EXH10-1
                                 LOAN AGREEMENT

         AGREEMENT,  made this 2nd day of August, 1990, by and between AUTOMATED
LIGHT  TECHNOLOGIES,  INC., a Delaware  corporation with an office and principal
place of business  located at 176 Bolton  Road in the Town of Vernon,  County of
Tolland and State of Connecticut (the "Borrower"),  and CONNECTICUT  INNOVATIONS
INCORPORATED,  a corporation  constituted a quasi-public  instrumentality of the
State of Connecticut with an office located at 845 Brook Street,  in the Town of
Rocky Rill, County of Hartford and State of Connecticut ("CII").

                              W I T N E S S E T H:

         WHEREAS,  the Borrower has  requested  that CII shall lend the Borrower
the sum of THREE HUNDRED THOUSAND and NO/100 DOLLARS ($300,000.00) under the Eli
Whitney (Eli) Loan Fund; and

         WHEREAS, CII has agreed to make said loan upon the terms and conditions
hereinafter set forth;

         NOW,  THEREFORE,  in  consideration  of the  promises  and  the  mutual
covenants herein contained, the parties agree as follows:

         l. CII shall lend the  Borrower the sum of THREE  HUNDRED  THOUSAND AND
NO/100  DOLLARS  ($300,000.00)  in accordance  with the terms and conditions set
forth in this  Agreement  and  under a  promissory  note  ("Note")  of even date
herewith, a copy of which may be attached hereto.

         2. Contemporaneously with the execution and delivery of this Agreement,
the  Borrower  will  execute  and  deliver  to CII a  Security  Agreement  and a
Collateral  Assignment and Security  Agreement (the  "Security  Agreements"),  a
Subordination  Agreement  executed  by Mohd A.  Aslami and  Charles  DeLuca (the
"Subordina-tion"),  a Warrant for 66,667 shares of common stock of Borrower (the
"Warrant") and such other documents collectively, the ("Financing Documents") as
are set forth in Exhibit "A" to this Agreement.

         3.       The Borrower agrees:

               a.   To furnish upon request to CII (i) its balance sheet and the
                    related  statements of earnings and retained earnings within
                    ninety  (90)  days  after  the  end  of  each  fiscal  year,
                    including all  supporting  schedules  and  comments,  all of
                    which shall be prepared by an independent  public accountant
                    of  recognized  standing;  (ii) a balance  sheet and related
                    statements of earnings within forty-five (45) days after the
                    end of each fiscal quarter, such quarterly statements may be
                    prepared  by the  Borrower;  (iii) a report on the amount of
                    new employment created as a result of development


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                    of the product within  forty-five (45) days after the end of
                    each fiscal quarter,  to accompany said quarterly  financial
                    statements;  and  (iv)  such  further  financial  and  other
                    information as CII may in its discretion  reasonably require
                    from time to time;

               b.   To furnish to CII, upon request,  its employment records and
                    any other personnel records that CII may reasonably  request
                    in order to verify the creation of new employment;

               c.   To notify CII promptly of any material adverse change in the
                    financial condition of the Borrower;

               d.   To provide such  security for the loan as CII may require as
                    described  in the  Security  Agreements  and to execute  and
                    deliver all documents in connection therewith as of the date
                    hereof except as may be provided in the Financing Documents;

               e.   That the funds  provided will not be used otherwise than for
                    working capital;

               f.   To  maintain  fire  and  other  hazard  insurance   policies
                    covering the property  securing this loan ("Property") in an
                    amount satisfactory to CII. Such insurance policies shall be
                    provided by a company  licensed to provide such insurance in
                    the State of Connecticut  and shall be  satisfactory in form
                    to CII.  The  policies  shall  name CII as Loss Payee as its
                    interests  may  appear and a copy of the  policies  shall be
                    deposited with CII upon the execution hereof;

               g.   To  maintain  a policy of  liability  insurance  in form and
                    amount  satisfactory  to CII,  such policy to be issued by a
                    company  licensed to provide such  insurance in the State of
                    Connecticut;

               h.   To  obtain  the  permission  of CII prior to any move of its
                    principal place of business within the State of Connecticut.
                    The  Borrower  may  not  relocate  its  principal  place  of
                    business outside of the State of Connecticut; and

               i.   To  obtain  and  maintain  during  the term of the loan life
                    insurance  on the life of Mohd A.  Aslami  in the  amount of
                    $200,000.00  and Charles DeLuca in the amount of $100,000.00
                    and to assign the same to CII,  the  proceeds of which shall
                    be used to pay down  outstanding  principal  and interest on
                    the loan,  with any surplus being returned to the designated
                    beneficiaries.


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         4. The Borrower represents and warrants that:

               a.   It  is  a  technology   based  company  engaged  in  product
                    innovation in an area listed as a "ELI Eligibility Area";

               b.   It and its  officers  have the power and  authority to enter
                    into and perform this Agreement and to incur the obligations
                    herein  provided for and that all documents  and  agreements
                    executed and delivered pursuant hereto, when delivered, will
                    be valid and  binding in  accordance  with their  respective
                    terms;

               c.   There has been no material  adverse  change in the financial
                    condition of the Borrower since April 30, 1990;

               d.   It has obtained or will obtain funding for the project equal
                    to  or  greater  than  the  amount  of  the  loan  from  the
                    Connecticut  Development Authority or other source and shall
                    close such  transaction  within ninety (90) days of the date
                    of this Agreement;

               e.   It is unable,  on  reasonable  terms,  to obtain  sufficient
                    assistance  to  undertake  development  of the project  from
                    commercial sources alone: and

               f.   Over the term of the loan,  the  project for which the funds
                    are  provided is expected to create at least one new job for
                    every ten thousand dollars borrowed.

         5. CII shall from time to time, in its  discretion,  and without notice
to the Borrower,  during regular business hours, have the privilege of making an
inspection  of the  Property  and the  Borrower  shall assist CII in making said
inspection  and shall make  available  such  books and other  records as CII may
reasonably request. CII agrees that it shall keep confidential, except as may be
required  by  law  and  provided  that  Borrower  is not  in  default  hereunder
(including expiration of any applicable grace and cure periods), all proprietary
information regarding Borrower's operations and products in the possession of or
known to CII.

         6. This Agreement may  not be modified  or amended in any manner except
in writing executed by all of the parties hereto.

         7. This  Agreement  and any of the  documents  related  hereto  and the
rights hereunder may not be assigned by the Borrower without the written consent
of CII This  Agreement and any o f the documents  related  hereto and the rights
hereunder  may be  assigned by CII;  provided,  however,  that CII agrees  that,
unless Borrower


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is in default  hereunder  (including the expiration of any applicable  grace and
cure periods) and the loan has been  accelerated by CII, it shall not assign the
same to a competitor of Borrower.  For the purposes  hereof,  a  "competitor  of
Borrower"  shall be any person or entity that develops,  manufactures or markets
systems  for  monitoring  or locating  breaks and damages in fiber optic  and/or
copper  lines  or any  other  system  or  systems  currently  or in  the  future
developed, manufactured or marketed by Borrower.

         8. The terms and conditions of the Financing Documents are incorporated
herein, and any breach of said terms and conditions is a breach hereunder, and a
breach hereunder shall be a breach of any of the Financing Documents.

         9. Any  misrepresentation,  breach of warranty  or other  breach of any
agreement  or covenant  contained  herein not cured within any  applicable  cure
period,  including,  without  limitation,  the  cure  periods  set  forth in the
Financing Documents, shall entitle CII to declare the unpaid balance of the loan
due and payable  without  further  notice to the  Borrower,  or to exercise  any
remedy it may have with  respect to the  Property as set forth in the  Financing
Documents,  subject to the limitations set forth therein,  or otherwise provided
by law, or to exercise any such remedies cumulatively.

         10. The Borrower  shall provide CII  with the opinion of the Borrower's
counsel in the form of Exhibit B attached hereto.

         11. The Borrower  agrees and warrants that in the  performance  of this
contract it will not discriminate or permit discrimination against any person or
group of persons on the grounds of race,  color,  religious creed,  age, marital
status,  national  origin,  sex,  mental  retardation  or  physical  disability,
including,  but not limited to  blindness,  unless it is shown by such  Borrower
that such disability  prevents  performance of the work involved,  in any manner
prohibited by the laws of the United States or of the State of Connecticut,  and
further agrees to provide the Commission on Human Rights and Opportunities  with
such information requested by the Commission concerning the employment practices
and procedures of the Borrower as relate to the provisions of this section.

         12. Any words or phrases used herein that are defined in Section  32-34
of the Connecticut  General Statutes or in the Regulations of Connecticut  State
Agencies adopted and promulgated under said Sections of said Statutes shall have
the meanings set forth in said definitions.

         13. This  Agreement  shall be governed by and  construed in  accordance
with the laws of the State of Connecticut.

         14. This Agreement shall terminate upon payment in full of the loan.


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IN WITNESS  WHEREOF,  the parties  hereto have executed this agreement as of the
date and year first above written.

                                              CONNECTICUT INNOVATIONS
                                              INCORPORATED

                                              BY:                       
________________________                         _______________________________
                                                  DAVID C. DRIVER
                                                  Its Executive Director

________________________                      AUTOMATED LIGHT TECHNOLOGIES,
                                                       INC.

                                              BY:                      
________________________                         _______________________________
                                                  MOHD A. ASLAMI
                                                  Its President,
                                                  Duly Authorized
________________________ 


STATE OF CONNECTICUT)
                    ) ss. at Hartford
COUNTY OF HARTFORD  )

         On this ___ day of August,  1990,  before me, the undersigned  officer,
personally  appeared  David  C.  Driver,  who  acknowledged  himself  to be  the
Executive Director of CONNECTICUT INNOVATIONS INCORPORATED,  a corporation,  and
that he as such  Executive  Director,  being  authorized so to do,  executed the
foregoing  instrument for the purposes herein contained,  by signing the name of
the corporation by himself as Executive Director.

         In Witness Whereof I hereunto set my hand.



                                                   -----------------------------
                                                   Commissioner of the Superior
                                                   Court/Notary Public

STATE OF CONNECTICUT)
                    ) ss. at Hartford
COUNTY OF HARTFORD  )

         On this 2nd day of August,  1990,  before me, the undersigned  officer,
personally appeared Mohd A. Aslami, who acknowledged himself to be the President
of  Automated  Light  Technologies,  Inc.,  a  corporation,  and that he as such
President,  being authorized so to do, executed the foregoing instrument for the
purposes herein contained,  by signing the name of the corporation by himself as
President.

         In Witness Whereof I hereunto set my hand.

                                                   ----------------------------
                                                   Commissioner of the Superior
                                                   Court/Notary Public