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                                                                     EXHIBIT 1.3

                   SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS

               THIS SETTLEMENT AGREEMENT AND RELEASE OF CLAIMS ("Settlement
Agreement") is made this 31st day of October, 1997, between John Hively, John
Greb, Dennis Casey and Barry Lynn (collectively the "Claimants") on the one hand
and Interscience Computer Corporation, a California corporation ("Debtor") on
the other hand. The Claimants and the Debtor are referred to collectively herein
as the "Parties."

                                 R E C I T A L S

              A. On or about January 8, 1997, the Claimants sold a business
known as Laser Support and Engineering, Inc. to the Debtor. Various disputes
arose concerning Laser Support and Engineering, Inc. and the Claimants and the
Debtor each filed lawsuits in Orange County Superior Court to resolve these
disputes.
              B. The Claimants sought an injunction against the Debtor in aid of
their enforcement of their claims. In lieu of the injunction, the Orange County
Superior Court entered an order permitting the Debtor to file a bond (the Bond")
to secure its obligations to Claimants. On or about Septem-ber 5, 1996 Debtor
posted the Bond in the amount of $952,000.

              C. The Parties then attempted to resolve their claims through
binding arbitration at JAMS/ENDDISPUTE in Orange,


                                   EXHIBIT 1.3

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California.  On March 4, 1997 the arbitrator entered his
award finding in favor of the Claimants.

              D. On March 5, 1997 the Debtor filed for relief under Chapter 11
of the Bankruptcy Code and additional disputes arose among the parties
concerning the amounts owed to the Claimants, the Bond, and other matters.

              E. The Parties now desire to resolve all the differences between
them, to avoid the uncertainty and aggravation of litigation, and to buy their
peace.

              F. The Parties enter into this Settlement Agreement in reliance on
the fact that the Official Committee of Unsecured Creditors of Interscience
Computer Corporation and the Debtor's principal lender, Sanwa Bank of
California, have each agreed not to oppose a settlement between the Debtor and
the Claimants on the terms specified herein.

                                    AGREEMENT

                      1. Recitals Are Contractual. The foregoing recitals are
referred to and incorporated herein by reference.

                      2. Payment to Claimants. In consideration of all the
agreements set forth herein, the Debtor shall pay to the Claimants the sum of
$760,000 payable on or before November 30, 1997. The funds shall be payable to
the Claimants jointly care of the Palmieri, Tyler, Wiener, Wilhelm & Waldron LLP
Client Trust Account.


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                      3. Mutual General Releases. Contingent upon the Parties'
of each fully complying with their obligations set forth in this Settlement
Agreement, the Claimants hereby release the Debtor and the Debtor hereby
releases the Claimants from any and all claims, causes of action obligations or
liabilities of any nature whatsoever, whether known or unknown, fixed or
contingent, which they may have or may hereafter have, against one another.
Without limiting the foregoing, the Debtor hereby releases John Hively of any
claims arising out of or relating to his employment agreement with the Debtor.
Notwithstanding the foregoing, this mutual general release shall not apply to
the duties and obligations of the Parties as set forth in this Settlement
Agreement.

                      4. Release of Bond. Contingent upon the receipt and
certification of all funds required to be paid herein and upon execution of this
Settlement Agreement and approval thereof by the bankruptcy court as required by
law, the Claimants shall take such actions and execute such documents as are
necessary to release their claim on the Bond and to dismiss the proceedings
before the Orange County Superior Court and JAMS/ENDDISPUTE. The Claimants
further agree that, contingent upon the Debtor's performance of all obligations
required herein, the consideration paid by the Debtor to the Claimants pursuant
to this agreement shall

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constitute a complete satisfaction of the Claimants' claim against the Debtor.

                      5. Good Faith. Each of the Parties represents and warrants
that this Settlement Agreement is entered into in good faith.

                      6. No Assignment. Each of the Parties repre- sents and
warrants that it has not assigned, transferred or purported to have assigned or
transferred to any person or entity any claim, cause of action or right based
upon the disputes or litigation referenced herein.

                      7. Waiver of Civil Code Section 1542. Each of the Parties
expressly waives and relinquishes each of the rights and benefits which it might
otherwise have or claims to have under the provisions of Section 1542 of the
California Civil Code, which provides:

               A general release does not extend to claims which the creditor
               does not know or suspect to exist in his favor at the time of
               executing the release, which if known by him must have materially
               affected his settlement with the Debtor.

                      8. Agreement Binding. This Settlement Agreement shall be
binding upon and shall inure to the benefit of all the predecessors, successors,
heirs, agents, trustees, attorneys and assigns of each of the Parties hereto.

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                      9. California Law. This Settlement Agreement shall be
construed and interpreted under and according to the laws of the State of
California.

                      10. Attorneys' Fees. Each of the Partes agrees to bear its
own attorneys' fees and costs in connection with the disputes referenced herein.
However, should any party hereto commence or maintain any action or proceeding
at law or in equity, including motions, applications, counterclaims or
cross-complains, against any other party hereto raising claims arising out of or
connected to this Settlement Agreement, the prevailing party in said action or
proceeding shall be entitled to recover its attorneys' fees and costs.

                      11. No Admission of Liability. This Settlement Agreement
is made as a compromise of disputed claims. This Settlement Agreement is made to
avoid the cost, expense and risk of litigation only, and the making of this
Settlement Agreement does not constitute admission of liability or other
obligation on the part of any other Parties.

                      12. Representation by Counsel; Entire Agreement. The
execution of this Settlement Agreement is free and voluntary. The Parties hereby
acknowledge that they have been represented by counsel in the negotiation of
this Settlement Agreement. No promise or inducement to enter into this
Settlement Agreement, except as expressly stated herein, is made by or to the
Parties. This Settlement Agreement contains the entire agreement between the
Parties

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and the terms hereof supersede all prior discussions, understanding, or
agreements between the Parties relative to the subject matter hereof. The terms
hereof are intended to constitute a binding contract.

                      13. Interpretation. The Parties agree that the terms of
this Settlement Agreement were arrived at after bargaining and negotiation among
the Parties and each of the provisions hereof shall be construed as having been
drafted by each of the Parties hereto.

                      14. Modification. This Settlement Agreement may only be
amended or modified by a writing signed by the party against whom enforcement is
sought.

                      15. Counterparts. This Settlement Agreement may be
executed in counterparts, and each such counterparts shall be deemed to be a
duplicate original of the Settlement Agreement. All such counterparts taken
together shall constitute a single contract. The Parties expressly authorize
that counterparts may be executed and delivered via facsimile transmission.



                                        CLAIMANTS


                                        ------------------------------
                                        John Hively


                                        ------------------------------
                                        John Greb


                                        ------------------------------
                                        Dennis Casey


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                                        ------------------------------
                                        Barry Lynn


APPROVED AS TO FORM:

PALMIERI, TYLER, WIENER,
WILHELM & WALDRON LLP


By:
   ------------------------
   Scott R. Carpenter
   Attorneys for Claimants


                                        INTERSCIENCE COMPUTER         
                                        CORPORATION, DEBTOR-IN-       
                                        POSSESSION                    
                                                                      
                                                                      
                                        By:
                                           ---------------------------
                                           Walter Kornbluh, President 
                                        

APPROVED AS TO FORM:

BIEGENZHAN WEINBERG


By:
   ------------------------
   Joel B. Weinberg
   Attorneys for Debtor


APPROVED AS TO FORM AND CONTENT:

OFFICIAL COMMITTEE OF UNSECURED
CREDITORS OF INTERSCIENCE
COMPUTER CORPORATION


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


APPROVED AS TO FORM AND CONTENT:

SANWA BANK OF CALIFORNIA


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


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