EXHIBIT 10.13

     FIRST AMENDMENT AND WAIVER (the  "Amendment"),  dated as of August 31, 1995
of a certain  Amended and  Restated  Agreement  dated as of May 1, 1994  between
Inrad,  Inc.  (the  "Company")  and  Chemical  Bank (the  "Bank")  (the  "Letter
Agreement").

                                  WITNESSETH:

     WHEREAS, the Company and the Bank are parties to the Letter Agreement; and

     WHEREAS,  the Company has requested the Bank to modify the Letter Agreement
and to  waive  certain  violations  of the  Letter  Agreement,  and the  Bank is
agreeable to such requests;

     NOW  THEREFORE,  in  consideration  of the premises  and mutual  agreements
herein contained, the parties hereby agree as follows:

     1. Definitions.  Except as otherwise  stated,  capitalized terms defined in
the  Letter  Agreement  and  used  herein  without  definition  shall  have  the
respective meanings assigned to them in the Letter Agreement.

     2. Waivers.  The Bank hereby waives the violations of the Letter  Agreement
described  below  (which have taken place on or before the date  hereof) and any
Defaults  or Events of  Default  resulting  therefrom,  solely to the extent set
forth below:

          (a) Subsection  5(k) of the Letter  Agreement  requires the Company to
     not allow the ratio of the Company's account payables to Banks Indebtedness
     due under the Note to be below 1.1::1 or above  1.5::1.  The Company was in
     default of this provision for the period April 30, 1995, May 31, 1995, June
     30, 1995 and July 31, 1995.

          (b) Subsection  5(l) of the Letter  Agreement  requires the Company to
     not allow  the  ratio of the  Company's  principal  Indebtedness  under the
     Letter Agreement to accounts  receivable as of December 31, 1994,  January,
     1995 and  February,  1995 to be greater  than 85%.  During that period such
     ratio was 85.4%, 97% and 91% at the respective month ends.

          (c) Subsection  7(j) of the Letter  Agreement  requires the Company to
     have an  operating  profit  of at least  $50,000  for  fiscal  year  ending
     12/31/94.  During fiscal year ending  12/31/94,  the Company had a $554,000
     operating loss.

     3. Amendment of the Letter Agreement.

          (a)  Subsection  2(b) of the  Letter  Agreement  is hereby  amended by
     deleting the entire subsection and substituting the following:

               "2(b) The Company  shall  execute and deliver to the Bank a Note,
          substantially  in  the  form  annexed  hereto  as  Exhibit  "A",  with
          appropriate  insertions  therein,  which shall  evidence the term loan
          borrowing  pursuant to Subsection  2(a) hereof.  The Note (a) shall be
<PAGE>

          dated the date  hereof,  (b) shall be payable  in monthly  consecutive
          installments of principal as follows:

                       15,000    5/1/94
                       15,000    6/1/94                       
                       15,000    7/1/94                        
                       15,000    8/1/94                       
                       15,000    9/1/94                       
                       15,000   10/1/94                       
                       15,000   11/1/94                       
                       15,000   12/1/94                       
                       15,000    1/1/95                       
                       15,000    2/1/95                       
                       15,000    3/1/95                       
                       15,000    4/1/95                       
                       15,000    5/1/95                       
                       15,000    6/1/95                       
                       15,000    7/1/95                       
                       15,000    8/1/95                       
                        5,000    9/1/95                       
                        5,000   10/1/95                       
                        5,000   11/1/95                       
                        5,000   12/1/95                       
                        5,000    1/1/96                       
                        5,000    2/1/96                       
                        5,000    3/1/96                       
                        5,000    4/1/96                       
                        5,000    5/1/96                       
                        5,000    6/1/96                       
                        5,000    7/1/96                       
                        5,000    8/1/96                       
                        5,000    9/1/96                       
                        5,000   10/1/96                       
                        5,000   11/1/96                       
                        5,000   12/1/96                       
                       10,000    1/1/97                       
                       10,000    2/1/97                       
                       10,000    3/1/97                       
                       10,000    4/1/97                       
                       10,000    5/1/97                       
                       10,000    6/1/97                       
                       10,000    7/1/97

                                       -2-
<PAGE>
                       
                       10,000    8/1/97                       
                       10,000    9/1/97                       
                       10,000   10/1/97                       
                       10,000   11/1/97                       
                       10,000   12/1/97                       
                       10,000    1/1/98                       
                       10,000    2/1/98                       
                       10,000    3/1/98                       
                      170,000    4/1/98   (Final Balloon Payment)"

          (b)  Subsection  2 of  the  Letter  Agreement  is  hereby  amended  by
     inserting  new  paragraph  (2(e))  and 2(f) at the end  thereof  to read as
     follows:

          "2(e)  Collateral  Terms.  The Investor  Group shall provide
          $245,000 cash collateral pursuant to the terms in Schedule I
          hereto,  to secure the last  $245,000 of principal due under
          the Note, provided,  however that once the principal balance
          of  the  Note  is  reduced  to  below  $245,000,  with  each
          principal  payment  made by the Company  thereafter,  a like
          amount  of said cash  collateral  shall be  returned  to the
          Investor Group. The cash collateral provided hereunder shall
          be  applied by Bank to the Note only if there is an Event of
          Default  under  Section  7(a)  or  7(g)  of  the  Agreement,
          otherwise the cash  collateral  shall remain with Bank until
          the  occurrence of such Events of Default under 7(a) or 7(g)
          or until such time as the Note is paid in full.

          (f) Other Collateral Provision.  The second lien on platinum
          inventory of Bank will be released on the effective  date of
          this Amendment.  Additionally, the security agreement of the
          Bank on  equipment  shall be  released  either in part or in
          whole,  as  appropriate,  at such  time or times as  Company
          secures   financing  on  currently   unfinanced   equipment,
          provided, the proceeds of such financings are shared equally
          between Company and Bank, with Bank's share to be applied to
          principal  payments due  hereunder  in the inverse  order of
          maturity."

          (c)  Subsection  5(k)  of  the  Letter  Agreement  is  deleted  in its
     entirety.

          (d) Subsection 5(l) of the Letter Agreement is amended by deleting the
     words "to  eligible  accounts  receivable"  from the first line thereof and
     substituting therefore "to the sum of eligible accounts receivable and cash
     collateral delivered pursuant to subsection 2(e) hereof, if any."

                                       -3-
<PAGE>

          (e) Subsection 5(m) of the Letter Agreement is amended by deleting the
     "." at the end  thereof  and by adding  thereto,  "; or liens on  equipment
     given to the Investor  Group,  which liens are  subordinate  to that of the
     Bank and the documentation for which is in form and substance  satisfactory
     to Bank."

          (f) Section 7(j) of the Letter  Agreement is amended by deleting it in
     its entirety and substituting therefore:

          "The Company  fails to have earnings  before cash  interest,
          taxes,    depreciation   and   amortization   less   capital
          expenditures  divided by cash debt  service  (Chemical  Bank
          Debt and Equipment Lease Debt) equal to or greater than 1.25
          at 12/31/96  and 1.5 at first  quarter  1997 and each fiscal
          quarter  thereafter each calculated on the four prior fiscal
          quarters which have elapsed."

     4.  Representations  and  Warrants.  To induce  the Bank to enter into this
Amendment, the Company hereby represents and warrants that:

          (a) The Company has the power,  authority  and legal right to make and
     deliver  this  Amendment  and to perform its  obligations  under the Letter
     Agreement,  as amended by this  Amendment,  without  any  notice,  consent,
     approval or authorization not already  obtained,  and the Company has taken
     all necessary action to authorize the same.

          (b) The making and delivery of this  Amendment and the  performance of
     the Letter  Agreement  as  amended by this  Amendment  do not  violate  any
     provision of law or any  regulation or of the Company's  charter or by-laws
     or result in the breach of or  constitute  a default  under or require  any
     consent under any  indenture or other  agreement or instrument to which the
     Company is a party or by which the  Company or any of its  property  may be
     bound or affected. The Agreement as amended by this Amendment constitutes a
     legal, valid and binding obligation of the Company,  enforceable against it
     in accordance with its terms,  except as the enforceability  thereof may be
     limited  by  any   applicable   bankruptcy,   reorganization,   insolvency,
     moratorium or other laws affecting creditors' rights generally.

          (c) The representations  and warranties  contained in Section 4 of the
     Letter  Agreement  are  true  and  correct  on and as of the  date  of this
     Amendment and after giving effect thereto.

          (d) No default  or Event of Default  has  occurred  and is  continuing
     under  the  Letter  Agreement  as of the date of this  Amendment  and after
     giving effect thereto.

     5. Effective Date.  This Amendment  shall become  effective when all of the
following shall have occurred:

                                      -4-
<PAGE>

          (a) The Bank shall have received counterparts of this Amendment,  duly
     executed by each of the parties hereto.

          (b) The Bank shall have received a copy of the resolution of the Board
     of  Directors  of the  Company  authorizing  the  execution,  delivery  and
     performance of this Amendment,  certified by an appropriate  officer of the
     Company.

          (c) The  Bank  shall  have  received  a $2,500  non-refundable  fee in
     accordance with its terms as so amended.

          (d) The Investor  Group shall have  delivered the cash  collateral and
     pledge to Bank of the same.

          (e) Each current  Guarantor  shall have confirmed its guarantee to the
     Bank.

     6.   Counterparts.   This   Amendment  may  be  signed  in  any  number  of
counterparts, each of which shall be an original and all of which taken together
shall  constitute a single  instrument with the same effect as if the signatures
thereto and hereto were upon the same instrument.

     7. Full Force and Effect.  Except as expressly  modified by this Amendment,
all of the terms and provisions of the Letter  Agreement  shall continue in full
force and effect,  and all  parties  hereto  shall be  entitled to the  benefits
thereof.

     8.  Governing  Law.  This  Amendment  shall be governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
New York.


     IN WITNESS  WHEREOF,  the parties have hereto  caused this  Amendment to be
duly executed and delivered by their proper and duly  authorized  officers as of
the date set forth above.

                                             INRAD, Inc.

                                             By:    /s/  Warren Ruderman
                                                  -------------------------
                                                     Title:   President

                                             CHEMICAL BANK

                                             By:   /s/  Frank Apollo
                                                  -------------------------
                                                   Title:   Vice President
 
                                       -5-
<PAGE>

                      CONFIRMATION OF INDIVIDUAL GUARANTOR

     The  undersigned,  (an  "Individual  Guarantor")  entered  into a Guarantee
Agreement   (the   "Guarantee"),   dated   January  9,  1991,   absolutely   and
unconditionally  guaranteeing  to Chemical Bank, its  successors,  endorsees and
assigns (the "Bank"),  the payment of any and all obligations (as defined in the
Guarantee) and liabilities  related  thereto,  of INRAD,  INC. (the  "Company"),
whether then existing or thereafter  contracted or incurred by Company,  and any
and all renewals or  extensions  thereof,  or any part  thereof,  together  with
interest  thereon and all expenses of collection  thereof and of the  Guarantee,
including  reasonable  attorney's fees. Reference is made to the Guarantee for a
complete statement of its terms and conditions.

     To induce the Bank to accept the First  Amendment  and Waiver to the Letter
Agreement (the "Letter  Agreement")  being  executed and delivered  concurrently
herewith,  the Guarantor hereby (i) ratifies and confirms its Guarantee to Bank,
and (ii)  confirms that such  Guarantee  continues in full force and effect with
respect to such Individual Guarantor.


                                                       /s/  Warren Ruderman
                                                    ---------------------------
                                                            WARREN RUDERMAN
<PAGE>

                       CONFIRMATION OF CORPORATE GUARANTOR

     The  undersigned,  (a  "Corporate  Guarantor")  entered  into  a  Guarantee
Agreement   (the   "Guarantee"),   dated   January  9,  1991,   absolutely   and
unconditionally  guaranteeing  to Chemical Bank, its  successors,  endorsees and
assigns (the "Bank"),  the payment of any and all obligations (as defined in the
Guarantee) and liabilities  related  thereto,  of INRAD,  INC. (the  "Company"),
whether then existing or thereafter  contracted or incurred by Company,  and any
and all renewals or  extensions  thereof,  or any part  thereof,  together  with
interest  thereon and all expenses of collection  thereof and of the  Guarantee,
including  reasonable  attorney's fees. Reference is made to the Guarantee for a
complete statement of its terms and conditions.

     To induce the Bank to accept the First  Amendment  and Waiver to the Letter
Agreement (the "Letter  Agreement")  being  executed and delivered  concurrently
herewith,  the Guarantor hereby (i) ratifies and confirms its Guarantee to Bank,
and (ii)  confirms that such  Guarantee  continues in full force and effect with
respect to such Corporate Guarantor.

                                             INRAD INTERNATIONAL, INC.

                                          By:   /s/  Warren Ruderman
                                             ---------------------------
                                                Title:   President