Document:

PATENT ASSET PURCHASE AGREEMENT AND LICENSE

      This Patent Asset Purchase Agreement and License ("Agreement"), dated as
of August 14, 1998 (the "Closing Date"), is made by and between
AlliedSignal Inc., a Delaware corporation and acting through its Defense & Space
Systems business unit having offices at 699 Route 46, Teterboro, NJ 07608 and
101 Columbia Road, Morris Township, New Jersey 07962 U.S.A. and AlliedSignal
Technologies Inc., a corporation of the State of Arizona, having an office at
8440 South Hardy Drive, Tempe, Arizona 85285, U.S.A. (collectively referred to
as "Seller"), and Laser Energetics Inc., having an office at 4044 Quaker Bridge
Road, Mercerville, NJ 08619, U.S.A., hereinafter referred to as "Purchaser.
Seller and Purchaser, collectively, hereinafter may also be referred to as
"Parties"

                                   BACKGROUND

      Whereas, Seller is the owner of certain patents and related equipment and
documentation relating to Lasers (as defined below); and

      Whereas, Purchaser is interested in acquiring the patents and related
equipment and documentation from Seller; and

      Whereas, Seller is willing to sell and Purchaser is willing to purchase
the patents and related equipment and documentation under the terms and
conditions of this Agreement;

      NOW, THEREFORE, in consideration of the mutual promises herein set forth,
the parties hereto agree as follows:

SECTION 1 - DEFINITIONS

      As used in this Agreement, the following terms shall have the indicated
meanings set forth below:

1.1 "Accounting Period" shall mean a calendar year for the years 1999 through
2013.

1.2 "Acquired Assets" shall mean the Patents together with related Equipment and
Documentation.

1.3 "Net Sales" shall mean the amount actually billed by Purchaser, or its
Affiliates or Licensees to its customers as shown on their invoices, on
arms-length sales of Product, less the following deductions where applicable:

      1.3.1 normal and customary cash and trade discounts and credits for
      returns and allowances;

<PAGE>

      1.3.2 insurance costs and transportation charges, if any, paid or allowed
      by Purchaser; and

      1.3.3 sales or other taxes or duties imposed upon and paid by Purchaser.

      1.3.4 If Purchaser, Affiliates or sublicensees provide Product to
      customers for other than cash compensation, then the basis for calculating
      the Net Sales shall mean the average Net Sales of the Product sold by
      Purchaser, its Affiliates or sublicensees to arms-length customers during
      the annual deferred payment period in question; if there are no such sales
      during such period, then the parties shall agree on a reasonable Net Sales
      for the purpose of calculating royalties; or

1.4 "Seller" and "Purchaser" shall include the Affiliates of the named company.

1.5 "Affiliate" shall mean a corporation, company, or any other legal entity
directly or indirectly controlling, controlled by, or under common control with
Seller or Purchaser.

1.6 "Patents" shall mean the active U.S. patents and their foreign counterparts
as listed in Exhibit A and expired U.S. patents and their foreign counterparts
as listed in Exhibit B. Patents shall include all divisionals, continuations,
continuations-in-part, re-examinations and reissues thereof.

1.7 "Patent Documents" shall mean all records and physical embodiments relating
to the Patents in the documentary form as it exists in Seller's files.

1.8 "Equipment and Documentation" shall mean the equipment and documentation as
it currently exists, listed in Exhibit C.

1.9 "Product" shall mean any and all products or components that employ or are
produced by the practice of inventions claimed in the Patents.

1.10 "Closing Date" shall mean the day on which this Agreement is fully executed
by both Parties.

                                    2 of 16
<PAGE>

SECTION 2 - PURCHASE AND SALE

2.1 Purchase and Sale Subject to the terms and conditions of this Agreement,
Seller hereby sells, conveys, transfers, assigns and delivers to Purchaser, and
Purchaser hereby purchases and accepts from Seller, all of Seller's right, title
and interest in and to all of the Acquired Assets.

      2.1.1 Purchaser acknowledges that Exhibit B represents patent assets that
      have expired and are no longer valid.

2.2 Delivery Seller shall deliver, at Purchaser's expense, within thirty (30)
days of the Closing Date, all Patent Documents and all Equipment and
Documentation to Purchaser.

SECTION 3 - BASE PURCHASE PRICE AND DEFERRED COMPENSATION

3.1 Purchase Price and Payment Purchaser is acquiring the Acquired Assets for a
defined consideration, and for the convenience of the Purchaser, Seller has
agreed to accept compensation in the form of a Base Purchase Price and Deferred
Compensation. The Parties explicitly agree that the Base Purchase Price and
Deferred Compensation are irrevocable and based on the value of the Acquired
Assets as of the Closing Date. The Base Purchase Price of One Hundred and Sixty
Thousand Dollars shall be paid to Seller in two installments as follows:

      3.1.1 Thirty Thousand ($30,000) due upon execution of this Agreement;

      3.1.2 One Hundred and Thirty Thousand ($130,000) due within one hundred
      and twenty (120) days of execution of this Agreement.

3.2 Deferred Compensation In addition to the Base Purchase Price, Seller agrees
to accept from Purchaser Deferred Compensation for the Acquired Assets based on
sales of Product through the year 2012. Purchaser, its Affiliates and Licensees
shall pay Seller the Deferred Compensation as calculated below:

      3.2.1 A six percent (6%) annual royalty on Net Sales of all Products
      beginning in the 1999 Accounting Period through the 2012 Accounting
      Period, but in no event less than the Annual Guaranteed Minimum Payment
      (as defined below).

            3.2.1.1 In the event that any Product is sold for currency other
            than United States currency, the royalty payable shall first be
            calculated using the currency exchange rate (listed in the Wall
            Street Journal) in effect on the date that the royalty payment is
            due. Such royalty payments shall be reduced by any taxes,
            assessments, or other charges of any kind or description imposed on
            Purchaser, its Affiliates or Licensees by any foreign country. In
            the event that withholding tax is imposed on Purchaser, its
            Affiliates, or Licensees, the authenticated tax receipt issued to
            substantiate payment of such tax shall be issued to Seller and such
            tax receipt shall be delivered to Seller concurrently with any
            royalty payment subject to such tax.

                                    3 of 16
<PAGE>

      3.2.2 The Purchaser shall pay to the Seller an annual guaranteed minimum
      payment ("Annual Guaranteed Minimum Payment") of Twenty-Five Thousand
      Dollars ($25,000.00) payable as follows:

            3.2.2.1 Purchaser shall pay an annual guaranteed minimum payment of
            Twenty-Five Thousand Dollars ($25,000.00) for each calendar year, or
            Accounting Period, commencing on January 1, of the year after laser
            sales begin, but no later than January 1, 2000 and every calendar
            year thereafter through the year 2012.

            3.2.2.2 In addition to any payments due under 3.2.1, the Annual
            Guaranteed Minimum Payment shall be made in accordance with the
            Promissory Note attached hereto as Exhibit D.

      3.2.3 Purchaser shall deliver to Seller, within forty-five (45) days after
      each Accounting Period, a true and accurate written report giving such
      particulars of the business conducted by Purchaser during the Accounting
      Period as are pertinent to an accounting for royalties for Product under
      this Agreement and shall pay to Seller all royalty amounts due less the
      Annual Guaranteed Minimum Payment. The written report shall include:

            3.2.3.1 the Net Sales of Product during the Accounting Period;

            3.2.3.2 the calculation of royalties thereon;

            3.2.3.3 the quantities of Product used or otherwise disposed of as
            contemplated by section 1.3.4 ;

            3.2.3.4 the calculation of royalties from (3.2.3.3); and

            3.2.3.5 the total royalties payable for the Accounting Period or a
            statement that no royalties are payable.

            3.2.3.6 Any payments hereunder shall be made in U.S Dollars on each
            March 1st following the Accounting Period on which payments are
            being made by means of wire transfer and as specified in Section
            3.3.

            3.2.3.7 By way of illustration only, and not intended to affect the
            terms of this Agreement or the Promissory Note, if the first
            Accounting Period is the year 2000, the first payment shall be made
            on March 1st 2001 which shall include the Annual Guaranteed Minimum
            Payment and any additional royalty payments. The last payment shall
            be made on March 1st 2014 which shall include the last Annual
            Guaranteed Minimum Payment and any additional royalty payments.

                                    4 of 16
<PAGE>

      3.2.4 Royalties payable for a particular Accounting Period shall be
      credited` against the Annual Guaranteed Minimum Payment due for each
      corresponding Accounting Period.

      3.2.5 No more than one royalty payment shall be required on any individual
      Product sold by Purchaser, its Affiliates or Licensees regardless of the
      form or number of times each such Product is resold. For instance, no
      payment shall be required from a Licensee that converts, makes, and sells
      a Product for which Purchaser makes a royalty payment.

3.3 All payments made under this Section shall be in U.S. dollars and wired
transferred to:

               Mellon Bank
               Pittsburgh, PA
               ABA 043000261
               AlliedSignal Technologies Inc.
               Account No. 009-7594
               Advice:

3.4 Purchaser shall pay interest to Seller at a rate of two (2) percent over the
prime interest rate as established by the Chase Manhattan Bank on any and all
amounts that are at any time overdue and payable to Seller under this Agreement.
The payment of such interest shall not replace any of Seller's other rights
under this Agreement resulting from Purchaser's failure to pay any amounts due
hereunder.

SECTION 4 - ACCOUNTING

4.1 The Purchaser shall keep, and shall cause its Affiliates and Licensees to
keep, adequate books and records in sufficient detail to enable the royalties
payable hereunder to be determined.

4.2 Acceptance by the Seller of any payment tendered hereunder, whether or not
the amount thereof shall be in dispute, shall not constitute acceptance of the
account or schedules on which such payment is based; provided, however, that the
correctness of any such payment shall be conclusively presumed unless questioned
within three (3) years from the date of receipt thereof.

                                    5 of 16
<PAGE>

4.3 The Seller shall have the right to inspect, through its personnel or an
independent certified public accountant designated by the Seller for such
purpose, during regular business hours, any or all pertinent books and records
of the Purchaser for the purpose of verifying the correctness of any account
furnished to the Seller and compliance by the Purchaser with its obligations
hereunder; provided, however, that nothing herein contained shall obligate the
Purchaser to retain books and records with respect to any payment made hereunder
longer than three (3) years after receipt by the Seller of such payment, unless
questions regarding such books and records are still unresolved at the end of
such three (3) year period. If any inspection shows that the royalty set forth
in Section 3 above was underpaid by greater than ten percent (10%) of the amount
actually due to Seller, Purchaser shall reimburse Seller for all fees and
expenses of the accountant who conducted the inspection.

      4.3.1 Purchaser shall ensure such audits with its Affiliates and Licensees
      and shall be responsible for the contractual compliance of its Affiliate's
      and Licensee's obligations to Seller.

SECTION 5: - LICENSE TO SELLER

5.1 Purchaser grants to Seller a non-exclusive, paid-up, royalty free,
irrevocable, worldwide license to practice the Patents solely for Seller's
internal business purposes. The above grant includes the right to sublicense the
Patents to Seller's Affiliates, to be used by such Affiliates solely for
internal purposes. For the purpose of the foregoing, Seller acknowledges that
"internal purposes" means non-commercial purposes, it being acknowledged and
agreed that all potential commercial applications of the Patents shall belong
entirely to Purchaser.

SECTION 6: - PATENT MAINTENANCE AND ABANDONMENT

6.1 Purchaser shall be solely responsible at its own costs to maintain the
Patents.

6.2 Purchaser shall not discontinue the payment of maintenance fees for any
Patent without the prior written consent of Seller. Purchaser shall give Seller
written notice of Purchaser's desire to abandon any patent at least one hundred
and twenty (120) days prior to the date that the patent would go abandoned.
Seller shall have the option to acquire all right, title and interest in any
such patent and continue the maintenance thereof at its own expense.

                                    6 of 16
<PAGE>

SECTION 7: WARRANTY

7.1 The Seller warrants that it is the owner of the Patents as well as the
Equipment and Documentation, and has the right to enter into this Agreement. The
Seller has not made any prior transfer or license of any of the Acquired Assets.

7.2 The Seller assumes no responsibility and does not make any warranty
expressed or implied or indemnification with respect to the manufacture, use,
sale or other disposition by Purchaser or its Affiliates or Licensees of
Products incorporating or made by use of any Patent or Equipment and
Documentation transferred under this Agreement, including any warranty that the
practice of any Patent, Equipment and Documentation transferred hereunder is
free from infringement of any third party intellectual property rights.
Notwithstanding the foregoing, the Seller represents and warrants that there are
no claims, actions, suits or proceedings pending or threatened against the
Seller relating to the Acquired Assets.

7.3 Except as set forth in Sections 7.1 and 7.2, Seller makes no representations
or warranties of any kind either expressed or implied with respect to the
validity or scope of the Patents and shall not be liable to Purchaser by reason
of the fact that one or more of the patents, or one or more of the claims
thereof, may be adjudged invalid.

7.4 Seller makes no representations or warranties of any kind either expressed
or implied with respect to the status or scope of the Patents listed in Exhibit
B and shall not be liable to Purchaser by reason of the fact the Patents listed
in Exhibit B have no force or effect in the United States or any foreign
country.

7.5 THE EQUIPMENT TRANSFERRED HEREUNDER IS FURNISHED IN AN "AS IS" CONDITION.
SELLER SHALL NOT BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL OR OTHER TYPE OF
DAMAGES. ALL WARRANTIES WHETHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, OR
STATUTORY, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, ARE HEREBY EXCLUDED AND DISCLAIMED. SELLER EXPRESSLY
EXCLUDES AND DISCLAIMS ANY AND ALL LIABILITY ARISING OUT OF, RESULTING FROM, OR
IN CONNECTION WITH THE USE, OPERATION, DESIGN, CONDITION, SUITABILITY, FAILURE,
MALFUNCTION OR DEFECT IN THE EQUIPMENT PROVIDED HEREUNDER.

SECTION 8 INDEMNIFICATION

8.1 Seller Indemnification Purchaser assumes all duties and obligations arising
out of its practice of the Patents or its producing or using Products after the
Closing Date. Purchaser assumes all risk and liability for failure or alleged
failure to meet such duties or obligations, including, without limitation, any
suit arising from any allegation of the Purchaser's infringement of any
adversely held patent by reason of the Purchaser's use of the Patents. Purchaser
shall exonerate, hold harmless, defend and indemnify Seller against any kind of
claim or liability whatsoever arising out of such failure or alleged failure
including, without limitation, claims of customers, end-users, members of the
public, any government or any agency thereof or employee's claims.

                                    7 of 16
<PAGE>

8.2 Purchaser Indemnification Seller assumes all duties and obligations arising
out of its practice of the Patents or its producing or using Products prior to
and including the Closing Date. Seller assumes all risk and liability for
failure or alleged failure to meet such duties or obligations. Seller shall
exonerate, hold harmless, defend and indemnify Purchaser against any claim or
liability whatsoever arising out of such failure or alleged failure including,
without limitation, claims of customers, end-users, members of the public, any
government or any agency thereof or employee's claims prior to and including the
Closing Date.

      8.2.1 Seller shall have no obligation to Purchaser to defend any claim or
      suit or to hold harmless or to indemnify against any loss, cost, expense,
      payment or damage, arising from any allegation of infringement or
      violation of any patent right or other right or alleged right of a third
      party by reason of Purchaser's use of the Patents.

8.3 Seller shall have no obligation to bring or prosecute actions or suits
against third parties for infringement of any Patents transferred hereunder.

SECTION 9 LIMITATION OF LIABILITY

9.1 Neither Party is liable to the other, whether in contract, tort or
otherwise, for consequential, special, indirect or incidental damages, including
without limitation lost profits or revenues, even if informed that they may
occur.

9.2 In no event shall Seller's total liability to Purchaser, whether in
contract, tort or otherwise, exceed the total amount of monies paid by Purchaser
to Seller under the terms of this Agreement.

SECTION 10 GENERAL PROVISIONS

10.1 Survival All representations, warranties, indemnifications, covenants and
agreements of or by any of the Parties contained in this Agreement shall survive
the Closing Date.

10.2 Governing Law This Agreement shall be construed and interpreted, and
performance hereunder shall be governed by the laws of the state of New Jersey,
without regard to its conflict of laws principles.

                                    8 of 16
<PAGE>

10.3 Assignment This Agreement may not be assigned or crosslicensed by the
Purchaser without the prior written consent of the Seller, which consent shall
not be unreasonably withheld and which consent shall not be required with
respect to Affiliates and/or a successor to the business of Purchaser to which
it relates. Except as otherwise permitted by Seller, Purchaser's obligations
under this Agreement shall apply to the assignee, or crosslicensee and Purchaser
shall require the assignee or crosslicensee to comply therewith. Except as so
provided, any purported assignment hereof shall be null and void.

10.4 Binding Effect This Agreement shall be binding and inure to the benefit of
the Parties and their successors or assigns.

10.5 Notice Any notice, payment or other communication required or authorized to
be given by either party to the other hereunder shall be in writing and shall be
delivered personally or by registered international air mail, electronic
transmission, facsimile, telegraph or cable, postage or other charges prepaid,
addressed to the party to receive the same at the address set forth below or
such other address as such party shall have specified by written notice
hereunder:

                  If to Seller:

                           AlliedSignal Technologies Inc.
                           8440 South Hardy Drive
                           Tempe, Arizona  85285

                           Attention: President

                           with a copy to:

                           AlliedSignal Inc.
                           P.O. 2245
                           101 Columbia Road
                           Morristown, New Jersey  07962-2245
                           U.S.A.

                           Attention: Chief Patent Counsel

                  If to Purchaser:

                           Laser Energetics Inc.
                           4044 Quaker  Bridge Road
                           Mercerville, NJ  08619

                           Attention: Robert D. Battis - President

                           with a copy to:

                           Stark & Stark
                           P.O. Box 5315
                           Princeton, New Jersey  08543-5315
                           Attention: Daniel J. Sheridan

                                    9 of 16
<PAGE>

            Notices as herein provided for shall be considered to have been
      effective the earlier of when received or five days after mailing thereof.

10.6 Severability The invalidity or unenforceability of any section or provision
of this Agreement shall not affect the validity or enforceability of any one or
more of the other sections or provisions. If any section or provision herein is
held to be unenforceable for any reason, this Agreement shall be adjusted rather
than voided, in order to achieve the intent of the parties to the extent
possible. In that event, all other sections and provisions herein shall be
deemed valid and enforceable to the fullest extent permitted by applicable law.

10.7 Captions The Section headings contained in this Agreement are for purposes
of reference only and shall not limit, or otherwise affect the construction of
any provisions of this Agreement.

10.8 Waiver Acceptance by either Party of any performance less than required
hereby shall not be deemed to be a waiver of the rights of such Party to enforce
all of the terms and conditions hereof. No waiver of any provision of this
Agreement shall be deemed to or shall constitute a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing
waiver. No waiver shall be binding unless reduced to writing and executed by the
Party making such waiver.

10.9 Entire Agreement, Modification Except as otherwise specified, this
Agreement contains the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof, and merges and supersedes all
prior discussions and writings with respect hereto. Unless expressly set forth
in this Agreement, no warranties, express or implied, are made and no
statements, promises or inducements made or offered by either Party or by any
agent or representative of either Party shall be valid or binding. No
modification or alteration of this Agreement shall be effective unless made in
writing and signed by both Parties hereto.

                                    10 of 16
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered in duplicate as of the day and year first above written.

AlliedSignal Technologies Inc.                 AlliedSignal Inc.
                                               Defense & Space Systems.

By: /s/ Theo Grigorion                         By: /s/ Daniel J. Sullivan
    ----------------------------                   -----------------------------
Name:  T. Grigorion                            Name:  Daniel J. Sullivan
       -------------------------                      --------------------------
Title: President                               Title: Director, Contracts
       -------------------------                      --------------------------

Laser Energetics Inc.

By: /s/ Robert D. Battis
    ----------------------------
Name:  Robert D. Battis
       -------------------------
Title: Founder, President + CEO
       -------------------------

                                    11 of 16
<PAGE>

                                    Exhibit A
                                     Patents

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
 U.S. Patent No.                         Title                         U.S. Expiration Date  Other Countries
---------------------------------------------------------------------------------------------------------------------
<C>               <C>                                                  <C>                   <C>
5,331,652         Solid State laser Having Closed Cycle Gas Cooled     03/2013               FR, GB, GE, JP (all
                  Construction                                                               pending)
---------------------------------------------------------------------------------------------------------------------
5,321,711         Segmented Solid State Laser Gain Media with          8/2012                None
                  Gradient Doping Level
---------------------------------------------------------------------------------------------------------------------
5,235,606         Amplification of Ultrashort Pulses with Nd:Glass     10/2011               None
                  Amplifiers Pumped by Alexandrite Free Running Laser
---------------------------------------------------------------------------------------------------------------------
5,142,548         Broadband Tuning and Laser Line Narrowing            04/2010               None
                  Utilizing Birefringent Laser Hosts
---------------------------------------------------------------------------------------------------------------------
4,949,346         Conductively Cooled, Diode-Pumped Solid State Slab   08/2009               None
                  Laser
---------------------------------------------------------------------------------------------------------------------
4,944,567         Laser Imaging Fiber Optic Delivery System            11/2007               None
---------------------------------------------------------------------------------------------------------------------
4,933,946         Conductively Cooled Solid State Slab Laser           08/2009               None
---------------------------------------------------------------------------------------------------------------------
4,858,242         Improved Unitary Solid-State Laser                   03/2005               None
---------------------------------------------------------------------------------------------------------------------
4,835,786         Unitary Solid State Laser                            03/2005               None
---------------------------------------------------------------------------------------------------------------------
4,791,927         Dual-Wavelength Laser Scalpel Background of the      12/2005               None
                  Invention
---------------------------------------------------------------------------------------------------------------------
4,734,913         Unitary Solid-State Laser                            12/2005               None
---------------------------------------------------------------------------------------------------------------------
4,713,824         Noble-Metal Overcoated, Front Surface Silver         12/2004               None
                  Reflectors
---------------------------------------------------------------------------------------------------------------------
4,713,820         Thermal Lensing-Compensated Lanthanum Beryllate      08/2005               None
                  Laser
---------------------------------------------------------------------------------------------------------------------
4,484,334         Optical Beam Concentrator                            11/2001               Canada
---------------------------------------------------------------------------------------------------------------------
4,475,027         Optical Beam Homogenizer                             11/2001               Canada
---------------------------------------------------------------------------------------------------------------------
4,306,427         Chrysoberyl Gemstones                                10/1999               None
---------------------------------------------------------------------------------------------------------------------
4,272,733         Broadly Tunable Chromium - Doped Beryllium           10/1998               Canada
                  Aluminate Lasers and Operation Thereof
---------------------------------------------------------------------------------------------------------------------
</TABLE>

                                    12 of 16
<PAGE>

                                    Exhibit B
                                 Expired Patents

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
 U.S. Patent No.                         Title                         U.S. Expiration Date  Other Countries
---------------------------------------------------------------------------------------------------------------------
<C>               <C>                                                  <C>                   <C>
5,257,274         High Power Laser Employing Fiber Optic Delivery
                  Means
---------------------------------------------------------------------------------------------------------------------
4,829,528         Interlocked ring intractivity raman laser method
                  of generating raman shifted laser output
---------------------------------------------------------------------------------------------------------------------
4,809,283         Method of manufacturing chromium-doped berylliym
                  aluminate laser rod and lasers incorporating the
                  rods therein
---------------------------------------------------------------------------------------------------------------------
4,723,248         Optical Limiter
---------------------------------------------------------------------------------------------------------------------
4,660,205         Multi-Resonater Switching Laser
---------------------------------------------------------------------------------------------------------------------
4,633,475         Optical Limiter
---------------------------------------------------------------------------------------------------------------------
4,630,275         Controlled Slow Q-Switch
---------------------------------------------------------------------------------------------------------------------
4,569,053         Laser Tuner Assembly
---------------------------------------------------------------------------------------------------------------------
4,490,822         Cr-Doped yttrium gallium garnet laser
---------------------------------------------------------------------------------------------------------------------
4,461,947         Rotating laser beam with conincident gas jet
---------------------------------------------------------------------------------------------------------------------
4,415,373         Laser process for gettering defects in
                  semi-conductor devices
---------------------------------------------------------------------------------------------------------------------
4,262,497         Multi-Element Pleochroic gemstones
---------------------------------------------------------------------- ----------------------------------------------
</TABLE>

                                    13 of 16
<PAGE>

                                    Exhibit C

                           Equipment and Documentation

         Laser Systems
ALX-2015 Air Cooled system with beam expander and diagnostic
         hardware
                  ALX-1560 Water Cooled system with breadboard, alignment laser,
                  and diagnostic hardware
                  Holographic Laser system as is (power supply and laser head)*

         Laser Components
                  Harmonic generating crystals
                           KD*P SHG crystals
                           BBO SHG crystals
                           KDP 90 degree THG crystals
                  SHG and THG mounting hardware
                  Birefringent tuners and mounts
                  Acousto-optic Q-switches and mounts
                  Electro-optic Q-switches
                  Faraday rotators and mounts
                  Alexandrite laser resonator mirrors
                  Air cooled pump chamber and spare components
                  Water cooled pump chamber spare components
                  Precision apertures for spatial filters
                  Spare flashlamps for laser systems

         Support Equipment
                  Tektronix 7104 Oscilloscope (for ALX-1560 system)
                  Hamamatsu fast photodiode and Bertan HV supply
                  Tektronix 2467 Oscilloscope (for ALX-2015 system)
                  Burleigh variable space Fabry-Perot Etalon
                  Burleigh electronically tunable Fabry-Perot etalon
                  Laser Scientech Energy meters
                  Coherent Labmaster energy meter
                  Laser Precision ratiometers
                  Price pump
                  Raman cell, 1 meter
                  Assorted mounts for diagnostic hardware
                  Barium Sulfate for diffuse pump chambers
                  Englehard 0.003" thick silver foil for air cooled pump chamber

         Documentation
                  Claris CAD hard drive containing drawings for:
                           ALX-1560
                           ALX-2015
                  BRH approval documentation on dual frequency laser system
                  CLEO 1993 marketing information package

                                    14 of 16
<PAGE>

Notes:
* Holographic laser system is not functional.
ALX-2015A is not included.
ALX-31 hardware is not included.
Laser rod inventory including boules is not included.

                                    15 of 16
<PAGE>

                                    EXHIBIT D

                                 PROMISSORY NOTE

$ THREE HUNDRED AND FIFTY THOUSAND DOLLARS ($350,00.00)

      For value received, the undersigned promises to pay to the order of
AlliedSignal Inc. Technologies Inc., the principal sum of Three Hundred and
Fifty Thousand Dollars ($ 350,000.00), with interest as specified in Section
3.4, from the date hereof until paid, said principal and interest payable in
lawful money of the United States in accordance with Section 3.4, in fourteen
(14) equal annual installments, payable as follows: Twenty-Five Thousand Dollars
($ 25,000.00) on the first day of March, 2000 or 2001 in accordance with the
terms of the Agreement, and a like amount on the first day of each and every
March month thereafter until the entire sum is paid.

      If payment of any installment is not made in the amount designated, and on
the date and place designated the whole of said principal and interest shall
forthwith become due and payable at the election of the holder of this note.

      The endorsers and guarantors hereon hereby severally waive presentment for
payment, notice of nonpayment, protest, and notice of protest, and diligence in
bringing suit against any party hereto.

Dated this _____ day of _________________, 19_____.

                                        ________________________________________

                                        ________________________________________
______ Sworn to before me this ____ day of ___________________________, 19___,
in the State of ______________________, County of ______________________.

                                            Notary Public
                                            My Commission Expires ___________

                                    16 of 16CONFIDENTIAL

         Fabrication of a Diode-Pumped, Self-Frequency-Doubled IR Laser

                                  Task Order #4

               Issued pursuant to the Task Order Agreement between
                             Laser Energetics, Inc.
                                       and
                        the University of Central Florida
                                  on behalf of
           the Center for Research and Education in Optics and Lasers

This Task Order is issued pursuant to the terms and conditions of the referenced
Task Order Agreement dated May 5, 1997, and directs the University of Central
Florida in the performance of the order in accordance with the additional
provisions listed below.

Objective

The objective of this Task Order, to be performed under the conditions of the
Contract Agreement between the University of Central Florida and Laser
Energetics, Inc., is the fabrication of an efficient IR-diode pumped version of
one these oxyborates (Nd:YCOB), and with appropriate modifications to also
demonstrate significant self-frequency doubling. This will be the first
demonstration of a diode-pumped Nd: YCOB laser, and also the first time that a
diode-pumped Nd: YCOB laser is self-frequency doubled. We believe that these
developments will have considerable impact on the laser community. This laser
system will be compact, in a pre-engineered rectangular package, suitable for
demonstration.

The laser will be configured to operate in one of two modes:

Infrared operation. With direct IR diode pumping, the laser will operate with a
cw output power of several tens of milliwatts with a wavelength of ~l060nm.

Self-frequency doubled output. With a different resonator configuration, the
laser will emit bright second harmonic emission with a wavelength of ~530nm.

The laser system itself will be in a box approximately 12"x12"x6", and be
accompanied by one composite power supply system having dimensions of
16"x12"x2". It will run from 110V wall power and not require any forms of
cooling etc.

Duration of Task Order

The duration of this development is June 1, 1998 through September 30, 1998.

<PAGE>

                                                                    CONFIDENTIAL

Financial Payment

LEI will provide the finance to support this development. These are summarized
on the associated budget below. The total budgeted cost is $25,503.

Proprietary Information and Intellectual Property

All conditions on proprietary information and Intellectual Property relating to
this project shall be those covered by the Contract Agreement between the
University of Central Florida and Laser Energetics, Inc., and in compliance with
the Laser Energetics, Inc. Confidential Non-disclosure Agreement which will be
carried out separately.

Deliverable

The laser will become the property of Laser Energetics at the termination of the
contract.

Budget for Task Order #4

<TABLE>
<S>                                                              <C>              <C>
Wages, Salaries & Benefits
      Graduate research associates (3 months @ $1.25k/month)     $ 3,750
      Benefits                                                   $     6
                                                                 -------
Total Wages, Salaries, & Benefits                                                 $ 3,756

Direct Costs
      Optical mechanical components                              $ 4,735
      Optics                                                     $ 2,290
      Transportation costs (shipping & CLEO meeting)             $ 1,000
                                                                 -------
Total Direct Costs                                                                $ 8,025

Equipment
      Translation mounts                                         $ 1,200
      Infrared diodes                                            $ 1,500
      Combination LDD & TC controller                            $ 6,015
                                                                 -------
Total Equipment                                                                   $ 8,715

Indirect Costs @ 42.5% (less equipment)                                           $ 5,007

Total                                                                             $25,503
</TABLE>

<PAGE>

                                                                    CONFIDENTIAL

IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their
duly authorized officers of representative effective as of the date first
written below.

University of Central Florida                Laser Energetics, Inc.

/s/ Betsy Gray                               /s/ Robert Battis
--------------------------------             -----------------------------------
Betsy Gray, Interim Director                 Robert Battis
Office of Sponsored Research                 President & CEO
Date: 98/7/29                                Date: 9-30-98
      --------------------------                   -----------------------------

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