AMENDMENT LETTER

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                                                                    EXHIBIT 10.1


                      [UNION BANK OF CALIFORNIA LETTERHEAD]



                                AMENDMENT LETTER



                                                  Commercial Banking Group
                                                  Union Bank of California
                                                  000 X. Xxxx Xxxxxx, Xxxxx 000
                                                  Xxxxxx, XX 00000



April 20, 1999


Xx. Xxxxxxx Xxxxxx, President
Smartflex Systems, Inc.
00000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000-0000

Re:      FOURTH AMENDMENT ("Amendment") to the Amended and Restated Loan
         Agreement dated September 26, 1997 (this Amendment, the Third Amendment
         dated March 31, 1999, the Second Amendment dated November 17, 1998, the
         First Amendment dated October 1, 1998 and the Amended and Restated Loan
         Agreement together called the "Agreement")

Dear Xx. Xxxxxx:

In reference to the Agreement defined above between UNION BANK OF CALIFORNIA,
N.A. ("BANK") and SMARTFLEX SYSTEMS, INC. ("BORROWER"), Bank and Borrower desire
to amend the Agreement. Capitalized terms used herein which are not otherwise
defined shall have the meanings given them in the Agreement.

         1.       Amendment to the Agreement:

                  (a)      Section 5.10, of the Agreement, is hereby amended in
                           its entirety to read as follows:

                           "CAPITAL EXPENDITURES. Borrower and its affiliates
                           will not, in aggregate, make capital expenditures in
                           excess of Ten Million Dollars ($10,000,000) in any
                           fiscal year and shall only make such expenditures as
                           are necessary for Borrower in the conduct of its
                           ordinary course of business.

Except as specifically amended hereby, the Agreement shall remain in full force
and effect and is hereby ratified and confirmed.



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This Fourth Amendment shall become effective when Bank shall have received the
acknowledgment copy of this Fourth Amendment executed by Xxxxxxxx.

Very truly yours,

UNION BANK OF CALIFORNIA, N.A.


By:      /s/ Xxxxxx Xxxxxx
         ------------------------------
         Xxxxxx Xxxxxx
Title:   Vice President


By:      /s/ Xxx Xxxx
         ------------------------------
         Xxx Xxxx
Title:   Vice President


AGREED AND ACCEPTED TO THIS 30TH DAY OF APRIL 1999.

SMARTFLEX SYSTEMS, INC.


By:      /s/ Xxxxxxx X. Xxxxxx
         ------------------------------
         Xxxxxxx Xxxxxx
Title:   President