replacing the word "sixty" in each with the word "forty-five".

      (c) Section 7.1(b) of the Loan Agreement is hereby amended by deleting the
existing language and substituting the following:


                                     - 38 -
   39
            7.1(b) Mergers, Etc. Neither the Borrower nor any Subsidiary will
consolidate with or merge into any other Person or permit any other Person to
consolidate with or merge into it, or acquire all or substantially all of the
assets of any Person, or sell, assign, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or substantially all of its
assets to any Person, except that

                  (1) a Subsidiary may consolidate with or merge into the
            Borrower or another Subsidiary; and

                  (2) the Borrower or any of its Subsidiaries may acquire all or
            substantially all of the assets of any Person provided (i) such
            Person is engaged in a line of business substantially similar to one
            or more of Borrower's existing lines of business, (ii) the aggregate
            purchase price liability incurred in any calendar year, including
            all contingent liabilities, when aggregated with all such
            acquisitions and any Investments permitted under Section 7.4(2) in
            any calendar year shall not exceed 25% of Consolidated Tangible Net
            Worth as of the end of the most recent fiscal quarter or, if 80% or
            more of the purchase price is paid in capital stock of the Borrower,
            40% of Consolidated Tangible Net Worth as of the end of the most
            recent fiscal quarter and (iii) based on a pro forma calculation of
            the ratios set forth in Section 7.7 as of the date such acquisition
            is closed, assuming consolidation of the acquired business with the
            Borrower for the four full fiscal quarters ended immediately
            preceding such closing and pro forma debt and debt service payments
            based on scheduled principal payments, including acquisition
            borrowings, if any, and pro forma interest on total debt at then
            prevailing borrowing rates, Borrower is in compliance with the
            financial covenants set forth in Section 7.7.

      (d) Section 7.2 of the Loan Agreement is hereby amended by deleting the
existing clause (11) and substituting the following:

                  (11) Liens in respect of any purchase money obligations for
            tangible property used in its business, which obligations shall not
            at any time exceed 5% of Consolidated Tangible Net Worth, provided
            that any such encumbrances shall not extend to property and assets
            of the Borrower or any Subsidiary not financed by such a purchase
            money obligation;

      (e) Section 7.3 of the Loan Agreement is hereby amended by adding the
following words to the end thereof prior to the close parenthesis: "and
transfers of capital equipment that will be leased pursuant to Financing
Leases".


                                     - 39 -
   40
      (f) Section 7.4 of the Loan Agreement is hereby amended by deleting the
existing clause (2) and substituting the following:

                  (2) Investments in or to any Subsidiary or other Person,
            provided Borrower remains in compliance with Section 7.1(b);

and by deleting from clause (4) the word "$100,000,000" and replacing it with
the word "$500,000,000".

      (g) Section 7.7 of the Loan Agreement is hereby amended by deleting
subsection (a) and replacing it with the following:

            (a) Consolidated Tangible Net Worth. The Consolidated Tangible Net
Worth as of the end of each fiscal quarter of the Borrower shall:

                  (A) prior to an IPO, not be less than the sum of (i)
      $38,000,000, and (ii) 50% of Consolidated Net Income (excluding losses)
      for each consecutive fiscal quarter of the Borrower beginning with the
      quarter ending March 31, 1996, on a cumulative basis; and

                  (B) after an IPO, not be less than the sum of (i) the amount
      required by clause (A) above immediately prior to such IPO plus (ii) the
      net proceeds to the Borrower of the IPO less (iii) the Sub S Dividends.

For purposes of the foregoing, the following terms shall have the meanings
indicated:

      "IPO" shall mean the initial underwritten public offering pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
covering the offer and sale of the Borrower's Common Stock for the account of
the Borrower.

      "Sub S Dividends" shall mean one or more distributions by the Borrower to
its shareholders who were shareholders prior to the IPO in an aggregate amount
equal to the Borrower's "accumulated adjustments account", as defined in Section
1368(a)(l) if the Internal Revenue Code of 1986, as of the date of the IPO.

      (h) Section 8.1 of the Loan Agreement is hereby amended by replacing
existing clause (i) with the following:

      (i) There shall occur any default under any instrument or agreement
evidencing any indebtedness for money borrowed in excess of $100,000 by the
Borrower or any of its Subsidiaries;

and by adding the following clauses (1) and (m) after clause (k):


                                     - 40 -
   41
      (l) There shall occur any Event of Default under any other loan or credit
agreement to which the Borrower and the Lender are parties;

      (m) The transfer by John R. Bertucci and/or his Affiliates of securities
of the Borrower or the voting power related to such securities as a result of
which the power to elect, appoint or cause the election or appointment of at
least a majority of the members of the board of directors of the Borrower shall
no longer be held by John R. Bertucci and/or his Affiliates;

      Section 2. Representations and Warranties. The Borrower hereby represents
and warrants as follows:

            (a) The execution and delivery of this Amendment and the performance
of this Amendment, the Loan Agreement as amended hereby and each of the other
Loan Documents, and the transactions contemplated hereby and thereby, have been
authorized by all necessary corporate actions of the Borrower. This Amendment,
the Loan Agreement as amended hereby and each of the other Loan Documents
constitute the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms.

            (b) The Borrower has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Amendment, the Loan
Agreement as amended hereby and each of the other Loan Documents. Neither the
authorization, execution, delivery or performance by the Borrower of this
Amendment nor the performance of the Loan Agreement as amended hereby or any
other Loan Document nor the performance of the transactions contemplated hereby
or thereby violates or will violate any provision of the corporate charter or
by-laws of the Borrower, or does or will, with the passage of time or the giving
of notice or both, result in a breach of or a default under, or require any
consent under or result in the creation of any lien, charge or encumbrance upon
any property or assets of the Borrower pursuant to, any material instrument,
agreement or other document to which the Borrower is a party or by which the
Borrower or any of its properties may be bound or affected.

            (c) The execution and delivery by the Borrower of this Amendment and
the performance by the Borrower of the Loan Agreement as amended hereby and the
Loan Documents do not and will not violate any provision of law or regulation
applicable to the Borrower, or any writ, order or decree of any court or
governmental or regulatory authority or agency applicable to the Borrower.

      Section 3. Conditions to Effectiveness. The effectiveness of this
Amendment is conditioned on the following:


                                     - 41 -
   42
            (a) The Borrower and the Lender shall each have executed and
delivered a counterpart of this Amendment;

            (b) The representations and warranties contained in Article IV of
the Loan Agreement shall be true and correct in all material respects as of the
date hereof as though made on and as of the date hereof; and

            (c) No Default or Event of Default under the Loan Agreement shall
have occurred and be continuing.

      Section 4. Miscellaneous.

            (a) On and after the date hereof, each reference in the Loan
Agreement to "this Agreement" or the words of like import shall mean and be
deemed to be a reference to the Loan Agreement as amended hereby.

            (b) Except as amended and modified hereby, the Loan Agreement is in
all respects ratified and confirmed as of the date hereof, and the terms,
covenants and agreements therein shall remain in full force and effect.

            (c) This Amendment and the modifications to the Loan Agreement set
forth herein shall be deemed to be a document executed under seal and shall be
governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts.

            (d) This Amendment may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same document.

      IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the date and the year first above written.

                                       MKS INSTRUMENTS, INC.


                                       By:______________________________________
                                       Title:___________________________________

                                       THE FIRST NATIONAL BANK OF BOSTON


                                       By:______________________________________
                                       Title:___________________________________


                                     - 42 -

   1
                                                                   EXHIBIT 10.10

                                 LEASE AGREEMENT


1. PARTIES. This Lease, dated for reference purposes only, October 12, 1989, is
made by and between ASPEN INDUSTRIAL PARK PARTNERSHIP, a Colorado limited
partnership, (herein called "Landlord") and HPS, DIVISION OF MKS INDUSTRIES,
INC. (herein called "Tenant").

2. PREMISES. Landlord does hereby lease unto Tenant the following described
premises containing approximately 39,032 square feet measured to the outside of
the exterior walls, including overhangs, canopies and loading docks, and to
approximately one-half the thickness of common walls; commonly known as 5330
Sterling Drive, in the City of Boulder, County of Boulder, State of Colorado; as
shown on the plans attached hereto as Exhibit "A".

Said Lease is subject to the terms, covenants and conditions herein set forth
and the Tenant covenants as a material part of the consideration for this Lease
to keep and perform each and all of said terms, covenants and conditions by it
to be kept and performed and that this Lease is made upon the conditions of said
performance.

3. TERM. The terms of this Lease shall be for five (5) years, commencing on
November 1, 1989.

4. POSSESSION.

      a. If the Landlord, for any reason whatsoever, cannot deliver possession
of the said Premises to the Tenant at the commencement of the term hereof, this
Lease shall not be void or voidable, nor shall Landlord be liable to Tenant for
any loss or damage resulting therefrom, nor shall the expiration date of the
above term be in any way extended, but in that event, all rent shall be abated
during the period between the commencement of said term and the time when
Landlord delivers possession.

      b. In the event that Landlord shall permit Tenant to occupy the Premises
prior to the commencement date of the term, such occupancy shall be subject to
all the provisions of this Lease. Said early possession shall not advance the
termination date hereinabove provided.

5. RENT. The Tenant shall pay for the full five (5) year term of this Lease, a
reserve minimum rent of One Million Five Hundred Fifty-Four Thousand One Hundred
Ninety-Seven Dollars ($1,554,197.00). The total minimum reserve rent shall be
payable as follows:

      a. The Tenant covenants and agrees to pay minimum rent for the Leased
Premises for the first Lease Year of Two Hundred Ninety-Two Thousand Seven
Hundred Forty Dollars ($292,740.00), which amount shall be payable in equal
monthly installments of Twenty-Four Thousand Three Hundred Ninety-Five Dollars
   2
($24,395.00) per month; for the second Lease Year, the sum of Three Hundred One
Thousand Five Hundred Twenty-Two Dollars ($301,522.00), payable in equal monthly
installments of Twenty- Five Thousand One Hundred Twenty-Six and 83/100ths
Dollars per month ($25,126.83); for the third Lease Year, the sum of Three
Hundred Ten Thousand Five Hundred Sixty-Eight Dollars ($310,568.00) payable in
equal monthly installments of Twenty- Five Thousand Eight Hundred Eighty and
67/100ths Dollars ($25,880.67) per month; for the fourth Lease Year, the sum of
Three Hundred Nineteen Thousand Eight Hundred Eighty-Five Dollars ($319,885.00),
payable in equal monthly installments of Twenty- Six Thousand Six Hundred
Fifty-Seven and 08/100ths Dollars ($26,657.08); and for the fifth Lease Year,
the sum of Three Hundred Twenty-Nine Thousand Four Hundred Eighty Two Dollars
($329,482.00), payable in equal monthly installments of Twenty- Seven Thousand
Four Hundred Fifty Six and 83/100ths Dollars ($27,456.83) per month.

      b. All minimum rent payable hereunder shall be paid without setoff or
deduction, in advance, on or before the first day of each month during the term
of this Lease at the address of the Landlord first written above, or such other
address or addresses as Landlord may hereafter determine by notice to the
Tenant.

      c. Rent for any period during the term hereof which is for less than one
(1) month shall be a prorated portion of the monthly installment herein, based
on a thirty (30) day month.

6. SECURITY DEPOSIT. Tenant shall deposit with Landlord the sum of _____________
None _______________________ upon commencement of the term of this Lease. Said
sum shall be held by Landlord as security for the faithful performance by Tenant
of all the terms, covenants, and conditions of this Lease to be kept and
performed by Tenant during the term hereof. If Tenant defaults with respect to
any provision of this Lease, including, but not limited to the provisions
relating to the payment of rent, Landlord may (but shall not be required to)
use, apply or retain rent or any other sum in default or for the payment of any
amount of Tenant's default. If any portion of said deposit is so used or
applied, Tenant shall within five days after written demand therefor, deposit
cash with Landlord in an amount sufficient to restore the security deposit to
its original amount and Tenant's failure to do so shall be a material breach of
this Lease. Landlord shall not be required to keep this security deposit
separate from its general funds, and Tenant shall not be entitled to interest on
such deposit. If Tenant shall fully and faithfully perform every provision of
this Lease to be performed by it, the security deposit or any balance thereof
shall be ___________ ___________ Tenant (or, at Landlord's option, to the last
assignee of Tenant's interest hereunder) at the expiration of the Lease term. In
the event of termination of Landlord's interest in this Lease, Landlord shall
transfer said deposit to Landlord's successor in interest.


                                      -2-
   3
7. OPERATING EXPENSE ADJUSTMENTS. For the purposes of this Article, the term
Direct Expenses is defined as follows:

      All direct costs of operation and maintenance, as determined by standard
      practices, and shall include the following costs by way of illustration,
      but not be limited to: real property taxes and assessments; rent taxes,
      gross receipt taxes, (whether assessed against the Landlord or assessed
      against the Tenant and collected by the Landlord, or both); water and
      sewer charges; Insurance premiums; utilities; janitorial services; labor;
      window cleaning; costs incurred in the management of the Building, if any;
      air conditioning and heating; elevator maintenance; supplies; materials,
      equipment; and tools; including maintenance, costs, and upkeep of all
      common areas, and all building repairs except repair of structural defects
      ("Direct Expenses" shall not include depreciation on the Building of which
      the Premises are a part or equipment therein, loan payments, executive
      salaries or real estate brokers' commissions.)

      Tenant shall pay one hundred percent (100%) of Direct Expenses paid or
incurred by the Landlord for the operation or maintenance of the Building of
which the Premises are a part.

      Even though the term has expired and Tenant has vacated the Premises, when
the final determination is made of Tenant's share of Direct Expenses for the
year in which this Leave terminates, Tenant shall immediately pay any increase
due over the estimated expenses paid and conversely any overpayment made in the
event of said expenses decrease shall be immediately rebated by Landlord to
Tenant.

8. USE. Tenant shall use the Premises for office-warehouse and/or manufacturing
purposes, and shall not use or permit the Premises to be used for any other
purpose without the prior written consent of Landlord.

      Tenant shall not do or permit anything to be done in or about the Premises
nor bring or keep anything herein which will in any way increase the existing
rate or affect any fire or other insurance upon the Building or any of its
contents, or cause cancellation of any insurance policy covering said Building
or any part thereof or any of its contents. Tenant shall not do or permit
anything to be done in or about the Premises which will in any way obstruct or
interfere with the rights of other tenants or occupants of the building or
injure or annoy them or use or allow the Premises to be used for any improper,
immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or
permit any nuisance in, on or about the Premises. Tenant shall not commit or
suffer to be committed any waste in or upon the Premises.

9. COMPLIANCE WITH LAW. Tenant shall not use the Premises or permit anything to
be done in or about the Premises which will in any way conflict with any law,
statute, ordinance or governmental rule or regulation now in force or which may


                                      -3-
   4
hereafter be enacted or promulgated. Tenant shall, at its sole costs and
expense, promptly comply with all laws, statutes, ordinances and governmental
rules, regulations or requirements now in force or which may hereafter be in
force, and with the requirements of any board of fire insurance underwriters or
other similar bodies now or hereafter constituted, relating to, or affecting the
condition, use or occupancy of the Premises, excluding structural changes not
related to or affected by Tenant's improvements or acts. The judgment against
Tenant, whether the Landlord be a party thereto or not, that tenant has violated
any law, statute, ordinance or governmental rule, regulation or requirement,
shall be conclusive of that fact as between the Landlord and Tenant.

10. ALTERATIONS AND ADDITIONS. Tenant shall not make or suffer to be made any
alterations, additions or improvements to or of the Premises or any part thereof
without the consent of Landlord first had and obtained, and any alterations,
additions or improvements to or of said Premises, including, but not limited to,
wall covering, paneling and built-in cabinet work, but excepting movable
furniture and trade fixtures, shall on the expiration of the term become a part
of the realty and belong to the Landlord and shall be surrendered with the
Premises. In the event Landlord consents to the making of any alterations,
additions or improvements to the Premises by Tenant, the same shall be made by
Tenant at Tenant's sole cost and expense, and an contractor or person selected
by Tenant to make the same must first be approved by the Landlord. Upon the
expiration or earlier termination of the term hereof, Tenant shall, prior to the
written demand by the Landlord, given at least thirty (30) days prior to the end
of the term, at Tenant's sole cost and expense, forthwith and with all due
diligence, remove any alterations, additions, or improvements made which have
been designated by the Landlord to be removed, and repair any damage to the
Premises caused by such removal.

11. REPAIRS.

      a. By taking possession of the Premises, Tenant shall be deemed to have
accepted the Premises as being in good, sanitary order, condition and repair.
Tenant shall, at Tenant's sole cost and expense, keep the Premises and every
part thereof in good condition and repair, damage thereto from causes beyond the
reasonable control of Tenant and ordinary wear and tear excepted. Tenant shall
upon the expiration or sooner termination of this Lease hereof surrender the
Premises to the Landlord in good condition, ordinary wear and tear and damage
from causes beyond the reasonable control of Tenant excepted. Except as
specifically provided in an addendum, if any, to this Lease, Landlord shall have
no obligation whatsoever to alter, remodel, improve, repair, decorate or paint
the Premises or any part thereof, and the parties hereto affirm that Landlord
has made no representations to Tenant respecting the condition of the Premises
or the Building except as specifically herein set forth.


                                      -4-
   5
12. LIENS. Tenant shall keep the Premises and property in which the Premises are
situated free from any liens out of any work performed, materials furnished or
obligations incurred by Tenant. Landlord may require, at Landlord's sole option,
that Tenant shall provide to Landlord, at Tenant's sole cost and expense, a lien
and completion bond in an amount equal to one and one-half (1 1/2) times any and
all estimated cost of improvements, additions, or alterations in the Premises,
to insure Landlord against any liability for mechanics' and materialmen's liens
and to insure completion of the work.

13. ASSIGNMENT AND SUBLETTING. Tenant shall not either voluntarily or by
operation of law, assign, transfer, mortgage, pledge, hypothecate or encumber
this Lease or any interest therein, and shall not sublet the said Premises or
any part thereof, or any right or privilege appurtenant thereto, or suffer any
other person (the employees, agents, servants and invitees of Tenant excepted)
to occupy or use the said Premises, or any portion thereof, without the written
consent of Landlord first had and obtained, which consent shall not be
unreasonably withheld, and a consent to one assignment, subletting, occupation
or use by any other person shall not be deemed to be a consent to any subsequent
assignment, subletting, occupation or use by another person. Any such assignment
or subletting without such consent shall be void, and shall, at the option of
the Landlord, constitute a default under this Lease.

14. HOLD HARMLESS. Tenant shall identify and hold harmless Landlord against and
from any and all claims arising from Tenant's use of the Premises for the
conduct of its business or from any activity, work, or other thing done,
permitted or suffered by the Tenant in or about the Building, and shall further
indemnify and hold harmless Landlord against and from any and all claims arising
from any breach or default in the performance of any obligations on Tenant's
part to be performed under the terms of this lease, or arising from any act or
negligence of the Tenant, or any officer, agent, employee, guest, or invitee of
Tenant, and from all and against all cost, attorney's fees, expenses and
liabilities incurred in or about any such claim or action or proceeding be
brought against Landlord by reason of any such claim, Tenant, upon notice from
Landlord shall defend the same at Tenant's expense by counsel reasonably
satisfactory to Landlord. Tenant as a material part of the consideration to
Landlord hereby assumes all risk of damage to property or injury to persons, in,
upon or about the Premises, from any cause other than Landlord's negligence, and
Tenant hereby waives all claims in respect thereof against Landlord.

      Landlord or its agents shall not be liable for any damage to property
entrusted to employees of the Building, nor for loss or damage to any property
by theft or otherwise, nor for any injury to or damage to persons or property
resulting from fire, explosion, falling plaster, steam, gas, electricity, water
or rain which may leak from any part of the Building or from the pipes,
appliances or plumbing works therein or from the roof, street or subsurface or
from any other place resulting from dampness or any other cause whatsoever,
unless caused by or due to the negligence of


                                      -5-
   6
Landlord, its agents, servants or employees. Landlord or its agents shall not be
liable for interference with the light or incorporeal hereditaments, loss of
business by Tenant, nor shall Landlord be liable for any latent defects in the
Premises or in the Building. Tenant shall give prompt notice to Landlord in
cause of fire or accidents in the Premises or in the Building or of defects
therein or in the fixtures or equipment.

15. SUBROGATION. As long as their respective Insurers so permit, Landlord and
Tenant hereby mutually waive their respective rights of recovery against each
other for any loss insured by fire, extended coverage and other property
insurance policies existing for the benefit of the respective parties. Each
party shall obtain any special endorsements, if required by their insurer to
evidence compliance with the aforementioned waiver.

16. INSURANCE. Tenant shall not install any electrical equipment that overloads
the wiring panels, etc. in the leased premises. Tenant shall make at his own
expense whatever changes are necessary to relieve any overload condition and to
comply with the requirements of the insurance Underwriters or the governmental
authorities having jurisdiction. Tenant agrees to carry general liability
insurance in the minimum total amount or amounts of Five Hundred Thousand
Dollars ($500,000.00), for each occurrence of bodily injury and One Hundred
Thousand Dollars ($100,000.00) property damage. Tenant shall supply to Landlord
certificates of insurance showing the liability insurance coverage, and
throughout the term hereof, certificates of renewals of such policies. Said
certificate shall provide that the insurer shall have given Landlord ten (10)
days written notice prior to cancellation of said policy. In the event Tenant
fails to secure such insurance or to give evidence to Landlord of such insurance
by depositing with Landlord certificates as above provided, Landlord may
purchase such insurance in Tenant's name and charge Tenant the premiums
therefor. Building insurance for damage caused by fire and all other perils is
the responsibility of the Landlord. Premiums for such coverage shall be paid by
the Landlord. Said insurance policy will add MKS Instruments, Inc. as an
additional insured.

17. PROPERTY TAXES. Tenant shall pay, or cause to be paid, before delinquency,
any and all taxes levied or assessed and which become payable during the term
thereof upon all Tenant's leasehold improvements, equipment, furniture, fixtures
and personal property located in the premises; except that which has been paid
for by Landlord, and is the standard of the Building. In the event any or all of
Tenant's leasehold improvements, equipment, furniture, fixtures and personal
property shall be assessed and taxed with the building. Tenant shall pay to
Landlord its share of such taxes within ten (10) days after delivery to Tenant
by Landlord of a statement in writing setting forth the amount of such taxes
applicable to Tenant's property.

18. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with the
rules and regulations that Landlord shall from time to time promulgate.


                                      -6-
   7
Landlord reserves the right from time to time to make all reasonable
modifications to said rules. The additions and modifications to those rules
shall be binding upon Tenant upon delivery of a copy of them to Tenant. Landlord
shall not be responsible to Tenant for the nonperformance of any said rules by
any other tenants or occupants.

19. HOLDING OVER. If Tenant remains in possession of the Premises or any part
after the expiration of the term hereof, with the express written consent of
Landlord, such occupancy shall be a tenancy from month-to-month at a rental in
the amount of the last monthly rental, plus all other charges payable hereunder,
and upon all terms hereof applicable to a month-to-month tenancy.

20. ENTRY BY LANDLORD. Landlord reserves and shall at any and all times have the
right to enter the Premises, inspect the same, supply janitorial service and any
other service to be provided by Landlord to Tenant hereunder, to submit said
Premises and responsibility, and to alter, improve or repair the Premises and
any portion of the Building of which the Premises are a part that Landlord may
deem necessary or desirable, without abatement of rent and may for that purpose
erect scaffolding and other necessary structures where reasonably required by
the character of the work to be performed, always providing that the entrance to
the Premises shall not be blocked thereby, and further providing that the
business of the Tenant shall not be interfered with unreasonably. Tenant hereby
waives any claim for damages or for any injury or inconvenience to interference
with Tenant's business, any loss of occupancy or quiet enjoyment of the
Premises, and any other loss occasioned thereby. For each of the aforesaid
purposes, Landlord shall at all times have and retain a key with which to unlock
all of the doors in, upon and about the Premises, excluding Tenant's vaults,
safes, and files, and Landlord shall have the right to use any and all means
which Landlord may deem proper to open said doors in an emergency, in order to
obtain entry to the Premises without liability to Tenant except for any failure
to exercise due care for Tenant's property. Any entry to the Premises obtained
by Landlord by any of said means, or otherwise shall not under any circumstances
be construed or deemed to be a forcible or unlawful entry into, or a detainer
of, the Premises, or an eviction of Tenant from the Premises or any portion
thereof.

21. RECONSTRUCTION. In the event the Premises or the Building of which the
Premises are a part are damaged by fire or other perils covered by extended
coverage insurance, Landlord agrees to forthwith repair the same; and this Lease
shall remain in full force and effect, except that the Tenant shall be entitled
to a proportionate reduction of the rent while such repairs are being made, such
proportionate reduction to be based upon the extent to which the making of such
repairs shall materially interfere with the business carried on by the Tenant in
the Premises. If the damage is due to the fault or neglect of Tenant or its
employees, there shall be no abatement of rent.


                                      -7-
   8
      In the event the Premises or the Building of which the Premises are a part
are damaged as a result of any cause other than the perils covered by fire and
extended coverage insurance, then Landlord shall forthwith repair the same,
provided the extent of the destruction be less than ten percent (10%) of the
then full replacement cost of the Premises or the Building of which the Premises
are a part. In the event the destruction of the Premises or the Building is to
an extent greater than ten percent (10%) of the then full replacement cost, then
Landlord shall have the option: (1) to repair or restore such damage, this Lease
continuing in full force and effect, but the rest to be proportionately reduced
as hereinabove in this Article provided; or (2) give notice to Tenant at any
time within sixty (60) days after such damage terminating this Lease as of the
date specified in such notice, which date shall be no less than thirty (30) and
no more than sixty (60) days after the giving of such notice. In the event of
such notice, this Lease shall expire and all interest of the Tenant in the
Premises shall terminate on the date so specified in such notice and the Rent,
reduced by a proportionate amount, based upon the extent, if any, to which such
damage materially interfered with the business carried on by the Tenant in the
Premises, shall be paid up to date of said such termination.

      Notwithstanding anything to the contrary contained in this Article,
Landlord shall not have any obligation whatsoever to repair, reconstruct or
restore the Premises when the damage resulting from any casualty covered under
this Article occurs during the last twelve (12) months of the term of this Lease
or any extension thereof.

      Landlord shall not be required to repair any injury or damage by fire or
other cause, or to make any repairs or replacements of any panels, decoration,
office fixtures, railings, floor coverings, partitions, or any other property
installed in the Premises by Tenant.

      The Tenant shall not be entitled to any compensation or damages from
Landlord for loss of the use of the whole any part of the Premises, Tenant's
personal property or any inconvenience or annoyance occasioned by such damage,
repair, reconstruction or restoration.

22. DEFAULT. The occurrence of any one or more of the following events shall
constitute a default and breach of this Lease by Tenant.

      a. The vacating or abandonment of the Premises by Tenant.

      b. The failure by Tenant to make any payment of rent or any other payment
required to be made by Tenant hereunder, as and when due, where such failure
shall continue for a period of three (3) days after written notice thereof by
Landlord to Tenant.


                                      -8-
   9
      c. The failure by tenant to observe any of the covenants, conditions or
provisions of this Lease to be observed or performed by the Tenant, other than
as described in Article 23.b above, where such failure shall continue for a
period of thirty (30) days after written notice thereof by Landlord to Tenant;
provided, however, that if the nature of Tenant's default is such that more than
thirty (30) days are reasonably required for its cure, then Tenant shall not be
deemed to be in default if Tenant commences such cure within said thirty (30)
day period and thereafter diligently prosecutes such cure to completion.

      d. The making by Tenant of any general assignment or general arrangements
for the benefit of creditors; or the filing by or against Tenant of a petition
to have Tenant adjudged a bankrupt, or a petition or reorganization or
arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty [60] days); or
the appointment of a trustee or a receiver to take possession of substantially
all of Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where possession is not restored to Tenant within thirty (30) days; or
the attachment, execution or other judicial seizure of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in this Lease,
where such seizure is not discharged in thirty (30) days.

23. REMEDIES IN DEFAULT. In the event of any such material default or breach by
Tenant, Landlord may at any time thereafter, with or without notice or demand,
and without limiting Landlord in the exercise or a right or remedy which
Landlord may have by reason of such default or breach:

      a. Terminate Tenant's right to possession of the Premises by any lawful
means, in which case this Lease shall terminate and Tenant shall immediately
surrender possession of the Premises to Landlord. In such event Landlord shall
be entitled to recover from Tenant all damages incurred by Landlord by reason of
Tenant's default including, but not limited to, the cost of recovering
possession of the Premises; expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorney's fees, any real
estate commission actually paid; the worth at the time of award by the court
having jurisdiction thereof of the amount by which the unpaid rent for the
balance of the term after the time of such award exceeds the amount of such
rental loss for the same period that Tenant proves could be reasonably avoided;
that portion of the leasing commission paid by Landlord and applicable to the
unexpired term of this Lease. Unpaid installments of rent or other sums shall
bear interest from the due date at the rate of twenty percent (20%) per annum.
In the event Tenant shall have abandoned the Premises, Landlord shall have the
option of (a) taking possession of the Premises and recovering from Tenant the
amount specified in this paragraph, or (b) proceeding under the provisions of
the following Article 23.b.


                                      -9-
   10
      b. Maintain Tenant's right to possession, in which case this Lease shall
continue in effect whether or not Tenant shall have abandoned the Premises. In
such event, Landlord shall be entitled to enforce all of Landlord's rights and
remedies under this Lease, including the right to recover the rent as it becomes
due hereunder.

      c. Pursue any other remedy now or hereafter available to Landlord under
the laws or judicial decision of the State in which the Premises are located.

24. EMINENT DOMAIN. If more than twenty-five percent (25%) of the Premises shall
be taken or appropriated by any public or quasi-public authority under the power
of eminent domain, either party hereto shall have the right, at its option, to
terminate this Lease, and Landlord shall be entitled to any and all income,
rent, award, or any interest therein whatsoever which may be paid or made in
connection with such public or quasi-public use or purpose, and Tenant shall
have no claim against Landlord for the value of any unexpired term of this
Lease. If either less than or more than twenty-five percent (25%) of the
Premises is taken, and neither party elects to terminate as herein provided, the
rental thereafter to be paid shall be equitable reduced. If any part of the
Building other than the Premises may be so taken or apportioned, Landlord shall
have the right, at its option to terminate this Lease and shall be entitled to
the entire award as above provided.

25. ESTOPPEL CERTIFICATE. Tenant shall at any time and from time to time upon
not less than ten (10) days' prior written notice from Landlord, execute,
acknowledge, and deliver to Landlord a statement in writing, (a) certifying that
this Lease is unmodified and full force and effect (or, if modified, stating the
nature of such modification and certifying that this Lease as so modified, is in
full force and effect), and the date to which the rental and other charges are
paid in advance, if any, and (b) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of the Landlord hereunder, or
specifying such defaults if any are claimed. Any such statement may be relied
upon by any prospective purchaser or encumbrancer of all or any portion of the
real property of which the Premises are a part. The failure of Tenant to timely
deliver such statement, or a statement specifically setting forth any items
which would be exceptions from such certification, shall be conclusive evidence
that Tenant has certified to the matters set forth herein.

26. AUTHORITY OF PARTIES.

      a. Corporate Authority. If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of the
corporation, in accordance with a duly adopted resolution of the board of
directors of said corporation or in accordance with the by-laws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms.


                                      -10-
   11
      b. Limited Partnerships. If the Landlord herein is a limited partnership,
it is understood and agreed that any claims by Tenant on Landlord shall be
limited to the assets of the limited partnership, and furthermore, Tenant
expressly waives any and all rights to proceed against the individual partners
or the officers, directors or shareholders of any corporate partner, except to
the extent of their interest in said limited partnership.

27. GENERAL PROVISIONS.

      a. Plats and Riders. Clauses, plats and riders, if any, signed by the
Landlord and the Tenant endorsed on or affixed to this Lease are a part hereof.

      b. Waiver. The waiver by Landlord of any term, covenant, or condition
herein contained shall not be deemed to be a waiver of such term, covenant or
condition or any subsequent breach of the same or any other term, covenant or
condition herein contained. The subsequent acceptance of rent hereunder by
Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of
any term, covenant or condition of this Lease, other than the failure of the
Tenant to pay the particular rental so accepted, regardless of Landlord's
knowledge of such preceding breach at the time of the acceptance of such rent.

      c. Notices. All notices and demands which may or are to be required or
permitted to be given by either party to the other hereunder shall be in
writing. All notices and demands by the Landlord to the Tenant shall be sent by
United States Mail, postage prepaid, addressed to the Tenant at the Premises, or
to such other place as Tenant may from time to time designate in a notice to the
Landlord. All notices and demands by the Tenant to the Landlord shall be sent by
United States Mail, postage prepaid, addressed to the Landlord at the Office of
the Building, or to such other person or place as the Landlord may from time to
time designate in a notice to the Tenant.

      d. Joint Obligation. If there be more than one Tenant, the obligations
hereunder imposed upon Tenants shall be joint and several.

      e. Marginal Headings. The original headings and Article titles to the
Articles of this Lease are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part hereof.

      f. Time. Time is of the essence of this Lease and each and all of its
provisions in which performance is a factor.

      g. Recordation. Neither the Landlord nor Tenant shall record this Lease or
a short form memorandum hereof without the prior written consent of the other
party.


                                      -11-
   12
      h. Quiet Possession. Upon Tenant paying the rent reserved hereunder and
observing and performing all of the covenants, conditions and provisions on
Tenant's part to be observed and performed hereunder, Tenant shall have quiet
possession of the Premises for the entire term hereof, subject to all the
provisions of this Lease.

      i. Late Charges. Tenant hereby acknowledges that late payment by Tenant to
Landlord of rent or other sums due hereunder will cause Landlord to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, out are not limited to, processing
and accounting charges, and late charges which may be imposed upon Landlord by
terms of any mortgage or trust deed covering the Premises. Accordingly, if any
installment of rent or of a sum due from Tenant shall not be received by
Landlord or Landlord's designee within ten (10) days after written notice that
said amount is past due, then Tenant shall pay to Landlord a late charge equal
to ten percent (10%) of such overdue amount. The parties hereby agree that such
late charges represent a fair and reasonable estimate of the cost that Landlord
will incur by reason of the late payment by Tenant. Acceptance of such late
charges by the Landlord shall, in no event, constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder.

      j. Prior Agreements. This Lease contains all of the agreements of the
parties hereto with respect to any matter covered or mentioned in this Lease,
and no prior agreements or understanding pertaining to any such matters shall be
effective for any purpose. No provision of this may be amended or added to
except by an agreement in writing signed by the parties hereto or their
respective successors in interest. This Lease shall not be effective or binding
on any party until fully executed by both parties hereto.

      k. Attorney's Fees. In the event of any action or proceeding brought by
either party against the other under this Lease, the prevailing party shall be
entitled to recover all costs and expenses including the fees of its attorney in
such action or proceeding in such amount as the court may adjudge reasonable as
attorney's fees.

      l. Sales of Premises by Landlord. In the event of any sale of the
building, Landlord shall be and is hereby entirely freed and relieved of, all
liability under any and all of its covenants and obligations contained in or
derived from this Lease arising out of any act, occurrence or omission occurring
after the consummation of such sale; and the purchaser, at such sale or any
subsequent sale of the Premises shall be deemed, without any further agreement
between the parties or their successors in interest or between the parties and
any such purchaser, to have assumed and agreed to carry out any and all of the
covenants and obligations of the Landlord under this Lease.


                                      -12-
   13
      m. Subordination Attornment. Upon request of the Landlord, Tenant will, in
writing, subordinate its rights hereunder to the lien of any first mortgage or
first deed of trust to any bank, insurance company or other lending institution,
now or hereafter in force against the land and Building of which the Premises
are a part, and upon any building hereafter placed upon the land of which the
Premises are a part, and to all advances made or hereafter to be made upon the
security thereof.

            In the event any proceedings are brought for foreclosure or in the
event of the exercises of the power of sale under any mortgage or deed of trust
made by the Landlord covering the Premises, the Tenant shall attorn to the
purchaser upon any such foreclosure of sale and recognize such purchases as the
Landlord under this Lease.

            The provisions of this Article to the contrary notwithstanding, and
so long as Tenant is not in default hereunder, this Lease shall remain in full
force and effect for the full term hereof.

      n. Name. Tenant shall not use the name of the Building or of the
development in which the Building is situated for any purpose other than as an
address of the business to be conducted by the Tenant in the Premises.

      o. Separability. Any provision of the Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof and such other provision shall remain in full force and effect.

      p. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.

      q. Choice of Law. This Lease shall be governed by the laws of the State in
which the Premises are located.

      r. Signs and Auctions. Tenant shall not place any sign upon the Premises
or Building or conduct any auction thereon without Landlord's prior written
consent.

28. BROKERS. Tenant warrants that it has had no dealings with any real estate
brokers or agents in connection with the negotiation of this Lease, and it knows
or no other real estate broker or agent who is entitled to a commission in
connection with this Lease.

29. LIEN OF LANDLORD. Tenant hereby grants to the Landlord a lien upon all the
furniture, fixtures, equipment, or other property belonging to the Tenant
located on or within the leased premises at any time during the Lease term, to
secure the


                                      -13-
   14
performance of the Tenant's obligations under this Lease, said lien to be prior
to any other lien on such property except a lien in favor of the seller of such
property to secure the unpaid purchase price thereof. This Landlord's lien may
be foreclosed in the same manner as a security agreement, and the filing of this
Lease or a memorandum thereof, or a financing statement in the security interest
records of Boulder County, Colorado, shall constitute full lawful notice of this
lien. If the Landlord also has a lien on such property, or any portion thereof,
by virtue of any other instrument, or by operation of law, the lien under this
Lease shall be in addition thereto, and the Landlord shall have alternate
remedies at his option.

      The parties hereto have executed this Lease at the place and on the dates
specified immediately adjacent to their respective signatures.

      If this Lease has been filled in, it has been prepared for submission to
your attorney for his approval. No representation or recommendation is made by
the real estate broker or its agents or employees as to the legal sufficiency,
legal effect, or tax consequences of this Lease, or the transactions relating
thereto.


LANDLORD:                        TENANT:

ASPEN INDUSTRIAL PARK            MKS INSTRUMENTS, INC.
   PARTNERSHIP, a Colorado
   limited partnership



By:___________________________   By:____________________________
     William D. Stewart III,        Robert F. O'Brien
     General Partner                Treasurer


                                      -14-
   15
                                   EXHIBIT "A"



Lots 2 and 3, Aspen Industrial Park, A subdivision in the City and County of
Boulder, State of Colorado.


                                      -15-
   16
                            LEASE EXTENSION AGREEMENT


      THIS LEASE EXTENSION AGREEMENT is between Aspen Industrial Park
Partnership, a Colorado limited partnership ("Landlord") and HPS, DIVISION OF
MKS INDUSTRIES, INC. ("Tenant").

30. Premises

      a. Lease Agreement. Landlord and Tenant entered into a lease agreement for
Lots 2 and 3, Aspen Industrial Park, a subdivision in the City and County of
Boulder, State of Colorado, commonly known as 5330 Sterling Drive, Boulder,
Colorado, dated October 12, 1989 for a term of five years commencing on November
1, 1989 (the "Lease Agreement").

      b. Term of Lease. Landlord and Tenant desire to extend the Lease Agreement
on the same terms and conditions for a period of four (4) additional years
commencing on November 1, 1994 (the "Extended Term") and to agree on the rent
for the period of the Extended Term.

31. Extended Term and Rent

      a. Lease Extension. Landlord and Tenant hereby agree to extend the Lease
Agreement for a period of four years commencing November 1, 1994 under all of
the same terms and conditions as set forth in the Lease Agreement except for the
rent adjustment set forth in paragraph 2.2 below.

      b. Minimum Rent. The minimum rent for the full four-year Extended Term of
the Lease Agreement shall be One Million Three Hundred Sixty-Six Thousand One
Hundred Nineteen and 84/100 Dollars ($1,366,119.84) payable in equal monthly
installments of Twenty-Eight Thousand Four Hundred Sixty and 83/100 Dollars
($28,460.83).

32. Confirmation of Lease Agreement

      a. Except as specifically modified in Article II above, Landlord and
Tenant hereby ratify and confirm all of the terms and conditions of the Lease
Agreement and agree that all such terms and conditions shall be in full force
and effect in their entirety during the Extended Term.


                                      -16-
   17
      Dated this 14th day of October, 1994



LANDLORD:                             TENANT:


ASPEN INDUSTRIAL PARK PARTNERSHIP,    MKS INSTRUMENTS, INC.
 a Colorado limited partnership


By:/s/ William D. Stewart III         By:   /s/ Robert F. O'Brien
   -------------------------------       ------------------------------
   William D. Stewart, III               Robert F. O'Brien
   General Partner                       Treasurer


                                      -17-

   1
                                                                   EXHIBIT 10.11
         


                               LOAN AGREEMENT


         This Loan Agreement (the "Agreement") is entered into as of the
    day of November, 1993, by and between The First National Bank of Boston
("Lender") and MKS Instruments, Inc., a Massachusetts corporation ("Borrower").

                                    PREMISES:

         WHEREAS, the Borrower has requested that the Lender make loans to it;
and

         WHEREAS, the Lender is willing to lend funds to the Borrower on the
terms and conditions hereinafter set forth;

         NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the adequacy and receipt of which are hereby
acknowledged, the parties hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         1.1 Definitions. In addition to terms defined elsewhere in this
Agreement, the following terms shall have the meanings indicated, which meanings
shall be equally applicable to both the singular and plural forms of such terms:

              1.1.1. "Advance" shall mean the drawing down by the Borrower of a
Base Rate Loan, a LIBOR Loan or a Money Market Rate Loan on any given Advance
Date.

              1.1.2. "Advance Date" shall mean the date as of which an Advance
is consummated.

              1.1.3. "Affiliate" of any Person shall mean any other Person
which, directly or indirectly, controls, or is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" of any
Person shall mean the power, directly or indirectly, either to (i) vote 10% or
more of the securities having ordinary voting power for the election of
directors of such Person or (ii) direct the management and policies of such
Person, whether by contract or otherwise. As to the Borrower, the term
"Affiliate" shall include, without limitation, any partnership or joint venture
of which the Borrower or any Affiliate of the Borrower is a general partner or
is a limited partner with more than a ten percent (10%) interest, and any
director or executive officer of the Borrower.

              1.1.4. "Base Rate" shall mean the rate of interest announced by
the Lender at its head office from time to time as its "Base Rate".
   2
              1.1.5. "Base Rate Loan" shall mean an Advance that is specified as
such in the Notice of Borrowing with respect to such Advance and that bears
interest as provided in Section 2.4.1 or a portion of the Term Loan as to which
the Borrower elects to pay interest at the Base Rate as provided in Section 3.2.

              1.1.6. "Borrowing" shall mean the incurrence of one or more
Advances on a given date.

              1.1.7. "Business Day" shall mean a day on which commercial banks
are required to be open for business in Boston, Massachusetts.

              1.1.8. "Cash Flow Ratio" shall have the meaning set forth in
Section 8.7(c).

              1.1.9. "Closing Date" shall mean the date of this Agreement.

              1.1.10. "Compliance Certificate" shall have the meaning set forth
in Section 7.1(c).

              1.1.11. "Consolidated Debt Service" shall mean for any period the
sum (without duplication) of Interest Expense, the interest portion of Financing
Lease Obligations and required principal payments on long-term debt of the
Borrower and its Subsidiaries, determined on a consolidated basis.

              1.1.12. "Consolidated Indebtedness" shall mean the Indebtedness of
the Borrower and its Subsidiaries, determined on a consolidated basis.

              1.1.13. "Consolidated Net Income" shall mean for any period the
net income (or loss) for such period (before extraordinary items and excluding
the net income of any business entity that is not a Subsidiary in which the
Borrower or one of its Subsidiaries has an ownership interest unless such net
income shall have actually been received by such company in the form of cash
distributions) of the Borrower and its Subsidiaries after deducting all
operating expenses, depreciation and amortization, Interest Expense, the
interest portion of Financing Lease Obligations, all taxes in respect of income
and profits paid or payable (including accrued Sub S distributions required to
make shareholder tax payments) and all other proper deductions, all determined
on a consolidated basis.

              1.1.14. "Consolidated Operating Cash Flow" shall mean for any
period, the net income (or loss) for such period (before extraordinary items and
excluding the net income of any business entity that is not a Subsidiary in
which the Borrower or one of its Subsidiaries has an ownership interest unless
such net income shall have actually been received by such company in the form of
cash distributions) of the

                                      -2-
   3
Borrower and its Subsidiaries before deducting Interest Expense and taxes and
after restoring thereto depreciation of real and personal property and leasehold
improvements and amortization and after deducting cash taxes paid, Sub S
distributions required to make shareholder tax payments, and capital
expenditures incurred.

              1.1.15. "Consolidated Tangible Net Worth" shall mean, at any time,
net stockholders' equity of the Borrower and its Subsidiaries determined in
accordance with generally accepted accounting principles including the book
amount of all minority interests in MKS International, Inc. but excluding the
book amount of all minority interests in other Affiliates and any foreign
exchange translation adjustment, with no upward adjustments due to a
reevaluation of assets (other than any such upward adjustment as may be required
under generally accepted accounting principles in connection with the
acquisition by the Borrower or any Subsidiary of another company or entity)
minus the following items (without duplication of deductions) appearing on the
balance sheet of the Borrower and its Subsidiaries:

              (a) the book amount of all assets (including, without limitation,
goodwill, patents, trademarks, copyrights, organizational expense and
unamortized debt discount) that would be treated as intangibles under generally
accepted accounting principles;

              (b) treasury stock; and

              (c) any write-up in the book amount of any asset or Investment
subsequent to the Closing Date, resulting from a reevaluation or reappraisal
thereof from the amount entered in accordance with generally accepted accounting
principles by the Borrower or any Subsidiary on its books with respect to its
acquisition of the asset or Investment.

              1.1.16. "Costs" shall have the meaning set forth in Section 10.4.

              1.1.17. "Debt-to-Net Worth Ratio" shall have the meaning set forth
in Section 8.7(b).

              1.1.18. "Default" shall mean any event that, with the lapse of
time, the giving of notice, or both, would become an Event of Default hereunder.

              1.1.19. "Event of Default" shall have the meaning set forth in
Section 9.1 hereof.

              1.1.20. "Financing Lease" shall mean any lease of the Borrower or
a Subsidiary, as lessee, that is shown or is required to be shown in accordance
with


                                      -3-
   4
generally accepted accounting principles as a liability on the balance sheet of
the lessee thereunder.

              1.1.21. "Financing Lease Obligation" shall mean for any period the
monetary obligation of the lessee under a Financing Lease. The amount of a
Financing Lease Obligation at any date is the amount at which the lessee's
liability under the Financing Lease would be required to be shown on its balance
sheet at such date.

              1.1.22. "Hazardous Substances" shall mean any hazardous waste, as
defined by 42 U.S.C. Section 6903(5), any hazardous substances, as defined by 42
U.S.C. Section 9601(14), any pollutant or contaminant, as defined by 42 U.S.C.
Section 9601(33), or any toxic substance, oil or hazardous materials or other
chemicals or substances regulated by any laws or regulations relating to the
discharge of air pollutants, water pollutants, or processed wastewater.

              1.1.23. "Indebtedness" shall mean, for any Person, (a) all
obligations of such Person that in accordance with generally accepted accounting
principles would be reflected on the balance sheet of such Person as a
liability, (b) all obligations of any other Person the payment or collection of
which such Person has guaranteed (except by reason of endorsement for collection
in the ordinary course of business) or in respect of which such Person is
liable, contingently or otherwise, including, without limitation, liable by way
of agreement to purchase, to provide funds for payment, to supply funds to or
otherwise to invest in such other Person, or otherwise to assure a creditor
against loss, (c) all obligations of any other Person for borrowed money or for
the deferred purchase price of property or services secured by (or for which the
holder of such indebtedness has an existing right, contingent or otherwise, to
be secured by) any mortgage, or other encumbrance upon or in property
(including, without limitation, accounts and contract rights) owned by such
Person, whether or not such Person has assumed or become liable for the payment
of such indebtedness or obligations, and (d) Financing Lease Obligations of such
Person.

              1.1.24. "Interest Expense" shall mean for any period the aggregate
amount of interest recorded, in accordance with generally accepted accounting
principles, on the financial statements for that period by the Borrower and its
Subsidiaries in respect of Consolidated Indebtedness incurred for borrowed
money.

              1.1.25. "Interest Period" shall mean the period designated by the
Borrower as such in the Notice of Borrowing with respect to any LIBOR Loan or
Money Market Rate Loan pursuant to and subject to the limitations set forth in
Section 2.5 or in the Interest Rate Change Notice for any portion of the Term
Loan pursuant to and subject to the limitations set forth in Section 3.2.

                                      -4-
   5
              1.1.26. "Interest Rate Change Notice" shall have the meaning set
forth in Section 3.2.

              1.1.27. "Interest Rate Determination Date" shall mean the third
Business Day prior to the first day of the related Interest Period for a LIBOR
Loan and the first day of the related Interest Period for a Money Market Rate
Loan or the determination of the Long Term Funds Rate.

              1.1.28. "Interim Maturity Date" shall mean the last day of any
Interest Period.

              1.1.29. "Investments" shall have the meaning set forth in Section
8.4.

              1.1.30. "LIBOR Loan" shall mean an Advance that is specified as
such in the Notice of Borrowing with respect to such Advance and that bears
interest at the rate provided in Section 2.4.2. or a portion of the Term Loan as
to which the Borrower elects to pay interest using the LIBOR Rate as provided in
Section 3.2.

              1.1.31. "LIBOR Rate" shall mean for any Interest Rate
Determination Date, the rate obtained by dividing (i) the quotation offered by
the Lender in the interbank Eurodollar market for U.S. dollar deposits of
amounts in immediately available funds comparable to the principal amount of the
LIBOR Loan or the portion of the Term Loan for which the LIBOR Rate is being
determined with a maturity comparable to the Interest Period for which such
LIBOR Rate will apply as of approximately noon (Boston time) three Business Days
prior to the commencement of such Interest Period by (ii) a percentage equal to
100% minus the stated maximum rate of all reserves required to be maintained
against "Eurocurrency liabilities" as specified in Regulation D (or against any
other category of liabilities that includes deposits by reference to which the
interest rate on LIBOR Loans is determined) as applicable on such date to any
member bank of the Federal Reserve System.

              1.1.32. "Licenses" shall have the meaning set forth in Section
5.8.

              1.1.33. "Lien" shall mean any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner of the
property, whether the interest is based on common law, statute or contract
(including the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes). For the purposes of this Agreement, the Borrower or a
Subsidiary shall be deemed to be the owner of any property that it has acquired
or holds subject to a Financing Lease or a conditional sale agreement or other
arrangement pursuant to which title to the property has been retained by or
vested in some other Person for security purposes, and such retention or vesting
shall be deemed to be a Lien.

                                      -5-
   6
              1.1.34. "Loan Documents" shall mean each of this Agreement, the
Notes, the Mortgage and any other document or instrument executed by the
Borrower in favor of the Lender in connection with the transactions contemplated
hereby.

              1.1.35. "Long Term Funds Loan" shall mean the portion of the Term
Loan as to which the Borrower elects to pay interest using the Long Term Funds
Rate as provided in Section 3.2.

              1.1.36. "Long Term Funds Rate" shall mean for any Interest Rate
Determination Date, the rate of interest quoted by the Lender in Boston on such
date in its sole discretion (it being understood that the Lender is under no
obligation to quote such rates) to the Borrower as the fixed rate of interest at
which it is willing to make a Long Term Funds Loan in the amount equal to the
portion of the Term Loan for which this rate is requested by the Borrower with a
maturity equal to the Interest Period requested.

              1.1.37. "Money Market Rate" shall mean for any Interest Rate
Determination Date, the rate of interest quoted by the Lender in Boston on such
date in its sole discretion (it being understood that the Lender is under no
obligation to quote such rates) to the Borrower as the fixed rate of interest at
which it is willing to make a Money Market Rate Loan in the amount and for the
Interest Period requested by the Borrower.

              1.1.38. "Money Market Rate Loan" shall mean an Advance that is
specified as such in the Notice of Borrowing with respect to such Advance and
that bears interest at the rate provided in Section 2.4.3 hereof.

              1.1.39. "Notes" shall mean the Revolving Credit Note and the Term
Note.

              1.1.40. "Mortgage" shall have the meaning set forth in Section
6.2.

              1.1.41. "Notice of Borrowing" shall have the meaning set forth in
Section 2.2.1.

              1.1.42. "Obligations" shall mean, without limitation, any and all
liabilities, debts, and obligations of the Borrower to the Lender, of each and
every kind, nature and description, under this Agreement, any other Loan
Document, the Foreign Exchange Agreement, and any interest rate swap agreement,
whether now existing or hereafter incurred. "Obligations" also means, without
limitation, any and all obligations of the Borrower to act or to refrain from
acting in accordance with the terms, provisions and covenants of this Agreement
or of any other Loan Document.

                                      -6-
   7
              1.1.43. "Permitted Liens" shall have the meaning set forth in
Section 8.2.

              1.1.44. "Person" shall mean any natural person, corporation,
unincorporated organization, trust, joint-stock company, joint venture,
association, company, partnership or government, or any agency or political
subdivision of any government.

              1.1.45. "Property" shall have the meaning set forth in Section
6.2(f).

              1.1.46. "Revolver Termination Date" shall mean June 30, 1994 or
any subsequent anniversary thereof if the Revolving Credit Loan shall have been
renewed by the Lender.

              1.1.47. "Revolving Credit Loan" shall mean the demand
discretionary revolving credit loan in an amount up to the amount of $7,000,000
extended or to be extended by the Lender to the Borrower on the terms and
conditions set forth herein.

              1.1.48. "Revolving Credit Note" shall have the meaning set forth
in Section 2.3.

              1.1.49. "Revolving Loan Account" shall mean the account on the
books of the Lender in the name of the Borrower in which the following shall be
recorded: Advances made by the Lender to and for the account of the Borrower
pursuant to Section 2 of this Agreement; all other charges, expenses and other
items properly chargeable to the Borrower with respect to such Advances; all
Costs with respect to such Advances; all payments made by the Borrower on
account of indebtedness evidenced by the Revolving Credit Note; and other
appropriate debits and credits.

              1.1.50. "Subsidiary" shall mean any Person of which the Borrower
at the time owns, directly or indirectly, through another Subsidiary or
otherwise, 50% or more of the equity interests.

              1.1.51. "Term Loan" shall have the meaning set forth in Section
3.1.

              1.1.52. "Term Loan Maturity Date" shall mean the seventh
anniversary of the date of this Agreement.

              1.1.53. "Term Note" shall have the meaning set forth in Section
3.1.

              1.1.54. "Term Loan Account" shall mean the account on the books of
the Lender in the name of the Borrower in which the following shall be recorded:
the principal outstanding and interest accrued under the Term Loan; all Costs
with

                                      -7-
   8
respect to the Term Loan; all payments made by the Borrower on account of
indebtedness evidenced by the Term Note; and other appropriate debits and
credits.

         1.2 Accounting Terms. Accounting terms not specifically defined in this
Agreement shall have the meanings given to them under generally accepted
accounting principles.

         1.3 Other Definitional Provisions. The words "hereof," "herein" and
"hereunder," and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not any particular provision of this Agreement.
Any Article, Section, Exhibit or Schedule references are to this Agreement
unless otherwise specified.

                                   ARTICLE II

                              REVOLVING CREDIT LOAN

         2.1 Revolving Credit. Subject to the terms and conditions of this
Agreement, the Lender hereby agrees to make Advances from time to time to the
Borrower during the period from the date hereof to the Revolver Termination Date
(or such earlier date on which the Lender shall have demanded payment of the
Revolving Credit Note) in an aggregate outstanding amount not to exceed at any
time $7,000,000. The Lender shall have the absolute discretion to make such
Advances as it deems appropriate and to demand re-payment of Advances at any
time. Each Advance shall, at the option of the Borrower, be a Base Rate Loan, a
LIBOR Loan or a Money Market Rate Loan provided, however, that no LIBOR Loan or
Money Market Rate Loan shall be made at any time in a principal amount of less
than $1,000,000.

         2.2 Notice of Borrowing.

              2.2.1. Whenever the Borrower desires to obtain a LIBOR Loan or a
Money Market Rate Loan hereunder, it may request that the Lender provide quotes
as of any specified Interest Rate Determination Date as to the LIBOR Rate and/or
the Money Market Rate for any or all Interest Periods, and the Lender shall
promptly provide such quotes. The Borrower shall give the Lender prior
telecopied or telephone notice (given not later than 10:00 a.m. (Boston time))
on the day of any Borrowing with respect to a Base Rate Loan or a Money Market
Rate Loan and at least three Business Days prior to, the day of any Borrowing
with respect to a LIBOR Loan. Each such notice (each a "Notice of Borrowing")
shall specify the principal amount of each Advance to be made, the date of the
Borrowing (which shall be a Business Day), whether each Advance being made is to
be initially maintained as a Base Rate Loan, a LIBOR Loan or a Money Market Rate
Loan and, in the case of a LIBOR Loan or Money Market Rate Loan, the initial
Interest Period applicable

                                      -8-
   9
thereto. If such notice is given by telephone, it shall be immediately confirmed
in writing. No more than one Base Rate Loan shall be outstanding at any time,
but the Borrower may increase the principal amount of any Base Rate Loan at any
time by giving a Notice of Borrowing as set forth above.

              2.2.2. Upon the Interim Maturity Date of any LIBOR Loan or Money
Market Rate Loan, unless the Borrower (i) shall have given the Lender a Notice
of Borrowing in accordance with Section 2.2.1 requesting that a new LIBOR Loan
or Money Market Rate Loan be made on such Interim Maturity Date or (ii) shall
have repaid such LIBOR Loan or Money Market Rate Loan on such Interim Maturity
Date, the Borrower shall be deemed to have requested that the Lender make a Base
Rate Loan to the Borrower on such Interim Maturity Date in an aggregate
principal amount equal to the aggregate principal amount of the LIBOR Loan or
Money Market Rate Loan maturing on such Interim Maturity Date.

         2.3 Revolving Loan Account. The Advances made by the Lender from time
to time to the Borrower under this Agreement shall be evidenced by the Revolving
Credit Note in the form of Exhibit A hereto (the "Revolving Credit Note"). The
Advances and the amounts of all payments on the Revolving Credit Note shall be
recorded by the Lender in the Revolving Loan Account of the Borrower. The debit
balance of the Revolving Loan Account shall represent the amount of the
Borrower's indebtedness to the Lender from time to time by reason of Advances
and other appropriate charges hereunder. All statements regarding the Revolving
Loan Account shall be deemed to be accurate absent manifest error or unless
objected to by the Borrower within 30 days after receipt. The Borrower agrees to
review each such statement promptly after receipt and to bring any errors or
discrepancies to the Lender's attention promptly.

         2.4 Interest.

              2.4.1. The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Base Rate Loan from the date the proceeds
thereof are made available to the Borrower until maturity (whether by
acceleration, voluntary prepayment or otherwise) at a rate per annum that shall
be the Base Rate in effect from time to time.

              2.4.2. The Borrower agrees to pay interest in respect of the
unpaid principal amount of each LIBOR Loan from the date the proceeds thereof
are made available to the Borrower until maturity (whether by acceleration,
voluntary prepayment or otherwise) at a rate per annum equal to the LIBOR Rate
plus 1.25%.

              2.4.3. The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Money Market Rate Loan from the date the
proceeds thereof are made available to the Borrower until maturity (whether by
acceleration,

                                      -9-
   10
voluntary prepayment or otherwise) at a rate per annum equal to the Money Market
Rate.

              2.4.4. Overdue principal and (to the extent permitted by law)
overdue interest in respect of each Base Rate Loan, each LIBOR Loan and each
Money Market Rate Loan (to the extent not converted into a Base Rate Loan) shall
bear interest, payable on demand, after as well as before judgment, at a rate
per annum equal to the Base Rate in effect from time to time plus 3% per annum.

              2.4.5. Interest shall accrue from and including the date of any
Advance and shall be payable by the Borrower monthly in arrears on the last day
of each month and on any prepayment (on the amount prepaid), at maturity
(whether by acceleration, voluntary prepayment or otherwise), and after such
maturity, on demand. Interest shall be calculated on the basis of actual days
elapsed and a 360-day year.

         2.5 Interest Periods. At the time it gives any Notice of Borrowing with
respect to a LIBOR Loan or a Money Market Rate Loan, the Borrower shall elect
the Interest Period applicable to the related Advance, which Interest Period
shall, at the option of the Borrower, be a period of 30, 60, 90, 120, 150 or 180
days (as to a LIBOR Loan) or any period up to 90 days (as to a Money Market Rate
Loan). Notwithstanding anything to the contrary contained herein:

                   (i) if any Interest Period begins on a day for which there is
              no numerically corresponding day in the calendar month at the end
              of such Interest Period, such Interest Period shall end on the
              last Business Day of such calendar month;

                   (ii) if any Interest Period would otherwise expire on a day
              that is not a Business Day, such Interest Period shall expire on
              the next succeeding Business Day; provided that if any Interest
              Period would otherwise expire on the day that is not a Business
              Day but is a day of the month after which no further Business Day
              occurs in such month, such Interest Period shall expire on the
              next preceding Business Day;

                   (iii) no Interest Period shall extend beyond the Revolver
              Termination Date.

         2.6 Termination of Existing Loans. On the Closing Date the letter
agreement between the Borrower and the Lender dated as of July 15, 1992, as
amended, shall terminate and be of no further force and effect.

                                      -10-
   11
                                   ARTICLE III

                                    TERM LOAN

         3.1 Refinancing. The Lender shall refinance its existing loans to the
Borrower evidenced by Floating Rate Mortgage Notes dated May 20, 1987, January
6, 1988 and January 30, 1989, under which a total of $9,550,090.75 in principal
plus accrued but unpaid interest is currently outstanding by converting such
Loans into a seven-year term loan (the "Term Loan") in the principal amount of
$10,000,000. The Lender shall advance the difference between $10,000,000 and
$9,432,124.08 to the Borrower on the Closing Date. The Term Loan shall be
evidenced by a term note (the "Term Note") payable to the Bank in the form of
Exhibit B hereto. Amortization of the Term Note shall be calculated on the basis
of a 15-year schedule of level monthly payments of principal with the entire
unpaid principal balance and all accrued and unpaid interest absolutely due and
payable on the Maturity Date.

         3.2 Interest.

              3.2.1. The Borrower agrees to pay interest in respect of the
unpaid principal amount of the Term Loan from the date of this Agreement until
paid in full as follows. The Term Loan shall bear interest at the Base Rate
unless the Borrower desires to pay interest on all or a portion of the Term Loan
at one of the following rates:

                   (i) During any period in which the Borrower maintains a Cash
              Flow Ratio in excess of 1.35 to 1 and a Debt-to-Net Worth Ratio
              not in excess of 1.35 to 1:

                        (a)  the LIBOR Rate Plus 1.75% or

                        (b)  the Long Term Funds Rate plus 1.75%.

                   (ii) During any period in which the Borrower maintains a Cash
              Flow Ratio of 1.35 to 1 or less or a Debt-to-Net Worth Ratio-of
              1.35 to 1 or more:

                        (a)  the LIBOR Rate plus 2.10% or

                        (b)  the Long Term Funds Rate plus 2.10%.

              3.2.2. Whenever the Borrower desires to obtain an interest rate
other than the Base Rate, it may request that the Lender provide quotes as of
any specified Interest Rate Determination Date as to the LIBOR Rate and/or the
Long Term Funds

                                      -11-
   12
Rate for any or all Interest Periods, and the Lender shall promptly provide such
quotes. The Borrower shall give the Lender prior telecopied or telephone notice
(given not later than 10:00 a.m. (Boston time)) on the day the Interest Period
is to begin with respect to use of the Long Term Funds Rate and at least three
Business Days prior to the day the Interest Period is to begin with respect to
use of the LIBOR Rate. Each such notice (each an "Interest Rate Change Notice")
shall specify the desired interest rate, the amount of the Term Loan to which
such interest rate shall apply and the initial Interest Period applicable
thereto. If such notice is given by telephone, it shall be immediately confirmed
in writing.

              3.2.3. Upon the Interim Maturity Date of any LIBOR Loan or Long
Term Funds Loan, unless the Borrower shall have given the Lender an Interest
Rate Change Notice in accordance with Section 3.2.2 requesting a new LIBOR Loan
or Long Term Funds Loan be made on such Interim Maturity Date, the Borrower
shall be deemed to have elected to pay interest on such amount of the Term Loan
at the Base Rate.

              3.2.4. At the time the Borrower gives any Interest Rate Change
Notice, the Borrower shall elect the Interest Period for which the interest rate
elected shall apply, which Interest Period shall, at the option of the Borrower,
be a period of 30, 60, 90, 120, 150 or 180 days (as to a LIBOR Loan) or any
period (as to a Long Term Funds Loan). Notwithstanding anything to the contrary
contained herein, the provisions set forth in subparagraphs (i) - (iii) of
Section 2.5 shall apply to the determination of an Interest Period.

         3.3 Term Loan Account. The principal and the amounts of all payments on
the Term Note shall be recorded by the Lender in the Term Loan Account of the
Borrower. All statements regarding the Term Loan Account shall be deemed to be
accurate absent manifest error or unless objected to by the Borrower within 30
days after receipt. The Borrower agrees to review each such statement promptly
after receipt and to bring any errors or discrepancies to the Lender's attention
promptly.

                                   ARTICLE IV

                                ADDITIONAL TERMS

         4.1 Payments.

              4.1.1. The Borrower shall have the right to prepay the Notes, in
whole at any time or in part from time to time, without premium or penalty,
provided that, no Money Market Loan may be prepaid and, except as set forth in
Section 4.3, no other Advance, either in whole or in part, may be prepaid on the
Advance Date of such Advance and no portion of the Term Loan may be prepaid on
the first day of an Interest Period with respect thereto. The Borrower shall
give notice (by telex or

                                      -12-
   13
telecopier, or by telephone (confirmed in writing promptly thereafter)) to the
Lender of each proposed pre-payment hereunder prior to 10:00 a.m. (Boston time),
(x) with respect to Base Rate Loans and Long Term Funds Loans, upon the Business
Day of the proposed prepayment and (y) with respect to LIBOR Loans, at least
three Business Days prior to the Business Day of the proposed prepayment, which
notice in each case shall specify the proposed prepayment date (which shall be a
Business Day), the aggregate principal amount of the proposed prepayment and
which Advances or portions of the Term Loan, as the case may be, are to be
prepaid. LIBOR Loans and Long Term Funds Loans that are voluntarily prepaid
before the last day of the applicable Interest Period shall be subject to the
additional compensation requirements set forth in Sections 4.3 and 4.4, and each
prepayment of a LIBOR Loan or a Long Term Funds Loan shall be in an aggregate
principal amount of not less than the total principal amount outstanding at such
time under such Loan. If at any time the outstanding principal amount of the
Advances exceeds $7,000,000, the Borrower will immediately prepay the Advances
by the amount of such excess.

              4.1.2. All payments of principal and interest due under the Notes
(including prepayments), and any other amounts owing to the Lender under this
Agreement shall be made by the Borrower not later than 3:00 p.m., Boston time,
on the day due in lawful money of the United States of America to the Lender at
its Boston, Massachusetts office in immediately available funds. The Borrower
hereby authorizes the Lender to charge such payments as they become due, if not
otherwise paid by the Borrower, to any account of the Borrower with the Lender
as the Lender may elect.

              4.1.3. Whenever any payment to be made hereunder or under any
other Loan Document shall be stated to be due on a day that is not a Business
Day, such payment may be made on the next succeeding Business Day, and such
extension of time shall in such case be included in computing interest or other
fees or charges provided for under this Agreement or any other Loan Document;
provided, however, that with respect to LIBOR Loans, if the next succeeding
Business Day falls in another calendar month, such payment shall be made on the
next preceding Business Day.

              4.1.4. All payments made by the Borrower on each Note shall be
applied by the Lender (a) first, to the payment of Costs with respect to such
Note, (b) second, to the payment of accrued and unpaid interest on such Note, in
such order as the Borrower shall direct, until all such accrued interest has
been paid, and (c) third, to the payment of the unpaid principal amount of such
Note in such order as the Borrower shall direct.

         4.2  Capital Adequacy.

              4.2.1. If, after the date of this Agreement, the Lender shall have
reasonably determined in good faith that the adoption or effectiveness after the
date


                                      -13-
   14
hereof of any applicable law, rule or regulation regarding capital adequacy, or
any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by the Lender
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, has
or would have the effect of materially reducing the rate of return on the
Lender's capital or assets as a consequence of its commitments or obligations
hereunder to a level below that which the Lender could have achieved but for
such adoption, effectiveness, change or compliance (taking into consideration
the Lender's then current policies with respect to capital adequacy), then from
time to time, subject to Section 4.2.2, within 15 days after demand by the
Lender the Borrower shall pay to the Lender such additional amount or amounts as
will compensate the Lender for such reduction (after the Lender shall have
allocated the same fairly and equitably among all of its customers or any class
generally affected thereby).

              4.2.2. The Lender will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Lender to any additional
payment under this Section 4.2 as promptly as practicable and shall be entitled
to such payment (a) in the case of a Base Rate Loan, only for costs incurred
from and after the date that the Lender gives such notice, and (b) in the case
of a Money Market Rate Loan, LIBOR Loan or Long Term Funds Loan, only for costs
incurred in connection with Loans made pursuant to a Notice of Borrowing or
Interest Rate Change Notice issued after the date that the Lender gives such
notice. The Lender will furnish to the Borrower with such notice a certificate
signed by an officer thereof certifying that the Lender is entitled to payment
under this Section 4.2 and setting forth the basis (in reasonable detail) and
the amount of each request by the Lender for any additional payment pursuant to
this Section 4.2.

         4.3 Special Provisions Governing LIBOR Loans. Notwithstanding any
other provisions of this Agreement, the following provisions shall govern with
respect to LIBOR Loans as to the matters covered:

              4.3.1. Increased Costs, Illegality. etc.

              (a) In the event that the Lender shall have determined (which
determination shall, if made in good faith and absent manifest error, be final,
conclusive and binding upon all parties):

                   (i) on any Interest Rate Determination Date, that by reason
              of any changes arising after the date of this Agreement affecting
              the interbank Eurodollar market, adequate and fair means do not
              exist for ascertaining the applicable interest rate on the basis
              provided for in the definition of LIBOR Rate; or

                                      -14-
   15
                   (ii) at any time during any Interest Period, that the Lender
              shall incur increased costs or reductions in the amounts received
              or receivable hereunder with respect to a LIBOR Loan by reason of
              (x) any change since the Interest Rate Determination Date for the
              Interest Period in question in any applicable law or governmental
              rule, regulation, guideline or order (or any interpretation
              thereof and including the introduction of any new law or
              governmental rule, regulation, guideline or order) (such as, for
              example but not limited to, a change in official reserve
              requirements, but excluding reserve requirements that have been
              included in calculating the LIBOR Rate for such Interest Period)
              and/or (y) other circumstances affecting the Lender, the interbank
              Eurodollar market or the position of the Lender in the relevant
              market; or

                   (iii) at any time, that the making or continuance of any
              LIBOR Loan has become unlawful by compliance by the Lender in good
              faith with any law, governmental rule, regulation, guideline or
              order, or has become impracticable as a result of a contingency
              occurring after the date of this Agreement;

then and in any such event, the Lender shall promptly after making such
determination give notice (by telephone confirmed in writing) to the Borrower of
such determination. Thereafter (x) in the case of clause (i) above, any Notice
of Borrowing given by the Borrower with respect to a LIBOR Loan that has not yet
been incurred shall be deemed rescinded by the Borrower and LIBOR Loans shall no
longer be available until such time as the Lender notifies the Borrower that the
circumstances giving rise to such notice no longer exist or that,
notwithstanding such circumstances, LIBOR Loans will again be made available
hereunder, (y) in the case of clause (ii), the Borrower shall pay to the Lender,
upon written demand therefor (but only with respect to any LIBOR Loan made
pursuant to a Notice of Borrowing issued after the giving of the written notice
that LIBOR Loans will again be made available hereunder referred to in clause
(x) above), such additional amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as the Lender in its sole
discretion shall determine) as shall be required to compensate the tender for
such increased cost or reduction in amount received (a written notice as to
additional amounts owed the Lender, showing the basis for such calculation
thereof, shall be given to the Borrower by the Lender and shall, absent manifest
error, be final, conclusive and binding upon the parties hereto), and (z) in the
case of clause (iii), the Borrower shall take one of the actions specified in
Section 4.3.1(b) as promptly as possible and, in any event, within the time
period required by law.

              (b) At any time that any LIBOR Loan is affected by the
circumstances described in Section 4.3.1(a)(ii) or (iii), the Borrower may (and
in the case of a LIBOR

                                      -15-
   16
Loan affected pursuant to Section 4.3.1(a)(iii) shall) either (x) if the
affected LIBOR Loan is then being made, withdraw the related Notice of Borrowing
by giving the Lender telephonic (confirmed in writing) notice thereof on the
same date that the Borrower was notified by the Lender pursuant to Section
4.3.1(a), or (y) if the affected LIBOR Loans are then outstanding, upon at least
three Business Days' written notice to the Lender, require the Lender to convert
each LIBOR Loan so affected into a Base Rate Loan.

              4.3.2. Compensation. The Borrower shall compensate the Lender,
upon its written request (which request shall set forth the basis for requesting
such amounts), for all reasonable losses, expenses and liabilities (including,
without limitation, any interest paid by the Lender to lenders of funds borrowed
by it to make or carry its LIBOR Loans to the extent not recovered by the Lender
in connection with the re-employment of such funds) and any loss sustained by
the Lender in connection with the re-employment of the funds (including, without
limitation, a return on such re-employment that would result in the Lender's
receiving less than it would have received had such LIBOR Loan remained
outstanding until the last day of the Interest Period applicable to such LIBOR
Loan) that the Lender may sustain: (i) if for any reason (other than a default
by or negligence of the Lender) a LIBOR Loan is not advanced on a date specified
therefor in a Notice of Borrowing (unless timely withdrawn pursuant to Section
4.3.1(b)(x) above), (ii) if any payment or prepayment of any LIBOR Loans occurs
for any reason whatsoever (including, without limitation, by reason of Section
4.3.1(b)) on a date that is prior to the last day of an Interest Period
applicable thereto, (iii) if any prepayment of any of its LIBOR Loans is not
made on the date specified in a notice of payment given by the Borrower pursuant
to Section 4.1 or (iv) as a consequence of an election made by the Borrower
pursuant to Section 4.3.1(b)(y).

         4.4 Special Provisions Governing Money Market Rate Loans and Long
Term Funds Loans. Notwithstanding other provisions of this Agreement, the
following provisions shall govern with respect to Money Market Rate Loans and
Long Term Funds Loans as to the matters covered:

              4.4.1. Costs of Lender. In the event that at any time the Money
Market Rate or the Long Term Funds Rate does not reflect the cost to the Lender
of the maintenance of reserves in respect of any Money Market Rate Loan or Long
Term Funds Loan, as the case may be (including, without limitation, any
marginal, emergency, supplemental, special or other reserves but excluding
reserves required under Regulation D to the extent included in the computation
of such interest rate), then upon delivery of a certificate signed by an officer
of the Lender certifying that the Lender is entitled to payment under this
Section 4.4.1 and showing the basis in reasonable detail for the Lender's
request, the Borrower shall pay to the Lender with respect to any Money Market
Rate Loan or Long Term Funds Loan made pursuant to a Notice of Borrowing or
Interest Rate Change Notice, as the case may be, issued

                                      -16-
   17
after the date of delivery of such certificate additional interest in such
amounts as shall be required to compensate the Lender for the additional cost as
determined by the Lender with respect to such Money Market Rate Loan or Long
Term Funds Loan. A certificate of the Lender as to any amount payable pursuant
to this paragraph shall, absent manifest error, be final, conclusive and binding
upon all parties hereto.

              4.4.2. Compensation. The Borrower shall compensate the Lender,
upon written request by the Lender (which request shall set forth the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by the Lender to fund its Money Market Rate Loans and/or Long Term
Funds Loans to the Borrower), which the Lender may sustain with respect to Money
Market Rate Loans and/or Long Term Funds Loans to the Borrower: (i) if for any
reason (other than a default by the Lender) a borrowing of any Money Market Rate
Loan or Long Term Funds Loan does not occur on a date specified therefor in a
Notice of Borrowing or Interest Rate Change Notice, as the case may be (whether
or not withdrawn by the Borrower or because an Event of Default is then in
existence), (ii) if any repayment or conversion of any Money Market Rate Loan or
Long Term Funds Loan occurs on a date that is prior to the last day of the
Interest Period applicable to that Loan, or (iii) if any prepayment of any Long
Term Funds Loan is not made on any date specified in a notice of prepayment
given by the Borrower.

                                    ARTICLE V

                 REPRESENTATIONS AND WARRANTIES OF THE BORROWER

         In order to induce the Lender to enter into this Agreement and to make
the loans provided for herein, the Borrower makes the following representations
and warranties to the Lender, all of which shall survive the execution and
delivery of this Agreement and the Notes.

         5.1 Organization, Existence and Power. The Borrower is duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. The Borrower has the corporate power
necessary to conduct the business in which it is engaged, to own the properties
owned by it and to consummate the transactions contemplated by the Loan
Documents. The Borrower is duly qualified or licensed to transact business in
all places where the nature of the properties owned by it or the business
conducted by it makes such qualification necessary and where the failure to be
so qualified or licensed would have a material adverse effect upon the
consolidated financial condition, assets or results of operations of the
Borrower and its Subsidiaries taken as a whole.

                                      -17-
   18
         5.2 Authorization of Loan Documents; Binding Effect. The execution and
delivery of this Agreement and the other Loan Documents and the performance of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate actions of the Borrower. Each of the Loan Documents
constitutes the legal, valid and binding obligation of the Borrower that is a
party thereto, enforceable against the Borrower in accordance with its terms.

         5.3 Authority. The Borrower has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Loan
Documents. Neither the authorization, execution, delivery, or performance by the
Borrower of this Agreement or of any other Loan Document nor the performance of
the transactions contemplated hereby or thereby violates or will violate any
provision of the corporate charter or by-laws of the Borrower, or does or will,
with the passage of time or the giving of notice or both, result in a breach of
or a default under, or require any consent under or result in the creation of
any lien, charge or encumbrance upon any property or assets of the Borrower
pursuant to, any material instrument, agreement or other document to which the
Borrower is a party or by which the Borrower or any of its properties may be
bound or affected.

         5.4 Capital Structure. The number of shares of stock of which the
Borrower's authorized capital stock consists, the par value per share of such
stock, the number of shares of such stock that have been issued and are
outstanding and the number of shares that have been issued and are held by the
Borrower as treasury shares are all disclosed on the Disclosure Schedule. Set
forth in the Disclosure Schedule is a complete and accurate list of all
Subsidiaries of the Borrower. The Disclosure Schedule indicates the jurisdiction
of incorporation or organization of each of the Subsidiaries, the number of
shares or units of each class of capital stock or other equity of the
Subsidiaries authorized, and the number of such shares or units outstanding and
the percentage of each class of such equity owned (directly or indirectly) by
the Borrower. No shares of stock or units of equity interests of the Borrower or
any of its Subsidiaries are covered by outstanding options, warrants, rights of
conversion or purchase or similar rights granted or created by the Borrower
except as set forth on the Disclosure Schedule. All the outstanding capital
stock of the Borrower has been validly issued and is fully paid and
nonassessable. All the stock or units of equity interests of the Borrower's
Subsidiaries that are owned by the Borrower or any Subsidiary of the Borrower
are owned free and clear of all mortgages, deeds of trust, pledges, liens,
security interests and other charges or encumbrances.

         5.5 Financial Condition. The audited consolidated balance sheet of the
Borrower and its Subsidiaries dated as of December 31, 1992 and the audited
statements of operations, cash flows and stockholders' equity of the Borrower
and its Subsidiaries for and as of the end of the period ending on that date,
including any related notes (the "Audited Financial Statements"), and the
unaudited consolidated

                                      -18-
   19
financial statements of the Borrower and its Subsidiaries (the "Unaudited
Financial Statements") dated as of July 3, 1993 (the "Balance Sheet Date"), all
of which (collectively, the "Financial Statements") were heretofore furnished to
the Lender, are true, correct and complete in all material respects and fairly
present in all material respects the financial condition of the Borrower and its
Subsidiaries as of the date of each such statement and have been prepared in
accordance with generally accepted accounting principles (subject, in the case
of the Unaudited Financial Statements, to the addition of notes and to normal
year-end adjustments that individually and in the aggregate are not expected to
be material) consistently applied throughout the periods involved. Other than as
reflected in such Financial Statements and except for liabilities incurred in
the ordinary course of business since the date thereof, the Borrower has no
Indebtedness that is or would be material to the financial condition of the
Borrower, nor any material unrealized or unanticipated losses from any
commitments. Since the Balance Sheet Date there has been no material adverse
change in the consolidated financial condition (as set forth in the Audited
Financial Statements) or results of operations of the Borrower and its
Subsidiaries taken as a whole.

         5.6 Pending Litigation. Except as set forth in the Disclosure Schedule,
there are no suits or proceedings pending or, to the knowledge of the Borrower,
threatened before any court or arbitration tribunal or by or before any
governmental or regulatory authority, commission, bureau or agency or public
regulatory body against the Borrower that if adversely determined would have a
material adverse effect on the consolidated financial condition, assets or
results of operations of the Borrower and its Subsidiaries taken as a whole.

         5.7 Certain Agreements; Material Contracts. The Borrower is not a party
to any agreement or instrument or subject to any court order or governmental
decree adversely affecting in any material respect the business, properties,
assets or financial condition of the Borrower and its Subsidiaries taken as a
whole.

         5.8 Authorization, Etc. All authorizations, consents, approvals,
accreditations, certifications and licenses required under the corporate charter
or by-laws of the Borrower or under applicable law or regulation for the
ownership or operation of the property owned or operated by the Borrower or the
conduct of any business or activity conducted by the Borrower, including
provision of services for which reimbursement is made by third party payors,
other than authorizations, consents, approvals, accreditations, certifications
or licenses the failure to obtain and/or maintain which would not have a
material adverse effect on the consolidated financial condition, assets or
results of operations of the Borrower and its Subsidiaries taken as a whole
(collectively, "Licenses") have been duly issued and are in full force and
effect. The Borrower has fulfilled and performed all of its material obligations
with respect to such Licenses (to the extent now required to be fulfilled or
performed) and no event has occurred that would allow, with or without the
passage

                                      -19-
   20
of time or the giving of notice or both, revocation or termination thereof or
would result in any other material impairment of the rights of the holder of any
such License. All filings or registrations with any governmental or regulatory
authority required for the conduct of the business or activity conducted by the
Borrower have been made, other than any such filings or registrations as to
which the failure to make same would not have a material adverse effect on the
consolidated financial condition, assets or results of operations of the
Borrower and its Subsidiaries, taken as a whole. Except as expressly
contemplated hereby, no approval, consent or authorization of or filing or
registration with any governmental commission, bureau or other regulatory
authority or agency is required with respect to the execution, delivery or
performance of any of the Loan Documents.

         5.9 No Violation. The execution, delivery and performance by the
Borrower of the Loan Documents do not and will not violate any provision of law
or regulation applicable to the Borrower, or any writ, order or decree of any
court or governmental or regulatory authority or agency applicable to the
Borrower. The Borrower is not in default, nor has any event occurred that with
the passage of time or the giving of notice, or both, would constitute a
default, in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement, instrument or
other document to which the Borrower is a party, which default would have a
material adverse effect on the consolidated assets, financial condition or
results of operations of the Borrower and its Subsidiaries, taken as a whole.
The Borrower is not in violation of any applicable federal, state or local law,
rule or regulation or any writ, order or decree, which violation would have a
material adverse effect on the consolidated assets, financial condition or
results of operations of the Borrower and its Subsidiaries, taken as a whole.
Except as otherwise set forth in the Disclosure Schedule under the caption
"Litigation," the Borrower has not received notice of any violation of any
federal, state or local environmental law, rule or regulation or assertion that
the Borrower has any obligation to clean up or contribute to the cost of
cleaning up any waste or pollutants.

         5.10 Payment of Taxes. The Borrower and its Subsidiaries have properly
prepared and filed or caused to be properly prepared and filed all federal tax
returns and all material state and local tax returns that are required to be
filed and have paid all taxes shown thereon to be due and all other taxes,
assessments and governmental charges or levies imposed upon the Borrower and its
Subsidiaries, their income or profits or any properties belonging to the
Borrower. No extensions of any statute of limitations are in effect with respect
to any tax liability of the Borrower or any Subsidiary of the Borrower. No
deficiency assessment or proposed adjustment of the federal income taxes of the
Borrower or any Subsidiary of the Borrower is pending and the Borrower has no
knowledge of any proposed liability of a substantial nature for any tax to be
imposed upon any of its properties or assets.

                                      -20-
   21
         5.11 Transactions With Affiliates, Officers, Directors and 1%
Shareholders. Except as set forth on the Disclosure Schedule, the Borrower has
no Indebtedness to or material contractual arrangement or understanding with any
Affiliate, officer or director of the Borrower, nor any shareholder holding of
record at least 1% of the equity of the Borrower nor, to the best of the
Borrower's knowledge (without independent inquiry), any of their respective
relatives.

         5.12 ERISA. The Borrower has never established or maintained any funded
employee pension benefit plan as defined under Section 3(2)(A) of the Employee
Retirement Income Security Act of 1974, as amended and in effect on the date
hereof ("ERISA"), other than the plans described on the Disclosure Schedule. No
employee benefit plan established or maintained, or to which contributions have
been made, by the Borrower or any Subsidiary of the Borrower that is subject to
Part 3 of Title I-B of ERISA, had an accumulated funding deficiency (as such
term is defined in Section 302 of ERISA) as of the last day of the fiscal year
of such plan ended most recently prior to the date hereof, or would have had an
accumulated funding deficiency (as so defined) on such day if such year were the
first year of the plan to which Part 3 of Title I-B of ERISA applied. No
material liability to the Pension Benefit Guaranty Corporation has been incurred
or is expected by the Borrower to be incurred by it or any Subsidiary of the
Borrower with respect to any such plan or otherwise. The execution, delivery and
performance of this Agreement and the other Loan Documents will not involve on
the part of the Borrower any prohibited transaction within the meaning of ERISA
or Section 4975 of the Internal Revenue Code. The Borrower has never maintained,
contributed to or been obligated to contribute to any "multiemployer plan," as
defined in Section 3(37) of ERISA. The Borrower has never incurred any
"withdrawal liability" calculated under Section 4211 of ERISA, and there has
been no event or circumstance that would cause it to incur any such liability.

         5.13 Ownership of Properties; Liens. The Borrower has good and
marketable title to all its material properties and assets, real and personal,
that are now carried on its books, including, without limitation, those
reflected in the Financial Statements (except those disposed of in the ordinary
course since the date thereof), and has valid leasehold interests in its
properties and assets, real and personal, which it purports to lease, subject in
either case to no mortgage, security interest, pledge, lien, charge, encumbrance
or title retention or other security agreement or arrangement of any nature
whatsoever other than Permitted Liens and those specified in the Disclosure
Schedule and other than those granted, or to be granted, to the Lender
hereunder. All of the Borrower's material leasehold interests and material
obligations with respect to real property are described on the Disclosure
Schedule.

         5.14 Employment Matters. Except as set forth on the Disclosure
Schedule, there are no material grievances, disputes or controversies pending
or, to the knowledge of the Borrower, threatened between the Borrower and its
employees, nor

                                      -21-
   22
is any strike, work stoppage or slowdown pending or threatened against the
Borrower.

         5.15 Insurance. The Borrower maintains in force fire, casualty,
comprehensive liability and other insurance covering its properties and business
that is adequate and customary for the type and scope of its properties and
business.

         5.16 Indebtedness. Except as reflected in the Financial Statements or
set forth in the Disclosure Schedule, and other than Indebtedness incurred in
the ordinary course of business since the Balance Sheet Date, the Borrower has
no outstanding Indebtedness.

         5.17 Securities Law Compliance. The Borrower is not an "investment
company" as defined in the Investment Company Act of 1940, as amended. All of
the Borrower's outstanding stock was offered, issued and sold in compliance with
all applicable state and federal securities laws.

         5.18 Accuracy of Information. None of the information furnished to the
Lender by or on behalf of the Borrower for purposes of this Agreement or any
Loan Document or any transaction contemplated hereby or thereby contains, and
none of such information hereinafter furnished will contain any material
misstatement of fact, nor does or will any such information omit any material
fact necessary to make such information not misleading at such time.

                                   ARTICLE VI

                      CONDITIONS TO ADVANCES AND TERM LOAN

         The Lender shall not be obligated to make any Advance or to fund the
Term Loan unless the following conditions have been satisfied:

         6.1 Each Advance and Funding of Term Loan. The obligations of the
Lender to make each Advance and to fund the Term Loan are subject to the
following conditions precedent, each of which shall have been met or performed
on or before the Advance Date or the Closing Date, as the case may be:

              (a) No Default. No Default or Event of Default shall have occurred
and be continuing or will occur upon the making of the Advance or the Term Loan.

              (b) Correctness of Representations. The representations and
warranties made by the Borrower in this Agreement shall be true and correct with
the same force and effect as though such representations and warranties had been
made on and as of the Advance Date (i) except to the extent that the
representations and warranties set forth in Article V of this Agreement are
untrue as a result of

                                      -22-
   23
circumstances that have changed subsequent to the date hereof, which change has
caused no non-compliance by the Borrower with the covenants, conditions and
agreements in this Agreement and (ii) except that the references in Section 5.5
of this Agreement to the financial statements and the term "Balance Sheet Date"
are deemed to refer to the most recent financial statements (inclusive of
consolidated balance sheets and statements of operations, cash flows and
stockholders' equity of the Borrower and its Subsidiaries) furnished to the
Lender pursuant to Section 7.1(a) and (b) of this Agreement and the date of such
financial statements, respectively.

              (c) No Litigation; Certain Other Conditions. There shall be no
suit or proceeding (other than suits or proceedings disclosed on the Disclosure
Schedule on the date of this Agreement) pending or threatened before any court
or arbitration tribunal or by or before any governmental or regulatory
authority, commission, bureau or agency or public regulatory body that, if
determined adversely to the Borrower or any Subsidiary of the Borrower, is
reasonably likely to have a material adverse effect on the consolidated
financial condition or results of operations of the Borrower and its
Subsidiaries taken as a whole.

              (d) No Material Adverse Change. There shall have been no material
adverse change in the consolidated financial condition or results of operations
of the Borrower and its Subsidiaries taken as a whole since the Balance Sheet
Date.

              (e) Loan Documents. All Loan Documents shall be in full force and
effect.

         6.2 First Advance and Funding of Term Loan. The obligations of the
Lender to make the first Advance and to fund the Term Loan are subject to the
following additional conditions precedent, each of which shall have been met or
performed on or before the Closing Date:

              (a) Opinion of Counsel. The Lender shall have received from
independent counsel to the Borrower an opinion or opinions, in form and
substance satisfactory to the Lender and its counsel.

              (b) Certificates of Legal Existence and Authority to do Business.
The Borrower shall have delivered to the Lender certificates as to its legal
existence and good standing under the laws of The Commonwealth of Massachusetts,
and the Borrower shall have delivered to the Lender certificates as to its
authority to do business as a foreign corporation in the States of California,
Colorado, Connecticut, Florida, Illinois, Maryland, Michigan, New Jersey, New
Mexico, New York, Oregon, Pennsylvania, Texas, Arizona, Minnesota and North
Carolina, each dated as of a recent date.

                                      -23-
   24
              (c) Clerk's Certificate. The Borrower shall have delivered to the
Lender a certificate of its Clerk as to (i) its charter documents and by-laws,
as amended, (ii) corporate votes authorizing the execution and delivery of the
Loan Documents, and (iii) incumbency of the officers authorized to execute the
Loan Documents on behalf of the Borrower.

              (d) Notes. A Revolving Credit Note and a Term Note, each duly
executed by the Borrower and otherwise completed, shall have been delivered to
the Lender.

              (e) Borrower's Certificates. The Borrower shall have furnished to
the Lender a certificate duly executed by the Borrower's chief financial officer
dated the Advance Date or Closing Date, as the case may be, to the effect that
each of the conditions set forth in the foregoing Section 6.1 has been met as of
such date.

              (f) Mortgage. A mortgage (the "Mortgage") in the form attached
hereto as Exhibit C with respect to the real property located in The
Commonwealth of Massachusetts that is owned by the Borrower (the "Property"),
duly executed by the Borrower and otherwise completed, shall have been delivered
to the Lender and recorded. A title insurance policy in favor of the Lender
issued by a title insurance company reasonably satisfactory to the Lender
insuring title to the Property on terms and subject to conditions reasonably
satisfactory to the Lender shall have been obtained.

              (g) Insurance. The Borrower shall have furnished to the Lender
copies of all its property insurance policies.

              (h) All Proceedings Satisfactory. All corporate and other
proceedings taken prior to or on the Closing Date in connection with the
transactions contemplated by this Agreement, and all documents and exhibits
related thereto, shall be reasonably satisfactory in form and substance to the
Lender and its counsel.

              (i) Additional Documents. The Borrower shall have delivered to the
Lender all additional opinions, documents and certificates that the Lender or
its counsel may reasonably require.

                                   ARTICLE VII

                      AFFIRMATIVE COVENANTS OF THE BORROWER

         The Borrower covenants and agrees that from the date of execution of
this Agreement and until the payment in full of the principal of and interest
upon the Notes and payment and performance of all other Obligations:


                                      -24-
   25
         7.1 Reporting Requirements. The Borrower shall, unless the Lender shall
otherwise consent in writing, furnish to the Lender:

              (a) As soon as available and in any event within sixty days after
the end of each of the first three quarters of each fiscal year of the Borrower
and its Subsidiaries, (i) a consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries as of the end of such quarter and (ii)
consolidated and consolidating statements of operations, cash flows and
stockholders' equity of the Borrower and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter, all in reasonable detail and duly certified by the chief financial
officer of the Borrower as having been prepared in accordance with generally
accepted accounting principles consistently applied (subject to addition of
notes and ordinary year-end audit adjustments), together with a certificate of
the chief financial officer of the Borrower stating that no Default or Event of
Default has occurred and is continuing or, if a Default or an Event of Default
has occurred and is continuing, a statement as to the nature thereof and the
action that the Borrower proposes to take with respect thereto;

              (b) As soon as available and in any event within ninety days after
the end of each fiscal year of the Borrower, the audited consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of such fiscal year and
the audited consolidated statements of operations, cash flows and stockholders'
equity of the Borrower and its Subsidiaries for such fiscal year, in each case
accompanied by the unqualified opinion with respect thereto of the Borrower's
independent public accountants and a certification by such accountants stating
that they have reviewed this Agreement and whether, in making their audit, they
have become aware of any Default or Event of Default and if so, describing its
nature, along with the related unaudited consolidating balance sheet of the
Borrower and its Subsidiaries as of the end of such fiscal year and the
unaudited consolidating statements of operations, cash flows and stockholders'
equity of the Borrower and its Subsidiaries for such fiscal year;

              (c) Not later than sixty days following the end of each fiscal
quarter a certificate signed by the chief financial officer of the Borrower
substantially in the form of Exhibit 7.1(c) hereto (the "Compliance
Certificate");

              (d) Not later than thirty days after the end of each fiscal year
of the Borrower, the Borrower's representative forecast for the next fiscal year
on a consolidated basis, including, at a minimum, projected statements of profit
and loss and projected cash flow, prepared in accordance with generally accepted
accounting principles consistently applied;

              (e) Promptly upon receipt thereof, one copy of each other report
submitted to the Borrower or any Subsidiary by independent accountants in

                                      -25-
   26
connection with any annual, interim or special audit made by them of the books
of the Borrower or any Subsidiary;

              (f) Promptly after the commencement thereof, notice of all
actions, suits and proceedings before any court, arbitration tribunal or
governmental regulatory authority, commission, bureau, agency or public
regulatory body that, if determined adversely to the Borrower or any Subsidiary
of the Borrower, would be reasonably likely to have a material adverse effect on
the consolidated financial condition or results of operations of the Borrower
and its Subsidiaries taken as a whole;

              (g) As soon as possible, and in any event within five days after
the Borrower shall know of the occurrence of any Default or Event of Default,
the written statement of the chief financial officer of the Borrower setting
forth details of such Default or Event of Default and action that the Borrower
proposes to take with respect thereto;

              (h) As soon as possible, and in any event within five days after
the occurrence thereof, written notice as to any other event of which the
Borrower becomes aware that with the passage of time, the giving of notice or
otherwise, is reasonably likely to result in a material adverse change in the
consolidated financial condition or results of operations of the Borrower; and

              (i) Such other information respecting the business or properties
or the condition or operations, financial or otherwise, of the Borrower as the
Lender may from time to time reasonably request.

         7.2 Loan Proceeds. The Borrower shall use the proceeds of the Advances
only for the purpose of general working capital, including, but not limited to,
for the purpose of acquisitions for which the aggregate cost may not exceed
$2,500,000 per annum.

         7.3 Maintenance of Business and Properties; Insurance.

              (a) The Borrower will continue to engage in business of the same
general nature as the business currently engaged in by the Borrower. The
Borrower will at all times maintain, preserve and protect all material
franchises and trade names and preserve all the Borrower's material tangible
property used or useful in the conduct of its business and keep the same in good
repair, working order and condition, ordinary wear and tear excepted, and from
time to time make all needful and proper repairs, renewals, replacements,
betterments, and improvements thereto so that the business carried on in
connection therewith may be conducted properly and advantageously at all times.


                                      -26-
   27
              (b) The Borrower will keep all of its insurable properties now or
hereafter owned adequately insured at all times against loss or damage by fire
or other casualty to the extent customary with respect to like properties of
companies conducting similar businesses and to the extent available at
commercially reasonable rates; and will maintain public liability and workmen's
compensation insurance insuring the Borrower to the extent customary with
respect to companies conducting similar businesses and to the extent available
at commercially reasonable rates, all by financially sound and reputable
insurers. All property insurance policies shall name the Lender as a loss payee
and shall contain a provision requiring at least 15 days' written notice to the
Lender prior to the cancellation or modification of each such policy. The
Borrower shall furnish to the Lender from time to time at the Lender's request
copies of all such insurance policies and certificates evidencing such insurance
coverage. Notwithstanding the foregoing, the Borrower may self-insure workmen's
compensation to the extent permitted by law and may also self-insure other risks
to the extent reasonably deemed prudent by the Borrower.

         7.4 Payment of Taxes. The Borrower shall pay and discharge, or cause to
be paid and discharged, all material taxes, assessments, and governmental
charges or levies imposed upon the Borrower and its Subsidiaries or their income
or profits, or upon any other properties belonging to the Borrower prior to the
date on which penalties attach thereto, and all lawful claims that, if unpaid,
might become a lien or charge upon any material properties of the Borrower,
except for such taxes, assessments, charges, levies or claims as are being
contested by the Borrower in good faith by appropriate proceedings promptly
initiated and diligently prosecuted, for which adequate book reserves have been
established in accordance with generally accepted accounting principles, as to
which no foreclosure, distraint, sale or other similar proceedings shall have
been commenced, or, if commenced, have been effectively stayed.

         7.5 Compliance with Laws, etc. The Borrower shall comply with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority, and obtain or maintain all Licenses required under
applicable law or regulation for the operation of the Borrower's business, where
noncompliance or failure to obtain or maintain would have a material adverse
effect on the consolidated financial condition, assets, or results of operations
of the Borrower and its Subsidiaries taken as a whole; provided, however, that
such compliance or the obtaining of such Licenses may be delayed while the
applicability or validity of any such law, rule, regulation or order or the
necessity for obtaining any such License is being contested by the Borrower in
good faith by appropriate proceedings promptly initiated and diligently
prosecuted.

         7.6 Books, Records and Accounts. The Borrower shall keep true and
correct books, records and accounts, in which entries will be made in accordance
with generally accepted accounting principles consistently applied, and that
shall comply

                                      -27-
   28
with the requirements of the Foreign Corrupt Practices Act of 1977 to the extent
applicable to the Borrower. The Lender or its representatives shall upon
reasonable notice to the Borrower be afforded, during normal business hours,
access to and the right to examine and copy any such books, records and accounts
and the right to inspect the Borrower's premises and business operations. All
financial and other information with respect to the Borrower and/or any of its
Subsidiaries now or hereafter obtained by the Lender under this Agreement or
otherwise in connection with any of the transactions contemplated hereunder
shall be held in confidence and shall not be released or made available to any
other Person, except (i) to governmental agencies (and examiners employed by
same) having oversight over the affairs of the Lender, (ii) pursuant to subpoena
or similar process issued by a court or governmental agency of competent
jurisdiction, or (iii) as otherwise directed by order of any court or
governmental agency of competent jurisdiction.

         7.7 Further Assurances. The Borrower shall execute and deliver, at the
Borrower's expense, all notices and other instruments and documents and take all
actions, including, but not limited to, making all filings and recordings, that
the Lender shall reasonably request in order to assure to the Lender all rights
given to the Lender hereby or under any other Loan Document.

         7.8 Bank Accounts. The Borrower shall maintain with the Lender a
deposit account and, at the written request of the Lender, shall give the Lender
written notice of any other accounts maintained by the Borrower, including the
types of accounts and names and addresses of the institutions with which such
accounts are maintained.

                                  ARTICLE VIII

                       NEGATIVE COVENANTS OF THE BORROWER

         The Borrower covenants and agrees that from the date of execution of
this Agreement and until the payment in full of the principal of and interest
upon the Notes and payment and performance of all other Obligations:

         8.1 Sale of Assets; Mergers, Etc.

              (a) Sale of Assets. The Borrower will not, except in the ordinary
course of business, sell, transfer, or otherwise dispose of, to any Person any
assets (including the securities of any Subsidiary).

              (b) Mergers, Etc. Neither the Borrower nor any Subsidiary will
consolidate with or merge into any other Person or permit any other Person to
consolidate with or merge into it, or acquire all or substantially all of the
assets of any Person, or sell, assign, lease or otherwise dispose of (whether in
one transaction

                                      -28-
   29
or in a series of transactions) all or substantially all of its assets to any
Person, except that

                   (1) a Subsidiary may consolidate with or merge into the
              Borrower or another Subsidiary; and

                   (2) the Borrower or any of its Subsidiaries may acquire all
              or substantially all of the assets of any Person provided the
              aggregate purchase price liability, including all contingent
              liabilities, when aggregated with all such acquisitions and any
              Investments permitted under Section 8.4(2) shall not exceed a
              total of $5,000,000 in each calendar year during the term of this
              Agreement beginning with calendar year 1993.

         8.2 Liens and Encumbrances.

              (a) Neither the Borrower nor any Subsidiary will (a) cause or
permit or (b) agree or consent to cause or permit in the future (upon the
happening of a contingency or otherwise), any of its real or personal property,
whether now owned or subsequently acquired, to be subject to any Lien other than
Liens described below (which may herein be referred to as "Permitted Liens"):

                   (1) Liens securing the payment of taxes, assessments or
              governmental charges or levies or the demands of suppliers,
              mechanics, carriers, warehousers, landlords and other like
              Persons, which payments are not yet due and payable or (as to
              taxes) may be paid without interest or penalty; provided, that, if
              such payments are due and payable, such Liens shall be permitted
              hereunder only to the extent that (A) all claims that the Liens
              secure are being actively contested in good faith and by
              appropriate proceedings, (B) adequate book reserves have been
              established with respect thereto to the extent required by
              generally accepted accounting principles, and (C) such Liens do
              not in the aggregate materially interfere with the owning
              company's use of property necessary or material to the conduct of
              the business of the Borrower and its Subsidiaries taken as a
              whole;

                   (2) Liens incurred or deposits made in the ordinary course of
              business (A) in connection with worker's compensation,
              unemployment insurance, social security and other like laws, or
              (B) to secure the performance of letters of credit, bids, tenders,
              sales contracts, leases, statutory obligations, surety, appeal and
              performance bonds and other similar obligations, in each case not
              incurred in connection with the borrowing of money, the obtaining
              of advances or the payment of the deferred purchase price of
              property;


                                      -29-
   30
                   (3) Liens not otherwise described in Section 8.2(a)(1) or (2)
              that are incurred in the ordinary course of business and are
              incidental to the conduct of its business or ownership of its
              property, were not incurred in connection with the borrowing of
              money, the obtaining of advances or the payment of the deferred
              purchase price of property and do not in the aggregate materially
              detract from the value of, or materially interfere with the owning
              company's use of, property necessary or material to the conduct of
              the business of the Borrower and its Subsidiaries taken as a
              whole;

                   (4) Liens in favor of the Lender or any of its affiliates;

                   (5) Judgment liens or attachments that shall not have been in
              existence for a period longer than 30 days after the creation
              thereof, or if a stay of execution shall have been obtained, for a
              period longer than 30 days after the expiration of such stay or if
              such an attachment is being actively contested in good faith and
              by appropriate proceedings, for a period longer than 30 days after
              the creation thereof;

                   (6) Liens existing as of the Closing Date and disclosed on
              the Disclosure Schedule hereto;

                   (7) Liens provided for in equipment or Financing Leases
              (including financing statements and undertakings to file financing
              statements) provided that they are limited to the equipment
              subject to such leases and the proceeds thereof;

                   (8) Leases, subleases, licenses and sublicenses granted to
              third parties not interfering in any material respect with the
              business of the Borrower or any Subsidiary of the Borrower;

                   (9) Any Lien on any asset of any corporation existing at the
              time such corporation is merged into or consolidated with the
              Borrower or a Subsidiary of the Borrower and not created in
              contemplation of such event;

                   (10) Any Lien existing on any asset prior to the acquisition
              thereof by the Borrower or any Subsidiary of the Borrower and not
              created in contemplation of such event;

                   (11) Liens in respect of any purchase money obligations for
              tangible property used in its business that at any time shall not
              exceed $2,000,000, provided that any such encumbrances shall not
              extend to


                                      -30-
   31
              property and assets of the Borrower or any Subsidiary not
              financed by such a purchase money obligation;

                   (12) Easements, rights of way, restrictions and other similar
              charges or Liens relating to real property and not interfering in
              a material way with the ordinary conduct of its business; and

                   (13) Liens on its property or assets created in connection
              with the refinancing of Indebtedness secured by Permitted Liens on
              such property, provided that the amount of Indebtedness secured by
              any such Lien shall not be increased as a result of such
              refinancing and no such Lien shall extend to property and assets
              of the Borrower or any Subsidiary not encumbered prior to any such
              refinancing.

              (b) In case any property is subjected to a Lien in violation of
Section 8.2(a), the Borrower will make or cause to be made provision whereby the
Notes will be secured equally and ratably with all other obligations secured by
such property, and in any case the Notes shall have the benefit, to the full
extent that the holders may be entitled thereto under applicable law, of an
equitable Lien equally and ratably securing the Notes. Such violation of Section
8.2(a) shall constitute an Event of Default hereunder, whether or not any such
provision is made pursuant to this Section 8.2(b).

         8.3 Sales and Leasebacks. The Borrower and its Subsidiaries will not
sell or transfer any of their property and become, directly or indirectly,
liable as the lessee under a lease of such property (other than such
transactions between the Subsidiaries).

         8.4 Investments. Neither the Borrower nor any Subsidiary will make or
maintain any investments, made in cash or by delivery of property or assets, (a)
in any Person, whether by acquisition of capital stock, Indebtedness, or other
obligations or securities, or by loan or capital contribution, or otherwise, or
(b) in any property, whether real or personal, (items (a) and (b) being herein
called "Investments"), except the following:

                   (1) Investments in direct obligations of, or guaranteed by,
              the United States government, its agencies or any public
              instrumentality thereof and backed by the full faith and credit of
              the United States government with maturities not to exceed (or an
              unconditional right to compel purchase within) one year from the
              date of acquisition;

                   (2) Investments in or to any Subsidiary or other Person
              provided any such Investment when aggregated with all such other
              Investments permitted under this Section 8.4(2) and any
              acquisitions


                                      -31-
   32
              permitted under Section 8.1(b) shall not exceed a total of
              $5,000,000 in each calendar year during the term of this Agreement
              beginning with calendar year 1993;

                   (3) Investments and obligations issued by any state of the
              United States or any political subdivision of any such state or
              any public instrumentality thereof with maturities not to exceed
              (or an unconditional right to compel purchase within) 180 days of
              the date of acquisition that are rated in one of the top two
              rating classifications by at least one nationally recognized
              rating agency;

                   (4) Investments in demand and time deposits with, Eurodollar
              deposits with, certificates of deposit issued by, or obligations
              or securities fully backed by letters of credit issued by (x) any
              bank organized under the laws of the United States, any state
              thereof, the District of Columbia or Canada having combined
              capital and surplus aggregating at least $100,000,000, or (y) any
              other bank organized under the laws of a state that is a member of
              the European Economic Community (or any political subdivision
              thereof), Japan, the Cayman Islands, or British West Indies having
              as of any date of determination combined capital and surplus of
              not less than $500,000,000 or the equivalent thereof (determined
              in accordance with generally accepted accounting principles)
              ("Permitted Banks");

                   (5) Shares of money market mutual funds registered under the
              Investment Company Act of 1940, as amended;

                   (6) Foreign currency swaps and hedging arrangements entered
              into in the ordinary course of business to protect against
              currency losses, and interest rate swaps and caps entered into in
              the ordinary course of business to protect against interest rate
              exposure on Indebtedness bearing interest at a variable rate;

                   (7) Investments in publicly traded companies and mutual funds
              (other than money market mutual funds) that in the aggregate shall
              not exceed $5,000,000; and

                   (8) Other Investments existing on the Closing Date and listed
              on the Disclosure Schedule.

         8.5 Transactions with Affiliates. Neither the Borrower nor any
Subsidiary will enter into any transaction (including the purchase, sale or
exchange of property or the rendering of any service) with any Affiliate except
upon fair and reasonable

                                      -32-
   33
terms that are at least as favorable to the Borrower or the Subsidiary as would
be obtained in a comparable arm's-length transaction with a non-Affiliate.

         8.6 ERISA Compliance. Neither the Borrower nor any of its Subsidiaries
will at any time permit any employee pension benefit plan (as such term is
defined in Section 3 of ERISA) maintained by the Borrower or any of its
Subsidiaries or in which employees of the Borrower or any of its Subsidiaries is
entitled to participate to:

              (a) engage in any "prohibited transaction" as such term is defined
in Section 4975 of the Internal Revenue Code of 1986, as amended, or described
in Section 406 of ERISA;

              (b) incur any "accumulated funding deficiency" as such term is
defined in Section 302 of ERISA, whether or not waived; or

              (c) terminate under circumstances that could result in the
imposition of a Lien on the property of the Borrower or any Subsidiary of the
Borrower pursuant to Section 4068 of ERISA.

         8.7  Financial Covenants.  The Borrower covenants and agrees that:

              (a) Consolidated Tangible Net Worth. The Consolidated Tangible Net
Worth as of the end of each fiscal quarter of the Borrower shall not be less
than the sum of (i) $26,000,000, and (ii) beginning with the year ending
December 31, 1994, 50% of Consolidated Net Income (excluding losses) for each
consecutive fiscal year of the Borrower beginning with the year ending December
31, 1994, on a cumulative basis.

              (b) Consolidated Indebtedness. The ratio ("Debt-to-Net Worth
Ratio") of the Consolidated Indebtedness (excluding all guaranties except
guaranties with respect to borrowed money) as of the end of each fiscal quarter
of the Borrower beginning with the fiscal quarter ending December 31, 1993 to
its Consolidated Tangible Net Worth as of the end of each fiscal quarter of the
Borrower beginning with the fiscal quarter ending December 31, 1993 shall not
exceed 1.5 to 1.

              (c) Consolidated Debt Service. The ratio (the "Cash Flow Ratio")
as of the end of each fiscal quarter of the Borrower of (i) Consolidated
Operating Cash Flow for the four consecutive fiscal quarters then ended to (ii)
Consolidated Debt Service determined for the four consecutive fiscal quarters
then ended shall not be less than 1.25 to 1.00.

         8.8 Contracts Prohibiting Compliance with Agreement. The Borrower will
not without the prior written consent of the Lender enter into any contract or
other

                                      -33-
   34
agreement that would prohibit or in any way restrict the ability of the Borrower
to comply with any provision of this Agreement.

                                   ARTICLE IX

                                EVENTS OF DEFAULT

         9.1 Default. If any one of the following events ("Events of Default")
shall occur:

              (a) Any representation or warranty made by the Borrower herein or
in any other Loan Document, or in any certificate or report furnished by the
Borrower hereunder or thereunder, shall prove to have been incorrect in any
material respect when made;

              (b) Payment of any principal or interest due under any Note shall
not be made on or before the date due;

              (c) A final judgment for in excess of $2,000,000 shall be rendered
against the Borrower or any of its Subsidiaries for the payment of money that,
after deducting the amount of any insurance proceeds paid or payable to or on
behalf of the Borrower or its Subsidiary in connection with such judgment, is in
excess of $2,000,000, and the same shall remain undischarged for a period of
thirty (30) days, during which period execution shall not effectively be stayed.
If a dispute exists with respect to the liability of any insurance underwriter
under any insurance policy of the Borrower or its Subsidiary, no deduction under
this subsection shall be made for the insurance proceeds that are the subject of
such dispute;

              (d) The Borrower or any Subsidiary shall (1) voluntarily terminate
operations or apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of such Person or of
all or a substantial part of the assets of such Person, (2) admit in writing its
inability, or be generally unable, to pay its debts as the debts become due, (3)
make a general assignment for the benefit of its creditors, (4) commence a
voluntary case under the Federal Bankruptcy Code (as now or hereafter in
effect), (5) file a petition seeking to take advantage of any other law relating
to bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, (6) fail to controvert in a timely and appropriate manner,
or acquiesce in writing to, any petition filed against it in an involuntary case
under the Federal Bankruptcy Code or applicable state bankruptcy laws or (7)
take any corporate action for the purpose of effecting any of the foregoing;

              (e) Without its application, approval or consent, a proceeding
shall be commenced, in any court of competent jurisdiction, seeking in respect
of the

                                      -34-
   35
Borrower or any Subsidiary: the liquidation, reorganization, dissolution,
winding-up, or composition or readjustment of debt, the appointment of a
trustee, receiver, liquidator or the like of such Person or of all or any
substantial part of the assets of such Person, or other like relief in respect
of such Person under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts; and, if the proceeding is
being contested in good faith by such Person, the same shall continue
undismissed, or unstayed and in effect for any period of 45 consecutive days, or
an order for relief against such Person shall be entered in any case under the
Bankruptcy Code or applicable state bankruptcy laws;

              (f) Any foreclosure or other proceedings shall be commenced to
enforce, execute or realize upon any lien, encumbrance, attachment, trustee
process, mortgage or security interest for payment of an amount in excess of
$250,000 against the Borrower or any Subsidiary;

              (g) Default shall be made in the due observance or performance of
any covenant or agreement under Article VIII;

              (h) Default shall be made in the due observance or performance of
any covenant or agreement contained herein (and not constituting an Event of
Default under any other clause in this Article IX) or in any other Loan Document
or in any other agreement between the Lender and the Borrower evidencing or
securing borrowed monies and such default shall continue and shall not have been
remedied within thirty days after the date on which such default occurred;

              (i) The Borrower or any of its Subsidiaries shall fail to make any
payment of principal or interest beyond the period of grace contained in any
instrument or agreement evidencing any indebtedness (other than to the Lender)
for money borrowed in excess of $100,000 (unless such default is the result of a
good faith dispute arising under such agreement or instrument and the other
party or parties thereto have not accelerated the maturity of such
indebtedness), or default shall be made by the Borrower or any of its
Subsidiaries in the performance of any other covenant or agreement contained in
any such agreement or instrument as a result of which the other party thereto
proceeds to accelerate the maturity of the indebtedness of such Person under
such agreement or instrument;

              (j) There shall occur any material adverse change in the financial
condition of the Borrower;

then, in the case of any such event, other than an event described in subsection
(d) or (e) of this Section 9.1, the Lender may, at its option immediately
declare any Obligations to it not otherwise due and payable at such time to be
forthwith due and payable, whereupon the same shall become forthwith due and
payable without further presentment, demand, protest, or other notice of any
kind, all of which are

                                      -35-
   36
hereby expressly waived, anything contained herein or in the Notes to the
contrary notwithstanding; and, in the case of any event described in subsection
(d) or (e) of this Section 9.1, any Obligation not otherwise due and payable at
such time shall become immediately due and payable without presentment, demand,
protest, or other notice of any kind, all of which are hereby expressly waived,
anything contained herein or in any Note to the contrary notwithstanding; and,
further, in each and every such occurrence the Lender may proceed to protect and
enforce its rights by suit in equity, action at law and/or other appropriate
proceedings either for specific performance of any covenant or condition
contained in this Agreement or in any instrument delivered to the Lender
pursuant to this Agreement, or in aid of the exercise of any power granted in
this Agreement or any such instrument.

         9.2 Lender's Further Rights and Remedies. Upon the occurrence and
during the unremedied continuation of an Event of Default, the Lender shall have
the right to require the Borrower to provide the Lender with cash collateral or
other collateral of a type and value satisfactory to the Lender in an amount
equal to the Borrower's outstanding Obligations to the Lender. With respect to
such collateral (the "Collateral"), the Lender shall have the rights and
remedies of a secured party under the Uniform Commercial Code ("UCC") and the
Borrower agrees to execute and deliver to the Lender such security agreements
and financing statements under the UCC as the Lender may require, and to pay the
cost of filing the same. Any deposits or other sums at any time credited by or
due from the Lender to the Borrower shall at all times constitute Collateral for
the Obligations. The Lender may apply the net proceeds of any disposition of
Collateral or set-off to the Obligations in such order as the Lender may
determine, whether or not due. With respect to Obligations not yet due,
including contingent Obligations, the Lender may at its option hold Collateral
(including any proceeds thereof) until all such Obligations have been paid in
full.

                                    ARTICLE X

                                  MISCELLANEOUS

         10.1 No Waiver, Remedies Cumulative. No failure on the part of the
Lender to exercise and no delay in exercising any right hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and are not exclusive
of any remedies provided by law. Any condition or restriction imposed in this
Agreement with respect to the Borrower may be waived, modified or suspended by
the Lender but only on the Lender's prior action in writing and only as so
expressed in such writing and not otherwise.

                                      -36-
   37
         10.2 Survival of Representations, etc. All representations, warranties
and covenants made herein or in any Loan Document shall survive the making of
any Advance hereunder and the delivery of the Notes and the consummation of all
other transactions contemplated hereby or thereby.

         10.3 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise and not by way of limitation of any
such rights, upon the occurrence and during the unremedied continuation of an
Event of Default, the Lender is hereby authorized at any time or from time to
time, without presentment, demand, protest or other notice of any kind to the
Borrower or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by the Lender to
or for the credit or the account of the Borrower against and on account of the
Obligations and liabilities of the Borrower to the Lender under this Agreement
or under any of the other Loan Documents, and all other claims of any nature or
description arising out of or connected with this Agreement or any other Loan
Document, irrespective of whether or not the Lender shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.

         10.4 Indemnity; Costs, Expenses and Taxes. The Borrower hereby agrees
to indemnify the Lender and its legal representatives, successors, assigns and
agents against, and agrees to protect, save and keep harmless each of them from
and to pay upon demand, any and all liabilities, obligations, taxes (including
any and all stamp and other taxes payable or determined to be payable in
connection with the execution and delivery of any Loan Documents), liens,
charges, losses, damages, penalties, claims, actions, suits, costs, indemnities,
expenses and disbursements (including, without limitation, reasonable legal
fees, costs and expenses, including without limitation reasonable costs of
attending and preparing for depositions and other court proceedings), of
whatsoever kind and nature, imposed upon, incurred by or asserted against such
indemnified party in any way relating to or arising out of any of the
transactions contemplated hereunder or in any of the Loan Documents, including
but not limited to all costs of investigation, monitoring, legal representation,
remedial response, removal, restoration, or permit acquisition that may now or
in the future be undertaken, suffered, paid, awarded, assessed or otherwise
incurred as a result of the presence of, release or threatened release of
Hazardous Substances on, in, under or near the Property (all of the foregoing,
collectively, "Costs") except to the extent arising by reason of the Lender's
gross negligence, misconduct or breach hereof. Without limiting the foregoing,
the Borrower agrees to pay on demand (a) all out-of-pocket costs and expenses of
the Lender in connection with the preparation, execution and delivery of this
Agreement and any other Loan Documents, including without limitation the
reasonable fees and out-of-pocket expenses of Foley, Hoag & Elliot, special
counsel for the Lender, with respect thereto, as well as (b) the reasonable fees
and all out-of-pocket expenses of legal counsel, independent public

                                      -37-
   38
accountants and other outside experts retained by the Lender in connection with
any request by the Borrower for consents, waivers or other action or forbearance
by the Lender hereunder, for the modification or amendment hereof, or other like
matters relating to the administration of this Agreement; and (c) all reasonable
costs and expenses, if any, of the Lender incurred after the occurrence of any
Event of Default hereunder in connection with the enforcement of any of the Loan
Documents or the protection of any of the Lender's rights, thereunder,
including, without limitation, any internal costs, including personnel costs of
the Lender incurred in connection with such administration and enforcement or
protection.

         10.5 Notices.

              (a) Unless telephonic notice is specifically permitted pursuant to
the terms of this Agreement, any notice or other communication hereunder to any
party hereto shall be by telegram, telecopier, telex, delivery in hand or by
courier, or registered or certified mail (return receipt requested) and shall be
deemed to have been given or made when telegraphed, telexed, telecopied (and
confirmed received), delivered in hand or by courier, or three days after being
deposited in the mails, postage prepaid, registered or certified, addressed to
the party as follows (or at any other address that such party may hereafter
specify to the other parties in writing):

                        (i)  If to the Lender:

                             The First National Bank of Boston
                             100 Federal Street
                             Boston, Massachusetts  02110
                             Attn:  Ms. Sharon A. Stone, Director
                             Telecopier No. (617) 434-4048

                             with a copy to:

                             Arlene L. Bender, Esq.
                             Foley, Hoag & Eliot
                             One Post Office Square
                             Boston, Massachusetts  02109
                             Telecopier No. (617) 482-7347

                        (ii) If to the Borrower:

                             Six Shattuck Road
                             Andover, Massachusetts 01810
                             Attn:  Mr. Robert F. O'Brien, Treasurer
                             Telecopier No. (508) 975-3756


                                      -38-
   39
                             with a copy to:

                             Richard S. Chute, Esq.
                             Hill & Barlow
                             One International Place
                             Boston, Massachusetts  02110
                             Telecopier No. (617) 439-3580

         10.6 MASSACHUSETTS LAW. THIS AGREEMENT AND EACH OF THE LOAN DOCUMENTS
SHALL BE DEEMED A CONTRACT MADE UNDER THE LAW OF THE COMMONWEALTH OF
MASSACHUSETTS AND SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF SAID STATE (WITHOUT REGARD TO ITS PRINCIPLES OF
CONFLICT OF LAWS).

         10.7 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the Borrower and the Lender, and their respective
legal representatives, successors and assigns; provided that the Lender may
assign its rights hereunder, but the Borrower may not assign any of its rights
hereunder.

         10.8 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original and all of
which when taken together shall constitute one and the same instrument.

         10.9 JURISDICTION, SERVICE OF PROCESS.

              (a) ANY SUIT, ACTION OR PROCEEDING AGAINST THE BORROWER WITH
RESPECT TO ANY OF THE LOAN DOCUMENTS OR ANY JUDGMENT ENTERED BY ANY COURT IN
RESPECT OF ANY THEREOF SHALL BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS LOCATED IN SUFFOLK COUNTY OR IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MASSACHUSETTS, AS THE LENDER (IN ITS SOLE
DISCRETION) MAY ELECT, AND THE BORROWER HEREBY ACCEPTS THE EXCLUSIVE
JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING
AND AGREES NOT TO ASSERT ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF SUCH COURTS.

              (b) IN ADDITION, THE BORROWER HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY


                                      -39-
   40
OF THE LOAN DOCUMENTS OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT THEREOF
BROUGHT IN SUFFOLK COUNTY IN THE COMMONWEALTH OF MASSACHUSETTS, AND HEREBY
FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUIT, ACTION OR PROCEEDING BROUGHT
IN SUFFOLK COUNTY IN THE COMMONWEALTH OF MASSACHUSETTS HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

         10.10 Limit on Interest. It is the intention of the Lender and the
Borrower to comply strictly with all applicable usury laws; and, accordingly, in
no event and upon no contingency shall the Lender ever be entitled to receive,
collect, or apply as interest under any Note any interest, fees, charges or
other payments equivalent to interest, in excess of the maximum rate that the
Lender may lawfully charge under applicable statutes and laws from time to time
in effect; and, in the event that the Lender ever receives, collects or applies
as interest on the Notes, any such excess, such amount that, but for this
provision, would be excessive interest shall be applied to the reduction of the
principal amount of the indebtedness evidenced by the Notes; and, if the
principal amount of indebtedness evidenced by the Notes, and all lawful interest
thereon, is paid in full, any remaining excess shall forthwith be paid to the
Borrower, or other party lawfully entitled thereto. In determining whether or
not the interest paid or payable, under any specific contingency exceeds the
highest contract rate permitted by applicable law from time to time in effect,
the Borrower and the Lender shall, to the maximum extent permitted under
applicable law, characterize any non-principal payment as a reasonable loan
charge, rather than as interest. Any provision of any Note, or of any other
agreement between the Lender and the Borrower, that operates to bind, obligate,
or compel the Borrower to pay interest in excess of such maximum lawful contract
rate shall be construed to require the payment of the maximum rate only. The
provisions of this Section 10.10 shall be given precedence over any other
provisions contained in the Notes or in any other agreement between the Lender
and the Borrower that is in conflict with the provisions of this Section 10.10.

         10.11 Amendments, Modifications, Waivers. Any term of this Agreement or
of the Notes may be amended and the observance of any term of this Agreement or
of the Notes may be waived (either generally or in a particular instance and
either retroactively or prospectively) only with the written consent of the
Borrower and the Lender.

         10.12 Headings. The headings of this Agreement are for convenience only
and are not to affect the construction of or to be taken into account in
interpreting the substance of this Agreement.

         10.13 WAIVER OF NOTICE, ETC. THE BORROWER WAIVES DEMAND, NOTICE,
PROTEST, NOTICE OF ACCEPTANCE OF THIS AGREEMENT, NOTICE OF LOANS MADE, CREDIT
EXTENDED, COLLATERAL RECEIVED OR


                                      -40-
   41
DELIVERED OR OTHER ACTION TAKEN IN RELIANCE HEREON AND ALL OTHER DEMANDS AND
NOTICE OF ANY DESCRIPTION, EXCEPT AS REQUIRED HEREBY. WITH RESPECT BOTH TO THE
OBLIGATIONS AND COLLATERAL, THE BORROWER ASSENTS TO ANY EXTENSION OR
POSTPONEMENT OF THE TIME OF PAYMENT OR ANY OTHER INDULGENCE, TO ANY
SUBSTITUTION, EXCHANGE OR RELEASE OF COLLATERAL, TO THE ADDITION OR RELEASE OF
ANY PARTY OR PERSONS PRIMARILY OR SECONDARILY LIABLE, TO THE ACCEPTANCE OF
PRETRIAL PAYMENT THEREON AND THE SETTLEMENT, COMPROMISING OR ADJUSTING OF ANY
THEREOF, ALL IN SUCH MANNER AND AT SUCH TIME OR TIMES AS THE LENDER MAY DEEM
ADVISABLE. THE BORROWER AGREES THAT NO ACTIONS TAKEN BY ANY PERSON EXCEPT THE
LENDER SHALL IMPAIR OR OTHERWISE AFFECT ITS OBLIGATIONS HEREUNDER UNTIL ALL
OBLIGATIONS OF THE BORROWER HEREUNDER ARE SATISFIED IN FULL.

         10.14 WAIVER OF TRIAL BY JURY. THE BORROWER WAIVES ANY AND ALL RIGHTS
THAT IT MAY HAVE TO A TRIAL BY JURY ON ANY CLAIM OR ACTION, OF ANY NATURE
WHATSOEVER, RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS.

         10.15 Severability. In the event that any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid, illegal or unenforceable provision had never
been contained herein.

         10.16 Entire Agreement. This Agreement and the other Loan Documents
constitute the full and entire understanding and agreement between the parties
with regard to the subject matter hereof and thereof and shall supersede all
prior agreements and understandings, whether written or oral, between the
parties with respect to the subject matter hereof and thereof.

         10.17 Compliance with Covenants. All computations determining
compliance with Sections 7 and 8 shall utilize accounting principles in
conformity with those used in the preparation of the financial statements
referred to in Section 5.5. If any subsequent financial reports of the Borrower
shall be prepared in accordance with accounting principles different from those
used in the preparation of the financial statements referred to in Section 5.5,
the Borrower shall inform the Lender of the changes in accounting principles and
shall provide to the Lender with such reports, such supplemental reconciling
financial information as may be required to ascertain compliance by the Borrower
with the covenants contained in this Agreement.



                                      -41-
   42
         10.18 Termination. This Agreement may be terminated by the Borrower at
any time upon written notice of such termination to the Lender; provided,
however, that, unless and until all loans made by the Lender hereunder and all
other Obligations hereunder of the Borrower to the Lender existing (whether or
not due) as of the time of the receipt of such notice by the Lender shall have
been paid in full, such termination shall in no way affect the rights and powers
granted to the Lender in connection with this Agreement, and until such payment
in full all rights and powers hereby granted to the Lender hereunder shall be
and remain in full force and effect.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as an agreement under seal as of the date first above written.

Witness:                               MKS INSTRUMENTS, INC.





___________________________________    By:_________________________________

                                       Title:______________________________




                                       THE FIRST NATIONAL BANK OF
                                       BOSTON



                                       By:_________________________________

                                       Title:______________________________


                                      -42-
   43
                                    EXHIBIT A

                          DEMAND REVOLVING CREDIT NOTE

                                                                November 1, 1993

$7,000,000                                                 Boston, Massachusetts

         FOR VALUE RECEIVED, MKS Instruments, Inc. (the "Company"), a
Massachusetts corporation, hereby promises to pay to the order of The First
National Bank of Boston, a national banking association (the "Payee"), at the
offices of the Payee at 100 Federal Street, Boston, Massachusetts, or such other
address as the Payee shall designate in a written notice to the Company, on
demand, the sum of $7,000,000 or such lesser sum as may from time to time be
outstanding, together with interest (calculated on the basis of a 360 day year
and the actual number of days elapsed in any period) at the annual rate
determined as provided in the Loan Agreement between the Company and the Payee
dated as of the date hereof (the "Loan Agreement").

         Payments of interest shall be made monthly in arrears beginning
December 1, 1993 and on the first Business Day of each month thereafter on the
balance of the principal amount outstanding hereunder until this Note is paid in
full. Funds paid hereunder shall be applied first to accrued and unpaid interest
and then to the unpaid principal balance.

         Overdue principal and interest shall bear interest at a rate of 3% per
annum over the Base Rate, payable on demand.

         This Note is issued by the Company pursuant to, and is governed by and
subject to the terms and conditions of, the Loan Agreement. All capitalized
terms used in this Note that are not defined herein, but that are defined in the
Loan Agreement, shall have the meanings assigned to them therein.

         Nothing contained in this Note, the Loan Agreement or the instruments
securing this Note shall be deemed to establish or require the payment of a rate
of interest in excess of the amount legally enforceable. In the event that the
rate of interest so required to be paid exceeds the maximum rate legally
enforceable, the rate of interest so required to be paid shall be automatically
reduced to the maximum rate legally enforceable, and any excess paid over such
maximum enforceable rate shall be automatically credited on account of the
principal hereof without premium or penalty.

         This Note may be prepaid in whole or in part only to the extent
provided in the Loan Agreement.
   44
         Notices to the Company shall be by telegram, telecopy, telex, delivery
in hand or by courier, or registered or certified mail (return receipt
requested) and shall be deemed to have been given or made when telegraphed,
telecopied (and confirmed received), telexed, delivered in hand or by courier,
or three days after being deposited in the United States mails postage prepaid,
registered or certified, return receipt requested, to the Company at Six
Shattuck Road, Andover, Massachusetts 01810, marked "Attention: Robert F.
O'Brien", Telecopier No. (508) 975-3756 or at such other address specified by
the Company in accordance herewith to the holder.

         No delay or omission on the part of the Payee in exercising any right
hereunder shall operate as a waiver of such right or of any other right of the
Payee, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. Every
maker, endorser and guarantor of this Note or the obligations represented hereby
waives presentment, demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance, default or enforcement of
this Note, assents to any extension or postponement of the time of payment or
any other indulgence, to any substitution, exchange or release of collateral and
to the addition or release of any other party or person primarily or secondarily
liable.

         IN WITNESS WHEREOF, the undersigned has executed this Note as an
instrument under seal, as of the date first above written.

                                       MKS INSTRUMENTS, INC.




                                       By:_________________________________

                                       Title:______________________________



                                       -2-
   45
                                    EXHIBIT B

                                    TERM NOTE
                                                                November 1, 1993

$10,000,000                                                Boston, Massachusetts


         FOR VALUE RECEIVED, MKS Instruments, Inc. (the "Company"), a
Massachusetts corporation, hereby promises to pay to the order of The First
National Bank of Boston, a national banking association (the "Payee"), at the
offices of the Payee at 100 Federal Street, Boston, Massachusetts, or such other
address as the Payee shall designate in a written notice to the Company, the
principal amount of $10,000,000 and to pay interest (calculated on the basis of
a 360 day year and the actual number of days elapsed in any period) monthly in
arrears beginning on December 1, 1993 and on the first Business Day of each
month thereafter on the balance of such principal amount remaining unpaid from
time to time from the date hereof until such principal amount shall have become
due and payable, whether at maturity, by prepayment or otherwise, at the annual
rate determined as provided in the Loan Agreement between the Company and the
Payee dated as of the date hereof (the "Loan Agreement").

         Payments of principal shall be made monthly in the aggregate fixed
amount of $55,555.56 beginning December 1, 1993 and on the first Business Day of
each month thereafter until maturity. The entire unpaid principal balance and
all accrued and unpaid interest hereunder shall be absolutely due and payable in
full on November 1, 2000. Funds paid hereunder shall be applied first to accrued
and unpaid interest and then to the unpaid principal balance.

         Overdue principal and interest shall bear interest at a rate of 3% per
annum over the Base Rate, payable on demand.

         This Note is issued by the Company pursuant to, and is governed by and
subject to the terms and conditions of, the Loan Agreement. This Note may become
due and payable and matured upon the occurrence of an Event of Default. All
capitalized terms used in this Note that are not defined herein, but that are
defined in the Loan Agreement, shall have the meanings assigned to them therein.

         Nothing contained in this Note, the Loan Agreement or the instruments
securing this Note shall be deemed to establish or require the payment of a rate
of interest in excess of the amount legally enforceable. In the event that the
rate of interest so required to be paid exceeds the maximum rate legally
enforceable, the rate of interest so required to be paid shall be automatically
reduced to the maximum rate legally enforceable, and any excess paid over such
maximum enforceable rate shall be automatically credited on account of the
principal hereof without premium or penalty.
   46
         This Note may be prepaid in whole or in part only to the extent
provided in the Loan Agreement.

         This Note is secured by a Commercial Real Estate Mortgage dated the
date hereof (the "Mortgage") from the maker hereof, as mortgagor, to the Payee
hereof, as mortgagee. The Mortgage constitutes a lien on certain property, more
particularly described therein, located in Andover and Lawrence, Massachusetts.

         Notices to the Company shall be by telegram, telecopy, telex, delivery
in hand or by courier, or registered or certified mail (return receipt
requested) and shall be deemed to have been given or made when telegraphed,
telecopied (and confirmed received), telexed, delivered in hand or by courier,
or three days after being deposited in the United States mails postage prepaid,
registered or certified, return receipt requested, to the Company at Six
Shattuck Road, Andover, Massachusetts 01810, marked "Attention: Robert F.
O'Brien", Telecopier No. (508) 975-3756 or at such other address specified by
the Company in accordance herewith to the holder.

         No delay or omission on the part of the Payee in exercising any right
hereunder shall operate as a waiver of such right or of any other right of the
Payee, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. Every
maker, endorser and guarantor of this Note or the obligations represented hereby
waives presentment, demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance, default or enforcement of
this Note, assents to any extension or postponement of the time of payment or
any other indulgence, to any substitution, exchange or release of collateral and
to the addition or release of any other party or person primarily or secondarily
liable.

         IN WITNESS WHEREOF, the undersigned has executed this Note as an
instrument under seal, as of the date first above written.


                                       MKS INSTRUMENTS, INC.




                                       By:_________________________________

                                       Title:______________________________




                                      -2-
   47
                                    EXHIBIT C

                              AMENDED AND RESTATED
                         COMMERCIAL REAL ESTATE MORTGAGE

         This AMENDED AND RESTATED COMMERCIAL REAL ESTATE MORTGAGE (as amended
from time to time, this "Mortgage") is made this 1st day of November, 1993, by
and from MKS Instruments, Inc., a Massachusetts corporation having its principal
place of business at Six Shattuck Road, Andover, Massachusetts 01810
("Mortgagor"), to THE FIRST NATIONAL BANK OF BOSTON, a national banking
association having its principal office at 100 Federal Street, Boston,
Massachusetts 02110 (the "Bank").

         Whereas, the parties have entered into the following two mortgages:
that certain Mortgage and Security Agreement dated January 6, 1988 recorded at
Essex North Registry of Deeds at Book 2660, Page 050 and that certain Mortgage
and Security Agreement dated May 20, 1987 recorded at said Deeds at Book 2500,
Page 022 (collectively, the "Prior Mortgages");

         Now, therefore, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree to amend and restate the
Prior Mortgages in their entirety as follows:

         1.   Mortgage, Obligations and Future Advances.

         1.1  Mortgage. For valuable consideration paid, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor hereby grants to the
Bank, with MORTGAGE COVENANTS, the "Property" described in Section 1.4, below,
to secure the prompt payment and performance of any and all obligations of
Mortgagor (and if more than one Mortgagor of any of them) to the Bank, whether
direct or indirect, absolute or contingent, primary or secondary, due or to
become due, now existing or hereafter arising or acquired, pursuant to the
following (the "Obligations"):

              (a) all obligations under a certain Promissory Note of even date
herewith from Mortgagor payable to the order of the Bank in the original
principal amount of $10,000,000 as the same may be further amended or extended
(the "Note"); and

              (b) all covenants and other obligations contained in this Mortgage
or contemplated hereby, including without limitation Mortgagor's obligations
under Section 7.1 hereof.

         1.2  Security Interest in Property. As continuing security for the
Obligations, Mortgagor hereby pledges, assigns and grants to the Bank a security
interest in any of the Property (as defined in Section 1.4 below) constituting
fixtures, (i.e., Building Service Equipment as defined in the Prior Mortgages).
This Mortgage shall be
   48
deemed to be a security agreement and financing statement pursuant to the terms
of the Uniform Commercial Code of Massachusetts.

         1.3  Collateral Assignment of Leases and Rents. Mortgagor hereby
assigns to the Bank as collateral security for the Obligations all of
Mortgagor's rights and benefits under any and all Leases (as defined in Section
1.4 below) and any and all rents and other amounts now or hereafter owing with
respect to the Leases or the use or occupancy of the Property. This collateral
assignment shall be absolute and effective immediately, but Mortgagor shall
continue to collect rents owing under the Leases until an Event of Default (as
defined in Section 6.1 below) occurs and the Bank exercises its rights and
remedies to collect such rents as set forth in Section 6.2(c) hereof.

         1.4  Property. The term "Property", as used in this Mortgage, shall
mean those certain parcels of land and the structures and improvements now or
hereafter thereon located at Six Shattuck Road, Andover, Massachusetts, and
17-23 Ballard Way, Lawrence, Massachusetts, as more particularly described in
Exhibit A attached hereto, together with: (i) all rights now or hereafter
existing, belonging or pertaining thereto; (ii) all fixtures, now owned or
hereafter acquired, that are located on the Property; (iii) all of the rights
and benefits of Mortgagor under any present or future leases and agreements
relating to the Property, or the use or occupancy thereof together with any
extensions and renewals thereof, specifically excluding all duties or
obligations of Mortgagor of any kind arising thereunder (the "Leases"); and (iv)
all contracts, permits and licenses respecting the use, operation or maintenance
of the Property.

         1.5  Cross-Collateral and Future Advances. It is the express intention
of the Mortgagor that this Mortgage secure payment and performance of all of the
Obligations, whether now existing or hereinafter incurred by reason of future
advances by the Bank or otherwise. Notice of the continuing grant of this
Mortgage shall not be required to be stated on the face of any document
evidencing any of the Obligations, nor shall such documents be required to
otherwise specify that they are secured hereby.

         2.   Representations, Warranties, Covenants.

         2.1  Representations and Warranties. Mortgagor represents and warrants
that:

              (a) (i) Mortgagor is a corporation duly organized and validly
existing under the laws of Massachusetts, (ii) Mortgagor has all requisite
capacity to own the Property and conduct its business as now conducted and as
presently contemplated, to execute and deliver this Mortgage and convey the
Property as contemplated hereby and to grant the security interests and
assignment of Leases contained herein,


                                      -2-
   49
(iii) the execution, delivery and performance of this Mortgage have been
authorized by all necessary proceedings of the Mortgagor and do not contravene
any provision of any law, rule or regulation applicable to Mortgagor or any
agreement, instrument, order or undertaking binding on Mortgagor or by which the
Property is bound or affected, (iv) this Mortgage has been duly executed and
delivered by Mortgagor and is the legal, valid and binding obligation of
Mortgagor enforceable in accordance with its terms except as limited by
bankruptcy, insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally;

              (b) Mortgagor is the sole legal and equitable owner of the
Property, holding good and marketable fee simple title to the Property, subject
to no liens, encumbrances, leases, security interests or rights of others except
as set forth in the title insurance policy issued by Ticor Title Insurance
Company of even date in favor of Mortgagee;

              (c) Mortgagor is the sole legal and equitable owner of the entire
lessor's interest in the Leases and Mortgagor has not executed any other
assignment of the Leases or any of the rights or rents arising thereunder; and

              (d) Each Obligation is a commercial obligation and does not
represent a loan used for personal, family or household purposes and is not a
consumer transaction, or to Mortgagor's knowledge otherwise subject to the
provisions of M.G.L. Chapter 140D, the Federal Truth in Lending Act or Federal
Reserve Board Regulation Z, or other consumer statutes or regulations and
restrictions.

         2.2  Recording: Further Assurances. Mortgagor covenants that it shall,
at its sole cost and expense and upon the request of the Bank, cause this
Mortgage, and each amendment, modification or supplement hereto, to be recorded
and filed in such manner and in such places, and shall at all times comply with
all such statutes and regulations, as may be required by law in order to
establish, preserve and protect the interest of the Bank in the Property and the
rights of the Bank under this Mortgage. Upon the written request of the Bank,
and at the sole expense of Mortgagor, the Mortgagor will promptly execute and
deliver such further instruments and documents and take such further actions as
the Bank may deem desirable to obtain the full benefits of this Mortgage and of
the rights and powers herein granted, including, without limitation, filing any
financing statement under the Uniform Commercial Code, and obtaining any
consents or estoppel certificates of lessees under the Leases that the Bank
deems appropriate. Mortgagor authorizes the Bank to file any such financing
statement without the signature of the Mortgagor to the extent permitted by
applicable law, and to file a copy of this Agreement in lieu of a financing
statement.


                                      -3-
   50
         2.3  Restrictions on Mortgagor. Mortgagor covenants that it will not,
directly or indirectly, without the prior written approval of the Bank in each
instance:

              (a) Sell, convey, assign, transfer, mortgage, pledge, hypothecate
or dispose of all or any part of any legal or beneficial interest in the
Property or any part thereof or permit any of the foregoing, except as expressly
permitted by the terms of this Mortgage; or

              (b) Permit to be created or suffer to exist any mortgage, lien,
security interest, attachment, or other encumbrance or charge on the Property or
any part thereof or interest therein, including, without limitation, (i) any
lien arising under any federal, state or local statute, rule, regulation or law
pertaining to the release or clean-up of Hazardous Substances and (ii) any
mechanics' or materialmen's lien, except as permitted by the Loan Agreement of
even date herewith between Mortgagor and Bank. Mortgagor further agrees to give
the Bank prompt written notice of the imposition of any lien referred to in this
Section 2.3(b) and to take any action necessary to secure the prompt discharge
or release of the same. Mortgagor agrees to defend its title to the Property and
the Bank's interest therein against the claims of all persons and, unless the
Bank requests otherwise, to appear in and diligently contest, at Mortgagor's
sole cost and expense, any action or proceeding which purports to affect
Mortgagor's title to the Property or the priority or validity of this Mortgage
or the Bank's interest hereunder.

         2.4  Operation of Property. Mortgagor covenants and agrees as follows:

              (a) Mortgagor will not permit the Property to be used for any
unlawful or improper purpose, will at all times comply with all federal, state
and local laws, ordinances and regulations, and will obtain and maintain all
governmental or other approvals, relating to Mortgagor, the Property or the use
thereof, including without limitation, any applicable zoning or building codes
or regulations and any laws or regulations relating to the handling, storage,
release or clean-up of Hazardous Substances, and will give prompt written notice
to the Bank of (i) any violation of any such law, ordinance or regulation by
Mortgagor or relating to the Property, (ii) receipt of notice from any federal,
state or local authority alleging any such violation and (iii) the release on
the Property of any Hazardous Substances. As used in this Mortgage, the term
"Hazardous Substances" shall mean any oil or other material or substance
constituting hazardous waste or hazardous materials or substances under any
applicable federal or state law, regulation or rule;

              (b) Mortgagor will at all times keep the Property insured for such
losses or damage, for such periods and amounts, on such terms and by such
companies as may be required by law or which the Bank may from time to time
reasonably require. All policies regarding such insurance shall name the Bank as
mortgagee, loss payee and additional insured, and provide that no cancellation
or



                                      -4-
   51
material modification of such policies shall occur without fifteen days prior
written notice to the Bank. Mortgagor will furnish to the Bank upon request such
copies of original policies, certificates of insurance, or other evidence of the
foregoing as is acceptable to the Bank;

              (c) Mortgagor will not enter into or modify the Leases without the
prior written consent of the Bank, such consent not to be unreasonably withheld
or delayed. Mortgagor may consent to a sublease under or the assignment of any
Lease upon written notice to the Bank, provided that Mortgagor does not release
the lessee from liability. Mortgagor will not accept any rentals under any Lease
for more than one month in advance, and will at all times perform and fulfill
every term and condition of the Leases;

              (d) Mortgagor will at all times (i) maintain accurate records and
books regarding the Property in accordance with generally accepted accounting
principles; (ii) permit the Bank and the Bank's agents, employees and
representatives, at such reasonable times as the Bank may request, to enter and
inspect the Property and such books and records; and (iii) promptly upon request
provide to the Bank such financial statements and information regarding
Mortgagor, the Property and the Leases as the Bank may request;

              (e) Mortgagor will at all times keep the Property in good and
first rate repair and condition (reasonable wear and tear excepted but damage
from casualty not excepted) and will not commit or permit any strip, waste,
impairment, deterioration or alteration of the Property or any part thereof; and

              (f) Mortgagor shall comply with, and not modify the terms and
conditions of, any prior mortgage affecting the Property or any note or other
obligation secured thereby and shall not permit the holder of any such prior
mortgage to advance any additional sums pursuant to such mortgage which would
constitute a lien superior to the lien of this Mortgage except with the prior
written consent of the Bank.

         2.5  Payments. The Mortgagor covenants to pay when due:

              (a) All federal, state or other taxes, betterment assessments and
other governmental levies, water rates, sewer charges, insurance premiums, and
other charges on the Property, this Mortgage or any Obligation secured hereby or
that could, if unpaid, result in a lien on the Property or on any interest
therein; and

              (b) All amounts when due under the Note and each other instrument
evidencing, securing or relating to any of the Obligations and under any
agreement to which Mortgagor is a party or by which Mortgagor is bound,
including without limitation, any mortgage encumbering the Property.



                                      -5-
   52
Mortgagor shall have the right to contest any notice, lien, encumbrance, claim,
tax, charge, betterment assessment or premium filed or asserted against or
relating to the Property; provided that it contests the same diligently and in
good faith and by proper proceedings and, at the Bank's request, provides the
Bank with adequate security, in the Bank's reasonable judgment, against the
enforcement thereof. Mortgagor shall furnish to the Bank the receipted real
estate tax bills or other evidence of payment of real estate taxes for the
Property within ten (10) days prior to the date from which interest or penalty
would accrue for nonpayment thereof as well as evidence of all other payments
referred to above within fifteen (15) days after written request therefor by the
Bank. If the Mortgagee fails to furnish such evidence of payment then the Bank
may, at the Mortgagor's expense, apply for and obtain municipal lien
certificates, and other evidence of real estate tax payments.

         2.6  Notices: Notice of Default. Mortgagor will deliver to the Bank,
promptly upon receipt of the same, copies of all notices or other documents it
receives that materially affect the Property or its use or claim that the
Mortgagor is in default in the performance or observance of any of the terms
hereof or that the Mortgagor or any tenant is in default of any terms of the
Leases. The Mortgagor further agrees to deliver to the Bank written notice
promptly upon the occurrence of any Event of Default hereunder, or event which
with the giving of notice or lapse of time or both would constitute an Event of
Default.

         3.   Takings. In case of any condemnation for public use of, or any
damage by reason of the action of any public or governmental entity or authority
to, all or any part of the Property (a "Taking"), or the commencement of any
proceedings or negotiations that might result in a Taking, Mortgagor shall
promptly give written notice to the Bank, describing the nature and extent
thereof. The Bank may, at its option, appear in any proceeding for a Taking or
any negotiations relating to a Taking and Mortgagor shall promptly give to the
Bank copies of all notices, pleadings, determinations and other papers relating
thereto. The Mortgagor shall in good faith and with due diligence and by proper
proceedings file and prosecute its claims for any award or payment on account of
any Taking. The awards of damages on account of any Taking shall be paid to the
Mortgagor. Such awards shall be applied to or toward the restoration (within a
reasonable time) of that part of the Property that remains or towards the
Obligations.

         4.   Insurance Proceeds. Mortgagor shall have the right to apply the
proceeds of any insurance resulting from any loss with respect to the Property
to repair (within a reasonable time) the damaged part of the Property. Any
excess insurance proceeds shall be applied to the Obligations in such order as
the Bank may determine.



                                      -6-
   53
         5.   Certain Rights of Bank.

         5.1  Advances. If Mortgagor fails to pay or perform any of its
obligations hereunder then, after 10 days notice (except in an emergency) to
Mortgagor, the Bank may in its sole discretion do so. Such payments may include,
but are not limited to, payments for taxes, assessments and other governmental
levies, water rates, insurance premiums, maintenance, repairs or improvements
constituting part of the Property. Notwithstanding the foregoing, the Bank shall
not make any payment described in Section 2.5 so long as the Mortgagor is then
in compliance with that Section and no Event of Default exists.

         5.2  Legal Proceedings. The Bank shall have the right, but not the
duty, to intervene or otherwise participate in any legal or equitable proceeding
that, in the Bank's reasonable judgment, might affect the Property or any of the
rights created or secured by this Mortgage. The Bank shall have such right
whether or not there shall have occurred an Event of Default hereunder.

         6.   Defaults and Remedies.

         6.1  Events of Default. Any Event of Default under and as defined in
the Loan Agreement between the Bank and Mortgagor dated as of the date hereof
shall constitute an "Event of Default" under this Mortgage.

         6.2  Remedies. On the occurrence of any Event of Default the Bank may,
at any time thereafter, at its option and, to the extent permitted by applicable
law, without notice, exercise any or all of the following remedies:

              (a) Declare the Obligations due and payable, and the Obligations
shall thereupon become immediately due and payable, without presentment,
protest, demand or notice of any kind, all of which are hereby expressly waived
by Mortgagor;

              (b) Take possession of the Property (including all records and
documents pertaining thereto) and exclude Mortgagor therefrom, and operate the
Property as a mortgagee in possession with all the powers as could be exercised
by a receiver or as otherwise provided herein or by applicable law;

              (c) Receive and collect all rents, income and profits from the
Property, including as may arise under the Leases, and Mortgagor appoints the
Bank as its true and lawful attorney with the power for the Bank in its own name
and capacity to demand and collect such rents, income and profits and take any
action that Mortgagor is authorized to take under the Leases. Lessees under the
Leases are hereby authorized and directed, following notice from the Bank, to
pay all amounts due Mortgagor under the Leases to the Bank, whereupon such
lessees shall be



                                      -7-
   54
relieved of any and all duty and obligation to Mortgagor with respect to such
payments so made;

              (d) Sell the Property or any part thereof or interest therein
pursuant to exercise of its STATUTORY POWER OF SALE or otherwise at public
auction on terms and conditions as the Bank may determine or otherwise foreclose
this Mortgage in any manner permitted by law, and upon such sale, Mortgagor
shall execute and deliver such instruments as the Bank may request in order to
convey and transfer all of Mortgagor's interest in the Property, and the same
shall operate to divest all rights, title and interest of Mortgagor in and to
the Property. In the event this Mortgage shall include more than one parcel of
property or subdivision (each hereinafter called a "portion"), the Bank shall,
in its sole and exclusive discretion, be empowered to foreclose upon any such
portion without impairing its right to foreclose subsequently upon any other
portion or the entirety of the Property from time to time thereafter;

              (e) Cause one or more environmental assessments to be taken,
arrange for the clean-up of any Hazardous Substances, or otherwise cure
Mortgagor's failure to comply with any statute, regulation or ordinance relating
to the presence or clean-up of Hazardous Substances; provided that the exercise
of any of such remedies shall not be deemed to have relieved Mortgagor from any
responsibility therefor or given the Bank "control" over the Property or cause
the Bank to be considered to be a mortgagee in possession, "owner" or "operator"
of the Property for purposes of any applicable law, rule or regulation
pertaining to Hazardous Substances; and

              (f) Take such other actions or proceedings as the Bank deems
necessary or advisable to protect its interest in the Property and ensure
payment and performance of the Obligations including, without limitation,
appointment of a receiver (and Mortgagor hereby waives any right to object to
such appointment) and exercise of any of the Bank's remedies provided in the
Note or in any document evidencing, securing or relating to any of the
Obligations or available to a secured party under the Uniform Commercial Code of
Massachusetts or under other applicable law.

         This Mortgage is upon the STATUTORY CONDITION, for any breach of which
the Bank shall have the STATUTORY POWER OF SALE and any other remedies provided
by applicable law including, without limitation, the right to pursue a judicial
sale of the Property or any portion thereof by deed, assignment or otherwise.
Mortgagor agrees and acknowledges that the acceptance by the Bank of any
payments from Mortgagor after the occurrence of any Event of Default, the
exercise by the Bank of any remedy set forth herein or the commencement of
foreclosure proceedings against the Property shall not waive the Bank's right to
foreclose or operate as a bar or estoppel to the exercise of any other rights or
remedies of the Bank. Mortgagor agrees and acknowledges that the Bank, by making



                                      -8-
   55
payments or incurring costs described herein, shall be subrogated to any right
of Mortgagor to seek reimbursement from any third parties including without
limitation, any predecessor in interest to Mortgagor's title or other party who
may be responsible under any law, regulation or ordinance relating to the
presence or clean-up of Hazardous Substances.

         6.3  Cumulative Rights and Remedies. All of the foregoing rights,
remedies and options are cumulative and in addition to any rights the Bank might
otherwise have, whether at law or by agreement and may be exercised separately
or concurrently. Mortgagor further agrees that the Bank may exercise any or all
of its rights or remedies set forth herein without having to pay Mortgagor any
sums for use or occupancy of the Property.

         6.4  Mortgagor's Waiver of Certain Rights. To the extent permitted by
applicable law, Mortgagor hereby waives the benefit of all present and future
laws (i) providing for any appraisal before sale of any portion of the Property
or (ii) in any way extending the time for the enforcement of the collection of
the Obligations or creating or extending a period of redemption from any sale
made hereunder.

         7.   Miscellaneous.

         7.1  Payments by the Bank. To the extent permitted by applicable law,
Mortgagor shall pay to the Bank, on demand, all reasonable expenses, (including
reasonable attorneys' fees and expenses and reasonable consulting, accounting,
appraisal, brokerage and similar professional fees and charges) actually
incurred by the Bank, in connection with the Bank's exercise, preservation or
enforcement of any of its rights, remedies and options set forth in this
Mortgage (including without limitation any amounts expended pursuant to Sections
5.1 and 6.2(e) hereof) and in connection with any litigation, proceeding or
dispute whether arising hereunder or otherwise relating to the Obligations,
together with interest thereon to the extent permitted by applicable law until
paid in full by Mortgagor at a rate per annum equal to three percent (3 %) above
the rate of interest per annum announced from time to time by The First National
Bank of Boston at its head office as its Base Rate. Any amounts owed by
Mortgagor hereunder shall be, until paid, part of the Obligations, and the Bank
shall be entitled, to the extent permitted by law, to receive and retain such
amounts in any action for a deficiency against or redemption by the Mortgagor,
or any accounting for the proceeds of a foreclosure sale or of insurance
proceeds. All references to "attorneys" in this Section 7 and elsewhere in this
Mortgage shall include without limitation any attorney or law firm engaged by
the Bank and the Bank's in-house counsel, and all references to "fees and
expenses" in this Mortgage shall include without limitation any fees of such
attorney or law firm and any allocated charges and allocation costs of the
Bank's in-house counsel. The obligations of Mortgagor under this Section 7.1
shall survive any payment or satisfaction of any of the other Obligations.



                                      -9-
   56
         7.2  No Waiver or Release. No failure of the Bank to exercise or delay
by the Bank in exercising any right or remedy or option provided for herein or
otherwise shall be deemed to be a waiver of that right, remedy or option or of
any other right, remedy or option. No sale of all or any of the Property, no
forbearance on the part of the Bank, no release or partial release of any of the
Property, and no extension of the time for the payment of the whole or any part
of any of the obligations or any other indulgence given by the Bank to the
Mortgagor or any other person or entity, shall operate to release or in any
manner affect the lien of this Mortgage or the original liability of the
Mortgagor except to the extent specifically provided in any written instrument
signed by the Bank accomplishing any of the foregoing. Notice of any such
extensions or indulgences is waived by the Mortgagor. This Mortgage may not be
waived, changed or discharged orally, but only by an agreement in writing signed
by the Bank, and any oral waiver, change or discharge of any provision of this
Mortgage shall be without authority and of no force and effect. A waiver on any
one occasion shall be limited to its express terms and conditions and the
circumstances giving rise to such waiver and shall not be construed to be a bar
to or waiver of any right on any future occasion.

         7.3  Notices. Any notice or other communication hereunder to any party
hereto shall be by telegram, telecopy, telex, delivery in hand or by courier, or
registered or certified mail (return receipt requested) and shall be deemed to
have been given or made when telegraphed, telexed, telecopied (and confirmed
received), delivered in hand or by courier, or three days after being deposited
in the mails, postage prepaid, registered or certified, addressed to each party
as follows (or at any other address that such party may hereafter specify to the
other parties in writing):

              (a)  If to the Bank:

                   The First National Bank of Boston
                   100 Federal Street
                   Boston, Massachusetts 02110
                   Attn:     Ms. Sharon A. Stone, Director
                   Telecopier No. (617) 434-4048

                   with a copy to:

                   Arlene L. Bender, Esq.
                   Foley, Hoag & Eliot
                   One Post Office Square
                   Boston, Massachusetts 02109
                   Telecopier No. (617) 482-7347




                                      -10-
   57
              (b)  If to the Mortgagor:

                   Six Shattuck Road
                   Andover, Massachusetts 01810
                   Attn:     Mr. Robert F. O'Brien, Treasurer
                   Telecopier No.

                   with a copy to:

                   Richard S. Chute, Esq.
                   Hill & Barlow
                   One International Place
                   Boston, Massachusetts 02110
                   Telecopier No. (617) 439-3580

         7.4  Mortgagor's Waivers. Mortgagor waives presentment, demand, notice,
protest, and all other demands and notices in connection with the delivery,
acceptance, performance, default or enforcement of this Mortgage (except for
such demands and notices as are specifically required to be provided to
Mortgagor under this Mortgage) and assents to any extension or postponement of
the time of payment or performance or any other indulgence with respect to any
of the Obligations, to any substitution, exchange or release of any collateral
for any of the Obligations and/or to the addition or release of any other party
or person primarily or secondarily liable hereunder or in connection with any of
the Obligations.

         7.5  Entire Agreement; Severability; Captions. The terms and conditions
of this Mortgage constitute the entire agreement, and supersede all prior
agreements and understandings, both written and oral, with respect to the
subject matter hereof. The invalidity of any provisions of this Mortgage shall
in no way affect the validity of any other provision hereof. The failure of the
Bank to perfect its lien on or security interest in any of the Property shall
not affect its rights in the remainder of the Property. Section and subsection
captions are for convenience of reference only, are not a part of this Mortgage
and shall not affect the interpretation hereof.

         7.6  Successors. This Mortgage shall be binding upon each of the
parties executing this Mortgage and their respective successors, administrators
and assigns, and shall inure to the benefit of the parties hereto and the
successors and assigns of the Bank. The term "Bank" shall include any subsequent
holder of this Mortgage by assignment or otherwise.

         7.7  Joint and Several Liability. If more than one party executes this
Mortgage the term "Mortgagor" shall mean each and every one of them, and each of
them shall be jointly and severally liable hereunder.



                                      -11-
   58
         7.8  Governing Law Jurisdiction. This Mortgage shall take effect as a
contract executed under seal and shall be interpreted in accordance with and
governed by the laws of The Commonwealth of Massachusetts (other than its rules
governing choice or conflicts of laws). Each party signing this Mortgage submits
to personal jurisdiction in The Commonwealth of Massachusetts and waives any and
all rights to object to such jurisdiction. Each such party agrees that service
of process may be made and personal jurisdiction obtained by serving Mortgagor
at any location provided in Section 7.3 hereof.

         7.9  JURY WAIVER. THE BANK (BY ITS ACCEPTANCE OF THIS MORTGAGE) AND THE
MORTGAGOR AGREE THAT NEITHER OF THEM, INCLUDING ANY ASSIGNEE OR SUCCESSOR SHALL
SEEK A JURY TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER
LITIGATION PROCEDURE BASED UPON, OR ARISING OUT OF, THIS MORTGAGE, ANY RELATED
INSTRUMENTS, ANY COLLATERAL OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR AMONG
ANY OF THEM. NEITHER THE BANK NOR THE MORTGAGOR SHALL SEEK TO CONSOLIDATE ANY
SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE
BANK AND THE MORTGAGOR, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.
NEITHER THE BANK NOR THE MORTGAGOR HAS AGREED WITH OR REPRESENTED TO THE OTHER
THAT THE PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES.

         EXECUTED under seal as of the date first above written.


                                       MORTGAGOR:


                                       MKS INSTRUMENTS, INC.




                                       By:_________________________________

                                       Title:______________________________



                                      -12-
   59
                          COMMONWEALTH OF MASSACHUSETTS

Suffolk, ss.                                                    November__, 1993

         Then personally appeared the above named ___________________________ of
MKS Instruments, Inc., and acknowledged that the foregoing is the free act and
deed of said corporation, before me,



                                       ____________________________________
                                       Notary Public
                                       Name:
                                       My commission expires:



                                      -13-
   60
                    AGREEMENT REGARDING LOST PROMISSORY NOTES

         In consideration of the execution and delivery to the First National
Bank of Boston (the "Bank") by MKS Instruments, Inc. (the "Company") of
replacement notes with respect to the Term Note dated November 1, 1993 in the
principal amount of $10,000,000 payable to the order of the Bank and the Demand
Revolving Credit Note dated November 1, 1993 in the principal amount of
$7,000,000 payable to the order of the Bank (the "Original Notes"), the Bank and
the Company hereby agree as follows:

         1.  The Bank has been unable to locate the Original Notes, which were
delivered by the Company to the Bank on November 1, 1993. The Bank has made or
caused to be made diligent efforts to find and recover the Original Notes, but
has been unable to do so, and accordingly believes the Original Notes are lost
or misplaced.

         2.  The Bank is, and has been, the rightful and unconditional owner of
the Original Notes at all times since issuance of the Original Notes to it on
November 1, 1993. The Original Notes have not been endorsed by the Bank for
transfer or sold, assigned, pledged, hypothecated, transferred, or deposited
under any agreement by the Bank, and no instrument or document authorizing such
transfer, sale, assignment, pledge, hypothecation, or deposit of the Original
Notes has been executed by or on behalf of the Bank.

         3.  The Bank agrees that if the Original Notes shall ever be found to
be in the custody and control of the Bank or recovered by the Bank, the Bank
will immediately and without consideration surrender the Original Notes to the
Company or its successor for cancellation.

         4.  The Bank agrees to indemnify and hold harmless the Company and its
successors and assigns (collectively, "Indemnitees") from and against any and
all liability, obligation, loss, damage and expense (including reasonable
attorneys' fees) arising from or on account of the sale, assignment, transfer,
hypothecation, pledge or other disposition of the Original Notes, by operation
of law or otherwise, by or for the Bank to any person other than the Company.
The Company agrees (i) that it will give prompt notice to the Bank upon
presentation to the Company of either Original Note or after receiving a claim
in writing against it of any claim against it as to which recovery may be sought
against the Bank under the foregoing indemnity and (ii) if such claim shall
arise from the claim of a third party, that it will permit the Bank to assume
the defense of any such claim or any litigation resulting from such claim. If
the Bank assumes the defense of such claim or any litigation resulting
therefrom, the obligations of the Bank hereunder as to such claim shall be to
take all steps that the Bank in its sole discretion deems necessary in the
defense, compromise or settlement of such claim or litigation and to pay or
reimburse the Company for the amount of any settlement approved by the Bank or
any judgment in connection with such claim or litigation and all costs and
expenses of the Company associated therewith. The Company shall cooperate fully
to make available to the Bank, at the
   61
Bank's expense, all pertinent information and witnesses under its control. A
final determination of any such action, suit, proceeding, claim, demand or
assessment through legal proceedings shall be binding and conclusive upon the
parties hereto as to the validity or invalidity, as the case may be, of such
claim against the Bank.

         5.  The Bank agrees to keep this Agreement as an official record of the
Bank and to maintain a copy of this Agreement in the loan file for the Company.

         6.  The Bank represents and warrants that this Agreement has been duly
authorized by all necessary action on the part of the Bank.

         IN WITNESS WHEREOF, the undersigned have executed this Agreement under
seal as of the ___ day of March, 1994.


                                       THE FIRST NATIONAL BANK OF
                                       BOSTON



                                       By:_________________________________

                                       Title:______________________________




                                       MKS INSTRUMENTS, INC.



                                       By:_________________________________

                                       Title:______________________________


                                      -2-
   62
                              MKS INSTRUMENTS, INC.

                                 FIRST AMENDMENT

                                TO LOAN AGREEMENT


This First Amendment (this "Amendment") dated as of June 30, 1994 amends the
Loan Agreement dated as of November 1, 1993 (the "Loan Agreement"), between MKS
INSTRUMENTS, INC. (the "Borrower") and THE FIRST NATIONAL BANK OF BOSTON (the
"Bank"). Capitalized terms used herein but not otherwise defined shall have the
meanings assigned to them in the Loan Agreement.

         WHEREAS, the Borrower and the Bank have executed the Loan Agreement
providing for a revolving credit facility for borrowings by the Borrower in
amounts up to $7,000,000; and

         WHEREAS, the Borrower has requested, and the Bank has agreed, to extend
the maturity of the credit facilities for an additional one-year period, on the
terms and conditions set forth below;

         NOW, THEREFORE, the Bank and the Borrower agree as follows:

         Section 1. Amendment to the Loan Agreement. Section 1.1.46 of the Loan
Agreement is hereby amended by deleting the date "June 30, 1994" appearing
therein in the definition of "Revolver Termination Date" and substituting
therefor the date "June 30, 1995".

         Section 2. Representations and Warranties. The Borrower hereby
represents and warrants as follows:

         (a) The execution and delivery of this Amendment and the performance of
this Amendment, the Loan Agreement as amended hereby and each of the other Loan
Documents, and the transactions contemplated hereby and thereby, have been
authorized by all necessary corporate actions of the Borrower. This Amendment,
the Loan Agreement as amended hereby and each of the other Loan Documents
constitute the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms.

         (b) The Borrower has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Amendment, the Loan
Agreement as amended hereby and each of the other Loan Documents. Neither the
authorization, execution, delivery or performance by the Borrower of this
Amendment nor the performance of the Loan Agreement as amended hereby or any
other Loan Document nor the performance of the transactions contemplated hereby
or thereby violates or will violate any provision of the corporate charter or
by-laws of
   63
the Borrower, or does or will, with the passage of time or the giving of notice
or both, result in a breach of or a default under, or require any consent under
or result in the creation of any lien, charge or encumbrance upon any property
or assets of the Borrower pursuant to, any material instrument, agreement or
other document to which the Borrower is a party or by which the Borrower or any
of its properties may be bound or affected.

              (c) The execution and delivery by the Borrower of this Amendment
and the performance by the Borrower of the Loan Agreement as amended hereby and
the Loan Documents do not and will not violate any provision of law or
regulation applicable to the Borrower, or any writ, order or decree of any court
or governmental or regulatory authority or agency applicable to the Borrower.


         Section 3. Conditions to Effectiveness. The effectiveness of this
Amendment is conditioned on the following:

         (a) the Borrower and the Bank shall each have executed and delivered a
counterpart of this Amendment;

         (b) the representations and warranties contained in Article V of the
Loan Agreement shall be true and correct in all material respects as of the date
hereof as though made on and as of the date hereof; and

         (c) no Default or Event of Default under the Loan Agreement shall have
occurred and is continuing.

         Section 4. Miscellaneous.

         (a) On and after the date hereof, each reference in the Loan Agreement
to "this Agreement" or words of like import shall mean and be deemed to be a
reference to the Loan Agreement as amended hereby.

         (b) Except as amended and modified hereby, the Loan Agreement is in all
respects ratified and confirmed as of the date hereof, and the terms, covenants
and agreements therein shall remain in full force and effect.

         (c) This Amendment and the modifications to the Loan Agreement set
forth herein shall be deemed to be a document executed under seal and shall be
governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts.


                                      -2-
   64
         (d) This Amendment may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.

         IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the date and the year first above written.


                                       MKS INSTRUMENTS, INC.



                                       By:_________________________________

                                       Title:______________________________




                                       THE FIRST NATIONAL BANK OF
                                       BOSTON



                                       By:_________________________________

                                       Title:______________________________




                                      -3-
   65
                              MKS INSTRUMENTS, INC.

                                SECOND AMENDMENT

                                TO LOAN AGREEMENT

This Second Amendment (this "Amendment") dated as of October 27, 1994 amends the
Loan Agreement dated as of November 1, 1993, as amended by the First Amendment
dated as of June 30, 1994 (as so amended, the "Loan Agreement"), between MKS
INSTRUMENTS, INC. (the "Borrower") and THE FIRST NATIONAL BANK OF BOSTON (the
"Bank"). Capitalized terms used herein but not otherwise defined shall have the
meanings assigned to them in the Loan Agreement.

         WHEREAS, the Borrower and the Bank have executed the Loan Agreement
providing for the Term Loan in the original principal amount of $10,000,000; and

         WHEREAS, the Borrower has requested, and the Bank has agreed, to amend
the interest rate applicable to the Term Loan from time to time, and modify
certain of the provisions with respect to the payment of interest thereon, on
the terms and conditions set forth below;

         NOW, THEREFORE, the Bank and the Borrower agree as follows:

         Section 1. Amendments to the Agreement.

         (a) Section 2.5 of the Loan Agreement is hereby amended by deleting the
phrase "30, 60, 90, 120, 150 or 180 days" and substituting therefor the phrase
"one, two, three, four, five or six months".

         (b) Section 3.2 of the Loan Agreement whereby amended as follows:

         (1) by deleting Section 3.2.1(i) and replacing it with the following:

             "(i) During any period in which the Borrower maintains a Cash
         Flow Ratio in excess of 1.35 to 1 but less than 1.75 to 1 and a
         Debt-to-Net Worth Ratio in excess of 1.35 to 1:

             (a)  the LIBOR Rate plus 1.75% or
             (b)  the Long Term Funds Rate plus 1.75%."; and

         (2) adding new a Section 3.2.1(iii) as follows:

             "(iii) During any period in which the Borrower maintains a
         Cash Flow Ratio in excess of 1.75 to 1 and a Debt-to-Net Worth
         Ratio not in excess of 1.35 to 1:
   66
             (a)  the LIBOR Rate plus 1.40% or
             (b)  the Long Term Funds Rate plus 1.40%."
             (c) Section 3.2.4 of the Loan Agreement is hereby amended by
deleting the phrase "30, 60, 90, 120, 150 or 180 days" and substituting
therefor the phrase "one, two, three, four, five or six months".

         Section 2. Representations and Warranties.

         (a) The execution and delivery of this Amendment and the performance of
this Amendment, the Loan Agreement as amended hereby and each of the other Loan
Documents, and the transactions contemplated hereby and thereby, have been
authorized by all necessary corporate actions of the Borrower. This Amendment,
the Loan Agreement as amended hereby and each of the other Loan Documents
constitute the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms.

         (b) The Borrower has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Amendment, the Loan
Agreement as amended hereby and each of the other Loan Documents. Neither the
authorization, execution, delivery or performance by the Borrower of this
Amendment nor the performance of the Loan Agreement as amended hereby or any
other Loan Document nor the performance of the transactions contemplated hereby
or thereby violates or will violate any provision of the corporate charter or
by-laws of the Borrower, or does or will, with the passage of time or the giving
of notice or both, result in a breach of or a default under, or require any
consent under or result in the creation of any lien, charge or encumbrance upon
any property or assets of the Borrower pursuant to, any material instrument,
agreement or other document to which the Borrower is a party or by which the
Borrower or any of its properties may be bound or affected.

         (c) The execution and delivery by the Borrower of this Amendment and
the performance by the Borrower of the Loan Agreement as amended hereby and the
Loan Documents do not and will not violate any provision of law or regulation
applicable to the Borrower, or any writ order or decree of any court or
governmental or regulatory authority or agency applicable to the Borrower.

         Section 3. Conditions to Effectiveness. The effectiveness of this
Amendment is conditioned on the following:

         (a) the Borrower and the Bank shall each have executed and delivered a
counterpart of this Amendment;


                                      -2-
   67
         (b) the representations and warranties contained in Article V of the
Loan Agreement shall be true and correct in all material respects as of the date
hereof as though made on and as of the date hereof; and

         (c) no Default or Event of Default under the Loan Agreement shall have
occurred and is continuing.

         Section 4. Miscellaneous.

         (a) On and after the date hereof; each reference in the Loan Agreement
to "this Agreement" or words of like import shall mean and be deemed to be a
reference to the Loan Agreement as amended hereby.

         (b) Except as amended and modified hereby, the Loan Agreement is in all
respects ratified and confirmed as of the date hereof; and the terms, covenants
and agreements therein shall remain in full force and effect.

         (c) This Amendment and the modifications to the Loan Agreement set
forth herein shall be deemed to be a document executed under seal and shall be
governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts.

         (d) This Amendment may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
as of the date and the year first above written.


                                       MKS INSTRUMENTS, INC.





                                       By:_________________________________

                                       Title:______________________________



                                      -3-
   68
                                       THE FIRST NATIONAL BANK OF
                                       BOSTON



                                       By:_________________________________

                                       Title:______________________________


                                      -4-
   69
                              MKS INSTRUMENTS, INC.

                                 THIRD AMENDMENT

                                TO LOAN AGREEMENT

This Third Amendment (this "Amendment") dated as of June 30, 1995 amends the
Loan Agreement dated as of November 1, 1993, as amended (the "Loan Agreement"),
between MKS INSTRUMENTS, INC. (the "Borrower") and THE FIRST NATIONAL BANK OF
BOSTON (the "Bank"). Capitalized terms used herein but not otherwise defined
shall have the meanings assigned to them in the Loan Agreement.

         WHEREAS, the Borrower and the Bank have executed the Loan Agreement
providing for a revolving credit facility for borrowings by the Borrower in
amounts up to $7,000,000; and

         WHEREAS, the Borrower has requested, and the Bank has agreed, to extend
the maturity of the credit facilities for an additional ninety (90) day period,
on the terms and conditions set forth below;

         NOW, THEREFORE, the Bank and the Borrower agree as follows:

         Section 1. Amendment to the Loan Agreement. Section 1.1.46 of the Loan
Agreement is hereby amended by deleting the date "June 30, 1995 appearing
therein in the definition of "Revolver Termination Date" and substituting
therefore the date "September 30, 1995".

         Section 2. Representations and Warranties. The Borrower hereby
represents and warrants as follows:

         (a) The execution and delivery of this Amendment and the performance of
this Amendment, the Loan Agreement as amended hereby and each of the other Loan
Documents, and the transactions contemplated hereby and thereby, have been
authorized by all necessary corporate actions of the Borrower. This Amendment,
the Loan Agreement as amended hereby and each of the other Loan Documents
constitute the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms.

         (b) The Borrower has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Amendment, the Loan
Agreement as amended hereby and each of the other Loan Documents. Neither the
authorization, execution, delivery or performance by the Borrower of this
Amendment nor the performance of the Loan Agreement as amended hereby or any
other Loan Document nor the performance of the transactions contemplated hereby
   70
or thereby violates or will violate any provision of the corporate charter or
by-laws of the Borrower, or does or will, with the passage of time or the giving
of notice or both, result in a breach of or a default under, or require any
consent under or result in the creation of any lien, charge or encumbrance upon
any property or assets of the Borrower pursuant to, any material instrument,
agreement or other document to which the Borrower is a party or by which the
Borrower or any of its properties may be bound or affected.

         (c) The execution and delivery by the Borrower of this Amendment and
the performance by the Borrower of the Loan Agreement as amended hereby and the
Loan Documents do not and will not violate any provision of law or regulation
applicable to the Borrower, or any writ, order or decree of any court or
governmental or regulatory authority or agency applicable to the Borrower.

         Section 3. Conditions to Effectiveness. The effectiveness of this
Amendment is conditioned on the following:

         (a) the Borrower and the Bank shall each have executed and delivered a
counterpart of this Amendment;

         (b) the representations and warranties contained in Article V of the
Loan Agreement shall be true and correct in all material respects as of the date
hereof as though made on and as of the date hereof; and

         (c) no Default or Event of Default under the Loan Agreement shall have
occurred and is continuing.

         Section 4. Miscellaneous.

         (a) On and after the date hereto, each reference in the Loan Agreement
to "this Agreement" or words of like import shall mean and be deemed to be a
reference to the Loan Agreement as amended hereby.

         (b) Except as amended and modified hereby, the Loan Agreement is in all
respects ratified and confirmed as of the date hereof, and the terms, covenants
and agreements therein shall remain in full force and effect.

         (c) This Amendment and the modifications to the Loan Agreement set
forth herein shall be deemed to be a document executed under seal and shall be
governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts.



                                      -2-
   71
         (d) This Amendment may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
as of the date and the year first above written.


                                       MKS INSTRUMENTS, INC.



                                       By:_________________________________

                                       Title:______________________________





                                       THE FIRST NATIONAL BANK OF
                                       BOSTON



                                       By:_________________________________

                                       Title:______________________________



                                      -3-
   72
BANK OF BOSTON




                                  July 27, 1995

MKS Instruments, Inc.
Six Shattuck Road
Andover, MA 01810


Attention:  Robert F. O'Brien, Treasurer


Ladies and Gentlemen:

         WHEREAS, MKS Instruments, Inc. a Massachusetts corporation ("Borrower")
and The First National Bank of Boston ("Lender") are parties to that certain
Loan Agreement dated November 1, 1993, as amended (the "Loan Agreement"); and

         WHEREAS, Borrower has signed a letter of intent dated May 17, 1995 (the
"Letter of Intent") which sets forth Borrower's intention to acquire through
merger UTI Instruments Company ("UTI"); and

         WHEREAS, Borrower has requested a waiver of Section 8.1(b) of the Loan
Agreement which restricts mergers to allow Borrower, or a wholly-owned
subsidiary of Borrower, to merge with UTI pursuant to the terms of the Letter of
Intent, and Lender has agreed to do so as set forth herein;

         NOW, THEREFORE, the Bank hereby waives compliance with Section 8.1(b)
of the Loan Agreement to permit the merger of Borrower, or a wholly-owned
subsidiary of Borrower, with UTI pursuant to the terms of the Letter of Intent.
This waiver is subject to Borrower, or a wholly-owned subsidiary of Borrower,
completing the merger with UTI on or before September 30, 1995.

         This waiver herein given shall not operate as a waiver of any other
Default or Event of Default, if any, now existing or hereafter arising. Borrower
represents that as of the date hereof all of the representations and warranties
set forth in Article V of the Loan Agreement are true and correct.

         In consideration of the foregoing, Borrower acknowledges that it has no
claims, counterclaims, offsets, or defenses against Lender with respect to the
Loan Agreement or otherwise.
   73
IN WITNESS WHEREOF, Lender has caused this document to be executed as a document
under seal by its duly authorized officer as of this 27th day of July, 1995.



                                       THE FIRST NATIONAL BANK OF
                                       BOSTON



                                       By:_________________________________

                                       Title:______________________________


ASSENTED TO:

MKS INSTRUMENTS


By:_______________________________

Title:____________________________

Date:_____________________________


                                      -2-
   74
BANK OF BOSTON




                               September 25, 1995


MKS Instruments, Inc.
Six Shattuck Road
Andover, MA 01810


          RE   Loan Agreement dated November 1, 1993 by and between MKS
               Investments, Inc. a Massachusetts corporation ("Borrower") and
               The First National Bank of Boston ("Lender")

Attention:     Robert F. O'Brien, Treasurer


Ladies and Gentlemen:

         In a letter dated July 27, 1995 the Lender agreed, provided the merger
was completed on or before September 30, 1995, to waive Section 8.1 (b) to allow
the Borrower to merge with UTI Instruments Company.

         The Borrower has requested that the Lender extend the time period for
completion of the merger from September 30, 1995 to October 31, 1995 and the
Lender hereby so agrees.

         This waiver herein given shall not operate as a waiver of any other
Default or Event of Default, if any, now existing or hereafter arising. The
Borrower represents that as of the date hereof all of the representations and
warranties set forth in Article V of the Loan Agreement are true and correct.

         In consideration of the foregoing, Borrower acknowledges that it has no
claims, counterclaims, offsets, or defenses against Lender with respect to the
Loan Agreement or otherwise.
   75
IN WITNESS WHEREOF, Lender has caused this document to be executed as a document
under seal by its duly authorized officer as of this 25th day of September,
1995.

                                       THE FIRST NATIONAL BANK OF
                                       BOSTON



                                       By:_________________________________

                                       Title:______________________________


ASSENTED TO:

MKS INSTRUMENTS


By:_______________________________

Title:____________________________

Date:_____________________________


                                      -2-
   76
                              MKS INSTRUMENTS, INC.

                                FOURTH AMENDMENT

                                TO LOAN AGREEMENT


This Fourth Amendment (this "Amendment") dated as of September 30, 1995 amends
the Loan Agreement dated as of November 1, 1993, as amended (the "Loan
Agreement"), between MKS INSTRUMENTS, INC. (the "Borrower") and THE FIRST
NATIONAL BANK OF BOSTON (the "Lender"). Capitalized terms used herein but not
otherwise defined shall have the meanings assigned to them in the Loan
Agreement.

         WHEREAS, the Borrower and the Lender have executed the Loan Agreement
providing for a revolving credit facility for borrowings by the Borrower in
amounts up to $7,000,000; and

         WHEREAS, the Borrower has requested, and the Lender has agreed, to
extend the maturity of the credit facilities on the terms and conditions set
forth below;

         NOW, THEREFORE, the Bank and the Borrower agree as follows:

         Section 1. Amendment to the Loan Agreement.

         (a) Section 1.1.46 of the Loan Agreement is hereby amended by deleting
the date "September 30, 1995" appearing therein in the definition of "Revolver
Termination Date" and substituting therefore the date "June 30, 1996".

         (b) Section 1.1.34 of the Loan Agreement is hereby amended by adding
"the Letter of Credit Agreements" after "the Notes,".

         (c) Section 2.1 of the Loan Agreement is hereby amended by deleting the
existing language and substituting the following:

         2.1.1 Subject to the terms and conditions of this Agreement, the Lender
hereby agrees to make Advances from time to time to the Borrower during the
period from the date hereof to the Revolver Termination Date (or such earlier
date on which the Lender shall have demanded payment of the Revolving Credit
Note) in an aggregate outstanding amount not to exceed at any time $7,000,000,
less the face amount of outstanding Letters of Credit plus unpaid LC Draws (as
defined in Section 2.1.2). The Lender shall have the absolute discretion to make
such Advances as it deems appropriate and to demand repayment of Advances at any
time. Each Advance shall, at the option of the Borrower, be a Base Rate Loan, a
LIBOR Loan or a Money Market Rate Loan provided, however, that no LIBOR Loan or
Money Market Rate Loan shall be made at any time in a principal amount of less
than $1,000,000.
   77
              2.1.2 Subject to the execution and delivery by the Borrower of a
letter of credit application and agreement and related documents in form
satisfactory to the Lender (each such "Letter of Credit Agreement"), and subject
to the terms of this Agreement, the Lender agrees to issue for the account of
the Borrower one or more standby letters of credit (the "Letters of Credit")
from time to time, from and after the date hereof with expiration dates not
later than the earlier of one year from the date of issuance or the Revolver
Termination Date, provided the sum of the aggregate face amount of outstanding
Letters of Credit plus unpaid LC Draws shall not exceed $250,000 after giving
effect to such issuance. The Lender shall have absolute discretion to issue such
Letters of Credit. The Borrower shall pay to the Lender upon the issuance of
each Letter of Credit, a Letter of Credit fee equal to 1.25% per annum of the
face amount of such Letter of Credit (pro-rated for the number of days such
Letter of Credit is outstanding). The Borrower shall also pay to the Lender, on
demand from time to time, such fees and expenses as are customarily charged by
the Bank in connection with the opening, amendment, negotiation and
administration of each Letter of Credit. The Borrower shall pay the Lender for
draws made on the Letters of Credit ("LC Draws") and other amounts relating to
the Letters of Credit due from time to time in accordance with the Letter of
Credit Agreements. If at any time the sum of the aggregate amount of Revolving
Credit Loans plus the aggregate face amount of outstanding Letters of Credit and
unpaid LC Draws shall exceed the Revolving Credit Loan, the Borrower shall
immediately pay cash to the Lender in such amount as shall be necessary to
eliminate such excess.

         (d) Section 9.2 of the Loan Agreement is hereby amended by adding the
following:

Upon the Revolver Termination Date, or the acceleration of the Revolving Credit
Note, the Borrower hereby agrees to pay to the Lender an amount equal to the
face amount of the then outstanding Letters of Credit, which amount shall be
held by the Lender as cash collateral for all LC Draws. The Borrower hereby
grants to the Bank a security interest in and pledge of such cash collateral to
secure all such LC Draws and other Obligations relating to the Letters of
Credit.

         Section 2. Representations and Warranties. The Borrower hereby
represents and warrants as follows:

         (a) The execution and delivery of this Amendment and the performance of
this Amendment, the Loan Agreement as amended hereby and each of the other Loan
Documents, and the transactions contemplated hereby and thereby, have been
authorized by all necessary corporate actions of the Borrower. This Amendment,
the Loan Agreement as amended hereby and each of the other Loan Documents
constitute the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms.


                                      -2-
   78
         (b) The Borrower has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Amendment, the Loan
Agreement as amended hereby and each of the other Loan Documents. Neither the
authorization, execution, delivery or performance by the Borrower of this
Amendment nor the performance of the Loan Agreement as amended hereby or any
other Loan Document nor the performance of the transactions contemplated hereby
or thereby violates or will violate any provision of the corporate charter or
by-laws of the Borrower, or does or will, with the passage of time or the giving
of notice or both, result in a breach of or a default under, or require any
consent under or result in the creation of any lien, charge or encumbrance upon
any property or assets of the Borrower pursuant to, any material instrument,
agreement or other document to which the Borrower is a party or by which the
Borrower or any of its properties may be bound or affected.

         (c) The execution and delivery by the Borrower of this Amendment and
the performance by the Borrower of the Loan Agreement as amended hereby and the
Loan Documents do not and will not violate any provision of law or regulation
applicable to the Borrower, or any writ, order or decree of any court or
governmental or regulatory authority or agency applicable to the Borrower.

         Section 3. Conditions to Effectiveness. The effectiveness of this
Amendment is conditioned on the following:

         (a) the Borrower and the Bank shall each have executed and delivered a
counterpart of this Amendment;

         (b) the representations and warranties contained in Article V of the
Loan Agreement shall be true and correct in all material respects as of the date
hereof as though made on and as of the date hereof; and

         (c) no Default or Event of Default under the Loan Agreement shall have
occurred and is

         Section 4. Miscellaneous.

         (a) On and after the date hereof, each reference in the Loan Agreement
to "this Agreement" or words of like import shall mean and be deemed to be a
reference to the Loan Agreement as amended hereby.

         (b) Except as amended and modified hereby, the Loan Agreement is in all
respects ratified and confirmed as of the date hereof, and the terms, covenants
and agreements therein shall remain in till force and effect.



                                      -3-
   79
         (c) This Amendment and the modifications to the Loan Agreement set
forth herein shall be deemed to be a document executed under seal and shall be
governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts.

         (d) This Amendment may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
as of the date and the year first above written.



                                       MKS INSTRUMENTS, INC.



                                       By:_________________________________

                                       Title:______________________________



                                       THE FIRST NATIONAL BANK OF
                                       BOSTON



                                       By:_________________________________

                                       Title:______________________________




                                      -4-
   80
                        FIFTH AMENDMENT TO LOAN AGREEMENT


         This Fifth Amendment to Loan Agreement is entered into as of the 31st
day of October, 1995, by and between The First National Bank of Boston
("Lender") and MKS Instruments, Inc., a Massachusetts corporation ("Borrower").

         WHEREAS, the Lender and the Borrower entered into a Loan Agreement as
of November 1, 1993 and have subsequently amended such Loan Agreement (as
amended, the "Loan Agreement");

         WHEREAS, the Lender and the Borrower desire to amend the Loan
Agreement;

         NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the adequacy and receipt of which are hereby
acknowledged, the parties hereto hereby agree as follows:

         1.  The Loan Agreement is hereby amended by deleting Section 1.1.14.
(the definition of Consolidated Operating Cash Flow) and replacing it with the
following:

             1.1.14. "Consolidated Operating Cash Flow" shall mean for any
         period, the net income (or loss) for such period (before extraordinary
         items and excluding the net income of any business entity that is not a
         Subsidiary has an ownership interest unless such net income shall have
         actually been received by such company in the form of cash
         distributions) of the Borrower and its Subsidiaries before deducting
         Interest Expense and taxes and after restoring thereto depreciation of
         real and personal property and leasehold improvements and amortization
         and after deducting cash taxes paid, Sub S distributions required to
         make shareholder tax payments, and capital expenditures incurred,
         provided that capital expenditures shall not include real estate
         purchases funded by debt.

         2.  The Loan Agreement is hereby amended by deleting Section 3.2.1. and
replacing it with the following:

             3.2.1. Borrower agrees to pay interest in respect of the unpaid
         principal amount of the Term Loan from the date of this Agreement until
         paid in full as follows. The Term Loan shall bear interest at the Base
         Rate unless Borrower desires to pay interest on all or a portion of the
         Term Loan at one of the following rates:

                    (i)   During any period in which the Borrower maintains a
             Debt-to-Net Worth Ration not in excess of 1.35 to 1:
   81
                          (a) and a Cash Flow Ration of from 1.35 to 1 to and
                    including 1.75 to 1, the LIBOR Rate plus 1.60%;

                          (b) and a Cash Flow Ration of from 1.76 to 1 to and
                    including 2.0 to 1, the LIBOR Rate plus 1.30%

                          (c) and a Cash Flow Ration of from 2.01 to 1 to and
                    including 3.0 to 1, the LIBOR Rate plus 1.10%;

                          (d) and a Cash Flow Ration in excess of 3.0 to 1, the
                    LIBOR Rate plus .90%; or

                          (e) the Long Term Funds Rate plus 1.75%; or

                    (ii)  During any period in which the Borrower maintains a
            Debt-to-Net Worth Ration of 1.35 to 1 or more or a Cash Flow
            Ratio of less than 1.35 to 1:

                          (a) the LIBOR Rate plus 2.00%; or 
                          (b) the Long Term Funds Rate plus 1.75%.

         3.  The Loan Agreement is hereby amended by adding the following clause
(k) to Section 9.1 after clause (j) thereof;

                    (k) There shall occur any Event of Default under the Loan 
Agreement between the Borrower and the Lender dated as of October 31, 1995;

         4.  As hereby amended, the Loan Agreement is hereby ratified and
confirmed.

         IN WITNESS WHEREOF, the parties hereto have causes this Fifth Amendment
to Loan Agreement to be executed as an agreement under seal as of the data first
above written.


Witness:                               MKS INSTRUMENTS, INC.




__________________________________     By:_________________________________

                                       Title:______________________________





                                       -2-
   82
                                       THE FIRST NATIONAL BANK OF
                                       BOSTON


                                       By:_________________________________

                                       Title:______________________________



                                      -3-
   83
BANK OF BOSTON

                                October 11, 1995



Robert F. O'Brien
Treasurer
MKS Instruments, Inc.
Six Shattuck Road
Andover, MA 01810


RE:  Loan Agreement dated November 1, 1993, by and between MKS
     Instruments, Inc, a Massachusetts corporation ("Borrower") and The
     First National Bank of Boston ("Lender"), as amended.


Dear Bob:

The purpose of this letter is to confirm our discussion regarding MKS's
potential acquisition of UTI Instruments Company, Inc ("UTI"). The Loan
Agreement restricts the use of the proceeds of Advances to general working
capital purposes, including acquisitions less than $2,500,000 per annum. You
have indicated that you plan to use the proceeds of Advances to temporarily fund
the acquisition of UTI for an amount to exceed $2,500,000. We hereby agree that
the proceeds of Advances may temporarily fund the UTI acquisition with permanent
funding to be in place on or before March 31, 1996. This agreement is subject to
satisfactory review of the Merger Agreement between MKS Instruments, Inc. and
UTI Instruments Company, Inc.

All other terms and conditions of the Loan Agreement shall remain in full force
and effect, including, without limitation, the Lender's absolute discretion to
make Advances and to demand repayment of Advances at any time.

Nothing contained in this letter shall operate as a waiver of any other Default
or Event of Default, if any, now existing or hereafter arising. The Borrower
represents that as of the date hereof all of the representations and warranties
set forth in Article V of the Loan Agreement are true and correct.

In consideration of the foregoing, Borrower acknowledges that it has no claims,
counterclaims, offsets, or defenses against Lender with respect to the Loan
Agreement or otherwise.
   84
If the foregoing correctly states our understanding, please sign the enclosed
copy of this letter where indicated.


                                       Very truly yours,



                                       THE FIRST NATIONAL BANK OF
                                       BOSTON


                                       By:_________________________________
                                               Sharon A. Stone, Director



ASSENTED TO AND ACCEPTED this ___ day of October:


MKS INSTRUMENTS, INC.


By:_________________________________

Title:______________________________



                                      -2-
   85
                              MKS INSTRUMENTS, INC.

                                 SIXTH AMENDMENT

                                TO LOAN AGREEMENT


         This Sixth Amendment (the "Amendment") dated as of February 23, 1996
amends the Loan Agreement dated as of November 1, 1993, as amended (the "Loan
Agreement"), between MKS Instruments, Inc. (the "Borrower") and The First
National Bank of Boston (the "Lender"). Capitalized terms used herein but not
otherwise defined shall have the meanings assigned to them in the Loan
Agreement.

         WHEREAS, the Borrower, the Lender and Chemical Bank shall enter into a
loan agreement (the "1996 Loan Agreement") on the date hereof; and

         WHEREAS, the Lender and the Borrower agree that certain terms of the
Loan Agreement should be made consistent with similar terms in the 1996 Loan
Agreement;

         NOW, THEREFORE, the Lender and the Borrower agree as follows:

         Section 1. Amendment to the Loan Agreement.

         (a) Section 4.2.2. of the Loan Agreement is hereby amended by deleting
the existing language and substituting the following:

              4.2.2. The Lender will notify the Borrower of any event occurring
after the date of this Agreement that will entitle the Lender to any additional
payment under this Section 4.2 as promptly as practicable. The Lender will
furnish to the Borrower with such notice a certificate signed by an officer of
the Lender certifying that the Lender is entitled to payment under this Section
4.2 and setting forth the basis (in reasonable detail) and the amount of each
request by the Lender for any additional payment pursuant to this Section 4.2.
Such certificate shall be conclusive in the absence of manifest error. The
Borrower shall not be obligated to compensate the Lender pursuant to this
Section for amounts accruing prior to the date that is 180 days before the
Lender notifies the Borrower of its obligations to compensate the Lender for
such amounts.

         (b) Sections 7.1(a) and 7.1(c) of the Loan Agreement are hereby amended
by replacing the word "sixty" in each with the word "forty-five".

         (c) Section 8.1(b) of the Loan Agreement is hereby amended by deleting
the existing language and substituting the following:
   86
         8.1(b)  Mergers, Etc. Neither the Borrower nor any subsidiary will
consolidate with or merge into any other Person or permit any other Person to
consolidated with or merge into it, or acquire all or substantially all of the
assets of any Person, or sell, assign, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or substantially all of its
assets to any Person, except that

                 (1) a Subsidiary may consolidate with or merge into the
         Borrower or another Subsidiary; and

                 (2) the Borrower or any of its Subsidiaries may acquire all or
         substantially all of the assets of any Person provided (i) such Person
         is engaged in a line of business substantially similar to one or more
         of Borrower's existing lines of business, (ii) the aggregate purchase
         price liability incurred in any calendar year, including all contingent
         liabilities, when aggregated with all such acquisitions and any
         Investments permitted under Section 8.4(2) in any calendar year shall
         not exceed 25% of consolidated Tangible Net Worth as of the end of the
         most recent fiscal quarter or, if 80% or more of the purchase price is
         paid in capital stock of the Borrower, 40% of Consolidated Tangible Net
         Worth as of the end of the most recent fiscal quarter and (iii) based
         on a pro forma calculation of the ratios set forth in Section 8.7 as of
         the date such acquisition is closed, assuming consolidated of the
         acquired business with the Borrower for the four full fiscal quarters
         ended immediately preceding such closing and pro forma debt and debt
         service payments based on scheduled principal payments, including
         acquisition borrowings, if any, and pro forma interest on total debt at
         then prevailing borrowing rates, Borrower is in compliance with the
         financial covenants set forth in Section 8.7.

     (d) Section 8.2 of the Loan Agreement is hereby amended by deleting the
existing clause (11) and substituting the following:

                 (11) Liens in respect of any purchase money obligations for
         tangible property used in its business, which obligations shall not at
         any time exceed 5% of Consolidated Tangible Net Worth, provided that
         any such encumbrances shall not extend to property and assets of the
         Borrower or any subsidiary not financed by such a purchase money
         obligation;

     (e) Section 8.3 of the Loan Agreement is hereby amended by adding the
following words to the end thereof prior to the close parenthesis: "and
transfers of capital equipment that will be leased pursuant to Financing
Leases".



                                      -2-
   87
     (f) Section 8.4 of the Loan Agreement is hereby amended by deleting the
existing clause (2) and substituting the following:

                 (2) Investments in or to any Subsidiary or other Person,
         provided Borrower remains in compliance with Section 8.1(b);

and by deleting from clause (4) the word "$100,000,000" and replacing it with
the word "$500,000,000".

     (g) Section 8.7 of the Loan Agreement is hereby amended by deleting
subsection (a) and replacing it with the following:

         (a)  Consolidated Tangible Net Worth. The Consolidated Tangible Net
Worth as of the end of each fiscal quarter of the Borrower shall:

              (A) prior to an IPO, not be less than the sum of (i) $38,000,000,
     and (ii) 50% of Consolidated Net Income (excluding losses) for each
     consecutive fiscal quarter of the Borrower beginning with the quarter
     ending March 31, 1996, on a cumulative basis; and

              (B) after an IPO, not be less than the sum of (i) the amount
     required by clause (A) above immediately prior to such IPO plus (ii) the
     net proceeds to the Borrower of the IPO less (iii) the Sub S Dividends.

For purposes of the foregoing, the following terms shall have the meanings
indicated:

     "IPO" shall mean the initial underwritten public offering pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
covering the offer and sale of the Borrower's Common Stock for the account of
the Borrower.

     "Sub S Dividends" shall mean one or more distributions by the Borrower to
its shareholders who were shareholders prior to the IPO in an aggregate amount
equal to the Borrower's "accumulated adjustments account", as defined in Section
1368(a)(1) if the Internal Revenue Code of 1986, as of the date of the IPO.

     (h) Section 9.1 of the Loan Agreement is hereby amended by replacing
existing clause (i) with the following:

     (i) There shall occur any default under any instrument or agreement
evidencing any indebtedness for money borrowed in excess of $100,000 by the
Borrower or any of its Subsidiaries;

and by adding the following clauses (l) and (m) after clause (k):



                                      -3-
   88
         (l) There shall occur any Event of Default under any other loan or
credit agreement to which the Borrower and the Lender are parties:

         (m) The transfer by John R. Bertucci and/or his Affiliates of
securities of the Borrower or the voting power related to such securities as a
result of which the power to elect, appoint or cause the election or appointment
of at least a majority of the members of the board of directors of the Borrower
shall no longer be held by John R. Bertucci and/or his Affiliates;

     Section 2. Representations and Warranties. The Borrower hereby represents
and warrants as follows:

     (a) The execution and delivery of this Amendment and the performance of
this Amendment, the Loan Agreement as amended hereby and each of the other Loan
Documents, and the transactions contemplated hereby and thereby, have been
authorized by all necessary corporate actions of the Borrower. This Amendment,
the Loan Agreement as amended hereby and each of the other Loan Documents
constitute the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms.

     (b) The Borrower has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Amendment, the Loan
Agreement as amended hereby and each of the other Loan Documents. Neither the
authorization, execution, delivery or performance by the Borrower of this
Amendment nor the performance of the Loan Agreement as amended hereby or any
other Loan Document nor the performance of the transactions contemplated hereby
or thereby violates or will violate any provision of the corporate charter
by-laws of the Borrower, or does or will, with the passage of time or the giving
of notice or both, result in a breach of or a default under, or require any
consent under or result in the creation of any lien, charge or encumbrance upon
any property or assets of the Borrower pursuant to, any material instrument,
agreement or other document to which the Borrower is a party or by which the
Borrower or any of its properties may be bound or affected.

     (c) The execution and delivery by the Borrower of this Amendment and the
performance by the Borrower of the Loan Agreement as amended hereby and the Loan
Documents do not and will not violate any provision of law or regulation
applicable to the Borrower, or any writ, order or decree of any court or
governmental or regulatory authority or agency applicable to the Borrower.

     Section 3. Conditions to Effectiveness. The effectiveness of this Amendment
is conditioned on the following:



                                      -4-
   89
     (a) The Borrower and the Lender shall each have executed and delivered a
counterpart of this Amendment;

     (b) The representations and warranties contained in Article V of the Loan
Agreement shall be true and correct in all material respects as of the date
hereof as though made on and as of the date hereof; and

     (c) No Default or Event of Default under the Loan Agreement shall have
occurred and be continuing.

     Section 4. Miscellaneous.

     (a) On and after the date hereof, each reference in the Loan Agreement to
"this Agreement" or words of like import shall mean and be deemed to be a
reference to the Loan Agreement as amended hereby.

     (b) Except as amended and modified hereby, the Loan Agreement is in all
respects ratified and confirmed as of the date hereof, and the terms, covenants
and agreements therein shall remain in full force and effect.

     (c) This Amendment and the modifications to the Loan Agreement set forth
herein shall be deemed to be a document executed under seal and shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts.

     (d) This Amendment may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
document.

     IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the date and the year first above written.


                                       MKS INSTRUMENTS, INC.



                                       By:_________________________________

                                       Title:______________________________




                                      -5-
   90
                                       THE FIRST NATIONAL BANK OF
                                       BOSTON


                                       By:_________________________________

                                       Title:______________________________


                                      -6-
   91
                                     WAIVER

         This Waiver (the "Waiver") dated as of October 18, 1996 concerns the
Loan Agreement dated as of November 1, 1993, as amended (the "1993 Loan
Agreement"), between MKS Instruments, Inc. (the "Borrower") and The First
National Bank of Boston (the "Lender") and the Loan Agreement dated as of
October 31, 1995, as amended (the "1995 Loan Agreement") between the Borrower
and the Lender. Capitalized terms used herein but not otherwise defined shall
have the meanings assigned to them in the 1993 and 1995 Loan Agreements.

         The Lender hereby waives the Events of Default under Section 9.1(g),
(k) and (l) of the 1993 Loan Agreement and under Section 8.1 (g), (k), and (l)
of the 1995 Loan Agreement resulting from (1) Borrower's failure to meet the
financial covenants set forth in Section 8.7(b) and (c) of the 1993 Loan
Agreement and Section 7.7 (b) and (c) of the 1995 Loan Agreement as of the end
of the fiscal quarter ended June 30, 1996 and (2) the Event of Default that has
occurred under Section 8.1(g), (k) and (1) of the Loan Agreement dated as of
February 23, 1996 among the Borrower, the Lender and the Chase Manhattan Bank
(f/k/a Chemical Bank) as a result of Borrower's failure to meet the financial
covenants set forth in Section 7.7(b) and (c) of such Loan Agreement as of the
end of the fiscal quarter ended June 30, 1996.

         Except for the above waiver, the 1993 and 1995 Loan Agreements are in
all respects ratified and confirmed as of the date hereof, and the terms,
covenants and agreements therein shall remain in full force and effect.

         IN WITNESS WHEREOF, the Lender has caused this Waiver to be duly
executed as of the date and the year first above written.


                                       THE FIRST NATIONAL BANK OF
                                       BOSTON


                                       By:_________________________________

                                       Title:______________________________



                                      -7-
   92
                              MKS INSTRUMENTS, INC.

                          WAIVER AND SEVENTH AMENDMENT

                                TO LOAN AGREEMENT


     This Waiver and Seventh Amendment (the "Wavier and Amendment") dated as of
February 4, 1997 concerns the Loan Agreement dated as of November 1, 1993 (the
"Loan Agreement"), between MKS Instruments, Inc. (the "Borrower") and The First
National Bank of Boston (the "Lender"). Capitalized terms used herein but not
otherwise defined shall have the meanings assigned to them in the Loan
Agreement.

     WHEREAS, the Borrower has requested that the Lender waive certain Events of
Default; and

     WHEREAS, the Lender is willing, on the terms, subject to the conditions and
to the extent set forth below, to grant such a wavier;

     NOW, THEREFORE, the Lender and the Borrower agree as follows:

     Section 1. Waiver. The Lender hereby waives the Events of Default under
Section 9.1(g), (j), (k) and (l) of the Loan Agreement resulting from Borrower's
failure to meet the financial covenant set forth in Section 8.7(c) of the Loan
Agreement as of the end of the fiscal quarters ended September 30 and December
31, 1996.

     Section 2. Amendment to the Loan Agreement.

     (a) Section 3.2.1. of the Loan Agreement is hereby amended by adding the
following at the end thereof:

     Notwithstanding the preceding clauses (i) and (ii), from June 30, 1996
     through June 30, 1997, the only alternative to the Base Rate shall be the
     LIBOR Rate plus 2.00%.

     (b)  Section 8.7(c) of the Loan Agreement is hereby amended by deleting the
          existing language and substituting the following:

          (c)  Cash Flow Ratio.  The ratio ("Cash Flow Ratio") of Consolidated
     Operating Cash Flow to Consolidated Debt Service:

               (1) for the Borrower's fiscal quarter ending March 31, 1997,
          shall not be less than 1.25 to 1.00;

               (2) for the Borrower's two consecutive fiscal quarters ending 
          June 30, 1997, shall not be less than 1.00 to 1.00;
   93
               (3) for the Borrower's three consecutive fiscal quarters ending
          September 30, 1997, shall not be less than 1.25 to 1.00; and

               (4) for the Borrower's four consecutive fiscal quarters ending
          December 31, 1997 and for each series of four consecutive fiscal 
          quarters of the Borrower ending after December 31, 1997, shall not be
          less than 1.25 to 1.00.

     Section 3. Representations and Warranties. The Borrower hereby represents
and warrants as follows:

         (a) The execution and delivery of this Waiver and Amendment and the
performance of this Waiver and Amendment, the Loan Agreement as amended hereby
and each of the other Loan Documents, and the transactions contemplated hereby
and thereby, have been authorized by all necessary corporate actions of the
Borrower. This Waiver and Amendment, the Loan Agreement as amended hereby and
each of the other Loan Documents constitute the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
their respective terms.

         (b) The Borrower has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Waiver and Amendment,
the Loan Agreement as amended hereby and each of the other Loan Documents.
Neither the authorization, execution, delivery or performance by the Borrower of
this Waiver and Amendment nor the performance of the Loan Agreement as amended
hereby or any other Loan Document nor the performance of the transactions
contemplated hereby or thereby violates or will violate any provision of the
corporate charter or by-laws of the Borrower, or does or will, with the passage
of time or the giving of notice or both, result in a breach of or a default
under, or require any consent under or result in the creation of any lien,
charge or encumbrance upon any property or assets of the Borrower pursuant to,
any material instrument, agreement or other document to which the Borrower is a
party or by which the Borrower or any of its properties may be bound or
affected.

         (c) The execution and delivery by the Borrower of this Waiver and
Amendment and the performance by the Borrower of the Loan Agreement as amended
hereby and the Loan Documents do not and will not violate any provision of law
or regulation applicable to the Borrower, or any writ, order or decree of any
court or governmental or regulatory authority or agency applicable to the
Borrower.

     Section 4. Loan Documents. This Waiver and Amendment shall be a Loan
Document for all purposes.


                                      -2-
   94
     Section 5. Conditions to Effectiveness. The effectiveness of this Waiver
and Amendment is conditioned on the following:

         (a) The Borrower and the Lender shall each have executed and delivered
a counterpart of this Waiver and Amendment;

         (b) The representations and warranties contained in Article of the Loan
Agreement shall be true and correct in all material respects as of the date
hereof as though made on and as of the date hereof;

         (c) No Default or Event of Default under the Loan Agreement shall have
occurred and be continuing other than the Events of Default described in Section
1 hereof; and

         (d) The Borrower's audited consolidated financial statements for the
year ended December 31, 1996 shall not differ in any materially adverse respect
from the Borrower's unaudited consolidated financial statements for the year
ended December 31, 1996, which the Borrower has provided to the Lender and upon
which the Lender has relied in agreeing to this Waiver and Amendment.

     Section 6. Miscellaneous.

         (a) On and after the date hereof, each reference in the Loan Agreement
to "this Agreement" or words of like import shall mean and be deemed to be a
reference to the Loan Agreement as amended hereby.

         (b) Except as amended and modified hereby, the Loan Agreement is in all
respects ratified and confirmed as of the date hereof, and the terms, covenants
and agreements therein shall remain in full force and effect.

         (c) This Waiver and Amendment and the modifications to the Loan
Agreement set forth herein shall be deemed to be a document executed under seal
and shall be governed by and construed in accordance with the laws of The
Commonwealth of Massachusetts.

         (d) This Waiver and Amendment may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same document.


                                      -3-
   95
     IN WITNESS WHEREOF, the parties have caused this Waiver and Amendment to be
duly executed as of the date and the year first above written.


                                       MKS INSTRUMENTS, INC.



                                       By:_________________________________

                                       Title:______________________________



                                       THE FIRST NATIONAL BANK OF
                                       BOSTON



                                       By:_________________________________

                                       Title:______________________________


                                      -4-
   96
     IN WITNESS WHEREOF, the parties have caused this Waiver and Amendment to be
duly executed as of the date and the year first above written.


                                       MKS INSTRUMENTS, INC.



                                       By:_________________________________

                                       Title:______________________________



                                       THE FIRST NATIONAL BANK OF
                                       BOSTON



                                       By:_________________________________

                                       Title:______________________________




                                      -5-

   1
                                                                EXHIBIT 10.12


                         STANDARD FORM OF INDUSTRIAL LEASE
                                    (SEMI-GROSS)

                                 TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
         ARTICLE I.  DEFINITIONS...............................................1
              1.1  Address of Landlord ....................................... 1
              1.2  Address of Tenant ......................................... 1
              1.3  Base Rent ................................................. 1
              1.4  Base Year ................................................. 1
              1.5  Building/s ................................................ 1
              1.6  Center .................................................... 1
              1.7  Common Area ............................................... 1
              1.8  Lease Term ................................................ 1
              1.9  Permitted Use of the Premises ............................. 1
              1.10 Premises .................................................. 1
              1.11 Rent ...................................................... 1
              1.12 Additional Rent ........................................... 2
              1.13 Security Deposit .......................................... 2
              1.14 Tenant's Allocated Share .................................. 2
              1.15 Tenant's Proportionate Share............................... 2
              1.16 Tenant's Prorata Share .................................... 2

         ARTICLE II.  THE DEMISED PREMISES ................................... 2
              2.1  Lease of the Premises ..................................... 2
              2.2  Use of Common Area ........................................ 2
              2.3  Quiet Enjoyment ........................................... 2
              2.4  Reservations by Landlord .................................. 2

         ARTICLE III.  TERM OF THE LEASE ..................................... 3
              3.1  Term ...................................................... 3
              3.2  Tender of Possession ...................................... 3
              3.3  Holding Over .............................................. 3

         ARTICLE IV.  RENT ................................................... 3
              4.1  Base Rent ................................................. 3
              4.2  Additional Rent ........................................... 4
                        4.2(a)    Utilities and Services ..................... 4
                        4.2(b)    Insurance .................................. 5
                        4.2(c)    Real Estate Taxes .......................... 5
                        4.2(d)    HVAC Maintenance ........................... 5
                        4.2(e)    Common Area Expenses ....................... 6
                        4.2(f)    Rent on Sales Taxes ........................ 6
              4.3  Late Payment .............................................. 7

   2
              4.4  Security Deposit .......................................... 7

         ARTICLE V.  LANDLORD'S RIGHTS AND OBLIGATIONS ....................... 7
              5.1  Maintenance by Landlord ................................... 7
              5.2  Mortgage and Transfer: Estoppel Certificates .............. 7
              5.3  Landlord's Inability to Perform ........................... 8
              5.4  Rights of Landlord ........................................ 8
                        5.4(a)    Name of Center ............................. 9
                        5.4(b)    Redecorate ................................. 9
                        5.4(c)    Re-Lease ................................... 9
                        5.4(d)    Vehicles ................................... 9
                        5.4(e)    Preservation of Center ..................... 9

         ARTICLE VI.  TENANT'S RIGHTS AND OBLIGATIONS ........................ 9
              6.1  Acceptance of Premises .................................... 9
              6.2  Alterations and Additions ................................. 9
              6.3  Assignment and Subletting ................................ 10
              6.4  Locks .................................................... 10
              6.5  Maintenance by Tenant .................................... 10
              6.6  Mechanic's Liens ......................................... 11
              6.7  Redelivery of Premises ................................... 11
              6.8  Signs and Advertisements ................................. 11
              6.9  Use of Common Areas ...................................... 11
              6.10 Use of Premises .......................................... 11
              6.11 Hazardous Substances ..................................... 11

         ARTICLE VII.  INSURANCE ............................................ 12
              7.1  Liability Insurance ...................................... 12
              7.2  Fire and Extended Coverage Insurance ..................... 12
              7.3  Indemnification of Landlord .............................. 12

         ARTICLE VIII.  EMINENT DOMAIN AND DAMAGE OR DESTRUCTION ............ 13
              8.1  Eminent Domain ........................................... 13
              8.2  Damage or Destruction .................................... 13

         ARTICLE IX.  DEFAULT AND REMEDIES .................................. 14
              9.1  Events of Default ........................................ 14
                        9.1(a)    Nonpayment ................................ 14
                        9.1(b)    Noncompliance ............................. 14
                        9.1(c)    Insolvency or Transfer .................... 15
                        9.1(d)    Bankruptcy ................................ 15
                        9.1(e)    Receiver .................................. 15
                        9.1(f)    Abandonment ............................... 15
              9.2  Remedies ................................................. 15
                        9.2(a)    Repossession and Sale ..................... 15
                        9.2(b)    Releasing ................................. 15

   3
                     9.2(c)    Cancellation ............................... 15
                     9.2(d)    Anticipatory Breach ........................ 16
                     9.2(e)    Attorney's Fees ............................ 16
           9.3   Remedies Cumulative ...................................... 16
           9.4   No Waiver ................................................ 16

      ARTICLE X.  MISCELLANEOUS ........................................... 16
           10.1  Bankruptcy or Assignment to Trustee ...................... 16
           10.2  Brokers .................................................. 16
           10.3  Captions ................................................. 17
           10.4  Certificates of Occupancy ................................ 17
           10.5  Entire Agreement ......................................... 17
           10.6  Joint and Several Liability of Multiple Tenants .......... 17
           10.7  Notices .................................................. 17
           10.8  Partial Invalidity ....................................... 17
           10.9  Recording ................................................ 17
           10.10 Successors ............................................... 17
           10.11 Use of the Singular; Gender .............................. 18
           10.12 Rider .................................................... 18

      EXHIBIT A.  RULES AND REGULATIONS

      EXHIBIT B . THE CENTER AND PREMISES

      EXHIBIT C.  LANDLORD'S IMPROVEMENTS TO PREMIES (if any)
   4
                                                           GA Property No. 17717
                                                                          IP-524


                STANDARD FORM OF INDUSTRIAL LEASE
                           (SEMI-GROSS)

         THIS LEASE, made this 21st day of September, 1995, by and between
GENERAL AMERICAN LIFE INSURANCE COMPANY, a Missouri corporation (hereinafter
"Landlord"), and MKS INSTRUMENTS, INC. (hereinafter "Tenant").

ARTICLE I.  DEFINITIONS.

1.1 Address of Landlord: One Lincoln Centre, Suite 567, 5400 LBJ Freeway,
Dallas, Texas 75240.

1.2 Address of Tenant: Six Shattuck Road, Andover, MA 01810.

1.3 Base Rent: See Paragraph No. 1 of Lease Rider Number One.

1.4 Base Year: *See Paragraph 2 of Lease Rider Number One.

1.5 Building/s: The Building/s in which the Premises is located. The specific
Building in which the Premises is located contains 54,301 square feet. The total
square footage of all the Buildings in the Center is 124,187 square feet.

1.6 Center: The land, improvements and appurtenances depicted on Exhibit B
attached hereto and commonly referred to as: ARAPAHO GROVE BUSINESS PARK and
located at 789 Grove Road, Suite 111, Richardson, Texas.

1.7 Common Area: The term "Common Area" means all the areas of the Center
designed for the common use and benefit of the Landlord and all of the tenants,
their employees, agents, customers and invitees. The Common Area includes, but
not by way of limitation, parking lots, truck courts, landscaped and vacant
areas, driveways, rail spurs, walks and curbs and facilities appurtenant to each
as such areas may exist from time to time.

1.8  Lease Term:  The lease term shall commence on September 1, 1995 and run for
three (3) years, and 0 months, expiring on August 31, 1998.

1.9 Permitted Use of the Premises: light electronic assembly and associated
activities.

1.10 Premises: 14,627 square feet of space in the Center located as outlined on
Exhibit B attached hereto, and addressed as: 789 Grove Road, Suite 111,
Richardson, Texas.
   5
1.11 Rent: All sums, monies or payments required to be paid by Tenant to
Landlord pursuant to this Lease, including Base Rent and Additional Rent.

1.12 Additional Rent: All sums, monies or payments required to be paid by Tenant
to landlord pursuant to this Lease other than Base Rent.

1.13 Security Deposit: $3,117.00

1.14 Tenant's Allocated Share: The percentage figure determined by dividing the
number of square feet in the Premises by the number of square feet in the
Building that is then leased to Tenant and to other tenants.

1.15 Tenant's Proportionate Share: The percentage figure determined by dividing
the number of square feet in the Premises by the total number of square feet in
all the buildings (this paragraph is applicable when the Center contains more
than one Building), which percentage figure is: 11.78%.

1.16 Tenant's Prorata Share: The percentage figure determined by dividing the
number of square feet in the Premises by the number of square feet in the
specific Building in which the Premises is located, which percentage figure is:
26.94%.

ARTICLE II. THE DEMISED PREMISES.

2.1 Lease of the Premises. In consideration of the Rents, covenants, agreements
and conditions hereinafter provided to be paid, kept, performed and observed,
the Landlord leases to the Tenant and the Tenant hereby hires from the Landlord
the Premises, upon all the terms and conditions set forth in this Lease.

2.2 Use of Common Area. Landlord grants the Tenant the nonexclusive revocable
use of the Common Area by tenant, Tenant's employees, agents, customers and
invitees, under all the terms and conditions hereof, which use shall be subject
at all times to such reasonable, uniform and non-discriminatory rules and
regulations as may from time to time be established.

2.3 Quiet Enjoyment. Landlord covenants that the Tenant, on paying the Rent
herein provided and keeping, performing and observing the covenants, agreements
and conditions herein required of the Tenant, shall peaceably and quietly hold
and enjoy the Premises for the Lease Term, subject, however, to the terms and
conditions of this Lease.

2.4 Reservations by Landlord. Landlord excepts and reserves from the Premises
the roof and exterior walls of the Building/s, and further reserves the right to
place, install, maintain, carry through, repair and replace such utility lines,
air ducts, pipes, wires, appliances, tunneling and the like in, over, through
and upon the Premises as may be reasonably necessary or advisable for the
servicing of the Premises or any other


                                       2
   6
portions of the Center. Landlord further reserves the right, at any time, and
from time to time to: (i) make alterations, changes and additions to the
Building/s and other improvements in the Center; (ii) add additional areas to
the Center and/or to exclude areas therefrom; (iii) construct additional
buildings and other improvements in the Center; (iv) remove or relocate the
whole or any part of any building or other improvement in the Center; and (v)
relocate any other tenant in the Center. It is further understood that the
existing layout of the buildings, walks, roadways, parking areas, entrances,
exits, and other improvements shall not be deemed to be a warranty,
representation or agreement on the part of the Landlord that the Center will
remain exactly as presently built, it being understood and agreed that Landlord
may change the number, dimensions and locations of the walks, buildings and
parking spaces as Landlord shall deem proper.

ARTICLE III. TERM OF THE LEASE.

3.1 Term. Tenant shall have and hold the Premises for and during the Lease Term
subject to the payment of the Rent and the full and timely performance by Tenant
of all the covenants and conditions set forth in this Lease.

3.2 Tender of Possession. Landlord shall use its best efforts to tender
possession of the Premises to Tenant at the commencement of the Lease Term.
Landlord shall not be subject to any liability for any failure to tender
possession of the Premises to Tenant, provided that such failure occurred as a
consequence of any circumstance or cause beyond Landlord's reasonable control,
including but not limited to any Act of God or the failure of a prior tenant to
vacate all or any portion of the Premises.

3.3 Holding Over. In the event of a holding over by Tenant or any of its
successors in interest after expiration or termination of this Lease without the
consent in writing of the Landlord, Tenant shall be deemed a Tenant at
sufferance and shall pay as liquidated damages, double Rent for the entire
holdover period and all attorney's fees and expenses incurred by Landlord in
enforcing its rights hereunder. Any holding over with the consent of Landlord
shall constitute Tenant a month-to-month tenant upon and subject to all the
terms, covenants and conditions of this Lease. *See paragraph 3 of Lease Rider
Number One.

ARTICLE IV. RENT.

4.1 Base Rent. Tenant covenants to pay without notice, deduction, set-off or
abatement to Landlord the Base Rent in lawful money of the United States in
equal consecutive monthly installments in advance on the first day of each month
during the Lease Term. Base Rent for any partial month shall be prorated on a
per diem basis. Base Rent shall be payable to Landlord at Landlord's Address or
such other place as Landlord may designate from time to time in writing. Tenant
shall pay the first full month's Base Rent upon execution of this Lease.


                                       3
   7
4.2 Additional Rent. Tenant covenants to pay without notice, deduction, set-off
or abatement to Landlord the Additional Rent in lawful money of the United
States in equal consecutive monthly installments in advance on the first day of
each month during the Lease Term. Additional Rent for any partial month shall be
prorated on a per diem basis. Additional Rent shall be payable to Landlord at
Landlord's Address or such other place as Landlord may designate in writing. In
order to provide for current payments of Additional Rent, Tenant agrees to pay
an amount of Additional Rent reasonably estimated by Landlord from time to time
commencing on the first day of the month following the month in which Landlord
notifies Tenant of the amount of such Additional Rent. If, as finally
determined, the amount of Additional Rent owing by Tenant shall be greater than
or less than the aggregate of all installments so paid to Landlord for each
calendar year, the Tenant shall pay to Landlord the amount of such underpayment,
or Landlord shall credit Tenant for the amount of such overpayment, as the case
may be. It is the intention hereunder to estimate the amount of Additional Rent
for each calendar year and then to adjust such estimate in the following year
based on the actual amount of Additional Rent owing. The obligation of Tenant
with respect to the payment of Additional Rent shall survive the termination of
this Lease. Any payment, refund or credit made pursuant to this paragraph shall
be made without prejudice to any right of Tenant to dispute the amount of
Additional Rent owing, or the right of Landlord to correct any items as billed
pursuant to the provisions hereof. Within 30 days of the date Landlord notifies
Tenant of the amount of Additional Rent owing, Tenant or its authorized agent
shall have the right to inspect the books of Landlord during the business hours
of Landlord at such location that Landlord may specify, for the purpose of
verifying such amount. Unless Tenant asserts specific errors within such 30
days, such notification by Landlord shall be deemed to be correct. No decrease
in Additional Rent shall reduce Tenant's liability hereunder below the amount of
Base Rent payable hereunder.

     4.2(a) Utilities and Services. Landlord shall not be liable for any
     interruption or failure whatsoever in utility services. Tenant shall
     contract in its own name and pay for all charges for electricity, gas,
     fuel, telephone, and any other services or utilities used in, servicing or
     assessed against the Premises, unless otherwise herein expressly provided.
     Additionally, and if the Building is master metered for water, sewer and
     exterior lighting, Tenant agrees to pay to Landlord as Additional Rent
     Tenant's Prorata Share of the cost of such utilities for the Building.
     Additionally, and as containerized rubbish collection bins will be provided
     to the Building, Tenant agrees to pay to Landlord as Additional Rent,
     Tenant's Allocated Share of the service cost of such bins (unless Landlord,
     exercising reasonable discretion, should determine that Tenant's actual use
     thereof is greater than such Tenant's Allocated Share therefore, in which
     case an equitable adjustment shall be made). Landlord may, however, require
     Tenant to contract for his own rubbish collection, in the event Tenant's
     needs for such containers


                                       4
   8
constitute excessive demand on common containers. In such event, Tenant shall
contract with the same provider as the Center's common bins.

4.2(b) Insurance. Tenant shall pay to Landlord as Additional Rent Tenant's
Prorata Share (or, Tenant's Proportionate Share in the event there is more than
one Building in the Center) of any increase in the cost of the premium for the
fire and extended coverage insurance that Landlord maintains hereunder over the
premium paid by Landlord for the Base Year. Tenant shall pay any increase in the
cost of fire and extended coverage insurance caused by Tenant's use or
activities on or about the Premises.

4.2(c) Real Estate Taxes. Tenant shall pay to Landlord as Additional Rent
Tenant's Prorata Share (or, Tenant's Proportionate Share in the event there is
more than one Building in the Center) of any increases in Landlord's Real Estate
Taxes over Real Estate Taxes for the Base Year levied against the Center. "Real
Estate Taxes" shall mean: (a) all ad valorem Real Estate Taxes on the Center
(adjusted after protest or litigation, if any) for any part of the term of this
Lease, exclusive of penalties; (b) any taxes which shall be levied in lieu of
any such ad valorem Real Estate Taxes; (c) any special assessments for benefits
on or to the Center paid in annual installments by Landlord; (d) occupational
taxes or excise taxes levied on rentals derived from the operation of the
property or the privilege of leasing property; (e) any private subdivision
assessment made against the Center; and (f) the expense of protesting,
negotiating or contesting the amount or validity of any such taxes, charges or
assessments, such expense to be applicable to the period of the item contested,
protested or negotiated.

If the Lease Term shall end during a tax year ("tax year" shall mean the annual
period for which Real Estate Taxes are assessed and levied) of which only part
is included in the Lease Term, the amount of such Additional Rent shall be
prorated on a per diem basis and shall be paid on or before the last day of the
Lease Term. If the Lease Term ends in any tax year before the amount to be
payable by Tenant has been determined under the provisions of this Section, an
amount payable for the portion of the Lease Term during the tax year shall be
reasonably estimated by Landlord and the estimated amount shall be promptly paid
by Tenant. As soon as the amount properly payable by Tenant for the partial
period has finally been determined, the amount shall be adjusted between
Landlord and Tenant. Tenant shall be liable for all taxes levied against
personal property and trade fixtures placed by Tenant in the Premises.

4.2(d) HVAC Maintenance. Tenant shall pay to Landlord as Additional Rent
Tenant's Allocated Share of Landlord's cost and expense of the maintenance
service agreements to the heating, ventilating and air conditioning equipment
and controls servicing the Premises. Tenant shall pay all expenses incurred to


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repair the heating, ventilating and air conditioning equipment servicing the
Premises. *See Paragraph 4 of Lease Rider Number One.

4.2(e) Common Area Expenses. Tenant will pay to Landlord as Additional Rent
Tenant's Prorata Share (or, Tenant's Proportionate Share in the event there is
more than one Building in the Center) of the Common Area Operating Cost. *See
Paragraph 5 of Lease Rider Number One.

"Common Area Operating Cost" means the Landlord's total cost and expense
incurred in owning, operating, maintaining and repairing the Common Area,
including but without limitation by enumeration, costs for all electricity, gas,
water, sewer or fuel used in connection with the operation, maintenance and
repair of the Common Area; the amount paid for all electricity furnished to the
Common Area to light the parking lots or for any other purpose; the amount paid
for all labor and/or wages and other payments including costs to Landlord of
workmen's compensation and disability insurance, payroll taxes, welfare and
fringe benefits made to janitors, employees, contractors and subcontractors of
the Landlord involved in the operation and maintenance or the Common Area;
managerial, administrative and telephone expenses related to operation and
maintenance of the Common Area; the total charges of any independent contractors
employed in the care, operation, repair, maintenance, cleaning, snow removal,
salting and landscaping of the Common Area; the amount paid for all supplies,
tools, replacement parts of components, equipment and necessities which are
occasioned by everyday wear and tear of the Common Area; the amount paid for
premiums for all insurance required from time to time by Landlord or Landlord's
mortgagees; the costs of machinery and equipment purchased or leased by Landlord
to perform its Common Area maintenance obligations; and property management fees
not to exceed five percent (5%) of the gross income of the Center. To the extent
that Landlord elects to provide services which are not separately metered or
directly billed to the tenant, such as water, sewer and trash hauling, the costs
of such services shall be included in Common Area Operating Cost. Common Area
Operating Cost shall not, however, include interest on debt, capital retirement
of debt, depreciation, costs properly chargeable to the capital account, except
for capital expenditures which reduce other operating expenses or such capital
expenditures that are required by changes in any governmental law or regulation
in which case such expenditures, plus interest on the unamortized principal
investment at ten (10%) percent per annum, shall be amortized over the life of
the improvements, and such costs shall be directly chargeable by the Landlord to
Tenant in the Tenant's Prorata Share (or, Tenant's Proportionate Share in the
event there is more than one Building in the Center).

4.2(f) Rent on Sales Taxes. Tenant shall pay to Landlord as Additional Rent any
Sales or Rent Taxes, however named or designated, levied on any form of Rent or
Additional Rent.


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4.3 Late Payment. Tenant's failure to make any rental payment or other payment
required of Tenant hereunder within three (3) days of the due date therefor
shall automatically result in the imposition of a service charge for such late
payment in the amount of ten (10%) percent of such payment, without notice. *See
Paragraph 6 of Lease Rider Number One.

4.4 Security Deposit. Tenant herewith deposits with Landlord the Security
Deposit as security for the performance by Tenant of every covenant and
condition of this Lease. Said Security Deposit may be mingled with other funds
of Landlord and shall bear no interest. If Tenant shall default with respect to
any covenant or condition of this Lease, Landlord may apply the whole or any
part of such Security Deposit to the payment of any sum in default, including
Rent and Additional Rent, or any sum which Landlord may be required to spend by
reason of Tenant's default. This includes, but is not limited to, applying the
Security Deposit first to any restoration, relamping, repairs and/or cleanup
costs necessary over and above normal wear and tear of the vacated space. Should
Landlord so apply the Security Deposit or any portion thereof during the Lease
Term, Tenant shall promptly reimburse Landlord for same. It is understood that
the Security Deposit is not to be considered as the last month's rent. Should
Tenant comply with all of the covenants and conditions of this Lease, the
Security Deposit or any balance thereof shall be returned to Tenant within 30
days of the expiration of the Lease Term.

ARTICLE V. LANDLORD'S RIGHTS AND OBLIGATIONS.

5.1 Maintenance by Landlord. During the Lease Term, Landlord shall operate and
maintain the Common Area and shall keep and maintain the roof, exterior walls
(excluding doors, glass or plate glass), gutters and downspouts of the
Building/s in good condition and repair. Landlord shall be under no obligation
and shall not be liable for any failure to make repairs that are Landlord's
responsibility herein until and unless Tenant notifies Landlord in writing of
the necessity therefor, in which event Landlord shall have a reasonable time
thereafter to make such repairs. Landlord reserves the right to the exclusive
use of the roof and exterior walls of the Building/s which Landlord is so
obligated to maintain and repair. Landlord shall enter into a service contract
on the Building for the heating, ventilation and air conditioning equipment for
periodic inspection and service of such equipment, and Tenant shall reimburse
Landlord pursuant to the provisions hereof. If any portion of the Center which
Landlord is obligated to maintain or repair is damaged by the negligence of
Tenant, its agents, employees or invitees, then repairs necessitated by such
damage shall be paid for by Tenant. *See Paragraph 7 of Lease Rider Number One.

5.2 Mortgage and Transfer: Estoppel Certificates. Landlord shall have the right
to transfer, mortgage, pledge or otherwise encumber, assign and convey, in whole
or in part, the Center, the Building/s, this Lease, and all or any part of the
rights now or


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thereafter existing therein and all Rents and amounts payable to Landlord under
the provisions hereof. In the event of any such transfer or transfers, Landlord
herein named (and in case of any subsequent transfer, the then transferor) shall
be automatically freed and relieved from and after the date of such transfer of
all personal liability as respects the performance of any covenants or
agreements on the part of Landlord contained in this Lease thereafter to be
performed. Nothing herein contained shall limit or restrict any such rights, and
the rights of the Tenant under this Lease shall be subject and subordinate to
all instruments executed and to be executed in connection with the exercise of
any such rights, including, but not limited to, the lien of any mortgage, deed
of trust, or security agreement now or hereafter placed upon Landlord's interest
in the Premises. This paragraph shall be self-operative. However, Tenant
covenants and agrees to execute and deliver upon demand such further instruments
subordinating this Lease to the lien, of any such mortgage, deed of trust or
security agreement as shall be requested by Landlord and/or mortgagee or
proposed mortgagee or holder of any security agreement and hereby irrevocably
appoints Landlord as its agent and attorney-in-fact to execute and deliver any
such instrument for and in the name of Tenant. Tenant shall, within ten (10)
days after written request of Landlord, execute, acknowledge, and deliver to
Landlord or to Landlord's mortgagee, proposed mortgagee, Land Lessor or proposed
purchaser of the Center or any part thereof, any estoppel certificates requested
by Landlord from time to time, which estoppel certificates shall show whether
the lease is in full force and effect and whether any changes may have been made
to the original lease; whether the term of the lease has commenced and full
rental is accruing; whether there are any defaults by Landlord and, if so, the
nature of such defaults; whether possession has been assumed and all
improvements to be provided by Landlord have been completed; and whether rent
has been paid more than thirty (30) days in advance and that there are no liens,
charges, or offsets against rental due or to become due and that the address
shown on such estoppel is accurate.

5.3 Landlord's Inability to Perform. If, by reason of: inability to obtain and
utilize labor, materials or supplies; circumstances directly or indirectly the
results of a state of war or national or local emergency; any laws, rules,
orders, regulations or requirements of any governmental authority now or
hereafter in force; strikes or riots; accident in, damage to or the making of
repairs, replacements, or improvements to, the Premises or any of the equipment
thereof; or by reason of any other cause beyond the reasonable control of the
Landlord including "Acts of God," Landlord shall be unable to perform or shall
be delayed in the performance of any covenant to supply any service, such
nonperformance or delay in performance shall not render Landlord liable in any
respect for damages to either person or property, constitute a total or partial
eviction, constructive or otherwise, work an abatement of rent or relieve Tenant
from the fulfillment of any covenant or agreement contained in this Lease.

5.4 Rights of Landlord. Landlord may enter upon the Premises for the purpose of
exercising any or all of the rights hereby reserved without being deemed guilty
of an


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eviction or disturbance of Tenant's use or possession and without being liable
in any manner to Tenant. The reservation of these rights by Landlord shall not
render Landlord liable for not performing any of the matters specified herein.

5.4(a) Name of Center. To change the name of the Building/s or the Center
without notice or liability of the Landlord to Tenant;

5.4(b) Redecorate. During the last ninety (90) days of the Lease Term or any
renewal or extension thereof, if during or prior to that time the Tenant has
vacated the Premises, to decorate, remodel, repair, alter or otherwise prepare
the Premises for reoccupancy; *See Paragraph 8 of Lease Rider Number One.

5.4(c) Re-Lease. To exhibit the Premises to others and to display "For Lease"
signs on the Premises during the last one hundred eighty (180) days of the Lease
Term or any renewal or extension thereof;

5.4(d) Vehicles. To remove abandoned or unlicensed vehicles and vehicles that
are unreasonably interfering with the use of the parking lot by others, and to
charge the responsible tenant for the expense of removing said vehicles;

5.4(e) Preservation of Center. To take any and all measures, including making
inspection, repairs, alterations, additions and improvements to the Premises or
to the Center as may be necessary or desirable for the safety, protection or
preservation of the Premises or the Center or the Landlord's interests, or as
may be necessary or desirable in the operation of the Premises or the Center.

ARTICLE VI. TENANT'S RIGHTS AND OBLIGATIONS.

6.1 Acceptance of Premises. Landlord will complete the Premises in accordance
with Exhibit C, if attached hereto. Tenant acknowledges that it will examine the
Premises before taking possession hereunder. Unless Tenant furnishes Landlord
with a notice in writing specifying any defect in the construction or condition
of the Premises within ten (10) days after taking possession, such taking of
possession shall be conclusive evidence as against Tenant that at the time
thereof the Premises were in good order and satisfactory condition.

6.2 Alterations and Additions. Tenant shall not make any alterations,
improvements, or additions to the Premises without the prior written consent and
approval of plans therefor by Landlord. Alterations, improvements or additions
made by either of the parties upon the Premises, except moveable furniture and
equipment placed in the Premises at the expense of Tenant, shall be the property
of Landlord and shall remain upon and be surrendered with the Premises as a part
thereof at the termination of this Lease, without disturbance, molestation,
injury or damage unless Landlord elects to require Tenant to remove such
alterations or improvements from the Premises at the


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expiration of this Lease. In the event damage shall be caused by moving said
furniture and equipment in or out of the Premises, said damage shall be repaired
at the cost of Tenant. *See Paragraph 9 of Lease Rider Number One.

6.3 Assignment and Subletting. Tenant shall not assign or hypothecate this Lease
or sublet all or any part of the Premises without the prior written consent of
Landlord. If Tenant wishes to assign or sublet the Premises, it shall give
notice in writing (by certified mail or by personal delivery) of such intention
to Landlord and, thereupon, Landlord shall, within thirty (30) days of receipt
of such notice, have the right to unilaterally terminate this Lease or to
approve said subletting by written notice to Tenant. If no notice is given by
Landlord, Landlord will be deemed to have elected to approve the assignment or
subletting. If the assignment or subletting is approved and rents under the
sublease are greater than the rents provided for herein, then Landlord shall
have the further option either (a) to convert the sublease into a prime Lease
and receive all of the rents, in which case Tenant will be relieved of further
liability hereunder and under the proposed sublease, or (b) to require Tenant to
remain liable under this Lease, in which event Tenant shall be entitled to
retain such excess rents. If the assignment or subletting is approved and rents
under the sublease are less than the rents provided for herein, Tenant shall
remain liable under all the covenants and conditions of this Lease. Landlord may
withhold its consent to any proposed assignee or subtenant which in Landlord's
judgment (a) would conflict with the tenancy, use or business of any other
tenant or the tenant mix of the Center, (b) has a net worth and/or credit
history inferior to that of Tenant, or (c) is currently a tenant or negotiating
for space in the Center.

6.4 Locks. No additional locks or similar devices shall be attached to any door
or window without Landlord's prior written consent. No keys for any door other
than those provided by the Landlord shall be made. If more than two keys for one
lock are desired, the Landlord will provide the same upon payment by the Tenant.
All keys must be returned to the Landlord at the expiration or termination of
the lease. *See Paragraph 10 of Lease Rider Number One.

6.5 Maintenance by Tenant. Tenant shall be responsible for all maintenance and
repair to the Premises of whatsoever kind or nature that is not herein set forth
specifically as the obligation of Landlord. Tenant shall take good care of the
Premises and fixtures, and keep them in good repair free from filth,
overloading, danger of fire or any pest or nuisance, repair any damage or
breakage done by Tenant or Tenant's agents, employees or invitees, including
damage done to the Building/s by Tenant's equipment or installations. Tenant
shall be responsible for the repair and replacement of all glass and plate glass
on the Premises. In the event Tenant fails to maintain the Premises as provided
for herein Landlord shall have the right, but not the obligation, to perform
such maintenance as is required of Tenant in which event Tenant shall reimburse
Landlord for its costs in providing such maintenance or repairs together with a
ten (10%) percent charge for Landlord's overhead and Tenant shall promptly
reimburse Landlord for the amount so billed to Tenant by Landlord.


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6.6 Mechanic's Liens. Tenant will not permit any mechanic's liens, or other
liens, to be placed upon the Premises, the Building/s or the Center during the
Lease Term or any extension or renewal thereof, and in case of the filing of any
such lien, Tenant will promptly pay same. Tenant agrees to pay all legal fees
that might be incurred by Landlord because of any mechanic's liens being placed
upon the Premises, as a result of Tenant's actions.

6.7 Redelivery of Premises. No later than the last day of the Lease Term, Tenant
will remove all Tenant's personal property and repair all injury done by or in
connection with installation or removal of such property and surrender the
Premises broom clean (together with all keys to the Premises) in as good a
condition as they were in at the beginning of the Lease Term, reasonable wear
and tear excepted.

6.8 Signs and Advertisements. Tenant shall not put upon nor permit to be put
upon any part or the Premises, the Building/s or the Center, any signs,
billboards or advertisements whatever in any location or any form without the
prior written consent of Landlord. A charge of $50.00 per day per sign,
billboard or advertisement will be assessed against Tenant if Tenant fails to
obtain the written consent of Landlord prior to placing any such signs.

6.9 Use of Common Areas. Tenant shall not use any part of the Center exterior to
the Premises for outside storage. No trash, crates, pallets, or refuse shall be
permitted anywhere on the Center outside of the Building/s by Tenant except in
enclosed metal containers to be located as directed by Landlord. Tenant shall
not park any trucks or trailers, loaded or empty, except in front of the loading
areas.

6.10 Use of Premises. The Premises hereby leased shall be used by the Tenant
only for the Permitted Use of the Premises and for no other purposes. Tenant
shall, at Tenant's expense, comply promptly with all applicable statutes,
ordinances, rules, regulations, orders and requirements in effect during the
term or any part of the term hereof regulating the use by Tenant of the
Premises. Tenant shall not use or permit the use of the Premises in any manner
that will tend to create waste or a nuisance, or will tend to unreasonably
disturb such other tenants in the Center. Tenant, its employees and all persons
visiting or doing business with the Tenant in the Premises shall be bound by and
shall observe the Rules and Regulations attached to this Lease, as Exhibit A,
and such further and other reasonable rules and regulations made hereafter by
the Landlord relating to the Center or the Premises of which notice in writing
shall be given to the Tenant and all such rules and regulations shall be deemed
to be incorporated into and form a part of this Lease.

6.11 Hazardous Substances. Tenant shall not cause or permit to be released
(whether by way of uncapping, pouring, spilling, spraying, spreading, attaching,
or otherwise) into or onto the Premises, or the Building/s, or the Center, or
the Common Areas (including


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the ground and ground water thereunder and the sewer and drainage systems
therein) any hazardous substances (as defined or established from time to time
by applicable local, state or federal law). Tenant shall immediately notify
Landlord if any such release occurs, and, as to any such release that has been
caused or permitted by Tenant: (I) Tenant shall immediately and entirely remove
such released hazardous substance, and in a manner fully in compliance with all
laws pertaining to the removal and storage or deposit thereof; and (11) Tenant
hereby agrees to hold Landlord harmless of and from any liability, public or
private, resulting to Landlord as a result of such release. Further, Tenant
shall, upon Landlord's demand and at Tenant's sole expense, demonstrate to
Landlord (through such tests, professional inspections, sampling or otherwise as
is, in Landlord's sole judgment, sufficient for the purpose) that Tenant has not
caused or permitted any such release of hazardous substances.

ARTICLE VII. INSURANCE.

7.1 Liability Insurance. Tenant covenants and agrees to maintain on the Premises
at all times during the Lease Term, or any extension or renewal thereof, a
policy or policies of comprehensive public liability and property damage
insurance with not less than $1,000,000.00 combined single limit for both bodily
injury and property damage.

7.2 Fire and Extended Coverage Insurance. Landlord shall, throughout the Lease
Term, or any extension or renewal thereof, maintain fire and extended coverage
(FEC) insurance on the property owned by Landlord located on the Center in such
amounts and with such deductibles as Landlord shall determine. Landlord shall
not in any way or manner insure any property of Tenant or any property that may
be in the Premises not owned by Landlord. Tenant shall comply with all insurance
regulations so that the lowest fire, lightning, explosion, extended coverage and
liability insurance rates may be obtained; and nothing shall be done or kept in
or on the Premises by Tenant which will cause an increase in the premium for any
such insurance on the Premises or on any Building/s of which the Premises are a
part or on any contents located therein, over the rate usually obtained for the
proper use of the Premises permitted by this Lease or which will cause
cancellation of any such insurance.

7.3 Indemnification of Landlord. Tenant shall indemnify Landlord and save
Landlord harmless from and against any and all loss (including loss of rentals
payable by Tenant or other tenants) and against all claims, actions, damages,
liability and expenses in connection with loss of life, bodily and, personal
injury or damage to property arising from any occurrence in, upon or at the
Premises or any part thereof, or occasioned wholly or in part by any act or
omission of Tenant, or by anyone permitted to be on the Premises by Tenant.
Tenant assumes all risk of and Landlord shall not be liable for injury to person
or damage to property resulting from the conditions of the Premises or from the
bursting or leaking of any and all pipes, utility lines, connections, or air
conditioning or heating equipment in, on or about the Premises, or from water,
rain or snow which may leak into, issue or flow from any part of the Building/s.
Tenant


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agrees, at all times, to indemnify and hold Landlord harmless against all
actions, claims, demands, costs, damages or expenses of any kind which may be
brought or made against Landlord or which Landlord may pay or incur by reason of
Tenant's occupancy of the Premises or its negligent performance of or failure to
perform any of its obligations under this Lease. In case Landlord shall, without
fault on its part, be made a party to any litigation commenced by or against
Tenant, then Tenant shall protect and hold Landlord harmless and shall pay all
costs, expenses and reasonable attorney's fees incurred or paid by Landlord in
connection with such litigation. *See Paragraph 11 of Lease Rider Number One.

ARTICLE VIII. EMINENT DOMAIN AND DAMAGE OR DESTRUCTION.

8.1 Eminent Domain. In the event that title to the whole or a substantial part
of the Premises shall be lawfully condemned or taken in any manner for any
public or quasi-public use, this lease and the term and estate hereby granted
shall forthwith cease and terminate as of the date of vesting of title and
Landlord shall be entitled to receive the entire award, Tenant hereby assigning
to Landlord the Tenant's interest therein, if any. However, nothing herein shall
be deemed to give Landlord any interest in or to require Tenant to assign to
Landlord any award made to Tenant for the taking of personal property or
fixtures belonging to Tenant or for the interruption of or damage to Tenant's
business or for Tenant's moving expenses. A sale to a public or quasi-public
authority under threat of condemnation shall constitute a taking by eminent
domain.

In the event that title to a part of the building/s other than the Premises
shall be so condemned or taken, Landlord may terminate this lease and the term
and estate hereby granted by notifying Tenant of such termination within sixty
(60) days following the date of vesting of title, and this lease and the term
and estate hereby granted shall expire on the date specified in the notice of
termination, not less than sixty (60) days after the giving of such notice, as
fully and completely as if such date were the date herein set for the expiration
of the Lease Term, and the Rent hereunder shall be apportioned as of such date.
In the event of any condemnation or taking of any portion of the parking area of
the Center, which does not result in a reduction of the parking area by more
than twenty percent (20%) the terms of this lease shall continue in full force
and effect. If more than twenty percent (20%) of the parking area is taken,
either party shall have the right to terminate this lease upon giving written
notice to the other party within thirty (30) days of such taking.

8.2 Damage or Destruction. If the Premises, the Building/s or the Center or any
part thereof is damaged by fire or other casualty, cause or condition whatsoever
and Landlord shall determine not to restore said Premises, Building/s or Center,
Landlord may, by written notice to Tenant given within sixty (60) days after
such damage, terminate this Lease. Such termination shall become effective as of
the date of the damage. If this Lease is not terminated as above provided and if
the Premises are made partially or wholly untenantable, Landlord, at its
expense, shall restore the same with


                                       13
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reasonable promptness to the condition in which Landlord furnished the Premises
to Tenant at the commencement of the Lease Term as to those items that were
provided to the Premises at Landlord's expense without any reimbursement by
Tenant. Landlord shall be under no obligation to restore any alteration,
improvements or additions to the Premises made by Tenant or paid for by Tenant,
including, but not limited to, any of the initial tenant finish done or paid for
by Tenant or any subsequent changes, alterations or additions made by Tenant or
reimbursed by Tenant. *See Paragraph 12 of Lease Rider Number One.

If, as a result of fire or other casualty, cause or condition whatsoever the
Premises are made partially or wholly untenantable and, if Landlord has not
given the sixty (60) day notice above provided for and fails within one hundred
twenty (120) days after such damage occurs to eliminate substantial interference
with Tenant's use of said Premises or substantially to restore said Premises,
Tenant may terminate this Lease after the end of said one hundred twenty (120)
days, effective as of the date such damage occurs, by notice to Landlord given
not later than ten (10) days after expiration of said one hundred twenty (120)
day period. If the Premises are rendered totally untenantable but this Lease is
not terminated, all rent shall abate from the date of the fire or other relevant
cause or condition until the Premises are ready for occupancy and reasonably
accessible to Tenant. If a portion of the Premises is untenantable, rent shall
be prorated on a per diem basis and apportioned in accordance with the portion
of the Premises which is usable by the Tenant until the damaged part is ready
for the Tenant's occupancy. In all cases, due allowance shall be made for
reasonable delay caused by adjustment of insurance loss, strikes, labor
difficulties or any cause beyond Landlord's reasonable control. For the purposes
of this Lease, said Premises shall be considered tenantable so long as and to
the extent that the Premises are occupied. In any event, Tenant shall be
responsible for the removal, or restoration, when applicable, of all its damaged
property and debris from the Premises, upon request by Landlord or else Tenant
must reimburse Landlord for the cost of removal.

ARTICLE IX. DEFAULT AND REMEDIES.

9.1 Events of Default. The occurrence of any one or more of the following events
shall constitute a Default and a material breach of this Lease by Tenant:

    9.1(a) Nonpayment. Failure of Tenant to pay any installment of Rent or other
    sum payable to Landlord hereunder on the date that same is due and such
    failure shall continue for a period of five (5) days; or *See Paragraph 13
    of Lease Rider Number One.

    9.1(b) Noncompliance. Failure of Tenant to comply with any term, condition
    or covenant of this Lease, other than the payment of Rent or other sum of
    money, and such failure shall not be cured within ten (10) days after
    written notice thereof has been delivered by Landlord to Tenant; or


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    9.1(c) Insolvency or Transfer. Insolvency, the making of a transfer in fraud
    of creditors or the making of an assignment for the benefit of creditors by
    Tenant or any guarantor of Tenant's obligation; or

    9.1(d) Bankruptcy. The filing by or against Tenant or any guarantor of
    Tenant's obligations hereunder of a petition in bankruptcy or for
    liquidation, or adjudication as a bankrupt or insolvent in proceedings filed
    by or against Tenant or such guarantor; or

    9.1(e) Receiver. Appointment of receiver or trustee for all or substantially
    all of the assets of Tenant or any guarantor of Tenant's obligations
    hereunder; or

    9.1(f) Abandonment. Abandonment by Tenant of any substantial portion of the
    Premises or cessation of use of the Premises for the purpose leased. *See
    Paragraph 14 of Lease Rider Number One.

9.2 Remedies. In the event of the occurrence of any Default, Landlord shall have
the right, without further notice to or demand upon Tenant and without being
liable to Tenant for any damages or to any prosecution therefor, to do any and
all of the following:

    9.2(a) Repossession and Sale. Re-enter and take exclusive possession of the
    Premises with or without force or legal process, refuse to allow Tenant to
    enter the same or have possession thereof, change the locks on the doors to
    the Premises, take possession of any furniture or fixtures or other property
    in or upon the Premises (Tenant hereby waiving the benefit of all exemptions
    by law), sell the same at public or private sale without notice and apply
    the proceeds thereof to the costs of sale, payment of damages and payment of
    all sums owing under this Lease; and/or

    9.2(b) Releasing. Relet the Premises as agent of Tenant for the balance of
    the term of this Lease or for a shorter or longer term and receive the rents
    therefor, applying them first to the payment of the expense of such
    reletting and, second, to the payment of damages suffered to the Premises,
    and third to all sums due and to become due under this Lease, Tenant
    remaining liable for and hereby agreeing to pay Landlord any deficiency;
    and/or

    9.2(c) Cancellation. Cancel and terminate the remaining term of this Lease,
    and re-enter and take possession of the Premises free of this Lease.
    Thereafter this Lease shall be null and void and the Rent in such case shall
    be apportioned and paid on and up to the date of such entry. Thereafter both
    parties shall be released and relieved from and of any and all obligations
    thereafter to accrue hereunder.


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Tenant shall be liable for all loss and damage resulting from such breach or
default; and/or

9.2(d) Anticipatory Breach. Treat such default as an anticipatory breach of this
Lease and, as liquidated damages for such default, be entitled to the
difference, if any, between the sum which, at the time of such termination for
anticipatory breach represents the then present worth (computed at ten percent
(10%) per year) of the excess aggregate rents and additional rents payable
hereunder that would have accrued over the balance of the Lease Term (including
renewals) had such term not been prematurely terminated, over the aggregate
market rental value of the Premises over the term (including renewals) that the
Lease would have run had it not been prematurely terminated; and/or

9.2(e) Attorney's Fees. Recover from Tenant, Landlord's attorney's fees incurred
in enforcing its rights hereunder.

9.3 Remedies Cumulative. All rights and remedies expressly provided in this
Lease for Landlord's protection shall be cumulative as to each other and of any
other rights and remedies provided hereunder or by law.

9.4 No Waiver. A waiver by Landlord of a breach or default by Tenant under the
terms and conditions of this Lease shall not be construed to be a waiver of any
subsequent breach or default or of any other or the same term or condition of
this Lease,: and the failure of Landlord to assert any breach or to declare a
default by Tenant shall not be construed to constitute a waiver thereof so long
as such breach or default continues unremedied.

ARTICLE X. MISCELLANEOUS.

10.1 Bankruptcy or Assignment to Trustee. Neither this Lease nor any interest
therein nor any estate hereby created shall pass to any trustee or receiver in
bankruptcy or to any other receiver or assignee for the benefit of creditors or
otherwise by operation of law during the term of this Lease or any renewal
thereof.

10.2 Brokers. Except as may be expressly set forth to the contrary in the Rider,
each party represents to the other that no person, firm, corporation, or other
entity is entitled to any brokerage commission or finder's fee on account of the
execution, delivery, and consummation of this Lease. Tenant hereby agrees to
indemnify Landlord and to hold Landlord free and harmless of and from any and
all claims, losses, damages, costs and expenses of whatsoever nature, including
attorneys' fees and costs of litigation arising from or relating to any
brokerage commissions or finder's fees incurred by Tenant in connection with
this Lease. *See Paragraph 15 of Lease Rider Number One.


                                       16
   20
10.3 Captions. The captions used throughout this Lease are for convenience and
reference only and shall in no way be held to explain, modify, amplify, or aid
in the interpretation, construction or meaning of any provisions in this Lease.

10.4 Certificates of Occupancy. Tenant may, prior to the commencement of the
Lease Term, apply for a certificate of occupancy to be issued by the
municipality in which the Premises are located, but this Lease shall not be
contingent on issuance thereof.

10.5 Entire Agreement. This Lease including its Exhibits and Rider, if any,
contains the entire agreement between the parties and no modification of this
Lease shall be binding upon the parties unless evidenced by an agreement in
writing signed by Landlord and Tenant after the date hereof.

10.6 Joint and Several Liability of Multiple Tenants. If there be more than one
Tenant named herein, the provisions of this Lease shall be applicable to and
binding upon such Tenants jointly and severally.

10.7 Notices. Except as otherwise herein provided, whenever by the terms of this
Lease notice shall or may be given either to Landlord or, to Tenant, such notice
shall be in writing and shall be deemed to have been properly delivered if sent
by certified mail, return receipt requested, postage prepaid, to Landlord at
Landlord's Address and to Tenant at the Premises, or to such other place as
Landlord or Tenant may designate in writing. The date of mailing shall be deemed
the date of delivery.

10.8 Partial Invalidity. If any term, covenant, condition or provision of this
Lease or the application thereof to any person or circumstances shall, to any
extent be invalid, unenforceable or violate a party's legal rights, then such
term, covenant, condition or provision shall be deemed to be null and void and
unenforceable. however, all other provisions of this Lease, or the application
of such term or provision to persons or circumstances other than those which are
held invalid, unenforceable or violative of legal rights, shall not be affected
thereby. and each and every other term, condition, covenant and provision of
this Lease shall be valid and be enforced to the fullest extent permitted by
law.

10.9 Recording. This Lease shall not be recorded by either party without the
written consent of the other.

10.10 Successors. The agreements' covenants and conditions of this Lease shall
be binding upon and inure to the benefit of the heirs, legal representatives,
successors and assigns of each of the parties hereto, except that no assignment,
encumbrance or subletting by Tenant unless permitted by the provisions of this
Lease, without the written consent of Landlord shall vest any right in the
assignee, encumbrance or sublessee of Tenant.


                                       17
   21
10.11 Use of the Singular; Gender. The terms "Landlord" and "Tenant," and
pronouns representing the same, wherever used herein shall include the plural as
well as the singular, the feminine as well as the masculine.

10.12 Rider. A Rider consisting of 3 pages, with paragraphs numbered 1 through
20 consecutively, is attached hereto and made a part hereof.

         IN WITNESS WHEREOF, the parties have executed this Lease as of the date
hereinabove stated.

                                      LANDLORD:

                                      GENERAL AMERICAN LIFE INSURANCE
                                      COMPANY, a Missouri Corporation



                                      By:_______________________________________


                                      TENANT:

                                      MKS INSTRUMENTS, INC.



                                      By:_______________________________________
                                           Robert T. O'Brien, Treasurer


                                      By:_______________________________________


                                      By:_______________________________________


                                       18
   22
                                    EXHIBIT A

                              RULES AND REGULATIONS

1.   Signs. Tenant shall not inscribe any inscription or post, place, or in any
     manner display any sign, notice, picture, placard or advertising matter
     whatsoever anywhere in or about Premises at places visible (either directly
     or indirectly as an outline or shadow on a glass pane) from anywhere
     outside of the Premises or from public and common areas within Premises
     without first obtaining Landlord's written consent thereto and Landlord
     shall specify the color, size, style and material to be used. *See
     Paragraph 19 of Lease Rider Number One.

2.   Showcases. No showcase shall be placed in front of or in the lobbies or
     corridors of the Premises and Landlord reserves the right to remove all
     showcases so placed and all signs other than those above provided for,
     without notice and at the expense of the tenant responsible. See Paragraph
     19 of Lease Rider Number One.

3.   Installation of Signs. All exterior and interior signs must be installed by
     Landlord or someone designated by Landlord and the actual cost thereof
     shall be paid by Tenant and all such signs are so placed at the risk of
     Tenant.

4.   Telephone Connections. If Tenant desires telegraphic, cable television, or
     telephone connections, Landlord will direct electricians where the wires
     are to be introduced and without such direction no boring or cutting for
     wires shall be permitted.

5.   Submission of Plans. Tenant shall submit to Landlord for Landlord's
     approval, a copy of its construction and equipment layout plan prior to
     commencement of construction. In the event that Tenant is unable to obtain
     Landlord's approval for said plans and layout, this Lease shall at Tenant's
     sole option be deemed null and void and any amounts paid by Tenant to
     Landlord pursuant to this lease shall be reimbursed to Tenant without
     offset. *See Paragraph 19 of Lease Rider Number One.

6.   No Nuisances. Tenant shall not do or permit anything to be done in the
     Premises which will be dangerous to life, or limb, or which will tend to
     create a nuisance or injure the reputation of the Building/s. Tenant shall
     not use burning fluid, camphine, alcohol, kerosene, or anything else in
     order to light or heat the Premises except steam, gas or electricity.
     Tenant shall not bring into the Premises or keep therein any heating or
     lighting apparatus other than that provided by Landlord; or install any air
     conditioning or air cooling apparatus without the written consent of
     Landlord; or in any way injure, modify, or tamper with any of such
     apparatus in any manner or in any manner in violation of the regulations of
     the


                                       19
   23
     Fire Department, or with any insurance policy upon said Buildings or any
     part thereof. Tenant shall not do or permit to be done in the Premises any
     activity in conflict with any of the laws, rules or regulations of any
     governmental agency or municipality having jurisdiction, or use the
     Premises for an illegal or immoral purpose. No beer, wine or intoxicating
     liquor shall be sold on or about the Premises without the written consent
     of Landlord in each instance.

7.   Passageways. The sidewalk, passages, lobbies, corridors, elevators and
     stairways shall not be obstructed by Tenant; or used except for ingress and
     egress from and to the Premises. The doors, skylights, windows and transoms
     that reflect or admit light into passageways or into any place in said
     Buildings, shall not be covered or obstructed by Tenant.

8.   Water Closets. The water closets and other apparatus shall not be used for
     any purpose other than those for which they were constructed, and no
     sweepings, rubbish, rags or other substances shall be thrown therein. Any
     damage resulting to them from misuse shall be borne by the tenant who shall
     cause it.

9.   No Defacing or Offensive Business. Tenant and its employees and guests are
     not to injure or deface the Buildings nor the woodwork, nor the walls of
     the Premises, nor to carry on upon the premises any noisome, noxious, noisy
     or offensive business nor conduct an auction therein, nor interfere in any
     way with other tenants or those having business with them.

10.  No Lodging. No room or rooms on or about the Premises shall be occupied or
     used as sleeping or lodging apartments.

11.  Lock all Doors. Tenant shall, when leaving Premises at close of business,
     or unoccupied at any time, lock all doors and windows and for any default
     or carelessness in this respect shall make good all injury sustained by
     other tenants and by Landlord or by either of them, for damages resulting
     from such default or carelessness.

12.  No Animals. No animal or bird shall be allowed in any part of the Premises
     or Buildings without the consent of Landlord.

13.  No Accumulation of Rubbish. Tenant shall not accumulate or store on or
     about the Premises any waste paper, discarded records, paper files,
     sweepings, rags, rubbish or other combustible matter other than the normal
     accumulation needed to conduct the Permitted Use of the Premises. Nothing
     shall be thrown by Tenant, its employees or guests, out of the windows or
     doors or down the passages or skylights or over balcony rails of the
     Buildings or in the parking areas.


                                       20
   24
14.  Exclusion of Peace Disturbers. Landlord reserves the right to exclude from
     the Premises or Buildings all drunken persons, idlers, diseased persons,
     peddlers, solicitors, persons of a general character or conduct so as to
     create a disturbance, and persons entering in crowds or in such unusual
     numbers as to cause inconvenience to tenants of the Buildings.

15.  Changes to Rules. Landlord reserves the right to change these rules and to
     make such other and further reasonable rules and regulations either as it
     affects one or all tenants as in its judgment may from time to time be
     needed for the safety, care and cleanliness of the Center, for the
     preservation of good order therein or for any other cause. When such
     changes are made such modified or new rules shall be deemed a part hereof
     with the same effect as if written herein, when a copy shall have been
     delivered to Tenant or left with some person in charge of the Premises.

16.  No Live Christmas Trees. No live or fresh cut Christmas Trees are permitted
     on or about the Premises.

17.  No Picnics. No outside picnics or barbecue's are permitted without the
     prior written consent of Landlord.

18.  No Outside Storage. No outside storage of any material is permitted.

19.  Smoking Policy. Though Landlord encourages no smoking at the property
     within the leased premises, beginning July 1, 1995 forward, Tenant,
     Tenant's employees and agents's outdoor smoking shall be limited to behind
     the building in which Tenant occupies space. Tenant shall be responsible
     for maintaining the area and Landlord shall bill Tenant directly for any
     needed clean-up costs resulting from any smoking debris which litters the
     property. Violations of the smoking area rules will be handled by Landlord
     and/or the City of Richardson. *See Paragraph 19 of Lease Rider Number One.

     Tenant, Tenant's employees and Tenant's customers shall not congregate in
     front of buildings except areas in front of Tenant's leased premises.


                                       21
   25
LEASE RIDER
NUMBER ONE
BY AND BETWEEN
GENERAL AMERICAN LIFE INSURANCE COMPANY
AND
MKS INSTRUMENTS, INC.


1.   1.3    Base Rent.

            Years 1 - 3  $5,485.13 per month


2.   1.4    Base Year. - Delete the sentence and replace with "The base year for
            this lease agreement is 1994".

3.   3.3    Holding Over. - On line 4 change "double Rent" to "monthly rent
            equivalent to one hundred twenty-five percent (125%) of the Base
            Rent".

4.   4.2(d) HVAC Maintenance. - Delete this paragraph and replace with the
            following: "Tenant shall be responsible for maintaining the
            heating/ventilation/air-conditioning systems throughout the term of
            the Lease. Upon termination of the Lease Agreement, Tenant shall
            deliver the equipment back to Landlord in the same condition as it
            was received, reasonable wear and tear accepted."

5.   4.2(e) Common Area Expenses. - At the end of the first paragraph add the
            following: "Additional rent due from this paragraph is estimated to
            be $597.27 per month. Tenant shall deposit an additional $597.27 per
            month during the term of the lease. At the end of each calendar
            year, if Tenant has deposited an excess amount, Landlord will credit
            any overage. If at the end of any calendar year Tenant has not
            deposited their pro rata portion in full, Tenant will be billed for
            any deficit."

6.   4.3    Late Payment. - On line 2 change "three (3)" to "ten (10)".

7.   5.1    Maintenance by Landlord. - On line one, top of page six, after the
            word "roof", insert "except as herein provided".

            On line two, top of page six, after the word "repair.", delete the
            following: "Landlord shall enter into a service contract on the
            Building for the Heating, ventilation and air conditioning equipment
            for periodic inspection


                                       22
   26
            and service of such equipment and Tenant shall reimburse Landlord
            pursuant to the provisions hereof."

8.   5.4(b) Redecorate. - Strike entire paragraph.

9.   6.2    Alterations and Additions. - On line 2 after "Premises" add "except
            as herein provided".

10.  6.4    Locks. - Strike entire paragraph.

11.  7.3    Indemnification of Landlord. - On line 2, after "loss", delete
            "(including loss of rentals payable by Tenant or other tenants)".

            On line 7, before "Premises" add "demised".

            On line 9, before "property" add "personal" and before "Premises"
            add "demised".

            On line 13, after "Building/s" add ", unless such damage or injury
            is a direct result of Landlord's gross negligence, willful act or
            failure to act".

            On line 16, delete "its" and replace with "Tenant's".

            At the end of the paragraph, add the following: "Notwithstanding
            anything contained in this Paragraph 7.3 to the contrary, Tenant
            shall not indemnify and hold Landlord harmless from any losses,
            claims, actions, damages, liabilities or expenses that are caused by
            or arise out of Landlord's gross negligence, willful acts or failure
            to act, or that is caused by conditions in the Demised Premises or
            the Building that has not been caused by Tenant and that Landlord
            has the obligation and duty to maintain, repair or replace."

12.  8.2    Damage or Destruction. - On line five of the first paragraph delete
            "sixty (60)" add "thirty (30)".

            Make the following changes in the second paragraph: On line 3,
            delete "sixty (60)" add "thirty (30)"; on line 4, delete "one
            hundred twenty (120)" add "ninety (90)"; on line 7, delete "one
            hundred twenty (120)" add "ninety (90)"; and on line 9, delete "one
            hundred twenty (120)" add "ninety (90)".

13.  9.1(a) Nonpayment. - On line 4, delete "five (5) days' add "ten (10) days
            after written notice from Landlord".

14.  9.1(f) Abandonment. - Delete this paragraph.


                                       23
   27
       15.  10.2 Brokers. - Delete this paragraph and add "Each party represents
                 that Firman Cook of Firman Cook, REALTORS(R) and Bill Bexley of
                 Fults Companies/ONCOR International, are entitled to a
                 brokerage commission on account of the execution, delivery and
                 consummation of this Lease."

       16.       Tenant shall be responsible for causing the demised premises to
                 at all times be in compliance with the terms of the Americans
                 with Disabilities Act of 1990 (the "ADA"), including, without
                 limitation of any improvements, additions or alterations to the
                 demised premises. Furthermore, Tenant shall at all times
                 operate the demised premises and its business thereon in a
                 manner which causes the demised premises to comply with ADA.
                 Landlord hereby reserves the right to hereafter modify, from
                 time to time, policies, practices, rules and procedures
                 applicable to the demised premises, to the extent necessary to
                 comply with the ADA.

       17.       Waiver of Subrogation. - Each party hereto waives any and every
                 claim which arises or may arise in its favor and against the
                 other party hereto during the term of this Lease or any renewal
                 or extension thereof for any and all loss of, or damage to, any
                 of its property located within or upon, or constituting a part
                 of, the Premises leased to Tenant hereunder, which loss or
                 damage is covered by valid and collectible fire and extended
                 coverage recoverable under said insurance policies. Such mutual
                 waivers shall be in addition to, and not in limitation or
                 derogation of, any other waiver or release contained in this
                 Lease with respect to any loss of, or damage to, property of
                 the parties hereto. Inasmuch as the above mutual waivers will
                 preclude the assignment of any aforesaid claim by way of
                 subrogation (or otherwise) to an insurance company (or to any
                 other person), each party hereby agrees immediately to give to
                 each insurance company which has issued to it policies of fire
                 and extended coverage insurance, written notice of the terms of
                 said mutual waivers, and to have said insurance policies
                 properly endorsed, if necessary, to prevent the invalidation of
                 said insurance coverages by reasons of said waivers.

       18.       Parking. - Parking for Tenant's customers, employees, and
                 agents shall be limited to directly in front of the Premises.
                 Overflow parking shall be limited to the open parking area
                 between the 777 Grove Road and 783 Grove Road buildings and the
                 north end of the 783 Grove Road building (See Exhibit "B"). Any
                 violation of this parking limitation shall allow Landlord to
                 have such vehicle towed with no recourse to Landlord.

       EXHIBIT A:

       19.       1. Signs. - On line 1 between "not" and "inscribe", insert
                 "except as herein permitted".


                                       24
   28
       2.        Showcases. - On Line 1, delete "in front of or in the lobbies
                 or corridors of the Premises" add "outside of the confines of
                 the demised Premises".

       5.        Submission of Plans. - At the end of this paragraph add the
                 following: "If the plans are not approved by Landlord within
                 three (3) business days after submission by Tenant to Landlord,
                 said plans shall automatically be deemed to be approved by
                 Landlord."

       19.       Smoking Policy. - Outdoor smoking breaks shall be in accordance
                 with Rules and Regulations Item No. 19.

       20.       Tenant's security deposit in the amount of $3,117 for lease
                 dated August 10, 1989 for 789 Grove Rd #111, Richardson, Texas
                 shall be transferred to this new lease.


                                       25

   1
                                                                   EXHIBIT 10.13



                                 LOAN AGREEMENT



                                  by and among



                             MKS INSTRUMENTS, INC.,
                                  as Borrower,


                       THE FIRST NATIONAL BANK OF BOSTON,
                             As Agent and as Lender,

                                       and

                                 CHEMICAL BANK,
                                   as Lender,




                                February 23, 1996



   2




                                TABLE OF CONTENTS

                                                                            Page


                                    ARTICLE I

                                   DEFINITIONS

1.1. Definitions .........................................................     1
1.2. Accounting Terms ....................................................     8
1.3. Other Definitional Provisions .......................................     8

                                   ARTICLE II

                            REVOLVING CREDIT FACILITY

2.1. Revolving Credit ....................................................     8
2.2. Advances ............................................................     9
2.5. Interest Periods ....................................................    11
2.6. Unused Commitment Fee ...............................................    11
2.7. Deficiency Advances .................................................    12
2.8. Termination of Existing Facilities ..................................    12

                                   ARTICLE III

                                ADDITIONAL TERMS

3.1. Payments ............................................................    13
3.2. Capital Adequacy ....................................................    14
3.3. Special Provisions Governing LIBOR Loans ............................    15
3.4. Taxes ...............................................................    16

                                   ARTICLE IV

                 REPRESENTATIONS AND WARRANTIES OF THE BORROWER

4.1. Organization, Existence and Power ...................................    17
4.2. Authorization of Loan Documents; Binding Effect .....................    18
4.3. Authority ...........................................................    18
4.4. Capital Structure ...................................................    18
4.5. Financial Condition .................................................    18
4.6. Pending Litigation ..................................................    19
4.7. Certain Agreements; Material Contracts ..............................    19


                                      -i-
   3
4.8.  Authorization, Etc .................................................    19
4.9.  No Violation .......................................................    20
4.10. Payment of Taxes ...................................................    20
4.11. Transactions With Affiliates, Officers, Directors and 1%
      Shareholders .......................................................    20
4.12. ERISA ..............................................................    21
4.13. Ownership of Properties; Liens .....................................    21
4.14. Employment Matters .................................................    21
4.15. Insurance ..........................................................    21
4.16. Indebtedness .......................................................    22
4.17. Securities Law Compliance ..........................................    22
4.18. Accuracy of Information ............................................    22

                                    ARTICLE V

                             CONDITIONS TO ADVANCES

5.1. Each Advance ........................................................    22
5.2. First Advance .......................................................    23

                                   ARTICLE VI

                      AFFIRMATIVE COVENANTS OF THE BORROWER

6.1. Reporting Requirements ..............................................    24
6.2. Loan Proceeds .......................................................    26
6.3. Maintenance of Business and Properties; Insurance ...................    26
6.4. Payment of Taxes ....................................................    26
6.5. Compliance with Laws, etc ...........................................    27
6.7. Further Assurances ..................................................    27
6.8. Bank Accounts .......................................................    27

                                   ARTICLE VII

                       NEGATIVE COVENANTS OF THE BORROWER

7.1. Sale of Assets; Mergers, Etc ........................................    28
7.2. Liens and Encumbrances ..............................................    29
7.3. Sales and Leasebacks ................................................    31
7.4. Investments .........................................................    31
7.5. Transactions with Affiliates ........................................    32
7.6. ERISA Compliance ....................................................    32
7.7. Financial Covenants .................................................    33
7.8. Contracts Prohibiting Compliance with Agreement .....................    33


                                      -ii-
   4
                                  ARTICLE VIII

                                EVENTS OF DEFAULT

8.1. Default .............................................................    33
8.2. Agent to Act ........................................................    36
8.3. Cumulative Rights ...................................................    36
8.4. No Waiver ...........................................................    36
8.5. Allocation of Proceeds ..............................................    36

                                   ARTICLE IX

                                    THE AGENT

9.1. Appointment .........................................................    37
9.2. Limitation on Liability .............................................    37
9.3. Reliance ............................................................    38
9.4. Notice of Default ...................................................    38
9.5. No Representations ..................................................    38
9.6. Indemnification .....................................................    39
9.7. The Agent in its Individual Capacity ................................    39
9.8. Resignation .........................................................    40
9.9. Sharing of Payments, Etc ............................................    40
9.10. Fees ...............................................................    41

                                    ARTICLE X

                                  MISCELLANEOUS

10.1. Assignments and Participations .....................................    41
10.2. Survival of Representations, Etc ...................................    42
10.3. Right of Setoff ....................................................    43
10.4. Indemnity; Costs, Expenses and Taxes ...............................    43
10.5. Notices ............................................................    44
10.6. MASSACHUSETTS LAW ..................................................    45
10.7. Counterparts .......................................................    45
10.8. JURISDICTION, SERVICE OF PROCESS ...................................    45
10.9. Limit on Interest ..................................................    46
10.10. Amendments ........................................................    46
10.11. Headings ..........................................................    47
10.12. WAIVER OF NOTICE, ETC .............................................    47
10.13. Severability ......................................................    48
10.14. Entire Agreement ..................................................    48


                                     -iii-
   5
10.15. Compliance with Covenants .........................................    48
10.16. Termination .......................................................    48
10.17. WAIVER OF TRIAL BY JURY ...........................................    48


                                      -iv-
   6
                                 LOAN AGREEMENT


      This Loan Agreement (the "Agreement") is entered into as of the 23rd day
of February, 1996, by and among The First National Bank of Boston ("Bank of
Boston"), Chemical Bank ("Chemical"; hereinafter Bank of Boston and Chemical may
be referred to individually as a "Lender" or collectively as the "Lenders"), The
First National Bank of Boston in its capacity as agent for the Lenders (in such
capacity, together with any successor agent appointed in accordance with the
terms of Section 9.8, the "Agent"), and MKS Instruments, Inc., a Massachusetts
corporation ("Borrower").

                                    PREMISES:

      WHEREAS, the Borrower has requested that the Lenders make available to it
a revolving credit facility of up to $20,000,000; and

      WHEREAS, the Lenders are willing to make such revolving credit facility
available to the Borrower on the terms and conditions hereinafter set forth;

      NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the adequacy and receipt of which are hereby
acknowledged, the parties hereto hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

      1.1. Definitions. In addition to terms defined elsewhere in this
Agreement, the following terms shall have the meanings indicated, which meanings
shall be equally applicable to both the singular and plural forms of such terms:

            "Adjusted LIBOR Rate" shall have the meaning set forth in Section
2.4.1.

            "Advance" shall mean the drawing down by the Borrower of a Base Rate
Loan or a LIBOR Loan on any given Advance Date.

            "Advance Date" shall mean the date as of which an Advance is
consummated.

            "Affiliate" of any Person shall mean any other Person which,
directly or indirectly, controls, or is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" of any
Person shall mean the power, directly or indirectly, either to (i) vote 10% or
more of the securities having ordinary voting power for the election of
directors of such Person or (ii) direct the management and policies of such
Person, whether by contract or otherwise. As to
   7
the Borrower, the term "Affiliate" shall include, without limitation, any
partnership or joint venture of which the Borrower or any Affiliate of the
Borrower is a general partner or is a limited partner with more than a ten
percent (10%) interest, and any director or executive officer of the Borrower.

            "Applicable Commitment Percentage" shall mean, with respect to each
Lender at any time, a fraction, the numerator of which shall be such Lender's
Revolving Credit Commitment and the denominator of which shall be the Total
Revolving Credit Commitment, which Applicable Commitment Percentage for each
Lender as of the Closing Date is as set forth in Exhibit A; provided, however,
that the Applicable Commitment Percentage of each Lender shall be increased or
decreased to reflect any assignments to or by such Lender effected in accordance
with Section 10.1.

            "Assignment and Acceptance" shall mean an Assignment and Acceptance
in the form of Exhibit B (with blanks appropriately filled in) delivered to the
Agent in connection with an assignment of a Lender's interest under this
Agreement pursuant to Section 10.1.

            "Base Rate" shall mean the higher of (a) the annual rate of interest
announced from time to time by the Bank of Boston at the Bank of Boston's office
at 100 Federal Street, Boston, Massachusetts, as its "base rate" or (b) one-half
of one percent (1/2%) above the Federal Funds Effective Rate. For the purposes
of this definition, "Federal Funds Effective Rate" shall mean, for any day, the
rate per annum equal to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Bank of Boston from three funds brokers of recognized standing selected by
the Bank of Boston.

            "Base Rate Loan" shall mean an Advance that is specified as such in
the Notice of Borrowing with respect to such Advance and that bears interest at
the Base Rate.

            "Borrowing" shall mean the incurrence of one or more Advances on a
given date.

            "Business Day" shall mean a day on which commercial banks are
required to be open for business in Boston, Massachusetts.

            "Cash Flow Ratio" shall have the meaning set forth in Section
7.7(c).

            "Closing Date" shall mean the date of this Agreement.


                                      -2-
   8
            "Compliance Certificate" shall have the meaning set forth in Section
6.1(c).

            "Consolidated Debt Service" shall mean for any period the sum
(without duplication) of Interest Expense, the interest portion of Financing
Lease Obligations and required principal payments on long-term debt of the
Borrower and its Subsidiaries, determined on a consolidated basis.

            "Consolidated Indebtedness" shall mean the Indebtedness of the
Borrower and its Subsidiaries, determined on a consolidated basis.

            "Consolidated Net Income" shall mean for any period the net income
(or loss) for such period (before extraordinary items and excluding the net
income of any business entity that is not a Subsidiary in which the Borrower or
one of its Subsidiaries has an ownership interest unless such net income shall
have actually been received by such company in the form of cash distributions)
of the Borrower and its Subsidiaries after deducting all operating expenses,
depreciation and amortization, Interest Expense, the interest portion of
Financing Lease Obligations, all taxes in respect of income and profits paid or
payable (including accrued Sub S distributions required to make shareholder tax
payments) and all other proper deductions, all determined on a consolidated
basis.

            "Consolidated Operating Cash Flow" shall mean for any period, the
net income (or loss) for such period (before extraordinary items and excluding
the net income of any business entity that is not a Subsidiary in which the
Borrower or one of its Subsidiaries has an ownership interest unless such net
income shall have actually been received by the Borrower or Subsidiary, as the
case may be, in the form of cash distributions) of the Borrower and its
Subsidiaries before deducting Interest Expense and taxes and after restoring
thereto depreciation of real and personal property and leasehold improvements
and amortization and after deducting cash taxes paid, Sub S distributions
required to make shareholder tax payments, and capital expenditures incurred,
provided that capital expenditures shall not include real estate purchases
funded by debt.

            "Consolidated Tangible Net Worth" shall mean, at any time, the
stockholders' equity of the Borrower and its Subsidiaries determined in
accordance with generally accepted accounting principles including the book
amount of all minority interests in MKS International, Inc. but excluding the
book amount of all minority interests in other Affiliates and any foreign
exchange translation adjustment, with no upward adjustments due to a
reevaluation of assets (other than any such upward adjustment as may be required
under generally accepted accounting principles in connection with the
acquisition by the Borrower or any Subsidiary of another company or entity)
minus the following items (without duplication of deductions) appearing on the
balance sheet of the Borrower and its Subsidiaries:


                                      -3-
   9
            (a) the book amount of all assets (including, without limitation,
goodwill, patents, trademarks, copyrights, organizational expense and
unamortized debt discount) that would be treated as intangibles under generally
accepted accounting principles;

            (b) treasury stock; and

            (c) any write-up in the book amount of any asset or Investment
subsequent to the Closing Date, resulting from a reevaluation or reappraisal
thereof from the amount entered in accordance with generally accepted accounting
principles by the Borrower or any Subsidiary on its books with respect to its
acquisition of the asset or Investment.

            "Costs" shall have the meaning set forth in Section 10.4.

            "Debt-to-Net Worth Ratio" shall have the meaning set forth in
Section 7.7(b).

            "Default" shall mean any event that, with the lapse of time, the
giving of notice, or both, would become an Event of Default hereunder.

            "Event of Default" shall have the meaning set forth in Section 8.1
hereof.

            "Existing Loan Agreements" shall mean the Loan Agreements between
the Borrower and the Bank of Boston dated November 1, 1993 and October 31, 1995,
respectively.

            "Financing Lease" shall mean any lease of the Borrower or a
Subsidiary, as lessee, that is shown or is required to be shown in accordance
with generally accepted accounting principles as a liability on the balance
sheet of the lessee thereunder.

            "Financing Lease Obligation" shall mean for any period the monetary
obligation of the lessee under a Financing Lease. The amount of a Financing
Lease Obligation at any date is the amount at which the lessee's liability under
the Financing Lease would be required to be shown on its balance sheet at such
date.

            "Hazardous Substances" shall mean any hazardous waste, as defined by
42 U.S.C. Section 6903(5), any hazardous substances, as defined by 42 U.S.C.
Section 601(14), any pollutant or contaminant, as defined by 42 U.S.C. Section
9601(33), or any toxic substance, oil or hazardous materials or other chemicals
or substances regulated by any laws or regulations relating to the discharge of
air pollutants, water pollutants, or processed wastewater.


                                      -4-
   10
            "Indebtedness" shall mean, for any Person, (a) all obligations of
such Person that in accordance with generally accepted accounting principles
would be reflected on the balance sheet of such Person as a liability, (b) all
obligations of any other Person the payment or collection of which such Person
has guaranteed (except by reason of endorsement for collection in the ordinary
course of business) or in respect of which such Person is liable, contingently
or otherwise, including, without limitation, liable by way of agreement to
purchase, to provide funds for payment, to supply funds to or otherwise to
invest in such other Person, or otherwise to assure a creditor against loss, (c)
all obligations of any other Person for borrowed money or for the deferred
purchase price of property or services secured by (or for which the holder of
such indebtedness has an existing right, contingent or otherwise, to be secured
by) any mortgage, or other encumbrance upon or in property (including, without
limitation, accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such indebtedness or
obligations, and (d) Financing Lease Obligations of such Person.

            "Interest Expense" shall mean for any period the aggregate amount of
interest recorded, in accordance with generally accepted accounting principles,
on the financial statements for that period by the Borrower and its Subsidiaries
in respect of Consolidated Indebtedness incurred for borrowed money.

            "Interest Period" shall mean the period designated by the Borrower
as such in the Notice of Borrowing with respect to any LIBOR Loan pursuant to
and subject to the limitations set forth in Section 2.5.

            "Interest Rate Determination Date" shall mean the third Business Day
prior to the first day of the related Interest Period for a LIBOR Loan.

            "Interim Maturity Date" shall mean the last day of any Interest
Period.

            "Investments" shall have the meaning set forth in Section 7.4.

            "IPO" shall mean the initial underwritten public offering pursuant
to an effective registration statement under the Securities Act of 1933, as
amended, covering the offer and sale of the Borrower's Common Stock for the
account of the Borrower.

            "LIBOR Loan" shall mean an Advance that is specified as such in the
Notice of Borrowing with respect to such Advance and that bears interest at the
adjusted LIBOR Rate.

            "LIBOR Rate" shall mean for any Interest Rate Determination Date,
the rate obtained by dividing (i) the quotation offered by the Agent in the
interbank Eurodollar market for U.S. dollar deposits of amounts in immediately
available funds


                                      -5-
   11
comparable to the principal amount of the LIBOR Loan for which the LIBOR Rate is
being determined with a maturity comparable to the Interest Period for which
such LIBOR Rate will apply as of approximately noon (Boston time) three Business
Days prior to the commencement of such Interest Period by (ii) a percentage
equal to 100% minus the stated maximum rate of all reserves required to be
maintained against "Eurocurrency liabilities" as specified in Regulation D (or
against any other category of liabilities that includes deposits by reference to
which the interest rate on LIBOR Loans is determined) as applicable on such date
to any member bank of the Federal Reserve System.

            "Licenses" shall have the meaning set forth in Section 4.8.

            "Lien" shall mean any interest in property securing an obligation
owed to, or a claim by, a Person other than the owner of the property, whether
the interest is based on common law, statute or contract (including the security
interest lien arising from a mortgage, encumbrance, pledge, conditional sale or
trust receipt or a lease, consignment or bailment for security purposes). For
the purposes of this Agreement, the Borrower or a Subsidiary shall be deemed to
be the owner of any property that it has acquired or holds subject to a
Financing Lease or a conditional sale agreement or other arrangement pursuant to
which title to the property has been retained by or vested in some other Person
for security purposes, and such retention or vesting shall be deemed to be a
Lien.

            "Loan Documents" shall mean each of this Agreement, the Notes and
any other document or instrument executed by the Borrower in favor of the
Lenders in connection with the transactions contemplated hereby.

            "Note" shall mean a Revolving Credit Note.

            "Notice of Borrowing" shall have the meaning set forth in Section
2.2.1.

            "Obligations" shall mean, without limitation, any and all
liabilities, debts, and obligations of the Borrower to each of the Lenders, of
each and every kind, nature and description, arising under this Agreement or any
other Loan Document, whether now existing or hereafter incurred. "Obligations"
also means, without limitation, any and all obligations of the Borrower to act
or to refrain from acting in accordance with the terms, provisions and covenants
of this Agreement or of any other Loan Document.

            "Permitted Liens" shall have the meaning set forth in Section 7.2.

            "Person" shall mean any natural person, corporation, unincorporated
organization, trust, joint-stock company, joint venture, association, company,
partnership or government, or any agency or political subdivision of any
government.


                                      -6-
   12
            "Required Lenders" shall mean, as of any date, Lenders on such date
having Credit Exposures (as defined below) aggregating at least 66-2/3% of the
aggregate Credit Exposures of all the Lenders on such date. For purposes of the
preceding sentence, the "Credit Exposure" of each Lender shall mean the
aggregate principal amount of the Advances owing to such Lender plus the
aggregate unutilized amounts of such Lender's Revolving Credit Commitment.

            "Revolver Termination Date" shall mean June 30, 1999 or any
subsequent anniversary thereof if the Total Revolving Credit Commitment shall
have been renewed by the Lenders.

            "Revolving Credit Commitment" means, with respect to each Lender,
the obligation of such Lender to make Advances to the Borrower up to an
aggregate principal amount at any one time outstanding equal to such Lender's
Applicable Commitment Percentage of the Total Revolving Credit Commitment.

            "Revolving Credit Facility" shall mean the loan arrangement
described in Article II of this Agreement, subject to all other applicable terms
of this Agreement.

            "Revolving Credit Note" shall have the meaning set forth in Section
2.3.

            "Revolving Credit Outstandings" means, as of any date of
determination, the aggregate principal amount of all Advances then outstanding
and all interest accrued thereon.

            "Revolving Loan Account" shall mean the account on the books of the
Agent in the name of the Borrower in which the following shall be recorded:
Advances made by the Lenders to and for the account of the Borrower pursuant to
Section 2 of this Agreement; all other charges, expenses and other items
properly chargeable to the Borrower with respect to such Advances; all Costs
with respect to such Advances; all payments made by the Borrower on account of
Indebtedness evidenced by the Revolving Credit Notes; and other appropriate
debits and credits.

            "Subsidiary" shall mean any Person of which the Borrower at the time
owns, directly or indirectly, through another Subsidiary or otherwise, 50% or
more of the equity interests.

            "Sub S Dividends" shall mean one or more distributions by the
Borrower to its shareholders who were shareholders prior to the IPO in an
aggregate amount equal to the Borrower's "accumulated adjustments account," as
defined in Section 1368(a)(1) of the Internal Revenue Code of 1986, as of the
date of the IPO.


                                      -7-
   13
            "Total Revolving Credit Commitment" shall mean a principal amount
equal to $20,000,000.

      1.2. Accounting Terms. Accounting terms not specifically defined in this
Agreement shall have the meanings given to them under generally accepted
accounting principles.

      1.3. Other Definitional Provisions. The words "hereof," "herein" and
"hereunder," and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not any particular provision of this Agreement.
Any Article, Section, Exhibit or Schedule references are to this Agreement
unless otherwise specified.


                                   ARTICLE II

                            REVOLVING CREDIT FACILITY

      2.1. Revolving Credit. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Advances from time to time to
the Borrower during the period from the date hereof to the Revolver Termination
Date on a pro rata basis as to the total Borrowing requested by the Borrower on
any day determined by such Lender's Applicable Commitment Percentage up to but
not exceeding the Revolving Credit Commitment of such Lender, provided, however,
that the Lenders will not be required and shall have no obligation to make any
such Advance (i) so long as a Default or an Event of Default has occurred and is
continuing or (ii) if the Agent has accelerated the maturity of any of the Notes
as a result of an Event of Default; provided further, however, that immediately
after giving effect to each such Advance, the aggregate principal amount of
Revolving Credit outstandings shall not exceed the Total Revolving Credit
Commitment. Within such limits and subject to the terms and conditions hereof,
the Borrower may borrow, repay and reborrow under the Revolving Credit Facility
on any Business Day from the Closing Date until, but (as to borrowings and
reborrowings) not including, the Revolver Termination Date. All Advances shall
be due and payable no later than the Revolver Termination Date. Each Advance
shall, at the option of the Borrower, be a Base Rate Loan or a LIBOR Loan
provided, however, that no LIBOR Loan having an Interest Period of 2, 3 or 6
months shall be made at any time in a principal amount of less than $1,250,000
and no LIBOR Loan having an Interest Period of 1 month shall be made at any time
in a principal amount of less than $1,000,000.


                                      -8-
   14
      2.2. Advances.

            2.2.1. Whenever the Borrower desires to obtain a LIBOR Loan
hereunder, it may request that the Agent provide quotes as of any specified
Interest Rate Determination Date as to the LIBOR Rate for any or all Interest
Periods, and the Agent shall promptly provide such quotes. The Borrower shall
give the Agent prior telecopied or telephone notice (given not later than 11:00
a.m. (Boston time)) on the day of any Borrowing with respect to a Base Rate Loan
and at least three Business Days prior to the day of any Borrowing with respect
to a LIBOR Loan. Each such notice (each a "Notice of Borrowing") shall specify
the principal amount of each Advance to be made, the date of the Borrowing
(which shall be a Business Day), whether each Advance being made is to be
initially maintained as a Base Rate Loan or a LIBOR Loan and, in the case of a
LIBOR Loan, the initial Interest Period applicable thereto. If such notice is
given by telephone, it shall be immediately confirmed in writing. Notice of
receipt of a Notice of Borrowing, together with the amount of each Lender's
portion of an Advance requested thereunder, shall be provided by the Agent to
each Lender by facsimile transmission with reasonable promptness on the day the
Agent receives the Notice of Borrowing. No more than one Base Rate Loan shall be
outstanding at any time, but the Borrower may increase the principal amount of
any Base Rate Loan at any time by giving a Notice of Borrowing as set forth
above.

            2.2.2. No later than 3:00 p.m. on the Advance Date, each Lender
shall, pursuant to the terms and subject to the conditions of this Agreement,
make the amount of the Advance or Advances to be made by it on such day
available by wire transfer to the Agent in the amount of its pro rata share,
determined according to such Lender's Applicable Commitment Percentage of the
Advance or Advances to be made on such day. Such wire transfer shall be directed
to the Agent and shall be in the form of Dollars constituting immediately
available funds. The amount so received by the Agent shall, subject to the terms
and conditions of this Agreement, promptly be made available to the Borrower on
the date so specified by delivery of the proceeds thereof to the Revolving Loan
Account or otherwise as shall be directed in the applicable Notice of Borrowing
and reasonably acceptable to the Agent.

            2.2.3. Upon the Interim Maturity Date of any LIBOR Loan, unless the
Borrower (i) shall have given the Agent a Notice of Borrowing in accordance with
Section 2.2.1 requesting that a new LIBOR Loan be made on such Interim Maturity
Date or (ii) shall have repaid such LIBOR Loan on such Interim Maturity Date,
the Borrower shall be deemed to have requested that the Lenders make a Base Rate
Loan to the Borrower on such Interim Maturity Date in an aggregate principal
amount equal to the aggregate principal amount of the LIBOR Loan maturing on
such Interim Maturity Date.


                                      -9-
   15
      2.3. Revolving Loan Account. The Advances made by each Lender from time to
time to the Borrower under this Agreement shall be evidenced by a Revolving
Credit Note in the form of Exhibit C hereto (each, a "Revolving Credit Note") in
the amount of such Lender's Revolving Credit Commitment. The Advances and the
amounts of all payments on the Revolving Credit Notes shall be recorded by the
Agent in the Revolving Loan Account of the Borrower. The debit balance of the
Revolving Loan Account shall represent the amount of the Borrower's indebtedness
to the Lenders from time to time by reason of Advances and other appropriate
charges hereunder. All statements regarding the Revolving Loan Account shall be
deemed to be accurate absent manifest error or unless objected to by the
Borrower within 30 days after receipt. The Borrower agrees to review each such
statement promptly after receipt and to bring any errors or discrepancies to the
Agent's attention promptly.

      2.4. Interest.

            2.4.1. The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Advance from the date the proceeds thereof are made
available to the Borrower until maturity (whether by acceleration, voluntary
prepayment or otherwise) as follows. Each Advance shall bear interest at the
Base Rate in effect from time to time unless the Borrower elects and qualifies
to pay interest on such Advance at the following rate (the "Adjusted LIBOR
Rate"):

                  (i) During any period in which the Borrower maintains a
      Debt-to-Net Worth Ratio of less than 1 to 1:

                        (a) and a Cash Flow Ratio of less than 1.75 to 1, the
                  LIBOR Rate plus 1.125%;

                        (b) and a Cash Flow Ratio of 1.75 to 1 or greater up to
                  and including 2.5 to 1, the LIBOR Rate plus .875%; or

                        (c) and a Cash Flow Ratio in excess of 2.5 to 1, the
                  LIBOR Rate plus .625%;

                  (ii) During any period in which the Borrower maintains a
      Debt-to-Net Worth Ratio of 1 to 1 or more but less than or equal to 1.5 to
      1:

                        (a) and a Cash Flow Ratio of less than 1.75 to 1, the
                  LIBOR Rate plus 1.25%;

                        (b) and a Cash Flow Ratio of 1.75 to 1 or greater up to
                  and including 2.5 to 1, the LIBOR Rate plus 1.00%; or

                        (c) and a Cash Flow Ratio in excess of 2.5 to 1, the
                  LIBOR Rate plus .75%.


                                      -10-
   16
            2.4.2. Overdue principal and (to the extent permitted by law)
overdue interest in respect of each Base Rate Loan and each LIBOR Loan (to the
extent not converted into a Base Rate Loan) shall bear interest, payable on
demand, after as well as before judgment, at a rate per annum equal to the Base
Rate in effect from time to time plus 3% per annum.

            2.4.3. Interest shall accrue from and including the date of any
Advance and shall be payable by the Borrower on each Advance in arrears on the
last day of each of the Borrower's fiscal quarters, on any prepayment (on the
amount prepaid), on any maturity date (whether by acceleration or otherwise),
and after such maturity, on demand. Interest shall be calculated on the basis of
actual days elapsed and a 360-day year.

      2.5. Interest Periods. At the time it gives any Notice of Borrowing with
respect to a LIBOR Loan, the Borrower shall elect the Interest Period applicable
to the related Advance, which Interest Period shall, at the option of the
Borrower, be a period of 1, 2, 3 or 6 months. Notwithstanding anything to the
contrary contained herein:

                  (i) if any Interest Period begins on a day for which there is
            no numerically corresponding day in the calendar month at the end of
            such Interest Period, such Interest Period shall end on the last
            Business Day of such calendar month;

                  (ii) if any Interest Period would otherwise expire on a day
            that is not a Business Day, such Interest Period shall expire on the
            next succeeding Business Day; provided that if any Interest Period
            would otherwise expire on the day that is not a Business Day but is
            a day of the month after which no further Business Day occurs in
            such month, such Interest Period shall expire on the next preceding
            Business Day;

                  (iii) no Interest Period shall extend beyond the Revolver
            Termination Date.

      2.6. Unused Commitment Fee. For the period beginning on the Closing Date
and ending on the Revolver Termination Date, the Borrower agrees to pay to the
Agent, for the pro rata benefit of the Lenders based on their Applicable
Commitment Percentages, an unused commitment fee equal to 0.25% per annum
multiplied by the average daily amount by which (a) the Total Revolving Credit
Commitment exceeds (b) the Revolving Credit Outstandings less all accrued and
unpaid interest. Such fees shall be due in arrears on the last Business Day of
each March, June, September and December commencing March 29, 1996 to and on the
Revolver Termination Date. Notwithstanding the foregoing, so long as any Lender
fails to make available any portion of its Revolving Credit Commitment when


                                      -11-
   17
requested, such Lender shall not be entitled to receive payment of its pro rata
share of such fee for so long as such Lender shall not have made available such
portion. Such fee shall be calculated on the basis of a year of 360 days for the
actual number of days elapsed.

      2.7. Deficiency Advances. No Lender shall be responsible for any default
of any other Lender in respect to such other Lender's obligation to make any
Advance nor shall the Revolving Credit Commitment of any Lender hereunder be
increased as a result of such default of any other Lender. Without limiting the
generality of the foregoing, in the event any Lender shall fail to advance funds
to the Borrower as herein provided, the Agent may in its discretion, but shall
not be obligated to, advance under the Revolving Credit Note in its favor as a
Lender all or any portion of such amount or amounts (each, a "deficiency
advance") and shall thereafter be entitled to payments of principal of and
interest on such deficiency advance in the same manner and at the same interest
rate or rates to which such other Lender would have been entitled had it made
such advance under its Revolving Credit Note; provided that, upon payment to the
Agent from such other Lender of the entire outstanding amount of each such
deficiency advance, together with accrued and unpaid interest thereon, from the
most recent date or dates interest was paid to the Agent by the Borrower on each
Advance comprising the deficiency advance at the rate of interest payable by the
Borrower and payment by such other Lender to Agent of customary late fees, then
such payment shall be credited against the applicable Revolving Credit Note of
the Agent in full payment of such deficiency advance and the Borrower shall be
deemed to have borrowed the amount of such deficiency advance from such other
Lender as of the most recent date or dates, as the case may be, upon which any
payments of interest were made by the Borrower thereon.

      2.8. Termination of Existing Facilities. The outstanding Advances, if any,
under the Loan Agreement between the Borrower and Bank of Boston dated November
1, 1993 (the "1993 Agreement") shall be replaced on the date hereof by one or
more Advances under this Agreement and Borrower shall have no further right to
obtain, and Lender shall have no obligation to make, Advances under the 1993
Agreement. The $3,000,000 demand unsecured revolving credit facility made
available to the Borrower by Chemical Bank as set forth in a letter agreement
dated August 23, 1995 shall terminate on the date hereof.


                                      -12-
   18
                                   ARTICLE III

                                ADDITIONAL TERMS

      3.1. Payments.

            3.1.1. The Borrower shall have the right to prepay the Notes, in
whole at any time or in part from time to time, without premium or penalty,
provided that, except as set forth in Section 3.3, no Advance, either in whole
or in part, may be prepaid on the Advance Date of such Advance. The Borrower
shall give notice (by telex or telecopier, or by telephone (confirmed in writing
promptly thereafter)) to the Agent of each proposed prepayment hereunder prior
to 11:00 a.m. (Boston time), (x) with respect to Base Rate Loans, upon the
Business Day of the proposed prepayment and (y) with respect to LIBOR Loans, at
least three Business Days prior to the Business Day of the proposed prepayment,
which notice in each case shall specify the proposed prepayment date (which
shall be a Business Day), the aggregate principal amount of the proposed
prepayment and which Advances are to be prepaid. LIBOR Loans that are
voluntarily prepaid before the last day of the applicable Interest Period shall
be subject to the additional compensation requirements set forth in Section 3.3,
and each prepayment of a LIBOR Loan shall be in an aggregate principal amount of
not less than the total principal amount outstanding at such time under such
LIBOR Loan. If at any time the outstanding principal amount of the Advances
exceeds $20,000,000, the Borrower will immediately prepay the Advances by the
amount of such excess.

            3.1.2. All payments of principal and interest due under the Notes
(including Prepayments), and any other amounts owing to the Lenders under this
Agreement shall be made by the Borrower not later than 2:30 p.m., Boston time,
on the day due in lawful money of the United States of America to the Agent at
its Boston, Massachusetts office in immediately available funds. The Borrower
hereby authorizes the Agent to charge such payments as they become due, if not
otherwise paid by the Borrower, to any account of the Borrower with the Agent as
the Agent may elect.

            3.1.3. Whenever any payment to be made hereunder or under any other
Loan Document shall be stated to be due on a day that is not a Business Day,
such payment may be made on the next succeeding Business Day, and such extension
of time shall in such case be included in computing interest or other fees or
charges provided for under this Agreement or any other Loan Document; provided,
however, that with respect to LIBOR Loans, if the next succeeding Business Day
falls in another calendar month, such payment shall be made on the next
preceding Business Day.

            3.1.4. All payments made by the Borrower on the Notes shall be
applied by the Agent (a) first, to the payment of Costs with respect to the
Notes, (b)


                                      -13-
   19
second, to the payment of accrued and unpaid interest on the Notes, until all
such accrued interest has been paid, and (c) third, to the payment of the unpaid
principal amount of the Notes. Except as otherwise provided herein, (a) each
payment on account of the principal of and interest on the Notes and the fees
described in Section 2.6 shall be made to the Agent for the account of the
Lenders pro rata based on their Applicable Commitment Percentages, (b) all
payments to be made by the Borrower for the account of each of the Lenders on
account of principal, interest and fees, shall be made without diminution,
setoff, recoupment or counterclaim, and (c) the Agent will promptly distribute
to the Lenders in immediately available funds payments received in fully
collected, immediately available funds from the Borrower.

      3.2. Capital Adequacy.

            3.2.1. If, after the date of this Agreement, a Lender shall have
reasonably determined in good faith that the adoption or effectiveness after the
date hereof of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by such Lender with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of materially reducing the rate
of return on such Lender's capital or assets as a consequence of its commitments
or obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's then current policies with respect to capital
adequacy), then from time to time, subject to Section 3.2.2, within 15 days
after demand, the Borrower shall pay to the Agent for the account of such Lender
such additional amount or amounts as will compensate such Lender for such
reduction (after such Lender shall have allocated the same fairly and equitably
among all of its customers or any class generally affected thereby).

            3.2.2. The Agent will notify the Borrower of any event occurring
after the date of this Agreement that will entitle a Lender to any additional
payment under this Section 3.2 as promptly as practicable. The Agent will
furnish to the Borrower with such notice a certificate signed by an officer of
the Lender requesting payment certifying that such Lender is entitled to payment
under this Section 3.2 and setting forth the basis (in reasonable detail) and
the amount of each request by such Lender for any additional payment pursuant to
this Section 3.2. Such certificate shall be conclusive in the absence of
manifest error. The Borrower shall not be obligated to compensate such Lender
pursuant to this Section for amounts accruing prior to the date that is 180 days
before such Agent notifies the Borrower of its obligations to compensate such
Lender for such amounts.


                                      -14-
   20
      3.3. Special Provisions Governing LIBOR Loans. Notwithstanding any other
provisions of this Agreement, the following provisions shall govern with respect
to LIBOR Loans as to the matters covered:

            3.3.1. Increased Costs, Illegality, etc. (a) In the event that the
Agent shall have determined (which determination shall, if made in good faith
and absent manifest error, be final, conclusive and binding upon all parties):

                        (i) on any Interest Rate Determination Date, that by
            reason of any changes arising after the date of this Agreement
            affecting the interbank Eurodollar market, adequate and fair means
            do not exist for ascertaining the applicable interest rate on the
            basis provided for in the definition of LIBOR Rate; or

                        (ii) at any time during any Interest Period, that the
            Lenders shall incur increased costs (including taxes) or reductions
            in the amounts received or receivable hereunder with respect to a
            LIBOR Loan by reason of (x) any change since the Interest Rate
            Determination Date for the Interest Period in question in any
            applicable law or governmental rule, regulation, guideline or order
            (or any interpretation thereof and including the introduction of any
            new law or governmental rule, regulation, guideline or order) (such
            as, for example but not limited to, a change in official reserve
            requirements, but excluding reserve requirements that have been
            included in calculating the LIBOR Rate for such Interest Period)
            and/or (y) other circumstances affecting any Lender, the interbank
            Eurodollar market or the position of any Lender in the relevant
            market; or

                        (iii) at any time, that the making or continuance of any
            LIBOR Loan has become unlawful by compliance by the Lenders in good
            faith with any law, governmental rule, regulation, guideline or
            order, or has become impracticable as a result of a contingency
            occurring after the date of this Agreement;

then and in any such event, the Agent shall promptly after making such
determination give notice (by telephone confirmed in writing) to the Borrower of
such determination. Thereafter (x) in the case of clause (i) above, any Notice
of Borrowing given by the Borrower with respect to a LIBOR Loan that has not yet
been incurred shall be deemed rescinded by the Borrower and LIBOR Loans shall no
longer be available until such time as the Agent notifies the Borrower that the
circumstances giving rise to such notice no longer exist or that,
notwithstanding such circumstances, LIBOR Loans will again be made available
hereunder, (y) in the case of clause (ii), the Borrower shall pay to the Agent,
upon written demand therefor (but only with respect to any LIBOR Loan made
pursuant to a Notice of Borrowing issued


                                      -15-
   21
after the giving of the written notice that LIBOR Loans will again be made
available hereunder referred to in clause (x) above), such additional amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as the Agent in its sole discretion shall determine) as
shall be required to compensate the Lenders for such increased cost or reduction
in amount received (a written notice as to additional amounts owed the Lenders,
showing the basis for such calculation thereof, shall be given to the Borrower
by the Agent and shall, absent manifest error, be final, conclusive and binding
upon the parties hereto), and (z) in the case of clause (iii), the Borrower
shall take one of the actions specified in Section 3.3.1(b) as promptly as
possible and, in any event, within the time period required by law.

            (b) At any time that any LIBOR Loan is affected by the circumstances
described in Section 3.3.1(a)(ii) or (iii), the Borrower may (and in the case of
a LIBOR Loan affected pursuant to Section 3.3.1(a)(iii) shall) either (x) if the
affected LIBOR Loan is then being made, withdraw the related Notice of Borrowing
by giving the Agent telephonic (confirmed in writing) notice thereof on the same
date that the Borrower was notified by the Agent pursuant to Section 3.3.1(a),
or (y) if the affected LIBOR Loans are then outstanding, upon at least three
Business Days' written notice to the Agent, require the Agent to convert each
LIBOR Loan so affected into a Base Rate Loan.

            3.3.2. Compensation. The Borrower shall compensate the Lenders, upon
the Agent's written request (which request shall set forth the basis for
requesting such amounts), for all reasonable losses, expenses and liabilities
(including, without limitation, any interest paid by the Lender to lenders of
funds borrowed by it to make or carry its LIBOR Loans to the extent not
recovered by the Lenders in connection with the re-employment of such funds) and
any loss sustained by any Lender in connection with the re-employment of the
funds (including, without limitation, a return on such re-employment that would
result in such Lender's receiving less than it would have received had such
LIBOR Loan remained outstanding until the last day of the Interest Period
applicable to such LIBOR Loan) that such Lender, may sustain: (i) if for any
reason (other than a default by or negligence of any Lender) a LIBOR Loan is not
advanced on a date specified therefor in a Notice of Borrowing (unless timely
withdrawn pursuant to Section 3.3.1(b)(x) above), (ii) if any payment or
prepayment of any LIBOR Loans occurs for any reason whatsoever (including,
without limitation, by reason of Section 3.3.1(b)) on a date that is prior to
the last day of an Interest Period applicable thereto, (iii) if any prepayment
of any of its LIBOR Loans is not made on the date specified in a notice of
payment given by the Borrower pursuant to Section 3.1 or (iv) as a consequence
of an election made by the Borrower pursuant to Section 3.3.1(b) (y).

      3.4. Taxes. All payments made by the Borrower under this Agreement and any
Notes shall be made free and clear of, and without deduction or withholding for
or on account of, any present or future income, stamp or other taxes, levies,
imposts,


                                      -16-
   22
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any governmental authority, excluding
net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on any Lender as a result of a present or former connection between such
Lender and the jurisdiction of the governmental authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from such Lender's having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement or any Note). If any such non-excluded taxes, levies, imposts, duties,
charges, fees deductions or withholdings ("Non-Excluded Taxes") are required to
be withheld from any amounts payable to the Lenders hereunder or under any Note,
the amounts so payable to the Lenders shall be increased to the extent necessary
to yield to the Lenders (after payment of all Non-Excluded Taxes) interest or
any such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement. Whenever any Non-Excluded Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Agent a certified copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes
when due to the appropriate taxing authority or fails to remit to the Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Lenders for any incremental taxes, interest or penalties that may
become payable to any Lenders as a result of any such failure. The agreements in
this subsection shall survive the termination of this Agreement and the payment
of the Advances and all other amounts payable hereunder.


                                   ARTICLE IV

                 REPRESENTATIONS AND WARRANTIES OF THE BORROWER

      In order to induce the Lenders to enter into this Agreement and to make
the loans provided for herein, the Borrower makes the following representations
and warranties to the Lenders, all of which shall survive the execution and
delivery of this Agreement and the Notes.

      4.1. Organization, Existence and Power. The Borrower is duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation. The Borrower has the corporate power necessary to conduct the
business in which it is engaged, to own the properties owned by it and to
consummate the transactions contemplated by the Loan Documents. The Borrower is
duly qualified or licensed to transact business in all places where the nature
of the properties owned by it or the business conducted by it makes such
qualification necessary and where the failure to be so qualified or licensed
would have a material adverse effect upon the consolidated financial condition,
assets or results of operations of the Borrower and its Subsidiaries taken as a
whole.


                                      -17-
   23
      4.2. Authorization of Loan Documents; Binding Effect. The execution and
delivery of this Agreement and the other Loan Documents and the performance of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate actions of the Borrower. Each of the Loan Documents
constitutes the legal, valid and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms.

      4.3. Authority. The Borrower has all requisite corporate power and
authority to execute, deliver and perform its obligations under the Loan
Documents. Neither the authorization, execution, delivery, or performance by the
Borrower of this Agreement or of any other Loan Document nor the performance of
the transactions contemplated hereby or thereby violates or will violate any
provision of the corporate charter or by-laws of the Borrower, or does or will,
with the passage of time or the giving of notice or both, result in a breach of
or a default under, or require any consent under or result in the creation of
any lien, charge or encumbrance upon any property or assets of the Borrower
pursuant to, any material instrument, agreement or other document to which the
Borrower is a party or by which the Borrower or any of its properties may be
bound or affected.

      4.4. Capital Structure. The number of shares of stock of which the
Borrower's authorized capital stock consists, the par value per share of such
stock, the number of shares of such stock that have been issued and are
outstanding and the number of shares that have been issued and are held by the
Borrower as treasury shares are all disclosed on the Disclosure Schedule. Set
forth in the Disclosure Schedule is a complete and accurate list of all
Subsidiaries of the Borrower. The Disclosure Schedule indicates the jurisdiction
of incorporation or organization of each of the Subsidiaries, the number of
shares or units of each class of capital stock or other equity of the
Subsidiaries authorized, and the number of such shares or units outstanding and
the percentage of each class of such equity owned (directly or indirectly) by
the Borrower. No shares of stock or units of equity interests of the Borrower or
any of its Subsidiaries are covered by outstanding options, warrants, rights of
conversion or purchase or similar rights granted or created by the Borrower
except as set forth on the Disclosure Schedule. All the outstanding capital
stock of the Borrower has been validly issued and is fully paid and
nonassessable. All the stock or units of equity interests of the Borrower's
Subsidiaries that are owned by the Borrower or any Subsidiary of the Borrower
are owned free and clear of all mortgages, deeds of trust, pledges, liens,
security interests and other charges or encumbrances.

      4.5. Financial Condition. The audited consolidated balance sheet of the
Borrower and its Subsidiaries dated as of December 31, 1995 (the "Balance Sheet
Date") and the audited statements of operations, cash flows and stockholders'
equity of the Borrower and its Subsidiaries for and as of the end of the period
ending on that date, including any related notes (the "Financial Statements"),
all of which were


                                      -18-
   24
heretofore furnished to the Lenders, are true, correct and complete in all
material respects and fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries as of the date of each such
statement and have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the periods involved.
Other than as reflected in such Financial Statements and except for liabilities
incurred in the ordinary course of business since the date thereof, the Borrower
has no Indebtedness that is or would be material to the financial condition of
the Borrower, nor any material unrealized or unanticipated losses from any
commitments. Since the Balance Sheet Date there has been no material adverse
change in the consolidated financial condition (as set forth in the Financial
Statements) or results of operations of the Borrower and its Subsidiaries taken
as a whole.

      4.6. Pending Litigation. Except as set forth in the Disclosure Schedule,
there are no suits or proceedings pending or, to the knowledge of the Borrower,
threatened before any court or arbitration tribunal or by or before any
governmental or regulatory authority, commission, bureau or agency or public
regulatory body against the Borrower that if adversely determined would have a
material adverse effect on the consolidated financial condition, assets or
results of operations of the Borrower and its Subsidiaries taken as a whole.

      4.7. Certain Agreements; Material Contracts. The Borrower is not a party
to any agreement or instrument or subject to any court order or governmental
decree adversely affecting in any material respect the business, properties,
assets or financial condition of the Borrower and its Subsidiaries taken as a
whole.

      4.8. Authorization, Etc. All authorizations, consents, approvals,
accreditations, certifications and licenses required under the corporate charter
or by-laws of the Borrower or under applicable law or regulation for the
ownership or operation of the property owned or operated by the Borrower or the
conduct of any business or activity conducted by the Borrower, including
provision of services for which reimbursement is made by third party payors,
other than authorizations, consents, approvals, accreditations, certifications
or licenses the failure to obtain and/or maintain which would not have a
material adverse effect on the consolidated financial condition, assets or
results of operations of the Borrower and its Subsidiaries taken as a whole
(collectively, "Licenses") have been duly issued and are in full force and
effect. The Borrower has fulfilled and performed all of its material obligations
with respect to such licenses (to the extent now required to be fulfilled or
performed) and no event has occurred that would allow, with or without the
passage of time or the giving of notice or both, revocation or termination
thereof or would result in any other material impairment of the rights of the
holder of any such License. All filings or registrations with any governmental
or regulatory authority required for the conduct of the business or activity
conducted by the Borrower have been made, other than any such filings or
registrations as to which the failure to make same would not


                                      -19-
   25
have a material adverse effect on the consolidated financial condition, assets
or results of operations of the Borrower and its Subsidiaries, taken as a whole.
Except as expressly contemplated hereby, no approval, consent or authorization
of or filing or registration with any governmental commission, bureau or other
regulatory authority or agency is required with respect to the execution,
delivery or performance of any of the Loan Documents.

      4.9. No Violation. The execution, delivery and performance by the Borrower
of the Loan Documents do not and will not violate any provision of law or
regulation applicable to the Borrower, or any writ, order or decree of any court
or governmental or regulatory authority or agency applicable to the Borrower.
The Borrower is not in default, nor has any event occurred that with the passage
of time or the giving of notice, or both, would constitute a default, in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement, instrument or other document to which the
Borrower is a party, which default would have a material adverse effect on the
consolidated assets, financial condition or results of operations of the
Borrower and its Subsidiaries, taken as a whole. The Borrower is not in
violation of any applicable federal, state or local law, rule or regulation or
any writ, order or decree, which violation would have a material adverse effect
on the consolidated assets, financial condition or results of operations of the
Borrower and its Subsidiaries, taken as a whole. Except as otherwise set forth
in the Disclosure Schedule under the caption "Litigation," the Borrower has not
received notice of any violation of any federal, state or local environmental
law, rule or regulation or assertion that the Borrower has any obligation to
clean up or contribute to the cost of cleaning up any waste or pollutants.

      4.10. Payment of Taxes. The Borrower and its Subsidiaries have properly
prepared and filed or caused to be properly prepared and filed all federal tax
returns and all material state and local tax returns that are required to be
filed and have paid all taxes shown thereon to be due and all other taxes,
assessments and governmental charges or levies imposed upon the Borrower and its
Subsidiaries, their income or profits or any properties belonging to the
Borrower. No extensions of any statute of limitations are in effect with respect
to any tax liability of the Borrower or any Subsidiary of the Borrower. No
deficiency assessment or proposed adjustment of the federal income taxes of the
Borrower or any Subsidiary of the Borrower is pending and the Borrower has no
knowledge of any proposed liability of a substantial nature for any tax to be
imposed upon any of its properties or assets.

      4.11. Transactions With Affiliates, Officers, Directors and 1%
Shareholders. Except as set forth on the Disclosure Schedule, the Borrower has
no Indebtedness to or material contractual arrangement or understanding with any
Affiliate, officer or director of the Borrower, nor any shareholder holding of
record at least 1% of the equity of the Borrower nor, to the best of the
Borrower's knowledge (without independent inquiry), any of their respective
relatives.


                                      -20-
   26
      4.12. ERISA. The Borrower has never established or maintained any funded
employee pension benefit plan as defined under Section 3(2)(A) of the Employee
Retirement Income Security Act of 1974, as amended and in effect on the date
hereof ("ERISA"), other than the plans described on the Disclosure Schedule. No
employee benefit plan established or maintained, or to which contributions have
been made, by the Borrower or any Subsidiary of the Borrower that is subject to
Part 3 of Title I-B of ERISA, had an accumulated funding deficiency (as such
term is defined in Section 302 of ERISA) as of the last day of the fiscal year
of such plan ended most recently prior to the date hereof, or would have had an
accumulated funding deficiency (as so defined) on such day if such year were the
first year of the plan to which Part 3 of Title I-B of ERISA applied. No
material liability to the Pension Benefit Guaranty Corporation has been incurred
or is expected by the Borrower to be incurred by it or any Subsidiary of the
Borrower with respect to any such plan or otherwise. The execution, delivery and
performance of this Agreement and the other Loan Documents will not involve on
the part of the Borrower any prohibited transaction within the meaning of ERISA
or Section 4975 of the Internal Revenue Code. The Borrower has never maintained,
contributed to or been obligated to contribute to any "multiemployer plan," as
defined in Section 3(37) of ERISA. The Borrower has never incurred any
"withdrawal liability" calculated under Section 4211 of ERISA, and there has
been no event or circumstance that would cause it to incur any such liability.

      4.13. Ownership of Properties; Liens. The Borrower has good and marketable
title to all its material properties and assets, real and personal, that are now
carried on its books, including, without limitation, those reflected in the
Financial Statements (except those disposed of in the ordinary course since the
date thereof), and has valid leasehold interests in its properties and assets,
real and personal, which it purports to lease, subject in either case to no
mortgage, security interest, pledge, lien, charge, encumbrance or title
retention or other security agreement or arrangement of any nature whatsoever
other than Permitted Liens and those specified in the Disclosure Schedule. All
of the Borrower's material leasehold interests and material obligations with
respect to real property are described on the Disclosure Schedule.

      4.14. Employment Matters. Except as set forth on the Disclosure Schedule,
there are no material grievances, disputes or controversies pending or, to the
knowledge of the Borrower, threatened between the Borrower and its employees,
nor is any strike, work stoppage or slowdown pending or threatened against the
Borrower.

      4.15. Insurance. The Borrower maintains in force fire, casualty,
comprehensive liability and other insurance covering its properties and business
that is adequate and customary for the type and scope of its properties and
business.

      4.16. Indebtedness. Except as reflected in the Financial Statements or set
forth in the Disclosure Schedule, and other than Indebtedness incurred in the


                                      -21-
   27
ordinary course of business since the Balance Sheet Date, the Borrower has no
outstanding Indebtedness.

      4.17. Securities Law Compliance. The Borrower is not an "investment
company" as defined in the Investment Company Act of 1940, as amended. All of
the Borrower's outstanding stock was offered, issued and sold in compliance with
all applicable state and federal securities laws.

      4.18. Accuracy of Information. None of the information furnished to the
Lenders by or on behalf of the Borrower for purposes of this Agreement or any
Loan Document or any transaction contemplated hereby or thereby contains, and
none of such information hereinafter furnished will contain any material
misstatement of fact, nor does or will any such information omit any material
fact necessary to make such information not misleading at such time.


                                    ARTICLE V

                             CONDITIONS TO ADVANCES

      The Lenders shall not be obligated to make any Advances unless the
following conditions have been satisfied:

      5.1. Each Advance. The obligations of the Lenders to make each Advance are
subject to the following conditions precedent, each of which shall have been met
or performed on or before the Advance Date or the Closing Date, as the case may
be:

            (a) No Default. No Default or Event of Default shall have occurred
and be continuing or will occur upon the making of the Advance.

            (b) Correctness of Representations. The representations and
warranties made by the Borrower in this Agreement shall be true and correct with
the same force and effect as though such representations and warranties had been
made on and as of the Advance Date (i) except to the extent that the
representations and warranties set forth in Article IV of this Agreement are
untrue as a result of circumstances that have changed subsequent to the date
hereof, which change has caused no non-compliance by the Borrower with the
covenants, conditions and agreements in this Agreement and (ii) except that the
references in Section 4.5 of this Agreement to the financial statements and the
term "Balance Sheet Date" are deemed to refer to the most recent financial
statements (inclusive of consolidated balance sheets and statements of
operations, cash flows and stockholders' equity of the Borrower and its
Subsidiaries) furnished to the Lenders pursuant to Section 6.1(a) and (b) of
this Agreement and the date of such financial statements, respectively.


                                      -22-
   28
            (c) No Litigation; Certain Other Conditions. There shall be no suit
or proceeding (other than suits or proceedings disclosed on the Disclosure
Schedule on the date of this Agreement) pending or threatened before any court
or arbitration tribunal or by or before any governmental or regulatory
authority, commission, bureau or agency or public regulatory body that, if
determined adversely to the Borrower or any Subsidiary of the Borrower, is
reasonably likely to have a material adverse effect on the consolidated
financial condition or results of operations of the Borrower and its
Subsidiaries taken as a whole.

            (d) No Material Adverse Change. There shall have been no material
adverse change in the consolidated financial condition or results of operations
of the Borrower and its Subsidiaries taken as a whole since the Balance Sheet
Date.

            (e) Loan Documents. All Loan Documents shall be in full force and
effect.

      5.2. First Advance. The obligations of the Lenders to make the first
Advance are subject to the following additional conditions precedent, each of
which shall have been met or performed on or before the Closing Date:

            (a) Deliveries. The Agent shall have received, in form and substance
satisfactory to the Agent and Lenders, the following:

                  (i) an opinion or opinions of independent counsel to the
      Borrower with respect to the Loan Documents and the transactions
      contemplated thereby;

                  (ii) certificates as to the Borrower's legal existence and
      good standing under the laws of The Commonwealth of Massachusetts, and
      certificates as to the Borrower's authority to do business as a foreign
      corporation in the States of Arizona, California, Colorado, Connecticut,
      Florida, Illinois, Maryland, Michigan, New Jersey, New Mexico, New York,
      Oregon, Pennsylvania and Texas, each dated as of a recent date;

                  (iii) a certificate of the Borrower's Clerk as to (i) its
      charter documents and by-laws, as amended, (ii) corporate votes
      authorizing the execution and delivery of the Loan Documents, and (iii)
      incumbency of the officers authorized to execute the Loan Documents on
      behalf of the Borrower;

                  (iv) a Revolving Credit Note to the order of each Lender, each
      duly executed by the Borrower and otherwise appropriately completed;

                  (v) a certificate duly executed by the Borrower's chief
      financial officer dated the Advance Date or Closing Date, as the case may
      be, to the


                                      -23-
   29
      effect that each of the conditions set forth in the foregoing Section 5.1
      has been met as of such date.

            (b) All Proceedings Satisfactory. All corporate and other
proceedings taken prior to or on the Closing Date in connection with the
transactions contemplated by this Agreement, and all documents and exhibits
related thereto, shall be reasonably satisfactory in form and substance to the
Agent and the Lenders.

            (c) Additional Documents. The Borrower shall have delivered to the
Agent all additional opinions, documents and certificates that the Agent or any
Lender may reasonably require.


                                   ARTICLE VI

                      AFFIRMATIVE COVENANTS OF THE BORROWER

      The Borrower covenants and agrees that from the date of execution of this
Agreement and until the payment in full of the principal of and interest upon
the Notes and payment and performance of all other Obligations, unless the
Required Lenders shall otherwise consent in writing:

      6.1. Reporting Requirements. The Borrower shall furnish to the Lenders:

            (a) As soon as available and in any event within forty-five days
after the end of each of the first three quarters of each fiscal year of the
Borrower and its Subsidiaries, (i) a consolidated and consolidating balance
sheet of the Borrower and its Subsidiaries as of the end of such quarter and
(ii) consolidated and consolidating statements of operations, cash flows and
stockholders' equity of the Borrower and its Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the end of
such quarter, all in reasonable detail and duly certified by the chief financial
officer of the Borrower as having been prepared in accordance with generally
accepted accounting principles consistently applied (subject to addition of
notes and ordinary year-end audit adjustments), together with a certificate of
the chief financial officer of the Borrower stating that no Default or Event of
Default has occurred and is continuing or, if a Default or an Event of Default
has occurred and is continuing, a statement as to the nature thereof and the
action that the Borrower proposes to take with respect thereto;

            (b) As soon as available and in any event within ninety days after
the end of each fiscal year of the Borrower, the audited consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of such fiscal year and
the audited consolidated statements of operations, cash flows and stockholders'
equity of the Borrower and its Subsidiaries for such fiscal year, in each case
accompanied by the


                                      -24-
   30
unqualified opinion with respect thereto of the Borrower's independent public
accountants and a certification by such accountants stating that they have
reviewed this Agreement and whether, in making their audit, they have become
aware of any Default or Event of Default and if so, describing its nature, along
with the related unaudited consolidating balance sheet of the Borrower and its
Subsidiaries as of the end of such fiscal year and the unaudited consolidating
statements of operations, cash flows and stockholders' equity of the Borrower
and its Subsidiaries for such fiscal year;

            (c) Not later than forty-five days following the end of each fiscal
quarter a certificate signed by the chief financial officer of the Borrower
substantially in the form of Exhibit D hereto (the "Compliance Certificate");

            (d) Not later than thirty days after the end of each fiscal year of
the Borrower, the Borrower's representative forecast for the next fiscal year on
a consolidated basis, including, at a minimum, projected statements of profit
and loss and projected cash flow, prepared in accordance with generally accepted
accounting principles consistently applied;

            (e) Promptly upon receipt thereof, one copy of each other report
submitted to the Borrower or any Subsidiary by independent accountants in
connection with any annual, interim or special audit made by them of the books
of the Borrower or any Subsidiary;

            (f) Promptly after the commencement thereof, notice of all actions,
suits and proceedings before any court, arbitration tribunal or governmental
regulatory authority, commission, bureau, agency or public regulatory body that,
if determined adversely to the Borrower or any Subsidiary of the Borrower, would
be reasonably likely to have a material adverse effect on the consolidated
financial condition or results of operations of the Borrower and its
Subsidiaries taken as a whole;

            (g) As soon as possible, and in any event within five days after the
Borrower shall know of the occurrence of any Default or Event of Default, the
written statement of the chief financial officer of the Borrower setting forth
details of such Default or Event of Default and action that the Borrower
proposes to take with respect thereto;

            (h) As soon as possible, and in any event within five days after the
occurrence thereof, written notice as to any other event of which the Borrower
becomes aware that with the passage of time, the giving of notice or otherwise,
is reasonably likely to result in a material adverse change in the consolidated
financial condition or results of operations of the Borrower and its
Subsidiaries taken as a whole; and


                                      -25-
   31
            (i) Such other information respecting the business or properties or
the condition or operations, financial or otherwise, of the Borrower as any
Lender may from time to time reasonably request.

      6.2. Loan Proceeds. The Borrower shall use the proceeds of the Advances
only for the purpose of general working capital, acquisitions not prohibited
hereby and capital expenditures.

      6.3. Maintenance of Business and Properties; Insurance.

            (a) The Borrower will continue to engage in business of the same
general nature as the business currently engaged in by the Borrower. The
Borrower will at all times maintain, preserve and protect all material
franchises and trade names and preserve all the Borrower's material tangible
property used or useful in the conduct of its business and keep the same in good
repair, working order and condition, ordinary wear and tear excepted, and from
time to time make all needful and proper repairs, renewals, replacements,
betterments, and improvements thereto so that the business carried on in
connection therewith may be conducted properly and advantageously at all times.

            (b) The Borrower will keep all of its insurable properties now or
hereafter owned adequately insured at all times against loss or damage by fire
or other casualty to the extent customary with respect to like properties of
companies conducting similar businesses and to the extent available at
commercially reasonable rates; and will maintain public liability and workmen's
compensation insurance insuring the Borrower to the extent customary with
respect to companies conducting similar businesses and to the extent available
at commercially reasonable rates, all by financially sound and reputable
insurers. The Borrower shall furnish to the Agent from time to time at the
Agent's request copies of all such insurance policies and certificates
evidencing such insurance coverage. Notwithstanding the foregoing, the Borrower
may self-insure workmen's compensation to the extent permitted by law and may
also self-insure other risks to the extent reasonably deemed prudent by the
Borrower.

      6.4. Payment of Taxes. The Borrower shall pay and discharge, or cause to
be paid and discharged, all material taxes, assessments, and governmental
charges or levies imposed upon the Borrower and its Subsidiaries or their income
or profits, or upon any other properties belonging to the Borrower prior to the
date on which penalties attach thereto, and all lawful claims that, if unpaid,
might become a lien or charge upon any material properties of the Borrower,
except for such taxes, assessments, charges, levies or claims as are being
contested by the Borrower in good faith by appropriate proceedings promptly
initiated and diligently prosecuted, for which adequate book reserves have been
established in accordance with generally accepted accounting principles, as to
which no foreclosure, distraint, sale or other


                                      -26-
   32
similar proceedings shall have been commenced, or, if commenced, have been
effectively stayed.

      6.5. Compliance with Laws, etc. The Borrower shall comply with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority, and obtain or maintain all Licenses required under
applicable law or regulation for the operation of the Borrower's business, where
noncompliance or failure to obtain or maintain would have a material adverse
effect on the consolidated financial condition, assets, or results of operations
of the Borrower and its Subsidiaries taken as a whole; provided, however, that
such compliance or the obtaining of such Licenses may be delayed while the
applicability or validity of any such law, rule, regulation or order or the
necessity for obtaining any such License is being contested by the Borrower in
good faith by appropriate proceedings promptly initiated and diligently
prosecuted.

      6.6. Books, Records and Accounts. The Borrower shall keep true and correct
books, records and accounts, in which entries will be made in accordance with
generally accepted accounting principles consistently applied, and that shall
comply with the requirements of the Foreign Corrupt Practices Act of 1977 to the
extent applicable to the Borrower. Each Lender or its representatives shall upon
reasonable notice to the Borrower be afforded, during normal business hours,
access to and the right to examine and copy any such books, records and accounts
and the right to inspect the Borrower's premises and business operations. All
financial and other information with respect to the Borrower and/or any of its
Subsidiaries now or hereafter obtained by any Lender under this Agreement or
otherwise in connection with any of the transactions contemplated hereunder
shall be held in confidence and shall not be released or made available to any
other Person, except (i) to governmental agencies (and examiners employed by
same) having oversight over the affairs of such Lender, (ii) pursuant to
subpoena or similar process issued by a court or governmental agency of
competent jurisdiction, or (iii) as otherwise directed by order of any court or
governmental agency of competent jurisdiction.

      6.7. Further Assurances. The Borrower shall execute and deliver, at the
Borrower's expense, all notices and other instruments and documents and take all
actions, including, but not limited to, making all filings and recordings, that
any Lender shall reasonably request in order to assure to the Lenders all rights
given to the Lenders hereby or under any other Loan Document.

      6.8. Bank Accounts. The Borrower shall maintain its principal operating
accounts with the Agent.


                                   ARTICLE VII


                                      -27-
   33
                       NEGATIVE COVENANTS OF THE BORROWER

      The Borrower covenants and agrees that from the date of execution of this
Agreement and until the payment in full of the principal of and interest upon
the Notes and payment and performance of all other Obligations, unless the
Required Lenders shall otherwise consent in writing:

      7.1. Sale of Assets; Mergers, Etc.

            (a) Sale of Assets. The Borrower will not, except in the ordinary
course of business, sell, transfer, or otherwise dispose of, to any Person any
assets (including the securities of any Subsidiary).

            (b) Mergers, Etc. Neither the Borrower nor any Subsidiary will
consolidate with or merge into any other Person or permit any other Person to
consolidate with or merge into it, or acquire all or substantially all of the
assets of any Person, or sell, assign, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) all or substantially all of its
assets to any Person, except that

                  (1) a Subsidiary may consolidate with or merge into the
            Borrower or another Subsidiary; and

                  (2) the Borrower or any of its Subsidiaries may acquire all or
            substantially all of the assets of any Person provided (i) such
            Person is engaged in a line of business substantially similar to one
            or more of Borrower's existing lines of business, (ii) the aggregate
            purchase price liability incurred in any calendar year, including
            all contingent liabilities, when aggregated with all such
            acquisitions and any Investments permitted under Section 7.4(2) in
            any calendar year shall not exceed 25% of Consolidated Tangible Net
            Worth as of the end of the most recent fiscal quarter or, if 80% or
            more of the purchase price is paid in capital stock of the Borrower,
            40% of Consolidated Tangible Net Worth as of the end of the most
            recent fiscal quarter and (iii) based on a pro forma calculation of
            the ratios set forth in Section 7.7 as of the date such acquisition
            is closed, assuming consolidation of the acquired business with the
            Borrower for the four full fiscal quarters ended immediately
            preceding such closing and pro forma debt and debt service payments
            based on scheduled principal payments, including acquisition
            borrowings, if any, and pro forma interest on total debt at then
            prevailing borrowing rates, Borrower is in compliance with the
            financial covenants set forth in Section 7.7.

      7.2. Liens and Encumbrances.


                                      -28-
   34
            (a) Neither the Borrower nor any Subsidiary will (a) cause or permit
or (b) agree or consent to cause or permit in the future (upon the happening of
a contingency or otherwise), any of its real or personal property, whether now
owned or subsequently acquired, to be subject to any Lien other than Liens
described below (which may herein be referred to as "Permitted Liens"):

                  (1) Liens securing the payment of taxes, assessments or
            governmental charges or levies or the demands of suppliers,
            mechanics, carriers, warehousers, landlords and other like Persons,
            which payments are not yet due and payable or (as to taxes) may be
            paid without interest or penalty; provided, that, if such payments
            are due and payable, such Liens shall be permitted hereunder only to
            the extent that (A) all claims that the Liens secure are being
            actively contested in good faith and by appropriate proceedings, (B)
            adequate book reserves have been established with respect thereto to
            the extent required by generally accepted accounting principles, and
            (C) such Liens do not in the aggregate materially interfere with the
            owning company's use of property necessary or material to the
            conduct of the business of the Borrower and its Subsidiaries taken
            as a whole;

                  (2) Liens incurred or deposits made in the ordinary course of
            business (A) in connection with worker's compensation, unemployment
            insurance, social security and other like laws, or (B) to secure the
            performance of letters of credit, bids, tenders, sales contracts,
            leases, statutory obligations, surety, appeal and performance bonds
            and other similar obligations, in each case not incurred in
            connection with the borrowing of money, the obtaining of advances or
            the payment of the deferred purchase price of property;

                  (3) Liens not otherwise described in Section 7.2(a)(1) or (2)
            that are incurred in the ordinary course of business and are
            incidental to the conduct of its business or ownership of its
            property, were not incurred in connection with the borrowing of
            money, the obtaining of advances or the payment of the deferred
            purchase price of property and do not in the aggregate materially
            detract from the value of, or materially interfere with the owning
            company's use of, property necessary or material to the conduct of
            the business of the Borrower and its Subsidiaries taken as a whole;

                  (4) Liens in favor of the Agent for the benefit of the
            Lenders;

                  (5) Liens permitted under Existing Loan Agreements;


                                      -29-
   35
                  (6) Judgment liens or attachments that shall not have been in
            existence for a period longer than 30 days after the creation
            thereof, or if a stay of execution shall have been obtained, for a
            period longer than 30 days after the expiration of such stay or if
            such an attachment is being actively contested in good faith and by
            appropriate proceedings, for a period longer than 30 days after the
            creation thereof;

                  (7) Liens existing as of the Closing Date and disclosed on the
            Disclosure Schedule hereto;

                  (8) Liens provided for in equipment or Financing Leases
            (including financing statements and undertakings to file financing
            statements) provided that they are limited to the equipment subject
            to such leases and the proceeds thereof;

                  (9) Leases or subleases with third parties or licenses and
            sublicenses granted to third parties not interfering in any material
            respect with the business of the Borrower or any Subsidiary of the
            Borrower;

                  (10) Any Lien on any asset of any corporation existing at the
            time such corporation is merged into or consolidated with the
            Borrower or a Subsidiary of the Borrower and not created in
            contemplation of such event;

                  (11) Any Lien existing on any asset prior to the acquisition
            thereof by the Borrower or any Subsidiary of the Borrower and not
            created in contemplation of such event;

                  (12) Liens in respect of any purchase money obligations for
            tangible property used in its business, which obligations shall not
            at any time exceed 5% of consolidated Tangible Net Worth, provided
            that any such encumbrances shall not extend to property and assets
            of the Borrower or any Subsidiary not financed by such a purchase
            money obligation;

                  (13) Easements, rights of way, restrictions and other similar
            charges or Liens relating to real property and not interfering in a
            material way with the ordinary conduct of its business; and

                  (14) Liens on its property or assets created in connection
            with the refinancing of Indebtedness secured by Permitted Liens on
            such property, provided that the amount of Indebtedness secured by
            any such Lien shall not be increased as a result of such refinancing
            and no


                                      -30-
   36
            such Lien shall extend to property and assets of the Borrower or any
            Subsidiary not encumbered prior to any such refinancing.

            (b) In case any property is subjected to a Lien in violation of
Section 7.2(a), the Borrower will make or cause to be made provision whereby the
Notes will be secured equally and ratably with all other obligations secured by
such property, and in any case the Notes shall have the benefit, to the full
extent that the holders may be entitled thereto under applicable law, of an
equitable Lien equally and ratably securing the Notes. Such violation of Section
7.2(a) shall constitute an Event of Default hereunder, whether or not any such
provision is made pursuant to this Section 7.2(b).

            (c) Neither the Borrower nor any Subsidiary will agree with any
third party not to cause or permit any of its real or personal property, whether
now owned or subsequently acquired, to be subject to Liens (with or without
exceptions).

      7.3. Sales and Leasebacks. The Borrower and its Subsidiaries will not sell
or transfer any of their property and become, directly or indirectly, liable as
the lessee under a lease of such property (other than such transactions between
the Subsidiaries and transfers of capital equipment that will be leased pursuant
to Financing Leases).

      7.4. Investments. Neither the Borrower nor any Subsidiary will make or
maintain any investments, made in cash or by delivery of property or assets, (a)
in any Person, whether by acquisition of capital stock, Indebtedness, or other
obligations or securities, or by loan or capital contribution, or otherwise, or
(b) in any property, whether real or personal, (items (a) and (b) being herein
called "Investments"), except the following:

                  (1) Investments in direct obligations of, or guaranteed by,
            the United States government, its agencies or any public
            instrumentality thereof and backed by the full faith and credit of
            the United States government with maturities not to exceed (or an
            unconditional right to compel purchase within) one year from the
            date of acquisition;

                  (2) Investments in or to any Subsidiary or other Person,
            provided Borrower remains in compliance with Section 7.1(b);

                  (3) Investments and obligations issued by any state of the
            United States or any political subdivision of any such state or any
            public instrumentality thereof with maturities not to exceed (or an
            unconditional right to compel purchase within) 180 days of the date
            of acquisition that are rated in one of the top two rating
            classifications by at least one nationally recognized rating agency;


                                      -31-
   37
                  (4) Investments in demand and time deposits with, Eurodollar
            deposits with, certificates of deposit issued by, or obligations or
            securities fully backed by letters of credit issued by (x) any bank
            organized under the laws of the United States, any state thereof,
            the District of Columbia or Canada having combined capital and
            surplus aggregating at least $500,000,000, or (y) any other bank
            organized under the laws of a state that is a member of the European
            Economic Community (or any political subdivision thereof), Japan,
            the Cayman Islands, or British West Indies having as of any date of
            determination combined capital and surplus of not less than
            $500,000,000 or the equivalent thereof (determined in accordance
            with generally accepted accounting principles);

                  (5) Shares of money market mutual funds registered under the
            Investment Company Act of 1940, as amended;

                  (6) Foreign currency swaps and hedging arrangements entered
            into in the ordinary course of business to protect against currency
            losses, and interest rate swaps and caps entered into in the
            ordinary course of business to protect against interest rate
            exposure on Indebtedness bearing interest at a variable rate;

                  (7) Investments in publicly traded companies and mutual funds
            (other than money market mutual funds) that in the aggregate shall
            not exceed $5,000,000; and

                  (8) Other Investments existing on the Closing Date and listed
            on the Disclosure Schedule.

      7.5. Transactions with Affiliates. Neither the Borrower nor any Subsidiary
will enter into any transaction (including the purchase, sale or exchange of
property or the rendering of any service) with any Affiliate except upon fair
and reasonable terms that are at least as favorable to the Borrower or the
Subsidiary as would be obtained in a comparable arm's-length transaction with a
non-Affiliate.

      7.6. ERISA Compliance. Neither the Borrower nor any of its Subsidiaries
will at any time permit any employee pension benefit plan (as such term is
defined in Section 3 of ERISA) maintained by the Borrower or any of its
Subsidiaries or in which employees of the Borrower or any of its Subsidiaries is
entitled to participate to:

            (a)   engage in any "prohibited transaction" as such term is defined
                  in Section 4975 of the Internal Revenue Code of 1986, as
                  amended, or described in Section 406 of ERISA;


                                      -32-
   38
            (b)   incur any "accumulated funding deficiency" as such term is
                  defined in Section 302 of ERISA, whether or not waived; or

            (c)   terminate under circumstances that could result in the
                  imposition of a Lien on the property of the Borrower or any
                  Subsidiary of the Borrower pursuant to Section 4068 of ERISA.

      7.7. Financial Covenants. The Borrower covenants and agrees that:

            (a) Tangible Net Worth Test. The Consolidated Tangible Net Worth as
of the end of each fiscal quarter of the Borrower shall:

                  (A) prior to an IPO, not be less than the sum of (i)
      $38,000,000, and (ii) 50% of Consolidated Net Income (excluding losses)
      for each consecutive fiscal quarter of the Borrower beginning with the
      quarter ending March 31, 1996, on a cumulative basis; and

                  (B) after an IPO, not be less than the sum of (i) the amount
      required by clause (A) above immediately prior to such IPO plus (ii) the
      net proceeds to the Borrower of the IPO less (iii) the Sub S Dividends.

            (b) Debt-to-Net Worth Ratio. The ratio ("Debt-to-Net Worth Ratio")
of the Consolidated Indebtedness (excluding all guaranties except guaranties
with respect to borrowed money) as of the end of each fiscal quarter of the
Borrower beginning with the fiscal quarter ending December 31, 1995 to its
Consolidated Tangible Net Worth as of the end of each fiscal quarter of the
Borrower beginning with the fiscal quarter ending December 31, 1995 shall not
exceed 1.5 to 1.

            (c) Cash Flow Ratio. The ratio (the "Cash Flow Ratio") as of the end
of each fiscal quarter of the Borrower of (i) Consolidated Operating Cash Flow
for the four consecutive fiscal quarters then ended to (ii) Consolidated Debt
Service for the four consecutive fiscal quarters then ended shall not be less
than 1.25 to 1.00.

      7.8. Contracts Prohibiting Compliance with Agreement. The Borrower will
not enter into any contract or other agreement that would prohibit or in any way
restrict the ability of the Borrower to comply with any provision of this
Agreement.


                                  ARTICLE VIII

                                EVENTS OF DEFAULT

      8.1. Default. If any one of the following events ("Events of Default")
shall occur:


                                      -33-
   39
            (a) Any representation or warranty made by the Borrower herein or in
any other Loan Document, or in any certificate or report furnished by the
Borrower hereunder or thereunder, shall prove to have been incorrect in any
material respect when made;

            (b) Payment of any principal or interest due under any Note shall
not be made on or before the date due;

            (c) A final judgment or settlement for in excess of $2,000,000 shall
be rendered against or agreed to by the Borrower or any of its Subsidiaries for
the payment of money that, after deducting the amount of any insurance proceeds
paid or payable to or on behalf of the Borrower or its Subsidiary in connection
with such judgment or settlement, as the case may be, is in excess of
$2,000,000, and such judgment shall remain undischarged for a period of thirty
(30) days, during which period execution shall not effectively be stayed, or
such settlement shall remain unpaid for a period of thirty days after the agreed
payment date unless such delay has been agreed to by the other party. If a
dispute exists with respect to the liability of any insurance underwriter under
any insurance policy of the Borrower or its Subsidiary, no deduction under this
subsection shall be made for the insurance proceeds that are the subject of such
dispute;

            (d) The Borrower or any Subsidiary shall (1) voluntarily terminate
operations or apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of such Person or of
all or a substantial part of the assets of such Person, (2) admit in writing its
inability, or be generally unable, to pay its debts as the debts become due, (3)
make a general assignment for the benefit of its creditors, (4) commence a
voluntary case under the Federal Bankruptcy Code (as now or hereafter in
effect), (5) file a petition seeking to take advantage of any other law relating
to bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, (6) fail to controvert in a timely and appropriate manner,
or acquiesce in writing to, any petition filed against it in an involuntary case
under the Federal Bankruptcy Code or applicable state bankruptcy laws or (7)
take any corporate action for the purpose of effecting any of the foregoing;

            (e) Without its application, approval or consent, a proceeding shall
be commenced, in any court of competent jurisdiction, seeking in respect of the
Borrower or any Subsidiary: the liquidation, reorganization, dissolution,
winding-up, or composition or readjustment of debt, the appointment of a
trustee, receiver, liquidator or the like of such Person or of all or any
substantial part of the assets of such Person, or other like relief in respect
of such Person under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts; and, if the proceeding is
being contested in good faith by such Person, the same shall continue
undismissed, or unstayed and in effect for any period of 45


                                      -34-
   40
consecutive days, or an order for relief against such Person shall be entered in
any case under the Bankruptcy Code or applicable state bankruptcy laws;

            (f) Any foreclosure or other proceedings shall be commenced to
enforce, execute or realize upon any lien, encumbrance, attachment, trustee
process, mortgage or security interest for payment of an amount in excess of
$250,000 against the Borrower or any Subsidiary;

            (g) Default shall be made in the due observance or performance of
any covenant or agreement under Article VII;

            (h) Default shall be made in the due observance or performance of
any covenant or agreement contained herein (and not constituting an Event of
Default under any other clause in this Article VIII) or in any other Loan
Document or in any other agreement between any Lender and the Borrower
evidencing or securing borrowed monies and such default shall continue and shall
not have been remedied within thirty days after the date on which such default
occurred;

            (i) There shall occur any default under any instrument or agreement
evidencing any indebtedness for money borrowed in excess of $100,000 by the
Borrower or any of its Subsidiaries;

            (j) The transfer by John R. Bertucci and/or his Affiliates of
securities of the Borrower or the voting power related to such securities as a
result of which the power to elect, appoint or cause the election or appointment
of at least a majority of the members of the board of directors of the Borrower
shall no longer be held by John R. Bertucci and/or his Affiliates;

            (k) There shall occur any material adverse change in the financial
condition of the Borrower;

            (l) There shall occur any Event of Default under either of the
Existing Loan Agreements;

then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall have not been waived, any or all of the
following actions may be taken: (i) the Agent (A) with the consent of the
Required Lenders, may, and at the direction of the Required Lenders shall,
declare any obligation of the Lenders to make further Advances terminated,
whereupon the obligation of each Lender to make further Advances hereunder shall
terminate immediately, and (B) the Agent shall at the direction of the Required
Lenders, at their option, declare by notice to the Borrower any or all of the
Obligations to be immediately due and payable, and the same, including all
interest accrued thereon and all other obligations of the Borrower to the Agent
and the Lenders, shall forthwith become immediately due and


                                      -35-
   41
payable without presentment, demand, protest, notice or other formality of any
kind, all of which are hereby expressly waived, anything contained herein or in
any instrument evidencing the Obligations to the contrary notwithstanding;
provided, however, that notwithstanding the above, if there shall occur an Event
of Default under clause (d) or (e) above, then the obligation of the Lenders to
make Advances shall automatically terminate and any and all of the Obligations
shall be immediately due and payable without the necessity of any action by the
Agent or the Required Lenders or notice to the Agent or the Lenders; and (ii)
the Agent and each of the Lenders shall have all of the rights and remedies
available under each of the Loan Documents or under any applicable law.

      8.2. Agent to Act. In case any one or more Events of Default shall occur
and not have been waived, the Agent may, and at the direction of the Required
Lenders shall, proceed to protect and enforce their rights or remedies either by
suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained herein or in
any other Loan Document, or to enforce the payment of the Obligations or any
other legal or equitable right or remedy.

      8.3. Cumulative Rights. No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.

      8.4. No Waiver. No course of dealing between the Borrower and any Lender
or the Agent or any failure or delay on the part of any Lender or the Agent in
exercising any rights or remedies under any Loan Document or otherwise available
to it shall operate as a waiver of any rights or remedies and no single or
partial exercise of any rights or remedies shall operate as a waiver or preclude
the exercise of any other rights or remedies hereunder or of the same right or
remedy on a future occasion.

      8.5. Allocation of Proceeds. If an Event of Default has occurred and not
been waived, and the maturity of the Notes has been accelerated pursuant to this
Article VIII, all payments received by the Agent hereunder, in respect of any
principal of or interest on the Obligations or any other amounts payable by the
Borrower hereunder, shall be applied by the Agent in the following order:

            (a) amounts due to the Lenders pursuant to Sections 2.6 and 10.4;

            (b) amounts due to the Agent pursuant to Section 9.10;


                                      -36-
   42
            (c) payments of interest on Notes to be applied for the ratable
      benefit of the Lenders;

            (d) payments of principal of Notes to be applied for the ratable
      benefit of the Lenders;

            (e) payments of all other amounts due under any of the Loan
      Documents, if any, to be applied for the ratable benefit of the Lenders;
      and

            (f) any surplus remaining after application as provided for herein,
      to the Borrower or otherwise as may be required by applicable law.


                                   ARTICLE IX

                                    THE AGENT

      9.1. Appointment. Each Lender hereby irrevocably designates and appoints
Bank of Boston as the Agent for the Lenders under this Agreement, and each of
the Lenders hereby irrevocably authorizes Bank of Boston as the Agent for such
Lender, to take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise such powers as are expressly
delegated to the Agent by the terms of this Agreement and such other Loan
Documents, together with such other powers as are reasonably incidental thereto.
The Agent shall not have any duties or responsibilities, except those expressly
set forth herein, or any fiduciary relationship with any of the Lenders, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.

      9.2. Limitation on Liability. Neither the Agent nor any of its officers,
directors, employees, agents or attorneys-in-fact shall be liable to the Lenders
for any action lawfully taken or omitted to be taken by it or them under or in
connection with the Loan Documents except for its or their own gross negligence
or willful misconduct. Neither the Agent nor any of its affiliates shall be
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any officer or
representative thereof contained in any Loan Document, or in any certificate,
report, statement or other document referred to or provided for in or received
by the Agent under or in connection with any Loan Document, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of any Loan
Document, or for any failure of the Borrower to perform its obligations under
any Loan Document, or for any recitals, statements, representations or
warranties made, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any collateral. The Agent shall not be under
any obligation to any of the Lenders to ascertain or to inquire as to the


                                      -37-
   43
observance or performance of any of the terms, covenants or conditions of any
Loan Document on the part of the Borrower or to inspect the properties, books or
records of the Borrower or its Subsidiaries.

      9.3. Reliance. The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent
certificate, affidavit, letter, cablegram, telegram, telefacsimile or telex
message, statement, order or other document or conversation reasonably believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Agent. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless an
Assignment and Acceptance shall have been filed with and accepted by the Agent.
The Agent shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first receive advice or concurrence of the
Lenders or the Required Lenders as provided in this Agreement or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense that may be incurred by it by reason of taking or continuing to take
any such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under the Loan Documents in accordance with a request
of the Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all present and
future holders of the Notes.

      9.4. Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Agent has received notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall promptly give notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders; provided that, unless and until
the Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Event of Default as it shall deem advisable in the best interests of the
Lenders.

      9.5. No Representations. Each Lender expressly acknowledges that neither
the Agent nor any of its affiliates has made any representations or warranties
to it and that no act by the Agent hereafter taken, including any review of the
affairs of the Borrower or its Subsidiaries, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon the Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the financial
condition, creditworthiness, affairs, status and nature of the Borrower and made
its own decision to enter into


                                      -38-
   44
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under the Loan Documents and to make such investigation as it deems necessary to
inform itself as to the status and affairs, financial or otherwise, of the
Borrower or its Subsidiaries. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the affairs, financial condition or
business of the Borrower or its Subsidiaries which may come into the possession
of the Agent or any of its Affiliates.

      9.6. Indemnification. Each of the Lenders agrees to indemnify the Agent in
its capacity as such (to the extent not reimbursed by the Borrower and without
limiting any obligations of the Borrower to do so), ratably according to the
respective principal amount of the Notes held by them (or, if no Notes are
outstanding, ratably in accordance with their respective Applicable Commitment
Percentages as then in effect) from and against any and all liabilities,
obligations, losses (excluding any losses suffered by the Agent as a result of
Borrower's failure to pay any fee owing to the Agent), damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may at any time (including without limitation at any time
following the payment of the Notes) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of any Loan Document or
any other Document contemplated by or referred to therein or the transactions
contemplated thereby or any action taken or omitted by the Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct. The
agreements in this subsection shall survive the payment of the Obligations and
the termination of this Agreement.

      9.7. The Agent in its Individual Capacity. With respect to its Advances
made or renewed by it and any Note issued to it, the Agent shall have the same
rights and powers under this Agreement as any Lender and may exercise the same
as though it were not the Agent, and the terms "Lender" and "Lenders" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Agent were not the Agent hereunder. The Agent may apply any amount obtained by
it through exercise of a right of banker's lien, set-off, counterclaim or
otherwise to satisfaction of any obligations owed it by the Borrower whether
under this Agreement or any Existing Loan Agreement and shall have the right to
determine the order in which amounts are applied to such obligations.


                                      -39-
   45
      9.8. Resignation. If the Agent shall resign as Agent under this Agreement,
then the Required Lenders may appoint, with the consent, so long as there shall
not have occurred and be continuing a Default or Event of Default, of the
Borrower, which consent shall not be unreasonably withheld, a successor Agent
for the Lenders, which successor Agent shall be a commercial bank organized
under the laws of the United States or any state thereof, having a combined
surplus and capital of not less than $500,000,000, whereupon such successor
Agent shall succeed to the rights, powers and duties of the former Agent and the
obligations of the former Agent shall be terminated and canceled, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Agreement; provided, however, that the former Agent's
resignation shall not become effective until such successor Agent has been
appointed and has succeeded of record to all right, title and interest in any
collateral held by the Agent; provided, further, that if the Required Lenders
and, if applicable, the Borrower cannot agree as to a successor Agent within
ninety (90) days after such resignation, the Agent shall appoint a successor
Agent that satisfies the criteria set forth above in this Section 9.8 for a
successor Agent and the parties hereto agree to execute whatever documents are
necessary to effect such action under this Agreement or any other Document
executed pursuant to this Agreement; provided, however, that in such event all
provisions of the Loan Documents shall remain in full force and effect. After
any retiring Agent's resignation hereunder as Agent, the provisions of this
Article IX shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.

      9.9. Sharing of Payments, Etc. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, set-off, counterclaim or
otherwise, obtain payment with respect to its Obligations (other than pursuant
to Article V) that results in its receiving more than its pro rata share of the
aggregate payments with respect to all of the Obligations (other than any
payment pursuant to Section 3.2 or 3.3), then (a) such Lender shall be deemed to
have simultaneously purchased from the other Lenders a share in their
Obligations so that the amount of the Obligations held by each of the Lenders
shall be pro rata and (b) such other adjustments shall be made from time to time
as shall be equitable to insure that the Lenders share such payments ratably;
provided, however, that for purposes of this Section 9.9, the term "pro rata"
shall be determined with respect to the Revolving Credit Commitment after
subtraction of amounts, if any, by which any such Lender has not funded its
share of the outstanding Advances and Obligations. If all or any portion of any
such excess payment is thereafter recovered from the Lender that received the
same, the purchase provided in this Section 9.9 shall be rescinded to the extent
of such recovery, without interest. The Borrower expressly consents to the
foregoing arrangements and agrees that each Lender so purchasing a portion of
the other Lenders' Obligations may exercise all rights of payment (including,
without limitation, all rights of set-off, banker's lien or counterclaim) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.


                                      -40-
   46
      9.10. Fees. The Borrower agrees to pay to the Agent, for its individual
account, an annual Agent's fee as from time to time agreed to by the Borrower
and Agent in writing.


                                    ARTICLE X

                                  MISCELLANEOUS

      10.1. Assignments and Participations. (a) At any time after the Closing
Date each Lender may, with the prior consent of the Borrower (so long as no
Event of Default has occurred and is continuing) and the Agent, which consents
shall not be unreasonably withheld, assign to one or more banks or financial
institutions all or a portion of its rights and obligations under the Loan
Documents (including, without limitation, all or a portion of any Note payable
to its order); provided, that (i) each such assignment shall be of a constant
and not a varying percentage of all of the assigning Lender's rights and
obligations hereunder, (ii) for each assignment involving the issuance and
transfer of a Note, the assigning Lender shall execute an Assignment and
Acceptance and the Borrower hereby agrees to execute a replacement Note to give
effect to the assignment, (iii) the minimum aggregate amount of a Revolving
Credit Commitment that shall be assigned is $5,000,000, (iv) such assignee shall
have an office located in the United States, and (v) no consent of the Borrower
or the Agent shall be required in connection with any assignment by a Lender to
another Lender or to an Affiliate of any Lender. Upon such execution, delivery,
approval and acceptance, from and after the effective date specified in each
Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder or under any such Note
have been assigned or negotiated to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and a holder
of such Note and (y) the assignor thereunder shall, to the extent that rights
and obligations hereunder or under such Note have been assigned or negotiated by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement.

            (b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) the assignment made
under such Assignment and Acceptance is made under such Assignment and
Acceptance without recourse; (ii) such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition of the Borrower or its Subsidiaries or the performance or observance
by the Borrower of any of its obligations under any Loan Document or any other
instrument or Document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements delivered pursuant to


                                      -41-
   47
Section 4.5 or Section 6.1, as the case may be, and such other Loan Documents
and other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Agent, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under any Loan Document; (v) such
assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under the Loan Documents as are delegated to
the Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of the Loan Documents are required to be performed by it as a Lender and a
holder of a Note.

            (c) The Agent shall maintain at its address referred to herein a
copy of each Assignment and Acceptance delivered to and accepted by it.

            (d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, the Agent shall give prompt notice thereof to Borrower.

            (e) Nothing herein shall prohibit any Lender from pledging or
assigning, without notice to or consent of the Borrower, any Note to any Federal
Reserve Bank in accordance with applicable law.

            (f) Each Lender may sell participations at its expense to one or
more banks or other entities as to all or a portion of its rights and
obligations under this Agreement; provided, that (i) such Lender's obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any Note issued to it
for the purpose of this Agreement, (iv) the Borrower, the Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
with regard to any and all payments to be made under this Agreement and (v) the
sale of any such participations that require Borrower to file a registration
statement with the Securities and Exchange Commission or under the securities
regulations or laws of any state shall not be permitted.

            (g) The Borrower may not assign any rights, powers, duties or
obligations under this Agreement or the other Loan Documents without the prior
written consent of all the Lenders.

      10.2. Survival of Representations, Etc. All representations, warranties
and covenants made herein or in any Loan Document shall survive the making of
any


                                      -42-
   48
Advance hereunder and the delivery of the Notes and the consummation of all
other transactions contemplated hereby or thereby.

      10.3. Right of Setoff. In addition to any rights now or hereafter granted
under applicable law or otherwise and not by way of limitation of any such
rights, upon the occurrence and during the unremedied continuation of an Event
of Default, the Agent and each Lender is hereby authorized at any time or from
time to time, without presentment, demand, protest or other notice of any kind
to the Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other indebtedness at any time held or owing by the Agent or
any Lender to or for the credit or the account of the Borrower against and on
account of the Obligations, and all other claims of any nature or description
arising out of or connected with this Agreement or any other Loan Document,
irrespective of whether or not such Agent or Lender shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.

      10.4. Indemnity; Costs, Expenses and Taxes. The Borrower hereby agrees to
indemnify the Lenders and their legal representatives, successors, assigns and
agents against, and agrees to protect, save and keep harmless each of them from
and to pay upon demand, any and all liabilities, obligations, taxes (including
any and all stamp and other taxes payable or determined to be payable in
connection with the execution and delivery of any Loan Documents), liens,
charges, losses, damages, penalties, claims, actions, suits, costs, indemnities,
expenses and disbursements (including, without limitation, reasonable legal
fees, costs and expenses, including without limitation reasonable costs of
attending and preparing for depositions and other court proceedings), of
whatsoever kind and nature, imposed upon, incurred by or asserted against such
indemnified party in any way relating to or arising out of the execution,
delivery, enforcement, performance and administration of this Agreement or any
other Loan Documents (all of the foregoing, collectively, "Costs") except to the
extent arising by reason of any Lender's gross negligence, misconduct or breach
hereof. Without limiting the foregoing, the Borrower agrees to pay on demand (a)
all out-of-pocket costs and expenses of the Agent in connection with the
preparation, execution and delivery of this Agreement and any other Loan
Documents, including without limitation the reasonable fees and out-of-pocket
expenses of Foley, Hoag & Eliot, special counsel for the Agent, with respect
thereto, as well as (b) the reasonable fees and all out-of-pocket expenses of
legal counsel, independent public accountants and other outside experts retained
by the Lenders in connection with any request by the Borrower for consents,
waivers or other action or forbearance by the Lenders hereunder, for the
modification or amendment hereof, or other like matters relating to the
administration of this Agreement; and (c) all reasonable costs and expenses, if
any, of the Lenders incurred after the occurrence of any Event of Default
hereunder in connection with the enforcement of any of the Loan Documents or the
protection of any of the Lenders' rights thereunder, including, without
limitation, any internal


                                      -43-
   49
costs, including personnel costs of the Lenders incurred in connection with such
administration and enforcement or protection.

      10.5. Notices.

            (a) Unless telephonic notice is specifically permitted pursuant to
the terms of this Agreement, any notice or other communication hereunder to any
party hereto shall be by telegram, telecopier, telex, delivery in hand or by
courier, or registered or certified mail (return receipt requested) and shall be
deemed to have been given or made when telegraphed, telexed, telecopied (and
confirmed received), delivered in hand or by courier, or three days after being
deposited in the mails, postage prepaid, registered or certified, addressed to
the party as follows (or at any other address that such party may hereafter
specify to the other parties in writing):

            (a)  If to the Agent:

                 The First National Bank of Boston
                 100 Federal Street
                 Boston, Massachusetts  02110
                 Attn:  Ms. Sharon A. Stone, Director
                 Telecopier No. (617) 434-4426

                 with a copy to:

                 Arlene L. Bender, Esq.
                 Foley, Hoag & Eliot
                 One Post Office Square
                 Boston, Massachusetts  02109
                 Telecopier No. (617) 832-7000

            (b)  If to the Borrower:

                 MKS Instruments, Inc.
                 Six Shattuck Road
                 Andover, Massachusetts  01810
                 Attn:  Mr. Robert F. O'Brien, Treasurer
                 Telecopier No. (508) 975-3756


                                      -44-
   50
                  with a copy to:

                  Richard S. Chute, Esq.
                  Hill & Barlow
                  One International Place
                  Boston, Massachusetts 02110
                  Telecopier No. (617) 428-3500

             (c)  if to the Lenders:

                  At the addresses set forth on the signature pages hereof
                  and on the signature page of each Assignment and
                  Acceptance.

      10.6. MASSACHUSETTS LAW. THIS AGREEMENT AND EACH OF THE LOAN DOCUMENTS
SHALL BE DEEMED A CONTRACT MADE UNDER THE LAW OF THE COMMONWEALTH OF
MASSACHUSETTS AND SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF SAID STATE (WITHOUT REGARD TO ITS PRINCIPLES OF
CONFLICT OF LAWS).

      10.7. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original and all of
which when taken together shall constitute one and the same instrument.

      10.8 JURISDICTION, SERVICE OF PROCESS.

            (a) ANY SUIT, ACTION OR PROCEEDING AGAINST THE BORROWER WITH RESPECT
TO ANY OF THE LOAN DOCUMENTS OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT OF
ANY THEREOF SHALL BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS
LOCATED IN SUFFOLK COUNTY OR IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN
DISTRICT OF MASSACHUSETTS, AS THE LENDERS (IN THEIR SOLE DISCRETION) MAY ELECT,
AND THE BORROWER HEREBY ACCEPTS THE EXCLUSIVE JURISDICTION OF SUCH COURTS FOR
THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING AND AGREES NOT TO ASSERT ANY CLAIM
THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS.

            (b) IN ADDITION, THE BORROWER HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION


                                      -45-
   51
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR ANY
JUDGMENT ENTERED BY ANY COURT IN RESPECT THEREOF BROUGHT IN SUFFOLK COUNTY IN
THE COMMONWEALTH OF MASSACHUSETTS, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY
CLAIM THAT ANY SUIT, ACTION OR PROCEEDING BROUGHT IN SUFFOLK COUNTY IN THE
COMMONWEALTH OF MASSACHUSETTS HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

      10.9. Limit on Interest. It is the intention of the Lenders and the
Borrower to comply strictly with all applicable usury laws; and, accordingly, in
no event and upon no contingency shall the Lenders ever be entitled to receive,
collect, or apply as interest under any Note any interest, fees, charges or
other payments equivalent to interest, in excess of the maximum rate that the
Lenders may lawfully charge under applicable statutes and laws from time to time
in effect; and, in the event that the Lenders ever receive, collect or apply as
interest on the Notes, any such excess, such amount that, but for this
provision, would be excessive interest shall be applied to the reduction of the
principal amount of the indebtedness evidenced by the Notes; and, if the
principal amount of indebtedness evidenced by the Notes, and all lawful interest
thereon, is paid in full, any remaining excess shall forthwith be paid to the
Borrower, or other party lawfully entitled thereto. In determining whether or
not the interest paid or payable, under any specific contingency exceeds the
highest contract rate permitted by applicable law from time to time in effect,
the Borrower and the Lenders shall, to the maximum extent permitted under
applicable law, characterize any non-principal payment as a reasonable loan
charge, rather than as interest. Any provision of any Note, or of any other
agreement between the Lenders and the Borrower, that operates to bind, obligate,
or compel the Borrower to pay interest in excess of such maximum lawful contract
rate shall be construed to require the payment of the maximum rate only. The
provisions of this Section 10.9 shall be given precedence over any other
provisions contained in the Notes or in any other agreement between the Lenders
and the Borrower that is in conflict with the provisions of this Section 10.9.

      10.10. Amendments. No amendment, modification or waiver of any provision
of any Loan Document and no consent by the Lenders to any departure therefrom by
the Borrower shall be effective unless such amendment, modification or waiver
shall be in writing and signed by the Agent, shall have been approved by the
Required Lenders through their written consent, and the same shall then be
effective only for the period and on the conditions and for the specific
instances and purposes specified in such writing; provided, however, that, no
such amendment, modification or waiver

            (i) that changes, extends or waives any provision of Section 3.1.4,
      Section 9.9 or this Section 10.10, the amount of or the due date of any
      scheduled principal installment of or the rate of interest payable on or
      fees


                                      -46-
   52
      payable with respect to any Obligation, that changes the definition of
      Required Lenders, that permits an assignment by the Borrower of its
      Obligations under any Loan Document, that reduces the required consent of
      the Lenders provided hereunder, that increases, decreases (other than
      pursuant to the express terms hereof) or extends (other than pursuant to
      the express terms hereof) the Revolving Credit Commitment of any Lender or
      the Total Revolving Credit Commitment or that waives any condition to the
      making of any Advance, shall be effective unless in writing and signed by
      each of the Lenders; or

            (ii) that affects the rights, privileges, immunities or indemnities
      of the Agent shall be effective unless in writing and signed by the Agent.

Notwithstanding any provision of the other Loan Documents to the contrary, as
between the Agent and the Lenders, execution by the Agent shall not be deemed
conclusive evidence that the Agent has obtained the written consent of the
Required Lenders. No notice to or demand on the Borrower in any case shall
entitle the Borrower to any other or further notice or demand in similar or
other circumstances, except as otherwise expressly provided herein. No delay or
omission on any Lender's or the Agent's part in exercising any right, remedy or
option shall operate as a waiver of such or any other right, remedy or option or
of any Default or Event of Default.

      10.11. Headings. The headings of this Agreement are for convenience only
and are not to affect the construction of or to be taken into account in
interpreting the substance of this Agreement.

      10.12. WAIVER OF NOTICE, ETC. THE BORROWER WAIVES DEMAND, NOTICE, PROTEST,
NOTICE OF ACCEPTANCE OF THIS AGREEMENT, NOTICE OF LOANS MADE, CREDIT EXTENDED,
COLLATERAL RECEIVED OR DELIVERED OR OTHER ACTION TAKEN IN RELIANCE HEREON AND
ALL OTHER DEMANDS AND NOTICE OF ANY DESCRIPTION, EXCEPT AS REQUIRED HEREBY. WITH
RESPECT BOTH TO THE OBLIGATIONS AND COLLATERAL, THE BORROWER ASSENTS TO ANY
EXTENSION OR POSTPONEMENT OF THE TIME OF PAYMENT OR ANY OTHER INDULGENCE, TO ANY
SUBSTITUTION, EXCHANGE OR RELEASE OF COLLATERAL, TO THE ADDITION OR RELEASE OF
ANY PARTY OR PERSONS PRIMARILY OR SECONDARILY LIABLE, TO THE ACCEPTANCE OF
PRETRIAL PAYMENT THEREON AND THE SETTLEMENT, COMPROMISING OR ADJUSTING OF ANY
THEREOF, ALL IN SUCH MANNER AND AT SUCH TIME OR TIMES AS THE LENDERS MAY DEEM
ADVISABLE. THE BORROWER AGREES THAT NO ACTIONS TAKEN BY ANY PERSON EXCEPT THE
LENDERS SHALL IMPAIR OR OTHERWISE AFFECT ITS OBLIGATIONS


                                      -47-
   53
HEREUNDER UNTIL ALL OBLIGATIONS OF THE BORROWER HEREUNDER ARE SATISFIED IN FULL.

      10.13. Severability. In the event that any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid, illegal or unenforceable provision had never
been contained herein.

      10.14. Entire Agreement. This Agreement and the other Loan Documents
constitute the full and entire understanding and agreement between the parties
with regard to the subject matter hereof and thereof and shall supersede all
prior agreements and understandings, whether written or oral, between the
parties with respect to the subject matter hereof and thereof.

      10.15. Compliance with Covenants. All computations determining compliance
with Articles 6 and 7 shall utilize accounting principles in conformity with
those used in the preparation of the financial statements referred to in Section
4.5. If any subsequent financial reports of the Borrower shall be prepared in
accordance with accounting principles different from those used in the
preparation of the financial statements referred to in Section 4.5, the Borrower
shall inform the Agent of the changes in accounting principles and shall provide
the Agent with such reports, such supplemental reconciling financial information
as may be required to ascertain compliance by the Borrower with the covenants
contained in this Agreement.

      10.16. Termination. This Agreement may be terminated by the Borrower at
any time upon written notice of such termination to the Agent; provided,
however, that, unless and until all loans made by the Lenders hereunder and all
other Obligations hereunder of the Borrower to any Lender existing (whether or
not due) as of the time of the receipt of such notice by the Agent shall have
been paid in full, such termination shall in no way affect the rights and powers
granted to the Lenders in connection with this Agreement, and until such payment
in full all rights and powers hereby granted to the Lenders hereunder shall be
and remain in full force and effect.

      10.17. WAIVER OF TRIAL BY JURY. THE BORROWER WAIVES ANY AND ALL RIGHTS
THAT IT MAY HAVE TO A TRIAL BY JURY ON ANY CLAIM OR ACTION, OF ANY NATURE
WHATSOEVER, RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS.


                                      -48-
   54
      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as an agreement under seal as of the date first above written.


Witness:                      MKS INSTRUMENTS, INC.



______________________        By:________________________________
                              Title:_____________________________


                              THE FIRST NATIONAL BANK OF BOSTON


                              By:________________________________
                              Title:_____________________________
                              Address:  100 Federal Street
                                        Boston, MA  02110


                              CHEMICAL BANK


                              By:________________________________
                              Title:_____________________________
                              Address:  c/o Chemical Connecticut
                                        Corporation
                                        3 Landmark Square, Suite 401
                                        Stamford, CT  06901


                                      -49-
   55
                                     EXHIBIT A



                                  Revolving           Applicable
                                  Credit              Commitment
         Lender                   Commitment          Percentage
         ------                   -----------         ----------
                                                
         The First National       $12,000,000                60%
          Bank of Boston

         Chemical Bank            $ 8,000,000                40%

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

                                  $20,000,000               100%



                                      -50-
   56
                                    EXHIBIT B

                        FORM OF ASSIGNMENT AND ACCEPTANCE

                        DATED __________________, ______

      Reference is made to the Loan Agreement dated as of February __, 1996 (the
"Agreement") among MKS Instruments, Inc., a Massachusetts corporation (the
"Borrower"), the Lenders (as defined in the Agreement), and The First National
Bank of Boston as Agent for the Lenders ("Agent"). Unless otherwise defined
herein, terms defined in the Agreement are used herein with the same meanings.

      ____________________ (the "Assignor") and _______________ (the "Assignee")
agree as follows:

      1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, WITHOUT RECOURSE, a _______%(1)
interest in and to all of the Assignor's rights and obligations under the
Agreement as of the Effective Date (as defined below), including, without
limitation, such percentage interest in the Advances owing to the Assignor on
the Effective Date and evidenced by the Revolving Credit Note held by the
Assignor.

      2. The Assignor (i) represents and warrants that, as of the date hereof,
the aggregate principal amount of Advances owing to it (without giving effect to
the assignments thereof which have not yet become effective) is $__________
under a Revolving Credit Note dated ____________, 19__ in the principal amount
of $_____________; (ii) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (iii) makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Agreement or any
of the Loan Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Agreement or any of the Loan Documents
or any other instrument or document furnished pursuant thereto; (iv) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any Subsidiary or the performance or
observance by the Borrower of any of its obligations under any of the Loan
Documents or any other instrument or document furnished pursuant thereto and (v)
attaches hereto the Revolving Credit Note referred to in Paragraph 1 above and
requests that the Agent exchange such Note for replacement Notes as follows: a
Revolving Credit Note dated ________________, 19___ in the principal amount of
$____________________, payable to the order of the Assignor, and a Revolving
Credit

_______________________

      (1) Specify percentage in no more than 4 decimal points. The minimum
Revolving Credit Commitment that shall be assigned is $5,000,000.
   57
Note, dated ____________________________ 19__, in the principal amount of
$__________________ , payable to the order of the Assignee.

      3. The Assignee (i) confirms that it has received a copy of the Agreement,
together with copies of the financial statements referred to in Section 4.5
thereof and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance upon
the Agent, the Assignor, or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Agreement; (iii)
appoints and authorizes the Agent to take such actions on its behalf and to
exercise such powers under the Loan Documents as are delegated to the Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto; (iv) will perform all of the obligations that by the terms of the
Agreement are required to be performed by the Lender; and (v) specifies as its
address for notices the office set forth beneath its name on the signature pages
hereof.

      4. The effective date for this Assignment and Acceptance shall be
____________________________ (the "Effective Date"). Following the execution of
this Assignment and Acceptance, it will be delivered to the Agent for approval
and acceptance and recording by the Agent.

      5. Upon such acceptance and recording, as of the Effective Date, (i) the
Assignee shall be a party to the Agreement and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and under the Loan Documents and (ii) the Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Agreement and the other Loan Documents.

      6. Upon such acceptance and recording, from and after the Effective Date,
the Agent shall make all payments under the Agreement and Note in respect of the
interest assigned hereby (including, without limitation, all payments of
principal, interest and fees with respect thereto) to the Assignee. The Assignor
and Assignee shall make all appropriate adjustments in payments under the
Agreement and the Note for periods prior to the Effective Date directly between
themselves.

      7. This Assignment and Acceptance shall be governed by and construed in
accordance with, the laws of the State of _________.

                                       [NAME OF ASSIGNOR)

                                       By:________________________________
                                           Name:__________________________
                                           Title:_________________________


                                      B-2
   58
                                       Notice Address:__________________________
                                                      __________________________
                                       After the Effective Date
                                       Outstanding Advances:  $_________________


                                       [NAME OF ASSIGNEE)

                                       By:______________________________________
                                           Name:________________________________
                                           Title:_______________________________

                                       Notice Address/Lending Office
                                                       _________________________
                                                       _________________________
                                                       _________________________

                                       Wire transfer Instructions:
                                                       _________________________
                                                       _________________________
                                                       _________________________
                                       After the Effective Date
                                       Outstanding Advances:  $_________________

                                       Accepted this _____ day of ________, 19__

                                       THE FIRST NATIONAL BANK OF BOSTON,
                                       as Agent


                                       By:______________________________________
                                           Name:________________________________
                                           Title:_______________________________

Consented to:

MKS INSTRUMENTS, INC.


By:________________________________
   Name:___________________________
   Title:__________________________


                                      B-3
   59
                                    EXHIBIT C

                              REVOLVING CREDIT NOTE

$______________                                            Boston, Massachusetts

                                                               February __, 1996


      FOR VALUE RECEIVED, MKS INSTRUMENTS, INC., a Massachusetts corporation
having its principal place of business located in Andover, Massachusetts (the
"Borrower"), hereby promises to pay to the order of
___________________________________________________ (the "Lender"), in its
individual capacity, at the office of THE FIRST NATIONAL BANK OF BOSTON, as
agent for the Lender (the "Agent"), located at 100 Federal Street, Boston,
Massachusetts (or at such other place or places as the Agent may designate in
writing) at the times set forth in the Loan Agreement dated as of February __,
1996 among the Borrower, the financial institutions party thereto (collectively,
the "Lenders") and the Agent (the "Agreement" -- all capitalized terms not
otherwise defined herein shall have the respective meanings set forth in the
Agreement), in lawful money of the United States of America, in immediately
available funds, the principal amount of ___________ DOLLARS ($__________) or,
if less than such principal amount, the aggregate unpaid principal amount of all
Advances made by the Lender to the Borrower pursuant to the Agreement, on the
Revolver Termination Date or such earlier date as may be required pursuant to
the terms of the Agreement, and to pay interest from the date hereof on the
unpaid principal amount hereof, in like money, at said office, on the dates and
at the rates provided in the Agreement. All or any portion of the principal
amount of Advances may be prepaid as provided in the Agreement.

      If payment of all sums due hereunder is accelerated under the terms of the
Agreement or under the terms of the other Loan Documents executed in connection
with the Agreement, the then remaining principal amount and accrued but unpaid
interest shall bear interest, which shall be payable on demand, at the rate per
annum set forth in Section 2.4.2 of the Agreement. Further, in the event of such
acceleration, this Revolving Credit Note shall become immediately due and
payable, without presentation, demand, protest or notice of any kind, all of
which are hereby waived by the Borrower.

      In the event this Revolving Credit Note is not paid when due at any stated
or accelerated maturity, the Borrower agrees to pay, in addition to the
principal and interest, all costs of collection, including reasonable attorneys'
fees, and interest thereon at the rates set forth above.

      Interest hereunder shall be computed as provided in the Agreement.
   60
      This Revolving Credit Note is one of the Revolving Credit Notes in the
aggregate principal amount of $20,000,000 referred to in the Agreement and is
issued pursuant to and entitled to the benefits of the Agreement to which
reference is hereby made for a more complete statement of the terms and
conditions upon which the Advances evidenced hereby were or are made and are to
be repaid. This Revolving Credit Note is subject to certain restrictions on
transfer or assignment as provided in the Agreement.

      No delay or omission on the part of the Lender in exercising any right
hereunder shall operate as a waiver of such right or of any other right of the
Lender, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. Every
maker, endorser and guarantor of this Revolving Credit Note or the obligations
represented hereby waives presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Revolving Credit Note, assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.

      IN WITNESS WHEREOF, the Borrower has caused this Revolving Credit Note to
be made, executed and delivered by its duly authorized representative under seal
as of the date and year first above written.


                                       MKS INSTRUMENTS, INC.

WITNESS:

___________________________            By:____________________________
___________________________               Name:_______________________
                                          Title:______________________


                                      C-2
   61
                                    EXHIBIT D

                         FORM OF COMPLIANCE CERTIFICATE



The First National Bank of Boston, as Agent
100 Federal Street
Boston, Massachusetts  02110
Attn:  Ms. Sharon A. Stone, Director

Ladies and Gentlemen:

      Pursuant to the provisions of Section 6.1(c) of the Loan Agreement (the
"Agreement") dated as of February __, 1996 by and between MKS Instruments, Inc.
(the "Borrower"), the Lenders (as defined in the Agreement) and The First
National Bank of Boston as Agent for the Lenders, the undersigned hereby
certifies in the name and on behalf of the Borrower as follows:

(A)   (1)   The Borrower has performed and maintained all of its obligations
            under the Agreement;

      (2)   The undersigned has caused the provisions of the Agreement to be
            reviewed and there is no Default or Event of Default thereunder,
            other than as set forth on the Disclosure Schedule attached hereto;

      (3)   No new action, suit or proceeding has been commenced, or threatened
            before any court, arbitration tribunal or governmental regulatory
            authority, commission, bureau, agency or public regulatory body
            that, if determined adversely to the Borrower or any Subsidiary of
            the Borrower, would be reasonably likely to have a material adverse
            effect on the consolidated financial condition or results of
            operations of the Borrower and its Subsidiaries taken as a whole,
            except as set forth on the Disclosure Schedule attached hereto;

      (4)   All of the representations and warranties set forth in the Agreement
            other than Sections 4.5 and 4.6 are true and correct except as a
            result of the changes in circumstances set forth on the Disclosure
            Schedule attached hereto;

      (5)   Since the end of the last fiscal year of the Borrower, there has
            been no material adverse change in the financial condition, business
            or results of operations of the Borrower and its Subsidiaries taken
            as a whole, except as set forth on the Disclosure Schedule attached
            hereto;


   62
      (6)   The financial statements submitted herewith are in compliance with
            the applicable provisions of Section 6.1 of the Agreement; and

      (7)   Said financial statements have been prepared in accordance with
            generally accepted accounting principles consistent with those
            applied in the preparation of the most recent annual financial
            statements furnished to the Lenders pursuant to Section 6.1 of the
            Agreement, present fairly in all material respects the information
            contained therein and the financial condition of the Borrower, and
            are correct in all material respects, subject in the case of
            statements furnished under Section 6.1(a) to normal year-end
            adjustments and the absence of certain footnotes required under
            generally accepted accounting principles.

(B)   The following calculations demonstrate that, based upon the financial
      statements of the Borrower submitted herewith, the Borrower is in
      compliance with all covenants set forth in Section 7.7 of the Agreement.


1.    Section 7.7(a) -- Tangible Net Worth
      Test

              (a)  Consolidated Tangible Net Worth         =    $____________

              (b)  50% of Consolidated Net Income
                   (excluding losses) for each
                   fiscal quarter beginning with the
                   fiscal quarter ending March 31,
                   1996, up to and including the
                   fiscal quarter last ended               =    $____________

              (c)  prior to an IPO:
                   (b) + $38,000,000
                   (which does not exceed
                   Consolidated Tangible Net Worth)        =    $____________

              (d)  after an IPO:
                   (c) + the net proceeds of the IPO
                   - the Sub S Dividend
                   (which does not exceed
                   Consolidated Tangible Net Worth)        =    $____________


                                      D-2
   63
         2.   Section 7.7(b) -- Debt-to-Net Worth
                   Ratio

              (a)  Consolidated Indebtedness
                   (excluding all guaranties except
                   guaranties with respect to
                   borrowed money) as of the end of
                   the fiscal quarter last ended           =    $____________

              (b)  Consolidated Tangible Net Worth
                   as of the end of the fiscal
                   quarter last ended                      =    $____________

              (c)  Ratio of (a) to (b)
                   (which is not more than 1.5 to 1)       =     ____________

         3.   Section 7.7(c) -- Cash Flow Ratio

              (a)  Consolidated Operating Cash Flow
                   for the four consecutive fiscal
                   quarters last ended                     =    $____________

              (b)  Consolidated Debt Service for the
                   four consecutive fiscal quarters
                   last ended                              =    $____________

              (c)  Ratio of (a) to (b)
                   (which is not less than 1.25 to
                   1.0)                                    =    $____________

              Terms defined in the Agreement and not otherwise expressly defined
         herein are used herein with the meanings set forth in the Agreement.

              In witness whereof, the undersigned has executed this Certificate
         on this ____ day of ________, 19___.

                                       MKS INSTRUMENTS, INC.


                                       By:___________________________________

                                       Name:_________________________________

                                       Title:    Chief Financial Officer


                                      D-3
   64
                               DISCLOSURE SCHEDULE

(1)   4.4   Capital Structure.

      a.    Capital Stock.

                                            Issued and
                     Authorized Capital     Outstanding      Treasury
          Class             Stock           Capital Stock      Stock
          -----     --------------------    -------------    --------
          Class A   10,000, no par value          2,454           0
          common

          Class B   10,000, no par value          3,250           0
          common

      b.    Subsidiaries of Borrower.

            (i)   MKS International, Inc.; Jurisdiction of Incorporation:
                  Massachusetts; Authorized Capital Stock: 300,000, $.01 par
                  value; Issued and Outstanding Capital Stock: 19,013;
                  Percentage of Equity Owned by Borrower: 70%

            (ii)  MKS East, Inc.; Jurisdiction of Incorporation: Massachusetts;
                  Authorized Capital Stock: 300,000, $.01 par value; Issued and
                  Outstanding Capital Stock: 1,000; Percentage of Equity Owned
                  by Borrower: 77.5%

            (iii) MKS Japan, Inc.; Jurisdiction of Incorporation: Japan;
                  Authorized Capital Stock: 2,000, Y50,000 par value; Issued and
                  Outstanding Capital Stock: 707; Percentage of Equity Owned by
                  Borrower: 77.5%

            (iv)  MKS Instruments Canada Limited; Jurisdiction of Incorporation:
                  Canada; Authorized Capital Stock: unlimited number; Issued and
                  Outstanding Capital Stock: 1,100; Percentage of Equity Owned
                  by Borrower: 77.5%

            (v)   MKS Instruments Deutschland GmbH; Jurisdiction of
                  Incorporation: Germany; Authorized Capital Stock: 1,200,000
                  DM; Issued and Outstanding Capital Stock: 1,200,000 DM;
                  Percentage of Equity Owned by Borrower: 77.5%
   65
            (vi)  MKS Instruments France, S.A.; Jurisdiction of Incorporation:
                  France; Authorized Capital Stock: 5,000; Issued and
                  Outstanding Capital Stock: 5,000; Percentage of Equity Owned
                  by Borrower: 77%

            (vii) MKS Korea Co., Ltd.; Jurisdiction of Incorporation: Republic
                  of Korea; Authorized Capital Stock: 20,000; Issued and
                  Outstanding Capital Stock: 5,000; Percentage of Equity Owned
                  by Borrower: 77.5%

            (viii) MKS Instruments, UK Limited; Jurisdiction of Incorporation:
                  United Kingdom; Authorized Capital Stock: 100; Issued and
                  Outstanding Capital Stock: 100; Percentage of Equity Owned by
                  Borrower: 75.0%

            (ix)  MKS FSC, Inc.; Jurisdiction of Incorporation: Barbados;
                  Authorized Capital Stock: 1,000; Issued and Outstanding
                  Capital Stock: 1,000; Percentage of Equity Owned by Borrower:
                  77.5%

      c.    Outstanding Options, Etc.

            On November 30, 1995, the Borrower adopted the MKS Instruments, Inc.
            1995 Stock Incentive Plan (the "Plan") pursuant to which options to
            purchase 192.1863 shares of Class B Common Stock of the Borrower
            have been granted. The option grants will not be effective until the
            Plan is adopted by the stockholders of the Borrower which has not
            yet occurred. The MKS Instruments, Inc. Stock Appreciation Plan, as
            amended, was terminated in its entirety, effective September 30,
            1995.

(2)   4.6   Pending Litigation.

            None.

(3)   4.11  Transactions with Affiliates, Etc.

            John R. Bertucci and Paul Utz, as lessors, lease on a month-to-month
            basis to the Borrower, as lessee, certain real estate in Santa
            Clara, California used by the Borrower as a sales and service
            facility. The current rent is approximately $57,696 per year.

(3)   4.12  ERISA.

            MKS Instruments, Inc. Profit-Sharing and Retirement Savings Plan


                                      -2-
   66
(4)   4.13  Ownership of Properties; Liens.

      (a)   Liens -- Borrower.

            (i)   Mortgage liens and security interests granted to Bank of
                  Boston on real property, fixtures, and certain other assets of
                  the Borrower.

            (ii)  Security interests granted to BancBoston Leasing, Inc. in
                  equipment leased by the Borrower.

            (iii) Security interests granted to certain lessors of equipment to
                  the Borrower, including Taylor of New England, Inc.,
                  Leasametric, Inc., Xerox Corporation, Pitney Bowes Credit
                  Corporation, and IBM Credit Corporation.

            (iv)  Liens granted to Leasing Associates, Inc. in certain
                  automobiles leased by the Borrower.

            (v)   Mortgage liens and security interests granted to Jefferson
                  National Life Insurance Company in connection with land owned
                  by Borrower in Boulder, Colorado.

            (vi)  Liens granted by UTI Instruments Company in its copying
                  machines and telephone system (UTI Instruments Company was
                  merged with and into the Borrower on November 17, 1995)

      (b)   Liens -- Subsidiaries.

            Liens granted by MKS Instruments France, S.A., MKS Investments
            Deutschland GmbH, and MKS Japan, Inc. on their respective land and
            buildings.

      (c)   Borrower's Material Leasehold Interests, Etc. See attachment.

(5)   4.14  Employment Matters.

            None.

(6)   4.16  Indebtedness.

      (a)   Indebtedness under the Existing Loan Agreements


                                      -3-
   67
      (b)   Loan Agreement with Chemical providing the Borrower with a revolving
            line of credit up to $3,000,000

      (c)   International Foreign Exchange Master Agreement dated as of June __,
            1995 by and between the Borrower and Chemical

      (d)   Guaranties as follows:

                  (i)   Guaranty by the Borrower of Indebtedness of MKS Japan,
                        Inc. to Fuji Bank and to Sanwa Bank.

                  (ii)  Guaranty by the Borrower of Indebtedness of MKS
                        Instruments Deutschland GmbH to Bank of Boston.

                  (iii) Guaranty by the Borrower of Indebtedness of MKS Korea
                        Co., Ltd. to Bank of Boston.

(7)   7.4  Investments.

            (a)   45,000 shares of common stock of Sycon Instruments, Inc.

            (b)   6,000 shares of common stock of Vacuum Technology, Inc.

            (c)   5,512 shares of Fuji Bank

            (d)   35,000 shares of common stock of Applied Science and
                  Technology, Inc.


                                      -4-
   68
                              MKS Instruments Inc.
                                Property Summary




                                                                                                Lease        Annual
            Location                Lease/Own      Size (sq. ft.)       Landlord                Expires      Rent

DOMESTIC LEASED

                                                                                            
100 Washington Street                 Lease             500        Candid Associates            Month-to-    $13,800
North Haven, CT                                                                                   Month

500 North Red Street St. 300          Lease             250        Centers of West Shore        Month-to-     $6,678
Tampa, FL                                                                                         Month

St. 409, 11350 McCormick Rd.          Lease             845        Hill Management               7/31/97     $18,455
Hunt Valley, MD

St. 100C, 100 Roessler Road           Lease             250        Executive Secretarial         9/30/98      $7,740
Pittsburgh, PA                                                     Service Inc.

St. 111, 113, 789 Grove St.           Lease            14,627      General America Life Ins.     8/31/98     $65,822
Richardson, TX                                                     Group

St. 101, 6700 SW 105th                Lease             415        Go Co Realty                  1/12/96      $6,078
Beaverton, OR

5601B Midway Park Place               Lease            3,400       Singer Development            5/31/96     $25,542
Albuquerque, NM                                                    Partnership

St. 311, 6650 Highland Road           Lease             300        Superior Contracting         Month-to-     $7,200
Waterford, MI                                                      Corp.                          Month

St. 215, 3019 Alvin Devane Blvd.      Lease            4,144       H.R.C. Joint Venture L.P.     6/30/98     $35,814
Austin, TX                                                         & Austin Bell
                                                                   Tower Investment Co.

Bldg. 3, 3350 Scott Blvd.             Lease            4,000       Utz/Bertucci                  4/30/98     $57,696
Santa Clara, CA

24 Walpole Park South Dr.             Lease            20,084      Walpole Park South II         3/31/97    $100,420
Walpole, MA                                                        Trust

Unit A, 13341 Southwest Hwy.          Lease             300        Southwest Investment          8/31/97      $6,420
Orland Park, IL

Mill Building 7,250 Canal St.         Lease            4,000       Andrea Management             4/30/98      $8,000
Lawrence, MA

5330 Sterling Drive                   Lease            39,032      Aspen Industrial Park         10/31/98   $341,530
Boulder, CO                                                        Partnership

3844 E. University Drive              Lease            15,457      The Hewson Company            7/31/00    $115,000
Phoenix, AZ

119 Main Street                       Lease             272        Large Sammell &              Month-to-     $4,200
Flemington, NJ                                                     Danziger                       Month

1815 W. First Ave. Suite 119          Lease            1,523       Tri-City Commerce             06/30/96     $7,070
Mesa, AZ                                                           Center

550 N. Reo Street                     Lease             300        JFG Associates               Month-to-     $6,678
Tampa, FL                                                                                         Month

7978 Victor-Pittsford Road            Lease             300        Eastview Office Park          10/31/96     $6,000
Victor, NY                                                         WBW Assoc.

   69


                                                                                                   Lease         Annual
            Location                     Lease/Own    Size (sq. ft.)            Landlord           Expires       Rent
                                                                                                  
10220 SW Nimbus                            Lease          2,168       Petula Assoc. Ltd. & Koll     12/31/98           $26,928
Portland, OR                                                          Portland Assoc.

DOMESTIC LEASED

2030 Fortune Drive Suite C                 Lease          35,873      South Bay/Copley Assoc.       2/14/98           $277,656
San Jose, CA                                                          III

3722 Lehigh Street Suite 410               Lease          1,055       Jason C. and Marcus K.        12/31/96            $8,440
Whitehall, PA                                                         Danweber

DOMESTIC OWED

3189 E. Airway Ave.                         Own           3,500
Costa Mesa, CA

3350 Scott Blvd. Bldg. 4                    Own           5,000
Santa Clara, CA

Six Shattuck Road                           Own           82,000
Andover, MA

651 Lowell Street                           Own           85,000
Methuen, MA

17 Ballard Way                              Own           40,000
Lawrence, MA

FOREIGN LEASED

4c Jingnuin Bldg.                          LEASE         156.9 SM     Silicon Int'l Ltd.            04/10/96           $66,000
Shanghai, China

174 Cleopatra Drive                        Lease           100                                     Month-to-           C$1,540
Nepean, Ontario, Canada K2G5X2                                                                       Month      

2nd flr. Zeus Bldg. 3-16 Yangjag Dong      Lease        123.57 SM                                   10/31/96        W7,200,000
Seocho-Ku, Seoul Korea

988-1 Bangbac - Dong                       Lease          112 SM                                    12/11/96        W1,608,000
Seocho-Ku, Seoul Korea
                                                                                                               (pound
2 St. Georges Ct.                          Lease           2191                                                sterling)17,500
Altincham, Cheshire, England

Rudower Chaussee 5                         Lease          43 SM                                      09/99             DM8,000
D-12484 Berlin, Germany

Kalfjeslaan 40                             Lease          135 SM                                     12/97            DM30,000
NL-2623 AJ Delft, Germany

5-17-13 Narita-higeshi                     Lease          10,481                                               (Yen)50,160,480
Suginami-ku, Tokyo, Japan

4-1-45, Miyahara                           Lease          1,722                                                 (Yen)7,158,600
Yodogawa-ku, Osaka-shi, Osaka, Japan

1-14-3 Hakataeki East, Hakata-ku           Lease          1,250                                                 (Yen)5,136,000
Fukuoka-shi, Fukuoka, Japan

1-34-6 Izumicyo, Izumi-ku                  Lease           610                                                  (Yen)2,162,160
Sendel-shi, Miyagi, Japan

1-1-14 Fujishirodal                        Lease           992                                                  (Yen)2,172,000
Suita-shi, Osaka, Japan

   70


                                                                             Lease      Annual
                 Location         Lease/Own    Size (sq. ft.)    Landlord    Expires    Rent
                                                                         
1-4-6 Honcho Aoba-ku                Lease           484                               (Yen)1,029,600
Sendai-shi, Miyagi

FOREIGN OWNED

108-30 Concourse Gate                Own           1,700                                     C$6,060
Nepean, Ontario, Canada K2E7U7                                                            Condo fees

43 Rue Du Cdt Rolland                Own           13,680
93350 - Le Bourget

Schatzbogen 43                       Own          1,310 SM
D-81829 Munchen, Germany

1-20-32, Miyamae                     Own           6,671
Suginami-ku, Tokyo

   71
                              MKS INSTRUMENTS, INC.

                           WAIVER AND FIRST AMENDMENT

                                TO LOAN AGREEMENT


         This Waiver and First Amendment (the "Waiver and Amendment") dated as
of October 18, 1996 concerns the Loan Agreement dated as of February 23, 1996
(the "Loan Agreement"), among MKS Instruments, Inc. (the "Borrower"), The First
National Bank of Boston and The Chase Manhattan Bank (f/k/a Chemical Bank)
(together, the "Lenders"). Capitalized terms used herein but not otherwise
defined shall have the meanings assigned to them in the Loan Agreement.

         WHEREAS, the Borrower has requested that the Lenders waive certain
Events of Default; and

         WHEREAS, the Lenders are willing, on the terms, subject to the
conditions and to the extent set forth below, to grant such a waiver;

         NOW, THEREFORE, the Lenders and the Borrower agree as follows:

         Section 1. Waiver. The Lenders hereby waive the Events of Default under
Section 8.1(g), (k) and (l) of the Loan Agreement resulting from Borrower's
failure to meet the financial covenants set forth In Section 7.7(b) and (c) of
the Loan Agreement as of the end of the fiscal quarter ended June 30, 1996.

         Section 2. Amendment to the Loan Agreement.

                  (a) Section 2.4.1. of the Loan Agreement is hereby amended by
deleting the existing language and substituting the following:

                  2.4.1. The Borrower agrees to pay interest in respect of the
         unpaid principal amount of each Advance from the date the proceeds
         thereof are made available to the Borrower until maturity (whether by
         acceleration, voluntary prepayment or otherwise) as follows. Each
         Advance shall bear interest at the Base Rate in effect from time to
         time unless the Borrower elects and qualifies to pay interest on such
         Advance at the following rate (the "Adjusted LIBOR Rate"):

                           (i) During any period in which the Borrower maintains
                  a Debt-to-Net Worth Ratio of less than 1 to 1:

                                    (a) and a Cash Flow Ratio of less than 1.40
                           to 1, the LIBOR Rate plus 1.65%;
   72
                                    (b) and a Cash Flow Ratio of 1.40 to 1 or
                           greater but less than 1.75 to 1, the LIBOR Rate plus
                           1.125%;

                                    (c) and a cash Flow Ratio of 1.75 to 1 or
                           greater up to and including 2.5 to 1, the LIBOR Rate
                           plus .875%; or

                                    (d) and a Cash Flow Ratio in excess of 2.5
                           to 1, the LIBOR Rate plus .625%;

                           (ii) During any period in which the Borrower
                  maintains a Debt-to-Net Worth Ratio of 1 to 1 or more but less
                  than or equal to 1.5 to 1:

                                    (a) and a Cash Plow Ratio of less than 1.40
                           to 1, the LIBOR Rate plus 1.65%;

                                    (b) and a Cash Flow Ratio of 1.40 to 1 or
                           greater but less than 1.75 to 1, the LIBOR Rate plus
                           1.25%;

                                    (c) and a Cash Flow Ratio of 1.75 to 1 or
                           greater up to and including 2.5 to 1, the LIBOR Rate
                           plus 1.00%; or

                                    (d) and a Cash Flow Ratio in excess of 2.5
                           to 1, the LIBOR Rate plus .75%.

         Section 3. Representations and Warranties. The Borrower hereby
represents and warrants as follows:

                  (a) The execution and delivery of this Waiver and Amendment
and the performance or this Waiver and Amendment, the Loan Agreement as amended
hereby and each of the other Loan Documents, and the transactions contemplated
hereby and thereby, have been authorized by all necessary corporate actions of
the Borrower. This Waiver and Amendment, the Loan Agreement as amended hereby
and each of the other Loan Documents constitute the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
their respective terms.

                  (b) The Borrower has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Waiver and
Amendment, the Loan Agreement as amended hereby and each or the other Loan
Documents. Neither the authorization, execution, delivery or performance by the
Borrower of this Waiver and Amendment nor the performance of the Loan Agreement
as amended hereby or any other Loan Document nor the performance of the
transactions contemplated hereby or thereby violates or will violate any
provision of the corporate charter or by-laws of the Borrower, or does or will,
with the passage of time or the giving of notice or both, result in a breach of
or a default under, or require any consent under or result in the creation of
any lien, charge or encumbrance upon any property or assets of the Borrower
pursuant to, any material instrument, agreement or other


                                       -2-
   73
document to which the Borrower is a party or by which the Borrower or any of its
properties may be bound or affected.

                  (c) The execution and delivery by the Borrower of this Waiver
and Amendment and the performance by the Borrower of the Loan Agreement as
amended hereby and the Loan Documents do not and will not violate any provision
of law or regulation applicable to the Borrower, or any writ, order or decree of
any court or governmental or regulatory authority or agency applicable to the
Borrower.

         Section 4. Loan Documents. This Waiver and Amendment shall be a Loan
Document for all purposes.

         Section 5. Conditions to Effectiveness. The effectiveness of this
Waiver and Amendment is conditioned on the following:

                  (a) The Borrower and the Lenders shall each have executed and
delivered a counterpart of this Waiver and Amendment;

                  (b) The representations and warranties contained in Article IV
of the Loan Agreement shall be true and correct in all material respects as of
the date hereof as though made on and as of the date hereof; and

                  (c) No Default or Event of Default under the Loan Agreement
shall have occurred and be continuing other than the Events of Default described
in Section 1 hereof.

         Section 6. Miscellaneous.

                  (a) On and after the date hereof, each reference in the Loan
Agreement to "this Agreement" or words of like import shall mean and be deemed
to be a reference to the Loan Agreement as amended hereby.

                  (b) Except as amended and modified hereby, the Loan Agreement
is in all respects ratified and confirmed as of the date hereof, and the terms,
covenants and agreements therein shall remain in full force and effect.

                  (c) This Waiver and Amendment and the modifications to the
Loan Agreement set forth herein shall be deemed to be a document executed under
seal and shall be governed by and construed in accordance with the laws of The
Commonwealth of Massachusetts.

                  (d) This Waiver and Amendment may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.


                                       -3-
   74
         IN WITNESS WHEREOF, the parties have caused this Waiver and Amendment
to be duly executed as of the date and the year first above written.

                                            MKS INSTRUMENTS, INC.



                                            By:______________________________
                                            Title:___________________________


                                            THE FIRST NATIONAL BANK OF BOSTON


                                            By:______________________________
                                            Title:___________________________


                                            THE CHASE MANHATTAN BANK

                                            By:______________________________
                                            Title:___________________________



                                       -4-
   75
                                     WAIVER

         This Waiver (the "Waiver") dated as of October 18, 1996 concerns the
Loan Agreement dated as of November 1, 1993, as amended (the "1993 Loan
Agreement"), between MKS Instruments, Inc. (the "Borrower") and The First
National Bank of Boston (the "Lender') and the Loan Agreement dated as of
October 31, 1995, as amended (the "1995 Loan Agreement") between the Borrower
and the Lender. Capitalized terms used herein but not otherwise defined shall
have the meanings assigned to them in the 1993 and 1995 Loan Agreements.

         The Lender hereby waives the Events of Default under Section 9.1(g),
(k) and (l) of the 1993 Loan Agreement and under Section 8.1(g), (k) and (l) of
the 1995 Loan Agreement resulting from (1) Borrower's failure to meet the
financial covenants set forth in Section 8.7(b) and (c) of the 1993 Loan
Agreement and Section 7.7(b) and (c) of the 1995 Loan Agreement as of the end of
the fiscal quarter ended June 30, 1996 and (2) the Event of Default that has
occurred under Section 8.1(g), (k) and (l) of the Loan Agreement dated as of
February 23, 1996 among the Borrower, the Lender and The Chase Manhattan Bank
(f/k/a Chemical Bank) as a result of Borrower's failure to met the financial
covenants set forth in Section 7.7(b) and (c) of such Loan Agreement as of the
end of the fiscal quarter ended June 30, 1996.

         Except for the above waiver, the 1993 and 1995 Loan Agreements are in
all respects ratified and confirmed as of the date hereof, and the terms,
covenants and agreements therein shall remain in full force and effect.

         IN WITNESS WHEREOF, the Lender has caused this Waiver to be duly
executed as of the date and the year first above written.

                                          THE FIRST NATIONAL BANK OF BOSTON



                                          By:___________________________________
                                          Title:________________________________
   76
                              MKS INSTRUMENTS, INC.

                           WAIVER AND SECOND AMENDMENT

                                TO LOAN AGREEMENT

         This Waiver and Second Amendment (the "Waiver and Amendment") dated as
of February 4, 1997 concerns the Loan Agreement dated as of February 23, 1996
(the "Loan Agreement"), among MKS Instruments, Inc. (the "Borrower"), The First
National Bank of Boston and The Chase Manhattan Bank (f/k/a Chemical Bank)
(together, the "Lenders"). Capitalized terms used herein but not otherwise
defined shall have the meanings assigned to them in the Loan Agreement.

         WHEREAS, the Borrower has requested that the Lenders waive certain
Events of Default; and

         WHEREAS, the Lenders are willing, on the terms, subject to the
conditions and to the extent set forth below, to grant such a waiver;

         NOW, THEREFORE, the Lenders and the Borrower agree as follows:

         Section 1. Waiver. The Lenders hereby waive the Events of Default under
Section 8.1(g), (k) and (l) of the Loan Agreement resulting from Borrower's
failure to meet the financial covenant set forth in Section 7.7(c) of the Loan
Agreement as of the end of the fiscal quarters ended September 30 and December
31, 1996.

         Section 2. Amendment to the Loan Agreement.

         (a) Section 2.4.1. of the Loan Agreement is hereby amended by adding
the following at the end thereof:

                  Notwithstanding the preceding clauses (i) and (ii), from June
                  30,1996 through June 30, 1997, the Adjusted LIBOR Rate shall
                  be the LIBOR Rate plus 1.65%.

         (b) Section 7.7(c) of the Loan Agreement is hereby amended by deleting
the existing language and substituting the following:

         (c) Cash Flow Ratio. The ratio ("Cash Flow Ratio") of Consolidated 
Operating Cash Flow to Consolidated Debt Service:

                                    (1) for the Borrower's fiscal quarter ending
                           March 31, 1997, shall not be less than 1.25 to 1.00;

                                    (2) for the Borrower's two consecutive
                           fiscal quarters ending June 30, 1997, shall not be
                           less than 1.00 to 1.00;
   77
                                    (3) for the Borrower's three consecutive
                           fiscal quarters ending September 30, 1997, shall not
                           be less than 1.25 to 1.00; and

                                    (4) for the Borrower's four consecutive
                           fiscal quarters ending December 31, 1997 and for each
                           series of four consecutive fiscal quarters of the
                           Borrower ending after December 31, 1997, shall not be
                           less than 1.25 to 1.00.

         Section 3. Fees. The Borrower shall pay to the Agent, for the pro rata
benefit of the Lenders based on their Applicable Commitment Percentages, a fee
of $25,000 on the date of this Waiver and Amendment. If the parties agree to
another amendment of the Loan Agreement prior to the date 180 days after the
date of this Waiver and Amendment, the Lenders agree to reduce by $8,000 the fee
that would otherwise be required to induce the Lenders to agree to such
amendment.

         Section 4. Representations and Warranties. The Borrower hereby
represents and warrants as follows:

                  (a) The execution and delivery of this Waiver and Amendment
and the performance of this Waiver and Amendment, the Loan Agreement as amended
hereby and each of the other Loan Documents, and the transactions contemplated
hereby and thereby, have been authorized by all necessary corporate actions of
the Borrower. This Waiver and Amendment, the Loan Agreement as amended hereby
and each of the other Loan Documents constitute the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
their respective terms.

                  (b) The Borrower has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Waiver and
Amendment, the Loan Agreement as amended hereby and each of the other Loan
Documents. Neither the authorization, execution, delivery or performance by the
Borrower of this Waiver and Amendment nor the performance of the Loan Agreement
as amended hereby or any other Loan Document nor the performance of the
transactions contemplated hereby or thereby violates or will violate any
provision of the corporate charter or by-laws of the Borrower, or does or will,
with the passage of time or the giving of notice or both, result in a breach of
or a default under, or require any consent under or result in the creation of
any lien, charge or encumbrance upon any property or assets of the Borrower
pursuant to, any material instrument, agreement or other document to which the
Borrower is a party or by which the Borrower or any of its properties may be
bound or affected.


                                       -2-
   78
                  (c) The execution and delivery by the Borrower of this Waiver
and Amendment and the performance by the Borrower of the Loan Agreement as
amended hereby and the Loan Documents do not and will not violate any provision
of law or regulation applicable to the Borrower, or any writ, order or decree of
any court or governmental or regulatory authority or agency applicable to the
Borrower.

         Section 5. Loan Documents. This Waiver and Amendment shall be a Loan
Document for all purposes.

         Section 6. Conditions to Effectiveness. The effectiveness of this
Waiver and Amendment is conditioned on the following:

                  (a) The Borrower and the Lenders shall each have executed and
delivered a counterpart of this Waiver and Amendment;

                  (b) The representations and warranties contained in Article IV
of the Loan Agreement shall be true and correct in all material respects as of
the date hereof as though made on and as of the date hereof;

                  (c) No Default or Event of Default under the Loan Agreement
shall have occurred and be continuing other than the Events of Default described
in Section 1 hereof; and

                  (d) The Borrower's audited consolidated financial statements
for the year ended December 31, 1996 shall not differ in any materially adverse
respect from the Borrower's unaudited consolidated financial statements for the
year ended December 31, 1996, which the Borrower has provided to the Lenders and
upon which the Lenders have relied in agreeing to this Waiver and Amendment.

         Section 7. Miscellaneous.

                  (a) On and after the date hereof, each reference in the Loan
Agreement to "this Agreement" or words of like import shall mean and be deemed
to be a reference to the Loan Agreement as amended hereby.

                  (b) Except as amended and modified hereby, the Loan Agreement
is in all respects ratified and confirmed as of the date hereof, and the terms,
covenants and agreements therein shall remain in full force and effect.

                  (c) This Waiver and Amendment and the modifications to the
Loan Agreement set forth herein shall be deemed to be a document executed under
seal and shall be governed by and construed in accordance with the laws of The
Commonwealth of Massachusetts.


                                       -3-
   79
                  (d) This Waiver and Amendment may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.

         IN WITNESS WHEREOF, the parties have caused this Waiver and Amendment
to be duly executed as of the date and the year first above written.

                                            MKS INSTRUMENTS, INC.



                                            By:_________________________________
                                            Title:______________________________


                                            THE FIRST NATIONAL BANK OF BOSTON


                                            By:_________________________________
                                            Title:______________________________


                                            THE CHASE MANHATTAN BANK

                                            By:_________________________________
                                            Title:______________________________


                                       -4-

   1
                                                                   EXHIBIT 10.14
      


                              REVOLVING CREDIT NOTE


$8,000,000                                                 Boston, Massachusetts

                                                               February 23, 1996


         FOR VALUE RECEIVED, MKS INSTRUMENTS, INC., a Massachusetts corporation
having its principal place of business located in Andover, Massachusetts (the
"Borrower"), hereby promises to pay to the order of CHEMICAL BANK (the
"Lender"), in its individual capacity, at the office of THE FIRST NATIONAL BANK
OF BOSTON, as agent for the Lender (the "Agent"), located at 100 Federal Street,
Boston, Massachusetts (or at such other place or places as the Agent may
designate in writing) at the times set forth in the Loan Agreement dated as of
February 23, 1996 among the Borrower, the financial institutions party thereto
(collectively, the "Lenders") and the Agent (the "Agreement" -- all capitalized
terms not otherwise defined herein shall have the respective meanings set forth
in the Agreement), in lawful money of the United States of America, in
immediately available funds, the principal amount of EIGHT MILLION DOLLARS
($8,000,000) or, if less than such principal amount, the aggregate unpaid
principal amount of all Advances made by the Lender to the Borrower pursuant to
the Agreement, on the Revolver Termination Date or such earlier date as may be
required pursuant to the terms of the Agreement, and to pay interest from the
date hereof on the unpaid principal amount hereof, in like money, at said
office, on the dates and at the rates provided in the Agreement. All or any
portion of the principal amount of Advances may be prepaid as provided in the
Agreement.

         If payment of all sums due hereunder is accelerated under the terms of
the Agreement or under the terms of the other Loan Documents executed in
connection with the Agreement, the then remaining principal amount and accrued
but unpaid interest shall bear interest, which shall be payable on demand, at
the rate per annum set forth in Section 2.4.2 of the Agreement. Further, in the
event of such acceleration, this Revolving Credit Note shall become immediately
due and payable, without presentation, demand, protest or notice of any kind,
all of which are hereby waived by the Borrower.

         In the event this Revolving Credit Note is not paid when due at any
stated or accelerated maturity, the Borrower agrees to pay, in addition to the
principal and interest, all costs of collection, including reasonable attorneys'
fees, and interest thereon at the rates set forth above.

         Interest hereunder shall be computed as provided in the Agreement.

         This Revolving Credit Note is one of the Revolving Credit Notes in the
aggregate principal amount of $20,000,000 referred to in the Agreement and is
issued
   2
pursuant to and entitled to the benefits of the Agreement to which reference is
hereby made for a more complete statement of the terms and conditions upon which
the Advances evidenced hereby were or are made and are to be repaid. This
Revolving Credit Note is subject to certain restrictions on transfer or
assignment as provided in the Agreement.

         No delay or omission on the part of the Lender in exercising any right
hereunder shall operate as a waiver of such right or of any other right of the
Lender, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. Every
maker, endorser and guarantor of this Revolving Credit Note or the obligations
represented hereby waives presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Revolving Credit Note, assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.

         IN WITNESS WHEREOF, the Borrower has caused this Revolving Credit Note
to be made, executed and delivered by its duly authorized representative under
seal as of the date and year first above written.

                                          MKS INSTRUMENTS, INC.

WITNESS:
                                          By:_______________________________
__________________________                Name:____________________________
__________________________                Title:_____________________________


                                      -2-

   1
                                                                   EXHIBIT 10.15


                              REVOLVING CREDIT NOTE

$12,000,000                                                Boston, Massachusetts

                                                               February 23, 1996


         FOR VALUE RECEIVED, MKS INSTRUMENTS, INC., a Massachusetts corporation
having its principal place of business located in Andover, Massachusetts (the
"Borrower"), hereby promises to pay to the order of THE FIRST NATIONAL BANK OF
BOSTON (the "Lender"), in its individual capacity, at the office of THE FIRST
NATIONAL BANK OF BOSTON, as agent for the Lender (the "Agent"), located at 100
Federal Street, Boston, Massachusetts (or at such other place or places as the
Agent may designate in writing) at the times set forth in the Loan Agreement
dated as of February 23, 1996 among the Borrower, the financial institutions
party thereto (collectively, the "Lenders") and the Agent (the "Agreement" --
all capitalized terms not otherwise defined herein shall have the respective
meanings set forth in the Agreement), in lawful money of the United States of
America, in immediately available funds, the principal amount of TWELVE MILLION
DOLLARS ($12,000,000) or, if less than such principal amount, the aggregate
unpaid principal amount of all Advances made by the Lender to the Borrower
pursuant to the Agreement, on the Revolver Termination Date or such earlier date
as may be required pursuant to the terms of the Agreement, and to pay interest
from the date hereof on the unpaid principal amount hereof, in like money, at
said office, on the dates and at the rates provided in the Agreement. All or any
portion of the principal amount of Advances may be prepaid as provided in the
Agreement.

         If payment of all sums due hereunder is accelerated under the terms of
the Agreement or under the terms of the other Loan Documents executed in
connection with the Agreement, the then remaining principal amount and accrued
but unpaid interest shall bear interest, which shall be payable on demand, at
the rate per annum set forth in Section 2.4.2 of the Agreement. Further, in the
event of such acceleration, this Revolving Credit Note shall become immediately
due and payable, without presentation, demand, protest or notice of any kind,
all of which are hereby waived by the Borrower.

         In the event this Revolving Credit Note is not paid when due at any
stated or accelerated maturity, the Borrower agrees to pay, in addition to the
principal and interest, all costs of collection, including reasonable attorneys'
fees, and interest thereon at the rates set forth above.

         Interest hereunder shall be computed as provided in the Agreement.

         This Revolving Credit Note is one of the Revolving Credit Notes in the
aggregate principal amount of $20,000,000 referred to in the Agreement and is
issued pursuant to and entitled to the benefits of the Agreement to which
reference is
   2
hereby made for a more complete statement of the terms and conditions upon which
the Advances evidenced hereby were or are made and are to be repaid. This
Revolving Credit Note is subject to certain restrictions on transfer or
assignment as provided in the Agreement.

         No delay or omission on the part of the Lender in exercising any right
hereunder shall operate as a waiver of such right or of any other right of the
Lender, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. Every
maker, endorser and guarantor of this Revolving Credit Note or the obligations
represented hereby waives presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Revolving Credit Note, assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.

         IN WITNESS WHEREOF, the Borrower has caused this Revolving Credit Note
to be made, executed and delivered by its duly authorized representative under
seal as of the date and year first above written.

                                          MKS INSTRUMENTS, INC.

WITNESS:
                                          By:______________________________
____________________________              Name:___________________________
____________________________              Title:____________________________


                                      -2-

   1
                                                                   EXHIBIT 10.16



                                 PROMISSORY NOTE

$475,000.00                                                     August ___, 1990
                                                                Denver, Colorado

         FOR VALUE RECEIVED, the undersigned, M.K.S. Instruments, Inc., a
Massachusetts Corporation, hereinafter collectively referred to as "Maker,"
whose address is 6 Shattuck Road, Andover, Massachusetts 01810, promises to pay
to the order of Jefferson National Life Insurance Company, an Indiana
corporation and/or Its Assigns (hereinafter referred to as "Holder," which term
shall include any subsequent holder of this Note), at its office at One Virginia
Ave., Indianapolis, Indiana 46204-3655 (or at such other place as Holder shall
designate in writing) in lawful money of the United States of America, the
principal sum of FOUR HUNDRED SEVENTY-FIVE THOUSAND AND NO/100 DOLLARS
($475,000.00), with interest thereon from the date hereof as hereinafter set
forth.

         1. General Definitions. As used herein the following terms shall have
the indicated meanings (definitions appear in alphabetical order and defined
terms used within definitions are defined in the appropriate alphabetical place
in this Paragraph 1):

                  (a) Deed Of Trust: The Deed of Trust dated of even date
herewith, from M.K.S. Instruments Inc., a Massachusetts corporation, as Grantor,
to the Public Trustee of the County of Boulder, Colorado, as Trustee, for the
use and benefit of Holder, as Beneficiary, encumbering the Property and securing
this Note.

                  (b) Default Rate: The interest rate equal to eighteen percent
(18%) per annum.

                  (c) Maturity Date: September 1, 2000, unless such maturity
date is sooner accelerated upon the occurrence of an event of default hereunder
or under any of the other Loan Documents.

                  (d) Interest Rate: The interest rate shall be fixed at the
rate of ten and three quarters percent (10.75%) per annum during the entire ten
(10) year term of the loan.

                  (e) Loan Documents: Collectively, this Note, the Deed of Trust
and all other documents and instruments executed by or on behalf of Maker, or
either of them, evidencing, securing or relating to the loan evidenced by this
Note, as the same may be amended from time to time.

                  (f) Loan Term: The period of time commencing on the date
hereof and terminating on the Maturity Date.
   2
                  (g) Outstanding Principal Balance: The principal amounts from
time to time outstanding under this Note during the Loan Term.

                  (h)Property: The Real Estate together with all fixtures,
equipment and machinery now or hereafter owned by Grantor and actually or
constructively attached to the subject property, all present and future leases
and rents in respect thereof, and as otherwise included in the definition of
"Property" in the Deed of Trust, but not including any business assets of any
tenant or of the Maker.

                  (i) Real Estate: The real property located in the County of
Boulder, State of Colorado, encumbered by the Deed of Trust and more
particularly described therein.

         2. Terms of Loan.

                  (a) Interest Rate: Commencing on the date hereof and
continuing until the Maturity Date, interest shall accrue on the Outstanding
Principal Balance at a rate per annum equal to the Interest Rate.

                  (b) Installments of Principal and Interest: Commencing on
October 1, 1990, and continuing thereafter on the first day of each calendar
month thereafter through August 1, 2000, Maker shall make equal monthly
installments of principal and interest (based on a 20 year amortization) on the
amount of Four Thousand Eight Hundred Twenty-Three and no/100 dollars
($4,823.00). On the Maturity Date of September 1, 2000, Maker shall pay Holder
all remaining sums of principal and interest and other sums due under the
Promissory Note and Deed of Trust. If not otherwise accelerated, the Note shall
be due and payable in full on September 1, 2000.

                  (c) Payment -- Maturity: If not sooner paid in accordance with
the terms of this Note, the entire Outstanding Principal Balance, plus any
accrued but unpaid interest thereon and all the sums due hereunder, shall be due
and payable, in full, on the Maturity Date.

                  (d) Prepayment: Upon thirty (30) days' notice, the loan may be
prepaid in full during the first five (5) years of the loan term at a prepayment
charge equalling ten and three-quarters percent (10.75%) of the principal
balance. Commencing with the sixth (6th) year of the loan term, the entire loan
can be prepaid at a charge of fifty percent (50%) of the then interest rate
being charged on the Note. (For example, if the loan balance is $400,000.00, and
the Borrower wishes to prepay in full during the sixth year of the loan term, a
prepayment of the $400,000.00 would result in a prepayment penalty of 50% of
10.75% multiplied by $400,000.00 or $21,500.00). Thereafter , the prepayment
penalty rate will be forty percent (40%) of the interest rate during the seventh
(7th) year of the loan term; thirty percent (30%) of 


                                      -2-
   3
the interest rate during the eighth (8th) year of the loan term; twenty percent
(20%) of the interest rate during the ninth (9th) year of the loan term; and,
ten percent (10%) of the interest rate during the tenth year of the loan term.
Any prepayment penalty charge shall also apply if the Holder accelerates payment
following a default or any involuntary prepayment with the exception of a full
or partial condemnation.

                  (e) Application of Payments: All payments on this Note shall
be made in immediately available funds received in Holder's office on the date
due. During the Loan Term, all payments on this Note shall be applied first to
the repayment of any sums advanced by Holder for the payment of taxes,
assessments, insurance premiums, late charges or other charges against the
Property (together with interest thereon from the date of advance until paid at
the Default Rate), then to the payment of accrued and unpaid interest on the
Outstanding Principal Balance and then to the reduction of the Outstanding
Principal Balance.

         3. Other Terms and Conditions.

                  (a) Default Rate: Upon the declaration of default by Holder
and written notice to Make, then and in such event the entire Outstanding
Principal Balance shall bear interest at the Default Rate from the date of
default until the default is cured, or, if the default is not cured, then until
the outstanding Principal Balance, accrued interest, attorney's fees and costs
are paid in full. In the event of Maker's failure to pay the Outstanding
Principal Balance, together with any accrued but unpaid interest thereon and all
other sums due hereunder upon the maturity hereof (by acceleration or
otherwise), same shall bear interest at the Default Rate from the date due until
the default is cured and if the default is not cured, then until the outstanding
Principal Balance, accrued interest, attorney's fees and costs are paid in full.

                  (b) Late Charge: In the event that Maker fails to pay any
installment due hereunder or any portion thereof within ten (10) days after the
due date thereof, Maker agrees to pay a late charge equal to five percent (5%)
of the overdue amount. Maker acknowledges that it would be extremely difficult
or impracticable to determine Holder's actual damages resulting from any late
payment and this late charge is a reasonable estimate of those damages.

                  (c) Default: Time is of the essence hereof. Upon the
occurrence of any of the following events of default, the payment of all
principal, interest and any other sums due in accordance with the terms of this
Note shall, at the option of Holder, be accelerated and such principal, interest
and other sums shall be immediately due and payable upon demand of Holder by
written notice to Maker, wherein Maker shall have a ten (10) day period from
receipt of written notice of default to cure any monetary default, and Holder
shall have the option to foreclose or to require foreclosure of any or all liens
securing the payment hereof:


                                      -3-
   4
                           (1) Default in the payment within ten (10) days after
receipt of written notice of default of any monthly installment due hereunder,
or any part thereof, or failure to pay the entire Outstanding Principal Balance,
together with any accrued but unpaid interest thereon and all other sums due
hereunder upon the maturity hereof (whether by acceleration or otherwise);

                           (2) Breach or violation by Maker of any other
agreement or covenant contained herein unless cured within twenty (20) days
after receipt of written notice thereof from Holder to Maker;

                           (3) Default by Maker under the Deed of Trust or under
any of the other Loan Documents (unless cured within any applicable grace
period).

                  (d) Character of the Loan: Maker certifies that the loan
evidenced by this Note is obtained for business or commercial purposes and that
the proceeds thereof will not be used primarily for personal, family, household
or agricultural purposes. It is expressly understood that this Note is
non-revolving and, therefore, that the total disbursements made to or for the
benefit of Maker in accordance with the provisions of this Note shall not, in
the aggregate, exceed $475,000.00.

                  (e) Security: The payment and performance of this Note is
secured in part by the Deed of Trust.

                  (f) Corporate Liability: Holder shall have full recourse
against Maker, and Maker shall be liable for payment of any and all sums
evidenced hereby and/or secured by the Deed of Trust and/or the other Loan
Documents, and for the performance of all of the covenants, duties and
obligations arising under this Note, the Deed of Trust and the other Loan
Documents.

                  (g) Governing Law: As an additional consideration for the
extension of credit, each maker, endorser, cosigner and guarantor of this Note
understands and agrees that the loan evidenced by this Note is made in the State
of Colorado and the provisions hereof will be construed in accordance with the
laws of the State of Colorado; and such parties further agree that in the event
of default, this Note may be enforced in any court of competent jurisdiction in
the State of Colorado, and they do hereby submit to the jurisdiction of such
court regardless of their residence or where this Note or any endorsement hereof
may be executed.

                  (h) Remedies Cumulative; Waiver: The remedies of Holder, as
provided herein or in any of the other Loan Documents, shall be cumulative and
concurrent, and may be pursued singularly, successively or together, at the sole
discretion of Holder, and may be exercised as often as occasion therefor shall
arise. No act of omission or commission of Holder, including specifically any
failure to exercise any right, remedy or recourse shall be deemed to be a waiver
or release of


                                      -4-
   5
the same; such waiver or release to be affected only through a written document
executed by Holder and then only to the extent specifically recited therein. A
waiver or release with reference to any one event shall not be construed as
continuing, as a bar to, or as a waiver or release of, any subsequent right,
remedy or recourse as to a subsequent event.

                  (i) Notice: Any notice, request, demand or other communication
required or permitted hereunder or required by law shall be in writing and shall
be effective upon delivery of the same in person to the intended addressee, or 1
day after deposit of the same with a responsible overnight courier service (such
as Federal Express) for delivery to the intended addressee or 3 days after
deposit of the same in the United States mail, postage prepaid, certified or
registered mail, return receipt requested, sent to the intended addressee at the
address shown on the first page of this Note, or to such different address as
the intended addressee shall have designated by written notice sent in
accordance herewith and actually received by the other party at least ten (10)
days in advance of the date upon which such change of address shall be
effective.

                  (j) Miscellaneous Provisions:

                           (1) Every maker, endorser, cosigner and guarantor of
this Note expressly grants to Holder the right to release or to agree not to sue
any other person, or to suspend the right to enforce this Note against such
other person or to otherwise discharge such person; and each such maker,
endorser, cosigner and guarantor agrees that the exercise of such rights by
Holder will have no effect on the liability of any other person, primarily or
secondarily liable hereunder. Each maker, endorser, cosigner and guarantor of
this Note waives demand for payment, presentment for payment, protest, notice of
protest, notice of dishonor, notice of nonpayment, notice of acceleration of
maturity, diligence in taking any action to collect sums owing hereunder and all
duty or obligation of Holder to effect, protect, perfect, retain or enforce any
security for the payment of this Note or to proceed against any collateral
before otherwise enforcing this Note.

                           (2) This Note and each payment of principal and
interest hereunder shall be paid when due without deduction or setoff of any
kind or nature or for any costs whatsoever.

                           (3) Maker agrees to reimburse Holder for all costs,
including, without limitation, attorneys' fees, incurred to collect this Note if
this Note is not paid when due. Maker agrees that Holder may from time to time
extend the maturity of this Note or the time any payment is due under this Note
and may accept further security or release security for the payment of this
Note, without in any way affecting any obligations of Maker to Holder.


                                      -5-
   6
                           (4) Maker hereby expressly warrants and represents
that there is not as of the date hereof any contract, agreement or
understanding, written or oral, between Maker and any person or entity
whatsoever which in any manner limits or affects the liability of Maker
hereunder, nor shall Maker enter into any such contract, agreement or
understanding prior to the payment in full of the principal indebtedness
evidenced by this Note.

                           (5) If any provision hereof or of any of the other
Loan Documents is, for any reason and to any extent, invalid or unenforceable,
then neither the remainder of the document in which such provision is contained,
nor the application of the provision to other persons, entities or
circumstances, nor any other document referred to herein, shall be affected
thereby, but instead shall be enforceable to the maximum extent permitted by
law.

                           (6) This Note shall be a joint and several obligation
of each Maker and of all endorsers, cosigners and guarantors hereof and shall be
binding upon them and, subject to the restriction with respect to assumption of
this Note referenced herein, their heirs, representatives, successors and
assigns.

                           (7) All fees, charges or other sums paid by Maker to
Holder, whether pursuant to the terms of this Note or otherwise, with respect to
the loan evidenced by this Note or with respect to the Deed of Trust or any of
the other Loan Documents which, under the laws of the State of Colorado, may be
deemed to be in the nature of interest, shall, for the purpose of any law of the
State of Colorado which may limit the maximum rate of interest to be charged
with respect to the loan evidenced by this Note, be payable by Maker as and
shall be deemed to be additional interest and, for such purposes only, the
agreed upon and contracted rate of interest as calculated above shall be deemed
to be increased to reflect the payment of such fees, charges and other sums as
interest, which rate of interest Maker hereby agrees to pay.

                           (8) This Note may not be terminated or amended
orally, but only by a termination or amendment in writing signed by Holder and
Maker.

                           (9) When the context and construction so require, all
words used in the singular herein shall be deemed to have been used in the
plural and the masculine shall include the feminine and neuter and vice versa.
The word "person" as used herein shall include any individual, company, firm,
association, partnership, corporation, trust or other legal entity of any kind
whatsoever.

                           (10) The headings of the paragraphs and sections of
this Note are for convenience of reference only, are not to be considered a part
hereof and shall not limit or otherwise affect any of the terms hereof.


                                      -6-
   7
         IN WITNESS WHEREOF, Maker has executed this Promissory Note as of the
day and year first above written.

                                            MAKER:  M.K.S. Instruments Inc.,
                                                       a Massachusetts Corp.




                                            By:________________________________
                                                 Robert F. O'Brien, Treasurer



STATE OF            )
                    ) SS.
COUNTY OF           )


         The foregoing instrument was acknowledged before me, in the County of
________________, State of ___________________, this ____________ day of
________________, 1990, by Robert F. O'Brien, Treasurer, of M.K.S. Instruments
Inc., a Massachusetts Corp.

                                       WITNESS my hand and official seal.

                                       My commission expires:

                                            ___________________________________
                                            Notary Public



                                      -7-

1
EXHIBIT 10.17

Confidential Materials omitted and filed
separately with the Securities and Exchange Commission.
Asterisks denote omissions.

PURCHASE AGREEMENT

This Purchasing Agreement is made the 1st day of June, 1996 by and
between Applied Materials, Inc., a Delaware corporation having its primary place
of business in Santa Clara, CA (hereinafter called Purchaser) and MKS
Instruments, Inc., having its primary place of business in Andover, MA
(irhereinafter called Seller).

Whereas the parties wish to enter into a written agreement to establish
terms, delivery periods, and pricing for the purchase and sale of certain
products (identified in Attachment 1), and in consideration of the mutual
promises set forth in this Agreement Purchaser and Seller agree as follows:

I. PURPOSE

To fully satisfy the ultimate customer by entering into a long-term, mutually
beneficial business relationship for a competitive advantage through continuous
improvement processes.

II. MUTUAL UNDERSTANDING

1. Build a creative relationship with teams to manage design,
resource planning, and quality.
2. Manage the relationship, not transactions.
3. Commit totally to continuous Improvement.
4. Manage total cost for mutual profitability.
5. Recognize co-destiny in business decisions through a
long-term, productivity-based agreement.
6. Share forecasts.
7. Reduce cycles through stocking programs and production
control.

III. TERM OF THE AGREEMENT

The initial term of this Agreement is for six (6) years, effective June I, 1996,
with an option to extend for twelve (12) months at the Purchaser's discretion.

IV. SCOPE

Seller will supply and Purchaser will purchase products, at all locations, in
accordance with attached price list (Attachment 1). Products will be purchased
2
Confidential Materials omitted and filed
separately with the Securities and Exchange Commission.
Asterisks denote omissions.

pursuant to this agreement via a Master Purchase Order Agreement (Attachment 7)
and delivered in accordance with Purchaser's Terms and Conditions (Attachment 3)
and all products will conform to applicable product specification. (Attachment
11, 12, 13), except for notations in Seller's response (Attachment 14). All
parties agree to the terms and conditions on Attachment 3. If there is a
conflict between the Terms and Conditions on Attachment 3 and this Agreement,
the Terms and conditions of this Agreement shall prevail.

V. PRICING

1. All base prices and price reductions as listed in the Contract Parts
Price List (Attachment 1) are firm through the first year of the agreement and
are established as the "benchmark" for all future price adjustments. Pricing
will be ************************* and,
******************************************************, will be adjusted to
reflect the change ************************************************************
*****. A copy of the past *********** is attached as part of this contract
(Attachment 2).

2. Seller agrees to supply Buyer written notice
**************************** ****** on any Item being obsoleted or unavailable
for purchase. Seller agrees to continue contract pricing the price at the time
of notification, for ******************.

VI. MOST FAVORED CUSTOMER

All of the prices, terms, warranties and benefits granted by Seller to Purchaser
herein are the same or better than the equivalent terms being offered by Seller
to any customer with like quality and quantity, but in no case will the prices
quoted Purchaser for sale be unlawfully discriminatory under any federal, state
or local laws.

VII. QUALITY/DELIVERY

Buyer agrees to furnish Seller with a monthly report showing Seller's quality
and delivery performance as it applies to the performance of this Agreement.

A. Tracking

1. Commencing June 1, 1996, Seller will implement a continuous
productivity program that will ultimately result in a
********************************** ***************************. The continuous
improvement program goals are attached

-2-
3
Confidential Materials omitted and filed
separately with the Securities and Exchange Commission.
Asterisks denote omissions.

(Attachment 8). The productivity projects are jointly agreed on by both parties
and involve the following types of activities:

i. manufacturing process improvements

ii. the Seller's involvement in the design process to
assure manufacturability and serviceability

iii. target savings for the materials/design on new
development projects

iv. review of processes and equipment to ensure quality
and cost

V. drawing and configuration control provided by Seller
provided on a need to know basis. The Buyer respects
the Sellers proprietary documents and processes.

2. These performance measurements are expressed in the Supplier
Performance detail Report, which is generated on a weekly basis by Purchaser.
Purchaser agrees to forward the Supplier Performance Report to Seller on a
timely basis and agrees to work with the Seller on the removal of any mutually
agreed upon invalid Quality and Delivery statistics. Seller agrees to conform to
the quality clauses as specified in Attachment 3, Article 10, and meet or exceed
milestone goals as expressed in Article VII. Seller agrees to meet or exceed
these Performance Standards for each of the Purchaser's product divisions. PPMs
will be calculated based on Attachment 4.

B. Quality Clauses

1. Purchaser reserves the right to audit the manufacturing and/or
quality process to assure policies and procedures are being followed, with 24
hours notice to the Seller.

2. After acceptance as a qualified source,
******************************** ******** in ********** or design in the product
being delivered to Purchaser and further agrees
****************************************************************************
******************************************************************************
**********.

-3-
4
Confidential Materials omitted and filed
separately with the Securities and Exchange Commission.
Asterisks denote omissions.

VIII. LEAD TIMES

Seller will provide a written plan to Purchaser outlining a measurable program
to reach lead times at Identified in Attachment 9.

IX. AGREEMENT ADMINISTRATION

Purchaser and Seller will meet at least once per quarter to mutually evaluate
the performance of each of the parties (Quarterly Business Reviews). Areas to be
addressed will include, but no be limited to, the following:

At each review, the performance of each participant will be quantified where
applicable. Goals to be achieved before the next review will be mutually
established.

In addition to the above Quarterly Business Reviews, monthly quality and
delivery meetings will be scheduled. These meetings will be at a location
mutually agreed upon and set up to discuss current quality and delivery Issues.
Purchaser will share PPM information with Seller and discuss progress towards
attaining mutual goals. Minutes and action items will be the responsibility of
the Purchaser and will be approved by the Seller and become part of the working
file and part of the review process for contract renewals.

X. FORECASTING

1. Purchaser will provide Seller with a weekly
**************************** forecast. Each forecast shall be deemed proprietary
for Seller's reference only. Production schedule information will be provided to
Seller on a quarterly basis listing production objectives. Buyer agrees to
target accuracy standards on a ************

-4-
5
Confidential Materials omitted and filed
separately with the Securities and Exchange Commission.
Asterisks denote omissions.

************ provided to Seller.

XI. RESTOCKING FEES

Seller will accept up to **************************************************** if
not used and in original packaging for a
*****************************************. Buyer can return such unused product
to Seller if is less than or equal to ***********. Buyer will be responsible for
the freight when returning unused product back to Seller. Specials and products
unique (or unique in volume) to the Buyer will be negotiated on a situation
basis, based on the ability to reuse and/or resell product.

XII. CANCELLATION FEES

All cancellation will be in writing (fax) or by electronic mail. The following
cancellation tees will apply to "spot buy" purchases:

************************************** ********
************************************** ********
************************************** ********
************************************** ********

XIII. TERMS OF PAYMENT

Payment by Purchaser shall be net 30.

XIV. INVOICING

Bus Route Program: In accordance with Attachment 15.

Spot Buy Program: Seller shall submit an invoice reflecting Buyer pail number,
Purchase Order number, quantity ordered, shipped and back ordered (if
applicable), per product price and extended pricing.

-5-
6
Confidential Materials omitted and filed
separately with the Securities and Exchange Commission.
Asterisks denote omissions.

XV. DESIGN CHANGES

Seller agrees for the duration of the
Agreement,*********************************
******************************************************************************
**************.

Buyer and Seller will mutually agree upon the time required to implement changes
which Buyer desires in the design, applicable drawings or specifications for any
product(s) covered by this Agreement, and upon the impact of such changes, if
any, on the terms and conditions applicable to the new product(s). In the event
Buyer's changes alter the pricing, delivery, lead time or other terms of this
Agreement, and agreement upon altered terms cannot be reached, the subject
product(s) may be removed from this Agreement without affecting the remaining
products.

XVI. SHIPPING TERMS

Price basis and all shipments will be *****************************************
*****************************************. Seller will use Buyers shipping
account for best rates (********************).

XVII. BUS ROUTE

This Purchase Agreement authorizes Seller to create and maintain inventory,
subject to this Agreement, for the Bus Route Program.

Releases against this Purchase Agreement shall be made as facsimile or EDI
transmission. They shall specify
**************************************************
****************************************. Buyer may release part number and
quantities required on an as-needed basis. The transmission will contain
******************** ********************. The first release of
**************************************** **********************. The parts will
be **************************************** ****************. The second release
of **************************************** ****************. These parts will
be picked up by Buyer *****************************
****************************************. The transmission can be used
******************** by the Seller.

-6-
7
Confidential Materials omitted and filed
separately with the Securities and Exchange Commission.
Asterisks denote omissions.

Buyer shall provide Seller with an anticipated ****************************
requirement on a weekly basis. The forecasts are not binding, do not represent
firm orders, and are provided for reasonable planning purposes only.

Seller agrees to be able to meet a **** upward or downward variation quarterly
in Buyer's forecasted demand for items produced in the United States. This
quantity will be adjusted quarterly based on forecasted demand. Deliveries for
demand for bus route items variations exceeding **** on a quarterly basis shall
not be included in the calculation of late delivery PPM under this Agreement.

XVIII. PRICING AND STANDARDS OF PERFORMANCE

1. The Purchaser's commitment to purchase from Seller during the period
of performance is contingent upon the ****************************************
****************************************. Buyer retains the right
*********************
***********************************************************.

2. Seller agrees to maintain an inventory level of ********** of usage
based on the monthly forecast quantity at Seller's facilities.

3. Seller will be notified when product is rejected by Purchaser for
failure to conform to Purchaser's Quality Standards, and upon receipt of such
notice Seller will promptly
********************************************************************************
****************************************. Rejected product and a Discrepant
Material Report (Attachment 5) will be forwarded to the Seller. Charges for the
item(s) are to be based upon Purchaser and Seller agreement over cause of
defect.

XIX. LIMITS OF LIABILITY

Purchaser's maximum liability in the event of termination is limited to
********* ************************* for parts modified to Purchaser's
specifications based on the rolling forecast provided by Purchaser. Items which
are ************************** ****************************************, will be
Identified by the Seller and, if long lead time components are identified,
liability in excess of **********, the Buyer and Seller will negate the
liability.

-7-
8
Confidential Materials omitted and filed
separately with the Securities and Exchange Commission.
Asterisks denote omissions.

XX. WARRANTY

Seller warrants that all Items delivered will be merchantable, will be free of
defects in materials, workmanship and title, and will conform to all applicable
specifications, drawings and descriptions set forth herein or furnished by
Purchaser for a period determined on Attachment 16 (Product Model Pricing).

Seller shall hold Purchaser harmless from any claim that any item supplied by
Seller infringes any patent, copyright or other intellectual property right of
any third party, except to the extent that such item was manufactured in
compliance with Buyer's detail design for specific structure.

XXI. PRODUCT DEVELOPMENT

In the event Seller and Purchaser jointly develop new products, any arrangement
may be covered under separate agreements apart from this Master Agreement, and
shall have no effect on this Agreement

XXII. GLOBAL PRICING

Seller agrees to extend the pricing negotiated in this contract, Attachments 1
and 2, multiplied by ******, to all of Applied Material's international
divisions and subsidiaries.
********************************************************************************
*********** at time of purchase.

XXIII. TESTING

Bi-annually Seller will provide Buyer with testing data and results of
************* tested under current Sematech standards. This data will be
submitted during the quarterly business reviews of the testing, preferably six
months from the effective date of the contract and, again, six months later.

Seller will conduct testing ********************* valves in accordance with
Attachment 17 and provide Buyer with complete testing data bi-annually.

-8-
9
Confidential Materials omitted and filed
separately with the Securities and Exchange Commission.
Asterisks denote omissions.

XXIV. SAFETY

Seller agrees to protect its own and its subcontractor's work and be responsible
under all circumstances for their condition and to protect Purchaser's facility,
property, employees and the public from damage or injury. Seller agrees to abide
by and observe all standards of the Occupational Safety & Health Administration
which are applicable to the work being performed at Applied Material facilities
as well as all miss and regulations that may be issued by Purchaser from time to
time.

XXV. PUBLICITY

No release shall be made to the news media or to the general public relating to
the Agreement without the prior written approval of both parties. All parties
recognize that news releases made by either party shall recognize the
participation and contributions of the other party.

XXVI. CONFIDENTIALITY AGREEMENT

The technical data and information which has been or may be furnished to Seller
by Purchaser in connection with Seller's supply of products, or purchasing
services is the property of Purchaser and has been furnished solely to enable
Seller to render service to Purchaser in accordance with the Non-disclosure
Agreement (Attachment 6).

XXVII. FORCE MAJEURE

Neither party shall be liable for failure to perform any of its obligations
under this agreement during any period in which such party cannot perform due to
fire, flood, or any other natural disaster, war, embargo, riot, or the
intervention of any government authority, provided that the party so delay
immediately notified the other party of such delay. If Seller's performance is
delayed for these reasons **** ************************. Purchaser may terminate
this agreement and/or Purchaser Orders thereunder by giving Seller written
notice, which termination shall be effective upon receipt of such notice. If
Purchaser terminates, its sole liability under this agreement or any other
Purchase Orders issued thereunder will be to pay any balance due for conforming
product (1) delivered by Seller before receipt of Purchaser's termination
notice; and (2) ordered by Purchaser for delivery and actually delivered within
fifteen (15) days after receipt of Purchaser's termination notice.

-9-
10
Confidential Materials omitted and filed
separately with the Securities and Exchange Commission.
Asterisks denote omissions.

XXVII. NOTICES

Notices, reports, and other communications made with respect to this agreement
will be given In writing, addressed to the parties at the following addresses or
such other addresses as may be designated in writing by either party to the
other. All notices required to be given will be effective when delivered by hand
or when deposited in the United States Mail, fax or EDI or carrier service.

Purchaser: Contract Specialist - CMM&E/Austin (Carol Lauer)
Supplier Engineer - CMM&E/Austin (Hamp Levi)

Seller: Applied Materials Account Manager - Bill McPheeters

XXIX. AMENDMENTS AND WAIVERS

No terms or provisions of this agreement may be changed, waived, discharged, or
terminated orally but only by an instrument in writing signed by the party
against whom the enforcement of such change, waiver, discharge, or termination
is sought.

XXX. GOVERNING LAW

This Agreement shall be interpreted In accordance with and governed by the laws
of the **********, except as to its principles of conflicts of law. The parties
hereto irrevocably submit to the jurisdiction of the *********** in any action
brought by the parties hereto concerning this Agreement.

XXXI. UNIFORM COMMERCIAL CODE

Except to the extent that the provisions of this Agreement are clearly
inconsistent therewith, this Agreement shall be governed by the applicable
provisions of the Uniform Commercial Code of the ***********. To the extent that
this Agreement entails delivery or performance of services, such services shall
be deemed "goods" within the meaning of the Uniform Commercial Code, except when
to so deem such services as "goods" would result in an absurdity.

-10-
11
Confidential Materials omitted and filed
separately with the Securities and Exchange Commission.
Asterisks denote omissions.

XXXII. DOCUMENTS INCORPORATED BY REFERENCE The following documents
are hereby incorporated by reference:

Attachment 1 List of Parts covered under contract/prices
Attachment 2 ****************************************
Attachment 3 Terms and Conditions
Attachment 4 PPM Calculations
Attachment 5 Discrepant Material Report
Attachment 6 Non-Disclosure Agreement
Attachment 7 Master Purchase Order
Attachment 8 Continuous Program Goals
Attachment 9 Product Model Pricing/Lead Times
Attachment 10 Quarterly Business Reviews
Attachment 11 **********
Attachment 12 **********
Attachment 13 **********
Attachment 14 MKS Response to Purchasing Specs
Attachment 15 *************************

XXXIII. ENTIRE AGREEMENT

This Agreement constitutes the entire agreement and supersedes all prior written
or oral and all contemporaneous oral agreement, understandings, negotiations
between Purchaser and Seller with respect to the subject matter hereof.

FOR APPLIED MATERIALS: FOR MKS INSTRUMENTS:

/s/Carol Lauer /s/Leo Berlinghieri
- -------------------------- --------------------------
Contract Specialist Leo Berlinghieri,
June 1, 1996 Director Customer Support

/s/Hamp Levi /s/Bill McPheeters
- -------------------------- --------------------------
Hamp Levi, Bill McPheeters,
Supplier Quality Engineer Account Representative
June 1, 1996

-11-
12
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks
denote omissions.

Attachment 1 MKS INSTRUMENTS, INC. Contract Parts

Austin Scla Spot Current 1996 EST. ANNUAL 1996 1996
Amat P/N Mks P/N B/R B/R Buy Pricing Pricing Change Usage Ext.Cost Ext.Cost
- ---------------------------------------------------------------------------------------------------------------------------------

******** ******* * ****** ****** **** ** ******* ********
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******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * * ****** ****** **** ** ******* ********
******** ******* * * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * * ****** ****** **** ** ******* ********
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******** ******* * ****** ****** **** ** ******* ********
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******** ******* * * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********

5/3/96
Prepared by C. Lauer

1
13
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks denote omissions.

Attachment 1 MKS INSTRUMENTS, INC. Contract Parts

******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
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******** ******* * ****** ****** **** ** ******* ********
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******** ******* * * ****** ****** **** ** ******* ********
******** ******* * * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * * ****** ****** **** ** ******* ********
******** ******* * ****** ****** **** ** ******* ********
******** ******* * * ****** ****** **** ** ******* ********

5/3/96
Prepared by C. Lauer

2
14
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks denote omissions.

Attachment 1 MKS INSTRUMENTS, INC. Contract Parts

TOTALS ** ******* ********
********

5/3/96
Prepared by C. Lauer

3
15
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

ATTACHMENT 2

MKS Purchasing Agreement
PO 517005

********************************
******** History

***** ******* ***********
***********

***** *****
***** *****
***** *****
***** *****
***** *****
*****

1
16
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks denote omissions.

ATTACHMENT 3

1. ACCEPTANCE - This agreement, together with the terms and conditions,
constitute the final, complete, exclusive and entire agreement between
Seller and Buyer with respect to the subject matter hereof. Any term or
condition in any order, confirmation or other document furnished by
Buyer which is in any way inconsistent with or in addition to this
agreement and the terms and conditions is hereby expressly rejected,
and Seller's acceptance of any offer or order of buyer is expressly
made in reliance on Buyer's assent to all terms and conditions hereof.
Seller's failure to object to any term or condition in any oral or
written communication from the Buyer, whether delivered before or after
the date hereof, shall not constitute an acceptance thereof or a waiver
of any term or condition hereof.
********************************************
*****************************************************.

2. INVOICES - Invoices shall contain the following information: purchase
order number, item number, description of goods, sizes, quantities,
unit prices, and extended totals in addition to any other information
specified elsewhere herein. Payment of invoices shall not constitute
acceptance of goods or services and shall be subject to adjustment for
errors, shortages, defects in the goods, or other failure of Seller to
meet the requirements of the Purchase Order. If any product is deemed
defective by Buyer, Buyer shall return such defective product to Seller
within ***** against the original P.O. number in accordance with
Seller's instructions, freight prepaid, with a description of such
defect. All *******************
*************************************************************** Partial
shipments must be invoiced separately.

3. CASH DISCOUNTS - Time in connection with any discount offered will be
calculated from
***********************************************************
**********************************************************. For the
purpose of earning the discount, payment is deemed to be made on the
date of ********************.

4. TAXES - Unless otherwise specified, the agreed prices include all
applicable federal, state, and local taxes. All such taxes shall be
stated separately on Seller's invoice.

1
17
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks denote omissions.

5. PRICES - Seller hereby agrees and represents that prices charged for
goods and services provided hereunder ********************
*********************************************************************
**********************************************.

6. ODC ELIMINATION - (a) In the event Seller's goods are manufactured with
or contain Class I ODCs as defined under Section 602 of the Federal
Clean Air Act (42 USC Section 7671a(a)) and implementing regulations,
or if Seller suspects that such a condition exists, Seller shall notify
Buyer prior to performing and work against this order. Buyer reserves
the right to terminate all orders for such goods without penalties. (b)
Buyer reserves the right to return any and all goods delivered which
are found to contain or have been manufactured with Class A ODCs. Buyer
reserves the right to terminate any outstanding orders for such goods
without penalties. Seller shall reimburse Buyer all monies paid to
Seller and all additional costs incurred by Buyer in purchasing and
returning such goods.

7. DELIVERY -

(a) Time is of the Essence. Failure to deliver to a mutually
acceptable delivery schedule shall constitute default.

(b) Buyer will pay only for maximum quantities ordered.
Overshipments will be held at Seller's risk and expense for a
reasonable time awaiting shipping instructions. Return
shipping charges for excess quantities will be at Seller's
expense.

(d) ***********************************************************.

8. PACKING AND SHIPMENT - Unless otherwise specified, when the price of
this order is based on the weight of the ordered goods, such price is
to cover net weight of goods ordered only, and no charges will be
allowed for boxing, crating, handling damage, carting, drayage,
storage, or other packing requirements. Unless otherwise specified, all
goods shall be packed, packaged, marked, and otherwise prepared for
shipment in a manner which is (i) in accordance with good commercial
practice, (ii) acceptable to common carriers for shipment at the lowest
rate for the particular goods and in accordance with I.C.C. regulations
and (iii) adequate to insure safe arrival of the goods at the named
destination.

2
18
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks denote omissions.

Seller shall mark all containers with necessary lifting, handling, and
shipping information and also purchase order numbers, date of shipment,
and the names of the consignee and consignor. An itemized packaging
sheet must accompany each shipment.

9. RESPONSIBILITY FOR GOODS - Seller shall *********************
**************************************. All shipment will be delivered
by Seller. Freight collect, or if prepaid, such freight will be billed
to the Buyer and Buyer will reimburse Seller for such freight. Unless
otherwise specified by Buyer, transportation will be by the most cost
effective method of transportation in keeping with any particular
delivery date.

10. QUALITY ASSURANCE - (a) All goods purchased hereunder shall be subject
to inspection and test by Buyer to the extent practicable at all times
and places, including the period of manufacture and in any event, prior
to final acceptance. If inspection or test is made by Buyer on Seller's
premises, Seller, without additional charge, shall provide all
reasonable facilities and assistance for the safety and convenience of
Buyer's inspectors. No preliminary inspection or test shall constitute
acceptance. Records of all inspection work shall be kept complete and
available to Buyer during the performance of this order and for such
further period as the Buyer may determine.

(b) In case any goods are defective in material or workmanship, or
otherwise not in conformity with the requirements of this order, Buyer
shall have the right either to reject, require correction, or accept
such goods with a mutually acceptable adjustment in price. Any goods
which have been rejected or required to be corrected shall be replaced
or corrected by and at the expense of the Seller promptly after notice.
If, after being requested by Buyer, the Seller fails to promptly
replace or correct any defective goods within the delivery schedule,
Buyer may
****************************************************************
****************************************************************
****************************************************************
****************************************************************
****************************************************************.

3
19
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks denote omissions.

11. WARRANTY - (a) Seller warrants that all goods and services delivered
hereunder shall be free from defects in workmanship, material, and
manufacture; shall comply with the requirements of this contract,
including any drawings or specifications incorporated herein or samples
furnished by Seller, and, where design is Seller's responsibility,
shall be free from defects in design. Seller further warrants all goods
purchased hereunder shall be of merchantable quality and shall be fit
and suitable for the purpose intended by Buyer. The foregoing warrants
shall constitute conditions and are in addition to all other
warranties, whether expressed or implied, and shall survive any
delivery, inspection, acceptance, or payment by Buyer.

(b) If any goods or services delivered hereunder do not meet the
warranties specified herein or otherwise acceptable, Buyer may
****************************************************************
****************************************************************
****************************************************************
****************************************************************
****************************************************************.

(c) Buyer's approval of Seller's material or design shall not relieve
Seller of the warranties set forth in this clause, nor shall waiver by
Buyer or any drawing or specification requirement for one or more of
the goods constitute a waiver of such requirements for the remaining
goods to be delivered hereunder unless so stated by Buyer in writing.
The provisions of this clause shall not limit or affect the rights of
Buyer under the clause entitled "QUALITY ASSURANCE".

12. CHANGES - Buyer may at anytime, by a written order and without notice
to sureties or assignees, suspend performance hereunder, increase or
decrease the order quantities, or make changes within the general scope
of this order in any one or more of the following:

(a) method of shipment or packing, and/or

(b) place and date of delivery

4
20
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks denote omissions.

(c) any requested changes in design or product specification will be
promptly considered by Seller and accommodation to such requests will
be at Seller discretion. If any such change causes an increase or
decease in the cost of or time required for performance of the Purchase
Order, an equitable adjustment shall be made in the Purchase Order
price or delivery schedule, or both, and the order shall be modified in
wiring accordingly. No claim by Seller for adjustment hereunder shall
be valid unless asserted within ************* from the date of receipt
by Seller of the notification of change, provided however, that such
period may be extended upon written approval of Buyer. However, nothing
in this clause shall excuse Seller from proceeding with the order as
changed or amended.

13. TERMINATION FOR DEFAULT - (a) Buyer may, by notice, termination this
Purchase Order in whole or in part (i) is Seller fails to deliver goods
or services on agreed delivery schedules; (ii) if Seller fails to
replace or correct defective goods or services; (iii) if Seller
materially fails to perform any other obligations or; (iv) if Seller
becomes insolvent.

(b) In the event of termination pursuant to this Section:

(i) Seller shall continue to supply any portion of this
Purchase Order not terminated.

(ii) At Buyer's request Seller will transfer title and
deliver to Buyer:

(1) any completed goods, (2) any partially completed
goods, and (3) all unique materials. Prices for
partially completed goods and unique materials so
accepted shall be negotiated. However, such prices
shall not exceed the Agreement price per item.

5
21
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks denote omissions.

15. PATENTS, ROYALTIES, AND ENCUMBRANCES - Seller will defend at its own
expense any action against Buyer to the extent it is based on a valid
claim of infringement of a United States patent, copyright or trademark
by Seller's products purchased hereunder and pay those damages or costs
finally awarded against Buyer in such action which are directly
attributable to such claim, provided Buyer notifies Seller promptly in
writing of any such action and prior related claims and gives Seller
sole control of the defense and any negotiations for settlement or
compromise. Should any Product become, or in Seller's opinion be likely
to become, the subject of a claim of infringement, Buyer shall permit
Seller, at Seller's option and expense, either (a) to procure for Buyer
the right to continue using such Products, (b) replace or modify the
same to become noninfringing, or (c) grant Buyer a credit less
depreciation for use, damage, and obsolescence and accept its return.
Said depreciation shall be an equal amount per year over the life of
the Products which is agreed for purposes of this clause to be five (5)
years from the date hereof. However, Seller shall have no liability to
Buyer under this clause or otherwise for any infringement, or claim
thereof based upon [(d) a portion of any Product nonmanufactured or
developed by or on behalf of Seller,] (e) the use of the Products in
combination with other products, equipment, devices, software, or data
not supplied by Seller, or (f) the combination, alteration, or
modification of any Product supplied hereunder if such claim would have
been avoided by the absence of such combination, alteration, or
modification.

16. PATENT LICENSE - Conditioned upon payment in full of the purchase price
for Products sold hereunder Seller, as part consideration for this
Purchase Order and without further cost to Buyer,*****************
****************************************************************
****************************************************************
****************************************************************
****************************************************************. In
addition, Buyer *********************************************
****************************************************************
****************************************************************.

6
22
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks denote omissions.

17. INSURANCE - Seller shall maintain (1) comprehensive general liability
insurance covering bodily injury, property contractual liability,
products liability and completed operations, (2) Worker's Compensation
and employer's liability insurance, and (3) auto insurance, in such
amounts as are necessary to insure against the risks of Seller's
operations. Upon request, Seller shall furnish to Buyer certificates
evidencing such coverage. Seller shall notify Buyer at least thirty
(30) days prior to the cancellation or change of any of the foregoing
policies.

18. TOOLS AND DOCUMENTS - Unless otherwise agreed in writing, special dies,
tools, patterns and drawings used in the manufacture of goods herein
ordered shall be furnished by and at the expense of the Seller.

19. ****************************************************************a
****************************************************************
*********************************************.

20. ASSIGNMENTS - No right or obligation under this order shall be assigned
by Seller without the prior written consent of Buyer, and any purported
assignment without such consent shall be void. Buyer may assign this
order at any time if such assignment is considered necessary by Buyer
in connection with a sale of Buyer's assets or a transfer of its
obligation.

21. GRATUITIES - Seller warrants that it has not offered or given and will
not offer or give to any employee, agent, or representative of Buyer
any gratuity. Any breach of this warranty shall be material breach of
each and every contract between Buyer and Seller.

22. NOTICE OF LABOR DISPUTES - Whenever an actual or potential labor
dispute is delaying or threatens to delay the timely performance of
this Purchase Order, Seller will immediately notify Buyer of such
dispute and furnish all relevant details.

23. INSOLVENCY - The insolvency or adjudication of bankruptcy, the filing
of a voluntary petition, or the making of an assignment for the benefit
of creditors, by either party, shall be a material breach hereof.

7
23
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks denote omissions.

24. COMPLIANCE WITH LAWS - Seller warrants that no law, rule, or ordinance
of the United States, a state, or any other government agency has been
violated in supplying the goods or services ordered herein.

25. WAIVER - In the event Buyer fails to insist on performance of any of
the terms and conditions, or fails to exercise any of its rights or
privileges hereunder, such failure shall not constitute a waiver of
such terms, conditions, rights, or privileges.

26. EQUAL EMPLOYMENT OPPORTUNITY - Seller represents and agrees that it is
in compliance with Executive Order 11246 and implementing regulations
unless exempted.

27. GOVERNMENT CONTRACTS - If this Purchase Order is issued in connection
with direct performance of a Government prime contract or subcontract,
then the flowdown Federal Acquisition Regulations clauses (and any
applicable agency supplements thereto) in effect on the date of this
Purchase Order are incorporated herein by reference. The contract
number of the prime contract or subcontract is listed on the fact of
this Purchase Order.

28. LIMITATION OF LIABILITY - SELLER SHALL NOT BE LIABLE TO BUYER HEREUNDER
FOR CONSEQUENTIAL, INCIDENTAL OR INDIRECT DAMAGES INCLUDING BUT NOT
LIMITED TO LOSS OF ANTICIPATED PROFITS, LOSS OF USE OF THE EQUIPMENT OR
ANY ASSOCIATED EQUIPMENT OR LOSS OF PRODUCT FROM BUYER'S OR OWNER'S
PLANT ARISING OUT OF CONTRACT, WARRANTY, NEGLIGENCE, INDEMNITY OR
STRICT LIABILITY. AS USED HEREIN, INCIDENTAL OR INDIRECT DAMAGES SHALL
NOT MEAN INJURY TO PERSONS OR DAMAGE TO TANGIBLE PROPERTY, EXCEPT FOR
PATENT AND WARRANTY OBLIGATIONS, INJURY TO PERSONS, OR DAMAGE TO THIRD
PARTIES (AS USED HEREIN, BUYER SHALL NOT BE CONSIDERED A THIRD PARTY),
THE TOTAL LIABILITY OF THE SELLER TO BUYER HEREUNDER SHALL NOT EXCEED
******* *********************.

8
24
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks denote omissions.

29. MUTUAL INDEMNITY - Each Party shall defend, indemnify and hold harmless
the other from and against any and all claims, suits, losses, and
liabilities and the associated costs and expenses (including attorney's
fees), caused in whole or in party by the others breach of any term or
provision of this agreement, or any negligent, grossly negligent or
intentional acts, errors or omissions by such party, its employees,
officers, agents or representatives in the performance of this
Agreement.

30. APPLICABLE LAW - This Purchase Order shall be governed by, subject to,
and constructed in accordance with the laws of the ***************
excluding conflict of law rules.

31. FORCE MAJEURE - Neither party shall be liable for failure to perform
any of its obligations under this agreement during any period in which
such party cannot perform due to fire, flood, or any other natural
disaster, war, embargo, riot, or the intervention of any government
authority, provided that the party so delayed immediately notifies the
other party of such delay. If Seller's performance is delayed for these
reasons **** ********************************************* uyer may
terminate this agreement and/or any Purchase Orders hereunder by giving
Seller written notice, which termination shall be effective upon
receipt of such notice. If Buyer terminates, its sole liability under
this agreement or any other Purchase Orders issued hereunder will be to
pay any balance due for conforming Product (1) delivered by Seller
before receipt of Buyer's termination notice; and (2) ordered by Buyer
for delivery and actually delivered within fifteen (15) days after
receipt of Buyer's termination notice.

9
25
ATTACHMENT 4 Confidential Materials omitted and filed separately with
the Securities and Exchange Commission. Asterisks denote omissions.

SUPPLIER RATING SYSTEM
PPM CALCULATIONS

WHAT THE HECK IS PPM?

The number of parts rejected or delinquent out of every million parts produced.

QUALITY

No. of parts rejected 15
(incoming & floor)
Divided by
No. of parts received 147
---
x 1,000,000 0.1020408 x 1,000,000 = 102,041 PPM

DELIVERY

No. of parts rec. late 44
(1 or more days)
Divided by
No. of parts received 147
---
x 1,000,000 0.2993197 x 1,000,000 = 299,320 PPM

SUPPLIER RATING INDEX (SRI)

************************************
************************************

****************************************************************
**************************.

******************** *******************
******************** *******************
******************** *******************
******************** *******************

SUPPLIER QUALITY INDEX (SQI) SUPPLIER DELIVERY INDEX (SDI)

Supplier Quality Performance Supplier Delivery Performance

C. Lauer
5/5/96

1
26
ATTACHMENT 5

AMET
DISCREPANT MATERIAL REPORT (DMR)

(USE BLACK INK, PRESS HARD)

1. BILL NO 2. PREV 3. DESCRIPTION

4. PRODUCT 5. MODEL 6. WORK ORDER, ACCOUNT, OR WAREHOUSE LOCATION 7. SERIAL NO.

8. ORIGINATOR OR PRINT ________ 9. EMPLOYEE NO. 10. DATE

11. RCA REQUIRED? 12. PAGE 13. ZONE 14. DEFECT CODE 15. QTY REACTED 16. TIME
YES NO

17. REQUIREMENTS
__________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________

18. DISCREPANCY
__________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________

19. WHEN FAILURE _________

20. DISPOSITION 21. 22. ____________ 23. HAND EXCHANGE?
REJECT
CODE AMET SUPPLIER YES NO

LINE AS IS 24. __________ 25. _____________ QTY 26. STOCK 27. STOCK
CHECK LOCATION
_________ 28. _____________ YES/NO

29. ________ LOT NO. 30. RTV ____

_____WORK IN HOUSE 31. ____ WORK TIME ____

QTY
32. SUPPLIER NAME 33. SUPPLIER NO.

34. FLOOR _____ (PRINT & _______) 35. EMPLOYEE NO. 36. DATE/TIME

39. COMMENTS:
__________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________

40. CIRCLE ONE 41. ____ CODE 42. _______ P.O. 7 ITEM NO. 42. ________ QTY 43. REORDER P.O. ___
CONSIGN/DEBIT

SHIP VIA: (1) WILL CALL (2) COMMON (3) UPS (4) FED X (5) AIR (7) OTHER

SERVICE REQUIRED: (0) N/A (1) ONE DAY (2) OVER NIGHT (3) ECONOMY (4) OTHER

FREIGHT CHARGES: (1) PREPAY & BILL (2) PREPAY & ALLOW (3) COLLECT (4) OTHER

FOB: (1) DESTINATION (2) SHIPPING POINT (3) FACTORY (4) OTHER

44. ___________ NAME DATE 45. _____ NO. 46. P.O. DUE DATE

47. _______ P.O. SHIP VIA CODE 48. ____ CODE 49. SHIPPING AUTHORIZATION NO.

50. ________ AUTHORIZATION COMMENTS:

51. COMMENTS:
__________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________

52. SYSTEM 53. DATE ENTERED 54. ENTERED BY: 55. ACCURATE _____ 56. AUDITOR DATE
YES NO

1
27

ATTACHMENT 6 Confidential Materials omitted and filed separately with the
NONDISCLOSURE AGREEMENT (BILATERAL) Securities and Exchange Commission. Asterisks denote omissions.

APPLIED MATERIALS, INC. ("Applied"), having its principal offices in Santa
Clara, CA and MKS Instruments, Inc. ("Participant") having its principal offices
in Andover, Massachusetts, wish to exchange certain proprietary information, the
party disclosing such information being referred to herein as "Discloser" and
the party receiving information being referred to as "Recipient." The parties
agree as follows:

I. IDENTIFICATION OF PROPRIETARY INFORMATION

A. Applied may disclose the following types of information: all
drawings, specifications, and other information relating to all parts under
Master PO 517005/A/S

B. Participant may disclose the following types of information:
____________________________________________________________________
____________________________________________________________________
C. The information described in A. and B. above shall be deemed
"Proprietary Information" if:

(1) in the case of a written disclosure, Discloser affixes to
the document an appropriate legend, such as "Proprietary" or "Confidential", and

(2) in the case of an oral or visual disclosure, Discloser
makes a contemporaneous oral statement and delivers to Recipient a written
statement within thirty (3) days to the effect that such disclosure is
proprietary, confidential or the like.

D. "Proprietary Information" shall not include information which: (1)
becomes a matter of public knowledge through no fault of Recipient, (2) is
rightfully received by Recipient from a third party without restriction on
disclosure, (3) is independently developed by Recipient without the use of
Discloser's Proprietary Information, (4) is in the possession of Recipient prior
to its disclosure by Discloser, or (5) is disclosed pursuant to a valid order of
a court or authorized government agency provided that Recipient has given
Discloser an opportunity to defend, limit or protect such disclosure.

II. RESPONSIBILITIES OF RECIPIENT

A. Recipient agrees (1) not to disclose Proprietary Information to any
third party and (2) to protect the Proprietary Information with at least the
degree of care with which it protects its own proprietary information, but in no
case with less than a reasonable degree of care.

B. Within thirty (30) days of a written request by Discloser, Recipient
shall (1) destroy or return to Discloser all documents received from Discloser
which contain Proprietary Information, all documents it may have created which
reveal any Proprietary Information, and all copies of the foregoing (except for
one copy which may be kept by the legal department for archival purposes only),
and (2) deliver to Discloser a certificate stating that Recipient has complied
with such requests.

C. The Nondisclosure Agreement ("NDA") Coordinator for Applied shall be
Carol Lauer.

D. The NDA Coordinator for Participant shall be Leo Berlinghieri.

III. DISCLOSURE PERIOD AND CONFIDENTIALITY PERIOD

A. The period during which Discloser may disclose Proprietary
Information under this Agreement shall begin on the date of the first disclosure
of Proprietary Information (which may be prior to the date of this Agreement)
and shall end on 5/31/02 (if no date is specified, the period shall end three
(3) years from the date this Agreement was signed). Either party may terminate
the Agreement by giving the other party ten (10) days written notice.

B. The obligations set forth in Article II shall (1) termination five
(5) years from the initial date of disclosure of the particular item of
Proprietary Information and (2) survive the termination or expiration of this
Agreement.

IV. MISCELLANEOUS

A. Recipient shall not acquire intellectual property rights from
Discloser other than by a separate written agreement. The disclosure of
Proprietary Information by Discloser does not constitute a warranty that such
information does not infringe the rights of any third party.

B. This Agreement does not create any partnership, joint venture or
agency between the parties. This Agreement shall not prevent a party from
entering into a relationship with a third party, provided the first party does
not violate the terms of this Agreement.

C. Before exporting or reexporting any Proprietary Information, a party
must comply with all applicable regulations of the U.S. Department of Commerce
Office of Export Administration and/or other applicable agencies.

D. This Agreement is the complete and exclusive statement of the
understanding between the parties regarding the subject matter hereof and
supersedes all prior or contemporaneous communications. It may be amended only
by a writing signed by both parties.

Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

E. This Agreement shall be interpreted and enforced according to the
laws of the *********** (exclusive conflict of law rules).

APPLIED MATERIALS, INC. MKS Instruments, Inc.
(Name of Participant Company)

By: /s/ C. Lauer 5/3/96 By: /s/ Leo Berlinghieri 6/12/96
----------------- ------ ---------------------------- -------
(Signature) (Date) (Signature) (Date)

Carol Lauer Contract Specialist Leo Berlinghieri Vice President, Customer Support
- -------------------- ------------------- --------------------- --------------------------------
(Printed Name) (Title) (Printed Name) (Title)

Applied Division or Product Group: GMME Please circle one: Customer Supplier Consultant
--------

28
Attachment 7 Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

APPLIED MATERIALS BILL TO: ACCOUNTS PAYABLE MAILSTOP NO. 3200 PURCHASE ORDER
9700 U.S. HIGHWAY 290 EAST
AUSTIN, TX 78724-1102
PHONE (512) 272-1000 FAX (512) 272-3000 NO. 517005

TO: MKS INSTRUMENTS, INC. SHIP TO: METRIC 5 BLDG. 5-B, 9715 BURNET RD., AUSTIN, TX 78758 Amendment:
6 Shattuck Road SHIP TO ABOVE ADDRESS UNLESS OTHERWISE NOTED BELOW
Andover, MA 01810 Date: 6/1/96

CONFIRMING: L. Berlinghleri By PL TERMS INSP. CODE RESALE NO. 3-00103-8201-5 SHIP VIA: FOB
CL Net 30 TAXABLE [ ] RESALE [ ] [ ] PPD [ ] COL [ ] Per Contract Terms Sellers Dock

ITEM QUANTITY UNIT AMI PART NO. RE DESCRIPTION DELIVERY ACCT. NO. UNIT PRICE EXTENDED
NO. V. SCHEDULE PRICE

Enter Document Text Here: This Master Purchase Order, No. 517005 (Fixed Price Spot Buys(, 517005A (Austin Bus
Route), 517005S (Santa Clara Bus Route) is issued to MKS Instruments, Inc. for the
purchase of products described in the attached Purchase Agreement per the Terms &
Conditions attached.

Ship To: Applied Materials
9715 Burnet Road
Metric 5
Austin, Texas 78758
or
Applied Materials, Bldg. 17, 2821 Scott Blvd., Santa Clara, CA 95060

Estimated Contract Value... ********************
********************
********************
********************

NOTE: APPLIED MATERIALS WILL NOT BE LIABLE FOR GOODS, SERVICES, COSTS OR EXPENSES WHICH HAVE NOT BEEN
AUTHORIZED BY APPLIED MATERIALS PURCHASING PERSONNEL.

APPLIED MATERIALS
THIS ORDER CAN BE ACCEPTED ONLY UPON THE TERMS AND CONDITIONS SPECIFIED ON THE
FACE AND REVERSE SIDE HEREOF, INCLUDING SUCH SPECIFICATIONS, DRAWINGS OR OTHER
DOCUMENTS AS ARE INCORPORATED HEREIN BY REFERENCE OR ATTACHED
HERETO. READ THEM! By:___________________________
BUYER

1
29
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omission.

Attachment 8
MKS Improvement Plan
Delivery & Quality PPM Levels

Delivery Performance

1. MKS will track it's own on-time delivery performance and compare
to the Applied Materials performance reports. All late
deliveries will be******************
********************************** will be performed on this
data and any trends identified will be followed by a corrective
action.

2. ************************************************************
************************************************************
*****************************************************.

3. Although MKS has produced under **************************
************************************ we periodically have
****************************************************************
*******************************************. Currently MKS is
**************************************************************
****************************************************************
***************************************
******************************. This directly supports our
delivery and quality improvement effort.

4. ****************** will continue to be done on a regular basis
to ensure MKS adjusts required capacity to meet current and
projected loads.

Quality Performance

1. MKS will continue to
********************************************. Additional
emphasis will be placed on ********************** related to
Applied Materials demand.

2. MKS will continue to
************************************************ on these
processing procedures. These procedures will be included in our
***********************.

3. MKS will review the returns from Applied Materials
**********************. Any trends identified will be followed
******************.

1
30
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.

4. The MKS
****************************************************************
will conduct a
********************************************************** input
from the **********************with a goal of quality
improvement.

5. MKS will incorporate its
**********************************************
***************************.

6. MKS *********************** will meet with Applied Materials
*********************** to review
***************************************.

The above information and action will be summarized and shown at the quarterly
meeting between Applied Materials and MKS Instruments. Other improvement
techniques will be explored and utilized relative to the performance data and
failure analysis.

2
31
Attachment 9

Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.

1
32
Attachment 10

QUARTERLY BUSINESS REVIEWS

July 30, 1996

Quality PPM
Delivery PPM

Notes:

October 18, 1996

Quality PPM
Delivery PPM

Notes:

January, 1997

Quality PPM
Delivery PPM

Notes:

1
33
ATTACHMENT 11

No. 0250-09510
Date: 9/11/92
APPLIED MATERIALS SPECIFICATION, Rev: E1 ADG
COMMODITY Page 1 of 9
- --------------------------------------------------------

APPROVALS
- --------------------------------------------------------

CMMR Engr. Test Engr Mgr. Test Engr. M.E. Mgr. W.C. Mgr.
- --------------------------------------------------------

****************************

Pages 1 through 9 contain
Confidential Materials which have been omitted
and filed separately with the Securities and Exchange Commission.

REV CHANGE DFTG APVD
DATE
- ---------------------------------------------------------------------

Information contained in this document if considered by Applied
Materials to be confidential and is not to be used in any manner
without the consent of Applied Materials

APPLIED MATERIALS
Used on Assembly 3050 Bowers Ave., Santa Clara, CA 95054

1
34
ATTACHMENT 12

No. 0250-09509
Date: 9/19/1994
APPLIED MATERIALS SPECIFICATION, Rev: PI
COMMODITY Page 1 of 9
- -------------------------------------------------------------------------

APPROVALS:
- -------------------------------------------------------------------------

CMMR Engr. Test Engr Mgr. Test Engr. M.E. Mgr. W.C. Mgr.
- -------------------------------------------------------------------------

************************

Pages 1 through 9 contain
Confidential Materials which have been omitted
and filed separately with the Securities and Exchange Commission.

REV CHANGE DFTG APVD
DATE
- --------------------------------------------------------------------

Information contained in this document if considered by Applied
Materials to be confidential and is not to be used in any manner
without the consent of Applied Materials

APPLIED MATERIALS
Used on Assembly 3050 Bowers Ave., Santa Clara, CA 95054

1
35
ATTACHMENT 13

No. 0250-10023
Date: 6/17/94
APPLIED MATERIALS SPECIFICATION, Rev: E1 ADG
COMMODITY Page 1 of 5
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APPROVALS:
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CMMR Engr. Test Engr Mgr. Test Engr. M.E. Mgr. W.C. Mgr.
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*******************

Pages 1 through 5 contain
Confidential Materials which have been omitted
and filed separately with the Securities and Exchange Commission.

REV CHANGE DFTG APVD
DATE
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Information contained in this document if considered by Applied
Materials to be confidential and is not to be used in any manner
without the consent of Applied Materials

APPLIED MATERIALS
Used on Assembly 3050 Bowers Ave., Santa Clara, CA 95054

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ATTACHMENT 14

To be provided

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37
ATTACHMENT 15 Confidential Materials omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote omissions.

Delivery Mechanics

TYPE 5 - Just-In-Time Bus Route Mechanics

A. This Agreement authorizes Seller to create and maintain inventory subject to
the terms of this Agreement, for the Bus Route Program in accordance to and
subject to Article 5 of the Master Purchase Order and Sales Agreement. Items to
be included in the Bus Route Program are found in Attachment 1 of the Master
Purchase Order and Sales Agreement.

B. Buyer will notify Seller of requirements **************************.
*************************************************************.

C. Seller will
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*******************.

D. Seller shall have all items
*****************************************************
**************************.

E. If the
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*******************************.

F. For back ordered items, Seller will
*******************************************
********************************************************************************
********************************.

G. Seller will be paid *********************************************************
*******************************:

For ********************

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Confidential Materials omitted and filed
separately with the Securities and Exchange
Commission. Asterisks denote omissions.

*******************************************************************
*******************************************************************

For ********************

H. Seller will maintain *************************************************
*******************************.

I. Buyer
will********************************************************************
********************************************************************************
******************************************************.

1. If discrepancies in pricing or quality are found,
*******************************************************.

2. If no discrepancies are found,
**************************************
******************************************.

J. Buyer shall make payment to Seller in accordance with the terms established
in this agreement.

   1
                                                                   Exhibit 10.18



                             PERSONAL & CONFIDENTIAL
                                   MEMORANDUM


         TO:
         FROM:     George Manning
         DATE:
         SUBJECT:  1997 Management Incentive Program


         The amount of bonus you may be eligible to earn as part of the 1997
         Management Incentive Program will be dependent on the percentage of
         consolidated net profits achieved by the Corporation as a percentage of
         consolidated net sales for calendar year 1997. Consolidated net profits
         means the consolidated net profits of the Corporation and its
         subsidiaries before payment by the Corporation of bonuses to all
         employees of the Corporation, contributions by the Corporation to the
         Retirement Plan on behalf of all employees of the Corporation, in the
         United States who are eligible to participate in the Retirement Plan,
         and payment by the Corporation of all income taxes.

         Your target bonus under this Management Incentive Program is 15% of
         your 1997 base compensation. If in calendar year 1997 the Corporation
         achieves the same consolidated net profits level it achieved in 1995,
         you would earn 15% of your base compensation for 1997 (your target
         bonus). If the consolidated net profits are 8% or less of consolidated
         net sales, you will earn no bonus. If consolidated net profits are in
         excess of 8% of net sales, you will earn a percent of your target bonus
         as shown on the attached table. Your bonus will be calculated as 1.25%
         of your target bonus for every 1/10% (.001) the consolidated net
         profits exceeds 8% of net sales. However, in no event can your bonus
         exceed 30% of your base compensation for 1997.

         In order to participate in this Management Incentive Program, you must
         be actively employed by MKS Instruments, Inc. as of December 31, 1997.

         THIS INFORMATION IS EXTREMELY CONFIDENTIAL AND SHOULD BE TREATED AS
         SUCH. YOU SHOULD NOT DIVULGE THIS INFORMATION INSIDE OR OUTSIDE OF MKS
         INSTRUMENTS, INC.



         Attachment
   2
                             PERSONAL & CONFIDENTIAL

                        1997 MANAGEMENT INCENTIVE PROGRAM
                CALENDAR YEAR 1997 CONSOLIDATED NET PROFIT TABLE
                         (JANUARY 1 - DECEMBER 31, 1997)

         Your target bonus is 15% of your 1997 base compensation. You will
         achieve 100% of your target bonus if consolidated net profits reach
         16%. Your maximum incentive is capped at 30% of your 1997 base
         compensation.



         CONSOLIDATED                    % OF TARGET BONUS
         NET PROFIT %*                         EARNED
                                  
         (less than or equal to) 8.0%           0%

         8.1% - 8.9%                        1.25 - 11.25%

         9% - 9.9%                          12.5 - 23.75%

         10% - 10.9%                          25 - 36.25%

         11% - 11.9%                        37.5 - 48.75%

         12% - 12.9%                          50 - 61.25%

         13% - 13.9%                        62.5 - 73.75%

         14% - 14.9%                          75 - 86.25%

         15% - 15.9%                        87.5 - 98.75%

         16% - 16.9%                         100 - 111.25%

         17% - 17.9%                       112.5 - 123.75%

         18% - 18.9%                         125 - 136.25%

         19% - 19.9%                       137.5 - 148.75%

         20% - 20.9%                         150 - 161.25%

         21% - 21.9%                       162.5 - 173.75%

         22% - 22.9%                         175 - 186.25%

         23% - 23.9%                       187.5 - 198.75%

         (greater than or equal to) 24%     200% - maximum



         *  Consolidated net profit before bonus, profit sharing, and taxes


                                      -2-

   1
                                                                   EXHIBIT 10.19




      THIS INDENTURE OF LEASE, made and entered into this 21st day of December,
1989 by and between DONNELL W. MURPHY as he is Trustee of WALPOLE PARK SOUTH
(II) Trust under a Declaration of Trust dated August 10, 1988 filed with the
Norfolk Registry District of the Land Court as Document No. 554329 (hereinafter
referred to as "LESSOR"); and, NGS ASSOCIATES, INC., a Massachusetts corporation
having its principal office in Canton, Massachusetts, (hereinafter referred to
as "LESSEE").

                                   WITNESSETH

      That LESSOR, for and in consideration of the rent and all other charges
and payments hereinafter reserved and payable by LESSEE, and in consideration of
the covenants, agreements, terms provisions and conditions to be kept and
performed hereunder by LESSEE, does hereby demise and lease to LESSEE, and
LESSEE does hereby hire and take from LESSOR the premises hereinafter mentioned
and described, subject to the covenants, agreements, terms, provisions and
conditions of this Lease for the term hereinafter stated:

1. DESCRIPTION OF DEMISED PREMISES

      The space, consisting of 5,021 square feet, substantially as outlined in
yellow on the plan annexed hereto as Exhibit 1 (hereinafter "PREMISES"), located
in the building known in the numbering as 24 WALPOLE PARK SOUTH, Walpole,
Massachusetts (hereinafter "BUILDING"). The Lease includes the LESSEE'S right to
use, the parking facilities of the Building for the parking of automobiles of
employees, customers, invitees, or licensees of LESSEE in common with other
tenants in the Building.

2. TERM OF LEASE

      2.1 DEFINITIONS: As used in this Lease, the words "TERM COMMENCEMENT DATE"
is the date on which the Premises are ready for
   2
LESSEE'S occupancy (as defined in Section 3.2 hereof) and as set forth in
Exhibit 2 hereof.

      2.2 HABENDUM: TO HAVE AND TO HOLD the Premises for a term of years
commencing on Term Commencement Date and ending on the Termination Date as
stated in Exhibit 2 or on such earlier date upon which said term may expire or
be terminated pursuant to any of the conditions or other provisions of this
Lease, or pursuant to law (which date for the termination of the term hereof is
hereinafter referred to as TERMINATION DATE"), or any later date to which the
term of this Lease may become extended pursuant to the provisions of Section 28
of the Addenda hereto annexed (if the term of this Lease becomes extended, the
expression "term" as used in this Lease shall be deemed to include such extended
term).

      2.3 DECLARATION FIXING TERM COMMENCEMENT DATE: As expeditiously as
possible after the Term Commencement Date, the LESSEE agrees upon request of the
LESSOR, to join in the execution, in recordable form, of a written declaration
in which shall be stated such Term Commencement Date and (if need be) the
Termination Date. If this Lease is terminated before the term expires, then upon
LESSOR'S request the parties shall execute, acknowledge, and deliver an
instrument acknowledging such fact and the date of termination of this Lease.

3. CONSTRUCTION - READINESS FOR OCCUPANCY

      3.1 COMPLETION DATE: Subject to delays due to causes beyond the reasonable
control of the LESSOR, or by action or inaction of LESSEE, LESSOR shall use
reasonable speed and diligence in the construction of the Premises and shall use
his best efforts to have the Premises ready for LESSEE'S occupancy on or before
the Term Commencement Date, but nothing herein contained shall be construed to
create any liability on the part of the LESSOR for his failure, due to any cause
whatsoever, to have the Premises ready for occupancy on said date. If the Term
Commencement Date shall not have occurred on or before March 1, 1990, for any
reason, except failure on the part of the LESSEE to perform any of its
obligations hereunder, LESSEE may give LESSOR a thirty (30) day written notice
of termination (sent by registered or certified mail, return receipt requested),
and unless the Term Commencement Date shall have occurred within thirty (30)
days from the date of receipt of such notice, the obligations to the parties
hereto shall cease and terminate as of the thirtieth (30th) day next following
receipt of such notice.

      3.2 WHEN PREMISES DEEMED READY: The Premises shall be conclusively deemed
ready for LESSEE'S occupancy as soon as the initial installations to be done by
LESSOR referred to in Exhibit 3 ("Building Standard Work") annexed hereto and
made a part hereof (hereinafter referred to as "BUILDING STANDARD WORK") in the
Premises have been substantially completed by LESSOR insofar as is practicable
in view of delays or defaults, if any, of LESSOR or his contractors, and the


                                      -2-

   3
facilities specified in Exhibit 3 are substantially available to LESSEE, in
accordance with the obligations assumed by LESSOR hereunder. The Premises shall
be not deemed to be unready for LESSEE'S occupancy or incomplete if only minor
insubstantial details of construction or mechanical adjustments remain to be
done in the Premises, or any part thereof (provided that LESSOR shall diligently
continue to complete all work required of him hereunder), or if the delay in the
availability of the Premises for occupancy is (i) due to special work, changes,
alterations, or additions required or made by LESSEE in the layout or finish or
the Premises or any part thereof other than as specified under Building Standard
Work (provided that LESSOR shall diligently continue to complete all work
required of him hereunder); or, (ii) caused in whole or in part by delay and/or
default on the part of LESSEE or its contractors.

      3.3 PREPARATION OF PREMISES: Except as is otherwise herein provided or as
may be otherwise approved by the LESSOR, all work necessary to prepare the
Premises for LESSEE'S occupancy, including work to be performed at LESSEE'S
expense, shall be performed by contractors employed by LESSOR and all materials
and workmanship shall be in accordance with Building Standard Work. The term
"preparation of the Premises for LESSEE'S occupancy" shall include not only work
done within the Premises, but also related work out-side the Premises such as,
but not limited to, the installation of additional air conditioning equipment
and facilities to serve the Premises and additional risers, feeders, and wiring
or other electrical equipment to serve the Premises. If any work, including, but
not by way of limitation, installation of built-in equipment by the manufacturer
or distributor thereof, shall be performed by contractors not employed by
LESSOR, LESSEE shall take all reasonable measures to the end that such
contractors shall cooperate in all ways with LESSOR'S contractors and shall not
conflict in any other way with the performance of such work.

      3.4 CONCLUSIVENESS OF LESSOR'S PERFORMANCE: LESSEE shall be conclusively
deemed to have agreed that LESSOR has performed all of his obligations
hereunder, unless not later than the end of the second calendar month next
beginning after the Term Commencement Date, LESSEE shall give LESSOR written
notice specifying the respects in which LESSOR has not performed any such
obligation. There shall be excluded from the scope of this section those
omissions or defects which could not reasonably have become apparent to LESSEE
within the time specified and those will be deemed to have been corrected unless
LESSEE shall have notified LESSOR thereof not later than the end of the sixth
calendar month next beginning after the Term Commencement Date.

4. USE OF PREMISES

      4.1 IN GENERAL: LESSEE shall use and occupy the Premises only for the
purpose of conducting the use set forth in Exhibit 2 hereof and for no other
purpose.


                                      -3-

   4
LESSEE shall not use, or suffer or permit the use of, or suffer or permit
anything to be done in or anything to be brought into or kept in the Premises or
any part thereof (i) which would violate any of the covenants, agreements,
terms, provisions, and conditions of this Lease; (ii) for any unlawful purpose
or in any unlawful manner; or, impair or interfere with or tend to impair or
interfere with any of the Building services or the proper and economic heating,
air conditioning, or other servicing of the Building or Premises, or with the
use of any of the other areas of the Building by, or occasion discomfort,
inconvenience, or annoyance to, any of the other tenants or occupants of the
Building. LESSEE shall not install any electrical or other equipment of any kind
which, in the reasonable judgement of LESSOR, might cause any such impairment,
interference, discomfort, inconvenience, or annoyance. The installation and/or
use of business office machines normally incident to the type and size of
LESSEE'S business operations in the Premises shall not be deemed forbidden by
this Article 4.

      4.2 SPECIFIC RESTRICTIONS:

            (a) No part of the Premises shall be used for any of the following
purposes:-

            (1)   As a facility for the use, generation, treatment, storage or
                  disposal of hazardous materials, (as any one or more of such
                  terms are defined by General Laws, Chapter 21C; General Laws
                  Chapter 21E; Comprehensive Environmental Response Act;
                  Compensation and Recovery Act, 42 USC section 9601 et seq; the
                  Resource Conservation and Recovery Act of 1976, 42 USC section
                  6901, et seq; or, any of the rules and regulations promulgated
                  under the aforesaid), except for the use, generation,
                  treatment, or storage of those hazardous materials as to which
                  LESSOR has given his prior approval, and then only to the
                  extent that such materials are licensed and approved in
                  accordance with all applicable laws and regulations of all
                  governmental authorities having jurisdiction thereof.

            (2)   Any industrial use which discharges processed waste water on
                  site.

            (3)   Subsurface disposal of liquid or likable waste.

            (4)   Storage of petroleum or other refined petroleum products
                  except within those portions of the premises which will be
                  heated, or in vaulted tanks equipped with monitoring systems.


                                      -4-
   5
            (5)   Manufacture and/or the tanning of leather, but this
                  prohibition shall not exclude the manufacture of products made
                  from leather.

            (6)   Dry cleaning establishment.

            (7)   Manufacture or processing of paper from pulp.

            (8)   Manufacture of plastic from raw materials, but this
                  prohibition shall not exclude the manufacture of any type of
                  product made from plastic material.

            (9)   Steel mill or foundry.

            (10)  Manufacture of abrasives.

            (11)  Dyeing of textiles.

            (b) No part of the Premises shall involve as a principal use any of
the following:-

            (1)   Processing, manufacture, or storage of chemicals.

            (2)   Printing of textiles.

            (3)   A laboratory which tests or analyzes biological or chemical
                  materials which are provided by others.

            (4)   Electroplating of products.

            (5)   Use of any volatile organic compound in any industry devoted
                  to the manufacture of electronic components unless the
                  following conditions are observed:

                  (i)   In order to minimize spillage or leakage during the
                        process of loading or unloading, all loading/unloading
                        areas of any building in which the same shall be used,
                        shall be roofed, and the ground area immediately below
                        the same pitched to and provided with an in-ground
                        holding tank, constructed of material sufficient to
                        contain any spill or leak of any volatile organic
                        compound.

                  (ii)  No volatile organic compound shall be stored in any room
                        or area of any building where any sink or open drain is
                        located.


                                      -5-
   6
      4.3 SEWER USE DISCHARGE PERMIT: LESSEE understands that sanitary sewerage
from the Building will discharge into the Town of Walpole, MA sewer system which
is a tributary to that owned and/or controlled by the Massachusetts Water
Resources Authority ("MWRA"). The LESSEE further understands that discharge of
such sewerage is generally regulated under 360 CMR 10.000 and that the LESSEE
may be considered to be "user" thereunder. If, because of the LESSEE'S use of
the premises, it discharges or will discharge "industrial wastes" (as defined in
360 CMR 10.004) into the said sewer system, the LESSEE shall make prompt
application to the MWRA for a Sewer Use Discharge Permit so as to permit such
discharge and agrees to hold and save the LESSOR harmless and indemnified for
any claim, demand, or penalty asserted by the MWRA or others with respect to
such sewer discharge.

5. RENT

      The LESSEE shall pay to the LESSOR, during the term of this Lease, the
yearly rent as stated in Exhibit 2 (hereinafter referred to as "YEARLY RENT"),
payable in equal monthly installments, as stated in said Exhibit 2, in advance,
on the first day of each month for and in respect of such month and at such rate
for such further time as LESSEE shall hold the Premises or any part thereof. The
rent reserved and covenanted to be paid under this Lease shall commence on the
Term Commencement Date. If, by reason of any provisions of this Lease, the rent
reserved hereunder shall commence on any day other than the first day of a
calendar month, the rent for such calendar month shall be prorated. The rent
shall be payable at the office of LESSOR or such place as LESSOR may designate,
without any setoff or deduction whatsoever.

6. UTILITIES

      6.1 FACILITIES: LESSOR will supply or cause to be supplied to the
Premises, at no cost to LESSEE, at or prior to the Term Commencement Date, all
facilities for water (hot and cold); heating, ventilation, and air conditioning;
sprinkler; electricity; and sewer services required for LESSEE'S intended use of
the Premises (all as set forth and described in Building Standard Work annexed
hereto as Exhibit 3), and where feasible such utilities and services shall be
separately metered.

      6.2 ADDITIONS TO ELECTRICAL SYSTEM: If LESSEE shall require electric
current or facilities for use in the premises in excess of what is provided in
Exhibit 3 hereof, LESSOR, upon written request and at the sole cost and expense
of LESSEE, will furnish and install such additional wire, conduits, feeders,
switchboards, and appurtenances as reasonably may be required to supply such
additional requirements of LESSEE if current therefore be available to LESSOR,
provided that the same shall be permitted by applicable laws and insurance
regulations, and shall not cause permanent damage or injury to the Building or
the Premises, or cause or create a dangerous or hazardous condition, or entail
excessive or unreasonable


                                      -6-
   7
alterations or repairs, or interfere with or disturb other tenants or occupants
of the Building. LESSEE agrees that it will not make any material alteration or
material addition to the electrical equipment and/or appliances in the Premises
without the prior written consent of LESSOR in each instance first obtained.

      6.3 PAYMENT OF CHARGES: LESSEE shall pay when due all charges for water,
gas, sewer, electricity, heating fuels, power, and any other services supplied
to it at the Premises directly to the utility company, supplier, or provider
providing the same.

7. COMMON AREAS

      7.1 RIGHT TO USE: LESSOR grants to LESSEE in common with other tenants
within the Building, and their agents, employees, licensees, customers, and
persons doing work for or business with them, the right to use the common areas
(hereinafter referred to as "COMMON AREAS") consisting of the parking areas,
roadways, pathways, sidewalks, entrances, and exits designated by LESSOR for
common use of the Building, subject to the terms and conditions of this Lease.

      7.2 MAINTENANCE OF COMMON AREAS: The LESSOR or his managing agent shall
maintain the Common Areas and, in connection therewith, shall have the right to
incur, in his sole discretion, such reasonable expenses as may be required (i)
to maintain and keep in good repair (including the making of any necessary
replacements) all portions of the Common Areas; (ii) to keep the Common Areas
reasonably free from accumulated snow, ice, and refuse, and open for use and
fully lighted during all business hours.

      7.3 CONTROL OF COMMON AREAS: The Common Areas shall be subject to the
exclusive control and management of LESSOR and LESSOR shall have the right to
establish, modify, change, and enforce reasonable rules and regulations with
respect to the Common Areas and LESSEE agrees to abide by and conform with such
rules and regulations. LESSEE agrees that it and its employees will park their
trucks, delivery vehicles and automobiles only in such of the parking areas as
LESSOR may from time to time designate for that purpose. LESSOR shall have the
right to close any part of the Common Areas for such time as may be necessary to
clean and repair the same, and to close any part of the parking area for such
time as LESSOR deems necessary in order to discourage noncustomer parking and to
do other things in the parking areas as LESSOR in her discretion deems
reasonable and necessary for the benefit of the Building.

8. ADDITIONAL RENT

      8.1 DEFINITIONS: As used in this Article 8, the words and terms which
follow mean and include the following:


                                      -7-
   8
            (a) "LESSEE'S PROPORTIONATE SHARE" shall mean a fraction having as
numerator the Rentable Area and having as denominator the Building Rentable Area
as stated in Exhibit 2.

            (b) "TAXES" shall mean the real estate taxes and assessments imposed
upon the Building and any and all other taxes, levies, betterments, assessments,
and charges arising from the ownership and/or the operation of said Building
which are or shall be imposed by national, state, municipal or other
authorities, and which are or may become a lien upon the Building. If, due to a
future change in the method of taxation, any franchise, income, or profit tax
shall be levied against LESSOR in substitution for or in lieu of any tax which
would otherwise constitute a real estate tax, such franchise, income, or profit
tax shall be deemed to constitute "taxes" for the purpose hereof. The word
"Taxes" shall exclude any special assessments which are imposed for benefits
rendered to the Building such as a sidewalk assessment, regardless of how
labeled or identified.

            (c) "TAX YEAR" shall mean the twelve (12) month period commencing on
July 1 immediately preceeding the Term Commencement Date, and each twelve (12)
month period commencing on an anniversary of said date during the term of this
Lease.

            (d) "OPERATING COSTS" shall mean all reasonable costs incurred and
expenditures of whatever nature made by the LESSOR in the operation and
management, repair, and maintenance of the Building; related equipment,
facilities, and appurtenances; as well as maintenance of all exterior portions
of the Building, and including, not limited to, the following:

      Taxes:

      Federal Social Security, Unemployment and Old Age Taxes and contributions,
      and Massachusetts Unemployment taxes and contributions accruing to and
      paid by the LESSOR on account of all employees of the LESSOR who are
      employed in, about, or on account of the Building, except that taxes
      levied upon the net income of the LESSOR, and taxes withheld from
      employees, and Taxes shall not be included herein.

      Water:

      All charges and rates connected with water supplied to the Building and
      related sewer use charges, to the extent such charges and rates are paid
      for by LESSOR.


                                      -8-
   9
      Supplies and Materials:

      All supplies and materials used in the operation and maintenance of the
      Building, Common Areas, and surrounding areaways.

      Wages:

      Wage and cost of all employee benefits of all employees of the LESSOR who
      are employed in, about or on account of the Building.

      Maintenance:

      The cost of all outside contractors and all, maintenance and service
      agreements with respect to the Building, Common Areas, and surrounding
      areaways; maintenance, repairs, and replacement of equipment used for
      servicing.

      Electricity:

      The cost of all electric current for the operation of any machine,
      appliance, or device used in connection with the operation of the
      Building, including the cost of electric current for exterior public
      lights.

      Insurance, etc.:

      Fire and extended coverage, casualty, liability, and such other insurance
      as may be required by any lending institution in connection with the
      Building and the Common Areas, and all other expenses customarily incurred
      in connection with the operation and maintenance of first-class buildings
      in the Metropolitan Boston area.

      Management:

      All fees and costs incurred in respect of the management of the Building.

"Operating Costs" shall include only reasonable and bona fide expenses actually
incurred by LESSOR and shall not include any of the following: executive
salaries; charges, which under this Lease, would be chargeable to a specific
tenant of the Building; leasing commissions; interest; depreciation; or other
expenses relating to ownership as distinguished from the operation and/or
management of the Building.

            (e) "COMPUTATION YEAR" shall mean the twelve (12) month period
beginning on the date of January 1 immediately prior to the Term Commencement
Date and each twelve (12) month period commencing on an anniversary of said date
during the term of this Lease. If the Term Commencement


                                      -9-
   10
Date or the Termination Date occurs during a Computation Year, the LESSEE shall
be liable for only a portion of the Operating Costs in respect to such
Computation Year, represented by a fraction, the numerator of which shall be the
number of days of the herein term which falls within the Computation Year, and
the denominator of which shall be three hundred and sixty-five (365).

            (f) "TAX STATEMENT" and "OPERATING COST STATEMENT" shall mean a
statement in writing signed by LESSOR, setting forth the amounts payable by
LESSEE for a specified Tax or Computation Year, respectively, pursuant to this
Section 8.

      8.2 PAYMENT OF TAXES BY LESSEE:

            (a) In each Tax Year, the LESSEE shall pay to LESSOR, LESSEE'S
Proportional Share of Taxes in the manner as hereinafter set forth.

            (b) Estimated payments on account of LESSEE'S Proportionate Share of
Taxes, (as reasonably estimated by the LESSOR) shall be made monthly by the
LESSEE and at the time and in the fashion provided in this Lease for the payment
of Yearly Rent. Such monthly payment shall be sufficient to provide LESSOR by
the end of each Tax Year with a sum equal to LESSEE'S Proportionate Share of
Taxes for such Tax Year. Promptly after the receipt of the Tax bill, LESSOR
shall provide LESSEE with a Tax Statement. If the total of the estimated
payments theretofore made by LESSEE for the Tax Year exceed the required
payments on account thereof for such year, LESSOR shall credit the amount of
overpayment against subsequent obligations of LESSEE on account of Taxes (or
refund such overpayment if the Term of this Lease has ended and LESSEE has no
further obligations to LESSOR); but, if the aggregate of the monthly payments
made by the LESSEE for such Tax Year are less than the LESSEE'S Proportionate
Share of Taxes, LESSEE shall pay the balance of said amount to LESSOR within
thirty (30) days after being so advised by LESSOR. LESSOR shall have the same
rights and remedies for non-payment by LESSEE of any payments due on account of
such Taxes as LESSOR has under this Lease for failure of LESSEE to pay Rent.

            (c) If the Term Commencement Date or the Termination Date occurs
during a Tax Year, the LESSEE shall be liable for only that portion of Taxes in
respect of such Tax Year represented by a fraction, the numerator of which shall
be the number of days of the herein term which falls within the Tax Year, and
the denominator of which shall be three hundred sixty-five (365). In the event
the first day of the Tax Year should be changed after the Term Commencement Date
to a day other than July 1 so as to change the twelve (12) month period
comprising the Tax year, in determining Taxes due from the LESSEE hereunder with
respect to Taxes payable for the period between July 1 and such changed first
day of the Tax Year, such amount of Taxes shall be multiplied by a fraction, the
numerator of which shall


                                      -10-
   11
be the number of days elapsing during such period, and the denominator of which
shall be three hundred sixty-five (365).

      8.3 PAYMENT OF OPERATING COSTS BY LESSEE:

            (a) In each Computation Year, the LESSEE shall pay to LESSOR,
LESSEE'S Proportionate Share of Operating Costs in the manner as hereinafter set
forth.

            (b) Estimated payments by LESSEE on account of LESSEE'S
Proportionate Share of Operating Costs shall be made monthly by the LESSEE and
at the time and in the fashion provided in this Lease for the payment of Yearly
Rent. Such monthly payment (to be reasonably estimated by the LESSOR) shall be
sufficient to provide LESSOR by the end of each Computation Year with a sum
equal to LESSEE'S Proportionate Share of Operating Costs pursuant to
subparagraph (a) hereof for such Computation Year. Promptly after the end of
each Computation Year, LESSOR shall submit to LESSEE a reasonably detailed
Operating Cost Statement for such year. If the estimated payments theretofore
made for such Computation Year by LESSEE exceed LESSEE'S required payment on
account thereof for such year, according to such statement, LESSOR shall credit
the amount of overpayment against subsequent obligations of LESSEE with respect
to Operating Costs (or refund such overpayment if the Term of this Lease has
ended and LESSEE has no further obligation to LESSOR); but, if the aggregate of
the monthly payments made for such Computation Year are less than the LESSEE'S
Proportionate Share of Operating Costs, LESSEE shall pay the balance of said
amount to LESSOR within thirty (30) days after being so advised by LESSOR.
LESSOR shall have the same rights and remedies for the nonpayment by LESSEE of
any payments due on account of Operating Costs as LESSOR has hereunder for the
failure of LESSEE to pay Rent.

9. CHANGES OR ALTERATIONS BY LESSOR

      LESSOR reserves the right at any time and from time to time, without the
same constituting an actual or constructive eviction, and without incurring any
liability to LESSEE therefor, or otherwise affecting LESSEE'S obligations under
this Lease, to make such changes, alterations, additions, improvements, repairs,
or replacements in or to the Building (including the Premises) and the fixtures
and equipment thereof, as well as in or to the outside areas, and entrances,
thereof, as he may deem necessary or desirable, provided, however, that there be
no unreasonable obstruction of the right of, access to, or unreasonable
interference with, the use and enjoyment of the Premises by LESSEE. Nothing
contained in this Section 9 shall be deemed to relieve LESSEE of any duty,
obligation, or liability of LESSEE with respect to making any repair,
replacement, or improvement, or complying with any law, order, or requirement of
any government or other authority.


                                      -11-
   12
10.  FIXTURES, EQUIPMENT, AND IMPROVEMENTS -- REMOVAL BY LESSEE

      All fixtures, equipment, improvements, and appurtenances attached to or
built into the Premises prior to or during the term, whether by LESSOR at his
expense or at the expense of LESSEE (either or both), or by LESSEE, shall be and
remain part of the premises and shall not be removed by LESSEE at the end of the
term unless otherwise expressly provided in this Lease. Where not built into the
Premises, and if furnished and installed by and at the sole expense of LESSEE,
all removable electric fixtures, carpets, drinking or tap water facilities,
furniture, or trade fixtures, or business equipment shall not be deemed to be
included if such fixtures, equipment, improvements, and appurtenances, and may
be, and upon the request of LESSOR will be, removed by LESSEE upon the condition
that such removal shall not materially damage the premises or the Building, and
that the cost of repairing any damage to the premises or the Building arising
from such removal shall be paid by LESSEE; provided however, that any such items
as toward which LESSOR shall have granted any allowance or credit to LESSEE
shall be deemed not to have been furnished and installed in the Premises by or
at the sole expense of LESSEE.

11. ALTERATIONS AND IMPROVEMENTS BY LESSEE AFTER TERM COMMENCEMENT DATE

      LESSEE shall make no structural alterations, decorations, installations,
removals, additions, or improvements in or to the Premises after the Term
Commencement Date without LESSOR'S prior written consent and then only by
contractors or mechanics engaged on LESSEE'S behalf, by LESSOR. No such
installations or work shall be undertaken or begun by LESSEE until LESSOR has
approved written plans and specifications therefor, and no amendments or
additions to such plans and specifications shall be made without the prior
written consent of LESSOR. Any such work, alterations, decorations,
installations, removals, additions, and improvements shall be done at LESSEE'S
sole expense and at such times and in such manner as LESSOR may from time to
time designate. If LESSEE shall make any alterations, decorations,
installations, removals, additions, or improvements, then LESSOR may require the
LESSEE at the expiration of this Lease to restore the Premises to substantially
the same condition as existed on the Term Commencement Date. LESSOR'S consents
and approvals called for in this Section 11 shall in no instance be unreasonably
withheld or delayed.

12. REPAIRS TO PREMISES

      12.1 REPAIRS BY LESSEE: LESSEE shall keep all and singular the Premises in
such repair, order, and condition as the same are in on the Term Commencement
Date or may be put in during the term hereof, reasonable use and wearing thereof
and damage by fire or by casualty insured against only excepted. LESSEE shall
make, as and when needed as a result of misuse by, or neglect or improper
conduct


                                      -12-
   13
of, LESSEE or LESSEE'S servants, employees, agents, or licensees, or otherwise,
all repairs in and about the Premises necessary to preserve them in such repair,
order, and condition, which repairs shall be in quality and class equal to the
original work. LESSOR may elect, at the expense of LESSEE, to make any such
repairs or repair any damage or injury to the Building or the Premises caused by
moving property of LESSEE in and out of the Building, or by installation or
removal of furniture or other property, or by misuse by, or neglect, or improper
conduct of LESSEE or LESSEE'S servants, employees, agents, or licensees outside
the Premises but affecting LESSEE'S use and enjoyment of the Premises, excluding
any repairs required to be made in or damage in the Premises by the LESSOR, as
set forth in section 12.2 hereof.

      12.2 REPAIRS BY LESSOR: All repairs required in the Premises occasioned by
action of the elements or by matters ordinarily covered by LESSOR'S fire and
extended coverage insurance, but excluding repairs becoming necessary as the
result of misuse or negligence on the part of LESSEE or LESSEE'S employees,
agents, or licensees, shall be made by and at the expense of LESSOR. LESSOR
agrees to keep in good order, condition, and repair, including replacements
thereof as and when necessary (i) the structural elements of the Premises which
includes all footings, foundations, floor slabs, columns, girders, mullions,
loadbearing exterior walls; and, (ii) the roofing system of the Premises which
includes support members, membrane assembly, flashings, roof insulation
assembly, hatches, sleeves, vents, and brackets.

13. INSURANCE, INDEMNIFICATION, EXONERATION AND EXCULPATION

      13.1 PUBLIC LIABILITY INSURANCE: LESSEE shall procure, keep in force, and
pay for comprehensive public liability insurance (hereinafter referred to as
"LIABILITY INSURANCE") indemnifying LESSOR and LESSEE against all claims and
demands for injury to or death of persons or damage to property which may be
claimed to have occurred upon the Premises, or in or about the common areas of
the Building which arise out of the LESSEE'S use and occupancy of the Premises,
in amounts which shall be in a combined single limit for bodily injury or death
and for property damage ("Broad Form" endorsement, so-called), in a sum of not
less than ONE MILLION DOLLARS ($1,000,000) DOLLARS.

      13.2 HAZARD INSURANCE: During the term of this lease, LESSOR shall keep
the Building including any improvements which may be made by LESSOR in the
Premises including, but not limited to, painting, light fixtures, floor
covering, and partitions, if installed by LESSOR, to the extent that the same
are customarily insurable as part of the realty and may be covered by LESSOR'S
insurance, insured against loss or damage by fire and any of the casualties
included in the broadest standard form obtainable of extended coverage or
supplementary contract endorsements.


                                      -13-
   14
      13.3 CERTIFICATE OF INSURANCE: All such insurance shall be effected with
insurers authorized to do business in Massachusetts under valid and enforceable
policies. The Liability Insurance shall name LESSOR and LESSEE as the insureds,
as their respective interests appear, and shall provide that it shall not be
cancelled without at least thirty (30) days prior written notice to each insured
named therein. Not less than fifteen (15) days prior to the expiration date of
each expiring policy of Liability Insurance, original copies of such policies
issued by the respective insurers, or certificates of such policies setting
forth in full the provisions thereof and issued by such insurers, together with
evidence satisfactory to LESSOR of payment of all premiums for such policies,
shall be delivered by LESSEE to LESSOR and certificates as aforesaid of such
policies shall upon request of LESSOR be delivered by LESSEE to the holder of
any mortgage affecting the Building. LESSEE may provide Liability Insurance as
an endorsement to any of its blanket policies.

      13.4 GENERAL: LESSEE will save LESSOR harmless, and will exonerate and
indemnify LESSOR from and against any and all claims, liabilities, or penalties
asserted by or on behalf of any person, firm, corporation, or public authority;

            (a) On account of, or based upon any injury to person, or loss of or
damage to property, sustained or occurring on the Premises on account of, or
based upon, the act, omission, fault, negligence, or misconduct of the LESSEE,
its employees, agents, and invitees.

            (b) On account of, or based upon any injury to person, or loss of or
damage to property, sustained or occurring elsewhere (other than on the
Premises), in or about the Building, and, in particular and without limiting the
generality of the foregoing, in or about the Common Areas, surrounding areaways,
roof, or other appurtenances and facilities used in connection with the Building
or Premises, arising out of the use or occupancy of the Premises by the LESSEE
or by any person claiming by, through, or under LESSEE, on account of or based
upon the act, omission, fault, negligence, or misconduct of all such persons
other than LESSOR and those for whose conduct the LESSOR is legally responsible.

            (c) On account of or based upon (including monies due on account of)
any work or thing whatsoever done by the LESSEE, its employees, agents, and
invitees (other than by LESSOR or his contractors, or agents or employees of
either) on the Premises during the term of this Lease and during the period of
time, if any, prior to the Term Commencement Date that LESSEE may have been
given access to and used the Premises; and, in respect to any of the matters set
forth in subsections (a) and (b) hereof, from and against all cost expenses
(including reasonable attorney's fees) and liabilities incurred in or in
connection with any such claim, or any action, or proceeding brought thereon;
and in case any action or proceeding by brought against LESSOR by reason of such
claim, LESSEE, upon notice from LESSOR shall, at LESSEE'S expense, resist or
defend such action or proceeding and employ such


                                      -14-
   15
counsel therefore reasonably satisfactory to LESSOR, it. being agreed that such
counsel as may act for insurance underwriters of LESSEE engaged in such defense,
shall be deemed satisfactory. Nothing in this Lease shall be construed to
require LESSEE to indemnify LESSOR against the consequences of any act,
omission, fault, negligence, or misconduct of LESSOR or those for whose conduct
LESSOR is legally responsible, and the LESSOR shall indemnify the LESSEE for or
in respect of such conduct.

      13.5 PROPERTY OF LESSEE: In addition to and not in limitation of the
foregoing, LESSEE covenants and agrees that all merchandise, furniture,
fixtures, and property of every kind, nature, and description which may be in or
upon the Premises or Building, or on the Common Areas, surrounding areaways, or
approaches adjacent thereto, during the term hereof, shall be at the sole risk
and hazard of LESSEE, and that if the whole or any part thereof shall be
damaged, destroyed, stolen, or removed due to any cause or reason whatsoever, no
part of said damage or loss shall be charged to or borne by LESSOR.

      13.6 BURSTING OF PIPES, ETC.: LESSOR shall not be liable for any injury or
damage to persons or property resulting from fire, explosion, falling plaster,
steam, gas, electricity, electrical disturbance, water, rain, or snow leaks from
any part of the Premises or the Building or from the pipes, appliances, or
plumbing works or from the roof, street, or sub-surface, or from any other place
by dampness or by any other cause of whatever nature; nor shall LESSOR or his
agents be liable for any such damage caused by other tenants or persons in the
Building or caused by operations in construction of any private, public, or
quasi-public work; nor shall LESSOR be liable for any latent defect in the
Premises or in the Building.

      13.7 REPAIRS AND ALTERATIONS: There shall be no allowance to LESSEE for
diminution of rental value of the Premises and no liability on the part of
LESSOR by reason of inconvenience, annoyance, or injury to LESSEE arising from
any repairs, alterations, additions, replacements, or improvements made by
LESSOR, LESSEE, or others in any portion of the Building or Premises, or in or
to the fixtures, appurtenances, or equipment thereof, or for failure of LESSOR
or others to make any repairs, alterations, additions, or improvements in or to
any portion of the Building or to the Premises, or in or to the fixtures,
appurtenances, or equipment thereof.

14. ASSIGNMENT AND SUBLETTING

      14.1 PROHIBITION: LESSEE covenants and agrees that neither this Lease nor
the term and estate hereby granted, nor any interest herein or therein, will be
assigned, mortgaged, pledged, encumbered, or otherwise transferred (including
without limitation, transfers by operation of law) and that neither the Premises
nor any part thereof will be encumbered in any manner by reason of any act or
omission on the part of LESSEE, or used or occupied or permitted to be used or
occupied by


                                      -15-
   16
anyone other than LESSEE, or be sublet (which term without limitation, shall
include granting of concessions, licenses, and the like) in whole or in part,
without, in each instance, having first received the express written consent of
LESSOR which shall not be unreasonably withheld or delayed, except that no such
consent shall be required for an assignment or sublease to LESSEE'S affiliates.
It shall be a condition of the validity of any assignment (whether the LESSOR'S
written consent is required or not, as aforesaid) that the assignee agrees
directly with LESSOR, by written instrument in form satisfactory to LESSOR, to
be bound by all the obligations of LESSEE hereunder including, without
limitation, the covenant against further assignment and subletting. No
assignment or subletting shall relieve LESSEE from its obligations hereunder and
LESSEE shall remain fully and primarily liable therefor.

      14.2 NO WAIVER: If this Lease be assigned, or if the Premises or any part
thereof be sublet or occupied by anyone other than LESSEE, LESSOR may, at any
time and from time to time, collect rent and other charges from the assignee,
subtenant, or occupant, and apply the net amount collected to the rent and other
charges herein reserved, but no such assignment, subletting, occupancy, or
collection shall be deemed a waiver of this covenant, or the acceptance of the
assignee, subtenant, or occupant as a tenant or the release of LESSEE from the
further performance by LESSEE of its obligations hereunder. The consent by
LESSOR to an assignment or subletting shall in no way be construed to relieve
LESSEE or any successor from obtaining the express consent in writing of LESSOR
to any further assignment of this Lease or subletting of all or a portion of the
Premises.

15. MISCELLANEOUS COVENANTS

      LESSEE covenants and agrees as follows:

      15.1 ACCESS TO PREMISES: LESSEE shall (i) permit LESSOR to erect, use, and
maintain pipes, ducts, and conduits in and through the Premises, provided the
same do not materially reduce the floor area or materially or adversely affect
the LESSEE'S use of the same; (ii) permit the LESSOR, any mortgagee of the
Building and its representatives, and any authorized representative of the
Walpole Board of Health to have free and unrestricted access to and to enter
upon the Premises at all reasonable hours for the purpose of inspection, or for
making repairs, replacements, or improvements in or to the Building, or the
equipment thereof (including without limitation, sanitary, electrical, or other
systems), or to determine compliance with all laws, orders, and requirements of
governmental or other authority, or exercising any right reserved to LESSOR
under this Lease (including the right during the progress of any such repairs,
replacements, or improvements, or while performing work and furnishing materials
in connection with compliance with any such laws, orders, or requirements, to
take upon or through or to keep and store within the Premises all necessary
materials, tools, and equipment); and, (iii) permit LESSOR, at reasonable times,
to show the Premises during ordinary business hours to any mortgagee,


                                      -16-
   17
prospective lessee, prospective purchaser, prospective mortgagee, or prospective
assignee of any mortgage of the Building, and during the period of twelve (12)
months next preceding the Termination Date to any person contemplating the
leasing of the Premises or any part thereof. If LESSEE shall not be personally
present to open and permit entry into the Premises at any time when for any
reason an entry therein shall be necessary or permissible, LESSOR or LESSOR'S
agents may, in an emergency situation, enter the same by a master key, or may
forcibly enter the same, without rendering LESSOR or such agents liable therefor
(if during such entry LESSOR or LESSOR'S agents shall accord reasonable care to
LESSEE'S property), and without in any manner affecting the obligations and
covenants of this Lease. The rights provided for in subsections (i), (ii) and
(iii) hereof shall be exercised upon reasonable notice (telephonic or otherwise)
if the same is practicable, and with minimum practicable interference with the
conduct of the LESSEE'S business in the Premises.

      15.2 ACCIDENTS TO SANITARY AND OTHER SYSTEMS: LESSEE shall give to LESSOR
prompt notice of any fire or accident occurring in the Premises, and of any
damage to, or defective condition in, any part of the Premises' sanitary,
electrical, heating, or other systems located in or passing through the
Premises, but if the damage or defective condition was caused by LESSEE or by
the employees, licensees, or invitees of LESSEE, the cost to remedy the same
shall be paid by LESSEE. LESSEE shall not be entitled to claim any eviction from
the Premises or any damages arising from any such damage or defect unless the
same shall have been occasioned by the negligence of LESSOR, his agents,
servants, or employees, and in case of a claim of eviction, unless such damage
or defective condition shall have rendered the Premises untenantable and the
Premises shall not have been made tenantable by LESSOR within a commercially
reasonable period of time.

      15.3 SIGNS: No signs may be installed on or in any window of the Premises
by LESSEE. No other signs shall be permitted in or about the Premises or
Building Without the written approval of the LESSOR which approval shall not be
unreasonably withheld or delayed. Said exterior sign shall in all events conform
to the requirements of Exhibit 4 hereof.

      15.4 INFLAMMABLE - ODORS: LESSEE shall not bring or permit to be brought
or kept in or on the Premises or elsewhere in the Building, any flammable,
combustible, or explosive fluids, material, chemical substances, or cause or
permit and odors of cooking or other processes, or any unusual or other
objectionable odors to emanate from or permeate the Premises.

      15.5 REQUIREMENTS OF LAW - FINES AND PENALTIES: LESSEE at its sole expense
shall comply with all laws, rules, orders and regulations of federal, state,
county, and municipal authorities and with any direction of any public officer
or officers, pursuant to law, which shall impose any duty upon LESSOR or LESSEE


                                      -17-
   18
arising out of LESSEE'S use or occupancy of the Premises. LESSEE shall reimburse
and compensate LESSOR for all expenditures made by, or damages or fines
sustained or incurred by LESSOR, due to nonperformance or noncompliance with, or
breach or failure to observe any term, covenant, or condition of this Lease upon
LESSEE'S part to be kept, observed, performed, or complied with.

      15.6 LESSEE'S ACTS - EFFECT ON INSURANCE: LESSEE shall not do or permit to
be done any act or thing upon the Premises nor elsewhere in the Building which
will invalidate or be in conflict with any insurance policies covering the
Building and the fixtures and property therein; and shall not do, or permit to
be done, any act or thing upon the Premises or Building which shall or might
subject LESSOR to any liability or responsibility for injury to any person or
persons or to property by reason of any business or operation being carried on
upon said Premises, or for any other reason. LESSEE at its own expense shall
comply with all rules, orders, regulations, or requirements of the Board of Fire
Underwriters, or any other similar body having jurisdiction, and shall not (i)
do, or permit anything to be done, in or upon the Premises, or bring or keep
anything therein, except as now or hereafter permitted by the Fire Department,
Board of Fire Underwriters, any fire insurance rating organization, or other
authority having jurisdiction, and then only in such quantity and manner of
storage as will not increase the rate for any insurance applicable to the
Building; or, (ii) use the Premises in a manner which shall increase such
insurance rates on the Building or on property located therein, over that
applicable at the commencement of this Lease. If by reason of failure of LESSEE
to comply with the provisions hereof, the insurance rate applicable to any
policy of insurance shall at any time thereafter be higher than it otherwise
would be, then LESSEE shall reimburse LESSOR for that part of any insurance
premiums thereafter paid by LESSOR, which shall have been charged because of
such failure by LESSEE.

      Under Sections 15.5 and 15.6 hereof, there shall be no duty on LESSEE to
make any structural change or to make any other change in the Premises unless
required because of the manner in which LESSEE shall be using the Premises.

16. DAMAGE BY FIRE OR OTHER CASUALTY

      If the Premises or any part thereof shall be damaged by fire or other
casualty, LESSOR shall proceed with reasonable diligence, and at the expense of
LESSOR (but only to the extent of insurance proceeds made available to LESSOR by
any mortgagee of the Building), to repair or cause to be repaired such damage;
provided, however, in respect of such alterations, decorations, additions, and
improvements originally made or installed by LESSEE at LESSEE'S expense as shall
have been damaged by such fire or other casualty, and which (in the judgment of
LESSOR) can more effectively be repaired as an integral part of the repair work
in the Premises, that the repairs to such LESSEE'S alterations, decorations,
additions, and improvements shall be performed by LESSOR but at LESSEE'S
expense. All repairs to and replacements


                                      -18-
   19
of property which LESSEE is entitled to remove as in Article 10 provided, shall
be made by at the expense of LESSEE. If the Premises or any part thereof shall
have been rendered unfit for use and occupation hereunder by reason of such
damage, the Yearly Rent or a just and proportionate part thereof according to
the nature and extent to which the Premises shall have been so rendered unfit,
shall be suspended or abated from the date of the occurrence of such casualty
until the Premises (except as to the property which is to be repaired by or at
the expense of LESSEE) shall have been restored as nearly as practicably may be
to the condition in which they were immediately prior to such fire or other
casualty; provided, however, that if LESSOR or any mortgagee of the Building
shall be unable to collect the insurance proceeds (including any rent insurance
proceeds) applicable to such damage because of some action or inaction on the
part of LESSEE, or the employees, licensees, or invitees of LESSEE, the cost of
repairing such damage shall be paid by LESSEE and there shall be no abatement of
rent. LESSOR shall not be liable for delays in the making of any such repairs
which are due to government regulations, casualties, strikes, unavailability of
labor and materials, and other causes beyond the reasonable control of LESSOR,
nor shall LESSOR be liable for any inconvenience or annoyance to LESSEE or
injury to the business of LESSEE resulting from delays in repairing such damage.
If (i) the Premises are so damaged by such fire or other casualty at any time
during the last twelve (12) months of the term hereof that the cost to repair
such damage (as reasonably estimated by the LESSOR) is likely to exceed
one-third of the total Yearly Rent for the period from the estimated date of
restoration until the Termination Date; or (ii) the Building (whether or not
including any portion of the Premises) is so damaged by such fire or other
casualty that substantial alteration or reconstruction of the Building shall in
LESSORS judgement be required, then and in either of such events, this Lease and
the term hereof may be terminated at the election of LESSOR by a notice in
writing of his election so to terminate which shall be given by LESSOR to LESSEE
within sixty (60) days following such fire or other casualty, the effective
termination date of which shall be not less than thirty (30) days after the date
on which such termination notice is received by LESSEE. If the Premises are
damaged by fire or other casualty, and are not substantially restored to its
original condition within a period of sixty (60) days therefrom, the LESSEE may,
by notice in writing to LESSOR cancel and terminate this Lease on account
thereof. In the event of any such termination, this Lease and the term hereof
shall expire as of such effective termination date as though that were the
Termination Date as stated in Exhibit 2, and the Yearly Rent shall be
apportioned as of such date; and, if the Premises or any part thereof shall have
been rendered unfit for use and occupation by reason of such damage, the Yearly
Rent for the period from the date of occurrence of such fire or other casualty
to the effective termination date, or a just and proportionate part thereof,
according to the nature and extent to which the Premises shall have been so
rendered unfit, shall be abated. Any abatement of rent pursuant to this section,
whether total or partial, shall extend to all rent items called for by this
Lease whether "yearly" or otherwise.


                                      -19-
   20
17. WAIVER OF SUBROGATION RIGHTS

      The LESSOR discharges and releases the LESSEE, his agents or employees, to
the extent of the LESSOR'S insurance coverage, for and on account of any and all
claims and liabilities arising out of any loss or damage during the term hereof,
or any extension thereof, to any property of the LESSOR caused by fire and such
risks as are customarily comprehended by the term "extended coverage" in
endorsements to fire insurance policies; and (ii) such other risks as are
covered by insurance which the LESSOR may desire to procure.

      The LESSEE discharges and releases the LESSOR, his agents or employees, to
the extent of LESSEE'S insurance coverage for and on account of any and all
claims and liabilities arising out of any loss or damage during the term hereof,
or any extension hereof, to any property of the LESSEE caused by (i) fire and
such risks as are comprehended by the term "extended coverage" in endorsements
to fire insurance policies; and (ii) such other risks as are covered by
insurance which the LESSEE may desire to procure.

      In consideration of the foregoing, each of the parties hereto agrees with
the other party (i) that such insurance as may be in effect during the term of
this Lease, or any extensions thereof, shall include a clause or endorsement
which provides in substance that the insurance company waives any right or
subrogation which it might otherwise have against the LESSOR or the LESSEE, as
the case may be; and, (ii) upon demand of the other party for any extra premium
costs, if any, incurred in obtaining such clause or endorsement.

      Upon demand in writing made by either party hereto, the other party agrees
to furnish to it a statement of the amount and type of such insurance coverage
and the names of the insurance companies and to request its insurance companies
to give notice to such other party of any cancellation or discontinuance of any
part of such coverage.

18. CONDEMNATION -- EMINENT DOMAIN

      In the event that the Premises or any part thereof, or the whole or any
part of the Building (including within such term the Common Areas thereof shall
be taken or appropriated by eminent domain or shall be condemned for any public
or quasi-public use, or (by virtue of any such taking, appropriation, or
condemnation) shall suffer any damage (direct, indirect, or consequential) for
which LESSOR or LESSEE shall be entitled to compensation, then (and in any such
event ) this Lease and the term hereof may be terminated at the election of
LESSOR or LESSEE by a notice in writing of his or its election so to terminate
which shall be given to the other party within sixty (60) days following the
date on which LESSOR shall have received notice of such taking, appropriation,
or condemnation.


                                      -20-
   21
      Upon the giving of any such notice of termination (either by LESSOR or
LESSEE) this Lease and the term hereof shall terminate on or retroactively as of
the date on which LESSEE shall be required to vacate any part of the Premises,
or shall be deprived of a substantial part of the means of access thereto;
provided, however, that LESSOR may in LESSOR'S notice elect to terminate this
Lease and the term hereof retroactively as of the date on which such taking,
appropriation, or condemnation became legally effective. In the event of any
such termination, this Lease and the term hereof shall expire as of such
effective termination date and the Yearly Rent shall be apportioned as of such
date: If neither party (having the right so to do) elects to so terminate,
LESSOR will, with reasonable diligence and at LESSOR'S expense, restore the
remainder of the Premises, or the remainder of the means of access thereto, as
nearly as practicably may be to the same condition as obtained prior to such
taking, appropriation, or condemnation, in which event (i) the Rentable Area and
Yearly Rent, according to the nature and extent of the taking, appropriation, or
condemnation, and the resulting permanent injury to the Premises, or the means
of access thereto, shall be permanently abated; and, (ii) a just proportion of
the remainder of the Yearly Rent, according to the nature and extent of the
taking, appropriation, or condemnation and the resultant injury sustained by the
Premises or the means of access thereto, shall be abated until what remains of
the Premises or the means of access thereto, shall have been restored as full as
may be for permanent use and occupation by LESSEE hereunder. There is expressly
reserved to LESSOR all rights to compensation and damages created, accrued, or
accruing by reason of any such taking, appropriation or condemnation, in
implementation and confirmation of which LESSEE does hereby acknowledge that
LESSOR shall be entitled to receive all such compensation and damages, grants to
LESSOR all and whatever rights (if any) LESSEE may have to such compensation and
damages, and agrees to execute and deliver all and whatever further instruments
of assignment as LESSOR may from time to time request.

      If part of the Building but not any part of the Premises, or if any part
of the Common Areas of the Building shall be taken or appropriated by eminent
domain or condemned for any public or quasi-public use, LESSOR'S right to
terminate this Lease pursuant to this Section may be exercised only if LESSOR
shall reasonably determine that the continued operation of the Building or what
may remain thereof would not be economically feasible.

      Upon the giving of any notice of termination under this Section 18,
whether by LESSOR or LESSEE, the term of this Lease shall end upon LESSEE'S
vacating the Premises pursuant to the notice, unless the term be sooner ended as
a matter of law as a consequence of the taking, appropriation, or condemnation.


                                      -21-
   22
19. LESSEE'S DEFAULT

      19.1 EVENTS OF DEFAULT: If at any time subsequent to the date of this
Lease any one or more of the following events (hereinafter referred to as a
"DEFAULT OF LESSEE") shall occur:

            (a) LESSEE shall fail to pay the rent or other charges hereunder
when due, and such failure shall continue for a period of seven (7) days after
receipt of notice from LESSOR (receipt shall be presumed within a three day
period after the same is posted in the U.S. Mail postage prepaid); provided
however, that if such failure shall occur more than once during each Computation
Year, no written notice from the LESSOR shall be required, and the LESSEE shall
be in default hereunder, if its failure shall continue for a period of seven (7)
days after the payment of rent or other charges hereunder shall become due.

            (b) LESSEE shall neglect or fail to perform or observe any other
covenant herein contained on LESSEE'S part to be performed or observed, and
LESSEE shall fail to remedy the same within thirty (30) days after written
notice from LESSOR, specifying such neglect or failure, or if such failure is of
such a nature that LESSEE cannot reasonably remedy the same within such thirty
(30) day period, LESSEE shall fail to promptly commence to remedy the same and
shall prosecute such remedy to completion with due diligence and continuity; or,

            (c) LESSEE'S leasehold in the Premises shall be taken on execution
or by other process of law directed against LESSEE; or,

            (d) LESSEE shall make an assignment for the benefit of creditors; or
shall file a voluntary petition in bankruptcy; or shall be adjudicated bankrupt
or insolvent; or shall file any petition or answer seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar
relief for itself under any present or future Federal, State, or other statute,
law, or regulation for the relief of debtors; or shall seek or consent to, or
acquiesce in, the appointment of any trustee, receiver, or liquidator of LESSEE
or of all or any substantial part of its properties; or shall admit in writing
its inability to pay its debts generally as they become due; or,

            (e) A petition shall be filed against LESSEE in bankruptcy or under
any other law seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any present or
future Federal, State or other statute, law or regulation and shall remain
undismissed or unstayed for an aggregate period of sixty (60) days (whether or
not consecutive); or, if any debtor in possession (whether or not LESSEE),
trustee, receiver, or liquidator of LESSEE of all or any substantial part of its
properties shall be appointed without the consent of acquiescence of LESSOR and
such appointment shall remain unvacated or unstayed 

                                      -22-
   23
for an aggregate period of sixty (60) days (whether or not consecutive), then in
any such case (i) if such Default of LESSEE shall occur prior to the Term
Commencement Date, this Lease shall ipso facto, and without further act on the
part of LESSOR, terminate; and,(ii) if such Default of LESSEE shall occur after
the Term Commencement Date, LESSOR may terminate this tease by notice to LESSEE
specifying a date not less than ten (10) days after the giving of such notice,
on which this Lease shall terminate and this Lease shall come to an end on the
date specified therein as fully and completely as if such date were the date
herein originally fixed for the expiration of the term of this Lease (LESSEE
hereby waiving any rights of redemption under present or future laws), and
LESSEE will then quit and surrender the Premises to LESSOR, but LESSEE shall
remain liable as hereinafter provided.

      19.2 RE-ENTRY BY LESSOR: If this Lease shall have been terminated as
provided in this Section, or if any execution shall be issued against LESSEE or
any of LESSEE'S property whereupon the Premises shall be taken or occupied by
someone other than LESSEE, then LESSOR may, without notice, re-enter the
Premises, either by force, summary proceedings, ejectment, or otherwise, and
remove and disposes LESSEE and all other persons and any and all property from
the same as if this Lease had not been made.

      19.3 DAMAGES DUE: In case of any such termination, the rent reserved
hereunder shall thereupon become due and be paid up to the time of such
termination together with any expenses LESSOR may incur for attorney's fees,
brokerage commissions, or expenses with respect to putting the Premises in good
order and for preparing the same for reletting. In addition, if such termination
occurs during the initial term of this Lease, there shall become due from the
LESSEE to the LESSOR an amount which shall be equal to the unamortized portion
of the total cost to the LESSOR of furnishing and providing the Building
Standard Work in and to the Premises, measured from the date of such termination
to the date originally fixed in this Lease as the Termination Date, as if such
cost was fully amortized over the initial term of this Lease.

      19.4 LIQUIDATED DAMAGES: In case of any such termination, LESSEE shall
also pay LESSOR as liquidated damages for the failure of LESSEE to observe and
perform the covenants herein contained to be performed by LESSEE, any deficiency
between the rent reserved hereunder and/or covenanted to be paid and the net
amount, if any, of the damages collected under Section 19.3 and the rents
collected on account of the lease or leases of the Premises for each month of
the period which would otherwise have constituted the balance of the term of
this Lease. In computing such liquidated damages there shall be added to such
deficiency such expenses as LESSOR may incur in connection with reletting such
as legal expenses, brokerage, advertising, and for keeping the Premises in good
order and for preparing the same for reletting. Any such liquidated damages
shall be paid in monthly installments by LESSEE on the first day of each month,
and any suit brought to


                                      -23-
   24
collect the amount of the deficiency for any month shall not prejudice in any
way the rights of LESSOR to collect the deficiency for any subsequent month by
similar proceedings. In no event shall LESSEE be entitled to receive the excess,
if any, of such net rents collected over the sums payable by any LESSEE of the
Premises to LESSOR hereunder. LESSOR, upon termination or at any time hereafter,
shall have the right, in lieu of collecting liquidated damages in installments
as above provided, to recover from LESSEE liquidated damages payable on demand
equal to the excess of the rent which would have been payable from the date of
such demand to the end of the period which would otherwise have constituted the
balance of the term of this Lease, over the then fair market rental value of the
Premises for the same period. For this purpose, in computing the amount of rent,
the amounts to be included for Operating Costs and other amounts required by
this Lease to be paid by LESSEE shall be deemed, for each month, to be equal to
the of the amount of the item for the twelve (12) months preceeding the date of
demand.

      19.5 LESSOR'S RIGHTS: In case of any default by LESSEE, reentry,
expiration, or dispossession by summary proceedings, or otherwise, LESSOR may
(i) re-let the Premises or any part or parts thereof, either in the name of
LESSOR or otherwise, for a term or terms which may at LESSOR'S option be equal
to or less than or exceed the period which would otherwise have constituted the
balance of the term of this Lease and may grant concessions or free rent to the
extent that LESSOR in his discretion deems advisable and necessary to re-let the
same; and, (ii) may make such reasonable alterations, repairs, and decorations
in the Premises as LESSOR in his sole judgement considers advisable and
necessary for the purpose of reletting the Premises, and the making of such
alterations, repairs, and decorations shall not operate or be construed to
release LESSEE from liability hereunder as aforesaid. LESSOR shall in no event
be liable in any way whatsoever for failure to re-let the Premises, or, in the
event that the Premises are re-let, for failure to collect the rent under such
reletting. LESSEE hereby expressly waives any and all rights of redemption
granted by or under any present or future laws in the event of LESSEE being
evicted or dispossessed, or in the event of LESSOR obtaining possession of the
Premises, by reason of the violation of the LESSEE of any of the covenants and
conditions of this Lease.

      19.6 REMEDIES NON-EXCLUSIVE: The specified remedies to which LESSOR may
resort hereunder are not intended to be exclusive of any remedies or means of
redress to which LESSOR may at any time be lawfully entitled and LESSOR may
invoke any remedy (including the remedy of specific performance) allowed at law
or in equity as if specific remedies were not herein provided for.

20. LESSOR'S DEFAULT

      LESSOR shall in no event be in default in the performance of any of
LESSOR'S obligations hereunder unless and until LESSOR shall have failed to
perform such


                                      -24-
   25
obligations within thirty (30) days, or such additional time as is reasonably
required to correct any such default, after written notice by LESSEE to LESSOR
specifying wherein LESSOR has failed to perform any such obligation.

21. ENTIRE AGREEMENT; WAIVER; SURRENDER

      21.1 ENTIRE AGREEMENT: This Lease, the Exhibits hereto annexed, and the
Addenda hereto annexed (if any) are made a part hereof, and contain the entire
and only agreement between the parties and any and all statements and
representations, written and oral, including previous correspondence and
agreements between the parties hereto, are merged herein. LESSEE acknowledges
that all representations and statements upon which it relied in executing this
Lease are contained herein, and that the LESSEE in no way relied upon any other
statements or representations, written or oral. Any executory agreement
hereafter made shall be ineffective to change, modify, discharge, or effect an
abandonment of this Lease in whole or in part unless such executory agreement is
in writing and signed by the party against whom the enforcement of the change,
modification, discharge, or abandonment is sought.

      21.2 WAIVER BY LESSOR: The failure of LESSOR to seek redress for
violation, or insist upon the strict performance of any covenant or condition of
this Lease, or any of the rules and regulations promulgated by the LESSOR shall
not prevent a subsequent act, which would have originally constituted a
violation, from having all the force and effect of an original violation. The
receipt by LESSOR of rent with knowledge of the breach of any covenant of this
Lease shall not be deemed a waiver of such breach. The failure of LESSOR to
enforce any of his rules and regulations against LESSEE and/or any other tenant
in the Building shall not be deemed a waiver of any such rules and regulations.
No provisions of this Lease shall be deemed to have been waived by LESSOR unless
such waiver be in writing signed by LESSOR. No payment by LESSEE or receipt by
LESSOR of a lesser amount than the monthly rent herein stipulated shall be
deemed to be other than on account of the stipulated rent, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment as rent be deemed an accord and satisfaction, and LESSOR may accept such
check or payment without prejudice to LESSOR'S right to recover the balance of
such rent or pursue any other remedy in this provided.

      21.3 SURRENDER: No act or thing done by LESSOR during the term hereby
demised shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept such surrender shall be valid, unless in writing signed by
the LESSOR. No employee or agent of LESSOR shall have any power to accept the
keys to the Premises prior to the termination of this Lease.


                                      -25-
   26
22. INABILITY TO PERFORM

      Except as provided in Sections 3.1 and 3.2 hereof, this Lease and the
obligations of LESSEE to pay rent hereunder and perform all of the other
covenants, agreements, terms, provisions, and conditions hereunder on the part
of LESSEE to be performed, shall in no way be affected, impaired, or excused
because LESSOR is unable to fulfill any of his obligations under this Lease; or
is unable to supply or is delayed in supplying any service expressly or
impliedly to be supplied; or is unable to make, or is delayed in making, any
repairs, replacements, additions, alterations, improvements, or decorations; or
is unable to supply or is delayed in supplying any equipment or fixtures if
LESSOR is prevented or is delayed from so doing by reason of strikes or labor
troubles, or any other similar or dissimilar cause whatsoever beyond LESSOR'S
reasonable control, including but not limited to governmental preemption in
connection with a national emergency; or by reason by any rule, order, or
regulation of governmental agency; or by reason of the conditions of supply and
demand which have been or are affected by war, hostilities, or other similar or
dissimilar emergency. In each such instance of inability of LESSOR to perform,
LESSOR shall exercise reasonable diligence to eliminate the cause of such
inability to perform.

23. BILLS AND NOTICES

      Any notice, consent, request, bill, demand, or statement hereunder by
either party to the other party shall be in writing and shall be deemed to have
been duly given when either delivered personally or mailed addressed to LESSOR
at his address as set forth in Exhibit 2 hereof and to LESSEE at the Premises,
or if any address for notices shall have been duly changed as hereinafter
provided, to the party at such changed address. Either party may at any time
change the address for such notices, consents, request, bills, demands, or
statements by delivering or mailing, as aforesaid, to the party entitled
thereto, a notice stating the change and setting forth the changed address.

24. PARTIES BOUND - SEISEN OF TITLE

      The covenants, agreements, terms, provisions, and conditions of this Lease
shall bind and benefit the successors and assigns of the parties hereto with the
same effect as if mentioned in each instance where a party hereto is named or
referred to, except that no violation of the provisions of Article 14 hereof
shall operate to vest any rights in any successor or assignee of LESSEE, and
that the provisions of this Article 24 shall not be construed as modifying
Article 19 hereof. The words "LESSOR" and "LESSEE" as used herein shall be
construed in each and every covenant and clause in this Lease, unless repugnant
to the context thereof, to refer to the person or persons first named above and
their respective representatives, successors, and assigns, and those claiming
by, through, or under any of them.


                                      -26-
   27
      If in connection with or as a consequence of the sale, transfer, or other
disposition of the Building, LESSOR ceases to be the owner of the reversionary
interest in the same, LESSOR shall be entirely freed and relieved from the
performance and observance thereafter of all covenants and obligations hereunder
on the part of LESSOR to be performed and observed, it being understood and
agreed in such event (and it shall be deemed and construed as a covenant running
with the land) that the person succeeding to LESSOR'S ownership of said
revisionary interest shall thereupon and thereafter assume, perform, and
observe, any and all such covenants and obligations of LESSOR.

25. SUBORDINATION AND LESSEE'S ESTOPPEL CERTIFICATE

      25.1 SUBORDINATION OF LEASE: LESSEE agrees that, at the election of the
LESSOR, this Lease shall be subject and subordinate to the lien of any one or
more mortgages which may be now or hereafter be placed on, encumber, or affect
the Building and to all renewals, modifications, consolidations, and
replacements thereof. When requested to do so by LESSOR, LESSEE agrees to
execute, acknowledge, and deliver to the LESSOR an instrument (hereinafter
referred to as "SUBORDINATION AGREEMENT") in form and substance reasonably
satisfactory to the LESSOR, and in proper form for recording, wherein LESSEE
agrees to and does subordinate this Lease to the lien of any one or more
mortgages above mentioned, and to all renewals, modifications, consolidations,
replacements, and extensions of the same, and to attorn to and recognized such
mortgage(s) thereunder, and to any person claiming by, through, or under such
mortgage(s).

      25.2 LESSEE'S ESTOPPEL CERTIFICATE: LESSEE shall at any time, and from
time to time, on not less than seven (7) days' prior written notice from LESSOR,
execute, acknowledge, and deliver to LESSOR a statement in writing addressed to
LESSOR (or to any mortgagee or prospective mortgagee of the Building) certifying
that this Lease is unmodified and is in full force and effect, or if there have
been modifications, the dates that this Lease is in full force and effect as
modified, setting forth the modifications; stating the dates to which the rent
and other charges under this Lease have been paid; and, whether or not to the
best of its knowledge, there exists any default in the performance of any
covenant, agreement, term, provision, or condition of this Lease, and if so,
specifying each such default of which it has knowledge. It is intended that any
such statement delivered pursuant hereto may be relied on by LESSOR and by any
such mortgagee or prospective mortgagee affecting the Building.

      25.3 NEGLECT OR FAILURE OF LESSEE: In the event that LESSEE shall neglect
or shall refuse to comply with its obligations as set forth in Sections 25.1 and
25.2, or shall neglect or refuse to execute a Subordination Agreement and/or
Estoppel Certificate within a ten (10) day period after LESSOR's written request
therefor, LESSEE hereby irrevocably appoints LESSOR as its attorney-in-fact with
full power


                                      -27-
   28
and authority to execute and deliver such instrument or instruments or and in
the name of LESSEE, or LESSOR may treat such neglect or failure on the part of
the LESSEE as Default of LESSEE within the meaning of Section 19.1 of this
Lease.

26. QUIET ENJOYMENT

      LESSEE, subject to the terms and provisions of this Lease, on payment of
the rent and other charges and upon observing, keeping, and performing all of
the other terms and provisions of this Lease on LESSEE'S part to be observed,
kept, and performed, shall lawfully, peaceably, and quietly have, hold, and
occupy and enjoy the Premises during the term hereof, without hindrance or
ejection by any persons lawfully claiming under LESSOR to have title to the
Premises superior to LESSEE. The foregoing covenant of quiet enjoyment is in
lieu of any other covenant, express or implied.

27. MISCELLANEOUS

      27.1 SEPARABILITY: If any provision of this Lease or portion of such
provision or the application thereof to any person or circumstance is for any
reason held invalid or unenforceable, the remainder of the Lease (or the
remainder of such provision) and the application thereof to other persons or
circumstances shall not be affected thereby.

      27.2 CAPTIONS AND VARIATIONS IN PRONOUNS: The captions in each article,
section, and subsection in this Lease are inserted only as a matter of
convenience and for reference, and in no way define, limit, or describe, the
scope of this Lease or the intent of any provision thereof. All pronouns and any
variation thereof shall be deemed to refer to the masculine, feminine, neuter,
singular or plural, as the identity of the party or parties, or their
representatives, heirs, successors and assigns, may require.

      27.3 INCORPORATION OF EXHIBITS AND ADDENDA: Exhibits 1, 2, 3, and 4 and
the Addenda hereto annexed (if any) and initialled by the parties hereto are
expressly made a part of this Lease.

      27.4 GOVERNING LAW: This Lease is made pursuant to, and shall be governed
by and construed in accordance with, the laws of the Commonwealth of
Massachusetts.

      27.5 NONRECOURSE: Neither the trustee of the LESSOR Trust nor any of the
beneficiaries thereof, or their respective heirs, successors, or assigns shall
be personally liable for the performance or observance of any covenant or
condition herein contained, or for the payment of any claim or judgement under
this Lease, and no recourse shall be had against any such person for such
performance, observance,


                                      -28-
   29
or payment. LESSEE agrees to look solely to the equity of the LESSOR in the
Building for the satisfaction of any LESSEE'S claims under this Lease.


      IN WITNESS WHEREOF, the parties hereto have executed this Indenture of
Lease in duplicate original as a sealed instrument on the day and year first
above set forth.

ATTEST                                 LESSOR:
                                       WALPOLE PARK SOUTH (II) TRUST
                                       By:



_______________________________        _____________________________________
                                       DONNELL W. MURPHY
Witness                                Trustee as aforesaid




                                       LESSEE:
                                       NGS ASSOCIATES, INC.
                                       By:



_______________________________        _____________________________________
Secretary                              Its
                                       Hereunto Duly Authorized


                                      -29-
   30
                                    EXHIBIT 1

                                PLAN OF PREMISES


                                      -30-
   31
                                    EXHIBIT 2

                                 REFERENCE DATA


DATE OF EXECUTION OF LEASE: December 21, 1989

LESSEE        NGS ASSOCIATES, INC.

ARTICLE 1

PREMISES:     Tenant space 2B in the Premises numbered as 24 Walpole Park South,
Walpole, MA, substantially as shown upon plan hereto annexed as Exhibit 1.

ARTICLE 2

      (a) TERM COMMENCEMENT DATE: March 1, 1990

      (b) TERMINATION DATE: February 28, 1995

ARTICLE 4

USE OF PREMISES: For warehousing and sale of LESSEE'S products, and any other
lawful use, and offices incidental thereto. No retail sales shall be permitted
to be conducted from the Premises.

ARTICLE 5

RENT: Rent shall be paid at the times and in the amounts as set forth in
Schedule A to this Exhibit 2. As set forth in Exhibit 2, payment of rent shall
commence on the first day of the fourth month next following the Term
Commencement Date. Notwithstanding the foregoing, the LESSEE shall, as of the
Term Commencement Date, be liable for its periodic payment of LESSEE'S
Proportionate Share of Taxes and LESSEE'S Proportionate Share of Operating
Costs, as provided in this Lease.

ARTICLE 7

PARKING SPACES ALLOCATED TO LESSEE: Nine (9) Spaces

ARTICLE 8

      (a) RENTABLE AREA: 5,021 (+)/(-) square feet

      (b) BUILDING RENTABLE AREA: 95,567 (+)/(-) square feet



                                      -31-
   32
      (c) LESSEE'S PROPORTIONATE SHARE: 5.3%

ARTICLE 23

      ADDRESSES OF PARTIES:

      to LESSOR:

           Walpole Park South (II) Trust
           147 Morgan Drive
           Norwood, MA 02062

      to LESSEE (prior to occupancy of Premises)

           110 Shawmut Road
           Canton, MA 02021

     (after occupancy of Premises)

           24 Walpole Park South
           Walpole, MA 02081


                                      -32-
   33
                                    EXHIBIT 2
                                   SCHEDULE A

                                  RENT SCHEDULE



               DUE DATE               RENTABLE SF        RENTAL RATE      PAYMENT
                                                                 
March             1, 1990              5,021 sf            $    /sf          $

April             1, 1990              5,021 sf            $    /sf          $

May               1, 1990              5,021 sf            $    /sf          $

June              1, 1990              5,021 sf            $6.50/sf          $2,720

July              1, 1990              5,021 sf            $6.50/sf          $2,720

August            1, 1990              5,021 sf            $6.50/sf          $2,720

September         1, 1990              5,021 sf            $6.50/sf          $2,720

October           1, 1990              5,021 sf            $6.50/sf          $2,720

November          1, 1990              5,021 sf            $6.50/sf          $2,720

December          1, 1990              5,021 sf            $6.50/sf          $2,720

January           1, 1991              5,021 sf            $6.50/sf          $2,720

February          1, 1991              5,021               $6.50/sf          $2,720


Effective Rent Yr             1                            $4.88/sf          $2,720

March             1, 1991              5,021 sf            $6.50/sf          $2,720

April             1, 1991              5,021 sf            $6.50/sf          $2,720

May               1, 1991              5,021 sf            $6.50/sf          $2,720

June              1, 1991              5,021 sf            $6.50/sf          $2,720

July              1, 1991              5,021 sf            $6.50/sf          $2,720

August            1, 1991              5,021 sf            $6.50/sf          $2,720

September         1, 1991              5,021 sf            $6.50/sf          $2,720

October           1, 1991              5,021 sf            $6.50/sf          $2,720

November          1, 1991              5,021 sf            $6.50/sf          $2,720

December          1, 1991              5,021 sf            $6.50/sf          $2,720

January           1, 1992              5,021 sf            $6.50/sf          $2,720

February          1, 1992              5,021 sf            $6.50/sf          $2,720

Effective Rent Yr             2                            $6.50/sf          $2,720



                                      -33-
   34


               DUE DATE               RENTABLE SF        RENTAL RATE      PAYMENT
                                                                 
March             1, 1992              5,021 sf            $6.50/sf          $2,720

April             1, 1992              5,021 sf            $6.50/sf          $2,720

May               1, 1992              5,021 sf            $6.50/sf          $2,720

June              1, 1992              5,021 sf            $6.50/sf          $2,720

July              1, 1992              5,021 sf            $6.50/sf          $2,720

August            1, 1992              5,021 sf            $6.50/sf          $2,720

September         1, 1992              5,021 sf            $6.50/sf          $2,720

October           1, 1992              5,021 sf            $6.50/sf          $2,720

November          1, 1992              5,021 sf            $6.50/sf          $2,720

December          1, 1992              5,021 sf            $6.50/sf          $2,720

January           1, 1993              5,021 sf            $6.50/sf          $2,720

February          1, 1993              5,021 sf            $6.50/sf          $2,720

Effective Rent Yr            3                             $6.50/sf          $2,720

March             1, 1993              5,021 sf            $6.50/sf          $2,720

April             1, 1993              5,021 sf            $6.50/sf          $2,720

May               1, 1993              5,021 sf            $6.50/sf          $2,720

June              1, 1993              5,021 sf            $6.50/sf          $2,720

July              1, 1993              5,021 sf            $6.50/sf          $2,720

August            1, 1993              5,021 sf            $6.50/sf          $2,720

September         1, 1993              5,021 sf            $6.50/sf          $2,720

October           1, 1993              5,021 sf            $6.50/sf          $2,720

November          1, 1993              5,021 sf            $6.50/sf          $2,720

December          1, 1993              5,021 sf            $6.50/sf          $2,720

January           1, 1994              5,021 sf            $6.50/sf          $2,720

February          1, 1994              5,021 sf            $6.50/sf          $2,720

Effective Rent Yr            4                             $6.50/sf          $2,720

March              1, 1994             5,021 sf            $6.50/sf          $2,720

April              1, 1994             5,021 sf            $6.50/sf          $2,720

May                1, 1994             5,021 sf            $6.50/sf          $2,720



                                      -34-
   35


               DUE DATE               RENTABLE SF        RENTAL RATE      PAYMENT
                                                                 
June               1, 1994             5,021 sf           $6.50/sf           $2,720

July               1, 1994             5,021 sf           $6.50/sf           $2,720

August             1, 1994             5,021 sf           $6.50/sf           $2,720

September          1, 1994             5,021 sf           $6.50/sf           $2,720

October            1, 1994             5,021 sf           $6.50/sf           $2,720

November           1, 1994             5,021 sf           $6.50/sf           $2,720

December           1, 1994             5,021 sf           $6.50/sf           $2,720

January            1, 1995             5,021 sf           $6.50/sf           $2,720

February           1, 1995             5,021 sf           $6.50/sf           $2,720

Effective Rent Yr            5                            $6.50/sf           $2,720

EFFECTIVE RENT:    5.00  YEAR LEASE                       $6.18/sf           $2,584

A)



                                      -35-
   36
                                    EXHIBIT 3

                             BUILDING STANDARD WORK

NOTES       1.    This "Scope of Work" is intended to outline the improvements
                  to accommodate the Lessee's tenancy within the "Tenant Space".

            2.    Unless otherwise noted the following items are not included:

                  A)    The floor, walls, superstructure, roof and mechanical
                        systems do not include any provisions for Lessee's
                        machinery, equipment or the installation of same.

                  B)    Security, Public Address, or Telephone Systems.

                  C)    Computer Power or Data Wiring.

            3.    Note the attached "Schedule (A)" for "Lessee's Quantities"
                  included within the "Scope of Work".

            4.    The Lessor or his nominee agree to perform the items noted
                  within the "Scope of Work" substantially in accordance with
                  the following information and for the "Rent" noted in Section
                  (I).


                                  
HEIGHT                                  Overall:21' - 4"   Maximum:  top of concrete
                                                           floor to top of  Steel.
                                                 


                    Office              Clear: 9' - 0"     Minimum:  top of concrete
                                                           floor to  underside of Acoustical
                                                           Ceiling.


                    Warehouse           Clear: 18' - 0"    Minimum:  top of concrete
                                                           floor to  underside of Steel
                                                 


TENANT              Office              Office  Toilet     (Mens Office Toilet)
 SPACE                                  Office Toilet      (Womens Office Toilet)
                                        Lunch
                                        Private Offices
                                        Conference Room
                                        Lab
                                        Reception

                                        The balance of the area is open office




                                      -36-
   37
                                  
                    Warehouse           The balance of the area is open warehouse.


                                        Standard Tenant Improvements



CONCRETE etc.                           111.    4" non structural concrete floor
                                                on grade.


                                        111.a.  3000 psi concrete.


                                        111.b.  6"x6"/#10/#10 welded wire mesh
                                                reinforcing.


                                        111.c   Control joints designed to reduce
                                                cracking.


                    Rear Entrance       120.    Precast concrete stairs and rail.


GLASS etc.          Front               306.    Exterior front windows, door and
                    Entrance                    sidelight.

METAL STUD
WALLS               Office              355.a.  Face Wall     (Interior)

                                                One layer of 1/2" gypsum board
                                                applied to the inside face of
                                                the front exterior wall, taped
                                                and sanded to the ceiling plus
                                                6".

                    Warehouse           355.b.  Face Wall     (Interior)

                                                One layer of 1/2" gypsum board
                                                applied to the inside face of
                                                the front exterior wall, taped
                                                and sanded to the underside of
                                                steel.

                    Office              360.a.  Demising (Office/Warehouse) (   Rated)
                                                Wall

                    Warehouse           360.b.  Demising  (Tenant)          (   Rated)
                                                Wall

                                                Framing 16" o.c., sound
                                                dampening insulation, two layers
                                                per face of 5/8" firecode gypsum
                                                board, taped and sanded to the
                                                underside of the metal deck.

                    Office             364.a.   Standard  (Bathrooms)(Non Rated)
                                                Wall

                                                Framing 16" o.c. to the
                                                underside of the metal deck or
                                                barjoint, one layer per face of
                                                1/2" gypsum board, taped and
                                                sanded to the underside of the
                                                ceiling plus 6".




                                      -37-
   38
                                  
DOORS and
FRAMES etc.         Rear Entrance       373.a.  Metal Door         (Non Rated)

                                                Pressed metal frame, hollow
                                                metal door, 1 1/2 pair of butts,
                                                lock set, closer, threshold and
                                                weather-stripping.

                                        373.c   Metal Door        (Rated)

                                                Pressed metal frame, hollow
                                                metal door, 1 1/2 pair of butts,
                                                lock set, and closer.

                                        373.e.  Hardboard         (Rated)
                                                Door

                                                Pressed metal frame, hardboard
                                                door, 1 1/2 pair of butts, pass
                                                set, & bumper.

FINISHES            Office              401.    Ceiling:  White painted aluminum
                                                          grid, 2' x 4'
                                                          acoustical tiles.

                                        404.    Doors:    Painted.

                    Office Toilet       406.    Floors:   Vinyl Composite Tile.

                    Kitchen &
                    Lab

                    Office              408.    Floors:   Carpet
                                                          ( )   Glued directly
                                                          to the floor.

                                                          ( )   Allow $12.00
                                                          per s.y. installed
                                                          with tax for selection
                                                          made from options
                                                          provided by Lessor.

                    Warehouse           409.    Floors:   Concrete Sealer.

                    Office              410.    Walls:    Two coats of flat
                                                          latex wall paint.

                    Office              413.    Base:     4" vinyl cove base.


                    Toilets             415.    Toilet paper holder, paper towel
                                                & soap dispensers, and mirrors.

                    Office Toilet       416.    Vanity cabinets and counters.

                    Office              418.    Louvre drapes for each
                                                exterior window.

PLUMBING            Office Toilet       500.a.  Men:      Water closet, vanity
                                                          sink & faucet.

                    Office Toilet       500.b.  Women:    Water closet, vanity
                                                          sink & faucet.

ELECTRIC                                552.    Service:  200 amp 120/208 volt
                                                          panel board, located
                                                          at  column line C,
                                                          with circuit breakers
                                                          and  electric meter.




                                      -38-
   39
                                  
                    Office              557.a.  Lights:   Lighting level of 75
                                                          fc using 2 x 4, 4 tube
                                                          recessed fluorescent
                                                          fixture.

                    Warehouse           557.c.  Lights:  Lighting level of 35 fc
                                                         using 8', 2 tube strip
                                                         fluorescent fixture.

                                        557.g.  Lights:  Emergency lights and
                                                         battery pack.

                                        557.h.  Lights:  Exit signs.

                    Office              559.a.  Switches: Single pole wall
                                                          switch & plate. Direct
                                                          from panel board.

                    Warehouse                             Direct from panel board.

                    Office              559.d.  Outlets: 110 volt duplex wall outlet.

                                        560.a.  Fire alarm horns and lights.

                                        560.b.  Fire alarm pull stations.

FIRE SPRINKLER                          600.a.  Group 2 standard hazard calculated
                                                wet system having one head per 120
                                                s.f. of floor area.

                    Office              603.    Drops with Heads

                    Warehouse           604.    Heads

HEATING and
COOLING             Office              650.a.  Heating and Cooling System
                                                1. Gas heat and electric cooled roof top unit.
                                                2. One thermostat per roof top unit.
                                                3. Air distributed via a ducted system
                                                   from the roof top unit and returned
                                                   via the ceiling space plenum.
                                                4. The system will maintain a:
                                                   Heating temperature of 68 degrees when the
                                                   outside temperature is 0 degrees.
                                                   Cooling temperature is 90 degrees or a 15 degree
                                                   differential between the inside & outside
                                                   temperature.    

                    Warehouse           650.b.  Heating System
                                                1. Gas fired suspended unit heaters.
                                                2. One thermostat per each heater
                                                3. Air distributed directly from unit heaters.
                                                4. The system will maintain a:
                                                   Heating temperature of 55 degrees when the
                                                   outside temperature is 0 degrees.

MISCELLANEOUS                           702.a.  Overhead door, 8'- 0" X 8' - 0".

                                        702.b.  Dock seal and rubber dock bumpers.

GENERAL                                  1158.  Exterior sign with Lessee's name
CONDITIONS                                      installed over the front and rear
                                                entrances.




                                      -39-
   40
                       1428.       Architectural service; one design & revision.


                        ================================
                        Non Standard Tenant Improvements
                        ================================


ROOF                       250.a. Cut & patch for roof top units

GLASS & GLAZ   Reception   300.   Slider with louver drapes.

PLUMBING       Kitchen     500.   Kitchen sink, faucer and disposal.

                           500.   Water connected for coffee maker.

ELECTRIC                   555.   Power wire roof top unit.

MISCELLANEOUS
                           700.   Labor & material for adds to "Scope
                                  of Work".

                           711.   Kitchen cabinets and counters.

ENCLOSURES                        Title Page
                                  Section (I) Summation
                                  Section (II) Scope of Work
                                  Schedule (A) Lessee's Quantities
                                  Schedule (B) Rent Schedule
                                  Key Plan Of Premises
                                  Lessee's Floor Plan


                                      -40-
   41


- ------------------------------------------------------------------------------------------------------------------------------------
PROPOSAL TO LEASE                                                   
  SCOPE OF WORK                                                                                                         LESSEE
SCHEDULE (A) PAGE (1)                                                                                                  QUANTITY
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             
Walpole Park South II Trust                                                              OFFICE: Rentable Area         2,500 sf
N.G.S. Associates, Inc.                                                               ------------------------              50%
      Tenant Space Number: WPS2-2B                           STANDARD                 ------------------------         --------
      Proposal Number: WPS2-03NGSASS.(2)                   IMPROVEMENTS               WAREHOUSE: Rentable Area         2,521 sf
         Tenant Number: WPS2-(N/A)                                                    ------------------------              50%
         November 21, 1989                                                            ------------------------         --------
                                                                                          TOTAL: Rentable Area         5,021 sf
- ------------------------------------------------------------------------------------------------------------------------------------
111    CONCRETE etc               Floors               On Grade                                                        5,021 sf
120 a)                            Stairs               Pre Case Stair & Rail                    Rear Entrance              1 ea
- ------------------------------------------------------------------------------------------------------------------------------------
306    GLASS etc                  Door & Windows                                                Front Entrance             1 ea
- ------------------------------------------------------------------------------------------------------------------------------------
355    a)  METAL STUD WALLS       Face Wall            Interior                                                           40 lf
355    b)                         Face Wall            Interior                                                            0 lf
360    a)                         Demising Wall        Office/Ware                                       Rated            40 if
360    b)                         Demising Wall        Tenant                                            Rated           250 lf
364    a)                         Standard Wall                                                      Non Rated           192 lf
- ------------------------------------------------------------------------------------------------------------------------------------
373    a)  DOORS & FRAMES etc     Metal Door                                    Non Rated       Rear Entrance              1 ea
373    c)                         Metal Door                                        Rated       Interior                   1 ea
373    e)                         Hardboard Door                                Non Rated       Interior                   8 ea
- ------------------------------------------------------------------------------------------------------------------------------------
401        FINISHES               Ceilings             Acoustical 2 x 6 Tile                                           2,500 sf
404                               Doors                Paint                                                              10 ea
406                               Floor                Vinyl Composite Tile                                            1,160 sf
408                               Floor                Carpet                                                            164 sy
410                               Walls                Paint                    Office Walls                           6,159 sf
413                               Base                 Vinyl Cove               Office Walls                             628 lf
515                               Accessories                                                                              2 ea 
416                               Vanities             Lavanette                                                           2 ea 
418                               Windows              Louvre Drapes                                                       3 ea 
- ------------------------------------------------------------------------------------------------------------------------------------
500        PLUMBING               Toilet Rooms         Plumbing Fixtures                                                   4 ea
- ------------------------------------------------------------------------------------------------------------------------------------
552        ELECTRIC               Service & Meters                                                                         1 ea
557    a)                         Light Fixtures       2' x 4' Recessed                                                   35 ea
557    b)                         Light Fixtures       8' Strips                                                           6 ea
557    c)                         Light Fixtures       Emergency                Lights                                     3 ea
557    d)                         Light Fixtures                                Battery Packs                              1 ea
557    e)                         Light Fixtures       Exit Signs                                                          3 ea
559    a)                         Switches             Single Pole              Wall Mounted Switch                       16 ea
559    b)                         Outlets              110 Volt                 Wall Mounted Duplex Outlet                38 ea
560    a)                         Fire Alarm           Horn & Lights                                                       1 ea
560    b)                         Fire Alarm           Full Stations                                                       2 ea
- ------------------------------------------------------------------------------------------------------------------------------------
603        FIRE SPRINKLER         Drops With Heads     Dropped Ceiling Area                                               25 ea
604                                          Heads     Exposed Ceiling Area                                               38 ea
- ------------------------------------------------------------------------------------------------------------------------------------
650    a)  HEATING & COOLING      Heating & Cooling    Roof Top Units                                                  2,500 sf
650    b)                         Heating              Unit Heaters                                                    4,521 sf
- ------------------------------------------------------------------------------------------------------------------------------------
702        MISCELLANEOUS          Overhead Doors       Seals                    Rubber Bumpers                             1 ea
- ------------------------------------------------------------------------------------------------------------------------------------
1158       GENERAL                Signs                Tenant Neat              Exterior                Front & Rear       1 pr
           CONDITIONS                                           
- ------------------------------------------------------------------------------------------------------------------------------------
250        ROOF                   Cut & Patch          Roof Top Units                                                      1 ea
- ------------------------------------------------------------------------------------------------------------------------------------



                                      -41-
   42
                                                                                                           
- ------------------------------------------------------------------------------------------------------------------------------------
300       GLASS & GLAZING         Reception            Slider W/ Louver Blinds                                            12 sf
- ------------------------------------------------------------------------------------------------------------------------------------
500 a)    PLUMBING                Kitchen              Kitchen Sink, Disposal & Faucet                                     1 ea
500 b)                            Kitchen              Water Connection for Coffee Maker                                   1 ea
- ------------------------------------------------------------------------------------------------------------------------------------
555       ELECTRIC                Power Wire           Roof Top Unit                                                       1 ea
- ------------------------------------------------------------------------------------------------------------------------------------
700 a)    MISCELLANEOUS           Labor & Material     For Additional Tenant Improvements                              5,021 sf
711                               Kitchen              Cabinets & Counters                                                 6 lf
- ------------------------------------------------------------------------------------------------------------------------------------




                                      -42-
   43
                                    EXHIBIT 4

                               SIGN SPECIFICATIONS


         This sign specification is written to create and maintain standards of
uniformity for all businesses in Walpole Park South (II). Tenants must conform
with these specifications, and any variations must be approved of by the
Landlord.

         A.       BUILDING SIGNS - One (1) non-illuminated 4'0" X 5'0" will be
                  allowed for each tenant for identification purposes. The sign
                  shall be manufactured with a 1 1/2" X 2 1/2" extruded aluminum
                  retainer forming frame around changeable .063 aluminum face.
                  Face and frame will be rust to match trim on building. All
                  lettering must be Rockwell Bold. The sign shall be mounted and
                  centered over entrance door.

              One (1) non-illuminated 1' 6" X 4' 0" will be allowed for tenant
              identification above the loading dock doors in the rear of the
              Building. The sign will be manufactured of 0.40 aluminum with a 1"
              aluminum tube frame. Face will be rust background with white copy.
              All lettering must be Rockwell Bold.

         B.       WINDOW SIGNS - Nothing is to appear in/or on the windows
                  without the LESSOR's approval before installation.

              OTHER SIGNS - No other signs, temporary or permanent, are allowed
              without written approval of the LESSOR.


                                      -43-
   44
                                     ADDENDA


         28.  LESSEE'S OPTION TO EXTEND LEASE TERM

              28.1 OPTION GRANTED: At the expiration of the initial term of this
         Lease, and if this Lease shall then be in full force and effect, and
         the LESSEE shall have fully performed or observed all of the terms,
         covenants, and conditions on its part to be performed or observed
         hereunder, the LESSEE shall have the option to extend the term of the
         Lease, upon the same terms, covenants and conditions, (except for rent
         as hereinbelow referred to as "EXTENDED TERM"). The option herein
         granted shall be exercised by the LESSEE by giving written notice to
         the LESSOR, not less than three (3) months and no more than six (6)
         months prior to the expiration of the initial Lease Term.

              28.2 RENT DURING EXTENDED TERM: The Yearly Rent payable by the
         LESSEE during the Extended Term shall be the greater of the following:
         (1) the rate per annum payable at the end of the initial Lease term;
         or, (2) a sum equal to what would be considered as the fair market
         rental for the Premises, based upon the use of the same as first class
         office and warehouse space located in the rental community between
         Route 1 and Route 128 as of the date of commencement of the Extended
         Term, under similar terms and conditions as contained in this Lease,
         but requiring no investment by LESSOR for improvements, renovations,
         repairs, etc. (hereinafter referred to as "MARKET RENT"). If the
         parties cannot agree as to the Market Rent, the Market Rent shall be
         determined by two (2) appraisers who are members of the American
         Institute of Real Estate Appraisers to be appointed and paid for by
         each of the parties. If such appraisers cannot agree on the Market
         Rent, they shall together promptly select a third appraiser who shall
         also be a member of the American Institute of Real Estate Appraisers
         and whose fee shall be shared by each of the parties hereto. A written
         determination as to the Market Rent signed by any two (2) of the
         appraisers so chosen shall be final and binding on the parties hereto.
         The Yearly Rent payable by the LESSEE during the Extended Term shall be
         paid in addition thereto, the LESSEE shall pay all other charges, such
         as, but not limited to, Taxes and Operating Costs as set forth in this
         Lease.


                                      -44-
   45
                                    EXHIBIT 2

                                 REFERENCE DATA


         DATE OF EXECUTION OF LEASE:  December 21, 1989

         DATE OF EXECUTION OF THIS FIRST AMENDMENT:  March   , 1994

         LESSEE:  NGS DIVISION/MKS INSTRUMENTS, INC.,

         ARTICLE 1 DESCRIPTION OF DEMISED PREMISES

              (a)  Initial Premises: 5,021+ square feet of space ("INITIAL
                   SPACE") consisting of 2,500+/- of office space and 2,521+/- 
                   of warehouse space located in the building numbered 24
                   Walpole Park South, Walpole, Massachusetts, as shown on the
                   space plan hereto annexed as Exhibit 1, outlined in yellow,
                   and being identified thereon as "Initial Space A".

              (b)  Additional Space: "B" Commencing on May 1, 1992 the LESSEE
                   shall take and lease from the LESSOR an additional 5,021+/-
                   square feet of space ("ADDITIONAL SPACE") consisting of
                   500+/- square feet of office space and 4,521+/- of warehouse
                   space located contiguous to the Initial Space, as shown on
                   the space plan hereto annexed as Exhibit 1, outlined in
                   yellow, and being identified thereon as "Additional Space B".

              (b)  Additional Space: "C" Commencing on March 1, 1994 the LESSEE
                   shall take and lease from the LESSOR an additional 10,042+/-
                   square feet of space ("ADDITIONAL SPACE") consisting of
                   1,250+/- square feet of office space and 8,792+/- of
                   warehouse space located contiguous to the Initial Space, as
                   shown on the space plan hereto annexed as Exhibit 1, outlined
                   in yellow, and being identified thereon as "Additional Space
                   C".

         ARTICLE 2

              2.1  TERM COMMENCEMENT DATE:  as to the Initial Space "A"
                   March 1, 1990

                   TERM COMMENCEMENT DATE:  as to the Additional Space "B"
                   May 1, 1992

                   TERM COMMENCEMENT DATE:  as to the Additional Space "C"
                   March 1, 1994


                                      -45-
   46
         2.2      TERMINATION DATE: March 31, 1997

to the same Exhibit 3A as annexed hereto, such Exhibit 3A being applicable to
the Additional Space (as defined in said Exhibit 2).

         Except as above provided, The Lease shall be otherwise deemed to be
unamended and unmodified.

         IN WITNESS WHEREOF, the parties have hereto executed this FIRST AMENDED
in duplicate original as a sealed instrument on this _____ day of March 1994.


                                          LESSOR:



_________________________________         ______________________________________
WITNESS                                   DONNELL W. MURPHY
                                          Trustee as aforesaid



ATTEST:                                   LESSEE:
                                          NGS DIVISION/MKS INSTRUMENTS, INC.
                                          BY:


_________________________________         ______________________________________
SECRETARY/CLERK                           ITS
                                          hereunto duly authorized


                                      -46-
   47
EXHIBIT:2             SCHEDULE:A          WALPOLE PARK SOUTH II TRUST
- --------------------------------------------------------------------------------

DATE: 03/15/94      TENANT : NGS DIVISION/MKS INSTRUMENTS, INC.
================================================================================



                                                                 RENT PAYMENT SCHEDULE
                                                             -------------------------------
                                   RENTABLE                  RENTABLE                RENTAL                     RENTAL
DUE DATE                            SQ. FT.                  SQ. FT.                  RATE                      PAYMENT
- --------------------    -------------------------------      -------------------------------------------------------------
                        Space A     Space B     Space C                   Space A     Space B     Space C
- -------------------     -------     -------     -------      ------       --------    --------    --------    ------------
                                                                                               
January 1, 1994         5,021       5,021       10,042       20,084       $   0.00    $   0.00    $   0.00    $       0.00
February 1, 1994        5,021       5,021       10,042       20,084       $   0.00    $   0.00    $   0.00    $       0.00
March 1, 1994           5,021       5,021       10,042       20,084       $   0.00    $   0.00    $   0.00    $       0.00
April 1, 1994           5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
May 1 1994              5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
June 1, 1994            5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
July 1, 1994            5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
August 1, 1994          5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
September 1, 1994       5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
October 1, 1994         5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
November 1, 1994        5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
December 1, 1994        5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
- --------------------------------------------------------------------------------------------------------------------------
CALENDAR YEAR 1
- --------------------------------------------------------------------------------------------------------------------------
January 1, 1995         5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
February 1, 1995        5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
March 1, 1995           5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
April 1, 1995           5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
May 1, 1995             5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
June 1, 1995            5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
July 1, 1995            5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
August 1, 1995          5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
September 1, 1995       5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
October 1, 1995         5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
November 1, 1995        5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
December 1, 1995        5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
- --------------------------------------------------------------------------------------------------------------------------
CALENDAR YEAR 2
- --------------------------------------------------------------------------------------------------------------------------
January 1, 1996         5,021       5,021       10,042       20,084       $   8.00    $   8.00    $   8.00    $   8,368.33
February 1, 1996        5,021       5,021       10,042       20,084       $   8.00    $   8.00    $   8.00    $   8,368.33
March 1, 1996           5,021       5,021       10,042       20,084       $   8.00    $   8.00    $   8.00    $   8,368.33



                                      -47-
   48


                                                                 RENT PAYMENT SCHEDULE
                                                             -------------------------------
                                   RENTABLE                  RENTABLE                RENTAL                     RENTAL
DUE DATE                            SQ. FT.                  SQ. FT.                  RATE                      PAYMENT
- --------------------    -------------------------------      -------------------------------------------------------------
                        Space A     Space B     Space C                   Space A     Space B     Space C
- -------------------     -------     -------     -------      ------       --------    --------    --------    ------------
                                                                                               
April 1, 1996           5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
May 1, 1996             5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
June 1, 1996            5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
July 1, 1996            5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
August 1, 1996          5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
September 1, 1996       5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
October 1, 1996         5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
November 1, 1996        5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
December 1, 1996        5,021       5,021       10,042       20,084       $   5.00    $   5.00    $   5.00    $   8,368.33
- --------------------------------------------------------------------------------------------------------------------------
CALENDAR YEAR 3
- --------------------------------------------------------------------------------------------------------------------------
January 1, 1997         5,021       5,021       10,042       20,084       $   8.00    $   5.00    $   5.00    $   8,368.33
February 1, 1997        5,021       5,021       10,042       20,084       $   8.00    $   5.00    $   5.00    $   8,368.33
March 1, 1997           5,021       5,021       10,042       20,084       $   8.00    $   5.00    $   5.00    $   8,368.33
April 1, 1997               0           0            0            0       $   0.00    $   0.00    $   0.00    $       0.00
May 1, 1997                 0           0            0            0       $   0.00    $   0.00    $   0.00    $       0.00
June 1, 1997                0           0            0            0       $   0.00    $   0.00    $   0.00    $       0.00
July 1, 1997                0           0            0            0       $   0.00    $   0.00    $   0.00    $       0.00
August 1, 1997              0           0            0            0       $   0.00    $   0.00    $   0.00    $       0.00
September 1, 1997           0           0            0            0       $   0.00    $   0.00    $   0.00    $       0.00
October 1, 1997             0           0            0            0       $   0.00    $   0.00    $   0.00    $       0.00
November 1, 1997            0           0            0            0       $   0.00    $   0.00    $   0.00    $       0.00
December 1, 1997            0           0            0            0       $   0.00    $   0.00    $   0.00    $       0.00
- --------------------------------------------------------------------------------------------------------------------------
CALENDAR YEAR 4



                                      -48-
   49
                                 FIRST AMENDMENT

         This is the FIRST AMENDMENT made to a certain Indenture of Lease ("THE
LEASE") made by and between Donnell W. Murphy, Trustee of Walpole Park South
(II) Trust ("LESSOR"), as landlord; and NGS Division/MKS Instruments, Inc., a
Massachusetts corporation ("THE LESSEE"), as tenant dated December 21, 1989. The
Lease concerns certain premises leased by the LESSEE from the LESSOR at 24
Walpole Park South Drive, Walpole, MA.

         In consideration hereof, the LESSOR and the LESSEE do hereby modify The
Lease as follows:

         29.      EXHIBIT 1 ("Plan of Premises") as annexed to The Lease is
               stricken and there is substituted in place thereof Exhibit 1 as
               annexed hereto.

         30.      EXHIBIT 2 ("Reference Data") as annexed to The Lease is
               stricken and there is substituted in place thereof Exhibit 2 as
               annexed hereto.

         31.      EXHIBIT 3 ("Building Standard Work") as annexed to The Lease
               is amended by identifying the same as being applicable to the
               Initial Space (as defined in Exhibit 2 hereto annexed); and
               further by adding to the same Exhibit 3A as annexed hereto, such
               Exhibit 3A being applicable to the Additional Space (as defined
               in said Exhibit 2).

               Except as above provided, The Lease shall be otherwise deemed
         to be unamended and unmodified.


                                      -49-
   50
         IN WITNESS WHEREOF, the parties have hereto executed this FIRST
AMENDMENT in duplicate original as a sealed instrument on this 19th day of
November, 1993.



                                              LESSOR:



__________________________________            __________________________________
WITNESS                                       DONNELL W. MURPHY
                                              Trustee as aforesaid
                                           
ATTEST:                                       LESSEE:
                                              NGS DIVISION/MKS INSTRUMENTS, INC.
                                              BY:
                                           
                                           
                                           
__________________________________            __________________________________
WITNESS                                       Its
                                              hereunto duly authorized
                              

                                      -50-
   51
EXHIBIT:2A     SCHEDULE:B
- --------------------------------------------------------------------------------

DATE: 10/15/93      TENANT : NGS DIVISION/MKS INSTRUMENTS, INC.
================================================================================



                                                                      RENT PAYMENT    SCHEDULE                                RENTAL
                                         RENTABLE                       RENTABLE       RENTAL                                 PAY-
DUE DATE                                  SQ. FT.                       SQ. FT.         RATE                                  MENT
- ----------------------     ---------------------------------------      ------------------------------------------------------------
                           Space A        Space B        Space C                       Space A    Space B     Space C
- ----------------------     --------       --------       ---------      --------       -------    -------     -------     --------
                                                                                                   
January 1, 1993            5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
February 1, 1993           5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
March 1, 1993              5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
April 1, 1993              5,021,00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
May 1 1993                 5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
June 1, 1993               5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
July 1, 1993               5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
August 1, 1993             5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
September 1, 1993          5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
October 1, 1993            5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
November 1, 1993           5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
December 1, 1993           5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
- ----------------------------------------------------------------------------------------------------------------------------------
CALENDAR YEAR 1                                                                  
- ----------------------------------------------------------------------------------------------------------------------------------
January 1, 1994            5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
February 1, 1994           5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
March 1, 1994              5,021.00       5,021.00       10,042.00      20,084.00        6.50       5.58       5.00       9,238.64
April 1, 1994              5,021.00       5,021.00       10,042.00      20,084.00        6.50       5.58       5.00       9,238.64
May 1, 1994                5,021.00       5,021.00       10,042.00      20,084.00        6.50       5.58       5.00       9,238.64
June 1, 1994               5,021.00       5,021.00       10,042.00      20,084.00        6.50       5.58       5.00       9,238.64
July 1, 1994               5,021.00       5,021.00       10,042.00      20,084.00        6.50       5.58       5.00       9,238.64
August 1, 1994             5,021.00       5,021.00       10,042.00      20,084.00        6.50       5.58       5.00       9,238.64
September 1, 1994          5,021.00       5,021.00       10,042.00      20,084.00        6.50       5.58       5.00       9,238.64
October 1, 1994            5,021.00       5,021.00       10,042.00      20,084.00        6.50       5.58       5.00       9,238.64
November 1, 1994           5,021.00       5,021.00       10,042.00      20,084.00        6.50       5.58       5.00       9,238.64
December 1, 1994           5,021.00       5,021.00       10,042.00      20,084.00        6.50       5.58       5.00       9,238.64
- ----------------------------------------------------------------------------------------------------------------------------------
CALENDAR YEAR 2                                                                  
- ----------------------------------------------------------------------------------------------------------------------------------
January 1, 1995            5,021.00       5,021.00       10,042.00      20,084.00        6.50       5.58       5.00       9,238.64
February 1, 1995           5,021.00       5,021.00       10,042.00      20,084.00        6.50       5.58       5.00       9,238.64



                                      -51-
   52


                                                                      RENT PAYMENT    SCHEDULE                                RENTAL
                                         RENTABLE                      RENTABLE        RENTAL                                 PAY-
DUE DATE                                  SQ. FT.                       SQ. FT.         RATE                                  MENT
- ----------------------     ---------------------------------------      ------------------------------------------------------------
                           Space A        Space B        Space C                       Space A    Space B     Space C
- ----------------------     --------       --------       ---------      --------       -------    -------     -------     --------
                                                                                                   
March 1, 1995              5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       5.00           0.00
April 1, 1995              5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
May 1, 1995                5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
June 1, 1995               5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
July 1, 1995               5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
August 1, 1995             5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
September 1, 1995          5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
October 1, 1995            5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
November 1, 1995           5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
December 1, 1995           5,021.00       5,021.00       10,042.00      20,084.00        0.00       0.00       0.00           0.00
- ----------------------------------------------------------------------------------------------------------------------------------
CALENDAR YEAR 3                                                                 



                                      -52-
   53
                                    EXHIBIT 2

                                 REFERENCE DATA

DATE OF EXECUTION OF LEASE: December 21, 1989

DATE OF EXECUTION OF THIS FIRST AMENDMENT: October , 1993

LESSEE: NGS DIVISION/MKS INSTRUMENTS, INC.,

ARTICLE 1 DESCRIPTION OF DEMISED PREMISES

         (a)      Initial Premises: 5,021 (+/-) square feet of space ("INITIAL
                  SPACE") consisting of 2,500 (+/-) of office space and 2,521
                  (+/-) of warehouse space located in the building numbered 24
                  Walpole Park South, Walpole, Massachusetts, as shown on the
                  space plan hereto annexed as Exhibit 1, outlined in yellow,
                  and being identified thereon as "Initial Space A".

         (b)      Additional Space: "B" Commencing on May 1, 1992 the LESSEE
                  shall take and lease from the LESSOR an additional 5,021 (+/-)
                  square feet of space ("ADDITIONAL SPACE") consisting of 500
                  (+/-) square feet of office space and 4,521 (+/-) of warehouse
                  space located contiguous to the Initial Space, as shown on the
                  space plan hereto annexed as Exhibit 1, outlined in yellow,
                  and being identified thereon as "Additional Space B".

         (b)      Additional Space: "C" Commencing on March 1, 1994 the LESSEE
                  shall take and lease from the LESSOR an additional 10,042
                  (+/-) square feet of space ("ADDITIONAL SPACE") consisting of
                  1,250 (+/-) square feet of office space and 8,792 (+/-) of
                  warehouse space located contiguous to the Initial Space, as
                  shown on the space plan hereto annexed as Exhibit 1, outlined
                  in yellow, and being identified thereon as "Additional Space
                  C".

ARTICLE 2

         2.1      TERM COMMENCEMENT DATE: as to the Initial Space "A" March 1,
                  1990

                  TERM COMMENCEMENT DATE: as to the Additional Space "B" May 1,
                  1992

                  TERM COMMENCEMENT DATE: as to the Additional Space "C" March
                  1, 1994

         2.2      TERMINATION DATE: February 28, 1995


                                      -53-
   54
ARTICLE 4

         USE OF PREMISES: For office and warehousing space of LESSEE'S products,
         and any other lawful use. No retail sales shall be permitted to be
         conducted from the premises.

ARTICLE 5 - RENT

         Rent for the Initial Space and the Additional Space shall be paid to
         LESSOR in accordance with the attached Exhibit 2A-Schedule B

ARTICLE 7 - PARKING SPACES ALLOCATED TO LESSEE:

         Twenty Six (30) spaces

ARTICLE 8.1(a) - RENTABLE AREA

                                               
         INITIAL SPACE:  "A"        5,021 + square feet
                                          -

         ADDITIONAL SPACE:  "B"     5,021 + square feet
                                          -

         ADDITIONAL SPACE:  "C"    10,042 + square feet
                                   -------             

         TOTAL                     20,084 + square feet
                                          -



         BUILDING RENTABLE AREA:  95,567+ square feet

         LESSEE'S PROPORTIONATE SHARE:

                                                     
              For Initial Space                        5.25%
              For Initial Space & Additional Spaces   21.00%



ARTICLE 23 - ADDRESSES OF PARTIES:

              LESSOR:   P.O. Box 123
                        7 West Street
                        Walpole, Massachusetts  02081

              LESSEE:   25 Walpole Park South
                        Walpole, Massachusetts 02081


                                      -54-
   55
                                   EXHIBIT 3A

                             BUILDING STANDARD WORK
                         APPLICABLE TO ADDITIONAL SPACE

         The interior development to the Additional Space shall be substantially
in accordance with the plan/sketch hereto annexed which indicates an approximate
12%/88% office-warehouse use.


                                      -55-
   56

                                   EXHIBIT 3A

Walpole Park South II Trust                                     October 15, 199?
MGS/MKS Instruments, Inc.                                       Page 3


                           SECTION (II) SCOPE OF WORK




   NOTES          1.    This "Scope of Work" is intended to outline the
                        improvements to accommodate the Lessee's tenancy within
                        the "Tenant Space".

                  2.    Unless otherwise noted the following items are not
                        included:

                        A)    The floor, walls, superstructure, roof and
                              mechanical systems do not include any provisions
                              for Lessee's machinery, equipment or the
                              installation of same.

                        B)    Security, Public Address, or Telephone Systems.

                        C)    Computer Power or Data Wiring.

                  3.    Note the attached "Schedule (A)" for "Lessee's
                        Quantities" included within the "Scope of Work".

                  4.    The Lessor or his nominee agree to perform the items
                        noted within the "Scope of Work" substantially in
                        accordance with the following information and for the
                        "Rent" noted in Section (I).



   HEIGHT                            Overall:  21' - 4" Maximum:  top of
                                               concrete floor to top of Steel.
                 Office              Clear:    9' - 0"   Minimum:  top of
                                               concrete floor to underside of
                                               Acoustical Ceiling.
                 Warehouse           Clear:    18' - 0" Minimum:  top of
                                               concrete floor to underside of
                                               Steel.


   TENANT SPACE  Office         1- 10x10 Private Office

- -------------------------------------------------------------------------------
* 7 WEST STREET * WALPOLE, MA * 02081 * (508) 668-1200 * FAX (508) 668-1201 *
- -------------------------------------------------------------------------------
   57
Walpole Park South II Trust                                     October 15, 199?
MGS/MKS Instruments, Inc.                                                 Page 4


                                1- 12x13 Private Office
                                1- 10x12 Kitchen Area
                                1- Mens Rooms
                                1- Ladies Room

                  Warehouse     The balance of the area is open warehouse.


                      Standard Tenant Improvements

   CONCRETE etc.                 111.   4" non structural concrete floor on
                                        grade.
                                 111.a  3000 psi concrete.
                                 111.b. 6"x6"/#10/#10 welded wire mesh
                                        reinforcing.
                                 111.c  Control joints designed to reduce
                                        cracking.
                  Rear Entrance  120.   Precast concrete stairs and rail.


   GLASS etc.     Front Entrance 306.   Exterior front windows, door and
                                        sidelight.


   METAL STUD
   WALLS          Office         355.a. Face Wall (Interior)
                                        One layer of 1/2" gypsum board
                                        applied to the inside face of the front
                                        exterior wall, taped and sanded to the
                                        ceiling plus 6".

                  Warehouse      355.b  Face Wall (Interior) One layer
                                        of 1/2" gypsum board applied to the
                                        inside face of the front exterior
                                        wall, taped and sanded to the
                                        underside of steel.

                  Warehouse      360.a  Demising Wall (Ware) (   Rated)

- -------------------------------------------------------------------------------
* 7 WEST STREET * WALPOLE, MA * 02081 * (508) 668-1200 * FAX (508) 668-1201 *
- -------------------------------------------------------------------------------
   58
Walpole Park South II Trust                                     October 15, 199?
MGS/MKS Instruments, Inc.                                       Page 5




                 Warehouse       360.b.    Demising Wall (Tenant) (Rated)
                                           Framing 16" o.c., sound dampening
                                           insulation, two layers per face
                                           of 5/8" firecode gypsum board,
                                           taped and sanded to the underside
                                           of the metal deck.

                 Office          364.a.    Standard Wall (Bathrooms) (Non
                                           Rated) Framing 16" o.c. to the
                                           underside of the metal deck or
                                           barjoint, one layer per face of 1/2"
                                           gypsum board, taped and sanded to
                                           the underside of the ceiling plus
                                           6".

DOORS and        Rear Entrance   373.a.    Metal Door (Non Rated)
                                           Pressed metal frame, hollow metal
                                           door, 1 1/2 pair of butts, lock set,
                                           closer, threshold and weather-
                                           stripping.
                                 373.c     Metal Door ( Rated) Pressed metal
                                           frame, hollow metal door, 1 1/2 pair
                                           of butts, lock set, and closer.
                                 373.e.    Hardboard Door ( Rated) Pressed
                                           metal frame, hardboard door, 1 1/2
                                           pair of butts, pass set, & bumper.

FINISHES         Office          401.      Ceiling:   White painted aluminum
                                                      grid, 2' x 4' acoustical
                                                      tiles.
                                 404.      Doors:     Painted.
                 Toilets         406.      Floors:    Vinyl Composite Tile.
                 Office          408.      Floors:    Carpet
                                                     ( )  Glued directly to
                                                          the floor.

  *7 WEST STREET * WALPOLE, MA * 02081 * (508) 668-1200 * FAX (508) 668-1201*
   59
Walpole Park South II Trust                                     October 15, 199?
MGS/MKS Instruments, Inc.                                       Page   6


                                               ( )  Allow $11.50 per
                                                    s.y. installed with
                                                    tax for selection
                                                    made from options
                                                    provided by
                                                    Lessor.
                 Warehouse      409.   Floors:   Concrete Sealer.
                                410.   Walls:    Two coats of flat latex
                                                 wall paint.
                                413.   Base:     4" vinyl cove base.
                 Toilets        415.   Toilet paper holder, paper
                                       towel & soap dispensers, and
                                       mirrors.
                 Toilets        416.   Vanity cabinets and counters.
                 Office         418.   Louvre drapes for each exterior
                                       window.

 PLUMBING       Office Toilet   500.a. Men:      Water closet, vanity sink
                                                 & faucet.
                Office Toilet   500.b. Women:    Water closet (1), vanity
                                                 sink (1) & faucet (1), with
                                                 floor drain and hose bib.

 ELECTRIC                       552.   Service:  125 amp 120/208 volt
                                                 panel board, located at
                                                 column line C, with
                                                 circuit breakers and
                                                 electric meter.
                 Office        557.a.  Lights:   Lighting level of 75 fc using
                                                 2 x 4, 4 tube recessed
                                                 fluorescent fixture.
                 Warehouse     557.c.  Lights:   Lighting level of 35 fc using
                                                 8', 2 tube strip fluorescent
                                                 fixture.
                                557.g. Lights:   Emergency lights and
                                                 battery pack.


  *7 WEST STREET * WALPOLE, MA * 02081 * (508) 668-1200 * FAX (508) 668-1201*

   60
Walpole Park South II Trust                                     October 15, 199?
MGS/MKS Instruments, Inc.                                               Page   7


                               557.h.    Lights:    Exit signs.
                Office         559.a.    Switches:  Single pole wall switch &
                                                    plate.
                Warehouse                           Direct from panel board.
                Office         559.d.    Outlets:   110 volt duplex wall
                                                    outlet.
                               560.a.    Fire alarm horns and lights.
                               560.b.    Fire alarm pull stations.
                               560.c.    Fire alarm smoke detectors.

 FIRE
 SPRINKLER                     600.a.    Group 2 standard hazard calculated
                                         wet system having one head per 120
                                         s.f. of floor area.
                Office         603.      Drops with Heads
                Warehouse      604.      Heads


 HEATING and    Office         650.a.    Heating and Cooling System
                                         1.   Gas heat and electric cooled roof
                                              top unit.
                                         2.   One thermostat per roof top unit.
                                         3.   Air distributed via a ducted
                                              system from the roof top unit
                                              and returned via the ceiling
                                              space plenum.
                                         4.   The system will maintain a:
                                              Heating temperature of 68 degrees
                                              when the outside temperature is
                                              0 degrees.  Cooling temperature of
                                              75 degrees when the outside
                                              temperature is 90 degrees or a
                                              15 degree differential between
                                              the inside & outside
                                              temperature.



  *7 WEST STREET * WALPOLE, MA * 02081 * (508) 668-1200 * FAX (508) 668-1201*
   61
Walpole Park South II Trust                                     October 15, 199?
MGS/MKS Instruments, Inc.                                       Page   8


                   Warehouse      650.b.    Heating System
                                            1.   Gas fired suspended unit
                                                 heaters.
                                            2.   One thermostat per each heater
                                            3.   Air distributed directly from
                                                 unit heaters.
                                            4.   The system will maintain a:
                                                 Heating temperature of 55
                                                 degrees when the outside
                                                 temperature is 0 degrees.

MISCELLANEOUS      Warehouse      702.a.    2- Overhead door,
                                               8' - 0" X 8' - 0".
                   Warehouse      702.b.    2- Dock seal and rubber
                                               dock bumpers.


GENERAL
CONDITIONS                        1158.     Exterior sign with Lessee's
                                            name installed over the front
                                            and rear entrances.
                                  1428.     Architectural service; one
                                            design & revision.


                   Non Standard Tenant Improvements

SPRINKLER                         600.      Relocate existing office area
                                            heads, back to exposed ceiling
                                            area.


MISCELLANEOUS                     700.      Labor & material for adds to
                                            "Scope of Work"


  *7 WEST STREET * WALPOLE, MA * 02081 * (508) 668-1200 * FAX (508) 668-1201*


   62
Walpole Park South II Trust                                     October 15, 199?
MGS/MKS Instruments, Inc.                                                 Page 9



         ENCLOSERS                     Title Page
                                       Section (I) Summation
                                       Section (II) Scope of Work
                                       Key Plan of Premises
                                       Lessee's Floor Plan
   63
                                SECOND AMENDMENT


      This is the SECOND AMENDMENT made to a certain Indenture of Lease ("THE
LEASE") made by and between Donnell W. Murphy, Trustee of Walpole Park South
(II) Trust ("LESSOR"), as landlord; and NGS Division/MKS Instruments, Inc. a
Massachusetts corporation ("THE LESSEE"), as tenant dated December 21, 1989. The
Lease concerns certain premises leased by the LESSEE from the LESSOR at 24
Walpole Park South Drive, Walpole, MA 02081.

      In consideration hereof, the LESSOR and the LESSEE do hereby modify The
Lease as follows:

      1. EXHIBIT 2 ("Reference Data") Article 2.2 as annexed to The Lease, the
data shall be stricken and is substituted in place thereof the following Date:
March 31, 1998.

      2. EXHIBIT 2A ("Rental Payment Schedule") as annexed to The Lease is
stricken and there is substituted in place thereof Exhibit 2A as annexed hereto.
Except as above provided, The Lease shall be otherwise deemed to be unamended
and unmodified.

      IN WITNESS WHEREOF, the parties have hereto executed this SECOND AMENDMENT
in duplicate original as a sealed instrument on this day of December 1996.


                                       LESSOR


________________________               __________________________
WITNESS                                DONNELL W. MURPHY
                                       Trustee as aforesaid
   64
ATTEST:                                LESSEE:
                                       NGS DIVISION/MKS INSTRUMENTS, INC.
                                       BY:



________________________               ___________________________
WITNESS                                Its Treasurer
                                       hereunto duly authorized
   65
This "LEASE AGREEMENT" is written on behalf of NGS Division/MKS Instruments
Inc., (TENANT), to lease ADDITIONAL office and warehouse space at the
aforementioned location. TENANT agrees to rent the premises, (unit 2A), AS IS,
known as Walpole Park South II Trust (LESSOR), and as per the following terms
and conditions. Please note the following information is in accordance with the
ADDITIONAL lease space ONLY and DOES NOT INCLUDE any terms and conditions of
EXISTING Lease Agreement.

                              TERMS AND CONDITIONS



   1) USEABLE OFFICE             square feet:  +/-        500 sf
      USEABLE WAREHOUSE          square feet:  +/-        4,521 sf

      RENTABLE                   square feet:  +/-        5,021 sf

   2) TWO Years and TEN Months (2.83) years  COMMENCEMENT:  May 1, 1992
                                             TERMINATION:  February 28, 1995

   3) MAY 1, 1992 - FEBRUARY 28, 1993 is $ 5.58/rsf, Net, Net, Net
      MARCH 1, 1993 - FEBRUARY 28, 1994 is $ 5.58/rsf, Net, Net, Net
      MARCH 1, 1994 - FEBRUARY 28, 1995 is $ 5.58/rsf, Net, Net, Net

   4) The RENTAL PAYMENTS as mentioned above, DO NOT INCLUDE TENANT'S
      proportionate share, which is 5.30%, of all real estate taxes and
      operating expenses, ie: exterior maintenance and landscaping, common
      area lights and water charges, and building liability insurance. The
      LESSEE is responsible for same as of May 1, 1992.

   5) All rental payments are DUE and PAYABLE ON or BEFORE the FIRST of the
      MONTH.

   6) LESSEE'S OPTION to EXTEND lease an additional THREE (3) years will
      be in accordance with the following. Notice of same will be given to
      LESSOR NOT LATER THAN September 1, 1994.

      MARCH 1, 1995 - FEBRUARY 28, 1996 is $5.00/rsf, Net, Net, Net 
      MARCH 1, 1996 - FEBRUARY 28, 1997 is $5.00/rsf, Net, Net, Net 
      MARCH 1, 1997 - FEBRUARY 28, 1998 is $5.00/rsf, Net, Net, Net

   (*)The Option to Extend lease, term rate is for the EXISTING as well as
      future rental spaces, both Units 2A-2B.
   66
         7) TENANT will have NINE (9) PARKING SPACES located on site.
   67
         Accepted by the LESSOR:

         WALPOLE PARK SOUTH II TRUST

         DONNELL MURPHY

         ---------------------------------
                        (Signature)

         PROPERTY MANAGER/TRUSTEE

         April  2, 1992



        Accepted by the TENANT:

        NGS DIVISION/MKS
        INSTRUMENTS INC.

        ---------------------------------
                                  (Name)

        ---------------------------------
                              (Signature)

        ---------------------------------
                                  (Title)

        April 2, 1992
   68


    BUILDING RENOVATIONS ETC.                                                     Lessee         Lessor     Adjustment       FNC
                                                                                 Quantity       Allows                       To
    SCOPE OF WORK                                                                                                        Lessee
    SCHEDULE (A) PAGE (1)
- -------------------------------------------------------------------------------------------------------------------------------


                                                                                                       
First Norwood Corporation                              OFFICE: Rentable Area      3,750 sf       500 sf    3,250 sf
NGS Division/MKS Instruments, Inc.       STANDARD      ______________
 Tenant Space Number: WPS2-2A          IMPROVEMENTS    ______________                75%          10%         65%
  Proposal Number: WPS2-D3NGSASS. (6)
   Tenant Number: WPS2-(N/A)
    April 6, 1992                                       WAREHOUSE:
                                                        Rentable Area              1,271 sf     4,521 sf   -3,250 sf
                                                                                      25%          90%        -65%
                                                        ______________
                                                        ______________
                                                        TOTAL: Rentable Area
                                                                                   5,021 sf     5,021 sf        0 sf

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


                                                                                                         
111 CONCRETE etc            Floors on Grade     Interior                                 5,021 sf     5,021 sf        0 sf         0
120                         Pre Cast Stair      Exterior                Rear Entrance        1 ea         1 ea        0 ea

- ------------------------------------------------------------------------------------------------------------------------------------
306 GLASS etc               Doors & Windows     Exterior                Front Entrance       1 ea      1 ea           0 ea        0

- ------------------------------------------------------------------------------------------------------------------------------------
355 a) METAL STUD WALLS     Face Wall           Interior                Offices             40 lf     20 lf          20 lf    11,041
355 b)                      Face Wall           Interior                Warehouse            0 lf      0 lf           0 lf
360 a)                      Demising Wall       Interior      Rated     Offices/Ware        40 lf      0 lf          40 lf
360 b)                      Demising Wall       Interior      Rated     Tenant             250 lf    250 lf           0 lf
364                         Standard Wall       Interior  Non Rated     Offices/Lab        210 lf     44 lf         166 lf

- ------------------------------------------------------------------------------------------------------------------------------------
373 a) DOORS & FRAMES etc   Metal Door          Exterior  Non Rated     Rear Entrance        1 ea      1 ea           0 ea     2,717
373 b)                      Metal Door          Interior      Rated     Off/Ware/            3 ea      1 ea           2 ea
373 c)                      Hardboard Door      Interior  Non Rated     Tenant               8 ea      2 ea           6 ea
                                                                        Offices/Lab
- ------------------------------------------------------------------------------------------------------------------------------------
401    FINISHES            Ceiling              Accoustical 2 x 4 Tile  Offices/Lab      3,750 sf      0 sf      3,750  sf    16,257
404                        Doors                Paint                   Offices/Lab         12 ea      0 ea         12  ea
406                        Floor                Vinyl Composite Tile    Lab              2,232 sf     72 sf      2,160  sf
408                        Floor                Carpet                  Offices            186 sy      0 sy        186  sy
410                        Walls                Paint                   Offices/Lab      7,059 sf      0 sf      7,059  sf
413                        Base                 Vinyl Core              Offices/Lab        728 if      0 if        728  if
415                        Accessories                                  Baths                2 ea      2 ea          0  ea
416                        Vanities             Layanette               Baths                2 ea      2 ea          0  ea
418                        Windows              Louvre Drapes           Offices              3 ea      3 ea          0  ea
- ------------------------------------------------------------------------------------------------------------------------------------
500    PLUMBING            Toilet Rooms         Plumbing Fixtures       Baths                4 ea      4 ea         0 ea           0
- ------------------------------------------------------------------------------------------------------------------------------------
550    ELECTRIC            Service & Meters                                                  1 ea      1 ea         0 ea       5,400
557 a)                     Light Fixtures       2' x  4' Recessed       Offices/Lab         47 ea      3 ea        44 ea
557 b)                     Light Fixtures       8' Strips               Warehouse            3 ea      3 ea         0 ea
557 c)                     Light Fixtures       Emergency Lights        Offs/Lab/Ware        3 ea      3 ea         0 ea
557 d)                     Light Fixtures                 Bat Packs     Offs/Lab/Ware        1 ea      1 ea         0 ea
557 e)                     Light Fixtures       Exit Signs              Offs/Lab/Ware        4 ea      2 ea         2 es
559 a)                     Switches             Single Pole Switch      Offs/Lab/Ware       17 ea      4 ea        13 ea
559 b)                     Outlets              110 Volt Duplex         Offs/Lab/Ware       27 ea      5 ea        22 ea
560 a)                     Fire Alarm           Horn & Lights           Offs/Lab/Ware        1 ea      1 ea         0 ea
560 b)                     Fire Alarm           Pull Stations           Offs/Lab/Ware        2 ea      2 ea         0 ea
- ------------------------------------------------------------------------------------------------------------------------------------
603  FIRE SPRINKLER        Drops With Heads     Dropped Ceiling Area    Offices/Lab         31 ea      4 ea        27 ea       2,024
604                        Heads                Exposed Ceiling Area    Warehouse           38 ea     38 ea         0 ea
- ------------------------------------------------------------------------------------------------------------------------------------
650 a) HEATING & COOLING   Heating & Cooling    Roof Top Units          Offices/Lab      3,750 sf  1,000 sf     2,750 sf      14,375
650 b)                     Heating              Unit Headers            Warehouse        4,521 sf  4,521 sf         0 sf
- ------------------------------------------------------------------------------------------------------------------------------------
702 MISCELLANEOUS          Overhead Doors       Seal &       Exterior   Warehouse            1 ea       1 ea        0 ea           0
                                                Bumper
- ------------------------------------------------------------------------------------------------------------------------------------
1158 GENERAL CONDITIONS    Signs                Tenant       Exterior   Front & Rear         0 pr       0 pr        0 pr
1428                       Architect            Name                                         0 ea       0 ea        0 ea
- ------------------------------------------------------------------------------------------------------------------------------------


   69


PROPOSAL TO LEASE         NON              Proposal Number: WPS2-03NGSASS. (6)          Lessee   Lessor            Adjust-   FNC to
SCHEDULE (A) PAGE (2)     STANDARD         Tenant Number:    WPS2 (N/A)                 Quantity Allows             ment     Lessee
                          IMPROVEMENTS

- -----------------------------------------------------------------------------------------------------------------------------------
                                                                                                       
250 a) ROOF               Cut & Patch       RTU                           Lab             1 ea     (None) ea        1 ea       1,122
250 b)                    Cut & Patch       RTU Gas & Elec P. Pocket      Lab             2 ea     (None) ea        2 ea
250 c)                    Cut & Patch       Unit Heater                   Ware            1 ea     (None) ea        1 ea
250 d)                    Cut & Patch       Unit Heater Exist Pent        Lab             1 ea     (None) ea        1 ea
- -----------------------------------------------------------------------------------------------------------------------------------

500 a) PLUMBING           Unit Heater       Relocate                      Ware            1 ls     (None) ls        1 ls       2,531
500 b)                    Unit Heater       Gas Piping                    Ware           35 lf     (None) lf       35 lf
500 c)                    Roof Top Unit     Gas Piping                    Lab            35 lf     (None) lf       35 lf
500 d)                    Water Heater      Relocate                      Offices         1 1s     (None) 1s        1 1s
- -----------------------------------------------------------------------------------------------------------------------------------
555 a) ELECTRIC           Power Wire        Roof Top Unit                 Lab             1 ea     (None) ea        1 ea      2,404
555 b)                    Power Wire        Unit Heater                   Ware            1 ea     (None) ea        1 ea
555 c)                    Power Wire        Water Heater                  Office          1 ea     (None) ea        1 ea
555 d)                    Re-Work/Relocate  Existing Etc.                 Offs/Lab/Ware   1 1s     (None) 1s        1 1s
555 e)                    Misc.                                           Offs/Lab/Ware   1 1s     (None) 1s        1 1s
559                       Outlets           20 And, 2/Circuit             Lab            20 ea     (None) ea       20 ea
- -----------------------------------------------------------------------------------------------------------------------------------
700 MISCELLANEOUS         Demolition        Existing Office/Ware Wall     Offices/Ware   42 lf     (None) lf       42 lf        966
- -----------------------------------------------------------------------------------------------------------------------------------
1100 GENERAL CONDITIONS   Labor & Material  Tenant Improvements                         5,021 sf   (None) sf    5,021 sf      2,768
1100                      Labor & Material                                              5,021 sf   (None) sf    5,021 sf
1150                      Building Permit                                               1 1s       (None) sf    1 1s
1155                      Dumpster                                                      1 ea       (None) ea    1 ea
                          Cleaning          Construction & Finel                        5,021 sf   (None) sf    5,021 sf
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL COST OF CONSTRUCTION (DUE UPON COMPLETION)--------------------------------------------------------------$61,602      $61,602
- ------------------------------------------------------------------------------------------------------------------------------------

   1
                                                                   EXHIBIT 10.20

[1]
Lease Agreement
MKS Japan Co., Ltd.

Harmonize Building
Fifth Floor

MIFUJI

[2]
Lease Agreement (Offices in Building)
Lessor:  Mifuji Kanzai K.K.
Lessee:  MKS Japan Co., Inc.

The aforementioned Lessor and Lessee conclude this lease agreement according to
the terms and conditions set forth below.

Paragraph 1 (Leased Property)
Lessor leases to Lessee, and Lessee leases from Lessor the property indicated
below.

Address of Property:                5-17-13, Narita-higashi, Suginami-ku, Tokyo
Structure and Scale the Building: Steel-framed reinforced concrete structure
with roof, with one underground floor and eight above ground floors.

Name: Harmonize Building

Leased area:

   2
Fifth floor: 324.5 square meters (98.3 tsubo)

Paragraph 2 (Purpose of Use)
Lessee shall use the leased property as an office, and shall not use it for any
other purpose.

Paragraph 3 (Term of Lease)
The term of the lease is established as set forth below.

A two (2) year period from January 1, 1996 to December 31, 1997 shall be
established as the term of the lease.
However, if within at least 6 months but no more than1 year from the date the
term of the lease expires, either party indicates to the other party in writing
a desire to renew the lease, this lease can be renewed upon the mutual consent
of both parties. At the time of the renewal, Lessee shall pay Lessor one month's
rent as a renewal few.

Paragraph 4 (Rent)

1. Total Monthly Rent: 4,729,997 yen (including 5% consumption tax of 225,237
yen)

(1) Rent:
Fifth floor: 1,336,490 yen (including 5% consumption tax of 38,930 yen)

(2) Fee for Shared Services
Fifth floor: 324,000 yen (including 5% consumer tax of 23,380 yen)
Second floor: 531,877 yen (including 5% consumer tax of 9,440 yen)

[3]
   3

2. By the end of every month Lessee shall pay the following month's rent by
transferring funds to a bank account designated by Lessor, and Lessee shall be
responsible for paying the fees for transferring funds. 

3. If the term of the lease ends before the end of a month or if the rent is
increased or decreased for any other reason, the rent shall be calculated on a
per diem basis based on the number of days in that month.

Paragraph 5 (Adjustments to Rent)

The rent in this contract shall be reviewed every two (2) years from the
commencement of the lease, and adjustments thereto carried out upon the mutual
consent of both parties.

However, if as a result of changes in prices, increases in taxes or other public
charges, or changes in other economic conditions, etc., the rent has become
unreasonable, Lessor can adjust the rent even before the term of the lease has
expired upon the consent of Lessee.

Paragraph 6 (Security Deposit)

1. As security to ensure that Lessee fulfills its obligations as set forth in
the terms of this contract, Lessee shall provide 9,830,000 yen, an amount
equivalent to ten (10) months rent, to Lessor at the time this contract is
signed.

2. When Lessee has failed to pay the rent on time, has caused damages or has
failed to fulfill any other of its obligations as set forth in the terms of this
contract, upon notification thereof, Lessor is entitled to appropriate all or
some of the deposit to pay for such. 

3. Lessee shall not be entitled to claim that the possession of the security 
deposit as established in this contract offsets any monetary obligation Lessee 
is responsible for paying to Lessor. 
   4

4. In the case of Paragraph 6, Section 2 above, within a week after receiving
the notification of appropriation, Lessee must supply the amount necessary to
restore the security deposit to the amount prior to the appropriation.

5. Lessee shall not transfer claim to the security deposit to a third party, nor
offer such for use as collateral.

Paragraph 7 (Return of the Security Deposit)
When the contract has terminated due to the expiration of the term thereof,
Lessor shall return the deposit to Lessee within one month after Lessor has
confirmed that Lessee has returned the leased property to its original
condition, has completely vacated the premises, and has completed dismantling
and removal operations.

Paragraph 8 (Termination of Lease Before Expiration)
If this contract is terminated before it expires due to circumstances of Lessee,
or if it is terminated for reasons that are the fault of Lessee, an amount
equivalent to 10% of the total in Paragraph 6, Section 1 above shall be paid as
compensation.

Paragraph 9 (Category of Project)
None

Paragraph 10 (Responsibility for Expenses)
Lessee shall be responsible for expenses produced as a result of the daily work
carried out within the area contracted for use by Lessee, such as the fees for
use of utilities such as electricity, water, gas. 
[4] 

Paragraph 11 (Late Payment Penalty) 
   5

When Lessee is late in paying obligations set forth in this contract,
upon notification thereof by Lessor, Lessee shall pay a late payment penalty
based on a per annum rate of 14.6%.

Paragraph 12 (Matters to be Reported)

When matters pertaining to any of the following occurs, Lessee must promptly
submit a written report of the gist thereof to Lessor.

1. When there has been a significant change with regard to the representative of
the company or any other item pertaining to the commercial registration of the
company.

2. When a merger, etc., has occurred.

3. When there has been a change in the type of business.

Paragraph 13 (Items Requiring Approval)

If Lessee is to perform any of the following, Lessee must submit a written
report of the intentions thereof to Lessor and receive Lessor's approval before
carrying out such actions. 

1. When Lessee desires to modify or establish new fixtures, furniture, designs
or room dividers, etc., of the leased property.

2. When Lessee desires to modify or expand existing equipment which was
previously installed by Lessor on the leased property.

3. When Lessee desires to install new auxiliary equipment.

4. When Lessee desires to establish a display such as a signboard, bulletin
board, sign, billboard or the like.

However, this restriction shall not apply to cases in which the leased property
is not modified or to acts approved by Lessor prior to the contract.

Paragraph 14 (Prohibited Items)
   6
Lessee is prohibited from carrying out any of the following.

1. Regardless of pretext, any act to transfer the rights in this contract, such
as the rights to use, lease, or conduct business on the leased property, etc.,
to a third party, or to use such as collateral.

2. Any act to sub-lease to a third party or let others use or manage part or all
of the leased property.

3. Any change to the purpose of use of the leased property.

4. Any act to display the company name, or post a sign, etc., in a location or
using a method other than that which has been designated by Lessor, or any other
act to display the name of a third party.

5. Any act that is detrimental to the maintenance and upkeep of the building or
any act which cause damage to the building.

6. Any act that disturbs the neighbors.

Paragraph 15 (Responsibility for Repair Expenses)

1. Lessor shall carry out repairs necessary for the maintenance and upkeep of
the building itself and its attachments.

2. Lessee shall be responsible for carrying out repairs and replacements on the
leased property including those relating to the walls, ceilings, floors,
windows, light fixtures and other electrical equipment, gas equipment, water
equipment and all such equipment and facilities used daily by Lessee, as well as
to all equipment and facilities directly used by clients and visitors of Lessee.

3. If Lessee discovers In the building owned by Lessor that a repair is needed
in the area leased by Lessee, Lessee has the obligation to notify Lessor
immediately, and even if Lessee is responsible for the repair expenses, repairs
shall always be carried out upon consent of Lessor.
   7

[5]

Paragraph 16 (Obligation to Notify)

Lessee must notify Lessor promptly when measures required for maintaining the
building must be carried out.

Paragraph 17 (Obligation to Take Necessary Precautions)

Lessee must take the precautions necessary of a good manager when using the
leased property.

Paragraph 18 (Entering the Premises for Inspections)

1. Lessor or a party designated by Lessor shall be allowed to enter and inspect
the leased property after notifying Lessee, in order to check on the maintenance
and upkeep of the building, as well as its sanitation, security and fire
prevention status, or for any other reason required for managing the building;
Lessor may request that Lessee take appropriate actions or Lessor itself can
take any action necessary.

2. In the above case, before entering and inspecting the premises, Lessor shall
provide Lessee with notification to that effect, however, this restriction shall
not apply in the case of an emergency.

Paragraph 19 (Exemptions)

1. When damages have occurred as a result of a disaster such as an earthquake,
fire, or flood, etc., if the Lessee suffers damages originating from or relating
to the building equipment and facilities such as those for electricity, gas,
water, or the cooling and heating system, etc., despite the Lessor, as landlord
and owner of the building, having taken proper care with regard to the
maintenance and management thereof, Lessor shall in no way be held responsible
for such damage. 
   8

2. Lessor shall not be held responsible when services are interrupted, partially
suspended, or the use of the leased property is partially restricted due to
inspection, maintenance, repair, or renovation work on the building carried out
by Lessor.

Paragraph 20 (Compensation for Damages)

When Lessee, an agent, employee, independent contractor, or any other party
related to Lessee, has either intentionally or accidentally damaged or harmed
Lessor or a third party, Lessee shall be responsible for providing compensation
for the entire amount suffered as a result of such damage.

Paragraph 21 (Taxes and Other Public Charges)

1. Lessor shall be responsible for paying taxes and other public charges on the
building stipulated in this contract.

2. When Lessee has installed a sign, billboard or other equipment etc., or has
carried out an installation categorized as being a project that is the
responsibility of the Lessee, Lessee shall be responsible for paying taxes or
other public charges imposed as a result thereof including real estate
acquisition taxes and taxes on fixed assets, etc.

Paragraph 22 (Destruction and Damage of  Building)

1. If as a result of a natural disaster, earthquake, or other reason for which
neither Lessor nor Lessee is responsible, all or a part of the leased property
is destroyed or damaged, Lessor and Lessee shall consult with each other with
regard to how to handle the situation after this contract. 

2. When all or part of the leased property has been lost or damaged, and it is
acknowledged that it would be impossible or extremely difficult to continue this
contract, this contract shall be terminated as of that point in time at which
the loss or damage occurred. 
   9
In this case, the security deposit shall be refunded in accordance with
Paragraph 7, Section 1.

[6]
Paragraph 23 (Petition to Terminate Contract Prior to Expiration of Lease)
If Lessee desires to terminate this contract before the lease has expired, six
(6) months prior to the expiration of the lease, Lessee must submit in writing
to the other party the reasons for terminating the contract.

Paragraph 24 (Termination of the Contract)

When any of the following has occurred, Lessor can terminate this contract
without providing prior notification to Lessee, and if Lessor has suffered
damages, Lessor can demand compensation for those damages from Lessee. 

1. When Lessee has failed to pay rent or other obligations for two (2) months or
more.

2. When Lessee has violated this contract or any of the attachments hereto.

3. When Lessee has violated a provision under Paragraph 12.

4. When a foreclosure, compulsory execution, bankruptcy, composition
proceedings, or consolidation, reorganization or dissolution of the corporation
has occurred.

Paragraph 25 (Obligation to Dismantle, Remove from and Vacate the Premises)

1. If this contract is terminated before it expires due to circumstances of
Lessee, or is terminated because the term of the lease agreement has expired,
Lessee shall, at the expense of the Lessee, promptly return the leased property
to its original condition, and shall completely vacate the premises by the date
designated by Lessor. 

2. In the preceding case, when vacating the premises Lessee shall not leave any
fixtures, equipment, devices, furnishings or any other object in the leased
property. 
   10
However, upon the consent of the Lessor, objects may remain on the premises
without remuneration.

3. In the case of Section 1 above, if Lessee does not vacate the leased property
promptly before the date designated by Lessor, from the day after the expiration
date of this contract up until the date by which the premises have been
completely vacated, Lessee shall pay compensation to Lessor which is double the
amount of the regular rent and shall also pay an appropriate amount to cover
expenses; and if Lessor sustains damages as a result of the delay in Lessee's
vacating of the premises, Lessee shall also pay compensation to Lessor for such
damages.

4. In the preceding case, if Lessee does not promptly complete dismantling and
removal, Lessor shall take measures for dismantling and removal at the expense
of Lessee, and Lessee shall not object to this action.

5. In the preceding case, Lessee shall pay compensation to Lessor which is
double the amount of the regular rent and shall also pay an appropriate amount
to cover expenses; and if Lessor sustains damages as a result of the delay in
Lessee's dismantling and removing property from the premises, Lessee shall also
pay compensation to Lessor for such damages.

Paragraph 26 (Demands for Purchasing Installations, etc.)

Lessee can for no reason demand any reimbursement to cover expenses incurred
when vacating the leased property or dismantling and removing property
therefrom, nor can the Lessee demand a refund to cover the necessary costs
associated with expenditures on fixtures and equipment and expenditures
benefiting Lessor, nor demand moving expenses, dispossession expenses, or
concession money, etc. Also, Lessee can not demand that Lessor purchase any
installations, fixtures, decorations, or equipment ,etc., that have been
established in the leased property at the Lessee's own expense.
   11
[7]
Paragraph 27 (Drafting of Notarized Document)

For the purpose of making the content of this contract explicit, when requested
by either Lessor or Lessee, this contract can at any time be handed over to a
Notary Public and a notarized document drafted.

Paragraph 28 (Court of Jurisdiction)

Should a dispute arise with regard to the rights and responsibilities relating
to this contract, the Tokyo District Court shall be the court of jurisdiction.

Paragraph 29 (Special Clauses)

1. This contract shall be notarized.

2.  Only rent between January 1, 1996 and March 31, 1996 shall be excused.

3.  Fees for shared services shall be paid from January 1, 1996 on.

Paragraph 30 (Other items)
Lessor and Lessee shall carry out the terms of this contract honestly.
If questions should arise concerning items not laid out in this contract, or if
doubt should arise with regard to the interpretation of an item in this
contract, both parties shall deliberate on the matter with sincerity and honesty
and endeavor to resolve any differences in accordance with civil and other laws
and regulations, and commercial customs.


As proof of this lease agreement, two copies thereof shall be made and signed
and sealed by both Lessor and Lessee, with one copy to remain in the possession
of each signatory.
   12
January 1, 1996

Lessor
Address: 5-17-13, Narita-higashi, Suginami-ku, Tokyo
Name: Mifuji Kanzai K.K.
C.E.O.: Yuichiro Sato [Seal]

Lessee
1-20-32, Miyamae, Suginami-ku, Tokyo
Name: MKS Japan Inc.
C.E.O.: Kiyoshi Hoshino [Seal]

[8]
Mifuji Group K.K.

1-9-2, Asagaya-kita,
Mifuji Building
Suginami-ku, Tokyo
Tel: 03-3336-3141 (Main)
Fax: 03-3336-3418

   13
                   [The Legal Translating Service Letterhead]

                          Certification of Translation

                         COMMONWEALTH OF MASSACHUSETTS
                              COUNTY OF MIDDLESEX
                        On this day of November 13, 1997

                               Gregory J. Krauth

of the Legal Translating Service, a division of Linguistic Systems, Inc., 130
Bishop Richard Allen Drive, Cambridge, Massachusetts 02139, being duly sworn,
declared the attached translation to have been made faithfully of his own
knowledge by himself and that the attached translation is a true and correct
English version of the original document, to the best of his knowledge and
belief.

      His qualifications as translator include familiarity with English as a
native language and with Japanese as an acquired language, and with said
languages as languages of instruction and use for more than 10 years, and that
he received a Master's degree from Indiana University and that he is employed
as a freelance translator by Linguistic Systems, Inc.

                              My commission expires March 16, 2001

                              /s/ Hugh McAden Oechler
                              
                              Hugh McAden Oechler
                              Notary Public

   1
                                                                   Exhibit 10.21

[1]
Lease Agreement

MKS Japan Co., Ltd.

Harmonize Building
First and Second Floors

MIFUJI

[2]
Lease Agreement (Offices in Building)
Lessor:  Mifuji Kanzai K.K.
Lessee:  MKS Japan Co., Inc.

The aforementioned Lessor and Lessee conclude this lease agreement according to
the terms and conditions set forth below.

Paragraph 1 (Leased Property)
Lessor leases to Lessee, and Lessee leases from Lessor the property indicated
below.

Address of Property:                5-17-13, Narita-higashi, Suginami-ku, Tokyo
Structure and Scale the Building: Steel-framed reinforced concrete structure
with roof, with one underground floor and eight above ground floors.

Name: Harmonize Building

Leased area:
   2
First floor: 467.6 square meters (141.7 tsubo)
Second floor: 506.5 square meters (153.5 tsubo)

Paragraph 2 (Purpose of Use)

Lessee shall use the leased property as an office, and shall not use it for any
other purpose.

Paragraph 3 (Term of Lease)
The term of the lease is established as set forth below.

A two (2) year period from May 1, 1997 to April 30, 1999 shall be established as
the term of the lease.

However, if within at least 6 months but no more than1 year from the date the
term of the lease expires, either party indicates to the other party in writing
a desire to renew the lease, this lease can be renewed upon the mutual consent
of both parties. At the time of the renewal, Lessee shall pay Lessor one month's
rent as a renewal few.

Paragraph 4 (Rent)

1. Total Monthly Rent: 4,729,997 yen (including 5% consumption tax of 225,237
yen)

(1) Rent:

First floor: 1,934,205 yen (including 5% consumption tax of 92,105 yen)
Second floor: 1,772,925 yen (including 5% consumption tax of 84,425 yen)

(2) Fee for Shared Services
First floor: 490,990 yen (including 5% consumer tax of 23,380 yen)
Second floor: 531,877 yen (including 5% consumer tax of 25,327 yen)

[3]
   3
2. By the end of every month Lessee shall pay the following month's rent by
transferring funds to a bank account designated by Lessor, and Lessee shall be
responsible for paying the fees for transferring funds. 

3. If the term of the lease ends before the end of a month or if the rent is
increased or decreased for any other reason, the rent shall be calculated on a
per diem basis based on the number of days in that month.

Paragraph 5 (Adjustments to Rent)
The rent in this contract shall be reviewed every two (2) years from the
commencement of the lease, and adjustments thereto carried out upon the mutual
consent of both parties.

However, if as a result of changes in prices, increases in taxes or other public
charges, or changes in other economic conditions, etc., the rent has become
unreasonable, Lessor can adjust the rent even before the term of the lease has
expired upon the consent of Lessee.

Paragraph 6 (Security Deposit)

1. As security to ensure that Lessee fulfills its obligations as set forth in
the terms of this contract, Lessee shall provide 35,306,000 yen, an amount
equivalent to ten (10) months rent, to Lessor at the time this contract is
signed.

2. When Lessee has failed to pay the rent on time, has caused damages or has
failed to fulfill any other of its obligations as set forth in the terms of this
contract, upon notification thereof, Lessor is entitled to appropriate all or
some of the deposit to pay for such. 

3. Lessee shall not be entitled to claim that the possession of the security
deposit as established in this contract offsets any monetary obligation Lessee
is responsible for paying to Lessor.
   4

4. In the case of Paragraph 6, Section 2 above, within a week after receiving
the notification of appropriation, Lessee must supply the amount necessary to
restore the security deposit to the amount prior to the appropriation.

5. Lessee shall not transfer claim to the security deposit to a third party, nor
offer such for use as collateral.

Paragraph 7 (Return of the Security Deposit)

When the contract has terminated due to the expiration of the term thereof,
Lessor shall return the deposit to Lessee within one month after Lessor has
confirmed that Lessee has returned the leased property to its original
condition, has completely vacated the premises, and has completed dismantling
and removal operations.

Paragraph 8 (Termination of Lease Before Expiration)

If this contract is terminated before it expires due to circumstances of Lessee,
or if it is terminated for reasons that are the fault of Lessee, an amount
equivalent to 10% of the total in Paragraph 6, Section 1 above shall be paid as
compensation.

Paragraph 9 (Category of Project)

None

Paragraph 10 (Responsibility for Expenses)

Lessee shall be responsible for expenses produced as a result of the daily work
carried out within the area contracted for use by Lessee, such as the fees for
use of utilities such as electricity, water, gas. 

[4] 

Paragraph 11 (Late Payment Penalty) 
   5

When Lessee is late in paying obligations set forth in this contract, upon
notification thereof by Lessor, Lessee shall pay a late payment penalty based on
a per annum rate of 14.6%.

Paragraph 12 (Matters to be Reported)

When matters pertaining to any of the following occurs, Lessee must promptly
submit a written report of the gist thereof to Lessor.

1. When there has been a significant change with regard to the representative of
the company or any other item pertaining to the commercial registration of the
company.

2. When a merger, etc., has occurred.

3. When there has been a change in the type of business.

Paragraph 13 (Items Requiring Approval)

If Lessee is to perform any of the following, Lessee must submit a written
report of the intentions thereof to Lessor and receive Lessor's approval before
carrying out such actions. 

1. When Lessee desires to modify or establish new fixtures, furniture, designs
or room dividers, etc., of the leased property.

2. When Lessee desires to modify or expand existing equipment which was
previously installed by Lessor on the leased property.

3. When Lessee desires to install new auxiliary equipment.

4. When Lessee desires to establish a display such as a signboard, bulletin
board, sign, billboard or the like.

However, this restriction shall not apply to cases in which the leased property
is not modified or to acts approved by Lessor prior to the contract.

Paragraph 14 (Prohibited Items)
   6

Lessee is prohibited from carrying out any of the following.

1. Regardless of pretext, any act to transfer the rights in this contract, such
as the rights to use, lease, or conduct business on the leased property, etc.,
to a third party, or to use such as collateral. 

2. Any act to sub-lease to a third party or let others use or manage part or all
of the leased property.

3. Any change to the purpose of use of the leased property.

4. Any act to display the company name, or post a sign, etc., in a location or
using a method other than that which has been designated by Lessor, or any other
act to display the name of a third party. 

5. Any act that is detrimental to the maintenance and upkeep of the building or
any act which cause damage to the building.

6. Any act that disturbs the neighbors.

Paragraph 15 (Responsibility for Repair Expenses)

1. Lessor shall carry out repairs necessary for the maintenance and upkeep of
the building itself and its attachments.

2. Lessee shall be responsible for carrying out repairs and replacements on the
leased property including those relating to the walls, ceilings, floors,
windows, light fixtures and other electrical equipment, gas equipment, water
equipment and all such equipment and facilities used daily by Lessee, as well as
to all equipment and facilities directly used by clients and visitors of Lessee.

3. If Lessee discovers In the building owned by Lessor that a repair is needed
in the area leased by Lessee, Lessee has the obligation to notify Lessor
immediately, and even if Lessee is responsible for the repair expenses, repairs
shall always be carried out upon consent of Lessor.
   7

[5]
Paragraph 16 (Obligation to Notify)
Lessee must notify Lessor promptly when measures required for maintaining the
building must be carried out.

Paragraph 17 (Obligation to Take Necessary Precautions)
Lessee must take the precautions necessary of a good manager when using the
leased property.

Paragraph 18 (Entering the Premises for Inspections)

1. Lessor or a party designated by Lessor shall be allowed to enter and inspect
the leased property after notifying Lessee, in order to check on the maintenance
and upkeep of the building, as well as its sanitation, security and fire
prevention status, or for any other reason required for managing the building;
Lessor may request that Lessee take appropriate actions or Lessor itself can
take any action necessary.

2. In the above case, before entering and inspecting the premises, Lessor shall
provide Lessee with notification to that effect, however, this restriction shall
not apply in the case of an emergency.

Paragraph 19 (Exemptions)

1. When damages have occurred as a result of a disaster such as an earthquake,
fire, or flood, etc., if the Lessee suffers damages originating from or relating
to the building equipment and facilities such as those for electricity, gas,
water, or the cooling and heating system, etc., despite the Lessor, as landlord
and owner of the building, having taken proper care with regard to the
maintenance and management thereof, Lessor shall in no way be held responsible
for such damage. 
   8

2. Lessor shall not be held responsible when services are interrupted, partially
suspended, or the use of the leased property is partially restricted due to
inspection, maintenance, repair, or renovation work on the building carried out
by Lessor.

Paragraph 20 (Compensation for Damages)

When Lessee, an agent, employee, independent contractor, or any other party
related to Lessee, has either intentionally or accidentally damaged or harmed
Lessor or a third party, Lessee shall be responsible for providing compensation
for the entire amount suffered as a result of such damage.

Paragraph 21 (Taxes and Other Public Charges)

1. Lessor shall be responsible for paying taxes and other public charges on the
building stipulated in this contract.

2. When Lessee has installed a sign, billboard or other equipment etc., or has
carried out an installation categorized as being a project that is the
responsibility of the Lessee, Lessee shall be responsible for paying taxes or
other public charges imposed as a result thereof including real estate
acquisition taxes and taxes on fixed assets, etc.

Paragraph 22 (Destruction and Damage of  Building)

1. If as a result of a natural disaster, earthquake, or other reason for which
neither Lessor nor Lessee is responsible, all or a part of the leased property
is destroyed or damaged, Lessor and Lessee shall consult with each other with
regard to how to handle the situation after this contract.

2. When all or part of the leased property has been lost or damaged, and it is
acknowledged that it would be impossible or extremely difficult to continue this
contract, this contract shall be terminated as of that point in time at which
the loss or damage occurred. 
   9
In this case, the security deposit shall be refunded in accordance with
Paragraph 7, Section 1.

[6]
Paragraph 23 (Petition to Terminate Contract Prior to Expiration of Lease)

If Lessee desires to terminate this contract before the lease has expired, six
(6) months prior to the expiration of the lease, Lessee must submit in writing
to the other party the reasons for terminating the contract.

Paragraph 24 (Termination of the Contract)

When any of the following has occurred, Lessor can terminate this contract
without providing prior notification to Lessee, and if Lessor has suffered
damages, Lessor can demand compensation for those damages from Lessee. 

1. When Lessee has failed to pay rent or other obligations for two (2) months or
more.

2. When Lessee has violated this contract or any of the attachments hereto.

3. When Lessee has violated a provision under Paragraph 12.

4. When a foreclosure, compulsory execution, bankruptcy, composition
proceedings, or consolidation, reorganization or dissolution of the corporation
has occurred.

Paragraph 25 (Obligation to Dismantle, Remove from and Vacate the Premises)

1. If this contract is terminated before it expires due to circumstances of
Lessee, or is terminated because the term of the lease agreement has expired,
Lessee shall, at the expense of the Lessee, promptly return the leased property
to its original condition, and shall completely vacate the premises by the date
designated by Lessor. 

2. In the preceding case, when vacating the premises Lessee shall not leave any
fixtures, equipment, devices, furnishings or any other object in the leased 
property. 
   10
However, upon the consent of the Lessor, objects may remain on the premises
without remuneration.


3. In the case of Section 1 above, if Lessee does not vacate the leased property
promptly before the date designated by Lessor, from the day after the expiration
date of this contract up until the date by which the premises have been
completely vacated, Lessee shall pay compensation to Lessor which is double the
amount of the regular rent and shall also pay an appropriate amount to cover
expenses; and if Lessor sustains damages as a result of the delay in Lessee's
vacating of the premises, Lessee shall also pay compensation to Lessor for such
damages.

4. In the preceding case, if Lessee does not promptly complete dismantling and
removal, Lessor shall take measures for dismantling and removal at the expense
of Lessee, and Lessee shall not object to this action.

5. In the preceding case, Lessee shall pay compensation to Lessor which is
double the amount of the regular rent and shall also pay an appropriate amount
to cover expenses; and if Lessor sustains damages as a result of the delay in
Lessee's dismantling and removing property from the premises, Lessee shall also
pay compensation to Lessor for such damages.

Paragraph 26 (Demands for Purchasing Installations, etc.)

Lessee can for no reason demand any reimbursement to cover expenses incurred
when vacating the leased property or dismantling and removing property
therefrom, nor can the Lessee demand a refund to cover the necessary costs
associated with expenditures on fixtures and equipment and expenditures
benefiting Lessor, nor demand moving expenses, dispossession expenses, or
concession money, etc. Also, Lessee can not demand that Lessor purchase any
installations, fixtures, decorations, or equipment ,etc., that have been
established in the leased property at the Lessee's own expense.
   11
[7]

Paragraph 27 (Drafting of Notarized Document)

For the purpose of making the content of this contract explicit, when requested
by either Lessor or Lessee, this contract can at any time be handed over to a
Notary Public and a notarized document drafted.

Paragraph 28 (Court of Jurisdiction)

Should a dispute arise with regard to the rights and responsibilities relating
to this contract, the Tokyo District Court shall be the court of jurisdiction.

Paragraph 29 (Special Clauses)

1. Lessor gives permission to Lessee to exhibit merchandise and equipment of the
work site in the leased rooms.

2. Use of storage room(s) and closet(s) not included in the leased rooms shall
be allowed during the term of the lease.

Paragraph 30 (Other items)

Lessor and Lessee shall carry out the terms of this contract honestly. If
questions should arise concerning items not laid out in this contract, or if
doubt should arise with regard to the interpretation of an item in this
contract, both parties shall deliberate on the matter with sincerity and honesty
and endeavor to resolve any differences in accordance with civil laws, other
laws and regulations, and commercial customs.
   12
As proof of this lease agreement, two copies thereof shall be made, signed and
sealed by both Lessor and Lessee, with one copy to remain in the possession of
each signatory.

April 21, 1997

Lessor
Address: 5-17-13, Narita-higashi, Suginami-ku, Tokyo
Name: Mifuji Kanzai K.K.
C.E.O.: Yuichiro Sato [Seal]

Lessee
1-20-32, Miyamae, Suginami-ku, Tokyo
Name: MKS Japan Inc.
C.E.O.: Kiyoshi Hoshino [Seal]

1-20-32 Miyamae, Suginami-ku, Tokyo
Name: MKS Japan Inc.
C.E.O.: John R. Bertucci [Seal]

[8]
Agreement

As proof of the agreement relating to the lease of the1st and 2nd floors
(offices in the building) of the Harmonize Building, two copies shall be made
thereof, and each shall be signed and sealed by both Lessor and Lessee, with one
copy to remain in the possession of each signatory.
   13
Items of the Agreement:
1. At that point in time when the rent has been adjusted when the lease
agreement is renewed, we agree that the amount of the security deposit shall be
increased or decreased based on the difference with the previous rent.

2. Six (6) months before the term of the lease agreement has expired, both the
Lessor and the Lessee shall indicate their intentions to the other party in
writing. Also, if the indication of the intentions of either party is
accidentally delayed, both Lessor and Lessee shall handle this matter with
sincerity and honesty.

April 21, 1997

Lessor
Address: 5-17-13 Narita-higashi, Suginami-ku, Tokyo
Name: Mifuji Kanzai K.K.
C.E.O.: Yuichiro Sato [Seal]

Lessee
1-20-32 Miyamae, Suginami-ku, Tokyo
Name: MKS Japan Inc.
C.E.O.: Kiyoshi Hoshino [Seal]

[9]

Security Deposit Receipt
[Revenue stamp]
   14
To: MKS Japan Inc.

We hereby accept payment and shall retain throughout the term of the lease
35,306,000 yen as a security deposit as set forth in the lease agreement for
leasing the1st and 2nd floors of the Harmonize Building.

April 21, 1997

Lessor
Mifuji Kanzai K.K.
C.E.O.: Yuichiro Sato

[10]
Mifuji Group K.K.
Mifuji Kanzai K.K.

5-17-13 Narita-higashi,
Suginami-ku, Tokyo, 116
Harmonize Building 8F
Tel: 03-3393-6661 (Main)
Fax: 03-3393-6660
Governor of Tokyo (7): #30401: Corporation/Member of Tokyo Association of Real
Estate Agents, Suginami Branch




   15
                   [THE LEGAL TRANSLATING SERVICE LETTERHEAD]


                          CERTIFICATION OF TRANSLATION


                         COMMONWEALTH OF MASSACHUSETTS
                              COUNTY OF MIDDLESEX
                        On this day of November 13, 1997

                               Gregory J. Krauth

of the Legal Translating Service, a division of Linguistic Systems, Inc., 130
Bishop Richard Allen Drive, Cambridge, Massachusetts 02139, being duly sworn,
declared the attached translation to have been made faithfully of his own
knowledge by himself and that the attached translation is a true and correct
English version of the original document, to the best of his knowledge and
belief.

     His qualifications as translator include familiarity with English as a
native language and with Japanese as an acquired language, and with said
languages as languages of instruction and use for more than 10 years, and that
he received a Master's degree from Indiana University and that he is employed
as a freelance translator by Linguistic Systems, Inc.


                                   My commission expires March 16, 2001


                                        /s/ Hugh McAden Oechler
                                        Hugh McAden Oechler
                                        Notary Public

   1
                                                                   EXHIBIT 10.22


                             SPLIT-DOLLAR AGREEMENT

         AGREEMENT dated as of September 12, 1991 (the Agreement") by and among
MKS Instruments, Inc., a Massachusetts corporation (the "Corporation"), John R.
Bertucci of Lexington, Massachusetts (the "Employee"), and Claire R. Bertucci of
Lexington, Massachusetts and Richard S. Chute of Cambridge, Massachusetts, as
Trustees of the John R. Bertucci Insurance Trust of January 10, 1986 (the
"Owner").

         WHEREAS, the Employee is employed by the Corporation; and

         WHEREAS, the Employee wishes to provide life insurance protection for
his family in the event of his death under a policy of life insurance insuring
his life and the life of Claire R. Bertucci (the "Policy") which is described in
Exhibit A hereto (and by this reference is hereby made subject to this
Agreement) issued by Pacific Mutual Life Insurance Company (the "Insurer"); and

         WHEREAS, the Corporation is willing to pay the premiums due on the
Policy as an additional employment benefit for the Employee on the terms and
conditions hereinafter set forth; and

         WHEREAS, the Owner is the owner of the Policy and, as such, possesses
all incidents of ownership in and to the Policy; and

         WHEREAS, the Corporation wishes to have the Policy collaterally
assigned to it by the Owner in order to secure the repayment of the amounts
which the Corporation will pay toward the premiums on the Policy; and

         WHEREAS, the parties hereto intend that by such collateral assignment
the Corporation shall receive only the right to such repayment with the Owner
retaining all other ownership rights in and to the Policy:
   2




         NOW, THEREFORE, in consideration of the premises and the mutual
promises contained herein and for other valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto hereby agree as follows:

         (1). Purchase of Policy: The Owner will, contemporaneously with the
execution hereof, purchase the Policy from the Insurer in the total face amount
of $5,000,000. The parties hereto agree that they will take all necessary action
to cause the Insurer to issue the Policy and shall take any further action which
may be necessary to cause the Policy to conform to the provisions of this
Agreement. The parties hereto agree that the Policy shall be subject to the
terms and conditions of this Agreement and of the collateral assignment filed
with the Insurer relating to the Policy.

         (2). Ownership of Policy:

                  (a). The Owner shall be the sole and absolute owner of the
         Policy and may exercise all ownership rights granted to the owner
         thereof by the terms of the Policy, except as may otherwise be provided
         herein.

                  (b). It is the intention of the parties to this Agreement and
         to the collateral assignment referred to herein that the Owner shall
         retain all rights which the Policy grants to the owner thereof and that
         the sole right of the Corporation hereunder shall be to be repaid the
         amounts which it has paid toward the premiums of the Policy.
         Specifically, but without limitation, the Corporation shall neither
         have nor exercise any right as collateral assignee of the Policy which
         could in any way


                                       -2-
   3




defeat or impair the right of the Owner to receive the cash surrender value or
the death proceeds of the Policy in excess of the amount due the Corporation
hereunder.

         (3). Payment of Premiums: Except as otherwise provided herein, on or
before the due date of each Policy premium, or within the grace period provided
therein, the Corporation shall pay the full amount of the premium to the
Insurer, and shall, upon request, promptly furnish the Employee evidence of
timely payment of such premium. The Corporation shall annually furnish the
Employee a statement of the amount of income reportable by the Employee for
federal and state income tax purposes as a result of the insurance protection
provided the Owner as the beneficiary of the Policy.

         (4). Collateral Assignment: To secure the repayment to the Corporation
of the amount of the premiums on the Policy paid by the Corporation under the
terms of this Agreement, the Owner has, contemporaneously with the execution
hereof, assigned the Policy to the Corporation as collateral under the form used
by the Insurer for such assignments, which collateral assignment specifically
provides that the sole right of the Corporation thereunder is to be repaid the
amounts it has paid toward the premiums on the Policy. Such repayment shall be
made from the cash surrender value of the Policy (as defined therein) if this
Agreement is terminated or if the Owner surrenders or cancels the Policy or from
the death proceeds of the Policy, if any, if the Employee or any other insured
should die while the Policy and this Agreement remain in force. In no event
shall the Corporation have any right to borrow against or make withdrawals from
the Policy or to surrender or cancel the


                                       -3-
   4




Policy or to take any other action which would impair or defeat the rights of
the Owner in and to the Policy. The collateral assignment of the Policy to the
Corporation hereunder shall not be terminated, altered, or amended by the Owner
while this Agreement is in effect. The parties hereto agree to take all action
necessary to cause such collateral assignment to conform to the provisions of
this Agreement.

         (5). Limitations on Rights of Owner in and to Policy:

                  (a). The Owner shall take no action with respect to the Policy
         which would in any way compromise or jeopardize the right of the
         Corporation to be repaid the amounts it has paid toward the premiums on
         the Policy while this Agreement is in effect.

                  (b). The Owner may pledge or assign the Policy, subject to the
         terms and conditions of this Agreement, in order to secure a loan from
         the Insurer or from a third party, in an amount which shall not exceed
         the cash surrender value of the Policy (as defined therein) as of the
         date to which premiums have been paid, less the amount paid toward the
         premiums on the Policy by the Corporation. Interest charges on such
         loan shall be the responsibility of and be paid by the Owner. For any
         Policy year in which the Owner borrows hereunder, the Corporation shall
         be correspondingly relieved of its obligation to pay any amounts toward
         premiums for such Policy year to the extent of such borrowing.

                  (c). The Owner shall have the sole right to surrender or
         cancel the Policy and to receive the full cash surrender value of the
         Policy directly from the Insurer. Upon the surrender or cancellation of
         the Policy, the Corporation shall have


                                       -4-
   5




the unqualified right to receive a portion of the cash surrender value equal to
the total amount of the premiums paid by the Corporation under the terms of this
Agreement. Immediately upon receipt of the cash value of the Policy from the
Insurer, the Owner shall pay to the Corporation the portion of such cash value
to which the Corporation is entitled under the terms of this Agreement and shall
retain the balance, if any. Upon such receipt and payment this Agreement shall
thereupon terminate.

         (6). Collection of Death Proceeds:

                  (a). Upon the death of the second to die of the Employee and
         Claire R. Bertucci, the Corporation and the Owner shall cooperate to
         take whatever action is necessary to collect the death benefit, if any,
         provided under the Policy, and when such death benefit, if any, has
         been collected and paid as provided herein, this Agreement shall
         thereupon terminate.

                  (b). Upon the death of the second to die of the Employee and
         Claire R. Bertucci, the Corporation shall have the unqualified right to
         receive a portion of such death benefit, if any, equal to the total
         amount of the premiums paid by the Corporation under the terms of this
         Agreement; provided, however, that, if the Owner shall deem it to be in
         the best interests of the Owner as evidenced by the written consent of
         the Owner, the Owner may, upon the death of the first to die of the
         Employee and Claire R. Bertucci, repay the Corporation the total amount
         of the premiums paid by the Corporation under the terms of this
         Agreement. The balance of the death benefit provided under the Policy,
         if any, shall be paid directly to the


                                       -5-
   6




Owner in the manner and in the amount or amounts provided in the beneficiary
designation provision of the Policy. In no event shall the amount payable to the
Corporation hereunder exceed the proceeds of the Policy payable at the death of
the second to die of the Employee and Claire R. Bertucci. No amount shall be
paid from such death benefit to the Owner until the full amount due the
Corporation hereunder has been paid. The parties hereto agree that the
beneficiary designation provision of the Policy shall conform to the provisions
hereof.

         (c). Notwithstanding any provision hereof to the contrary, in the event
that, for any reason whatsoever, no death benefit is payable under the Policy
upon the death of the second to die of the Employee and Claire R. Bertucci and
in lieu thereof the Insurer refunds all or any part of the premiums paid for the
Policy, the Corporation and the Owner shall have the unqualified right to share
such premiums based on their respective cumulative contributions thereto.

         (7). Termination of Agreement During Lifetime of Employee:

                  (a). This Agreement shall terminate during the lifetime of the
         Employee without notice upon the occurrence of any of the following
         events: (a) total cessation of the business of the Corporation; or (b)
         the bankruptcy, receivership, or dissolution of the Corporation.

                  (b). In addition, the Owner may terminate this Agreement,
         while no premium under the Policy is overdue, by written notice to the
         other parties hereto. Such termination shall be effective as of the
         date of such written notice.


                                       -6-
   7




         (8). Disposition of Policy on Termination of Agreement During Lifetime
of Employee:

         (a). For sixty (60) days after the date of the termination of this
Agreement during the lifetime of the Employee, the Owner shall have the option
of obtaining the release of the collateral assignment of the Policy to the
Corporation. To obtain such release, the Owner shall repay to the Corporation
the total amount of the premium payments made by the Corporation under the terms
of this Agreement. Upon receipt of such amount, the Corporation shall release
the collateral assignment of the Policy by the execution and delivery of an
appropriate instrument of release.

         (b). If the Owner fails to exercise such option described in Section
(8)(a) above within such sixty (60) day period, then, at the request of the
Corporation, the Owner shall execute any document or documents required by the
Insurer to transfer the interest of the Owner in the Policy to the Corporation.
Alternatively, the Corporation may enforce its right to be repaid the amount of
the premiums on the Policy paid by it from the cash surrender value of the
Policy under the collateral assignment of the Policy; provided, however, that,
in the event the cash surrender value of the Policy exceeds the amount due the
Corporation, such excess shall be paid to the Owner. Thereafter, neither the
Owner nor its successors or assigns shall have any further interest in and to
the Policy either under the terms thereof or under this Agreement.

         (9). Insurer Not a Party: The Insurer shall be fully discharged from
its obligations under the Policy by payment of the Policy death benefit to the
beneficiary


                                       -7-
   8




or beneficiaries named in the Policy, subject to the terms and conditions of the
Policy. In no event shall the Insurer be considered a party to this Agreement or
any modification or amendment hereof. No provision of this Agreement, nor of any
modification or amendment hereof, shall in any way be construed as enlarging,
changing, varying, or in any other way affecting the obligations of the Insurer
as expressly provided in the Policy, except insofar as the provisions hereof are
made a part of the Policy by the collateral assignment executed by the Owner and
filed with the Insurer in connection herewith.

         (10). Named Fiduciary; Determination of Benefits; Claims Procedure and
Administration:

                  (a). The Corporation is hereby designated as the named
         fiduciary under this Agreement. The Corporation, as the named fiduciary
         under this Agreement, shall have authority to control and manage the
         operation and administration of this Agreement, and the Corporation
         shall be responsible for establishing and carrying out a funding policy
         and method consistent with the objectives of this Agreement.

                  (b). (1) Claim. A person who believes that he or she is being
         denied a benefit to which he or she is entitled under this Agreement (a
         "Claimant") may file a written request for such benefit with the
         Corporation setting forth his or her claim. The request must be
         addressed to the President of the Corporation at its principal place of
         business.


                                       -8-
   9




                  (2) Claim Decision. Upon receipt of a claim, the Corporation
         shall advise the Claimant in writing that a reply will be forthcoming
         within ninety (90) days and shall deliver such reply within such ninety
         (90) day period. The Corporation may, however, extend the reply period
         for an additional ninety (90) days for reasonable cause. If the claim
         is denied in whole or in part, the Corporation shall adopt a written
         opinion, using language calculated to be understood by the Claimant,
         setting forth: (a) the specific reason or reasons for such denial; (b)
         the specific reference to pertinent provisions of this Agreement on
         which such denial is based; (c) a description of any additional
         material or information necessary for the Claimant to perfect his or
         her claim and an explanation why such material or such information is
         necessary; (d) appropriate information as to the steps to be taken if
         the Claimant wishes to submit the claim for review; and (e) the time
         limits for requesting a review under Subsection (3) of this Section and
         for review under Subsection (4) of this Section.

                  (3) Request for Review. Within sixty (60) days after the
         receipt by the Claimant of the written opinion described above, the
         Claimant may request in writing that the Clerk of the Corporation
         review the determination of the Corporation. Such request shall be
         addressed to the Clerk of the Corporation at its principal place of
         business. The Claimant or his or her duly authorized representative
         may, but need not, review the pertinent documents and submit issues and
         comments in writing for consideration by the Clerk of the Corporation.
         If the Claimant does not request a review by the Clerk of the
         Corporation of the


                                       -9-
   10




         determination by the Corporation within such sixty (60) day period, the
         Claimant shall be barred and estopped from challenging the
         determination of the Corporation.

                  (4) Review of Decision. Within sixty (60) days after the
         Clerk's receipt of a request for review, he or she will review the
         determination of the Corporation. After considering all materials
         presented by the Claimant, the Clerk will render a written opinion,
         written in a manner calculated to be understood by the Claimant,
         setting forth the specific reasons for the decision and containing
         specific references to the pertinent provisions of this Agreement on
         which the decision is based. If special circumstances require that the
         sixty (60) day time period be extended, the Clerk will so notify the
         Claimant and will render the decision as soon as possible, but no later
         than one hundred twenty (120) days after receipt of the request for
         review.

         (11). Amendment: This Agreement may not be amended, altered, or
modified, except by a written instrument signed by all of the parties hereto, or
their respective successors or assigns, and may not be otherwise terminated,
except as provided herein.

         (12). Binding Effect: This Agreement shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors, assigns,
heirs, executors, administrators, and beneficiaries.

         (13). Notice: Any notice, consent, or demand required or permitted to
be given under the provisions of this Agreement shall be in writing, and shall
be signed by the party giving or making the same. If such notice, consent, or
demand is mailed


                                      -10-
   11




to a party hereto, it shall be sent by United States certified mail, postage
prepaid, return receipt requested, addressed to such party's last known address
as shown on the records of the Corporation. The date of such mailing shall be
deemed the date of the notice, consent, or demand.

         (14). Governing Law: This Agreement shall be governed by, and construed
in accordance with, the laws of The Commonwealth of Massachusetts applicable to
a contract made and to be performed solely within The Commonwealth of
Massachusetts.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
an instrument under seal, all as of the day, month, and year first written
above.

                                    MKS INSTRUMENTS, INC.


                                    By:
                                       Ronald C. Weigner, Controller



                                    John R. Bertucci

                                    JOHN R. BERTUCCI INSURANCE
                                    TRUST OF JANUARY 10, 1986

                                    By:
                                       Claire R Bertucci, as Trustee
                                       and not individually


                                    By:
                                       Richard S. Chute, as Trustee
                                       and not individually


                                      -11-
   12




                                    EXHIBIT A


         The following described life insurance policy is subject to the
Split-Dollar Agreement to which this Exhibit A is attached:


Insurer:  Pacific Mutual Life Insurance Company


Insured:  John R. Bertucci and Claire R. Bertucci


Owner:    Claire R. Bertucci and Richard S. Chute as Trustees of the John R.
          Bertucci Insurance Trust of January 10, 1986


          Policy Number: 1A2246049


          Face Amount: $5,000,000


          Date of Issue: September 1, 1991


                                      -12-

   1
                                                                   EXHIBIT 10.23


                             SPLIT-DOLLAR AGREEMENT

         AGREEMENT dated as of September 12, 1991 (the "Agreement") by and among
MKS Instruments, Inc., a Massachusetts corporation (the "Corporation"), John R.
Bertucci of Lexington, Massachusetts (the "Employee"), and John R. Bertucci of
Lexington, Massachusetts and Thomas H. Belknap of Hamilton, Massachusetts, as
Trustees of the Claire R. Bertucci Insurance Trust of January 10, 1986 (the
"Owner").

         WHEREAS, the Employee is employed by the Corporation; and

         WHEREAS, the Employee wishes to provide life insurance protection for
his family in the event of his death under a policy of life insurance insuring
his life and the life of Claire R. Bertucci (the "Policy") which is described in
Exhibit A hereto (and by this reference is hereby made subject to this
Agreement) issued by Pacific Mutual Life Insurance Company (the "Insurer"); and

         WHEREAS, the Corporation is willing to pay the premiums due on the
Policy as an additional employment benefit for the Employee on the terms and
conditions hereinafter set forth; and

         WHEREAS, the Owner is the owner of the Policy and, as such, possesses
all incidents of ownership in and to the Policy; and

         WHEREAS, the Corporation wishes to have the Policy collaterally
assigned to it by the Owner in order to secure the repayment of the amounts
which the Corporation will pay toward the premiums on the Policy; and

         WHEREAS, the parties hereto intend that by such collateral assignment
the Corporation shall receive only the right to such repayment with the Owner
retaining all other ownership rights in and to the Policy:
   2
         NOW, THEREFORE, in consideration of the premises and the mutual
promises contained herein and for other valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto hereby agree as follows:

         (1). Purchase of Policy: The Owner will, contemporaneously with the
execution hereof, purchase the Policy from the Insurer in the total face amount
of $5,000,000. The parties hereto agree that they will take all necessary action
to cause the Insurer to issue the Policy and shall take any further action which
may be necessary to cause the Policy to conform to the provisions of this
Agreement. The parties hereto agree that the Policy shall be subject to the
terms and conditions of this Agreement and of the collateral assignment filed
with the Insurer relating to the Policy.

         (2). Ownership of Policy:

                  (a). The Owner shall be the sole and absolute owner of the
         Policy and may exercise all ownership rights granted to the owner
         thereof by the terms of the Policy, except as may otherwise be provided
         herein.

                  (b). It is the intention of the parties to this Agreement and
         to the collateral assignment referred to herein that the Owner shall
         retain all rights which the Policy grants to the owner thereof and that
         the sole right of the Corporation hereunder shall be to be repaid the
         amounts which it has paid toward the premiums of the Policy.
         Specifically, but without limitation, the Corporation shall neither
         have nor exercise any right as collateral assignee of the Policy which
         could in any way


                                       -2-
   3
defeat or impair the right of the Owner to receive the cash surrender value or
the death proceeds of the Policy in excess of the amount due the Corporation
hereunder.

         (3). Payment of Premiums: Except as otherwise provided herein, on or
before the due date of each Policy premium, or within the grace period provided
therein, the Corporation shall pay the full amount of the premium to the
Insurer, and shall, upon request, promptly furnish the Employee evidence of
timely payment of such premium. The Corporation shall annually furnish the
Employee a statement of the amount of income reportable by the Employee for
federal and state income tax purposes as a result of the insurance protection
provided the Owner as the beneficiary of the Policy.

         (4). Collateral Assignment: To secure the repayment to the Corporation
of the amount of the premiums on the Policy paid by the Corporation under the
terms of this Agreement, the Owner has, contemporaneously with the execution
hereof, assigned the Policy to the Corporation as collateral, which collateral
assignment specifically provides that the sole right of the Corporation
thereunder is to be repaid the amounts it has paid toward the premiums on the
Policy. Such repayment shall be made from the cash surrender value of the Policy
(as defined therein) if this Agreement is terminated or if the Owner surrenders
or cancels the Policy or from the death proceeds of the Policy, if any, if the
Employee or any other insured should die while the Policy and this Agreement
remain in force. In no event shall the Corporation have any right to borrow
against or make withdrawals from the Policy or to surrender or cancel the Policy
or to take any other action which would impair


                                       -3-
   4
or defeat the rights of the Owner in and to the Policy. The collateral
assignment of the Policy to the Corporation hereunder shall not be terminated,
altered, or amended by the Owner while this Agreement is in effect. The parties
hereto agree to take all action necessary to cause such collateral assignment to
conform to the provisions of this Agreement.

         (5). Limitations on Rights of Owner in and to Policy:

                  (a). The Owner shall take no action with respect to the Policy
         which would in any way compromise or jeopardize the right of the
         Corporation to be repaid the amounts it has paid toward the premiums on
         the Policy while this Agreement is in effect.

                  (b). The Owner may pledge or assign the Policy, subject to the
         terms and conditions of this Agreement, in order to secure a loan from
         the Insurer or from a third party, in an amount which shall not exceed
         the cash surrender value of the Policy (as defined therein) as of the
         date to which premiums have been paid, less the amount paid toward the
         premiums on the Policy by the Corporation. Interest charges on such
         loan shall be the responsibility of and be paid by the Owner. For any
         Policy year in which the Owner borrows hereunder, the Corporation shall
         be correspondingly relieved of its obligation to pay any amounts toward
         premiums for such Policy year to the extent of such borrowing.

                  (c). The Owner shall have the sole right to surrender or
         cancel the Policy and to receive the full cash surrender value of the
         Policy directly from the Insurer. Upon the surrender or cancellation of
         the Policy, the Corporation shall have


                                       -4-
   5
         the unqualified right to receive a portion of the cash surrender value
         equal to the total amount of the premiums paid by the Corporation under
         the terms of this Agreement. Immediately upon receipt of the cash value
         of the Policy from the Insurer, the Owner shall pay to the Corporation
         the portion of such cash value to which the Corporation is entitled
         under the terms of this Agreement and shall retain the balance, if any.
         Upon such receipt and payment this Agreement shall thereupon terminate.

         (6). Collection of Death Proceeds:

                  (a). Upon the death of the second to die of the Employee and
         Claire R. Bertucci, the Corporation and the Owner shall cooperate to
         take whatever action is necessary to collect the death benefit, if any,
         provided under the Policy, and when such death benefit, if any, has
         been collected and paid as provided herein, this Agreement shall
         thereupon terminate.

                  (b). Upon the death of the second to die of the Employee and
         Claire R. Bertucci, the Corporation shall have the unqualified right to
         receive a portion of such death benefit, if any, equal to the total
         amount of the premiums paid by the Corporation under the terms of this
         Agreement; provided, however, that, if the Owner shall deem it to be in
         the best interests of the Owner as evidenced by the written consent of
         the Owner, the Owner may, upon the death of the first to die of the
         Employee and Claire R. Bertucci, repay the Corporation the total amount
         of the premiums paid by the Corporation under the terms of this
         Agreement. The balance of the death benefit provided under the Policy,
         if any, shall be paid directly to the


                                       -5-
   6
         Owner in the manner and in the amount or amounts provided in the
         beneficiary designation provision of the Policy. In no event shall the
         amount payable to the Corporation hereunder exceed the proceeds of the
         Policy payable at the death of the second to die of the Employee and
         Claire R. Bertucci. No amount shall be paid from such death benefit to
         the Owner until the full amount due the Corporation hereunder has been
         paid. The parties hereto agree that the beneficiary designation
         provision of the Policy shall conform to the provisions hereof.

                  (c). Notwithstanding any provision hereof to the contrary, in
         the event that, for any reason whatsoever, no death benefit is payable
         under the Policy upon the death of the second to die of the Employee
         and Claire R. Bertucci and in lieu thereof the Insurer refunds all or
         any part of the premiums paid for the Policy, the Corporation and the
         Owner shall have the unqualified right to share such premiums based on
         their respective cumulative contributions thereto.

         (7). Termination of Agreement During Lifetime of Employee:

                  (a). This Agreement shall terminate during the lifetime of the
         Employee without notice upon the occurrence of any of the following
         events: (a) total cessation of the business of the Corporation; or (b)
         the bankruptcy, receivership, or dissolution of the Corporation.

                  (b). In addition, the Owner may terminate this Agreement,
         while no premium under the Policy is overdue, by written notice to the
         other parties hereto. Such termination shall be effective as of the
         date of such written notice.


                                       -6-
   7
         (8). Disposition of Policy on Termination of Agreement During Lifetime
of Employee:

                  (a). For sixty (60) days after the date of the termination of
         this Agreement during the lifetime of the Employee, the Owner shall
         have the option of obtaining the release of the collateral assignment
         of the Policy to the Corporation. To obtain such release, the Owner
         shall repay to the Corporation the total amount of the premium payments
         made by the Corporation under the terms of this Agreement. Upon receipt
         of such amount, the Corporation shall release the collateral assignment
         of the Policy by the execution and delivery of an appropriate
         instrument of release.

                  (b). If the Owner fails to exercise such option described in
         Section (8)(a) above within such sixty (60) day period, then, at the
         request of the Corporation, the Owner shall execute any document or
         documents required by the Insurer to transfer the interest of the Owner
         in the Policy to the Corporation. Alternatively, the Corporation may
         enforce its right to be repaid the amount of the premiums on the Policy
         paid by it from the cash surrender value of the Policy under the
         collateral assignment of the Policy; provided, however, that, in the
         event the cash surrender value of the Policy exceeds the amount due the
         Corporation, such excess shall be paid to the Owner. Thereafter,
         neither the Owner nor its successors or assigns shall have any further
         interest in and to the Policy either under the terms thereof or under
         this Agreement.

         (9). Insurer Not a Party: The Insurer shall be fully discharged from
its obligations under the Policy by payment of the Policy death benefit to the
beneficiary


                                       -7-
   8
or beneficiaries named in the Policy, subject to the terms and conditions of the
Policy. In no event shall the Insurer be considered a party to this Agreement or
any modification or amendment hereof. No provision of this Agreement, nor of any
modification or amendment hereof, shall in any way be construed as enlarging,
changing, varying, or in any other way affecting the obligations of the Insurer
as expressly provided in the Policy, except insofar as the provisions hereof are
made a part of the Policy by the collateral assignment executed by the Owner and
filed with the Insurer in connection herewith.

         (10). Named Fiduciary; Determination of Benefits; Claims Procedure and
Administration:

                  (a). The Corporation is hereby designated as the named
         fiduciary under this Agreement. The Corporation, as the named fiduciary
         under this Agreement, shall have authority to control and manage the
         operation and administration of this Agreement, and the Corporation
         shall be responsible for establishing and carrying out a funding policy
         and method consistent with the objectives of this Agreement.

                  (b). (1) Claim. A person who believes that he or she is being
         denied a benefit to which he or she is entitled under this Agreement (a
         "Claimant") may file a written request for such benefit with the
         Corporation setting forth his or her claim. The request must be
         addressed to the President of the Corporation at its principal place of
         business.


                                       -8-
   9
                  (2) Claim Decision. Upon receipt of a claim, the Corporation
         shall advise the Claimant in writing that a reply will be forthcoming
         within ninety (90) days and shall deliver such reply within such ninety
         (90) day period. The Corporation may, however, extend the reply period
         for an additional ninety (90) days for reasonable cause. If the claim
         is denied in whole or in part, the Corporation shall adopt a written
         opinion, using language calculated to be understood by the Claimant,
         setting forth: (a) the specific reason or reasons for such denial; (b)
         the specific reference to pertinent provisions of this Agreement on
         which such denial is based; (c) a description of any additional
         material or information necessary for the Claimant to perfect his or
         her claim and an explanation why such material or such information is
         necessary; (d) appropriate information as to the steps to be taken if
         the Claimant wishes to submit the claim for review; and (e) the time
         limits for requesting a review under Subsection (3) of this Section and
         for review under Subsection (4) of this Section.

                  (3) Request for Review. Within sixty (60) days after the
         receipt by the Claimant of the written opinion described above, the
         Claimant may request in writing that the Clerk of the Corporation
         review the determination of the Corporation. Such request shall be
         addressed to the Clerk of the Corporation at its principal place of
         business. The Claimant or his or her duly authorized representative
         may, but need not, review the pertinent documents and submit issues and
         comments in writing for consideration by the Clerk of the Corporation.
         If the Claimant does not request a review by the Clerk of the
         Corporation of the


                                       -9-
   10
         determination by the Corporation within such sixty (60) day period, the
         Claimant shall be barred and estopped from challenging the
         determination of the Corporation.

                  (4) Review of Decision. Within sixty (60) days after the
         Clerk's receipt of a request for review, he or she will review the
         determination of the Corporation. After considering all materials
         presented by the Claimant, the Clerk will render a written opinion,
         written in a manner calculated to be understood by the Claimant,
         setting forth the specific reasons for the decision and containing
         specific references to the pertinent provisions of this Agreement on
         which the decision is based. If special circumstances require that the
         sixty (60) day time period be extended, the Clerk will so notify the
         Claimant and will render the decision as soon as possible, but no later
         than one hundred twenty (120) days after receipt of the request for
         review.

         (11). Amendment: This Agreement may not be amended, altered, or
modified, except by a written instrument signed by all of the parties hereto, or
their respective successors or assigns, and may not be otherwise terminated,
except as provided herein.

         (12). Binding Effect: This Agreement shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors, assigns,
heirs, executors, administrators, and beneficiaries.

         (13). Notice: Any notice, consent, or demand required or permitted to
be given under the provisions of this Agreement shall be in writing, and shall
be signed by the party giving or making the same. If such notice, consent, or
demand is mailed


                                      -10-
   11
to a party hereto, it shall be sent by United States certified mail, postage
prepaid, return receipt requested, addressed to such party's last known address
as shown on the records of the Corporation. The date of such mailing shall be
deemed the date of the notice, consent, or demand.

         (14). Governing Law: This Agreement shall be governed by, and construed
in accordance with, the laws of The Commonwealth of Massachusetts applicable to
a contract made and to be performed solely within The Commonwealth of
Massachusetts.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
an instrument under seal, all as of the day, month, and year first written
above.

                                    MKS INSTRUMENTS, INC.


                                    By:
                                       Ronald C. Weigner, Controller



                                    John R. Bertucci


                                    CLAIRE R. BERTUCCI INSURANCE
                                    TRUST OF JANUARY 10, 1986


                                    By:
                                       John R. Bertucci, as Trustee
                                       and not individually


                                    By:
                                       Thomas H. Belknap, as Trustee
                                       and not individually


                                      -11-
   12
                                    EXHIBIT A


         The following described life insurance policy is subject to the
Split-Dollar Agreement to which this Exhibit A is attached:


Insurer:  Pacific Mutual Life Insurance Company


Insured:  John R. Bertucci and Claire R. Bertucci

Owner:    John R. Bertucci and Thomas H. Belknap as Trustees of the Claire R.
          Bertucci Insurance Trust of January 10, 1986

Policy Number:  1A22406290

Face Amount:  $5,000,000

Date of Issue:  September 1, 1991


                                      -12-

   1
                                                                 EXHIBIT 11.1   

                             MKS INSTRUMENTS, INC.

                 STATEMENT RE COMPUTATION OF EARNINGS PER SHARE




                                                                                 YEAR ENDED
                                                                      ---------------------------------
                                                                                             FULLY
                                                                        PRIMARY             DILUTED
                                                                      ------------        -------------
                                                                      DECEMBER 31,        DECEMBER 31,
                                                                         1996                 1996
                                                                      ------------        -------------
                                                                                   
Weighted average common stock outstanding during the period.....       12,035,440           12,035,440
Shares issuable from the assumed exercise of stock options,
  computed in accordance with the treasury stock method.........               --                   --
Dilutive effect of cheap stock computed in accordance with the
  treasury stock method(1)......................................          265,706              265,706
Number of shares assumed issued at an assumed initial public
  offering price per share necessary to fund the S corporation
  distribution as of January 1, 1997, to be made out of the
  proceeds of this offering.....................................        1,692,857            1,692,857
                                                                      -----------          -----------
Pro forma weighted average common shares outstanding............       13,994,003           13,994,003
                                                                      ===========          ===========
Pro forma net income............................................      $ 8,248,000          $ 8,248,000
                                                                      -----------          -----------
Pro forma net income per share..................................      $      0.59          $      0.59
                                                                      ===========          ===========






                                                                              NINE MONTHS ENDED
                                                                      ---------------------------------
                                                                                             FULLY
                                                                        PRIMARY             DILUTED
                                                                      -------------       -------------
                                                                      SEPTEMBER 30,       SEPTEMBER 30, 
                                                                         1997                 1997
                                                                      ------------        -------------
                                                                                   
Weighted average common stock outstanding during the period.....       12,035,440           12,035,440
Shares issuable from the assumed exercise of stock options,
  computed in accordance with the treasury stock method.........          139,596              279,836
Dilutive effect of cheap stock computed in accordance with the
  treasury stock method(1)......................................          265,706              265,706
Number of shares assumed issued at an assumed initial public
  offering price per share necessary to fund the S corporation
  distribution as of January 1, 1997, to be made out of the
  proceeds of this offering.....................................        1,692,857            1,692,857
                                                                      -----------          -----------
Pro forma weighted average common shares outstanding............       14,133,599           14,273,839
                                                                      ===========          ===========
Pro forma net income............................................      $ 8,731,000          $ 8,731,000
                                                                      -----------          -----------
Pro forma net income per share..................................      $      0.62          $      0.61
                                                                      ===========          ===========


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

(1) Pursuant to SEC Staff Accounting Bulletin No 83, all common and common
    equivalent shares issued at prices below the mid-point of the estimated
    initial public offering price range during the twelve-month period prior to
    the initial filing of the Registration Statement have been included in the
    calculation as outstanding for all periods presented using the treasury
    stock method.

   1
                                                                    Exhibit 21.1

MKS International, Inc.
MKS Instruments Deutschland GmbH
MKS Instruments France S.A.
MKS Instruments Canada Ltd.
MKS Instruments, U.K. Limited
MKS East, Inc.
MKS Japan, Inc.
MKS Korea Co., Ltd.
MKS FSC, Inc.

   1
                                                                    Exhibit 23.2

                       CONSENT OF INDEPENDENT ACCOUNTANT

       We consent to the inclusion in this registration statement on Form S-1
of our report dated October 28, 1997, on our audits of the financial statements
and financial statement schedules of MKS Instruments, Inc. We also consent to
the reference to our firm under the caption "Experts."

                                          COOPERS & LYBRAND L.L.P.

Boston, Massachusetts
November 12, 1997

                                      S-6

 

 5
 1,000
       
                             
                   9-MOS
                          DEC-31-1997
                             JAN-01-1997
                               SEP-30-1997
                                           5,421
                                       918
                                   32,018
                                       618
                                     28,081
                                67,558
                                          69,261
                                  34,918
                                 106,685
                           38,079
                                         16,348
                                0
                                          0
                                           113
                                      51,643
                   106,685
                                        134,629
                               134,629
                                           78,456
                                   78,456
                                40,481
                                   255
                               1,610
                                 14,082
                                     1,190
                             12,892
                                       0
                                      0
                                            0
                                    12,892
                                     0.62
                                     0.61

 

 5
 1,000
       
                             
                   YEAR
                          DEC-31-1996
                             JAN-01-1996
                               DEC-31-1996
                                           3,815
                                       391
                                   21,734
                                       482
                                     25,500
                                52,494
                                          69,121
                                  31,114
                                  95,000
                           30,090
                                         18,899
                                0
                                          0
                                           113
                                      45,385
                    95,000
                                        170,862
                               170,862
                                          102,008
                                  102,008
                                53,173
                                  (20)
                               2,378
                                 13,303
                                       800
                             12,503
                                       0
                                      0
                                            0
                                    12,503
                                     0.59
                                     0.59