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JEFFREY W. BROKER - State Bar No. 53226
SEAN A. O'KEEFE - State Bar No. 122417
LAUREN B. LESSLER - State Bar No. 167311
BROKER & O'KEEFE PROFESSIONAL CORPORATION
4695 Mac Arthur Court, Suite 1200
Newport Beach, CA  92660

Telephone: (714) 222-2000
Facsimile:  (714) 222-2022

Special Reorganization Counsel
for Debtor and Debtor-in-Possession




                         UNITED STATES BANKRUPTCY COURT
                         CENTRAL DISTRICT OF CALIFORNIA



In re                                                                   

                                                                        

TRI-LITE, INC., a Pennsylvania corporation                              

                        Debtor and                                      
                        Debtor-in-Possession.









Case No. SA 96-12049 JR                                           
                                                                  
Chapter 11 Proceeding                                             
                                                                  
THIRD AMENDED JOINT CHAPTER 11
PLAN OF REORGANIZATION AS
MODIFIED 


DISCLOSURE STATEMENT HEARING:                                     
                                                                  
DATE:    November 7, 1996                                         
TIME:    10:30 a.m.                                              
PLACE:   Courtroom 606                                            
         34 Civic Center Drive                             
         Santa Ana, CA                                     
                                                                  
CONFIRMATION HEARING:                                             
                                                                  
                                                                  
DATE:    January 16, 1997                                            
TIME:    11:30 a.m.                                                  
PLACE:   Courtroom 606                                           
         34 Civic Center Drive                            
         Santa Ana, CA                                    
                                                                  
                                                                  


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TO THE HONORABLE JOHN E. RYAN, UNITED STATES BANKRUPTCY JUDGE,
CREDITORS AND PARTIES IN INTEREST:


                                    ARTICLE I

                                  INTRODUCTION

         Tri-Lite, Inc., a Pennsylvania corporation, the Debtor and
Debtor-in-Possession in this Chapter 11 case (hereinafter "Debtor"),
Helionetics, Inc., a California corporation (hereinafter "Helionetics") Laser
Photonics, Inc., a Delaware Corporation (hereinafter "LPI") and Susan Barnes
(hereinafter "Barnes") hereby jointly propose a Second Amended Chapter 11 Plan
of Reorganization (the "Plan") for the resolution of the claims of Creditors and
Stockholders (Equity Security Holders) of the Debtor. Reference is made to the
Second Amended Disclosure Statement for Joint Chapter 11 Plan of Reorganization
(the Disclosure Statement") for a discussion of the Debtor's history, business
operations, properties and financial information, and for a summary of this Plan
and related matters.

         All holders of Claims and Equity Security Interests are encouraged to
read this Plan and the accompanying Disclosure Statement in their entirety
before voting to accept or reject this Plan. No materials, other than the
Disclosure Statement and the Exhibits and Schedules attached thereto and
referenced therein, have been approved by the United States Bankruptcy Court for
the Central District of California for use in soliciting acceptances or
rejections of this Plan.

         NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, ALL STATEMENTS IN THIS
PLAN AND THE ACCOMPANYING DISCLOSURE STATEMENT CONCERNING THE HISTORY OF THE
DEBTOR'S BUSINESS, THE PAST OR PRESENT FINANCIAL CONDITION OF THE DEBTOR,
TRANSACTIONS TO WHICH THE DEBTOR WAS OR IS A PARTY, OR THE EFFECT OF
CONFIRMATION OF THIS PLAN ON CREDITORS AND INTEREST HOLDERS ARE ATTRIBUTABLE
EXCLUSIVELY TO THE DEBTOR, AND NOT TO COUNSEL TO THE DEBTOR.


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                                   ARTICLE II

                        DEFINITIONS, INTERPRETATION, AND

                              RULES OF CONSTRUCTION

A)          Definitions

            The definitions contained in the Bankruptcy Code are incorporated
herein. Whether or not inconsistent with definitions contained in the Bankruptcy
Code, the following terms used herein shall have the following meanings:

            2.1 Alvin Katz: A. Alvin Katz, the President of the Debtor.

            2.2 Administrative Claim: A Claim for costs and expenses of
administration allowed under Section 503(b) of the Bankruptcy Code and referred
to in Section 507(a)(1) of the Bankruptcy Code, including, without limitation:
(a) the actual and necessary costs and expenses incurred after the Petition Date
of preserving the Estate and operating the business of the Debtor (such as
wages, salaries or commissions for services); (b) compensation for legal,
financial advisory, accounting and other services and reimbursement of expenses
awarded or allowed under Sections 330(a) or 331 of the Bankruptcy Code; and (c)
all fees and charges assessed against the Estate under 28 U.S.C. ss. 1930.

            2.3 AIM: AIM Energy, Inc., a corporation organized under the laws of
the state of Delaware, which is 100% owned by Helionetics. This entity owns all
proprietary rights to the AIM Filter.

            2.4 AIM Filter: A filter which eliminates Harmonics by capturing
unwanted Harmonic current flows, reducing both current and voltage distortion,
reducing the energy wasted due to harmonics and eliminating harmful effect on
equipment. The entirety of the proprietary rights to the AIM filter is owned by
AIM.

            2.5 Allowed Claim: A Claim against the Debtor to the extent that-

                        (a) the Claim was scheduled in the list of creditors
prepared and filed with the Bankruptcy Court by the Debtor and not listed as
disputed, contingent or unliquidated as to amount; or


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                        (b) a proof of claim

                                    (1) was timely filed; or

                                    (2) is deemed filed under applicable law or
by reason of an order of the Bankruptcy Court; and

                        (c) (1) the Debtor or Reorganized Debtor does not file
an objection within a time fixed by the Bankruptcy Court and the Claim is not
otherwise a Disputed Claim (but only to the extent that such Claim is not a
Disputed Claim);

                                    (2) the Claim is allowed (and only to the
extent allowed) by a Final Order; or

                                    (3) the Claim is specifically allowed under
this Plan.

            An Allowed Claim shall not include unmatured or post-petition
interest unless otherwise stated in the Plan.

            2.6 Allowed Amount: The amount of any Claim against the Debtor
determined in accordance with Sections 502 and 506(a) of the Bankruptcy Code and
any other applicable section(s) of the Bankruptcy Code, and recognized by the
Debtor as valid or allowed by Final Order of the Court, except to the extent
described or defined otherwise herein.

            2.7 Allowed Class . . . Claim: An Allowed Claim in the particular
Class described in the Plan or Disclosure Statement.

            2.8 Allowed Priority Claim: An Allowed Claim entitled to priority
pursuant to Sections 507(a)(3), (4) or (6) of the Bankruptcy Code.

            2.9 Allowed Secured Claim: An Allowed Claim secured by a lien,
security interest or other charge against the property in which the estate has
an interest, or which is subject to set-off under Section 553 of the Bankruptcy
Code, to the extent of the value, determined in accordance with Section 506(a)
of the Bankruptcy Code, of the interest of the holder of such secured Claim in
the estate's interest in such property, or to the extent of the amount subject
to any set-off, as the case may be. An Allowed Secured Claim may include
post-petition interest if permitted under Section 506(b) of the Code.


<PAGE>

            2.10 Allowed Tax Claim: An Allowed Unsecured Claim that is entitled
to priority pursuant to Section 507(a)(8) of the Code.

            2.11 Approval Date: The date on which an order approving the
Debtors' Disclosure Statement, or an amended version thereof, is entered by the
Clerk of the Bankruptcy Court on the Court's docket.

            2.12 Avoidance Action: Any adversary proceeding brought to seek the
recovery of money or property on account of transactions avoidable under
Sections 544, 547, 548, 549 or 550 of the Bankruptcy Code.

            2.13 Ballot: The Document by which the holder of a Claim or Interest
classified under the Plan shall vote to reject or accept the Plan.

            2.14 Bankruptcy Code or Code: Title 11 of the United States Code, as
now in effect or hereafter amended. All citations in the Plan or Disclosure
Statement to section numbers are to the Code unless otherwise expressly
indicated.

            2.15 Bankruptcy Court or Court: The United States Bankruptcy Court
for the Central District of California or such successor court or tribunal as
may hereafter be confirmed or created by lawful authority with power to confirm
reorganization plans under Chapter 11, Title 11 of the United States Code and
all other applicable statutes, rules and regulations.

            2.16 Bankruptcy Rules or Rules: The Federal Rules of Bankruptcy
Procedure and the Local Bankruptcy Rules for the United States Bankruptcy Court
for the Central District of California, as now in effect or hereafter amended.

            2.17 Bar Date: The last date for filing Claims, which was 60 days
after service of the notice thereof on Creditors. The Bar Date expired as to all
known Creditors no later than June 7, 1996. After the hearings relating to the
rejection of leases, employment and consulting contracts on May 23, 1996, a
second Bar Date notice was sent to affected claimants with a Second Bar Date of
August 16, 1996 only for such claimants.


<PAGE>

            2.18 Barnes: Susan Barnes, the spouse of Bernard Katz and the
beneficial holder of approximately 37% of the outstanding common stock of
Helionetics, an affiliate, stockholder and administrative creditor of the
Debtor, and a co-proponent of the Plan.

            2.19 Barnett: Richard B. Barnett, an individual asserting a Claim
secured by an alleged lien junior to that of Star Bank. This Claim has been
classified as the Class 2 Claim and is disputed by the Debtor.

            2.20 Bernard Katz: Bernard Katz, the Chairman of the Board of the
Debtor and of Helionetics as well as the spouse of Susan Barnes.

            2.21 Business Day: Any day, other than a Saturday, Sunday or legal
holiday as defined in Bankruptcy Rule 9006(a).

            2.22 Case: The within Chapter 11 proceeding, known as In re
Tri-Lite, Inc., a Pennsylvania corporation, bearing Case No. SA 96-12049 JR,
pending before the United States Bankruptcy Court, Central District of
California.

            2.23 Cash: Cash and Cash equivalents, including but not limited to
bank deposits, wire transfers, checks, and other similar items.

            2.24 Cash Collateral: cash, negotiable instruments, documents of
title, securities, deposit accounts, or other cash equivalents within the
meaning of Section 363(a) of the Bankruptcy Code.

            2.25 Claim: Any right to payment, whether or not such right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or, a
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right is an equitable remedy or is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured.

            2.26 Claimants or Creditors: Persons or entities holding Allowed
Claims.

            2.27 Class: A category of holders of Claims which are substantially
similar to other Claims and into which Allowed Claims and Allowed Secured Claims
are grouped and classified pursuant to Article IV of the Plan. The Classes
provided for in the Plan are the following:


<PAGE>

                        A) Class 1: Star Bank, N.A. as the holder of an Allowed
Secured Claim, which is secured by a first priority consensual lien on the
Debtor's inventory, accounts receivable, and other operating assets.

                        B) Class 2: Barnett, as the holder of a disputed Secured
Claim allegedly secured by a second priority consensual lien on the Debtor's
inventory, accounts receivable and other operating assets.

                        C) Class 3: All Claimants holding Allowed Unsecured
Claims less than, equal to, or voluntarily reduced by the holder thereof to
$500.

                        D) Class 4: All Claimants holding Allowed Unsecured
Claims other than Claims included in Class 3.

                        E) Class 5: Helionetics, Inc., as the holder of an
Allowed Secured Claim allegedly secured by a consensual lien on the Debtor's
inventory, accounts receivable, and other operating assets arising from the SPL
Purchase Agreement.

                        F) Class 6: The Stockholders (Equity Security Holders)
of the Debtor, including Helionetics and Barnes.

            2.28 Committee: The Official Committee of Creditors Holding
Unsecured Claims in the Debtor's estate.

            2.29 Common Stock: The Common Stock in the Debtor held by
Stockholders.

            2.30 Confirmation: The entry by the Clerk of the Bankruptcy Court on
the Court's docket of the Confirmation Order.

            2.31 Confirmation Date: The date on which the Clerk of the
Bankruptcy Court enters the Confirmation Order on the Court docket.

            2.32 Confirmation Order: The order entered by the Clerk of the
Bankruptcy Court confirming the Plan.

            2.33 Creditor: Any person or entity holding an Allowed Claim or
Claims against the Debtor within the meaning set forth in Section 101(10) of the
Bankruptcy Code.

            2.34 Debt: Liability on a claim as set forth in Section 101(12) of
the Bankruptcy Code.


<PAGE>

            2.35 Debtor: Tri-Lite, Inc., a Pennsylvania corporation, the Debtor
and Debtor-in-Possession in this Chapter 11 case. The Debtor is a co-proponent
of the Plan.

            2.36 Debtor-in-Possession: The Debtor, when acting in the capacity
of representative of the Estate in the Debtor's Case.

            2.37 Disbursing Agent: The Debtor and/or any other person or persons
designated under this Plan to disburse property pursuant to this Plan.

            2.38 Disclosure Statement: The Disclosure Statement accompanying the
Plan as required by Section 1125 of the Bankruptcy Code and approved by an Order
of the Bankruptcy Court.

            2.39 Disputed Claim: A Claim as to which a proof of claim has been
Filed or deemed Filed under applicable law, as to which an objection has been or
may be timely Filed by the Debtor or Reorganized Debtor and which objection, if
timely Filed, has not been withdrawn on or before any date fixed for Filing such
objections by the Plan or by Order of the Bankruptcy Court and has not been
overruled or denied by a Final Order. Prior to the time that an objection to a
claim has been or may be timely Filed, for the purposes of the Plan a Claim
shall be considered a Disputed Claim in its entirety if: (i) the amount of the
Claim specified in the proof of claim exceeds the amount of any corresponding
Claim scheduled by the Debtor in its Schedules of Assets and Liabilities; (ii)
any corresponding Claim scheduled by the Debtor in its Schedules of Assets and
Liabilities has been scheduled as disputed, contingent, or unliquidated,
irrespective of the amount scheduled; or (iii) no corresponding Claim has been
scheduled by the Debtor in its Schedules of Assets and Liabilities.

            2.40 Effective Date: The Effective Date of the Plan shall be the
forty-fifth (45th) calendar day after the Confirmation Date, unless said date
falls upon a Saturday, Sunday or holiday, in which case the Effective Date shall
be the next business day and on which no stay of the Confirmation Order is in
effect.

            2.41 Equity Security: Common stock of the Debtor.

            2.42 Equity Security Holder: A Stockholder owning common stock of
the Debtor. These parties have been classified as the holders of Class 6 Claims.


<PAGE>

            2.43 Estate: The estate created in this Chapter 11 Case for the
Debtor under Section 541 of the Bankruptcy Code.

            2.44 Executory Contract: Any unexpired lease or executory contract
of the Debtor as defined in Section 365 of the Bankruptcy Code.

            2.45 File or Filed: A pleading filed with the Clerk of the
Bankruptcy Court in this Chapter 11 Case.

            2.46 Final Order: An order or judgment of the Bankruptcy Court, or
other court of competent jurisdiction, as entered on the docket in the Case,
which has not been reversed, stayed, modified or amended, and as to which (i)
the time to appeal or seek certiorari has expired and no appeal or petition for
certiorari has been timely filed, or (ii) any appeal that has been or may be
taken or any petition for certiorari that has been or may be filed has been
resolved by the highest court to which the order or judgment was appealed or
from which certiorari was sought.

            2.47 Harmonics: Current and voltage distortion on AC power lines.
This distortion increases electrical bills, overheats wires and equipment,
wastes energy and creates electrical interference which can cause computers and
computed controlled-equipment to malfunction and interfere with
telecommunications. The AIM Filter is designed to address the problem of
Harmonics.

            2.48 Helionetics: Helionetics, Inc., a publicly-held California
corporation and a reporting company under the Securities and Exchange Act of
1934. Helionetics is the principal shareholder of the Debtor and is the owner of
approximately forty-nine percent (49%) of the Debtor's common stock. Helionetics
is an "affiliate" of the Debtor within the meaning set forth in Section
101(2)(A) of the Bankruptcy Code. Helionetics is a co-proponent of the Plan.

            2.49 Helionetics Litigation: The civil litigation pending against
Helionetics filed by the Debtor in the United States District Court, Northern
District of Ohio, Case No. 1:95CV2289, which was removed by the Debtor to the
United States Bankruptcy Court, Central District of California on May 23, 1996,
and assigned Adversary No. SA 96-1523 JR.


<PAGE>

            2.50 Helionetics Stock: Common Stock in Helionetics to be delivered
by Helionetics or by Barnes to Class 2 and Class 4 Creditors under the Plan.

            2.51 Lawrence A. Terkel: The owner of approximately ten percent
(10%) of the Debtor's common stock.

            2.52 LPI: Laser Photonics Inc., a publicly held Delaware corporation
and a reporting company under the Securities and Exchange Act of 1934. LPI is an
"Affiliate" of the Debtor within the meaning set forth in Section 101(2)(B) of
the Bankruptcy Code because Helionetics, itself an affiliate of the Debtor
within the meaning set forth in Section 101(2)(A) of the Bankruptcy Code, owns a
majority of the current issued and outstanding common stock of LPI.

            2.53 LPI Stock: 2,000,000 shares of LPI common stock owned by
Helionetics.

            2.54 New Tri-Lite Common Stock: Twenty-five million (25,000,000)
authorized and four million (4,000,000) shares of New Common Stock in the
Reorganized Debtor to be issued under the Plan.

            2.55 Order: An order or judgment of the Bankruptcy Court as entered
by the Clerk of the Court on the docket in this Case.

            2.56 Person: Any natural person, corporation, general partnership,
limited partnership, association, joint stock company, joint venture, estate,
trust, government or any political subdivision thereof, governmental unit (as
defined in Section 101(41) of the Bankruptcy Code), official committee appointed
by the United States Trustee, or other legal entity.

            2.57 Petition Date: February 26, 1996, the date upon which the
Debtor filed its voluntary petition under Chapter 11 of the Bankruptcy Code with
the Bankruptcy Court.

            2.58 Plan: The Third Amended Joint Chapter 11 Plan of Reorganization
proposed by the Debtor and Helionetics in this Case, and all exhibits,
schedules, releases, and other attachments annexed thereto, as the same may be
amended, modified or supplemented from time to time in accordance with the Code.

            2.59 Priority Tax Claim: An Allowed Claim entitled to priority under
Section 507(a)(8) of the Bankruptcy Code.


<PAGE>

            2.60 Prolite: Prolite Lighting and Sign Maintenance Co., Inc., a
Pennsylvania corporation, a wholly owned subsidiary of the Debtor.

            2.61 Pro Rata: proportionately so that the ratio of (a) the amount
of property distributed at any time on account of a particular Allowed Claim to
(b) the amount of the Allowed Claim is the same as the ratio of the amount of
property distributed at the same time on account of all Allowed Claims of the
Class in which the particular Allowed Claim is included to the amount of all
Allowed Claims in that Class.

            2.62 Reorganized Debtor: Tri-Lite, Inc., a Pennsylvania corporation
which, on and after the Confirmation Date, shall assume all of the rights and
obligations of the Debtor together with title to and control of the Debtor's
assets and liabilities upon Confirmation of the Plan, as such rights,
obligations, assets and liabilities are modified in the Plan.

            2.63 Scheduled: Set forth on the Schedules of Asset and Liabilities
on file with the Clerk of the Bankruptcy Court.

            2.64 Schedules of Assets and Liabilities: The Schedules of Assets
and Liabilities filed by the Debtor with the Clerk of the Bankruptcy Court, as
the same have been or may be amended from time to time prior to the Effective
Date of the Plan.

            2.65 Secured Claim: Any Claim that is secured by a lien on property
in which the Estate has an interest or that is subject to setoff under Section
553 of the Bankruptcy Code.

            2.66 Secured Creditor: The holder of an Allowed Secured Claim in
this Case.

            2.67 Section 1111(b) Election: An election by a Secured Creditor
with an interest in property of the Estate that is not of inconsequential value,
pursuant to the provisions of Section 1111(b) of the Bankruptcy Code, to have
its entire Allowed Claim treated as fully secured. In order to constitute an
effective Section 1111(b) Election, such an election must be made in writing
prior to the conclusion of the hearing on the Disclosure Statement.

            2.68 Star Bank: Star Bank, National Association, the holder of the
Class 1 Claim.

            2.69 Stipulation: That certain Revised Stipulation For 1)
Sequestration; 2) Interim Use; 3) Turnover of Cash Collateral; 4) Repayment of
Secured Debt entered into by and between the


<PAGE>

Debtor and Star Bank on April 29, 1996 and approved by the Bankruptcy Court
pursuant to its Order entered on April 30, 1996. A true and correct copy of the
Stipulation is attached to the Disclosure Statement as Exhibit "2."

            2.70 SPL: Self Powered Lighting, Inc., a New York corporation, a
wholly owned subsidiary of the Debtor.

            2.71 SPL Purchase Agreement: That certain agreement for the purchase
by the Debtor from Helionetics of all of the common stock of SPL.

            2.72 Stockbroker: The person designated by the Court to liquidate
and sell Helionetics Stock for the benefit of the Class 2 and Class 4 Claimants
under the Plan.

            2.73 Stockholder: The holder of record as of the Effective Date of
an Equity Security (common stock) of the Debtor. These parties have been
classified as the holders of Class 6 Claims.

            2.74 Unclassified Claims: The Allowed Amount of: (i) all
administrative expenses of the Debtor's Chapter 11 Case, allowed pursuant to
Section 503(b) of the Bankruptcy Code, and (ii) all Allowed, Unsecured Claims
entitled to priority pursuant to Section 507(a)(1),(3), (4) and (6) of the
Bankruptcy Code for wages, salaries, vacation, severance, sick pay or
commissions.

            2.75 Unsecured Claims: The Allowed Amounts of those Claims against
the Debtor for which there are no assets of the Debtor serving as security, but
not including any priority Claims.

            2.76 Unsecured Creditors: Creditors holding Allowed, Unsecured
Claims against the Debtor for which there are no assets of the Debtor serving as
security, but not including priority Claims.

            2.77 33 Act: The Federal Securities Act of 1933.

B)          Defined Terms.

            Any term used in the Plan or the Disclosure Statement that is not
defined in the Plan, either in Article II, Section A (Definitions) or elsewhere,
but that is used in the Bankruptcy Code or the Bankruptcy Rules has the meaning
assigned to that term in the Bankruptcy Code or the Bankruptcy Rules.


<PAGE>

C)          Rules of Interpretation.

            For purposes of the Plan: (a) whenever from the context it is
appropriate, each term, whether stated in the singular or the plural, shall
include both the singular and the plural; (b) any reference in the Plan to a
contract, instrument, release or other agreement or document being in a
particular form or on particular terms and conditions means that such document
shall be substantially in such form or substantially on such terms and
conditions; (c) any references in the Plan to an existing document or Exhibit
Filed or to be Filed means such document or Exhibit, as it may have been or may
be amended, modified or supplemented; (d) unless otherwise specified in a
particular reference, all references in the Plan to Sections, Articles and
Exhibits are references to Sections, Articles and Exhibits of or to the Plan;
(e) the words "herein," "hereof," "hereto," "hereunder" and others of similar
import refer to the Plan in its entirety rather than to only a particular
portion of the Plan; (f) captions and headings to Articles and Sections are
inserted for convenience of reference only and are not intended to be a part of
or to affect the interpretation of the Plan; and (g) the rules of construction
set forth in Section 102 of the Bankruptcy Code shall apply.

D)          Time Periods.

            In computing any period of time prescribed or allowed by the Plan,
the provisions of Bankruptcy Rule 9006(a) shall apply.

                                   ARTICLE III

                        TREATMENT OF UNCLASSIFIED CLAIMS

            3.1 Unless the holder of a particular claim agrees otherwise, all
Allowed Administrative Claims and all Allowed Unsecured Priority Claims shall be
paid in full, in Cash, on the Effective Date, or as soon thereafter as such
Administrative Claims or Allowed Priority Claims have been allowed by Final
Order of the Court. The holders of Allowed Administrative Claims may, at the
sole option of such holder, receive Helionetics Stock or New Tri-Lite Common
Stock in whole or partial satisfaction of such Claims. Such stock will be issued
under the exemption from Section 5 registration under the 33 Act provided by
Section 1145 of the Code and shall be `free trading' upon receipt by the holders
of such Claims. However, unless the holder of an Allowed Administrative


<PAGE>

Claim elects to be paid in stock, it shall be paid in Cash. The Debtor estimates
that unpaid Allowed Administrative Claims will be approximately $150,000 by the
Effective Date and estimates that Allowed Priority Claims will be approximately
$100,000 as of the Effective Date.

            3.2 The holders of Allowed Claims described by Section 507 (a) (8)
of the Bankruptcy Code, i.e. unsecured priority tax claims, shall receive
deferred cash payments, as provided for under Section 1129 (a)(9)(C) of the
Bankruptcy Code, equal to the value of their Allowed Claims as of the Effective
Date. Such deferred cash payments shall be payable as follows: From and after
the Effective Date, these claims shall bear interest at the rate of seven
percent (7%) per annum. The balance owed on said claims shall be paid in seventy
two (72) equal monthly installments of principal and interest, with the first
payment being due on the fifteenth (15th) day of the first full month following
the assessment date.

            3.3 After the Effective Date, the Allowed Unsecured Priority Tax
Claim of the Internal Revenue Service shall bear interest at a fixed interest
rate of 9% per annum. After the Effective Date, said Claimant shall receive
monthly payments of interest and principal, calculated on the basis of a twenty
(20) year amortization table. The first such payment shall be due and payable on
the fifteenth (15th) day of the first full month following the Effective Date,
and like payments shall be due and payable on the fifteenth (15th) day of each
and every month thereafter. The entire balance due and owing attributable to
each of the various tax periods set forth on the Allowed Unsecured Priority Tax
Claim shall be paid in full on or before the seventy-second (72nd) full month
from the date upon which each of the tax periods which are the subject matter
thereof were assessed.

                                   ARTICLE IV

                     CLASSIFICATION OF CLAIMS AND INTERESTS

            For purposes of satisfying Debtor's obligations created under the
Plan, the Claims of the Creditors and Interest Holders of the Debtor have been
classified as follows:

            4.1 Class 1: Star Bank, as the holder of an Allowed Secured Claim in
the approximate amount of $1,000,000, secured by a first priority consensual
lien encumbering the Debtor's inventory, accounts receivable, and other
operating assets.


<PAGE>

            4.2 Class 2: Barnett, as the holder of a disputed Secured Claim in
the approximate amount of $225,000 allegedly secured by a second priority
consensual lien encumbering the Debtor's inventory, accounts receivable, and
other operating assets.

            4.3 Class 3: All Claimants holding Allowed Unsecured Claims less
than, equal to, or voluntarily reduced by the holder thereof to $500.

            4.4 Class 4: All Claimants holding Allowed Unsecured Claims other
than Claims included in Class 3, in the approximate amount of $4,000,000 to
$5,000,000.

            4.5 Class 5: Helionetics, Inc., as the holder of an Allowed Secured
Claim allegedly secured by a consensual lien on the Debtor's inventory, accounts
receivable, and other operating assets, in the approximate amount of $1,850,000,
arising from the SPL Purchase Agreement.

            4.6 Class 6: The Stockholders (Equity Security Holders), including
Helionetics and Barnes, holding Common Stock of the Debtor.

                                    ARTICLE V

                         TREATMENT OF UNIMPAIRED CLASSES

            All Creditors and Stockholders in Classes 1 through 6 are impaired
under the Plan.

                                   ARTICLE VI

                          TREATMENT OF IMPAIRED CLASSES

            6.1 Class 1: The holder of the Class 1 Claim, Star Bank, shall be
treated in accordance with the terms of the Stipulation entered into by and
between Star Bank and the Debtor on April 29, 1996 and entered by the Clerk of
the Court on April 30, 1996. The Stipulation provides, inter alia, that Star
Bank shall receive monthly paydowns in the amount of $150,000 during the course
of the administration of the Debtor's case by the last business day of each
month commencing April 30, 1996, with the entire remaining balance of principal,
interest and other charges all due on December 15, 1996. The Debtor will
continue to make the payments called for under procedures set forth in the
Stipulation on a monthly basis and pay the remaining balance of principal,
interest and other charges to the Class 1 Claimant by December 15, 1996. The
Debtor and the Committee reserve the


<PAGE>

right to object to Star Bank's proof of claim or otherwise assert claims and
rights against Star Bank as expressly provided in the Stipulation, in particular
at paragraphs 18, 21 and 29 thereof.

            6.2 Class 2: The Class 2 Claimant shall retain the priority of his
liens on the assets of the Debtor as security for the balance owed on his
Allowed Secured Claim, including Post-Petition interest calculated at the
contract rate. The Class 2 Claimant shall have an Allowed Secured Claim which
shall be the sum of the following: Principal of $195,000, unpaid interest
accruing prior to December 1, 1995 in the amount of $665.45, and the amount of
all interest that shall accrue, from and including December 1, 1995, on said
principal at the contract rate (prime plus 1.5%) through the Effective Date. On
the Effective Date, all accrued but unpaid interest shall be added to principal.
Thereafter, the Class 2 Claimant's Allowed Secured Claim shall accrue interest
and be amortized as set forth below.

            From the Confirmation Date to the date the Class 2 Claimant's
Allowed Secured Claim is paid in full, the principal balance outstanding shall
bear interest at a fixed annual rate of 10% per annum. No portion of the Class 2
Allowed Secured Claim shall include attorneys' fees, default interest, late
penalties or similar charges or costs of any kind, accrued or incurred
post-petition, unless the same have been approved by the Court in accordance
with the procedure set forth in Article X, Section 10.1 hereof. Any future
default shall entitle the holder of the Class 2 Claim to recover his reasonable
attorneys' fees and costs of collection.

            After the Confirmation Date, the Class 2 Claimant shall receive
payments on his Allowed Secured Claim equal to the interest accruing on such
claim after the Confirmation Date plus the amortization of principal based upon
a straight line eight year schedule. The first such payment shall be due and
payable on the first day of the first full month following the Effective Date
and shall consist of 1/96 of the amount of outstanding principal plus accrued
interest and like payments shall be due and payable on the first day of every
month thereafter. The entire balance due and owing on the Class 2 Claimant's
Allowed Secured Claim shall be paid in full on or before the first (1st) day of
the thirty-sixth (36th) full month after the Effective Date.


<PAGE>

            Notwithstanding the foregoing, the Class 2 Claimant shall
subordinate the priority of his liens to a new lender for the purpose of the
furnishing to the Debtor or the Reorganized Debtor of additional working capital
through a new loan in an authorized principal balance of up to $5,000,000 (the
"New Loan"). The New Loan is to have the following lending parameters: The New
Loan is to be funded upon (a) no more than 80% of the Reorganized Debtor's
eligible accounts receivable; (b) no more than 50% of the value (at cost) of the
Reorganized Debtor's finished goods inventory; and (c) no more than 50% of the
forced liquidation value of the Reorganized Debtor's office furnishings,
machinery and equipment. The Class 2 Claimant shall execute such documentation
as may reasonably be required by a lender in connection with such New Loan(s)
confirming the foregoing and the Class 2 Claimant's subordination of the
priority of his liens to the liens in favor of such lender.

            As additional security for the performance by the Reorganized Debtor
of its obligations hereunder, Helionetics will guarantee the Reorganized
Debtor's performance of its obligations hereunder and Helionetics will secure
its performance under its guarantee by pledging for the benefit of the Class 2
Claimant 100,000 shares of common stock in LPI currently owned by Helionetics.
On the twelfth (12th) and twenty-fourth (24th) months following the Effective
Date there shall be a revaluation of the LPI stock pledged for the benefit of
the Class 2 Claimant. Helionetics will deliver such additional LPI stock to the
pledgeholder as may be required to maintain a market value of the pledged LPI
stock in an amount equal to a minimum of 100% of the then outstanding principal
balance owed by the Reorganized Debtor to the Class 2 Claimant under the Plan
within seven days of the date of such valuation. The LPI Stock pledged by
Helionetics for the benefit of the Class 2 Claimant pursuant to the Plan will be
exempt from Section 5 registration under the 33 Act pursuant to Section 1145 of
the Bankruptcy Code and Section 4(1) of the 33 Act and, after confirmation of
this Plan upon any foreclosure of the LPI Stock shall be available for immediate
resale as described herein without registration under Section 5 of the 33 Act.

            In the event that the Reorganized Debtor fails to make the payment
due on the Class 2 Claimant's Allowed Secured Claim in accordance with the above
payment schedule, and such


<PAGE>

nonpayment remains uncured for a period of ten (10) days after written notice of
said nonpayment is transmitted to the Reorganized Debtor, then the Class 2
Claimant may pursue any and all remedies available to him under state law and
the Bankruptcy Code.

            6.1 Class 3: The Holder(s) of Allowed Unsecured Claim(s) of less
than $500, or who voluntarily reduce their claim(s) to $500 by the date set by
the Court, will be paid in Cash 70% of the amount of their Allowed Unsecured
Claim, calculated without the accrual of Post-Petition interest, on or before
the Effective Date.

            6.2 Class 4: Each Class 4 Claimant shall receive deliveries of
Helionetics Stock or cash, or combinations of both from Helionetics (or at the
sole option of the Barnes, from Barnes), equal to seventy (70) cents for each
one (1) dollar of Allowed Unsecured Claim held by each Class 4 Unsecured
Creditor, calculated without the accrual of Post-Petition interest, in exchange
for their Claims against the Debtor. The Helionetics Stock will be delivered
under the exemption from Section 5 registration under the 33 Act provided by
Section 1145 of the Code and shall be `free trading' upon receipt by the Class 4
Unsecured Creditors (so long as the Class 4 Claimants individually or in the
aggregate are not 10% or more shareholders or controlling persons of
Helionetics). The Helionetics Stock or cash, or combinations of both, shall be
delivered to Class 4 Unsecured Creditors in the following manner:

                        6.4.1 Initial Delivery: As soon as practicable following
the Confirmation Date, but in any event no later than thirty (30) days after the
Confirmation Date, there will be an initial delivery (the "Initial Delivery") by
Helionetics (or, at the sole option of Barnes, from Barnes), of either (i)
Helionetics Stock having an aggregate value based upon a price per share equal
to the average closing price of a share of Helionetics Stock over the five (5)
consecutive trading days following the Confirmation Date, equal to thirty (30)
cents for each one (1) dollar of Allowed Unsecured Claim held by each Class 4
Unsecured Creditor, calculated without the accrual of post-petition interest, or
(ii) a Cash payment equal to thirty (30) cents for each one (1) dollar of
Allowed Unsecured Claim held by each Class 4 Unsecured Creditor, calculated
without the accrual of post-petition interest, at the option of Helionetics.
Within ten (10) days prior to the


<PAGE>

Initial Delivery, Helionetics or Barnes will send via regular mail written
notice to the Debtor and a representative of the Committee of the form of the
Initial Delivery (i.e., whether in all Cash or in all Helionetics Stock). At the
option of each Class 4 Claimant who so elects on the Ballot pertaining to the
Plan (each, a "Participating Class 4 Claimant"), in the event that the Initial
Delivery is in the form of Helionetics Stock, such stock will be delivered to a
stockbroker who has been designated by the Court pursuant to the Plan (the
"Designated Broker"). The Designated Broker will be instructed under the Plan to
liquidate and sell the Helionetics Stock for the account of the Participating
Class 4 Claimant solely pursuant to ordinary trading transactions as those terms
are used in Section 1145 of the Bankruptcy Code as soon as practicable following
the Confirmation Date in sufficient amount to obtain net cash proceeds equal to
thirty (30) cents for each one (1) dollar of Allowed Unsecured Claim held by
such Claimant calculated without the accrual of post-petition interest. Such
proceeds will be distributed to the Participating Class 4 Claimants shortly
after the Effective Date. Pursuant to the Plan, the Designated Broker shall be
entitled to a commission for selling the Helionetics Stock for the account of
each Participating Class 4 Claimant not in excess of the usual and customary
broker's commission. The Designated Broker will be required to deliver a copy of
the Plan and Disclosure Statement to each offeree and purchaser of the
Helionetics Stock. From time to time following the Initial Delivery, at the
request of the Designated Broker, Helionetics (or at the sole option of Barnes,
Barnes) will deliver to each Participating Class 4 Claimant and deliver to the
Designated Broker for the account thereof, additional Helionetics Stock as may
be required to ensure that the net cash proceeds payable to each Participating
Class 4 Claimant from the sale of the Helionetics Stock under the Initial
Delivery will in fact equal a net thirty (30) cents for each one (1) dollar of
Allowed Unsecured Claim calculated without the accrual of post-petition
interest, after payment of the Designated Broker's usual and customary fees and
expenses. In the event that the Initial Delivery is in the form of Helionetics
Stock, those Class 4 Claimants who (a) do not vote on the Plan and return the
Ballot or (b) do not properly complete the instructions for sale of the
Helionetics Stock accompanying the Ballot, or (c) elect not to sell their
Helionetics Stock through the use of the Designated Broker (in each case, a
"Non-Participating Class 4 Claimant"), will be


<PAGE>

delivered their Helionetics Stock at the time of the Initial Delivery pursuant
to the valuation formula described hereinabove. Each Non-Participating Class 4
Claimant shall not be entitled to receive any additional deliveries of
Helionetics Stock described above, notwithstanding that the net cash proceeds
received by such Non-Participating Class 4 Claimant upon the sale of its
Helionetics Stock does not equal thirty (30) cents for each one (1) dollar of
Allowed Unsecured Claim held by such Claimant calculated without the accrual of
post-petition interest. Pursuant to the Plan, in no event at any one time, in
the aggregate when combined with Helionetics Common Stock delivered for sale to
the Designated Broker by the Participating Class 4 Claimants, shall the
Designated Broker hold for sale shares of the Common Stock of Helionetics equal
to or in excess of ten percent (10%) of the then outstanding Common Stock of
Helionetics. At the time of the Initial Delivery, the LPI Stock pledged to the
Committee by Helionetics shall be revalued and dealt with under the terms of the
Amended and Restated Pledge Agreement, dated as of January 23, 1997 and related
documents.

                        6.4.2 Subsequent Deliveries: There will be subsequent
deliveries to Class 4 Unsecured Creditors, of either (i) Helionetics Stock
having an aggregate value equal to an additional forty (40) cents for each one
(1) dollar of Allowed Unsecured Claim held by each Class 4 Unsecured Creditor,
calculated without the accrual of post-petition interest, or (ii) periodic Cash
payments equal to a total of forty (40) cents for each one (1) dollar of Allowed
Unsecured Claim held by each Class 4 Unsecured Creditor, calculated without the
accrual of post-petition interest, at the option of Helionetics (or at the sole
option of Barnes)("Subsequent Deliveries"), as set forth below. Helionetics
Stock available to the Participating Class 4 Claimants shall be delivered to the
Designated Broker to be sold for their account. The Subsequent Deliveries,
whether in Cash or Helionetics Stock, shall be payable in four installments on
each of the following dates(or, if such date is not a regular business day, on
the first business day thereafter):

          Six (6) Months after Effective Date:             7.5%

          Twelve (12) Months after Effective Date:         15%

          Eighteen (18) Months after Effective Date:       22.5%

          Twenty-Four (24) Months after Effective Date:    55%


<PAGE>

                                   Total                   100%

            Each of the Subsequent Deliveries may be, at the option of
Helionetics (or at her option by Barnes), either entirely in the form of
Helionetics Stock or entirely in Cash, and Helionetics (or Barnes at her option)
may, in its discretion, alternate the form of each delivery. However, not more
than fifteen (15) days nor less than ten (10) days prior to the scheduled date
of each of the Subsequent Deliveries, Helionetics (or Barnes at her option) will
send via regular mail written notice to the Debtor and a representative of the
Committee of the form of the delivery (i.e., whether in Cash or in Helionetics
Stock). If Helionetics elects to deliver Helionetics Stock, it shall be valued
for the purposes of each such Subsequent Delivery at a price per share equal to
the average closing price of a share of Helionetics Stock over the five (5)
consecutive trading days up to and including the trading day immediately prior
to the date of such notice. Helionetics may, at its sole option, (or Barnes, at
her sole option) accelerate the date of any scheduled delivery hereunder;
provided, however, that Helionetics (or Barnes) shall not be permitted to
accelerate a Subsequent Delivery in the form of Helionetics Stock, if the
Helionetics Stock to be delivered to the Designated Broker, when aggregated with
the Helionetics Stock previously delivered to and still held by the Designated
Broker, would cause the Designated Broker to hold on behalf of the Participating
Class 4 Claimants Helionetics Stock equal to or in excess of ten percent (10%)
of the then outstanding Common Stock of Helionetics. At the time of each
Subsequent Delivery, the LPI Stock pledged to the Committee by Helionetics shall
be revalued and dealt with under the terms of the Amended and Restated Pledge
Agreement, dated as of January 23, 1997, and related documents.

            Debtor's Counsel will issue a qualified opinion that the delivery of
the aforesaid shares of Helionetics Common Stock under the Plan and their resale
by creditors into public markets is exempt from Section 5 registration under the
33 Act pursuant to Section 1145 of the Code and Section 4(1) of the 33 Act.
Helionetics shall obtain all appropriate board resolutions and other corporate
authority necessary to enter into the transactions contemplated herein prior to
December 15, 1996.

            The Court will be requested to make appropriate findings in the
Confirmation Order that: (i) title to the Helionetics Stock to be delivered to
Class 4 Claimants will pass to the Class 4 Claimants


<PAGE>

only upon the delivery of the Helionetics Stock to the Class 4 Claimants or to
the Designated Broker who will sell the Helionetics Stock for their account
pursuant to ordinary trading transactions, as applicable; (ii) the LPI Stock
pledged pursuant to the stipulation approved by the Court on September 3, 1996,
as modified by the Amended and Restated Pledge Agreement, dated as of January
23, 1997, and related documents and corresponding Stipulation to be filed with
the Court prior to the entry of the Confirmation Order, will be exempt from
Section 5 registration under the 33 Act pursuant to Section 1145 of the
Bankruptcy Code and Section 4(1) of the 33 Act and, after confirmation of this
Plan upon any foreclosure of the LPI Stock shall be available for immediate
resale as described herein without registration under Section 5 of the 33 Act;
(iii) as long as the Class 4 Unsecured Creditors individually or in the
aggregate are not 10% or more stockholders or controlling persons of
Helionetics, the offer and sale of the Helionetics Stock to the Class 4
Unsecured Creditors under the Plan, and the offer and sale of the Helionetics
Stock by the Class 4 Unsecured Creditors into the public market, including
without limitation the offer and sale of Helionetics Stock by the Designated
Broker on behalf of each Participating Class 4 Claimant, will be exempt from the
registration requirements under Section 5 of the 33 Act pursuant to the
exemptions provided by Section 1145 of the Code and Section 4 (1) of the 33 Act;
(iv) each offer and sale by the Designated Broker of the Helionetics Stock in
accordance with the Plan is an "ordinary trading transaction" under Section
1145(b)(1) of the Code; (v) neither the Class 4 Unsecured Creditors, nor the
Committee, nor the Designated Broker, nor the Debtor, is an "underwriter" as
defined under Section 1145 of the Code and, none of such persons are
"underwriters" under Section 2(11) of the 33 Act, with respect to the delivery,
offer, sale and issuance of the Helionetics Stock; (vi) Barnes and Helionetics
are "affiliates" of the Debtor as defined in Section 101(2) of the Code; (vii)
the offer and sale of the New Tri-Lite Common Stock to the Class 6 interest
holders and to Helionetics and/or Barnes, will be exempt from the registration
requirements under Section 5 of the Securities Act of 1933 pursuant to the
exemptions provided by Section 1145 of the Code; and (viii) the New Tri-Lite
Common Stock to be offered and sold to Helionetics and Barnes as Class 6
interest holders, will be offered and sold in the manner specified under
subsection (a)(1) of Section 1145 of the Code, such 


<PAGE>

offer and sale will be deemed to be a public offering as specified in subsection
(c) of Section 1145 of the Code, and such stock shall be available for immediate
resale subject to volume limitations on resale applicable to "affiliates" of an
issuer who have received "non-restrictive" securities in a public offering, as
set forth in Securities and Exchange Commission Rule 144, the exemptions
provided by Section 1145 of the Code, and Section 4(1) of the 33 Act.

            6.5 Class 5: In consideration of the Debtor having compromised
through an appropriate Order of the Bankruptcy Court dismissing the Helionetics
Litigation immediately after the Effective Date regarding the SPL Purchase
Agreement and any other relief sought by the Debtor against Helionetics, and in
consideration of the allowance of Helionetics' Allowed Class 5 Secured Claim in
the amount of approximately $1,850,000, (i) the Debtor will retain all of its
right, title and interest in the common stock of SPL; (ii) Helionetics (or at
her sole option Barnes) will cause sufficient Helionetics Stock or Cash to be
delivered to meet the requirements of Sections 6.2, 6.3, 6.4.1 and 6.4.2 of the
Plan to satisfy the requirements for the exchange of the Claims of Class 2, 3
and 4 Claimants; and (iii) on the Effective Date Helionetics shall contribute to
the Reorganized Debtor all of its interest in AIM which is intended to transfer
to the Reorganized Debtor all proprietary rights to the AIM Filter.

            The Class 5 Claimant shall retain the priority of its liens on the
assets of the Debtor as security for the balance owed on its Allowed Secured
Claim, including Post-Petition interest calculated at the non-default contract
rate. Notwithstanding the foregoing, the Class 5 Claimant shall subordinate the
priority of its liens, to a new lender for the purpose of (1) replacement of the
Allowed Secured Claim of the Class 1 Claimant and (2) the furnishing to the
Debtor or the Reorganized Debtor of additional working capital with a new loan
in an authorized principal balance of up to $5,000,000.

            No portion of the Class 5 Allowed Secured Claim shall include
attorneys' fees, default interest, late penalties or similar charges or costs of
any kind, accrued or incurred post-petition, unless the same have been approved
by the Court in accordance with the procedure set forth in Article X, Section
10.1 hereof.


<PAGE>

            From the Confirmation Date until the Class 5 Allowed Secured Claim
is paid in full, the balance outstanding shall bear interest at a fixed rate of
seven and one-half percent (7.5%) per annum. After the Confirmation Date the
Class 5 Claimant shall receive semi-annual payments of interest only, with the
first payment due on the first (1st) day of the sixth month following the
Effective Date with the entire balance due and owing on the Class 5 Claimant's
Allowed Secured Claim to be paid in full by on or before the first (1st) day of
the seventy-second (72nd) full month after the Effective Date.

            In the event that the Reorganized Debtor fails to make any payment
due on the Class 5 Claimant's Allowed Secured Claim in accordance with the above
payment schedule, and such nonpayment remains uncured for a period of ten (10)
days after written notice of said nonpayment is transmitted to the Reorganized
Debtor, the outstanding obligation shall accelerate and the Class 5 Claimant may
pursue any and all remedies available to it under state law and the Bankruptcy
Code.

            6.6 Class 6: On the Effective Date all Common Stock and securities
in the Debtor shall be automatically canceled and the Debtor's Articles shall be
automatically amended to authorize the issuance of up to twenty-five million
(25,000,000) shares of New Tri-Lite Common Stock, of which four million
(4,000,000) shares will be issued under the Plan. All members of Class 6, with
the exception of Helionetics and Barnes, shall be issued on a pro rata basis
12.5% of the New Tri-Lite Common Stock in the Reorganized Debtor in exchange for
their existing "old common shares" of the Debtor currently outstanding and in
their hands. Helionetics will contribute to the Reorganized Debtor on the
Effective Date all of its interest in AIM, which is intended to transfer to the
Reorganized Debtor all proprietary rights to the AIM Filter. Helionetics and/or
Barnes shall be issued 87.5% of the New Tri-Lite Common Stock in the Reorganized
Debtor in exchange for their respective "old common shares" of the Debtor
currently outstanding and in their hands in proportion to the shares of
Helionetics Stock (or at their option, Cash) they respectively deliver to Class
2 and 4 Creditors, in a transaction exempt from registration under the 33 Act,
pursuant to Section 1145 of the Code. In the event Barnes elects to deliver no
Helionetics Stock or Cash to Class 2 and Class 4


<PAGE>

Creditors, then the 87.5% block of New Tri-Lite Common Stock shall be allocated
between Barnes and Helionetics, in proportion to their holdings of "old common
shares" of the Debtor.

            The Court will be requested to make appropriate findings in the
Confirmation Order that: (i) title to the New Tri-Lite Common Stock to be
delivered to Class 6 Claimants (including Barnes and/or Helionetics) will pass
to the Class 6 Claimants only upon the delivery of New Tri-Lite Stock
certificates; (ii) the issuance of the New Tri-Lite Stock to the Class 6 members
and to Barnes and/or Helionetics under the Plan, will be exempt from the
registration requirements under Section 5 of the 33 Act pursuant to the
exemption provided by Section 1145 of the Code; (iii) neither the Class 6
members nor the Debtor (excluding Helionetics and Barnes), is an "underwriter"
as defined under Section 1145 of the Code; (iv) the New Tri-Lite Common Stock to
be issued to the Class 6 members, excluding Barnes and/or Helionetics, shall be
available for immediate resale without registration under Section 5 of the 33
Act, pursuant to the exemptions provided by Section 1145 of the Bankruptcy Code
and Section 4(1) of the 33 Act; (v) Barnes and Helionetics are "affiliates" of
the Debtor as defined in Section 101(2) of the Code; (vi) the offer and sale of
the New Tri-Lite Common Stock to the Class 6 interest holders and to Helionetics
and/or Barnes, will be exempt from the registration requirements under Section 5
of the Securities Act of 1933 pursuant to the exemptions provided by Section
1145 of the Code; and (vii) the New Tri-Lite Common Stock to be offered and sold
to the Class 6 interest holders, including Helionetics and Barnes, will be
offered and sold in the manner specified under subsection (a)(1) of Section 1145
of the Code, will be deemed to be a public offering as specified in subsection
(c) of Section 1145 of the Code, and shall be available for immediate resale
subject to volume limitations on resale applicable to "affiliates" of an issuer
who have organized "non-restrictive" securities in a public offering, as set
forth in Securities and Exchange Commission Rule 144, the exemptions provided by
Section 1145 of the Code, and Section 4(1) of the 33 Act.


<PAGE>

                                   ARTICLE VII

                         MEANS FOR EXECUTION OF THE PLAN

            7.1 Financing of Cash Distributions on Effective Date: Helionetics'
loan of funds to the Debtor (Barnes' loan of funds to the Debtor, in her sole
discretion), or the proceeds of new financing, and the Debtor's internally
generated cash will be used to pay Unclassified Claims by on or before the
Effective Date and the payment to Class 3 Unsecured Creditors.

            7.2 Payments to Star Bank: The Debtor will continue with its efforts
to secure replacement financing for its business operations and will have a new
institutional lender or Susan Barnes on terms satisfactory to her in place by
December 15, 1996 to insure the availability of the final payment due Star Bank
at that time.

            7.3 Delivery of Helionetics Stock or Cash: Helionetics (or at her
sole option, Barnes) will cause sufficient Helionetics Stock or Cash to be
delivered to meet the requirements of Sections 6.2, 6.4.1 and 6.4.2 of the Plan
to satisfy the requirements for the exchange of the Claims of Class 2 and 4
Claimants. The Helionetics Stock will be delivered for the benefit of the Class
2 and 4 Claimants under the exemption from Section 5 registration under the 33
Act provided by Section 1145 of the Bankruptcy Code as described in the Plan.

            7.4 Compromise of Controversy re: Helionetics Litigation: The
Helionetics Litigation will have been compromised, pursuant to a noticed hearing
under Bankruptcy Rule 9019, in such a fashion concurrently with the hearing on
Confirmation and contingent upon Confirmation of the Plan that the Debtor shall
be authorized to dismiss with prejudice its claims against Helionetics
immediately after the Effective Date. Helionetics is to specifically retain any
and all claims and causes of action it may hold against Star Bank and its
employees or agents and any and all other claims or causes of action it may have
against any third parties as a Stockholder of the Debtor.

            7.5 Contribution of AIM: On the Effective Date Helionetics shall
contribute to the Reorganized Debtor all of its interest in AIM which is
intended to transfer to the Reorganized Debtor all proprietary rights to the AIM
Filter.


<PAGE>

            7.6 Issuance of New Tri-Lite Common Stock: The Reorganized Debtor
will issue New Tri-Lite Common Stock to meet the requirements of Section 6.6 of
the Plan. The New Tri-Lite Common Stock will be issued to Class 6 members and to
Barnes and/or Helionetics in exchange for their "old common shares" of Tri-Lite,
Inc. currently outstanding and in their hands, as an exchange of new Debtor
securities for existing interests in the Debtor under the exemption from Section
5 registration under the 33 Act provided by Section 1145 of the Bankruptcy Code.

                                  ARTICLE VIII

                    REQUEST FOR FINDING OF FAIR AND EQUITABLE

                          TREATMENT OF IMPAIRED CLASSES

            Pursuant to Section 1129(b) of the Bankruptcy Code, the Debtor,
Helionetics and Barnes, as the co-proponents of this Chapter 11 Plan, hereby
request that this Court find that the provisions of this Plan provide fair and
equitable treatment to those Claimants who are impaired under the Plan and who
elect not to accept the Plan, and that this Court confirm the Plan ("cramdown")
notwithstanding the requirement of Section 1129(a)(8) of the Bankruptcy Code as
to such Claimants.

                                   ARTICLE IX

              CONDITIONS PRECEDENT TO DISTRIBUTIONS UNDER THE PLAN

            In addition to the other terms and conditions set forth herein, the
following shall constitute conditions precedent to any Claimant's or Interest
Holder's right to participate in the distributions under the Plan:

            9.1 As a condition to participation in the distribution under the
Plan, all Creditors shall execute and deliver to the Reorganized Debtor or join
in the execution or delivery of any instrument necessary for consummation of the
Plan.

            9.2 Within fifteen (15) business days of the Confirmation Date, the
Class 2 Claimant shall provide the Reorganized Debtor with evidence that a
legend has been placed upon the original of its promissory note reflecting the
fact that said note has been modified and amended by and in accordance with the
Plan. In the event the Class 2 Claimant fails to comply with this provision, it


<PAGE>

shall not be entitled to receive payments or accrue interest on its Claim after
the Confirmation Date until this condition is satisfied.

            9.3 As a condition to participation in distribution under the Plan,
any Person against whom a turnover judgment has been entered in this case shall
turn over to the Reorganized Debtor the property, or the value thereof, ordered
turned over by such judgment. No Person against whom a turnover judgment has
been entered shall have any right to participate in distributions under the Plan
until such Person turns over to the Reorganized Debtor the required amount, or
the value thereof, and such Person shall forfeit any rights to distribution
which the Plan contemplates and which would have occurred during the period of
noncompliance with any turnover judgment. Any rights of any such Person to
participate in distributions under the Plan shall terminate six months from the
Confirmation Date in the event such Person has not by that time turned over to
the Reorganized Debtor the required property or the value thereof.
Notwithstanding the foregoing, nothing contained herein shall limit any right of
the Reorganized Debtor to enforce any judgment of the Court.

            9.4 As a condition to participation in distribution under the Plan,
any Person against whom a preference judgment has been entered shall turn over
to the Reorganized Debtor the property preferentially transferred or the value
thereof. No Person shall have any right to participate in distributions under
the Plan until such Person turns over to the Reorganized Debtor the required
property or the value thereof and such Person shall forfeit any rights to
distributions which the Plan contemplates and which would have occurred during
the period of noncompliance with any preference judgment. Any right of any
Person to participate in distributions under the Plan shall terminate five years
from the Confirmation Date in the event such Person has not by that time turned
over to the Reorganized Debtor the required property or the value thereof.
Notwithstanding the foregoing, nothing contained herein shall limit any right of
the Reorganized Debtor to enforce any judgment of the Court.


<PAGE>

                                    ARTICLE X

                  DISALLOWANCE OF CLAIMS/RETENTION OF PROPERTY

            10.1 Notwithstanding anything to the contrary herein, no attorney's
fees or other "professional" fees (as the term "professional" is defined in 11
U.S.C. ss. 327), default interest, late penalties or any similar charges claimed
after the Petition Date shall be compensable by the Debtor or out of property of
the estate, nor shall the same constitute part of an Allowed Claim, until the
Creditor seeking to recover such fees and charges from the Debtor or the estate
has had such fees and charges approved by the Bankruptcy Court as "reasonable"
or otherwise properly payable by the Debtor or the estate. Such approval must be
made through a motion for the recovery of same, made on no less than twenty-one
(21) days' written notice to the Debtor, its attorneys, and the Office of the
United States Trustee. Any professional fees or default interest, late penalties
or similar charges claimed after the Petition Date claimed by a Creditor of the
estate as compensable by the Debtor or the estate which have not been approved
through the above procedure within sixty (60) days after the Effective Date
shall be barred.

            10.2 Notwithstanding anything contained herein, the Reorganized
Debtor shall have the right to request the Court to disallow any Claim of any
Person from which property is recoverable under section 542, 543, 550, or 553 of
the Bankruptcy Code or that is a transferee of a transfer avoidable under
section 544, 545, 547, 548, or 549 of the Bankruptcy Code unless such Person or
transferee has paid the amount, or turned over any such property for which such
Person or transferee is liable.

            10.3 Except as otherwise specifically provided herein, the
Reorganized Debtor shall retain all property of the estate including any rights
under avoidance actions, and including but not limited to any claims or causes
of action it may have against Star Bank and its employees or agents and any and
all other claims or causes of action it may have against any third parties which
shall become property of the Reorganized Debtor.

            10.4 All claims objections shall be filed within six (6) months
after the Effective Date, unless the Reorganized Debtor obtains an extension of
this deadline through a noticed motion. If a


<PAGE>

claims objection is filed, the claimant will not receive any distributions
called for under the Plan until the first day of the first full month after a
Final Order has been rendered by the Bankruptcy Court, or another court of
competent jurisdiction, establishing the amount and priority of such claim.

            10.5 Any payment(s) called for under the Plan which include (a)
checks issued by the Reorganized Debtor which have been returned as
undeliverable without a property forwarding address, or (b) checks issued by the
Reorganized Debtor which were not mailed or delivered because of the absence of
a proper address with which to mail or deliver same) shall be deposited by the
Reorganized Debtor into an interest bearing unclaimed property reserve to be
held in trust for the benefit of the holders of Allowed Claims entitled thereto
under the terms of the Plan. For a period of two (2) years following the
Effective Date, such unclaimed property shall be held in the unclaimed property
reserve for the benefit of the holders of Allowed Claims which have failed to
claim such property. Prior to the expiration of two (2) years following the
Effective Date, such unclaimed property due the holder of an Allowed Claim shall
be released from the unclaimed property reserve and delivered to such holder
upon presentation of proper proof by such holder of its entitlement thereto. At
the end of the second year following the Effective Date, the holders of Allowed
Claims theretofore entitled to said unclaimed property shall cease to be
entitled thereto and the same shall thereupon become the property of the
Reorganized Debtor.

                                   ARTICLE XI

                        DESIGNATION OF REORGANIZED DEBTOR

                          AS REPRESENTATIVES OF ESTATE

            Pursuant to Section 1123(b)(3)(B) of the Code, the Reorganized
Debtor is hereby designated as the representative of the estate of the Debtor.
The Reorganized Debtor is also to be the Disbursing Agent for the purposes of
any Cash distributions under the Plan. The Transfer Agents for Helionetics and
the Reorganized Debtor shall handle the delivery of Helionetics Stock and New
Tri-Lite Common Stock to Creditors (or to the Stockbroker designated by the
Court if they so elect) and Interest Holders under the Plan.


<PAGE>

                                   ARTICLE XII

                              MODIFICATION OF PLAN

            The Debtor may propose amendments or modifications to this Plan at
any time prior to confirmation or at the confirmation hearing, without leave of
the Court, upon proper notice. After confirmation, the Debtor may, with the
approval of the Court, and so long as it does not materially or adversely affect
the interest of creditors, remedy any defect or omission, or reconcile any
inconsistencies in the Plan, or the order of confirmation, in such manner as may
be necessary to carry out the purposes of this Plan.

                                  ARTICLE XIII

                    EXECUTORY CONTRACTS AND UNEXPIRED LEASES

            All prepetition executory contracts and unexpired leases in which
the Debtor is the lessor or lessee and which have not been previously rejected
during the course of this Chapter 11 case which are set forth on Exhibit "8"
hereto shall be assumed through the Plan. All other prepetition executory
contracts and/or unexpired leases not previously assumed or rejected during the
course of this Chapter 11 case shall be deemed rejected by the Plan. All claims
arising from the rejection of executory contracts and/or unexpired leases which
have been deemed rejected by the Plan must be filed with the Court within thirty
(30) days of the Confirmation Date or shall be barred.

                                   ARTICLE XIV

                             EFFECT OF CONFIRMATION

            14.1 From and after the Confirmation Date, the Debtor will be
discharged from any and all debts dischargeable under Section 1141(d) of the
Bankruptcy Code, and confirmation of the Plan, which shall occur on the
Confirmation Date shall otherwise have all of the effects provided in Section
1141 of the Bankruptcy Code which are not inconsistent with the terms of the
Plan.

            14.2 From and after the Confirmation Date all loan documents, trust
deeds and other contracts documenting claims against the Debtor shall be deemed
modified and/or superseded completely, as the case may be, by the terms of the
Plan. After the Confirmation Date, Claims shall be paid only in accordance with
the Plan, and any effort by any Claimant to compel the Debtors to


<PAGE>

pay such Claimant more than its Allowed Claim, or to pay its Claim in any manner
other than as provided for in the Plan shall constitute a violation of the
Confirmation Order and Section 1141 of the Bankruptcy Code.

            14.3 All claimants holding negotiable instruments signed by the
Debtor which reflect a prepetition claim, shall cause a legend or notation to be
placed conspicuously on the face of any such instrument stating that the terms
of this instrument have been modified by the terms of the Plan. This legend or
notation must be placed on said negotiable instruments within five (5) days of
the Effective Date, and no payments shall be made to the holders of any such
instrument until they have proved that this action has in fact been taken.

            14.4 From and after the Confirmation Date, any cash collateral
stipulation or order regarding the use of cash collateral then effective in this
proceeding, shall be rendered null and void, and the terms of the Plan shall be
controlling.

            14.5 Pursuant to Section 1142(a) of the Bankruptcy Code,
notwithstanding any other applicable non-bankruptcy law, rule or regulation
relating to financial condition, the Debtor is authorized to carry out the terms
of the Plan. Moreover, all claimants holding liens on the Debtor's properties,
are directed, pursuant to Section 1142(b) of the Bankruptcy Code, to execute or
deliver, or to join in the execution or delivery, of any instrument or other
document required to effect a transfer of property dealt with by the Plan, and
to perform any other act, including the satisfaction of any lien that is
necessary for the consummation of the Plan. To the extent that any lienholder
fails to comply with this provision, the Debtor may seek an order from the
Bankruptcy Court, on an expedited basis, compelling compliance with this
provision, and during the time period encompassed by this compliance, no
payments shall be made to the noncomplying Creditor under the Plan, and any such
Creditor shall be responsible for all costs and damages incurred by the Debtor
as a result of its noncompliance with this provision.

            14.6 On the Effective Date the Committee shall remain in existence
for the sole and exclusive purpose of enforcing the Committee's rights and
remedies in the event of Debtor's failure to comply with all terms of the Plan
including, but not limited to, enforcing the Committee's rights


<PAGE>

under the Letter Agreement and the Pledge Agreement with Helionetics. The
Committee will not have any rights, responsibilities or obligations after the
Effective Date except for the limited purpose set forth herein. Upon Debtor's
satisfaction of all provisions of the Plan vis-a-vis Class 4 Creditors, the
Committee shall dissolve and the members of such Committee released and
discharged from all rights and duties as committee members arising from or
related to this Case. The Committee's members and professionals shall only be
entitled to compensation and reimbursement from the estate for post-Effective
Date services rendered for the limited purpose set forth herein and said
compensation and reimbursement of expenses shall not exceed the sum of
$35,000.00 for these post-Effective Date services; provided, however, that this
$35,000.00 limitation does not pertain to pre-Effective Date fees and expenses
of the Committee and its professionals. Except as set forth herein, the members
of the Committee shall not be entitled to compensation or reimbursement of
expenses for any services rendered after the Effective Date, except for services
rendered and expenses incurred in connection with any applications for allowance
of compensation and reimbursement of expenses pending on the Effective Date.

                                   ARTICLE XV

                            RETENTION OF JURISDICTION

            The Court shall retain jurisdiction of this Chapter 11 case until
this Plan has been fully consummated, pursuant to and for the purposes set forth
in the Code, and specifically for the purpose of:

            15.1 Classification of the Claim of any Creditor in the
reexamination of Claims which have been allowed for the purposes of voting for
the determination of such objections as may be filed to Creditors' Claims. The
failure by the Debtor to object to or examine any claim for the purpose of
voting shall not be deemed to be a waiver of the Debtor's right to object to or
reexamine the Claim in whole or in part.

            15.2 The allowance of compensation or other administrative expenses.

            15.3 To hear and determine Claims concerning state, local, and
federal taxes pursuant to Sections 346, 505, 525, and 1146 of the Bankruptcy
Code.


<PAGE>

            15.4 To hear and determine any action or proceeding brought by
Debtor under Sections 510,543, 544, 545, 548, 549, 550, 551, and 553 of the
Bankruptcy Code, whether such action or proceeding is brought before or after
the Effective Date.

            15.5 To hear and determine all actions and proceedings which relate
to pre-confirmation matters brought by the Debtor whether such action or
proceeding is brought before or after the Effective Date.

            15.6 The determination of any issues relating to the assumption or
rejection of executory contracts and unexpired leases including the assumption
or rejection of executory contracts or unexpired leases not expressly dealt with
herein.

            15.7 The modification of this Plan after Confirmation pursuant to
the Bankruptcy Rules and Title 11 of the United States Code.

            15.8 The enforcement and interpretation of the terms of this Plan.

            15.9 The correction of any defects, the curing of any omission, or
the reconciliation of any inconsistency of this Plan or in the Confirmation
Order as may be necessary to carry out the purposes and intent of this Plan.

            15.10 The entry of any order, including injunctions, necessary to
enforce title, rights and powers of the Debtor and to impose such limitations,
restrictions, terms and conditions of such title, rights and powers as this
Court may deem necessary including, without limitation, any right of the Debtor
to recover assets pursuant to any of the relevant provisions of the Bankruptcy
Code.

            15.11 The determination of the validity, extent and priority of all
liens and security interests against property of the Debtor's Chapter 11 estate.

            15.12 To hear and determine such matters and make such orders as are
consistent with the Plan as may be necessary or desirable to carry out the
provisions thereof and to adjudicate any disputes arising under or relating to
any order entered by the Court in this proceeding.


<PAGE>

            15.13 The entry of an order concluding and terminating this Chapter
11 case.


DATED:  February __, 1997          Tri-Lite, Inc., a Pennsylvania corporation


                                        By: ______________________________
                                            A. Alvin Katz
                                        Its: President


DATED:  February __, 1997          Helionetics, Inc., a California corporation


                                        By: ______________________________
                                            E. Maxwell Malone
                                        Its: President


DATED:  February __, 1997          Laser Photonics, Inc., a Delaware corporation


                                        By: ______________________________
                                            Steven Qualls
                                        Its: President


DATED:  February __, 1997

                                        By: ______________________________
                                            Susan Barnes


Presented by:

BROKER & O'KEEFE
PROFESSIONAL CORPORATION

By: ______________________________
    Jeffrey W. Broker


<PAGE>

Special Reorganization Counsel
for Debtor and Debtor-in-Possession


<PAGE>

                                   EXHIBIT "7"


                         LEASES AND EXECUTORY CONTRACTS
                          BEING ASSUMED UNDER THE PLAN


            1. That certain lease of nonresidential real property dated July 31,
1995 by and between Ambrose B. Schnieders and Aleta B. Schnieders, as lessors
and Tri-Lite, Inc., a Pennsylvania corporation as lessee, pertaining to the
premises located at 2615 South Rouselle Street, Santa Ana, California.

            2. That certain lease of nonresidential real property dated as of
June 1, 1996 by and between Ohio Equities, Inc., as lessor and Tri-Lite, Inc., a
Pennsylvania corporation as lessee, pertaining to the premises located at 6925
Americana Parkway, Columbus, Ohio.


<PAGE>



                                TABLE OF CONTENTS

ARTICLE                             PAGE NO.

I     Introduction ..........................................................  2

II    Definitions, Interpretation, And Rules Of Construction ................  3

      A)   Definitions ......................................................  3

      B)   Defined Terms .................................................... 12

      C)   Rules of Interpretation .......................................... 12

      D)   Time Periods ..................................................... 13

III   Treatment Of Unclassified Claims ...................................... 13

IV    Classification Of Claims And Interests ................................ 14

V     Treatment Of Unimpaired Classes ....................................... 14

VI    Treatment Of Impaired Classes ......................................... 15

VII   Means For Execution Of Plan ........................................... 25

VIII  Request For Finding Of Fair And Equitable Treatment Of Impaired
        Classes ............................................................. 27

IX    Conditions Precedent To Distributions Under The Plan .................. 27

X     Disallowance Of Claims/Retention Of Property .......................... 28

XI    Designation Of Reorganized Debtor As Representatives Of Estate ........ 30

XII   Modification Of Plan .................................................. 30

XIII  Executory Contracts and Unexpired Leases .............................. 31

XIV   Effect Of Confirmation ................................................ 31

XV    Retention Of Jurisdiction ............................................. 33


<PAGE>

                                PROOF OF SERVICE

                                  1013A (3) CCP

STATE OF CALIFORNIA, COUNTY OF ORANGE

            I am employed in the aforesaid County. I am over the age of 18 and
not a party to the above-entitled action. My business address is 4695 MacArthur
Court, Suite 1200, Newport Beach, California 92660.

            On March 3, 1997, I served the pleading described as THIRD AMENDED
JOINT CHAPTER 11 PLAN OF REORGANIZATION AS MODIFIED on the interested parties in
this action by placing true and correct copies thereof enclosed in sealed
envelopes, with postage prepaid, addressed as follows:

<TABLE>
<CAPTION>
United States Trustee                         Committee of Unsecured Creditors            Spec Not Atty- Richard Barnett
---------------------                         --------------------------------            ------------------------------
<S>                                           <C>                                         <C>
Michael J. Hauser, Esq.                       Craig Barbarosh, Esq.                       Michael H. Weiss, Esq.
Office of the United States Trustee           Pillsbury Madison & Sutro LLP               Weiss, Scolney, Spees, Danker & Shinderman
600 W. Santa Ana Blvd., Suite 501             600 Anton Blvd., Suite 1100                 1875 Century Park East, Suite 800
Santa Ana, CA  92701                          Costa Mesa, CA  92626                       Los Angeles, CA  90067
</TABLE>


/_/     Via Fax
/_/     Via Overnight Mail
/_/     Via Hand Delivery
/x/     Via First Class Mail


            I am "readily familiar" with the firm's practice of the collection
and processing of correspondence for mailing. Under that practice, it would be
deposited with the U. S. postal service on that same day, with postage thereon
fully prepaid at Newport Beach, California in the ordinary course of the firm's
business. I am aware that, on motion of the party served, service is presumed
invalid if the postal cancellation date or postage meter date is more than one
day after the date of deposit for mailing as set forth in this affidavit.

            I declare under penalty of perjury that the foregoing is true and
correct.

            Executed on March 3, 1997, at Newport Beach, California.

                                            ______________________________
                                                    Susan Duncan