Document:

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                                                                   EXHIBIT. 10.8

Portions of this exhibit were omitted and filed separately with the Secretary of
the Commission pursuant to an application for confidential treatment filed with
the Commission pursuant to Rule 406 under the Securities Act of 1933.  Such
portions are marked by a series of asterisks.

                             PRODUCTION AGREEMENT

     This agreement including the Exhibits attached hereto (this "Agreement"),
dated June 9, 1998, is between

     Koninklijke Utermohlen N.V., a limited liability company organized under
the laws of the Netherlands, with its registered office at Wolvega, the
Netherlands ("Seller")

and

     STC Technologies, Inc., a limited liability company organized under the
laws of the State of Delaware, with its registered offices at Bethlehem,
Pennsylvania 18018, the United States of America ("Purchaser");

WHEREAS:

     The Seller carries on the business of the production, sale and distribution
of a cryogenic product for the treatment of warts, marketed and sold under the
name and trademark Histofreezer (the "Histofreezer Business");

     Pursuant to an agreement (the "Asset Purchase Agreement") the same date as
this Agreement, the Purchaser has purchased and accepted, and the Seller has
sold and transferred to the Purchaser certain assets belonging to the
Histofreezer Business.  A copy of the Asset Purchase Agreement is attached
hereto as Exhibit A;

     The Purchaser and the Seller wish to enter into a separate agreement, set
out below, to govern the production by the Seller, for the Purchaser, of
products for the Histofreezer Business;

NOW, THEREFORE, the parties here to agree as follows:

                            ARTICLE 1 - DEFINITIONS

In this Agreement, the following expressions have, except where the context
otherwise requires, the following meanings:

Confidential Information.  The term "Confidential Information" shall mean
------------------------
customer lists, customer details, prices, designs, all data, research, know how,
recipes, ingredients, formulae, processes, sketches, specifications, samples,
reports, studies, findings, inventions and ideas relating the Products.
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Copyrights.  The term "Copyrights" shall mean all copyrights related to the
----------
Products and the Histofreezer Business.

Cost.  The term "Cost" shall mean the direct cost to the Seller excluding any
----
and all indirect costs such as, including but without limitation operating
costs.

Intellectual Property Rights.  The term "Intellectual Property Rights" shall
----------------------------
mean the Patents, the Trademarks, the Copyrights and the know-how related to the
Products and the Histofreezer Business.

Materials.  The term "Materials" shall mean all relevant packaging and raw
---------
materials necessary and/or desirable for the manufacture of the Products by the
Seller.

New Product.  The term "New Product" shall mean a Product which has been changed
-----------
by an amendment to Specifications recommended by the Purchaser and any product
which is not a Product.

Patents.  The term "Patents" shall mean the Patents as defined in the Asset
-------
Purchase Agreement.

Products.  The term "Products" shall mean the products (together with their
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relevant packaging) set out in the price list attached as Exhibit 1 hereto and
produced in accordance with the Specifications.

Specifications.  The term "Specifications" shall mean the specifications
--------------
previously used by Apco B.V.; current ISO 9002/46002 standards; CE Standards;
the specifications comprised in Exhibit 3.1 of this Agreement or otherwise
comprised in this Agreement; all relevant laws; all relevant regulations; all
relevant directives; best manufacturing practice and procedures; principles of
good workmanship; acknowledged standards together with specific (but reasonable)
instructions of the Purchaser in the relevant written order for any Product(s).

Trademarks.  The term "Trademark" shall mean the Trademark as defined in the
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Asset Purchase Agreement.

Working Day.  The term "Working Day" shall mean a normal working day of the
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Seller.

                   ARTICLE 2 - PRODUCTION, ORDERS, PACKAGING

          2.1. The Purchaser appoints the Seller to be its exclusive
manufacturer of the Products on a worldwide basis for the duration of this
Agreement and the Seller shall exclusively produce and the Purchaser will
purchase Products in accordance with the provisions of this Agreement.

          2.2. In the first week of each calendar month the Purchaser will
provide the Seller with a production schedule (the "Production Schedule")
setting out the Purchaser's anticipated requirements for the production of
Products by the Seller for the next two (2) calendar months.

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          2.3. Within five (5) Working Days after receipt by the Seller of the
Production Schedule (supplied pursuant to Section 2.2 above), the Seller shall
confirm this Production Schedule to the Purchaser. If the Seller has
insufficient Materials, the Seller will take all reasonable action to obtain
sufficient Materials to fulfill this Production Schedule.

          2.4. (i)  The Seller shall not hold or order Materials for more than
six (6) months production of Products under this Agreement without the written
consent of the Purchaser. If the Seller shall hold or order Materials for more
than six months production of Products without the written consent of the
Purchaser, then it shall do so at its own risk and the Purchaser will not be
obliged to buy any such Materials from the Seller as set forth in subsection
(ii) of this Section 2.4. For the avoidance of doubt the calculation of the
likely demand for Materials shall be reasonable and based upon the preceding six
months demand for Materials.

               (ii) If the Purchaser gives the Seller less than six (6) months
notice of a change to the Products and certain of the Sellers stock of Materials
are therefore no longer required, the Purchaser shall, at its option, purchase
such Materials from the Seller at their Cost to the Seller or shall permit the
Seller to continue to use such Materials until they are fully used. Such
purchase shall be for such Materials required for up to a maximum of six months
production of Products or more if written consent has been given by the
Purchaser to the Seller in respect of the ordering of the same.

          2.5. The Seller will at all times maintain a minimum stock of Products
equal to an average of two (2) calendar months sales of Products based upon the
preceding twelve (12) months sales.

          2.6. (i)  The Purchaser shall place order for Products in writing by
facsimile to the Seller. Such order shall specify the quantity of the Products
and the information specified in Article 5 of this Agreement,

          (ii) If the order is:

                    (a) received by the Seller during a Working Day, the Seller
shall immediately confirm the order to the Purchaser and shall within five (5)
Working Days (or a longer period if specified in the relevant order) dispatch
the relevant Products to the Purchaser's customer as specified in the relevant
order.

                    (b) not received by the Seller during a Working Day, the
Seller shall confirm the order to the Purchaser on the first Working Day
following receipt of the facsimile by the Seller and shall within five (5)
Working Days (or a longer period if specified in the relevant order) from this
date dispatch the relevant Products to the Purchaser's customer as specified in
the relevant order.

          2.7. The Seller shall be responsible for completing all the relevant
paperwork required for the dispatch of the Products to the Purchaser's customers
and the Seller shall dispatch goods to such customers in accordance with Article
5 hereof.

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          2.8. Subject to Section 16.7, the Seller has the right to have the
Products manufactured by the Seller by a third party and the Seller may
subcontract its obligations to manufacture Products or any part of them under
this Agreement provided always that the Seller must obtain the written consent
of the Purchaser in respect to the appointment of any new subcontractor for the
manufacture of the Products or any part of them (for the avoidance of doubt not
being a subcontractor at the date of this Agreement), which consent shall not be
unreasonably withheld.

          2.9. The Seller shall during the continuance of the agreement maintain
for its own risk and account such facilities and employ sufficient qualified
personnel as are necessary to manufacture the Products in accordance with
obligations imposed upon it by this Agreement in quantities sufficient to meet
the demands of the market or make arrangements with subcontractors in order to
effect the same.

                ARTICLE 3 - SPECIFICATIONS AND QUALITY CONTROL

          3.1. The Seller will produce, package and label the Products in
conformity with the Specifications. The Purchaser reserves the right to amend
the Specification and quality control procedures relating to the Products at any
time and shall notify the Seller of the same in writing upon reasonable notice
or shorter notice if required by law or any other regulatory body. For the
avoidance of doubt the Purchaser shall solely be responsible for the
Specification of the Products and any changes to the Specification of the
Products shall only be made on the written instruction of the Purchaser to the
Seller.

          3.2. The Seller shall procure that such notices as the Purchaser may
require concerning the Intellectual Property Rights are affixed to or used in
connection with the Products.

          3.3. The Seller shall not without Purchaser's written consent effect
or permit the removal or alteration of, or the making of any addition to, any
trademark, the trade name, notice, nameplate, serial number or patent number or
other reference to Intellectual Property Rights to be referred to or to be
affixed to any of the Products or in any accompanying documentation as per the
instructions of the Purchaser or to any packaging or other material supplied by
the Purchaser.

          3.4. The Seller shall produce the Products in accordance with the then
current ISO9002/46002 and CE standards. Copies of all relevant documents related
to the production of the Products including, but without limitation, those
documents required to complete the CE mark file as approved by KEMA, will be
made available to the Purchaser upon signing this Agreement. Notwithstanding the
foregoing, the Seller will be responsible for maintaining the CE mark files and
shall ensure they are kept up to date and in accordance with good practice for
as long as the Purchaser has not obtained the CE registration in its own name.
The Seller shall supply the Purchaser with copies of all additions to the CE
file and ISO file which relate to the quality control aspects of production of
the Product(s) immediately upon their receipt by the Seller.

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          3.5. The Purchaser or its designated representative shall have the
right to inspect the Seller's facilities used for the manufacturing and
warehousing of the Products and the Purchaser or its designated representative
shall have the right to examine the Products manufactured by the Seller in order
to ensure that the Projects are being manufactured in accordance with the
Specifications and procedures provided for in this Agreement.

          3.6. The Seller expressly agrees to inspect the fitness, safety and
good condition of the Products prior to their delivery to the Purchaser's
customers. Further, the Products shall be delivered only with those
instructions, and warnings to accompany each individual Product as the Purchaser
consents to in writing.

                   ARTICLE 4 - PURCHASE PRICE AND INVOICING

          4.1. The Purchaser shall purchase the Products from the Seller at the
prices set out in Exhibit 4.1 to this Agreement and shall pay for them within 45
days of the date of the relevant invoice.

          4.2. The Seller shall only invoice the Purchaser for Products when
they have been dispatched to the Purchaser's customer in accordance with the
provisions of Article 5 below.

          4.3. If the Cost to the Seller of Materials shall increase by more
than 30 percent, then the parties shall use their best endeavors to agree
revised prices for the Products taking into account such changes. Any such
variation shall ensure that the difference between the Seller's reasonable and
proper Cost of production of the Products and the price of the Products to the
Purchaser shall remain substantially the same as at the date of this Agreement.

                             ARTICLE 5 - DELIVERY

          5.1. Unless otherwise instructed, the Seller will deliver the Products
directly to the customers designated by the Purchaser in the Purchaser's order.
The Purchaser's order shall indicate the time of delivery, the destination and
the customer to whom and where the delivery has to take place and whether the
Costs of transportation of the Products is for the account of the Purchaser or
the Purchaser's customer. The Seller shall inform the relevant carrier to
invoice either the Purchaser or the Purchaser's customer for the Cost of such
transportation as appropriate. It is agreed that such destination may be world
wide and the Seller hereby confirms to be able to deliver to any world-wide
destination as designated in such orders. The Seller will ensure all appropriate
and necessary documentation and other regulatory requirements are fulfilled
including transportation in order to ensure the delivery of Products to the
relevant Purchaser's customer. The costs of such documentation and compliance
with regulatory requirements are for the account of the Seller save for the Cost
of transportation which shall be borne by the Purchaser or the Purchaser's
customer.

          5.2. The Purchaser shall indicate the means of transport in the
requests, mentioned under Section 5.1 and furthermore under which conditions
transport shall take place in accordance with the Incoterms 1990 of the
International Chamber of Commerce.

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          5.3. Products shall be at the Purchaser's risk from the moment of
their dispatch by the Seller (Ex Works Wolvega as defined in Inctoterms 1990 of
the International Chamber of Commerce, subject to the obligations on the Seller
set out in Section 5.1 above) to the Purchaser's customer.

          5.4. Immediately after the dispatch of Products to the Purchaser's
customer, the Seller shall inform the Purchaser of the same in writing together
with the estimated time and date of arrival of such Products to the Purchaser's
customer.

                           ARTICLE 6 - NEW PRODUCTS

          6.1. If the Purchaser requests the Seller to produce a New Product,
then the procedure between the parties shall be:

               (i)   First, the Purchaser shall define the specifications for
the New Product together with a proposed purchase price for the same.

               (ii)  Second, within 20 Working Days the Seller shall notify the
Purchaser of the cost of supplying such New Products to the Purchaser and of any
additional costs to the Purchaser under its obligation to buy Materials under
Section 2.4 The Seller shall calculate the cost and price of supplying New
Products to the Purchaser upon a similar basis to the calculations used for the
existing cost structure and any such cost calculation shall be reasonable.

               (iii) Third, the Parties using their reasonable endeavors, shall
attempt to agree a price for supply for New Products.

                     ARTICLE 7 - CONFIDENTIAL INFORMATION

          7.1.   Each party shall handle all Confidential Information provided
by the other party as business secrets and shall handle Confidential Information
in strict confidence. Each party is further required to take all necessary
precautions to ensure that the information and material will not be disclosed to
any third party without the written consent of the other party.

          7.2.   This obligation of confidentiality applies to all employees and
other persons, including any subcontractor without limitation, acting for and on
behalf of any of the Parties and each of the Purchaser and the Seller shall
ensure that such persons are placed under the same duty of confidence that the
Purchaser and the Seller have agreed to in this Agreement.

          7.3.   This Article 7 shall remain in force for a period of 5 years
after this Agreement has terminated.

                          ARTICLE 8 - R&D AND SUPPORT

          8.1.   The Seller will assist the Purchaser with respect to any
further research and development for the Products and will use its best
endeavors to provide the Purchaser with know-how and feedback in respect
thereof.

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          8.2. The Seller shall pass on to the Purchaser, without any
compensation and for the avoidance of doubt on a royalty free basis and non-
exclusive basis any technical improvements which he has made during the duration
of this Agreement, or, where a patentable invention has been discovered by the
Seller, to grant non-exclusive licenses (with rights to assign and sublicense)
in respect of inventions relating to improvements and new applications of the
original invention, to the Purchaser for the term of the patent held by the
latter. Insofar as improvements and inventions made by the Seller during the
duration of this Agreement are incapable of being used independently of the
Purchaser's secret know-how or patent, the Seller's undertaking as referred to
in the first sentence shall be exclusive in favor of the Purchaser.

          8.3. For the avoidance of doubt any improvements in and/or additions
to know-how related to the Production process for Products created by the Seller
shall belong to the Seller.

          8.4. Immediately after it has come to its attention the Seller shall
report to the Purchaser any and all cases of unfair practice in connection with
the Products and of any violation of Intellectual Property Rights. The Seller
shall upon request of the Purchaser provide the Purchaser with any and all
possible assistance and cooperation in defending and securing such rights of the
Purchaser. At the request of the Purchaser, the Seller will participate in
actions including legal action before the competent courts against any third
party infringing the Purchaser's rights.

          8.5. In the case of an event as referred to in Section 8.4 the
Purchaser will use its best endeavors to resolve the issue.

                   ARTICLE 9 - INTELLECTUAL PROPERTY RIGHTS

          9.1. Except as provided hereafter, nothing contained herein shall be
construed as a transfer or a license or any patent, industrial designs,
trademark, trade names, know-how or any other intellectual property right, in
any of the Products; all such rights are to be expressly reserved to the
Purchaser as the exclusive true and lawful owner thereof.

          9.2. The Purchaser herewith grants to the Seller a limited non-
exclusive license to use the Intellectual Property Rights as follows:

               (i)  The use is limited to the effect that the Seller may use the
Intellectual Property Rights only in direct connection with the manufacturing,
packaging and warehousing of the Products under this Agreement only for sale to
the Purchaser. This does not include the use thereof on stationery, in
advertising, at trade fairs, on radio and television, or as part of the Seller's
firm name. The Seller may only assign or sub-license the Intellectual Property
Rights with the written consent of the Purchaser.

               (ii)  The Seller may not use the Intellectual Property Rights for
any of the Products that have been altered or changed without the Purchaser's
prior written consent nor for other products or services which are not the
Purchaser's.

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               (iii)  The Purchaser reserves the right to impose additional
directions or limitations concerning the use of the Intellectual Property Rights
and such directions or limitations shall automatically become a binding part of
this Agreement upon the Purchaser having given the Seller written notice of the
same without prejudice to the rights granted to the Seller under Section 9.2
subsection (i).

          9.3. The limited license granted by this Article 9 shall automatically
expire upon the termination or expiration of this Agreement and the Seller shall
have no right to whatsoever nature to use the Intellectual Property Rights
following the termination of this Agreement.

          9.4. Products to be delivered under this Agreement will bear the
Trademarks.

          9.5. Without prejudice to any rights which the Purchaser may have
against the Seller under the Asset Purchase Agreement if the manufacturer of
Products by the Seller or its subcontractors (collectively, the "Group") (i)
results in any claim for patent infringement against the Group or (ii) if a
member of the Group shall be sued by a third party for infringement of a third
party's patent rights, and the alleged infringing process, method or composition
is claimed under the Purchaser's Patents, the Seller shall immediately notify
the Purchaser in writing setting forth the facts in reasonable detail. The
Purchaser shall have the right in its sole discretion, to control the defense of
such claim or suit with counsel of its choice at its expense, in which event the
Seller shall have the right to be represented by advisory counsel of its own
selection at its own expense, and the Seller shall cooperate fully in the
defense of such suit, and shall furnish to the Purchaser all evidence and
assistance in its control. If the Purchaser does not elect within thirty (30)
days after such notice to so control the defense of such suit, the Seller may
undertake such control at its own expense. The Purchaser shall then have the
right to be represented by advisory counsel of its own selection at its own
expense, shall cooperate fully in the defense of such suit, and shall furnish to
the Seller all evidence and assistance in its control. The party that does not
control the defense shall be enabled to join the suit to file any counter claims
for damages in respect of the third party, provided always that it accepts the
control of and shall act in line with the defense by the other party. The Seller
shall not settle the suit or otherwise consent to an adverse judgment in such
suit that diminishes the rights or interests of the Purchaser or imposes
additional obligations on the Purchaser, without the express written consent of
the Purchaser, which consent shall not be withheld unreasonably. Without
prejudice to any rights which the Purchaser may have against the Seller under
the Asset Purchase Agreement any judgments, settlements or damages payable with
respect to legal proceedings covered by this Article 9.5 shall be paid by or to
the party which controls the defense.

                          ARTICLE 10 - PENALTY CLAUSE

          10.1.  Any breach of:

                 (i) Articles 7 and 9 of this Agreement and Article 11 of the
Asset Purchase Agreement shall be considered by the Parties hereto as an event
of gross default ("Gross Default"); and

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                 (ii) any other Article of this Agreement shall, provided that
such breach is not remedied with 30 (thirty) days of notice to the other Party
in default, from the Party not being in default, also be considered by the
Parties hereto as an event of gross default ("Gross Default").

          10.2. In the event of Gross Default, the defaulting party shall
without any prior notice or court action being required forfeit to the benefit
of the other party a penalty immediately payable amounting to ** for each
violation and for ** each day that such default will continue up to an aggregate
maximum of ** without any damage or loss required to be proven, the foregoing
without prejudice to the right of the non-defaulting Party to claim full damages
and to exercise any other right available to it in addition thereto. It is
agreed that article 6:92 paragraphs 1 and 2 of the Netherlands Civil Code are
not applicable.

                ARTICLE 11 - REPLACEMENT AND RECALL OF PRODUCTS

          11.1.  The Seller shall recall and replace, at its expense (including,
without limitation, all indirect costs such as transportation, documentation,
customs formalities and other regulatory compliance), any Products that are not
produced in accordance with the Specifications or any variation of them ("Faulty
Products"), or at the option of the Purchaser the Seller shall refund to the
Purchaser the price paid for the same in which case the Seller will acquire the
Faulty Products. The Seller's obligation to recall and to replace Faulty
Products pursuant to this Article 11 shall not apply to Products that after
delivery to the Purchaser's customer have been subjected to misuse, mishandling,
or to neglect or unusual physical or chemical stress. The Seller shall inform
the Purchaser in writing of the existence of Faulty Products as soon as it is
aware of the same, and shall recall or replace or refund Faulty Products within
5 Working Days of becoming aware of the same.

          11.2. If the Seller fails to comply with its obligations pursuant to
Section 11.1 within five Working Days from the Purchaser informing the Seller in
writing of its failure the Purchaser may also recall or replace Faulty Products
and the provisions of Article 11.1 shall apply as relevant. For the avoidance of
doubt the cost of such recall and replacement or refund of Faulty Products shall
be at the Seller's expense and the Purchaser shall charge the costs of the same
to the Seller.

                           ARTICLE 12 - INDEMNITIES

          12.1. By the Seller: The Seller hereby agrees to indemnify and hold
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Purchaser harmless from ad against any and all claims, suits, losses,
obligations, damages, deficiencies, costs, penalties, liabilities (including
strict liabilities), assessments, judgments, amounts paid in settlement, fines,
and expenses (including court costs and reasonable fees of lawyers and other
professionals) (including court costs and reasonable fees of lawyers and other
professionals) (individually and collectively, "Losses") for bodily injury,
personal injury, death, property and other damage caused by any Product which is
not manufactured in accordance with the provisions of this Agreement (and in
particular, but without limitation, the Specifications provided for in this
Agreement or as otherwise varied in accordance with the provisions of it) or
caused by the breach by the Seller of any representation, warranty, covenant or
other obligation

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of this Agreement or caused by the negligence of the Seller or any person for
whose actions the Seller is legally liable provided, however, that the Seller
shall have no liability to the Purchaser for any Losses to the extent that such
Losses resulted from or arose out of (i) the negligence or misconduct or (ii)
breach of this Agreement of/by the Purchaser or any person for whose actions the
Purchaser is liable or (iii) any occurrence for which the Purchaser has
liability to the Seller pursuant to Article 12.2 below or (iv) any occurrence
for which the Purchaser has liability to the Seller pursuant to the Asset
Purchase Agreement.

          12.2. By the Purchaser. Without prejudice to any rights the Purchaser
                ----------------
may have against the Seller under the Asset Purchase Agreement the Purchaser
hereby agrees to indemnify and hold the Seller harmless from and against any and
all Losses, resulting from an infringement by the Product or any New Product of
the intellectual property rights of a third party, for bodily injury, personal
injury, death, property and other damage caused by the Products manufactured in
accordance with the provisions of this Agreement (and in particular the
Specifications provided for in this Agreement or as otherwise varied in
accordance with the provisions of it) or caused by the breach by the Purchaser
of any representation, warranty, covenant or other obligation of this Agreement
or caused by the negligence or the Purchaser or any person for whose actions the
Purchaser is legally liable provided, however, that the Purchaser shall have no
liability to the Seller for any Losses to the extent that such Losses resulted
from or arose out of (i) the negligence or misconduct of the Seller or any
person for whose actions the Seller is legally liable, (ii) a breach by the
Seller of this Agreement, (iii) any occurrence for which the Seller has
liability to the Purchaser pursuant to Section 12.1 above or (iv) any occurrence
for which the Seller has liability to the Purchaser pursuant to the Asset
Purchase Agreement.

          12.3. Indemnification Procedure. Each party shall provide prompt
                -------------------------
notice to the other of any actual or threatened Loss or claim therefor of which
the other becomes aware; provided that the failure to provide prompt notice
shall only be a bar to recovering Losses to the extent that a party was
prejudiced by such failure. In the event of any such actual or threatened Loss
or claim therefor, each party shall provide the other information and assistance
as the other shall reasonably request for purposes of the defense of such
threatened loss or claim and each party shall receive from the other all
necessary and reasonably cooperation in such defense including, but not limited
to, the services of employees or the other party who are familiar with the
transactions or occurrences out of which any such Loss or claim may have arisen.
As provided in Section 9.5 each party shall have the right to participate in the
defense of any Loss or Losses with counsel of its choosing whose reasonable and
proper fees shall be borne by the party with liability for indemnification under
Article 12.1 or 12.2 as the case may be, and no party shall have the right to
settle any claim or agree to the entry of any judgment or other relief without
the prior consent of the other party, which consent shall not be withheld
unreasonably.

                     ARTICLE 13 - DURATION AND TERMINATION

          13.1. This Agreement shall be in force as from June 1, 1998 for a
period of 5 (five) years. Early termination of this Agreement will be possible
only as provided below and such termination shall not include the termination of
rights and obligations which are expressed herein to continue. Without prejudice
to any rights and obligations the parties may have in the

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event of breach of this Agreement, no compensation shall be due by the
terminating party in connection with any termination hereof.

          13.2. Each party may terminate this Agreement with immediate effect by
giving written notice to the other party (i) in the event of Gross Default by
the other party, (ii) in the event of receivership ("faillissement") or
moratorium ("surseance van betaling") of such other party or of direct or
indirect owners of at least half of such other party's share capital and (iii)
in the event the performance of this Agreement has been suspended due to force
majeure (as specified in Article 17 below) for at least 30 (thirty) consecutive
days.

          13.3. The Purchaser may terminate this Agreement with immediate effect
by giving written notice to the Seller:

                    (a) if there are changes to the direct or indirect control
or ownership of (the shares in the capital of) the Seller and the Purchaser does
not provide its consent for the same, such consent not to be unreasonably
withheld;

                    (b) in the event that the Seller cannot or does not comply
with its obligations under Article 3 of this Agreement.

          13.4. Upon the termination of this Agreement

                    (a) all unfilled orders for the manufacturing of Products
may be cancelled at the discretion of the Purchaser;

                    (b) the Seller shall remove and discontinue with immediate
effect, the use of the Intellectual Property Rights and the use of all signs,
stationery, advertising and other material that would make it appear to the
public that Seller is still manufacturing the Products or has any connection
with the Purchaser;

                    (c) save in the event of Gross Default of the Seller the
Seller shall within 10 Working Days of termination supply the Purchaser with a
list of its inventory of Products and New Products (if any). The Purchaser shall
buy all such Products for the prices referred to in Section 4.1 up to a maximum
of the value of 2 months inventory of Products based upon sales of Products for
the preceding 6 months except for any Products older than 6 months and damaged
Products, which shall be transferred to the Purchaser at no cost. The Seller
shall deliver these Products in accordance with the Purchaser's instructions to
the Purchaser or to a third party;

                    (d) save in the event of Gross Default of the Seller the
Seller shall within 10 Working Days of termination supply the Purchaser with a
list of its inventory of Materials. The Purchaser shall buy all such Materials
for a price equal to their cost to the Seller up to a maximum value of 6 months
inventory of Materials, based upon sales of Products for the preceding 6 months.
In such circumstances the Purchaser shall also buy any additional Materials for
which the Purchaser has given consent to the Seller in accordance with Section
2.4 for a price equal to their cost to the Seller;

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                    (e) in the case of Gross Default of the Seller the Seller
shall immediately transfer all the Products and Materials in its inventory at no
cost to the Purchaser;

                    (f) the Seller shall forthwith return all packaging,
literature, manuals and other material supplied by Purchaser or related to the
Intellectual Property Rights or any Confidential Information to the Purchaser,
together with all copies thereof;

                    (g) the Seller shall refrain from using the Intellectual
 Property Rights and any other proprietary rights of Purchaser for any business
 and manufacturing purposes whatsoever.

                             ARTICLE 14 - NOTICES

          14.1. Any notice or other communications required or permitted
hereunder, shall be in writing and given by any of the following methods: (i)
personal delivery; (ii) facsimile transmission and in the case of a facsimile
transmission a fax confirmation receipt report shall evidence receipt of such
facsimile transmission; (iii) registered or certified mail, postage prepaid,
return receipt requested; or (iv) overnight delivery service. Notices shall be
sent to the appropriate party at its address or facsimile number given below (or
at such other address or facsimile number for such party as shall be specified
by notice given hereunder):

If to the Purchaser:
STC Technologies, Inc.
1745 Eaton Avenue
Bethlehem, PA  18018-1799
USA
to the attention of Mr. Michael Gausling

If to the Seller:
Koninklijke Utermohlen N.V.
Frisaxstraat 1
8471 ZW Wolvega
The Netherlands
to the attention of Mr. D.T. van der Vat

                 ARTICLE 15 - APPLICABLE LAW AND JURISDICTION

          15.1. This Agreement shall be governed by and construed in accordance
with the laws of the Netherlands.

          15.2. Any disputes arising between the parties under or in connection
with the Agreement or any further agreements resulting herefrom, shall be
resolved by the court of competent jurisdiction of Amsterdam.

                                       12
<PAGE>

                          ARTICLE 16 - MISCELLANEOUS

     16.1. Costs. Each party to this Agreement shall pay its own costs of an
           -----
incidental to the formation of this Agreement.

     16.2. Complete Agreement. This Agreement, including the Schedules and
           ------------------
Exhibits attached thereto, represents the entire understanding and agreement
between the Purchase and the Seller with respect to the subject matter hereof.
All preceding agreements and understandings pertaining thereto have been
incorporated into this Agreement or, if not incorporated, have been superseded
by this Agreement and have lapsed from the date of the coming into force of this
Agreement.

     16.3. Amendment. This Agreement can only be amended, supplemented or
           ---------
changed, and any provisions or conditions of the Agreement can only be waived,
in writing signed by both parties with a specific reference to this Agreement.

     16.4. Recitals and Headings. Recitals (i) through (iii) shall be deemed to
           ---------------------
form part of this Agreement. The headings contained in this Agreement are
included for reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement.

     16.5. Severability. If any provision of this Agreement is illegal, void or
           ------------
unenforceable, such provision shall have no force and effect, but the illegality
or unenforceability of such provision shall have no effect upon and shall not
impair the enforceability of any other provision of this Agreement. If such
illegality, nullity or unenforceability becomes apparent, the parties shall
consult with each other as soon as practicable in order to reach agreement on a
legal, valid and enforceable replacement of such clause in such a manner that
the intention of the parties shall be approximated as much as possible.

     16.6. Implementation. The parties agree to execute such further documents
           --------------
or agreements as may be necessary or desirable for the implementation of this
Agreement and the consummation of the transactions contemplated hereby.

     16.7. Assignment. None of the rights or obligations under this Agreement
           ----------
may be assigned or transferred by the Seller without the prior written consent
of the Purchaser which shall not be unreasonably withheld. The Seller and
Purchaser can freely assign or transfer any ("cessie") or all
("contractsoverneming") of the rights and obligations under this Agreement to an
affiliated company. The Purchaser may freely assign any ("cessie") or all
("contractsoverneming") of the rights and obligations under this Agreement to
any third party. In so far as may be required, the Seller and the Purchaser
thereby in advance give their consent to any such assignment.

     16.8. Waiver. Failure or neglect by either party to enforce at any time of
           ------
the provisions hereof shall not be construed nor shall be deemed to be a waiver
of such parties' right hereunder nor shall in any way affect the validity of the
whole or any part of this Agreement nor prejudice the rights of such party to
take subsequent action.

                                       13
<PAGE>

     16.9. Agreement prevails over Exhibits. If there is any inconsistency
           --------------------------------
between the terms and conditions in the Exhibits and the other provisions of
this Agreement, then the provisions of this Agreement shall prevail.

                          ARTICLE 17 - FORCE MAJEURE

     17.1. No party shall be held liable or responsible to the other parties nor
be deemed to have defaulted under or breached this Agreement for failure or
delay in fulfilling or performing any term of the Agreement to the extent that
such failure or delay is caused by or results from causes beyond the control of
the affected party including but not limited to fires, earthquakes, floods,
embargoes, wars, acts of war, insurrections, riots, civil commotions and acts of
God.

SIGNED AND AGREED at Amsterdam in two original copies on the date and year
first above written.

/s/ Mr. D.T. van der Vat                    /s/ Michael Gausling
______________________________              _____________________________
Koninklikje Utermohlen N.V.                 STC Technologies, Inc.
By:  Mr. D.T. van der Vat                   By:  Michael Gausling
its:  Managing Director                     its:  President and CEO

                                       14
<PAGE>

                                                                       Exhibit A

                   AGREEMENT FOR SALE AND PURCHASE OF ASSETS

     This agreement including the Exhibits attached hereto (this "Agreement"),
dated June 9, 1998, is between

1.    Koninklijke Utermohlen N.V., a limited liability company organized under
      the laws of the Netherlands, with its registered office at Wolvega, the
      Netherlands ("Seller") and

2.    STC Technologies, Inc., a limited liability company organized under the
      laws of the State of Delaware, with its registered offices at Bethlehem,
      Pennsylvania 18018, the United States of America ("Purchaser");

WHEREAS,

(i)   among other activities, Seller engages in the business of the production,
      sale and distribution of a cryogenic product for the treatment of skin
      lesions, marketed and sold under the name and trade mark Histofreezer (the
      "Histofreezer Business");

(ii)  upon the terms and subject to the conditions set forth herein, Purchaser
      desires to purchase and accept, and Seller desires to sell and transfer to
      Purchaser certain assets relating to the Histofreezer Business;

(iii) the parties hereto desire to enter into a separate agreement that shall
      govern the future relationship between the Seller and the Purchaser in
      respect of the production by the Seller of the Products (the "Production
      Agreement").

NOW, THEREFORE, the parties hereto agree as follows:

                            ARTICLE 1 - Definitions

In this Agreement the following expressions have, except where the context
otherwise requires, the following meanings:

(1)   Contracts
      ---------
      The term "Contracts" shall have the meaning specified at Section 3.1
      hereof.

(ii)  Closing
      -------
      The term "Closing" shall mean the closing of the transactions envisaged in
      this Agreement, as described in Article 6 hereof.

(iii) Closing Date
      ------------
      The term "Closing Date" shall mean the date of the Closing.

                                      -1-
<PAGE>

(iv)   Effective Time
       --------------
       The term "Effective Time" shall mean 12:01 a.m. Amsterdam time on June 1,
       1998.

(v)    Patents
       -------
       The term "Patents" shall mean the Patents as specified in Section 2.1
       (i).

(vi)   Product
       -------
       The term "Product" shall mean the cryogenic product for the treatment of
       skin lesions, marketed and sold on the date hereof, and as developed,
       marketed and sold after the date hereof.

(vii)  Purchase Price
       --------------
       The term "Purchase Price" shall have the meaning specified at Section 5.1
       hereof.

(viii) Purchased Assets
       ----------------
       The term "Purchased Assets" shall have the meaning specified at Section
       2.1 hereof.

                    ARTICLE 2 - Sale and Purchase of Assets

2.1.   Sale and Purchase of Assets

Subject to the terms and conditions stated in this Agreement, and effective as
of the Effective Time, the Seller shall sell, transfer, assign and deliver to
the Purchaser, and the Purchaser shall purchase and accept the transfer,
assignment and delivery of, all of the following assets (the "Purchased
Assets"):

(i)   the patent which is described by country on Exhibit 2.1 (i) hereto (the
      "Patents") and all patent applications and patent rights relating to the
      Histofreezer Business, all associated technical information, shop rights,
      processes, operating, maintenance and other manuals, drawings and
      specifications, formulations, process flow diagrams and related data;

(ii)  the trademark which is described by country on Exhibit 2.1 (ii) hereto
      (the "Trademark");

(iii) all copyrights relating to the Histofreezer Business, including but not
      limited to packaging designs, advertisements, slogans, technical drawings,
      manuals and software (including source codes);

(iv)  the registration of and all rights to the domainname histofreezer.com;

(v)   all documentation relating to the production, manufacturing process, know-
      how and other information relating to the Histofreezer Business, including
      but not limited to commercial information, trade secrets and technical
      information relating to the Patents and the Products;

                                      -2-
<PAGE>

(vi)   all rights to databases relating to the Histofreezer Business, including
       but not limited to the list of distributors and/or customers (whether
       such customers are parties to the Contracts or not);

(vii)  all stock of promotional, educational and other information material
       relating to the Histofreezer business, including but not limited to
       brochures, leaflets, surveys of test results, CD ROM's, films, video's
       and sound recordings;

(viii) such part of the accounts receivable under the Contracts as follows from
       Section 3.5.

       All of the Purchased Assets shall be free and clear of all liens,
       encumbrances, mortgages or charges of any kind, except those liens,
       encumbrances, mortgages or charges specifically identified on the
       abovementioned Exhibits 2.1 (i) through 2.1 (ii).

2.2.   Excluded Assets

Except for the Purchased Assets, the Seller shall not sell, transfer, assign or
deliver anassets to the Purchaser.

                      ARTICLE 3 - Assumption of Contracts

3.1.   Assumption of Certain Contracts

The Purchaser agrees to assume all rights of the Seller as of the Effective Time
under the contracts listed on Exhibit 3.1 hereto (the "Contracts") and agrees to
assume all liabilities under the Contracts relating to the period after the
Effective Time subject to and/or in accordance with this Article 3 and Section
5.3 and Section 7.7.

3.2.   Consent to transfer of Contracts

Any assignment pursuant to this Agreement of a Contract which is not assignable
without a third party consent shall be subject to such consent having been
given. The Seller and Purchaser shall use  their reasonable best efforts to
obtain,  after the Closing Date,  the consent of the counterparties to the
Contracts to the transfer of the rights thereunder by the Purchaser and consent
to the assumption of liabilities thereunder by the Purchaser.

3.3.   No Consent Obtained

If the consent from any counterparty to any of the Contracts, if and in so far
as required, will not have been obtained prior to or at the Closing, such
contract shall be deemed non-assignable and the Purchaser shall not assume any
rights and obligations of the Seller under such contract, subject to and save
for as provided in Section 3.4, Section 3.5 subsection (iii), Section 3.6,
Section 5.3 and Section 7.7.

3.4.   Benefit to Contracts

                                      -3-
<PAGE>

Except as otherwise provided for in Sections 3.3, 3.5 and 3.6, the Parties agree
that the benefit to the Contracts shall vest in the Purchaser with effect from
the Effective Time to the effect that:

(i)   the Seller receives the benefit of all revenues and profits and bears all
      costs and expenses arising in respect of the Contracts relating to the
      period up to the Effective Time; and

(ii)  the Purchaser receives the benefit of all revenues and profits and bears
      all costs and expenses arising in respect of the Contracts relating to the
      period after the Effective Time, provided, however, that the Purchaser
      shall be under no obligation to bear any costs and expenses in respect of
      any Contracts for which no consent to the assignment by the relevant
      counterparty has been given.

3.5.   Allocation of Receivables

With regard to amounts payable under the Contracts prior to or after the
Effective Time, the following is agreed:

(i)   subject to Section 3.5 (ii) receivables relating to invoices sent by the
      Seller under the Contracts which are dated prior to the Effective Time
      shall be for the benefit of the Seller;

(ii)  Seller shall ship Product and send invoices during May 1998 in the
      ordinary course of business consistent with past practices, except that
      the maximum amount of Product to be shipped and invoiced in May 1998 by
      Seller shall be NLG 500,000 (five hundred thousand Netherlands Guilders)
      (the "Limit") with any excess to be retained by Seller and shipped and
      invoiced by Purchaser after the Effective Time. To the extent that the
      Seller exceeds the Limit then the Seller shall credit the Purchaser with
      such sum in the Seller's trading relationship with the Purchaser pursuant
      to the Production Agreement;

(iii) all receivables relating to invoices sent under the Contracts whether
      assigned or not pursuant to Section 3.2 and dated on or after the
      Effective Time shall be for the benefit of the Purchaser but for the
      avoidance of doubt the Purchaser shall not be entitled to any other right
      or subject to any liability or obligation in respect of any Contract
      deemed non assignable pursuant to Section 3.3 until such time as any such
      Contract is assigned to the Purchaser pursuant to Section 7.7.

3.6.   Allocation of Received Amounts and Payables

With regard to amounts received by the Seller or the Purchaser prior to or after
the Effective Time under the Contracts and amounts payable under the Contracts,
the following is agreed:

(i)   any amount received by the Purchaser (whether prior to, at, or after the
      Closing) under the Contracts shall, if and in so far such amount relates
      to an invoice which is dated prior to the Effective Time, be paid by the
      Purchaser to the Seller;

                                      -4-
<PAGE>

(ii)  any amount received by the Seller (whether prior to, at, or after the
      Closing) under the Contracts shall, if and in so far as such amount
      relates to an invoice which is dated after the Effective Time, be paid by
      the Seller to the Purchaser.

(iii) any amount due by the Seller to a third party under the Contracts before
      the Effective Time or relating to a period before the Effective Time
      shall, if and in so far as the Purchaser pays such amount to such third
      party, be reimbursed by the Seller to the Purchaser.

                     ARTICLE 4 - Assumption of Liabilities

4.1.   Assumption of Certain Liabilities

The Purchaser agrees to assume only the obligations of the Seller under the
Contracts pursuant to Article 3.

4.2.   Exclusion of Other Liabilities

Except as provided for in Section 4.1, it is expressly understood and agreed
that the Purchaser will not be liable for any obligations, liabilities, debts,
claims, costs or expenses of any kind or nature whatsoever (excluding the costs
to effect legal transfer of title and registration in the relevant registers of
the  Patents and the Trademark which shall be for the account of the Purchaser)
related to the Seller's business, or  the ownership or use of the Purchased
Assets prior to the Effective Time, or transfer of the Purchased Assets by the
Seller to the Purchaser, including, but not limited to, any obligations,
liabilities, debts, claims, costs or expenses of any kind or nature whatsoever,
related to employees or former employees of the Seller.

                    ARTICLE 5 - Purchase Price and Payment

5.1.   Purchase Price

Subject to the terms and conditions of this Agreement, the Purchase Price for
the Purchased Assets is NLG 4,800,000 (four million eight hundred thousand
Netherlands Guilders).

5.2.   Payment

The Purchase Price shall be paid on the Closing Date by the Purchaser
transferring an amount of NLG 4,800,000 to the bank account of the Seller with
ABN-AMRO Bank in Wolvega, the Netherlands, account number 540.211.087.

5.3.   Adjustments to the Purchase Price

For any Contracts to which, before the date falling exactly 90 days after the
Closing Date, the counterparty has not given his consent, if and in so far as
required, to the assignment to the Purchaser in accordance with Article 3, the
Purchase Price shall be reduced with  the percentage, as shown on Exhibit 5.3
hereto. However, if, during the one year period after the Effective Time there
are sales of Product in the geographic area covered by any Contracts to which
consent was not given, Purchaser shall repay to Seller such percentage

                                      -5-
<PAGE>

of the penalty (but not greater than 100% of the penalty) equal to the gross
turnover of the Product sold in such area during such one year period, divided
by the total turnover of the Products sold by the Seller to such distributor in
such area during 1997 being the fiscal year of the Seller from 1 May 1997 to 30
April 1998.

                       ARTICLE 6 - Closing Arrangements

6.1.   Time and Place of Closing

The closing of the transactions envisaged in this Agreement (the "Closing")
shall be held at the same place as and simultaneously with the closing
contemplated under the Production Agreement, or at such other time and place as
the Seller and the Purchaser mutually agree in writing.

6.2.   Closing Procedure

At the Closing:

(i)   the Purchaser shall pay the Purchase Price to the Seller and shall deliver
      to the Seller evidence that the Purchase Price has been credited to the
      bank account mentioned in Section 5.2 hereof;

(ii)  the Seller and the Purchaser shall sign:

                    (a)  the Production Agreement;

                    (b)  deed of assignment of the rights and benefits, and
assumption of liabilities, under the Contracts, in the form of Exhibit 6.2 (ii)
(b) hereto;

                    (c)  a deed of assignment of the Patents, in the form of
Exhibit 6.2 (ii) (c) hereto;

                    (d)  a deed of assignment of the Trademark, in the form of
Exhibit 6.2 (ii) (d) hereto;

                    (e)  a document acknowledging the assignment of the domain
name histofreezer.com by the Seller to the Purchaser and requesting the relevant
registrar to register the Purchaser as the holder of the registration;

(iii)  the Seller shall deliver to the Purchaser:

                    (a)  the original copies of the Contracts, including all
amendments, annexes, schedules end exhibits thereto and all correspondence and
other documentation in respect thereof;

                                      -6-
<PAGE>

                    (b)  a hard copy of as well as a floppy disc or other data
carrier containing the assigned databases, including all customer lists relating
to the Histofreezer Business;

                    (c)  a complete copy of the CE mark files relating to the
products made under the Patents or otherwise being part of the Histofreezer
Business, including but not limited to the test report by KEMA and any relevant
correspondence on the issue of CE marks;

                    (d)  or as soon as possible but no later than 30 days from
the Closing Date in so far as the know-how and other secret information is in
writing, copies thereof in hard copy and, if applicable, on other carriers
identifying such know-how and secret information;

                    (e)  or as soon as possible but no later than 30 days from
the Closing Date all the necessary information to insert into Exhibit 8.1 (v) of
this Agreement.

(iv)  in so far as the know-how and other secret information relating to the
      Patents, the Trademark and the Histofreezer Business is not available in
      writing or other carrier, the Seller will identify the key employees with
      knowledge thereof.

6.3.   Termination of STC Agreement

On the Closing Date the Purchaser and the Seller shall terminate the
distribution agreement between themselves dated June 4 1991 and both parties
hereby waive any rights either of them may have against the other as a
consequence of such early termination.

6.4.   Both parties acknowledge that in relation to Article 85 of the EC Treaty
and the Netherlands Competition Act ("Mededingingswet"), the Netherlands Merger
Code ("SER besluit Fusiegedragsregels 1975") they share the responsibilities to
make all required notifications and provide all required information and
documents to, and obtain all required consents and appovals from, all relevant
authorities and agencies, howsoever named.

6.5.   Closing Indivisible

Each of the foregoing transactions is part of a single indivisible Closing and
none of these transactions shall be deemed to have been consummated unless and
until each of them shall have been completed in accordance with the terms hereof
save in respect of Section 6.2 (iii) (d and (e) for which the Seller has 30 days
from and including the Closing Date, to comply with.

                      ARTICLE 7 - Post-Closing Covenants

7.1.   Use of Patents, trade name and Trademark by Seller

As of the Closing Date the Seller undertakes to refrain from any use of the name
"Histofreezer" and Trademark and/or a similar trade name and trademark and
acknowledges the Purchaser has the sole right to use the same, whether or not in
combination with other indications.  The Seller will also refrain from using the
Patents and
                                      -7-
<PAGE>

the know-how and other secret information as well as the databases, whether or
not in a modified form, except as provided for in the Production Agreement.

7.2.   Assignment of Know-How and Other Secret Information

All key employees of the Seller with knowledge of the know-how and other secret
information relating to the Patents, the Trademark and the Histofreezer Business
not available in writing or other carriers shall be made available at no cost
for the assignment thereof within three months after the Closing Date, in
consultation with the Seller and in a manner satisfactory to the Purchaser.

7.3.   Delivery of Certain Materials

As soon as possible but not later than 30 days from the Closing Date, the Seller
shall deliver all stock of promotional, educational and other information
material relating to the Histofreezer Business, including but not limited to
brochures, leaflets, surveys of test results, CD ROM's, films, video's and sound
recordings, at an address designated by the Purchaser, at no cost.

7.4.   CE-Mark

The Seller will use its best endeavors to assist the Purchaser with obtaining
the CE-Mark for the products made under the Patents or otherwise being part of
the Histofreezer Business.

7.5.   Effort to Keep Customers

The Seller and the Purchaser shall use their best endeavors to ensure that the
present customers of the Histofreezer Business shall continue to place orders
with Purchaser at a level no less than currently made.

7.6.   Further Assurances

The Seller shall, at any time and from time to time after the Closing Date, upon
request by the Purchaser, execute and deliver such documents and take such other
action as the Purchaser may reasonably request in order to consummate more
effectively the transactions contemplated hereby, including but not limited to
the production data when Seller commences production in its facility in Wolvega.

7.7.   Non-Assigned Contracts

With respect to Contracts which are not assigned at the Closing Date, both
Seller and Purchaser shall use  their best efforts to (i) continue to attempt to
effect such assignment, or (ii) locate an alternative distributor for the
Product for the same geographic area.  Failing either of (i) and (ii) of this
Section 7.7 and during the period when such Contracts are not assigned to the
Purchaser the Seller shall make purchases of Product from the Purchaser, as
distributor of Purchaser pursuant to a distributorship agreement on ordinary and
customary terms and in particular the relevant price for the Products in the
applicable non-assigned

                                      -8-
<PAGE>

Contracts, to be resold to the distributor who did not consent to the assignment
at the relevant price specified in the applicable non-assigned Contracts.

7.8.   Patents

At the sole discretion of the Purchaser, the Seller shall use its best endeavors
to assist the Purchaser to add the name of Mr. Wilhelmus J.B. Swart as inventor
to the registration of the Patent. The costs relating thereto shall be borne by
the Purchaser, provided that the Seller shall bear (i) all costs relating to the
cooperation of its present employees, directors and consultants therewith, and
(ii) all reasonable costs (save that such cost shall not exceed 5,000 NLG)
relating to the cooperation of its former employees, directors and consultants
therewith.

      ARTICLE 8 - Representations and Warranties of the Seller; Survival

8.1.   Representations and Warranties of the Seller

The Seller hereby unconditionally represents and warrants that:

(i)   Organization and Power: The Seller is a company with limited liability
      duly organized and validly existing under the laws of the Netherlands. The
      Seller has the corporate power and authority to own the Purchased Assets
      and to carry on the Histofreezer Business now being conducted. The Seller
      has the full right, power, and authority to enter into and to perform this
      Agreement and all other agreements, certificates, and documents executed
      or delivered, or to be executed or delivered, by the Seller in connection
      herewith or to consummate the transactions contemplated hereby
      (collectively, with this Agreement, "Seller's Documents"), and all
      necessary corporate action with respect thereto has been taken, and no
      further action is necessary therefore. Neither the authorization,
      execution, delivery or performance of any of the Seller's Documents will
      violate, conflict with, result in a breach of, constitute a default under,
      or require any notice, consent, approval or order under the Seller's
      articles of association. On the Closing Date, the Seller will have the
      full right, power and authority to sell, assign, transfer, and deliver the
      Purchased Assets and the Contracts (subject to the consent to assign of
      the relevant contracting party) as provided in this Agreement. This
      Agreement has been duly authorized, executed and delivered by the Seller,
      and this Agreement and all other Seller's Documents are, or when executed
      and delivered will be, legal valid, and binding obligations of the Seller,
      enforceable in accordance with their respective terms.

(ii)  Notification and Consultation: On or before the Closing Date, but no later
      than as required by law or regulation, the Seller will have, in respect of
      the transactions envisaged in this Agreement, made all required
      notifications and provided all required information and documents to, and
      obtained all required consents and approvals from, all relevant
      authorities, agencies, works councils, labor unions and other bodies
      howsoever named, under all applicable laws and regulations, including but
      not limited to the Netherlands Works Council Act ("Wet op de
      Ondernemingsraden") and any collective labor agreement ("CAO") applicable
      to employees of the Seller.

                                      -9-
<PAGE>

(iii)  Purchased Assets: The Purchased Assets are in good marketable and
       operating condition and repair and are suitable for use in the business
       of Seller prior to the date hereof, Seller has free and unencumbered
       title to the Purchased Assets, free from any liens, pledges, retentions
       of title or encumbrances of any nature whatsoever, and no third parties
       have any right and/or title in or to the Purchased Assets. The Seller has
       taken all necessary precautions to protect it's patents, trademarks,
       trade names, industrial designs and copyrights included in the Purchased
       Assets. The Seller has not violated to its best knowledge any patent,
       copyright, industrial design, trademark, trade name or, other
       intellectual property right of a third party nor does the Seller know of
       any asserted infringement by the Seller of any intellectual property
       right of another. After the assignment of the Purchased Assets and the
       execution of the Production Agreement, the Purchaser shall be able to
       conduct the Histofreezer Business in the same manner as it was conducted
       before the Closing Date. Seller has developed and has been concurrently
       using the technology to manufacture the Products on a commercial basis
       and there are no defects, shortcomings or technical reasons which would
       prevent the manufacture and sale of the Products by the Purchaser on a
       commercially feasible basis. All patent fees and all other costs in
       connection with a proper registration of the Patents and Trademark for
       the period ending two weeks after Closing have been paid in a timely
       manner. Exhibit 8.1 (iii) hereto accurately lists, by country, the annual
       patent fees and all other costs in connection with a proper registration
       of the Patents and Trademark and the date on which such fees and/or costs
       become due.

(iv)   Contracts: Each of the Contracts is in full force and effect and there
       exists no default or event of default or event, occurrence, condition or
       act (including the transactions envisaged in this Agreement) which, with
       the giving of notice, the lapse of time or any other event or condition,
       would become a default or event of default thereunder. The Seller has not
       violated any of the terms or conditions of any of the Contracts in any
       material respect, and, to the best of Sellers knowledge, information and
       belief, all of the covenants to be performed by any other party thereto
       have been fully performed. The Seller has not received any notice that
       any party to any of the Contracts intends to cancel or terminate any of
       the Contracts. There are no commitments by the Seller to the
       counterparties of the Contracts other than mentioned in the copies of
       Contracts that have been delivered to the Purchaser on the Closing Date,
       nor are there any disputes between the Seller and such parties.

(v)    Permits and Compliance with Laws: The Seller has complied with all, and
       is not in violation of any, laws and regulations affecting the Purchased
       Assets, the Contracts and the Histofreezer Business. No permits or
       licenses are required by any governmental authority for the operation of
       the Histofreezer Business as currently being conducted, except as set
       forth on Exhibit 8.1 (v) hereto

(vi)   Legal Proceedings: there are no actions, suits, claims or proceedings
       affecting the Purchased Assets or the Contracts in any court or before
       any arbitrator or governmental agency, nor are, to the best knowledge of
       Seller, such actions, suits, claims or proceedings threatening, with the
       exception of:

                                     -10-
<PAGE>

                    (a)  patent infringement claim in the United States,
instigated by the Purchaser against Cryosurgery, Inc.; and

                    (b)  patent infringement preliminary injunction proceedings
pending before the President of the District Court in The Hague, the
Netherlands, instigated by the Purchaser as claimant against Wartner B.V. and
Dokman en Ruizendaal B.V. as defendants.

(vii)  No Inconsistent Agreements: neither the execution and delivery of this
       Agreement nor the consummation of the transactions contemplated herein
       will result in a violation or breach of, or constitute a default under,
       any term or provision of any material mortgage, pledge, security
       agreement, instrument, order, judgement, decree, rule, regulation, law,
       contract, agreement or any other commitment or restriction to which
       Seller is a party or by which it is subject or bound, nor will such
       actions result in (a) the creation of any claim, lien, charge or
       encumbrance on any of the Purchased Assets or the Contracts, or (b) the
       acceleration or creation of any material obligation in connection with
       the Purchased Assets or the Contracts, or (c) the forfeiture of any
       material right or privilege connected to the Purchased Assets or the
       Contracts.

(viii) Sufficient Insurance: Seller has, and will have for the term of the
       survival of the representations and warranties as determined in
       accordance with Section 8.2 hereof, insurance policies in place covering
       all events that will cause any amount becoming due by the Seller to the
       Purchaser under this Agreement, up to a maximum amount of no less than
       NLG 2,000,000 (two million Netherlands Guilders). As of the Closing Date
       and for the term of such insurance policies, Purchaser will be the named
       beneficiary of each such policy such that if a claim is made successfully
       under any such policy Purchaser shall receive any moneys received in
       settlement of the claim from the relevant insurer.

(ix)   Swart Patent: The Seller  warrants that the license agreement between the
       Seller and Wilhelmus J.B. Swart dated April 1987 has terminated.

(x)    No Liabilities Resulting from Agreement; No Undisclosed Liabilities:
       Neither the execution and delivery of this Agreement nor the consummation
       of the transactions contemplated herein will result in any debt,
       liability or obligation of any nature, whether accrued, absolute,
       contingent or otherwise, and whether due or to become due, for the
       Purchaser, other than (a) such obligations under the Contracts as are
       specified in Article 3 and (b) such obligations relating to the Purchased
       Assets as are specified on Exhibit 8.1 (iii) hereto, and (c) the
       Purchasers obligations to the Seller under this Agreement.

(xi)   Accuracy of Information: Seller has disclosed to Purchaser all that is
       relevant with respect to the Purchased Assets and the Contracts, and no
       information provided to Purchaser is incorrect or misleading in any way
       whatsoever.

8.2.   Survival of Representations and Warranties

                                     -11-
<PAGE>

All representations and warranties of the Seller contained in this Agreement
shall survive for a period of two years following the Closing Date.

                 ARTICLE 9 - Indemnification and Hold Harmless

9.1.   General Indemnification and Hold Harmless

The Seller hereby agrees to indemnify Purchaser and to hold the Purchaser
harmless, without any right to compensation or set-off against any amount due by
the Purchaser to the Seller,

(i)   against and in respect of any and all loss, damage, liability, cost and
      expense (including attorney's fees), suffered or incurred as a result of
      the inaccuracy of any of the Seller's representations or the breach of any
      warranty or of any other obligation of the Seller pursuant to this
      Agreement or in any certificate, schedule, instrument or document
      delivered to Purchaser by or on behalf of Seller in connection with the
      conclusion of this Agreement; and

(ii)  without limitation to Section 9.1 (i), against and in respect of any and
      all loss, damage, liability, cost and expense (including attorney's fees),
      relating to any and all claims, including but not limited to personal
      injury claims, relating to the period prior to the Closing Date and
      relating to the Purchased Assets, the Contracts the Histofreezer Business
      or any other business or activity of the Seller.

9.2.   Indemnification and Hold Harmless Against Employment Related Claims

Without limitation to Section 9.1, Seller agrees to indemnify Purchaser and hold
Purchaser harmless against and from any and all claims of employees or former
employees of Seller, whether relating to continued employment, vacation days,
severance payments, the termination of employment, pension rights, premiums of
any kind, disability excess scheme ("WAO-excedent regeling"), disability
insurance shortfall ("WAO-gat") or any other employment related claims.

   ARTICLE 10 - Reimbursement for Damages Relating to Proceedings and Claims

10.1.   Reimbursement for Damages Relating to Disclosed Proceedings and Claims

Without limitation to Sections 9.1 and 9.2, Seller agrees to reimburse Purchaser
for any and all loss, damage, liability, cost, expense (including attorney's
fees), judgments and amounts paid in settlement (including attorney's fees),
resulting from the proceedings described in Sections 8.1 (vi) (a) and (b), up to
the maximum amount of USD 100,000 (one hundred thousand United States dollars)
for each of such proceedings.

10.2.   Reimbursement for Damages Relating to Infringement Claims

Without limitation to Sections 9.1, 9.2 and 10.1, Seller agrees to reimburse
Purchaser for any and all loss, damage, liability, cost, expense (including
attorney's fees), judgments and amounts paid in settlement, resulting from any
and all claims and/or proceedings in which the alleged infringement occurred
prior to the Effective Time, other than those described in

                                     -12-
<PAGE>

Sections 8.1 (vi) (a) and (b), up to the aggregate maximum amount of USD 100,000
(one hundred thousand United States dollars).

               ARTICLE 11 - Non-Competition and Confidentiality

11.1.   Non-Competition

The Seller hereby agrees and undertakes that it will not:

(i)   at any location in the world in which the  Seller has at the date of the
      signing of this Agreement distributors or customers for Products, without
      the prior written consent of the Purchaser during a period of five (5)
      years after the Closing Date as principal, consultant, sales
      representative, agent, distributor, shareholder, partner or any other
      capacity whatsoever, either directly or indirectly be engaged in or
      concerned with the conduct of the Histofreezer Business currently
      conducted by the Seller or in any other field which is connected to such
      conduct of business or which in any way can be regarded as competing with
      the Histofreezer Business;

(ii)  approach any employee, sales representative or agent of the Purchaser with
      the aim of persuading him, her or them to terminate his or her or their
      relationship with the Purchaser or take any action that may result in the
      impairment of the relationship between such employee or sales
      representative or agent with the Purchaser;

(iii) approach any customer, supplier of or other company or enterprise doing
      business with the Purchaser with the aim of persuading it to terminate its
      relationship with the Purchaser or take any action  that may result in the
      impairment of such relationship;

11.2.   Confidentiality

The Seller further undertakes not to, and to cause all of its present and former
employees and directors not to,  at any time subsequent to this Agreement
divulge or communicate to any company, person or entity (other than to the
Purchaser or to any of its directors, officers or employees who need to acquire
such knowledge in the performance of their duties or as directed or approved by
the Purchaser in writing) any confidential information or information of an
apparently confidential nature whatsoever concerning the Histofreezer Business
or the Patents, or the business, affairs, accounts, dealings, transactions,
customers, suppliers or business relations of the Purchaser.

11.3.   Penalty

In the event that the Seller breaches any of its obligations contained in the
previous paragraphs of this Article 11, it shall immediately without any action
or formality being required to be taken or fulfilled forfeit for the benefit of
the Purchaser an immediately payable penalty of NLG 250,000 (two hundred fifty
thousand Netherlands guilders) for each infringement and of NLG 10,000 (ten
thousand Netherlands guilders) for each day such infringement will continue, up
until the aggregate maximum amount of NLG 500,000 (five hundred thousand
Netherlands guilders), without any damages or losses being

                                     -13-
<PAGE>

required to be proven and without prejudice to the right of the Purchaser to
claim damages if there are grounds for so doing.

                             ARTICLE 12 - Notices

12.1.   Any notice or other communications required or permitted hereunder,
shall be in writing and given by any of the following methods: (i) personal
delivery; (ii) facsimile transmission; (iii) registered or certified mail,
postage prepaid, return receipt requested; or (iv) overnight delivery service.
Notices shall be sent to the appropriate party at its address or facsimile
number given below (or at such other address or facsimile number for such party
as shall be specified by notice given hereunder):

     If to Purchaser:
     STC Technologies, Inc.
     1745 Eaton Avenue
     Bethlehem, Pennsylvania 18018-1799
     U.S.A
     to the attention of: Mr. Michael Gausling

     If to Seller:
     Koninklijke Utermohlen N.V.
     Frisaxstraat 1
     8471 ZW Wolvega
     The Netherlands
     to the attention of: Mr. D.T. van der Vat

     All such notices, requests, demands, waivers and communications shall be
     deemed received upon (i) actual receipt thereof by the addressee, (ii)
     actual delivery thereof to the appropriate address or (iii) in the case of
     a facsimile transmission, upon transmission thereof by the sender and
     issuance by the transmitting machine of a confirmation slip confirming that
     the number of pages constituting the notice have been transmitted without
     error. In the case of notices sent by facsimile transmission, the sender
     shall contemporaneously send a copy of the notice by registered mail to the
     addressee at the address provided for above. However, such mailing shall in
     no way alter the time at which the facsimile notice is deemed received.

                 ARTICLE 13 - Applicable law and jurisdiction

13.1.   Applicable law

This agreement shall be governed by and construed in accordance with the laws of
the Netherlands.

13.2.   Jurisdiction

Any disputes arising between the parties under or in connection with the
Agreement or any further agreements resulting herefrom, shall be resolved by the
court of competent jurisdiction of Amsterdam.

                                     -14-
<PAGE>

                          ARTICLE 14 - Miscellaneous

14.1.   Costs

Each party to the Agreement shall pay its own costs of and incidental to the
preparation of this Agreement and the sale and purchase hereby agreed to be
made.

14.2.   Complete agreement

This Agreement, including the Exhibits attached thereto, represents the entire
understanding and agreement between the Purchaser and the Seller with respect to
the subject matter hereof. All preceding agreements and understanding pertaining
thereto have been incorporated into the Agreement or, if not incorporated, have
been superseded and have lapsed.

14.3.   Amendment

The Agreement can only be amended, supplemented or changed, and any provisions
or conditions of the Agreement can only be waived, in a writing signed by both
parties with a specific reference to this Agreement.

14.4.   Recitals and Headings

Recitals (i) through (iii) shall be deemed to form part of this Agreement. The
headings contained in this Agreement are included for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.

14.5.   Severability

If any provision of this Agreement is illegal, void or unenforceable, such
provision shall have no force and effect, but the illegality or unenforceability
of such provision shall have no effect upon and shall not impair the
enforceability of any other provision of this Agreement. If such illegality,
nullity or unenforceability becomes apparent, the parties shall consult with
each other as soon as practicable in order to reach agreement on a legal, valid
and enforceable replacement of such provision in such a manner that the
intention of the parties shall be approximated as much as possible.

14.6.   Implementation

The parties agree to execute such further documents or agreements as may be
necessary or desirable for the implementation of this Agreement and the
consummation of the transactions contemplated hereby.

14.7.   Assignment

None of the rights or obligations under this agreement may be assigned or
transferred by the Seller without the prior written consent of the  Purchaser,
which consent shall not be unreasonably withheld. The Purchaser can freely
assign or transfer any ("cessie") or all ("contractsoverneming") of the rights
and obligations under this agreement to a third party.

                                     -15-
<PAGE>

In so far as consent may be required, the Seller hereby in advance gives its
irrevocable consent to any such transfer or assignment. The Purchaser shall not
sell or transfer the Purchased Assets and the Contracts to a third party during
the (first) term of 5 years of the Production Agreement unless such party at the
same time assumes the rights and obligations of the Purchaser under the
Production Agreement, provided the Production Agreement has not been terminated
prematurely.

14.8.   No Waiver

Failure or neglect by either party to enforce at any time of the provisions
hereof shall not be construed nor shall be deemed to be a waiver of such
parties' right hereunder nor shall in any way affect the validity of the whole
or any part of this Agreement nor prejudice the rights of such party to take
subsequent action.

SIGNED AND AGREED at Amsterdam in two original copies on the date and year first
above written.

Koninklijke Utermohlen N.V.                  STC Technologies, Inc.

/s/ Mr. D.T. van der Vat                     /s/ Michael Gausling
By: Mr. D.T. van der Vat                     By: Michael Gausling
Its: managing director                       Its: President and CEO

                                     -16-
<PAGE>

                                                                 Exhibit 2.1 (i)
                                                                 ---------------

                                  the Patents

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
   Country          National Appln.   Date of     ARTICLE 15    Date of    Date of       Renewal
                      Or European     filing       National      grant      expiry       Fee due
                       Patent NO.                 Patent No.
-------------------------------------------------------------------------------------------------
<S>                <C>                <C>        <C>            <C>        <C>           <C>
Argentina              000327298      28-01-94                  05-07-96   05-07-11      05-07-98
-------------------------------------------------------------------------------------------------
Australia              005397694      25-01-94   00000664788    19-03-96   25-01-14      25-01-99
-------------------------------------------------------------------------------------------------
Belgium                000608954      27-01-94                  23-04-97   27-01-14      27-01-99
-------------------------------------------------------------------------------------------------
Brazil                 094003874      28-01-94                                           28-01-99
-------------------------------------------------------------------------------------------------
Germany                000608954      27-01-94   00694027316    23-04-97   27-01-14      27-01-99
-------------------------------------------------------------------------------------------------
Canada                 002114465      28-01-94                                           28-01-99
-------------------------------------------------------------------------------------------------
Denmark                000608954      27-01-94                  23-04-97   27-01-14      27-01-99
-------------------------------------------------------------------------------------------------
Finland                000940431      28-01-94                                           28-01-99
-------------------------------------------------------------------------------------------------
France                 000608954      27-01-94                  23-04-97   27-01-14      27-01-99
-------------------------------------------------------------------------------------------------
Great Brittain         000608954      27-01-94                  23-04-97   27-01-14      27-01-99
-------------------------------------------------------------------------------------------------
Hungaria               009400247      28-01-94                             28-01-14      28-01-99
-------------------------------------------------------------------------------------------------
India                  000003794      24-01-94
-------------------------------------------------------------------------------------------------
Indonesia              000940157      28-01-94
-------------------------------------------------------------------------------------------------
Italy                  000608954      27-01-94                  23-04-97   27-01-14      27-01-99
-------------------------------------------------------------------------------------------------
Japan                  002356394      27-01-94   00002106456    06-11-96   27-01-14      21-02-99
-------------------------------------------------------------------------------------------------
Luxembourg             000608954      27-01-94                  23-04-97   27-01-14      27-01-99
-------------------------------------------------------------------------------------------------
Malaysia               009400215      27-01-94
-------------------------------------------------------------------------------------------------
Mexico                 009400745      28-01-94
-------------------------------------------------------------------------------------------------
Netherlands            000608954      27-01-94                  23-04-97   27-01-14      31-01-99
-------------------------------------------------------------------------------------------------
Norway                 000940235      24-01-94                                           24-01-99
-------------------------------------------------------------------------------------------------
Ukraine                094005073      27-01-94
-------------------------------------------------------------------------------------------------
Austria                000608954      27-01-94                  23-04-97   27-01-14      27-01-99
-------------------------------------------------------------------------------------------------
China                  941010872      25-01-94                                           25-01-99
-------------------------------------------------------------------------------------------------
Poland                 000302044      27-01-94
-------------------------------------------------------------------------------------------------
Saudi Arabia           094140653      05-04-94
-------------------------------------------------------------------------------------------------
South Africa           000940541      26-01-94   00000940541    30-11-94   26-01-14      26-01-99
-------------------------------------------------------------------------------------------------
Spain                  000608954      27-01-94                  23-04-97   27-01-14      27-01-99
-------------------------------------------------------------------------------------------------
Sweden                 000608954      27-01-94                  23-04-97   27-01-14      27-01-99
-------------------------------------------------------------------------------------------------
Thailand               000021368      28-01-94
-------------------------------------------------------------------------------------------------
Tsjechia               000019494      28-01-94
-------------------------------------------------------------------------------------------------
Turkye                 000940053      28-01-94   0000027588     13-06-95   28-01-09      28-01-98
-------------------------------------------------------------------------------------------------
USA                    008736277      24-10-96   00005738682    14-04-98   10-08-13      14-10-01
-------------------------------------------------------------------------------------------------
Russia                 094002316      27-01-94
-------------------------------------------------------------------------------------------------
Venezuela              000000136      28-01-94
-------------------------------------------------------------------------------------------------
</TABLE>

                                     -17-
<PAGE>

                                                                Exhibit 2.1 (ii)
                                                                ----------------

                                 the Trademark

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
    Country            Registration    Date of      Renewal      Class    Reference
                          Number       filing        date
-----------------------------------------------------------------------------------
<S>                    <C>             <C>         <C>           <C>      <C>
Benelux                   430 435      15-05-87     15-05-07      5, 10     10 210
-----------------------------------------------------------------------------------
Bulgaria                  525 069      09-06-88     09-06-08      5, 10     10 210
-----------------------------------------------------------------------------------
Egypt                     525 069      09-06-88     09-06-08      5, 10     10 210
-----------------------------------------------------------------------------------
Russia                    525 069      09-06-88     09-06-08      5, 10     10 210
-----------------------------------------------------------------------------------
Hungary                   525 069      09-06-88     09-06-08      5, 10     10 210
-----------------------------------------------------------------------------------
Morocco                   525 069      09-06-88     09-06-08      5, 10     10 210
-----------------------------------------------------------------------------------
Tjechie                   525 069      09-06-88     09-06-08      5, 10     10 210
-----------------------------------------------------------------------------------
Romania                   525 069      09-06-88     09-06-08      5, 10     10 210
-----------------------------------------------------------------------------------
Slovakia                  525 069      09-06-88     09-06-08      5, 10     10 210
-----------------------------------------------------------------------------------
Viet Nam                  525 069      09-06-88     09-06-08      5, 10     10 210
-----------------------------------------------------------------------------------
Byelorussia               525 069      09-06-88     09-06-08      5, 10     10 210
-----------------------------------------------------------------------------------
Austria                   525 069      09-06-88     09-06-08      5, 10     10 210
-----------------------------------------------------------------------------------
Germany                   525 069      09-06-88     09-06-08      5, 10     10 210
-----------------------------------------------------------------------------------
Algeria                   525 069      09-06-88     09-06-08      5, 10     10 210
-----------------------------------------------------------------------------------
France                    525 069      09-06-88     09-06-08      5, 10     10 210
-----------------------------------------------------------------------------------
Italy                     525 069      09-06-88     09-06-08      5, 10     10 210
-----------------------------------------------------------------------------------
Spain                     525 069      09-06-88     09-06-08      5, 10     10 210
-----------------------------------------------------------------------------------
Portugal                  525 069      09-06-88     09-06-08      5, 10     10 210
-----------------------------------------------------------------------------------
China                     647 331      22-11-95     22-11-15      5, 10    10 5586
-----------------------------------------------------------------------------------
Poland                    647 331      22-11-95     22-11-15      5, 10    10 5586
-----------------------------------------------------------------------------------
Argentina                 1470481      30-09-93     30-09-03       10      10 2304
-----------------------------------------------------------------------------------
Australia                 B575267      26-03-92     26-03-99       10      10 2624
-----------------------------------------------------------------------------------
Brazil                  816539375      14-09-93     14-09-03       10      10 2301
-----------------------------------------------------------------------------------
Canada                    409 060      05-03-93     05-03-08       10      10 1975
-----------------------------------------------------------------------------------
Switzerland               3406/97*     30-04-97    application     10      10 6607
-----------------------------------------------------------------------------------
Eastern Germ.             2007468      18-12-91     15-03-01      5, 10    10 2132
-----------------------------------------------------------------------------------
Denmark                10319-1992      06-11-92     06-11-02       10      10 2725
-----------------------------------------------------------------------------------
Finland                   127 854      06-09-93     06-09-03       10      10 2728
-----------------------------------------------------------------------------------
United Kingdom            1347342      13-06-87     13-06-05       10       10 211
-----------------------------------------------------------------------------------
Hong Kong                14964/95*     25-11-95      granted       10      10 5581
-----------------------------------------------------------------------------------
Indonesia                D9523881      14-12-95    application     10      10 5582
-----------------------------------------------------------------------------------
Israel                      84720      04-12-94     14-09-99       10      10 2817
-----------------------------------------------------------------------------------
India                     687 995*     23-11-95    application     10      10 5583
-----------------------------------------------------------------------------------
Japan                     3262688      04-02-97     24-02-07       10      10 4502
-----------------------------------------------------------------------------------
Korea                     381 811      12-11-97     12-11-07       10      10 5584
-----------------------------------------------------------------------------------
Mexico                    441 928      13-09-93     13-09-03       10      10 3407
-----------------------------------------------------------------------------------
Malaysia                 96-00312*     09-01-96    application     10      10 5579
-----------------------------------------------------------------------------------
</TABLE>

                                     -18-
<PAGE>

                                                    Exhibit 2.1 (ii) - continued
                                                    ----------------------------

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
    Country            Registration    Date of      Renewal       Class    Reference
                          Number       filing        date
------------------------------------------------------------------------------------
<S>                    <C>             <C>         <C>           <C>       <C>
Norway                    177 901      14-11-96     14-11-06        10      10 2726
------------------------------------------------------------------------------------
Saudi Arabia              93/3063      21-04-93     21-04-03        10      10 3363
------------------------------------------------------------------------------------
Sweden                    265 704      07-04-95     07-04-05        10      10 2727
------------------------------------------------------------------------------------
Singapore                11339/95*     24-11-95    application      10      10 5578
------------------------------------------------------------------------------------
Thailand                  303 782*     06-03-96    application      10      10 5580
------------------------------------------------------------------------------------
Taiwan                    8513436*     22-03-96    application      10      10 5586
------------------------------------------------------------------------------------
USA                       1525479      21-02-89     21-02-09        10       10 212
------------------------------------------------------------------------------------
Paraguay                 trademark       agent     application   yet to be   filed
                                      instructed
------------------------------------------------------------------------------------
Chili                    trademark       agent     application   yet to be   filed
                                      instructed
------------------------------------------------------------------------------------
Venezuela                trademark       agent     application   yet to be   filed
                                      instructed
------------------------------------------------------------------------------------
Peru                     trademark       agent     application   yet to be   filed
                                      instructed
------------------------------------------------------------------------------------
</TABLE>

                                     -19-
<PAGE>

                                                                     Exhibit 3.1
                                                                     -----------

                                 the Contracts

Counterparty:                         Effective Date:       Termination Date:

Binnvar Sp.z.o.o. Warsaw              May 26, 1997          May 26, 2000
Braun Medical  Ltd.Lda                May 8, 1995           May 8, 1998
Braun Medical S.A.                    July 7, 1994          July 7, 1997
Braun Biotrol                         November 30, 1993/    December 1, 1998
                                      November 30, 1996     December 1, 1998
Eriphyle B.V.                         February 23, 1993     February 23, 1996
GrupoMH S.A.                          February 2, 1998      February 2, 2001
Hamilton Pharmaceutical               April 14, 1992        April 14, 1995
Kingo Diagnostika, Denmark            April 6, 1994         April 6, 1997
Kjemi-Diagnostikk A.S., Norway        May 26, 1993          May 26, 1996
Medical Diagnostic Instruments Ltd.   December 20, 1993     December 20, 1996
Medipet Oy                            September 17, 1992    September 17, 1995
Medway BME Corp.                      June 4, 1997          June 4, 2000
Petzold                               November 25, 1992/    November 25, 1997
                                      November 25, 1995
Pharmachem Ltd.                       October 22, 1997      October 22, 2000
Pharmascience Inc.                    February 25, 1997     February 25, 2000
Promesan Italie                       March 8, 1997         March 8, 2000
Skafte & Claesson AB                  February 8, 1994      February 8, 1997
Smith & Nephew Ltd                    April 19, 1993        April 19, 1996
Thames Laboratories Ltd.              May 24, 1991          May 24, 1996
Uhlmann-Eyraud S.A.                   January 23, 1992      January 23, 1997
United Italian Trading Corp.          February 8, 1995      February 8, 1998
United Italian Trading Corp.          August 15, 1996       August 15, 1999
Utermohlen Medical Care S.A.          February 15, 1998     December 31, 1999

                                     -20-
<PAGE>

                                                                     Exhibit 5.3
                                                                     -----------

  gross turnover of each counterparty to the Contracts during the period from
                 May 1, 1997 through April 31, 1998, by country

Country sold to                   Recorded sales     % of total        Contract
                                  1/5/97-31/4/98
--------------------------------------------------------------------------------
USA                               1.366.000             31,9%              X
--------------------------------------------------------------------------------
Germany                             964.000             22,5%              X
--------------------------------------------------------------------------------
UK                                  382.000              8,9%              X
--------------------------------------------------------------------------------
France                              220.000              5,1%              X
--------------------------------------------------------------------------------
Spain                               212.000              5,0%              X
--------------------------------------------------------------------------------
Netherlands                         193.000              4,5%
--------------------------------------------------------------------------------
Canada                              157.000              3,7%              X
--------------------------------------------------------------------------------
South Africa                        150.000              3,5%              X
--------------------------------------------------------------------------------
Finland                             132.000              3,1%              X
--------------------------------------------------------------------------------
Sweden                               98.000              2,3%              X
--------------------------------------------------------------------------------
Italy                                56.000              1,3%              X
--------------------------------------------------------------------------------
Norway                               54.000              1,3%              X
--------------------------------------------------------------------------------
Belgium                              46.000              1,1%              X
--------------------------------------------------------------------------------
Portugal                             44.000              1,0%              X
--------------------------------------------------------------------------------
Ireland                              42.000              1,0%              X
--------------------------------------------------------------------------------
Switzerland                          36.000              0,8%              X
--------------------------------------------------------------------------------
Australia                            26.000              0,6%              X
--------------------------------------------------------------------------------
Hong Kong                            16.000              0,4%              X
--------------------------------------------------------------------------------
Denmark                              15.000              0,4%              X
--------------------------------------------------------------------------------
Greece                               14.000              0,3%              X
--------------------------------------------------------------------------------
Saudi Arabia                         14.000              0,3%
--------------------------------------------------------------------------------
UAE                                  13.000              0,3%
--------------------------------------------------------------------------------
Jordan                               12.000              0,3%
--------------------------------------------------------------------------------
Singapore                             8.000              0,2%              X
--------------------------------------------------------------------------------
Iceland                               7.000              0,2%
--------------------------------------------------------------------------------
Argentina                             5.000              0,1%
--------------------------------------------------------------------------------
Venezuela                             2.000              0,0%
--------------------------------------------------------------------------------
Quatar                                1.000              0,0%
--------------------------------------------------------------------------------
Total DFl.                        4.282.000            100,0%
--------------------------------------------------------------------------------

                                     -21-
<PAGE>

                                                            Exhibit 6.2 (ii) (b)
                                                            --------------------

                          form of deed of assignment
          of the rights and benefits, and assumption of liabilities,
                              under the Contracts

The undersigned,

1.  Koninklijke Utermohlen N.V., a limited liability company organized under the
    laws of the Netherlands, with its registered offices at Wolvega, the
    Netherlands ("Seller")

and

2.  STC Technologies, Inc., a limited liability company organized under the laws
    of the State of Delaware, with its registered offices at Bethlehem,
    Pennsylvania 18018, the United States of America ("Purchaser");

WHEREAS Seller and Purchaser have entered into an Agreement for Sale and
Purchase of Assets of the same date (hereinafter "Asset Purchase Agreement"),
pursuant to which Seller shall transfer and assign to Purchaser all its rights
to the contracts listed in Article 1 below related to the Histofreezer Business;

NOW THEREFORE, THE PARTIES HAVE AGREED AS FOLLOWS:

Article 1 - Contracts

Seller hereby assigns to Purchaser and Purchaser hereby transfers and accepts
the assignment subject to the consent, where required of the relevant
contracting party, of all rights and obligations relating to the following
contracts, from 1 June 1998 but excluding any rights, obligations or liabilities
arising or accruing before 1 June 1998 in respect of the same:

Counterparty:                       Effective Date:       Termination Date:

Binnvar Sp.z.o.o. Warsaw            May 26, 1997          May 26, 2000
Braun Medical Lda                   May 8, 1995           May 8, 1998
Braun Medical S.A.                  July 7, 1994          July 7, 1997
Braun Biotrol                       November 30, 1993/    December 1, 1998
                                    November 30, 1996     December 1, 1998
Eriphyle B.V.                       February 23, 1993     February 23, 1996
GrupoMH S.A.                        February 2, 1998      February 2, 2001
Hamilton Pharmaceutical             April 14, 1992        April 14, 1995
Kingo Diagnostika, Denmark          April 6, 1994         April 6, 1997
Kjemi-Diagnostikk A.S., Norway      May 26, 1993          May 26, 1996
Medical Diagnostic Instruments Ltd. December 20, 1993     December 20, 1996
Medipet Oy                          September 17, 1992    September 17, 1995
Medway BME Corp.                    June 4, 1997          June 4, 2000

                                     -22-
<PAGE>

Petzold                             November 25, 1992/    November 25, 1997
                                    November 25, 1995
Pharmachem Ltd.                     October 22, 1997      October 22, 2000
Pharmascience Inc.                  February 25, 1997     February 25, 2000

Promesan Italie                     March 8, 1997         March 8, 2000
Skafte & Claesson AB                February 8, 1994      February 8, 1997
Smith & Nephew Ltd                  April 19, 1993        April 19, 1996
Thames Laboratories Ltd.            May 24, 1991          May 24, 1996
Uhlmann-Eyraud S.A.                 January 23, 1992      January 23, 1997
United Italian Trading Corp.        February 8, 1995      February 8, 1998
United Italian Trading Corp.        August 15, 1996       August 15, 1999
Utermohlen Medical Care S.A.        February 15, 1998     December 1, 1998

Article 2 - Purchase Price

The contracts listed in Article 1 are assigned subject to the consent of the
relevant contracting party to Purchaser for part of the consideration referred
to in the Asset Purchase Agreement. The receipt of this sum is hereby
acknowledged by Seller.

Article 3 - Power of attorney

Seller hereby gives Purchaser an irrevocable and unconditional power of attorney
to sign on behalf of Seller any deeds or documents or undertake any act or thing
that might be required to effect the above assignment in the name of Purchaser.

Article 4 - Governing Law

This agreement shall be governed by Netherlands law.

Thus agreed and signed, in twofold, on June     9, 1998 at Amsterdam

____________________________________________________________________
Koninklijke Utermohlen N.V.              STC Technologies, Inc.
By: Mr. D.T. van der Vat                            By: Michael Gausling
Its: managing director                     Its: President and CEO

                                     -23-
<PAGE>

                                                           Exhibit 6.2 (ii) (c)
                                                           --------------------

                   form of deed of assignment of the Patent

The undersigned,

1.  Koninklijke Utermohlen N.V., a limited liability company organized under the
    laws of the Netherlands, with its registered offices at Wolvega, the
    Netherlands ("Seller")

and

2.  STC Technologies, Inc., a limited liability company organized under the laws
    of the State of Delaware, with its registered offices at Bethlehem,
    Pennsylvania 18018, the United States of America ("Purchaser");

WHEREAS

Seller and Purchaser have entered into an Agreement for Sale and Purchase of
Assets of the same date (hereinafter "Asset Purchase Agreement"), pursuant to
which Seller shall transfer to Purchaser all its rights to patents and patent
applications related to the Histofreezer Business (as defined in the Asset
Purchase Agreement), as well as know-how, copyrights and all other intellectual
property rights related to the Histofreezer Business;

NOW THEREFORE, THE PARTIES HAVE AGREED AS FOLLOWS:

Article 1 - Patents and Patent Applications

Seller hereby transfers to Purchaser and Purchaser hereby accepts the transfer
of all rights to:

the following patents:

    European patent registration no. EP 0608954 filed on 27 January 1994 and
    granted on 23 April 1997, registered in the following countries: Austria,
    Belgium, Germany, Denmark, France, United Kingdom of Great Britain and
    Northern Ireland, Italy, Luxemburg, Netherlands, Spain and Sweden;

    Australia patent registration      no. 000664788   granted 19 March 1996;
    Germany patent registration        no. 694027316   granted 23 April 1997;
    Japan patent registration          no. 002106456   granted 6 November 1996;
    South Africa patent registration   no. 000940541   granted 30 November 1994;
    Turkey patent registration         no. 000027588   granted 13 June 1995;
    USA patent registration            no. 005738682   granted 14 April 1998;

    and

                                     -24-
<PAGE>

    all related patent registrations in other countries

    (hereinafter jointly: the "Patents"),

and the following patent applications and the registrations that may result
therefrom:

    Argentina patent application          no. 000327298  dated 28 January 1994;
    Brazil patent application             no. 094003874  dated 28 January 1994;
    Canada patent application             no. 002114465  dated 28 January 1994;
    Finland patent application            no. 000940431  dated 28 January 1994;
    Hungary patent application            no. 009400247  dated 28 January 1994;
    India patent application              no. 000003794  dated 24 January 1994;
    Indonesia patent application          no. 000940157  dated 28 January 1994;
    Malaysia patent application           no. 009400215  dated 27 January 1994;
    Mexico patent application             no. 009400745  dated 28 January 1994;
    Norway patent application             no. 000940235  dated 24 January 1994;
    Oekraine patent application           no. 094005073  dated 27 January 1994;
    China patent application              no. 941010872  dated 25 January 1994;
    Poland patent application             no. 000302044  dated 27 January 1994;
    Saudi Arabia patent application       no. 094140653  dated 5 April 1994;
    Thailand patent application           no. 000021368  dated 28 January 1994;
    Czech patent application              no. 000019494  dated 28 January 1994;
    Russia patent application             no. 094002316  dated 27 January 1994;
    Venezuela patent application          no. 000000136  dated 28 January 1994;

    and

    all applications for patents on the basis of the aforementioned patent
    applications and registrations in other countries

    (hereinafter jointly: the "Patent Applications").

including the rights, title and interest therein and all the rights, powers,
privileges and immunities conferred on the proprietor thereof by the grant of
the Patents and arising or accruing from the Patent Applications, free from all
encumbrances and including the right to sue for damages and other remedies in
respect of any infringement on the Patents and the Patent Applications, which
may have occurred prior to the date hereof, and to the intent that the grant of
a patent pursuant to the Patent Applications shall be in the name of and shall
vest in Purchaser.

Article 2 - Know-How and Intellectual Property Rights

Seller is the sole owner of the know-how related to the Histofreezer Business,
know-how meaning, inter alia, all information, data, techniques, procedures,
experimental results, redesigns, renewals, extensions and other secret
proprietary knowledge, including but not limited to Patents and Patent
Applications (hereinafter: the "Know-How"), and Seller is the sole owner of all
other industrial and intellectual property rights relevant to the development,
design and manufacturing of the aforementioned products and the

                                     -25-
<PAGE>

Histofreezer Business, including but not limited to copyrights (hereinafter: the
"Intellectual Property Rights").

Seller hereby transfers to Purchaser and Purchaser hereby accepts the transfer
of the rights relating to the Know-How and the Intellectual Property Rights,
free from all encumbrances and including the right to sue for damages and other
remedies in respect of any infringement on the Know-How or the Intellectual
Property Rights, which may have occurred prior to the date hereof.

This article obligates Seller, inter alia, to provide Purchaser as soon as
possible, but in any event within three months, with all relevant information
and documents regarding the design and manufacture of products, including but
not limited, inventions that have been patented, or for which an application for
a patent has been filed. Such information and documents, consisting of Know-How
and the Intellectual Property Rights, shall include but not be limited to
experiences, methods, techniques, skills, manufacturing secrets etc. etc. on the
basis for which a competent engineer could realize a similar invention, as well
as drawings, calculations and tolerances etc. etc.

Article 3 - Purchase Price

The Patents, the Patent Applications, Know-How and Intellectual Property Rights
will be transferred to Purchaser for the consideration referred to in the Asset
Purchase Agreement. The receipt of this sum is hereby acknowledged by Seller.

Article 4 - Power of attorney

Seller hereby gives Purchaser an irrevocable and unconditional power of attorney
to sign on behalf of Seller any deeds or documents or undertake any act or thing
that might be required to effect the above transfers and register the Patents,
the Patent Applications, Know-How and Intellectual Property Rights with the
proper authorities in the name of Purchaser as owner.

Article 5 - Governing Law

This agreement shall be governed by Netherlands law.

Thus agreed and signed, in threefold, on June 9, 1998 at Amsterdam

___________________________              ___________________________
Koninklijke Utermohlen N.V.              STC Technologies, Inc.
By: Mr. D.T. van der Vat                 By: Michael Gausling
Its: managing director                   Its: President and CEO

                                     -26-
<PAGE>

                  Exhibit 6.2 (ii) (d)
                  --------------------

                  form of deed of assignment of the Trademark

The undersigned,

1     Koninklijke Utermohlen N.V., a limited liability company organized under
      the laws of the Netherlands, with its registered office at Wolvega, the
      Netherlands ("Seller")
and

2     STC Technologies, Inc., a limited liability company organized under the
      laws of the State of Delaware, with its registered offices at Bethlehem,
      Pennsylvania 18018, the United States of America ("Purchaser");

WHEREAS

Seller and Purchaser have entered into an Agreement for Sale and Purchase of
Assets of the same date (hereinafter "Asset Purchase Agreement"), pursuant to
which Seller shall transfer to Purchaser all its rights to trademarks and
trademark applications related to the Histofreezer Business (as defined in the
Asset Purchase Agreement);

NOW THEREFORE, THE PARTIES HAVE AGREED AS FOLLOWS:

Article 1 - Trademarks and Trademark Applications

Seller hereby transfers to Purchaser and Purchaser hereby accepts the transfer
of:

     in classes 5 and 10:
     --------------------

     International trademark registration no. 525 069 filed on 9 June 1988,
     registered in the following countries: Algeria, Austria, Belarus,
     Bulgaria, Czech, Egypt, Germany, France, Hungary, Italy, Morocco, Portugal,
     Romania, Russia, Slovakia, Spain and Vietnam;

    International trademark registration no. 647 331 filed on 22 November 1995,
    registered in the following countries: China and Poland;

    Benelux trademark registration       no. 430 435 dated 15 May 1987;
    East-Germany trademark registration  no. 2007468 dated 15 March 1991;

                                     -27-
<PAGE>

    in class 10:
    ------------

    Argentina trademark registration     no. 1470481    dated 30 September 1993;
    Australia trademark registration     no. B575267    dated 26 March 1992;
    Brazil trademark registration        no. 816539375  dated 14 September 1993;
    Canada trademark registration        no. 409 060    dated 5 March 1993;
    Denmark trademark registration       no. 10319-1992 dated 6 November 1992;
    Finland trademark registration       no. 127 854    dated 6 September 1993;
    UK trademark registration            no. 1347342    dated 13 June 1987;
    Hong Kong trademark registration     no. 14964/95   dated 25 November 1995;
    Israel trademark registration        no. 84720      dated 4 December 1994;
    Japan trademark registration         no. 3262688    dated 4 February 1997;
    Korea trademark registration         no. 381 811    dated 12 November 1997;
    Mexico trademark registration        no. 441 928    dated 13 September 1993;
    Norway trademark registration        no. 177 901    dated 14 November 1996;
    Saudi Arabia trademark registration  no. 93/3063    dated 21 April 1993;
    Sweden trademark registration        no. 265 704    dated 7 April 1995;
    USA trademark registration           no. 1525479    dated 21 February 1989;

    and

    all related trademark registrations in other countries

    (hereinafter jointly: the "Trademarks"),

and is entitled to the benefit of the following trademark applications and
registrations that may result therefrom:

    in class 10:
    ------------

    Switzerland trademark application  no. 3406/97     dated 30 March 1997;
    Indonesia trademark application    no. D9523881    dated 14 December 1995;
    India trademark application        no. 687 995     dated 23 November 1995;
    Malaysia trademark application     no. 96-00312    dated 9 January 1996;
    Singapore trademark application    no. 11339/95    dated 24 November 1995;
    Thailand trademark application     no. 303 782     dated 6 March 1996;
    Taiwan trademark application       no. 8513436     dated 22 March 1996;
    Paraguay trademark application                     ) instructed, but
    Chilli trademark application                       ) have yet to be
    Venezuela trademark application                    ) filed by
    Peru trademark application                         ) trademark agent

    and

    all applications for trademarks on the basis of the aforementioned trademark
    applications and registrations in other countries and/or in other classes

    (hereinafter jointly: the "Trademark Applications");

                                     -28-
<PAGE>

including the rights, title and interest therein and all the rights, powers,
privileges and immunities conferred on the proprietor thereof by the grant of
the Trademarks and arising or accruing from the Trademark Applications, free
from all encumbrances and including the right to sue for damages and other
remedies in respect of any infringement on the Trademarks and the trademark
Applications, which may have occurred prior to the date hereof, and to the
intent that the grant of a trademark pursuant to the Trademark Applications
shall be in the name of and shall vest in Purchaser.

Article 2 - Purchase Price

The Trademarks and the Trademark Applications will be transferred to Purchaser
for the consideration referred to in the Asset Purchase Agreement. The receipt
of this sum is hereby acknowledged by Seller.

Article 3 - Power of attorney

Seller hereby gives Purchaser an irrevocable and unconditional power of attorney
to sign on behalf of Seller any deeds or documents or undertake any acts or
things that might be required to effect the above transfers and register the
Trademarks, the Trademark Applications, Know-How and Intellectual Property
Rights with the proper authorities in the name of Purchaser as owner.

Article 4 - Governing Law

This agreement shall be governed by Netherlands law.

Thus agreed and signed, in threefold, on June 9, 1998 at Amsterdam

---------------------------              -----------------------------
Koninklijke Utermohlen N.V.              STC Technologies, Inc.
By: Mr. D.T. van der Vat                 By: Michael Gausling
Its: managing director                   Its: President and CEO

                                     -29-
<PAGE>

                                                                     Exhibit 4.1

                                  The Prices

<TABLE>
<CAPTION>
Table A
Product                                                           Price per unit
-------                                                           --------------
<S>                                                               <C>
Unit with aerosol can and 40 applicators (medium)                      * *
Unit with aerosol can and 50 applicators (small, mix and long)         * *

     For sales to the distributor in Belgium it has been agreed upon separately
that the Products in Table A will be priced to STC at **

     Other products that are part of this agreement are defined and priced as
follows:

Table B
-------
Box with 20 medium applicators                                         * *
Box with 20 small applicators                                          * *
Sample packaging with aerosol can and 5 applicators (3 medium
  and 2 small)
</TABLE><PAGE>

                                                                    EXHIBIT 10.9

Portions of this exhibit were omitted and filed separately with the Secretary of
the Commission pursuant to an application for confidential treatment filed with
the Commission pursuant to Rule 406 under the Securities Act of 1933Financial
Printing GroupFinancial Printing GroupPortions of this exhibit were omitted and
filed separately with the Secretary of the Commission pursuant to an application
for confidential treatment filed with the Commission pursuant to Rule 406 under
the Securities Act of 1933.  Such portions are marked by a series of asterisks.

                        RESEARCH AND LICENSE AGREEMENT
                        ------------------------------

          This Research and License Agreement, dated April 26, 1995 (the
"Agreement"), is entered into among SRI International, a California nonprofit
public benefit corporation ("SRI"), having a place of business located at 333
Ravenswood Avenue, Menlo Park, California 94025-3493, the David Sarnoff Research
Center (a wholly owned subsidiary of SRI), a Delaware corporation ("Sarnoff"),
having a place of business located at 201 Washington Road, Princeton, New Jersey
08540 and SolarCare Technologies Corporation, a Delaware corporation ("STC"),
having a place of business located at 1745 Eaton Avenue, Bethlehem, Pennsylvania
18018.

                             W I T N E S S E T H :

          Whereas, SRI and Sarnoff own or have rights in certain patent rights
and know-how relating to Up-converting phosphor reporters (Labels), Probes and
instrumentation for use in Diagnostics applications.

          Whereas, STC has licensed certain patent rights and know-how relating
to Up-converting phosphor reporters for use in diagnostics applications.

          Whereas, STC desires to financially support certain research by SRI
and Sarnoff regarding Up-converting phosphor reporters (Labels), Probes and
instrumentation, on the terms and subject to the conditions of the Agreement.

          Whereas, SRI and Sarnoff are willing to grant a license to STC under
SRI's and Sarnoff's rights in such patent rights and know-how, together with the
inventions and other results of such research, to Up-converting phosphor
reporters (Labels), Probes and instrumentation, on the terms and subject to the
conditions of the Agreement.

          Now, Therefore, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties hereto, agreeing to be legally
bound hereby, agree as follows:
<PAGE>

                                                                    EXHIBIT 10.9

          For purposes of the Agreement, the terms defined in this article shall
have the respective meanings set forth below:

          1.1.  "Affiliate" shall mean, with respect to any Person, any other
Person which directly or indirectly controls, is controlled by, or is under
common control with, such Person.  A Person shall be regarded as in control of
another Person if it owns, or directly or indirectly controls, at least fifty
percent (50%) of the voting stock or other ownership interest of the other
Person, or if it directly or indirectly possesses the power to direct or cause
the direction of the management and policies of the other Person by any means
whatsoever.  For purposes of this Agreement, Sarnoff shall not be deemed to be
an Affiliate of SRI.

          1.2.  "Blocking Patent" shall mean any patent rights  owned or
controlled by a Third Party, which are claimed to be infringed by the exercise
of the rights granted hereunder to practice any process or method, or to make,
use or sell any composition or apparatus under the Licensed Patents or Licensor
Improvements.

          1.3.  "Commercial Sale" shall mean, with respect to any Product, the
sale for use or consumption by the general public of such Product, provided,
however, that sales of Product for research, development, investigation,
clinical trials and or evaluation shall not be deemed sales for use or
consumption by the general public, unless the price for such Product is in
excess of Cost plus twenty percent (20%).

          1.4.  "Cost" shall mean the full value of all direct and indirect
expenses relating to the manufacture of a Product, plus thirty percent (30%)
allocation (based on sale price) for overhead expenses.

          1.5.  "Development Period" shall mean the period commencing on the
Effective Date and expiring on the second anniversary of the Effective Date,
unless extended pursuant to Section 3.4 or terminated sooner pursuant to
Sections 13.3 and 13.6.

          1.6.  "Development Program" shall mean the research and development
program described generally in Article 3 and defined, in particular, in the Task
Orders attached hereto as Exhibit A, as amended from time to time in accordance
with this Agreement.

          1.7.  "Diagnostic(s)" shall mean the detection of soluble, suspended
or particulate substances, cells, biological macromolecules and/or other
analytes, including but not limited to proteins, carbohydrates, pharmaceuticals,
nucleic acids, bacteria, viruses and eukaryotic cells.

                                      -2-
<PAGE>

          1.8.   "Effective Date" shall mean the date of this Agreement, as
first written above.

          1.9.   "FDA" shall mean the United States Food and Drug
Administration, or the successor thereto.

          1.10.  "Field" shall mean any and all Diagnostic applications that
involve the use of Up-converting phosphor reporter (Label), Probe and/or
Labelled Probe compositions, materials, combinations, methods and/or processes
and the development, manufacture and sale of apparatus and compositions for use
in such Diagnostic applications.

          1.11.  "First Commercial Sale" shall mean the first Commercial Sale by
STC, its Affiliates or licensees.

          1.12.  "Government Program(s)" shall mean grants, contracts and/or
other arrangements sought from or awarded directly or indirectly by various
departments, agencies or instrumentalities of the United States Government or
the several states in connection with Diagnostics applications within the Field.

          1.13.  "Improvements" shall mean any and all inventions, discoveries,
ideas, processes, methods, compositions, formulae, techniques, information and
data, whether or not patentable, conceived, developed or reduced to practice
during the term of this Agreement that beneficially change or enhance the
economic and/or technical attributes of the Products, the use of the Products
and/or the manufacture of the Products arising out of or in connection with (a)
the Development Program, (b) any activity otherwise funded by STC under this
Agreement, (c) any activity in connection with the use of the STC Patent Rights
or STC Know-How, (d) any activity in connection with the use of the Licentec
Rights and/or (e) as set forth in Section 5.1, any activity in connection with
any Government Program.

          1.14.  "Instrument Product" shall mean a light emitting apparatus for
use in the Field, which if made, used or sold would infringe one or more Valid
Patent Claims of a Licensed Patent, but for the license granted by this
Agreement, or which otherwise uses or incorporates Licensed Know-How.

          1.15.  "Label" shall mean any chemical substituent that produces,
under appropriate excitation conditions, a detectable optical signal.

          1.16.  "Labelled Probe" shall mean a combination comprising one or
more Labels attached to a Probe or one or more Probes attached to a Label.

          1.17.  "Licensed Know-How" shall mean the SRI Know-How and the
Phosphor Know-How.

          1.18.  "Licensed Patents" shall mean the SRI Patents and the Phosphor
Patent.

                                      -3-
<PAGE>

          1.19.  "Licensors" shall mean Sarnoff and SRI, jointly and severally.

          1.20.  "Licensor Improvements" shall mean any and all Improvements
either (i) conceived or reduced to practice by employees or others acting by or
on behalf of SRI and/or Sarnoff, either alone or jointly with others or (ii)
acquired by SRI and/or Sarnoff by acquisition, license or otherwise.

          1.21.  "Licentec Rights" shall mean the rights granted to STC pursuant
to that certain Research and License Agreement being entered into
contemporaneously herewith, among STC, TPM Europe Holding B.V. ("TPM") and
Rijksuniversiteit Leiden ("Leiden") to practice certain processes or methods,
and to make, have made, use or sell certain compositions.

          1.22.  "Materials" shall mean phosphor particles and compositions,
biological reagents and other matter, laser diodes and other electronic and
optical devices to be supplied by SRI or Sarnoff to STC under this Agreement.

          1.23.  "Net Sales" shall mean, with respect to any Product, the
proceeds received by STC from the Commercial Sales of Product to independent
customers who are not Affiliates, less (a) credits, allowances, discounts and
rebates to, and chargebacks from the account of, such independent customers for
spoiled, damaged, out-dated, rejected or returned Product; (b) actual freight
and insurance costs incurred in transporting such Product in final form to such
customers; (c) cash, quantity and trade discounts; and (d) sales, use, value-
added and other taxes or governmental charges incurred in connection with the
exportation or importation of such Product in final form.

          1.24.  "Person" shall mean an individual, corporation, partnership,
trust, business trust, association, joint stock company, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization, government,
governmental agency, authority or instrumentality, or any other form of entity
not specifically listed herein.

          1.25.  "Phosphor Know-How" shall mean all technology, information and
data, which is not generally known, including but not limited to discoveries,
formulae, procedures, protocols, techniques, methods and results of
experimentation and testing, which are necessary or useful for STC (i) to make
use or sell in the Field, any composition, which is described in or related to
the Phosphor Patent, in which Sarnoff or SRI has an ownership or licensed
interest as of the date or during the term of this Agreement or (ii) to practice
any process related to any such compositions which are described in or related
to the Phosphor Patent.

          1.26.  "Phosphor Patent" shall mean (a) pending ********************
******************************************************************************
*************************************, and all corresponding foreign patent
applications heretofore or hereafter filed or having legal force in any country
owned by or licensed to Sarnoff, (b) all patent applications that claim any
Improvement heretofore or hereafter filed or having legal force in any country
owned by or licensed to Sarnoff, (c) all patents that have issued or in

                                      -4-
<PAGE>

the future issue from the patent applications described in clauses (a) and (b)
above, including utility, model and design patents and certificates of
invention, and (d) all divisionals, continuations, continuations-in-part,
reissues, renewals, extensions or additions to any such patent applications and
patents; all to the extent and only to the extent that Sarnoff has the right to
grant licenses, immunities or other rights thereunder as of the date or during
the term of the Agreement.

          1.27.  "Probe" shall mean a binding component which binds
preferentially to one or more targets with an affinity sufficient to permit
discrimination of Labelled Probe bound to a target from non-specifically bound
Labelled Probe (i.e., background).

          1.28.  "Product(s)" shall mean the Instrument Product and the Test
Product.

          1.29.  "Royalty Term" shall mean, with respect to each Product in each
country, the period of time equal to the longer of (a) ten (10) years from the
date of the First Commercial Sale of such Product in such country or (b) the
term that one or more Valid Patent Claims of a Licensed Patent would infringe
the manufacture, use or sale of a Product, but for the license granted by this
Agreement.

          1.30.  "SRI Know-How" shall mean all technology, information and data,
which is not generally known, including but not limited to discoveries,
formulae, procedures, protocols, techniques, methods and results of
experimentation and testing, which are necessary or useful for STC to practice
in the Field any process or method, or to make use or sell in the Field, any
composition, which is described in or related to (i) the SRI Patents or (ii) SRI
Invention Disclosure P-3409 entitled "Method of Preparing Small Particle Size
Probes" by Luke Schneider filed on August 16, 1993 with the SRI Office of
Intellectual Property, in all cases, in which Sarnoff or SRI has an ownership or
licensed interest as of the date or during the term of this Agreement.

          1.31.  "SRI Patents" shall mean (a) pending **************************
********************************************************************************
***********************************************************************, and all
corresponding foreign patent applications heretofore or hereafter filed or
having legal force in any country owned by or licensed to SRI or Sarnoff, (b)
all patent applications that claim any Improvement heretofore or hereafter filed
or having legal force in any country owned by or licensed to SRI or Sarnoff, (c)
all patents that have issued or in the future issue from the patent applications
described in clauses (a) and (b) above, including utility, model and design
patents and certificates of invention, and (d) all divisionals, continuations,
continuations-in-part, reissues, renewals, extensions or additions to any such
patent applications and patents; all to the extent and only to the extent that
SRI or Sarnoff has the right to grant licenses, immunities or other rights
thereunder as of the date or during the term of the Agreement.

          1.32.  "STC Know-How" shall mean all technology, information and data,
which is not generally known, including, but not limited to, formulae,
procedures, protocols, techniques

                                      -5-
<PAGE>

and results of experimentation and testing, which constitute an Improvement
conceived and reduced to practice during the term of this Agreement by employees
or others acting on behalf of STC, either alone or jointly with others (but not
including Improvements conceived by employees or others acting on behalf of
Licensors, either alone or jointly with others), in which STC has an ownership
or licensed interest, but shall not include any Licentec Rights.

          1.33.  "STC Patent Rights" shall mean (a) all patent applications that
claim any Improvement filed or having legal force in any country during the term
of this Agreement, owned by or licensed to STC, (b) all patents that have issued
or in the future issue therefrom, including utility, model and design patents
and certificates of invention and (c) all divisionals, continuations,
continuations-in-part, reissues, renewals, extensions or additions to any such
patent applications and patents; all to the extent and only to the extent that
STC has the right to grant licenses, immunities or other rights thereunder as of
the date or during the term of the Agreement, but shall not include any Licentec
Rights.

          1.34.  "Territory" shall mean world-wide.

          1.35.  "Test Product" shall mean a composition for use in the Field,
which if made, used or sold would infringe one or more Valid Patent Claims of a
Licensed Patent, but for the license granted by this Agreement, or which
otherwise uses or incorporates Licensed Know-How.

          1.36.  "Third Party" shall mean any Person other than SRI, Sarnoff,
STC, TPM, Leiden, GIB (as such term is defined in Section 17.5) and their
respective Affiliates and employees.

          1.37.  "Up-converting" shall mean the excitation of any phosphor
particle by light, which produces emission resulting light having a shorter
wavelength than the wavelength of the excitation light.

          1.38.  "Valid Patent Claim" shall mean a claim of an issued and
unexpired patent, which has not been held revoked, unenforceable or invalid by a
decision of a court or other governmental agency of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal, or which has not
been admitted to be invalid or unenforceable through reissue or disclaimer or
otherwise.

                                   ARTICLE 2

                        REPRESENTATIONS AND WARRANTIES
                        ------------------------------

          2.1.  Licensors represent and warrant to STC, as follows:

                2.1.1.  Licensors own and hold good, marketable and legal title
to the Licensed Patents and Licensed Know-How.

                                      -6-
<PAGE>

          2.1.2.  Licensors have not previously granted any rights (and are not
bound by any agreement to grant any rights) in the Licensed Patents or Licensed
that conflict with the rights granted to STC hereunder.

          2.1.3.  Each of Licensors is a corporation, duly organized, validly
existing and in good standing under the laws of its state of incorporation, with
the power and authority to own the Licensed Patents and the Licensed Know-How
and to sign, deliver and perform all of its obligations under this Agreement.

          2.1.4.  Each of Licensors has taken all necessary actions on its part
to authorize the execution, delivery and performance of the obligations
undertaken in this Agreement.  This Agreement has been duly, executed and
delivered by and on behalf of each of Licensors and constitutes the legal, valid
and binding obligations of Licensors, enforceable against them in accordance
with its terms.

          2.1.5.  All consents, approvals, licenses and authorizations of United
States government agencies and other persons required to be obtained in
connection with this Agreement have been properly obtained and are in full force
and effect.

          2.1.6.  The execution, delivery and performance of this Agreement (A)
does not, in any material respect, conflict with or violate any applicable
statute, law, rule or regulation (B) does not conflict with or violate any
organizational, charter or internal governance document of each of Licensors and
(C) does not conflict with or constitute a default under any contract, agreement
or obligation of each of Licensors.

          2.1.7.  As of the Effective Date, there is no litigation, other legal
action or claim pending, threatened or reported contesting the validity of or
right to use the Licensed Patents and/or Licensed Know-How and there has been no
notice of any infringement upon or conflict with any asserted rights of Third
Parties.

          2.1.8.  To the best knowledge of Sarnoff and SRI, each of Licensors
has delivered to STC all information and documents in their possession or under
their control prior to December 31, 1994 relating to the Licensed Patents and
Licensed Know-How.

     2.2. STC represents and warrants to Licensors, as follows:

          2.2.1.  STC has the legal right to use and sublicense the Licentec
Rights, in accordance with the terms of this Agreement.

          2.2.2.  STC is a corporation, duly organized, validly existing and in
good standing under the laws of the State of Delaware, with the power and
authority to sign, deliver and perform all of its obligations under this
Agreement.

                                      -7-
<PAGE>

          2.2.3.  STC has taken all necessary actions on its part to authorize
the execution, delivery and performance of the obligations undertaken in this
Agreement.  This Agreement has been duly executed and delivered by and on behalf
of STC and constitutes legal, valid and binding obligations enforceable against
STC in accordance with its terms.

          2.2.4.  All consents, approvals, licenses and authorizations of United
States governmental agencies and other persons required to be obtained in
connection with this Agreement have been properly obtained and are in full force
and effect.

          2.2.5.  The execution, delivery and performance of this Agreement (A)
does not, in any material respect, conflict with or violate any applicable
statute, law, rule or regulation, (B) does not conflict with or violate any
organizational, charter or internal governance document of STC and (C) does not
conflict with or constitute a default under any contract, agreement or
obligation of STC.

                                   ARTICLE 3

                              DEVELOPMENT PROGRAM
                              -------------------

          3.1.  Conduct of Research.  The Development Program to be performed by
                -------------------
Licensors shall be administered through Sarnoff and during the Development
Period, each of Sarnoff and SRI shall use their commercially reasonable efforts
to conduct the Development Program in accordance with the tasks set forth on
Exhibit A (each, a "Task" and, collectively, the "Tasks"), as such Exhibit may
be amended, in writing, from time to time by Task Orders (as such term is
hereinafter defined).  Each Task shall describe in reasonably sufficient detail
(a) the research activities to be conducted and the objectives thereof, (b) the
responsibilities of the parties, the principal researchers (if any) and any
specific resources required to conduct the research activities, (c) the total
funding and the payment schedule therefor and (d) an estimated schedule for such
activities.  Sarnoff and SRI shall conduct the Development Program in good
scientific manner, and in compliance in all material respects with all
requirements of applicable laws, rules and regulations.  Because the research
services to be performed are of an advisory or experimental nature, Sarnoff and
SRI do not warrant that the Development Program, in whole or in part, will be
successful or achieve the objectives set forth on Exhibit A.

                3.1.1.  From time to time during the term of the Development
Period, (i) STC and Sarnoff may mutually agree on the scope of new Tasks to be
conducted by Sarnoff to be included in the Development Program and (ii) STC and
SRI may mutually agree on the scope of new Tasks to be conducted by SRI to be
included in the Development Program.

                3.1.2. Each new Task shall be in writing ("Task Order") and
shall reference the Agreement and describe in reasonably sufficient detail (a)
the research activities to be conducted and the objectives thereof, (b) the
responsibilities of the parties, the principal researchers (if any) and any
specific resources required to conduct the research activities, (c) the total
funding and the payment schedule therefor and (d) an estimated schedule for such
activities.

                                      -8-
<PAGE>

               3.1.3.  STC and SRI or Sarnoff, as the case may be, shall execute
a copy of each mutually acceptable Task Order which thereafter shall be
incorporated in and made a part of this Agreement.

               3.1.4.  Upon Sarnoff's receipt of a fully-executed copy of the
Task Order and any initial research payment required for such Task, Sarnoff
and/or SRI shall initiate each new Task under the Development Program.

               3.1.5.  Licensors shall ensure that all of their respective
employees and independent contractors have executed and delivered binding
agreements agreeing to assign all intellectual property rights to Sarnoff or
SRI, as the case may be, and to promptly report the conception and reduction to
practice of all discoveries and inventions to the Sarnoff or SRI Intellectual
Property Office, as the case may be.

          3.2. Funding.  In consideration of the participation of Sarnoff and
               -------
SRI in the Development Program, STC agrees to pay to Sarnoff a research fee of
two hundred thousand dollars ($200,000) for the work to be performed during the
first year of this Agreement (the "Year 1 Fee"). The Year 1 Fee shall be paid to
Sarnoff, as set forth below. Sarnoff shall not incur expenses in conducting the
Development Program in excess of such total amount, and STC shall have no
obligation to reimburse Sarnoff for expenses incurred in excess of such total
amount, unless otherwise expressly agreed to in writing by both parties. If it
appears to Sarnoff that the Development Program to be conducted during the first
year of this Agreement cannot be completed without incurring expenses in excess
of such total amount, Sarnoff shall notify STC, and STC shall determine whether
(a) to discontinue the Development Program when such total amount has been
spent, (b) to authorize Sarnoff to spend additional amounts, or (c) to revise
the scope of the Development Program, as appropriate. Such Year 1 Fees are non-
refundable and non-creditable against future royalties, and following an initial
payment by STC to Sarnoff of one hundred thousand dollars ($100,000) within 7
days of the Effective Date, Sarnoff and SRI shall initiate work on the
Development Program. Such initial payment shall be applied to the Tasks in
accordance with Exhibit A and subsequent Task Orders. Thereafter, all future
payments by STC will be based on the Task Order schedule for payment terms as
called for under Section 3.1.2 (c) above.

          3.3. Second Year Funding.  Not less than sixty (60) days prior to the
               -------------------
expiration of the first year of the Development Period, Sarnoff shall present a
written development proposal in the form of proposed Task Orders, for the second
year effort.  STC shall commit to a research fee of three hundred thousand
dollars ($300,000) for the work to be performed during the second year (the
"Year 2 Fee") to maintain the license granted herein, except in the event that
the Development Program is terminated or modified by STC pursuant to Sections
13.3 and 13.6 or the second following sentence. The Year 2 Fee shall be paid in
accordance with the last sentence of this Section 3.3. Notwithstanding the
commitment of the Year 2 Fee and, in addition to the rights of STC set forth in
the second sentence of this Section 3.3, STC may request that the Year 2 Fee be
reduced to an amount less than three hundred thousand dollars ($300,000) in the
event that Sarnoff and SRI have failed to substantially perform the Development
Program during the first year of the Development

                                      -9-
<PAGE>

Program. In such case, a new Development Program for the second year may be
entered into by written consent of the Parties. The Year 2 Fee is non-refundable
and non-creditable against future royalties. The payment by STC of the Year 2
Fee will be in accordance with the terms of the Task Orders for the second year
of the Development Program.

          3.4.  Renewal.  By mutual written agreement and consent of the
                -------
Parties, the Development Program may be extended beyond the Development Period
for additional periods of one (1) year each.  If STC desires to renew the
Development Program, STC shall give Sarnoff written notice of such election not
less than sixty (60) days prior to the expiration of the then current
Development Period, as applicable.  Sarnoff shall have thirty (30) days to
present a written development proposal in the form of proposed Task Orders for
the renewal year.

          3.5.  Records.  Sarnoff, on behalf of the Licensors, shall maintain
                -------
records, in sufficient detail and in good scientific manner, which shall reflect
all work done and results achieved in the performance of each Task included in
the Development Program (including all data in the form required under all
applicable laws and regulations).

          3.6.  Meetings and Progress Reports.  During the term of the
                -----------------------------
Development Program, Sarnoff and SRI shall keep STC generally informed of the
progress under each Task, including telephonic conferences or other
communications at STC's request and meetings at Sarnoff, SRI or STC, at STC's
request.  The parties will meet approximately four times a year, but in no case
shall there be (i) more than four (4) months between meetings or a delay of more
than one (1) month from the date of completion of a Task, except as mutually
agreed in writing.  The first meeting shall be held at Sarnoff shortly after the
Effective Date.  The reasonable travel and subsistence costs for those SRI
and/or Sarnoff meeting participants invited by STC to attend a meeting will be
invoiced separately from Development Program payments and shall be paid by STC,
upon the presentation of accurate and complete conforming documentation.
Sarnoff or SRI, as the case may be, will provide STC with minutes of each
meeting within ten (10) days after the conduct of such meeting.  STC shall give
GIB (as such term is defined in Section 17.5) prompt notice of the arrangement
of any proposed meeting between STC and any Licensor relating to the Development
Program.  A representative of GIB (reasonably acceptable to the parties) shall
be permitted to attend any such meeting.  All costs and expenses of GIB and its
representative in connection with attendance at such meeting shall be borne by
GIB.  A written report from Sarnoff and SRI containing, in reasonable detail, a
description of the work performed by Sarnoff and SRI under each Task of the
Development Program and the results thereof will be transmitted to STC upon the
first to occur of (i) fifteen (15) days after the completion of each Task and
(ii) five (5) days prior to each scheduled meeting relating to such Task.

          3.7.  Final Task Report.  Within thirty (30) days following the
                -----------------
completion of each Task, Sarnoff shall prepare and provide STC with a detailed
written final Task report, which shall describe the work performed by Sarnoff
and SRI under each Task of the Development Program and the results thereof.

                                      -10-
<PAGE>

          3.8.  Development Program Information.  Except in the case of
                -------------------------------
Improvements owned by STC or Jointly by STC, Sarnoff and SRI (as set forth in
Section 12.1), SRI and Sarnoff shall own all information, data and other results
(including, but not limited to resulting patent applications and patents)
achieved by SRI and Sarnoff in the performance of the Development Program, all
of which shall be deemed Licensor Improvements licensed to STC under the license
granted to STC hereby, as set forth in Section 4.3 hereof.

          3.9.  Materials.
                ---------

                3.9.1.  From time to time, by Task Order, during the Development
Period, upon the request of STC, Sarnoff and SRI shall provide STC with
reasonable research quantities of Materials for use by STC solely to develop and
commercialize Products in the Field.  The cost of such Materials is included
within the total amount of Year 1 Fees and Year 2 Fees described above.

                3.9.2.  All Materials provided by Sarnoff and SRI to STC under
Section 3.9.1 above (a) shall remain the sole property of Sarnoff and SRI, (b)
shall be used by and under the control of STC solely to develop and
commercialize Products in the Field, (c) shall not be used by or delivered to
any Third Party without the prior written consent of Sarnoff, and (d) may be
used in connection with in vitro Diagnostics of samples obtained from human
                        -- -----
subjects, but shall not otherwise directly involve the in vivo application in or
                                                       -- ----
to human subjects, without the prior written consent of Sarnoff or SRI.

                3.9.3.  ALL MATERIALS PROVIDED BY SARNOFF OR SRI UNDER THE
AGREEMENT ARE PROVIDED "AS IS" AND WITHOUT ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR ANY WARRANTY THAT THE
USE OF THE MATERIALS WILL NOT INFRINGE OR VIOLATE ANY PATENT OR OTHER
PROPRIETARY RIGHTS OF ANY OTHER PERSON.

                                   ARTICLE 4

                                LICENSE GRANTS
                                --------------

          4.1.  Exclusive License.   SRI and Sarnoff hereby grant to STC an
                -----------------
exclusive license, with the right to grant sublicenses, to practice the methods,
and to make, have made, use and sell the Products under the SRI Patents and the
SRI Know-How within the Field and throughout the Territory.  Prior to the grant
of sublicense rights, STC shall inform SRI of the identity of the prospective
sublicensee and shall consult with SRI with respect thereto.  STC shall deliver
a copy of each sublicense under this Agreement to SRI promptly after execution
of the same.  Each sublicense shall be subject to the terms and conditions of
the Agreement.

                                      -11-
<PAGE>

          4.2.  Non-exclusive Licenses.
                ----------------------

                4.2.1.  Sarnoff hereby grants to STC a non-exclusive license,
with the right to grant sublicenses, to practice the methods, and to make, have
made, use and sell the Products under the Phosphor Patent and the Phosphor Know-
How within the Field and throughout the Territory. STC shall deliver a copy of
each sublicense under this Agreement to SRI promptly after execution of the
same. Each sublicense shall be subject to the terms and conditions of the
Agreement.

                4.2.2.  Sarnoff and SRI hereby grant and agree to grant to STC,
for no additional royalty or other consideration, a non-exclusive, worldwide
license, with the right to grant sublicenses, to make, have made, use and sell
the Products under any patent rights of Licensors not included within the scope
of the Licensed Patents or Licensed Know-How, but only to the extent necessary,
within the Field, to make, have made, use and sell the Products under the
Licensed Patents and Licensed Know-How; all to the extent and only to the extent
that SRI or Sarnoff have the right to grant licenses, immunities or other rights
thereunder as of the date or during the term of this Agreement. Each sublicense
shall be subject to the terms and conditions of the Agreement. Notwithstanding
anything to the contrary set forth in this Agreement, STC, its Affiliates or
assigns shall have no right, title, interest or license, either express or
implied, in the Sarnoff technology known as "Microlab," as described in U.S.
Patent application Serial No. 08/338703**** and any improvements, enhancements
or further developments to any of the foregoing (collectively, the "Microlab
Project"). Sarnoff represents, warrants and agrees that (i) it has not utilized
and will not utilize, in connection with the Microlab Project, any rights in the
Licensed Patents, Licensed Know-How and/or Improvements (including Licensor
Improvements) exclusively licensed to STC and (ii) the scope of the Microlab
Project is, and will remain, outside of the scope of the exclusive licenses
granted to STC hereunder, except that, for purposes of the representation,
warranty and agreement set forth in this clause (ii), the word "useful"
appearing in the fifth line of the definition of the term "SRI Know-How" set
forth in Section 1.30 hereof shall be deemed to be deleted.

          4.3.  Improvements and the License Thereof.
                ------------------------------------

                4.3.1.  Licensors shall each, independently, disclose to STC,
within forty-five (45) days after (i) receipt by such Licensor's Intellectual
Property Office of both the reported conception and reduction to practice or
(ii) the acquisition, by assignment, license or otherwise, of any Licensor
Improvements.

                4.3.2.

                    (a)  Subject to Section 4.3.2(c) relating to Improvements
conceived, developed or reduced to practice solely by employees of Sarnoff in
connection with

                                      -12-
<PAGE>

activities relating to the Phosphor Patent and the Phosphor Know-How, SRI
and Sarnoff hereby grant and agree to grant to STC,****************************
********************, an exclusive license, with the right to grant sublicenses
(in accordance with the terms set forth in Section 4.1), to practice the
methods, and to make, have made, use and sell the Products under the Licensor
Improvements relating to clauses (a), (b) (d) and (e) of the definition of
Improvements set forth in Section 1.13 hereof, and the Joint Inventions
described in Section 12.1 (including patents and patent applications) within the
Field and throughout the Territory.

                    (b)  SRI and Sarnoff hereby grant and agree to grant to STC,
************************************************, a non-exclusive license, with
the right to grant sublicenses (in accordance with the terms set forth in
Section 4.1), to practice the methods, and to make, have made, use and sell the
Products under the Licensor Improvements relating to clause (c) of the
definition of Improvements set forth in Section 1.13 hereof within the Field and
throughout the Territory.

                    (c)  Sarnoff hereby grants and agrees to grant to STC,
***********************************************, a non-exclusive license, with
the right to grant sublicenses (in accordance with the terms set forth in
Section 4.2.1), to practice the methods, and to make, have made, use and sell
the Products under the Licensor Improvements relating to those Improvements
conceived, developed or reduced to practice solely by employees of Sarnoff in
connection with activities relating to the Phosphor Patent and the Phosphor
Know-How, within the Field and throughout the Territory.

          4.4.  Reservation of Certain Rights.  Notwithstanding the foregoing,
                -----------------------------
the licenses granted to STC under the Agreement are subject to the reservation
of (a) the right of SRI and Sarnoff to practice the processes and methods, and
to make, use and sell the compositions, matter, apparatus, instruments and
products, which are the subject of claims disclosed in the Licensed Patents or
which constitute Licensed Know-How or Licensor Improvements, (i) for all
commercial purposes outside the Field and (ii) for internal non-commercial
research purposes, and (b) certain rights in favor of the United States
Government pursuant to Title 35 United States Code Chapter 18 and the
regulations promulgated thereunder, in connection with Government Programs.

          4.5.  STC License Grant.  STC hereby grants to Licensors a non-
                -----------------
exclusive, irrevocable, royalty-free license to practice the processes and
methods, and to make, have made, and use the compositions, claimed in the STC
Patent Rights or which constitute STC Know-How within the Territory (a) for all
commercial purposes outside the Field (except in connection with or relating to
the Microlab Project), with the right to grant sublicenses and (b) for internal
non-commercial research purposes (except in connection with or relating to the
Microlab Project, without the right to grant sublicenses.  STC shall disclose
and make available to SRI and Sarnoff information regarding the STC Patent
Rights and the STC Know-How.

          4.6.  Licentec License Grant.  STC hereby grants to Licensors a non-
                ----------------------
exclusive sublicense to practice the processes and methods, and to make, have
made, and use the

                                      -13-
<PAGE>

compositions, claimed in the Licentec Rights, royalty-free (without the right to
grant sublicenses to any Person), for non-commercial internal research purposes
under this Agreement within the Field and within the Territory, to the extent
permitted under the Agreement described in Section 1.21.

          4.7.  Technical Assistance under the License.
                --------------------------------------

                4.7.1.  Upon execution of the Agreement and from time to time
during the term of this Agreement, promptly upon the request of STC (unless
disclosed by SRI and Sarnoff previously under the terms of this Agreement), SRI
and Sarnoff shall disclose and make available to STC all information available
to SRI and Sarnoff and not previously disclosed to STC regarding use within the
Field of the Licensed Patents, Licensed Know-How and Licensor Improvements.

                4.7.2.  Upon execution of the Agreement and from time to time
during the term of this Agreement, promptly upon the request of Licensors, STC
shall disclose and make available to Licensors all information available to STC
and not previously disclosed to Licensors regarding the STC Patent Rights, STC
Know-How and the Licentec Rights.

                4.7.3.  During the term of the Agreement, upon reasonable notice
and during normal business hours, SRI and Sarnoff (a) shall provide such
technical assistance regarding the Licensed Patents, Licensed Know-How and
Licensor Improvements, as STC reasonably requests, to conduct its activities
contemplated by the Agreement, and (b) shall make available to STC such
technical personnel of SRI and Sarnoff as reasonably necessary to provide the
foregoing technical assistance. STC shall reimburse SRI and Sarnoff its standard
research or consulting costs for any such technical assistance, determined in
accordance with SRI's and Sarnoff's normal business practice applied on a
consistent basis, together with all reasonable out-of-pocket travel and other
expenses incurred by SRI and Sarnoff in providing such technical assistance. At
the request of STC, SRI and Sarnoff shall provide STC with estimates of the
anticipated costs of any requested technical assistance prior to undertaking
such technical assistance.

                4.7.4.  During the term of the Agreement, upon reasonable notice
and during normal business hours, STC (a) shall provide such technical
assistance regarding the STC Patent Rights, STC Know-How, Improvements owned by
STC and Licentec Rights, as Licensors reasonably request to conduct their
activities contemplated by the Agreement, and (b) shall make available to
Licensors such technical personnel of STC as reasonably necessary to provide the
foregoing technical assistance. SRI and Sarnoff, as the case may be, shall
reimburse STC its standard research or consulting costs for any such technical
assistance, determined in accordance with STC's normal business practice applied
on a consistent basis, together with all reasonable out-of-pocket travel and
other expenses incurred by STC in providing such technical assistance. At the
request of Licensors, STC shall provide Licensors with estimates of the
anticipated costs of any requested technical assistance prior to undertaking
such technical assistance.

                                      -14-
<PAGE>

                4.7.5.  In the event that STC desires to enter into an agreement
with any Third Party (which, for purposes of this Section 4.7.5 shall not
include GIB and its Affiliates) to provide any contract research and development
services in connection with the research and development of the Products, STC
shall give SRI and Sarnoff first consideration to provide such research or
development services, provided that after discussions concerning the provision
of such contract research and development services, STC shall have no obligation
to enter into such agreement with Sarnoff or SRI.

          4.8.  Supply of Materials.  At the request of STC, from time to time,
                -------------------
during the term of this Agreement, SRI and Sarnoff shall supply to STC (on a
non-exclusive basis) such quantities of Materials, as STC reasonably requests,
for use in the manufacture of Products intended by STC for Commercial Sale,
provided, however, that Sarnoff and SRI shall have no express or implied
obligation to seek or obtain a change in Sarnoff's or SRI's permit status or
establish a FDA GMP facility in which to manufacture phosphors.  The terms of
such supply arrangement shall be such reasonable terms as the parties, in good
faith, negotiate from time to time.  The terms of this Section 4.8 are not
intended to limit the scope of Section 3.9, the subject of which is the supply
of Materials for the development and commercialization of Products in the Field
in connection with the Development Program.

                                   ARTICLE 5

                                OTHER PROGRAMS
                                --------------

          5.1.  Government Programs.  Subject to the terms hereof, SRI and
                -------------------
Sarnoff shall be free to seek Government Programs, provided that all
intellectual property rights invented, discovered, conceived or reduced to
practice in connection therewith, to the extent that Licensors have the ability
to obtain and maintain such rights (with respect to which they shall use their
commercially reasonable efforts) and subject to the requirements and government
reservations under such Government Programs, shall be deemed Licensor
Improvements hereunder.  Licensors shall inform STC of such programs as soon as
practicable after becoming aware of or acquiring an interest in pursuing such
Government Programs.  Licensors shall give STC first consideration, to the
extent permitted under such Government Programs, to provide research or
development services within STC's areas of expertise, provided that Licensors
shall have no obligation to enter into such arrangement with STC.

          5.2.  Government Programs with STC.
                ----------------------------

          5.2.1.  Certain Government Programs will require the participation of
a for-profit company to commercialize the products developed under such
programs.  Licensors shall inform STC of such Government Programs as soon as
practicable after becoming aware of or acquiring an interest in pursuing such
Government Programs.  SRI and Sarnoff shall grant STC a right of first offer to
become the commercialization partner in connection with such Government Program
and shall provide to STC, both with such offer and during the period from

                                      -15-
<PAGE>

the date STC receives such offer through the date that is the later to occur of
(i) 15 days prior to the submission of a proposal in response to a request for
proposal by SRI or Sarnoff or (ii) 45 days after notification of the award of a
contract to SRI or Sarnoff under such Government Program (the "Evaluation
Period"), all of the written information in its possession or under its control
and access to SRI and Sarnoff personnel so as to enable STC to evaluate and
respond to such offer. During the Evaluation Period, in the event that STC
expresses any preliminary interest in the offer, STC, SRI and Sarnoff shall
conduct good faith discussions and negotiations with respect to such Government
Program and neither SRI or Sarnoff shall be permitted to solicit or conduct
discussions or negotiations with any Third Party with respect to such Government
Program. STC agrees to respond within the Evaluation Period as to whether it
will accept or reject such offer of participation in such Government Program,
and in any event, as promptly as it determines that it has no interest in
participating in such Government Program. In the event that STC does not respond
within the Evaluation Period it will be deemed to have rejected such offer. In
the event that such offer is rejected or deemed rejected, SRI and Sarnoff shall
be permitted to enter into an arrangement with a Third Party (subject to and
only in accordance with Section 5.3 hereof), provided that such arrangement, as
a whole, is on terms no more or less favorable to SRI or Sarnoff and no more
favorable to such Third Party than the arrangement last offered to STC. In
connection with such Government Program and in the event that STC is the prime
contractor, STC shall provide any subcontract research or development services
under the Government Program in the areas that are not areas of expertise of
STC, to SRI or Sarnoff, provided that the terms of such subcontract are
reasonably satisfactory to STC.

                5.2.2.  Rights to subject inventions made with STC in connection
with or arising out of such Government Program shall be deemed Improvements,
subject to this Agreement.

          5.3.  Government Programs without STC.  Should STC reject the offer to
                -------------------------------
participate in such Government Program, the parties agree to seek out a Third
Party, mutually agreeable to STC, SRI and Sarnoff, to participate in such
Government Program.  STC agrees to enter into discussions with such Third Party
to provide the appropriate licenses to such Third Party, provided, however, that
STC shall have no obligation whatsoever to grant a license to such Third Party.

          5.4.  Commercial Programs.  Sarnoff and SRI shall have the right to
                -------------------
market their development capabilities and enter into Third Party agreements
relating to Up-converting phosphor reporters outside the Field.

                                   ARTICLE 6

                    FEES, ROYALTIES AND MILESTONE PAYMENTS
                    --------------------------------------

          6.1.  License and Maintenance Fees.  In partial consideration of the
                ----------------------------
licenses granted to STC in Sections 4.1 and 4.2.1 above, STC shall pay to SRI a
license fee of ********

                                      -16-
<PAGE>

upon the execution of this Agreement. During the term hereof, STC shall also pay
to SRI an annual maintenance fee of ******* on each anniversary after the
completion of the Development Period until the First Commercial Sale of a
Product. Such license and maintenance fees are non-refundable and non-creditable
against future royalties.

          6.2.  Royalties on Test Products.  As additional consideration for the
                --------------------------
license granted to STC to use the Licensed Know-How in connection with the
manufacture, use and sale of the Test Products, during the Royalty Term, STC
shall pay to SRI royalties equal to **************** of Net Sales of Test
Products by STC and its Affiliates.  Upon and after such time as the
manufacture, use and sale of Test Products by STC and its Affiliates would
infringe a Valid Patent Claim relating to a Label method claim set forth in the
SRI Patents, the royalty rate shall be increased by **************** of Net
Sales of Test Products by STC and its Affiliates, in such countries in the
Territory in which there exist such Valid Patent Claims, for the remainder of
the Royalty Term.  Upon and after such time as the manufacture, use and sale of
Test Products by STC and its Affiliates would infringe a Valid Patent Claim
relating to a Probe composition claim set forth in the SRI Patents, the royalty
rate shall be increased by **********  **** of Net Sales of Test Products by STC
and its Affiliates, in such countries in the Territory in which there exist such
Valid Patent Claims, for the remainder of the Royalty Term.

          6.3.  Royalties on Instrument Products.  As additional consideration
                --------------------------------
for the license granted to STC to use the Licensed Know-How in connection with
the manufacture, use and sale of the Instrument Products, during the Royalty
Term, STC shall pay to SRI royalties equal to ****************** of Net Sales of
Instrument Products by STC and its Affiliates.  Upon and after such time as the
manufacture, use and sale of Instrument Products by STC and its Affiliates would
infringe a Valid Patent Claim relating to an apparatus claim set forth in the
SRI Patents, the royalty rate shall be increased by ****************** of Net
Sales of Instrument Products by STC and its Affiliates, in such countries in the
Territory in which there exist such Valid Patent Claims, for the remainder of
the Royalty Term.

          6.4.  Minimum Annual Royalty.  Upon and after the First Commercial
                ----------------------
Sale and during the Royalty Term, STC shall pay to SRI minimum annual royalties
of ******* for the first year, ******* for the second year and ******** per year
thereafter.

          6.5.  Sublicense Fee.
                --------------

                6.5.1.  Except as set forth in Section 6.5.2, during the Royalty
Term, STC shall pay to SRI a sublicense fee of the lesser of (i) **************
****** or (ii) the percent payable by STC in respect of sublicenses to TPM
Europe Holding B.V. in connection with the Licentec Rights, of those certain
payments received by STC from the grant of sublicense rights to Third Parties to
make, use or sell Products within the Field and within the Territory. No sales
of Products by Third Parties shall be included in the Net Sales of STC and its
Affiliates. All payments made to SRI in respect of sublicense rights shall be
credited against the minimum royalty obligation of STC set forth in Section 6.4.

                                      -17-
<PAGE>

                6.5.2.  In the event that, in connection with a Government
Program identified to STC by SRI, STC sublicenses its rights granted hereunder
to a Third Party for-profit entity identified by SRI, STC shall pay to SRI a
sublicense fee of ******************** of any consideration received by STC from
the grant of sublicense rights to such Third Parties to make, use or sell
Products within the Field and within the Territory. No sales of Products by such
Third Parties shall be included in the Net Sales of STC and its Affiliates. All
payments made to SRI in respect of sublicense rights shall be credited against
the minimum royalty obligation of STC set forth in Section 6.4.

          6.6.  Third Party Royalties.  With respect to any Product sold in any
                ---------------------
country by STC, its Affiliates or sublicensees, if STC is required to pay
royalties to any Third Party in order to exercise its rights hereunder to
practice any process or method, or to make, use or sell any composition, which
is the subject of a Blocking Patent in such country, then STC shall have the
rights to withhold and/or reduce royalty payments and sublicense fees, in
accordance with the terms set forth in Article 10 hereof.

          6.7.  Reagent Rental Royalties.  Notwithstanding anything set forth in
                ------------------------
Sections 6.2. and 6.3. to the contrary, in the event that STC enters into any
arrangement with a Third Party whereby STC leases (or arranges for a lease) to,
or places (or arranges for the placement) of an Instrument Product at the
facility of a Third Party end user in combination with an agreement to sell Test
Product to such Third Party end user and the prices with respect to the
Instrument Product and Test Product are not separately identified (a "Reagent
Rental Transaction"), STC shall pay royalties as follows: (a) STC shall pay
royalties on the Test Products on the basis of the ****************************
******************************** in the Reagent Rental Transaction and (b) STC
shall pay royalties on the Instrument Product on the basis of ******************
*****************************************************************************
net of any financing charges incurred in connection with such Reagent Rental
Transaction.

                                   ARTICLE 7

                        ROYALTY REPORTS AND ACCOUNTING
                        ------------------------------

          7.1.  Reports, Etc.  During the term of the Agreement following the
                ------------
First Commercial Sale of a Product, STC shall furnish to SRI semi-annual written
reports (with respect to the period from January 1 through June 30 and the
period from July 1 through December 31) showing in reasonably specific detail,
on a country by country basis, (a) the gross sales of each Product sold by STC
and its Affiliates during the reporting period and the calculation of Net Sales
from such gross sales; (b) the royalties payable in United States dollars, if
any, which shall have accrued hereunder based upon Net Sales of each Product;
(c) the withholding taxes, if any, required by law to be deducted in respect of
such sales; (d) the date of the First Commercial Sales of each Product in each
country during the reporting period; (e) the exchange rates used in determining
the amount of United States dollars; (f) the aggregate amount

                                      -18-
<PAGE>

of payments received by STC from the grant of sublicense rights to Third Parties
and (g) the aggregate royalties accrued on Net Sales and the aggregate
sublicense fee accrued during such period and the calculation of the minimum
royalties, if any, payable to SRI for such period. With respect to receipts from
sales of Products invoiced in United States dollars and sublicense fees received
in United States dollars, the gross sales, Net Sales, royalties payable and
sublicense fees shall be expressed in United States dollars. With respect to
receipts from sales of Products invoiced in a currency other than United States
dollars and sublicense fees received in a currency other than United States
dollars, the gross sales, Net Sales, royalties payable and sublicense fees shall
be expressed in United States dollars, calculated using an internationally
acceptable exchange rate for such currency in effect in connection with the
exchange by STC of such other currency into United States dollars (as disclosed
pursuant to clause (e) above). Reports shall be due on the ninetieth (90th) day
following the close of each period. STC shall keep complete and accurate records
in sufficient detail to properly reflect all gross sales and Net Sales and to
enable the royalties payable hereunder to be determined.

          7.2.  Audits.
                ------

                7.2.1.  Upon the written request of SRI and not more than once
in each calendar year, STC shall permit an independent certified public
accounting firm of nationally recognized standing, selected by SRI and
reasonably acceptable to STC, at SRI's expense, to have access during normal
business hours to such of the records of STC as may be reasonably necessary to
verify the accuracy of the royalty reports hereunder for any year ending not
more than thirty-six (36) months prior to the date of such request. The
accounting firm shall disclose to SRI only whether the records are correct or
not and the specific details concerning any discrepancies. No other information
shall be shared.

                7.2.2.  If such accounting firm concludes that additional
royalties were owed during such period, STC shall pay the additional royalties
within thirty (30) days of the date SRI delivers to STC such accounting firm's
written report so concluding. The fees charged by such accounting firm shall be
paid by SRI; provided, however, if the audit discloses that the royalties
payable by STC for the audited period are more than one hundred five percent
(105%) of the royalties actually paid for such period, then STC shall pay the
reasonable fees and expenses charged by such accounting firm.

                7.2.3.  STC shall include in each sublicense granted by it
pursuant to the Agreement a provision requiring the sublicensee to make reports
to STC, to keep and maintain records of sales made pursuant to such sublicense
and to grant access to such records by SRI's independent accountant to the same
extent required of STC under the Agreement. Upon the expiration of thirty-six
(36) months following the end of any year, the calculation of royalties payable
with respect to such year shall be binding and conclusive upon SRI and STC and
their respective Affiliates.

          7.3.  Confidential Financial Information.  Licensors shall treat all
                ----------------------------------
financial information subject to review under this article or under any
sublicense agreement as

                                      -19-
<PAGE>

confidential, and shall cause its accounting firm to retain all such financial
information in confidence.

                                   ARTICLE 8

                                   PAYMENTS
                                   --------

          8.1.  Payment Terms.  Royalties shown to have accrued by each royalty
                -------------
report provided for under Article 7 above shall be due and payable on the date
such royalty report is due.  Payment of royalties in whole or in part may be
made in advance of such due date.

          8.2.  Payment Method.  Except as provided in this section, all
                --------------
payments under the Agreement shall be paid in United States dollars, and all
such payments shall be originated from a United States bank located in the
United States and made by bank wire transfer in immediately available funds to
such account as the party to whom the payment is due shall designate before such
payment is due.

          8.3.  Exchange Control.  If at any time legal restrictions prevent the
                ----------------
prompt remittance of part or all royalties with respect to any country where the
Product is sold, STC shall give prompt written notice to SRI of such event and
the reasons therefor, and shall use reasonable commercial methods to make such
payment through lawful means or methods.  In the event that, notwithstanding the
efforts set forth in the preceding sentence, STC is unable to lawfully remit
such royalties, it shall establish a separate bank account in such country, on
behalf of SRI, into which account the proper amount of royalties with respect to
sales of Product in such country shall be deposited, whereupon the obligation of
STC to pay SRI such royalties shall be deemed satisfied.

          8.4.  Withholding Taxes.  All amounts owing from one party to the
                -----------------
other under the Agreement shall not be grossed-up to account for any withholding
taxes, value-added taxes or other taxes, levies or charges with respect to such
amounts payable by one party to the other, their Affiliates or sublicensees, or
any taxes required to be withheld by the party owing amounts hereunder, its
Affiliates or sublicensees to the extent such taxes are imposed by reason of the
party owing amounts hereunder, its Affiliates or sublicensees having a permanent
establishment in any country or otherwise being subject to taxation by such
country.

                                   ARTICLE 9

                             DILIGENCE OBLIGATIONS
                             ---------------------

          9.1.  Research, Development and Commercialization Efforts.  STC shall
                ---------------------------------------------------
use its commercially reasonable efforts to research, develop and commercialize,
to obtain all regulatory approvals to manufacture and market, and to commence
marketing and market, such Products in

                                      -20-
<PAGE>

such countries as STC determines are commercially feasible. STC, at its sole
expense, shall fund all such efforts at an annual minimum level of $1,000,000
beginning from the Effective Date of this Agreement and continuing through the
first to occur of the third (3rd) anniversary of the Effective Date or the
First Commercial Sale of Product. In the event that the First Commercial Sale of
Product has not occurred on or prior to such third (3rd) anniversary,
thereafter, until the First Commercial Sale of Product, STC, at its sole
expense, shall fund all such efforts at an annual minimum level of $2,000,000.
After such First Commercial Sale of Product such minimum annual funding
obligation shall cease and STC shall use commercially reasonable efforts to meet
the reasonably foreseeable market demand therefor.

          9.2.  Records.  STC shall maintain records, in sufficient detail and
                -------
in good scientific manner appropriate for patent purposes, which shall reflect
all work done and results achieved in the performance of its research and
development regarding the STC Patent Rights and STC Know-How (including all data
in the form required under all applicable laws and regulations).

          9.3.  Reports.  Within ninety (90) days following the last day of June
                -------
and December during the term of the Agreement, STC shall prepare and deliver to
SRI a written report which shall describe, in reasonably sufficient detail, (a)
the research performed to date employing the Licensed Patents and Licensed Know-
How, (b) the progress of the development of Products, and (c) the status of
obtaining the necessary approvals to manufacture and market Products.

                                  ARTICLE 10

                     INFRINGEMENT ACTIONS BY THIRD PARTIES
                     -------------------------------------

          10.1.  Patent Defense, Blocking Patents, Etc.
                 -------------------------------------

                 10.1.1.  If the manufacture, use or sale of a Product by STC,
its Affiliates, or licensees (collectively, the "Group") (i) results in any
claim for patent infringement against the Group because of a Blocking Patent or
(ii) if a member of the Group shall be sued by a Third Party for infringement of
a Third Party's patent rights, and the alleged infringing process, method or
composition is claimed under the Licensed Patents and/or Licensor Improvements,
the party to this Agreement having notice of such claim shall promptly notify
the others in writing, setting forth the facts in reasonable detail. STC shall
have the right, in its sole discretion, to control the defense of such claim or
suit with counsel of its choice at its own expense, in which event Licensors
shall have the right to be represented by one (1) advisory counsel of their own
selection at their own expense, and each Licensor shall cooperate fully in the
defense of such suit, and shall furnish to STC all evidence and assistance in
its control. Subject to Sections 10.1.4 and 10.1.5, STC shall not have the right
to settle the suit or otherwise consent to an adverse judgment in such suit that
diminishes the rights or interests of the Licensors or imposes additional

                                      -21-
<PAGE>

obligations on the Licensors, without the express written consent of Licensors,
which consent shall not be withheld unreasonably. If STC does not elect within
thirty (30) days after such notice to so control the defense of such suit,
Licensors may undertake such control at their own expense. STC shall then have
the right to be represented by advisory counsel of its own selection at its own
expense, shall cooperate fully in the defense of such suit, and shall furnish to
Licensors all evidence and assistance in its control. Licensors shall not have
the right to settle the suit or otherwise consent to an adverse judgment in such
suit that diminishes the rights or interests of the Group or imposes additional
obligations on the Group, without the express written consent of STC, which
consent shall not be withheld unreasonably. Any judgments, settlements or
damages payable with respect to legal proceedings covered by this Section 10.1
shall be paid by the party which controls the defense, provided that eighty
percent (80%) of any payment made by STC (including payments under Section
14.1(c)) shall be deducted from any royalty (including minimum royalties) and
sublicense fees otherwise payable by STC to SRI.

          10.1.2.  In connection with any claim or suit arising under Section
10.1.1, eighty percent (80%) of any such costs and expenses incurred by STC and
eighty percent (80%) of any costs and expenses incurred by STC in connection
with its indemnification obligations arising out of clause (c) of Section 14.1
shall be offset against any minimum and other royalties and sublicense fees
payable hereunder.  In addition, in the event and to the extent that STC is
obligated to make royalty payments and pay sublicense fees after deducting such
offset, STC shall have the right to reserve and not pay-over to SRI all royalty
payments and sublicense fees attributable to the country in which the claim of
infringement arose.

          10.1.3.  If the Blocking Patent, claim, or suit is resolved pursuant
to Section 10.1.4(a), STC shall have the right to retain all reserved royalty
payments and sublicense fees.  If the Blocking Patent, claim, or suit is
resolved under Section 10.1.4(b), STC shall pay-over to SRI any reserved royalty
payments and sublicense fees, after deduction of eighty percent (80%) of all
costs, expenses, judgments, settlements and damages incurred by STC in such
matter (including under Section 14.1(c)).  If the Blocking Patent, claim, or
suit is resolved under Section 10.1.5(a), STC shall pay-over to SRI a percentage
of any reserved royalty payments and sublicense fees (after deducting eighty
percent (80%) of all the costs, expenses, judgments, settlements and damages
incurred by STC in such matter, including under Section 14.1(c)) equal to the
ratio of the reduced royalty rate to the royalty rate in effect immediately
prior to such reduction.  STC shall have the right to retain any remaining
reserved royalty payment and sublicense fees (after deducting all such costs,
including under Section 14.1(c)).  If the Blocking Patent, claim, or suit is
resolved under Section 10.1.5(b), STC shall have the right to retain all
reserved amounts.

          10.1.4.  Notwithstanding anything to the contrary set forth herein, if
a Blocking Patent is issued, discovered, or claimed by a Third Party, or, if a
Third Party shall claim or sue a member of the Group for infringement of a Third
Party's patent rights, and the alleged infringing process, method or composition
is claimed under the Licensed Patents and/or Licensor Improvements, then STC
shall have the right, at STC's sole election, and upon 60 (sixty) days written
notice to SRI to:

                                      -22-
<PAGE>

                    (a) terminate this Agreement as to such country and/or to
such Products; or

                    (b) attempt to resolve the problem raised by the Blocking
Patent, claim, or suit, in which event STC's obligations under this Agreement
with respect to such license in such country shall be suspended pending the
resolution of the matter. The matter shall be deemed resolved if STC is granted
a royalty-free license under the Blocking Patents.

          10.1.5.   Notwithstanding anything to the contrary set forth herein,
if STC is unable to resolve the matter without entering into a royalty-bearing
license agreement with such Third Party, then:

                    (a)  The royalty rate for Products sold in such country
shall be reduced by the rate of the royalty bearing license agreement with such
Third Party, but shall be ******************************, in the case of Test
Products, and ******************, in the case of Instrument Products; or

                    (b) STC may terminate this Agreement as to such country on
30 (thirty) days written notice to SRI.

                                  ARTICLE 11

                                CONFIDENTIALITY
                                ---------------

          11.1.  Confidential Information.  During the term of this Agreement,
                 ------------------------
and for a period of five (5) years following the expiration or earlier
termination hereof, each party shall exercise reasonable care to maintain in
confidence all information of the other party (including samples) disclosed by
the other party and identified as, or acknowledged to be, confidential (the
"Confidential Information"), and shall not use, disclose or grant the use of the
Confidential Information, except on a need-to-know basis to those directors,
officers, employees, agents, independent contractors, sublicensees and permitted
assignees, to the extent such disclosure is reasonably necessary in connection
with such party's activities as expressly authorized by this Agreement.  To the
extent that disclosure is authorized by this Agreement, prior to disclosure,
each party hereto shall obtain the written agreement of any such Person, who is
not otherwise bound by fiduciary obligations to such party, to hold in
confidence and not make use of the Confidential Information for any purpose
other than those permitted by this Agreement.  Each party shall notify the other
promptly upon discovery of any unauthorized use or disclosure of the other
party's Confidential Information.

          11.2.  Permitted Disclosures.  The nonuse and nondisclosure
                 ---------------------
obligations contained in this article shall not apply to the extent that (a) any
receiving party (the "Recipient") is required (i) to disclose information by
law, order or regulation of a governmental agency or a court of competent
jurisdiction, or (ii) to disclose information to any governmental agency for
purposes of obtaining approval to test or market a product, provided, in either
case, that the

                                      -23-
<PAGE>

Recipient shall provide written notice thereof to the other party and sufficient
opportunity to object, time permitting, to any such disclosure or to request
confidential treatment thereof; or (b) the Recipient can demonstrate that (i)
the information was public knowledge at the time of such disclosure to the
Recipient, or thereafter became public knowledge, other than as a result of acts
directly or indirectly attributable to the Recipient in violation hereof; (ii)
the information was rightfully known by the Recipient (as shown by its written
records) prior to the date of disclosure to the Recipient by the other party
hereunder; (iii) the information was disclosed to the Recipient on an
unrestricted basis from a Third Party not under a duty of confidentiality to the
other party; or (iv) the information was independently developed by employees or
agents of the Recipient without access to the Confidential Information of the
other party.

                                  ARTICLE 12

                            INVENTIONS AND PATENTS
                            ----------------------

          12.1.  Ownership of Inventions.  The entire right and title in and to
                 -----------------------
all Improvements conceived and reduced to practice in the performance of the
parties' activities contemplated by this Agreement and during the term of this
Agreement (collectively, the "Inventions") (a) by employees or others acting
solely on behalf of SRI, shall be owned solely by SRI ("SRI Inventions"), (b) by
employees or others acting solely on behalf of Sarnoff, shall be owned solely by
Sarnoff ("Sarnoff Inventions"), (c) by employees or others acting solely on
behalf of STC shall be owned solely by STC ("STC Inventions"), and (d) by
employees or others acting jointly on behalf of SRI, Sarnoff and/or STC, shall
be owned jointly by SRI, Sarnoff and/or STC (the "Joint Inventions").  Each
party promptly shall disclose to the other parties the making, conception and
reduction to practice of Inventions by employees or others acting on behalf of
such party.  SRI, Sarnoff and STC each hereby represents that all employees and
other Persons acting on its behalf in performing its obligations under the
Agreement shall be obligated to assign to it, or as it shall direct, all
Inventions conceived by such employees or other Persons.

          12.2.  Invention Responsibilities.  Subject to the provisions of this
                 --------------------------
Article 12 and the last sentence of this Section 12.2, SRI shall be responsible
for and shall control the preparation, filing, prosecution and maintenance of
all patent applications and patents regarding SRI Inventions; Sarnoff shall be
responsible for and shall control the preparation, filing, prosecution and
maintenance of all patent applications and patents regarding Sarnoff Inventions;
and STC shall be responsible for and shall control the preparation, filing,
prosecution and maintenance of all patent applications and patents regarding STC
Inventions.  SRI, Sarnoff and STC shall determine by mutual agreement the party
which shall be responsible for and shall control the preparation, filing,
prosecution and maintenance of all patent applications and patents regarding
Joint Inventions. SRI, Sarnoff and STC each shall cooperate with the other
parties and shall execute all lawful papers and instruments and make all
rightful oaths and declarations as may be necessary in the preparation, filing,
prosecution and maintenance of all patent

                                     -24-
<PAGE>

applications and patents as referred to in this section. Notwithstanding
anything to the contrary set forth in this Section 12.2, neither SRI nor Sarnoff
shall file any patent application containing any information with respect to a
SRI Invention, Sarnoff Invention or Joint Invention in the event that STC
desires to maintain such information or Invention as a trade secret.

          12.3.  Licensed Patents.
                 ----------------

                 12.3.1.  Prosecution of SRI Patents.  SRI shall exert its
                          --------------------------
reasonable commercial efforts to file and prosecute patent applications included
in the SRI Patents in the *****************************************************
*******************************************************************************
and such other countries as the parties mutually agree, and to maintain any
resulting patents. At SRI's discretion, such foreign filing may be initiated
through the Patent Cooperation Treaty designating such countries. SRI shall
provide STC with copies of each such patent application as filed, together with
notice of its filing date and serial number, and copies of all office actions
and responses thereto. In addition, prior to taking any action upon or after the
Effective Date, SRI will consult with STC and its patent counsel in respect of
patent strategy and other matters in connection with the prosecution and
maintenance of the SRI Patents. SRI shall amend or modify any patent application
or other filing, as reasonably requested by STC. Upon and after the issuance of
patents included within the SRI Patents, SRI shall be obligated to maintain such
patents in full force and effect.

                 12.3.2.  Prosecution of Phosphor Patent.  Sarnoff shall exert
                          ------------------------------
its reasonable commercial efforts to file and prosecute patent applications
included in the Phosphor Patent in the*****************************************
*******************************************************************************
************ and such other countries as the parties mutually agree, and to
maintain any resulting patents. At Sarnoff's discretion, such foreign filing may
be initiated through the Patent Cooperation Treaty designating such countries.
Sarnoff shall provide STC with copies of each such patent application as filed,
together with notice of its filing date and serial number, and copies of all
office actions and responses thereto. In addition, prior to taking any action
upon or after the Effective Date, Sarnoff will consult with STC and its patent
counsel in respect of patent strategy and other matters in connection with the
prosecution and maintenance of the Phosphor Patent. SRI shall amend or modify
any patent application or other filing, as reasonably requested by STC. Upon and
after the issuance of patents included within the Phosphor Patent, SRI shall be
obligated to maintain such patents in full force and effect.

                 12.3.3.  Expense Reimbursement by STC.  In connection with the
                          ----------------------------
obligations of SRI and Sarnoff set forth in Sections 12.3.1 and 12.3.2 above,
STC shall reimburse SRI for reasonable fees, costs and expenses, in an amount of
up to ******************************* per year, promptly after the presentation
of accurate and complete invoices and other supporting documentation as STC
reasonably requests.

                                      -25-
<PAGE>

               12.3.4.  Prosecution by STC.  If SRI or Sarnoff should decide
                        ------------------
against or fail to file, prosecute or maintain a patent application or patent in
respect of an Invention in any country, SRI or Sarnoff will notify STC in a
timely manner. STC shall have the right, at its expense, to file, prosecute
and/or maintain such application or patent in any such country. In any such
case, SRI and Sarnoff agree, if requested by STC, to assist and cause its
employees to assist STC in every reasonable way (with out of pocket expenses to
be reimbursed by STC), including execution of documents, to enable STC to take
such action. In the event that SRI or Sarnoff desires to assign a particular
patent application or patent in any country to STC and STC agrees to accept such
assignment, STC agrees to grant to SRI and Sarnoff, in fields of use other than
the Field, an exclusive license in the particular patent application or patent
in that country, with right to sublicense. Each party agrees, upon request, to
inform the other parties of the status of any application or patent in which
such other parties has rights as provided in this Agreement. Notwithstanding
anything to the contrary set forth in this Section, if SRI's or Sarnoff's
decision against or failure to file, prosecute or maintain a patent application
or patent is a breach of an obligation of such party under 12.3.1, 12.3.2 or
another section of this Agreement, STC shall have the right to offset its
expenses against any amount due and owing to SRI and/or Sarnoff, as the case may
be.

               12.3.5.  Enforcement of SRI Patents and Invention Patent Rights.
                        ------------------------------------------------------
Each party shall notify the others of any infringement in the Field known to
such party of the SRI Patents and Invention patent rights and shall provide the
other with the available evidence, if any, of such infringement. STC, at its
sole expense, shall have the right to determine the appropriate course of action
to enforce such patents and patent rights or otherwise abate the infringement
thereof, to take (or refrain from taking) appropriate action to enforce such
patents and patent rights, to sue in the name of SRI and/or Sarnoff, as the case
may be and to control any litigation or other enforcement action and to enter
into, or permit, the settlement of any such litigation or other enforcement
action with respect to such patents and patent rights, and shall consider, in
good faith, the interests of SRI and Sarnoff in so doing. All monies recovered
upon the final judgment or settlement of any such suit to enforce such patents
and patent rights in the Field shall be divided, after payment of counsel and
reimbursement of expenses, ******************** to SRI or Sarnoff and
******************** to STC. Notwithstanding the foregoing SRI and Sarnoff shall
fully cooperate with STC, at STC's request, in the planning and execution of any
action to enforce such patents and patent rights.

               12.3.6.  Enforcement of Phosphor Patent.  STC shall notify
                        ------------------------------
Sarnoff of any infringement in the Field known to STC of Phosphor Patent and
shall provide Sarnoff with the available evidence, if any, of such infringement.
Sarnoff, at its sole expense, shall have the right to determine the appropriate
course of action to enforce the Phosphor Patent or otherwise abate the
infringement thereof, to take (or refrain from taking) appropriate action to
enforce the Phosphor Patent, to control any litigation or other enforcement
action and to enter into, or permit, the settlement of any such litigation or
other enforcement action with respect to the Phosphor Patent, and shall
consider, in good faith, the interests of STC in so doing. If, within sixty (60)
days of receipt of notice from STC, Sarnoff does not abate the infringement or
file suit to enforce the Phosphor Patent against the infringing parties in the
Field, or is STC reasonably determines

                                      -26-
<PAGE>

that Sarnoff is not giving due consideration to its interests, STC shall have
the right to take whatever action it deems appropriate to enforce the Phosphor
Patent and to sue in the name of SRI and/or Sarnoff, as the case may be. The
party controlling any such enforcement action shall not settle the action or
otherwise consent to an adverse judgment in such action that adversely affects
the rights or interests of the non-controlling party or imposes additional
obligations on the non-controlling party, without the prior written consent of
the non-controlling party, which consent shall not be withheld unreasonably. All
monies recovered upon the final judgment or settlement of any such suit to
enforce the Phosphor Patent in the Field shall be divided, after payment of
counsel and reimbursement of expenses, ******************** to SRI or Sarnoff
and ******************** to STC. Notwithstanding the foregoing, SRI, Sarnoff and
STC shall fully cooperate with each other in the planning and execution of any
action to enforce the Phosphor Patent.

                                  ARTICLE 13

                             TERM AND TERMINATION
                             --------------------

          13.1.  Expiration.  Subject to the provisions of this Article 13, this
                 ----------
Agreement shall expire on the expiration of STC's obligation to pay royalties to
SRI under Sections 6.2 and 6.3 above.

          13.2.  Termination by STC.  STC may terminate the Agreement, in its
                 ------------------
sole discretion, upon thirty (30) days prior written notice to SRI.

          13.3.  Termination for Cause.  Except as otherwise provided in Article
                 ---------------------
15 and Section 17.11, a party may terminate the Agreement (a) upon or after the
breach of any material provision of the Agreement by the other party if the
other party has not cured such breach within thirty (30) days after written
notice thereof by the non-breaching party; (b) if the other party voluntarily
commences any action or seeks any relief regarding its liquidation,
reorganization, dissolution or similar act or under any bankruptcy, insolvency
or similar law, other than an action under Chapter 11 of the U.S. Bankruptcy
Code or (c) if a proceeding is commenced or an order, judgment or decree is
entered seeking the liquidation, reorganization, dissolution or similar act or
any other relief under any bankruptcy, insolvency or similar law against the
other party, without its consent, which continues undismissed or unstayed for a
period of sixty (60) days, other than an action under Chapter 11 of the U.S.
Bankruptcy Code.

          13.4.  Termination of Licentec Rights.  Except as set forth below, in
                 ------------------------------
the event that the patent license to STC under the Licentec Rights is
terminated, SRI shall have the right to terminate this Agreement upon thirty
(30) days prior written notice, except, however, (a) if STC is contesting the
termination of such rights, the effect of such notice shall be stayed until
thirty (30) days after a final, binding and unappealable determination that such
termination was proper and lawful, (b) if the Licentec Rights have been assigned
to GIB Laboratories, Inc. and assumed by it, SRI shall not have the right to
terminate this agreement, (c) if the manufacture, use and sale of Products in
the Field do not infringe a Valid Patent Claim of the Licentec Rights, SRI shall
not

                                      -27-
<PAGE>

have the right to terminate this Agreement and/or (d) the termination is with
respect to less than all of the Licentec Rights.

          13.5.  Effect of Expiration or Termination.  Expiration or termination
                 -----------------------------------
of the Agreement shall not relieve the parties of any obligation accruing prior
to such expiration or termination, and the provisions of Articles 11, 14, 16 and
17 shall survive the expiration or termination of this Agreement. Upon
expiration of this Agreement under Section 13.1 above, STC shall have a fully-
paid, non-exclusive license under the Licensed Know-How and Licensor
Improvements in the Field.

          13.6.  Development Program Breach.  Notwithstanding anything to the
                 --------------------------
contrary contained herein, in the event of a breach by SRI or Sarnoff of their
obligations under the Development Program, STC shall have the right to terminate
its obligations under the Development Program in the manner set forth in Section
13.3 (provided that Licensors then do not have the right to terminate this
Agreement as a result of a breach of this Agreement by STC), but all other
provisions of this Agreement shall remain in full force and effect.

                                  ARTICLE 14

               INDEMNIFICATION, INSURANCE, LIMITED LIABILITY AND
                           DISCLAIMER OF WARRANTIES
                           ------------------------

          14.1.  Indemnification by STC.  Except to the extent set forth in this
                 ----------------------
Section 14.1 and in Sections 14.2 and 14.6, STC shall indemnify, defend and by
this Agreement or hold harmless SRI and Sarnoff, their directors, officers,
employees and agents from and against all direct, out-of-pocket, losses,
liabilities, damages and expenses (including reasonable attorneys' fees and
costs) that they may suffer as a result of any claims, demands, actions or other
proceedings made or instituted by any Third Party against any of them and
arising out of or relating to (a) any breach of this Agreement by STC, (b) any
negligence, recklessness or intentional act or omission by  STC in the
performance of its activities contemplated by this Agreement, (c) any claim of
infringement resulting from the use of the Licensed Patents or Licensor
Improvements or (d) any personal injury to or death of any person or damage to
any property in connection with any act or omission by STC in the performance of
its activities contemplated by this Agreement, except to the extent that those
losses, liabilities, damages and expenses arise out of or are related to (y) the
negligence, recklessness or intentional act or omission by SRI or Sarnoff in the
performance of its activities contemplated by this Agreement or (z) any personal
injury to or death of any person or damage to any property in connection with
any act or omission by SRI or Sarnoff in the performance of its activities
contemplated by this Agreement.

          14.2. Indemnification by SRI and Sarnoff.  Except to the extent set
                ----------------------------------
forth in this Section 14.2 and in Sections 14.1, 14.5 and 14.6, SRI and Sarnoff
shall indemnify, defend and hold harmless STC and its directors, officers,
employees and agents from and against all direct, out-of-pocket, losses,
liabilities, damages and expenses (including reasonable attorneys' fees and

                                      -28-
<PAGE>

costs) that they may suffer as a result of any claims, demands, actions or other
proceedings made or instituted by any Third Party against any of them that arise
out of or are related to (a) the negligence, recklessness or intentional act or
omission by SRI or Sarnoff in the performance of its Development Program
activities contemplated by this Agreement or (b) any personal injury or death to
any person or damage to any property in connection with any act or omission by
SRI or Sarnoff in the performance of its Development Program activities
contemplated by this Agreement, except to the extent that those losses,
liabilities, damages and expenses arise out of (y) the negligence, recklessness
or intentional acts or omissions of STC in the performance of its activities
contemplated by this Agreement or (z) any personal injury to or death of any
person or damage to any property in connection with any act or omission by STC
in the performance of its activities contemplated by this Agreement.

          14.3.  Indemnification Procedure.  A party (the "Indemnitee") that
                 -------------------------
intends to claim indemnification under this article shall promptly notify the
other party of any loss, liability, damage or expense, or any claim, demand,
action or other proceeding with respect to which the Indemnitee intends to claim
such indemnification.  A party shall not settle or consent to an adverse
judgment in any such claim, demand, action or other proceeding that adversely
affects the rights or interests of any Indemnitee or imposes additional
obligations on such Indemnitee, without the prior express written consent of
such Indemnitee.  The Indemnitees, its employees and agents, shall cooperate
fully with all other parties and its legal representatives in the investigation
of any action, claim or liability covered by this indemnification.

          14.4.  Insurance.
                 ---------

                 14.4.1.  By SRI.  SRI shall maintain comprehensive general
                          ------
liability insurance, including contractual liability insurance, against claims
for bodily injury or property damage arising from its activities contemplated by
the Agreement, with such insurance companies and in such amounts as SRI
customarily maintains for similar activities. SRI shall maintain such insurance
during the Development Period and thereafter for so long as SRI maintains
insurance for itself covering such activities.

                 14.4.2.  By Sarnoff.  Sarnoff shall maintain comprehensive
                          ----------
general liability insurance, including contractual liability insurance, against
claims for bodily injury or property damage arising from its activities
contemplated by the Agreement, with such insurance companies and in such amounts
as Sarnoff customarily maintains for similar activities. Sarnoff shall maintain
such insurance during the Development Period and thereafter for so long as
Sarnoff maintains insurance for itself covering such activities.

                 14.4.3.  By STC.  STC shall maintain comprehensive general
                          ------
liability insurance, including contractual and product liability insurance,
against claims for bodily injury or property damage arising from its activities
contemplated by the Agreement, with insurance companies reasonably acceptable to
SRI, and in amounts not less than ********** per occurrence and ********** in
the aggregate. STC shall maintain such insurance for so long as it continues to
conduct its activities contemplated by the Agreement and thereafter for so long
as

                                      -29-
<PAGE>

STC maintains insurance for itself covering such activities. Upon request, STC
shall provide SRI with certificates of insurance evidencing STC's compliance
with the insurance requirements of this section.

          14.5.  Product Liability.  SRI and Sarnoff assume no responsibility
                 -----------------
for the manufacturing, product specifications, or end-uses of Product.  No
warranties made by STC in connection with Product shall expressly or implicitly
obligate SRI or Sarnoff.  STC shall indemnify, defend and hold SRI and Sarnoff
harmless against all claims for all losses, expenses and damages awarded by a
court of competent jurisdiction, and reimburse Sarnoff or SRI for all reasonable
legal fees and costs incurred by Sarnoff or SRI in defense of such claims
arising from the manufacture, use or sale of Product.  STC shall have the right
to control any lawsuit based on such claims and to settle the same.  SRI and/or
Sarnoff shall give STC prompt written notice of any claim against SRI and/or
Sarnoff for which SRI and/or Sarnoff shall seek indemnification.

          14.6.  Limited Liability.  In no event shall any party be liable to
                 -----------------
another party for any special, consequential or incidental damages arising out
of or related to this Agreement, however caused and on any theory of liability
(including negligence), and whether or not a party has been advised of the
possibility of such damages.  In no event shall SRI's or Sarnoff's aggregate
liability to STC exceed the total amount actually paid by STC to SRI and Sarnoff
under this Agreement.

          14.7.  DISCLAIMER OF WARRANTIES.  NOTHING IN THE AGREEMENT SHALL BE
                 ------------------------
CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY SRI OR SARNOFF THAT ANY
PATENT WILL ISSUE BASED UPON ANY PENDING PATENT APPLICATION INCLUDED IN THE
LICENSED PATENTS, THAT ANY PATENT INCLUDED IN THE LICENSED PATENTS WHICH ISSUES
WILL BE VALID, OR THAT THE USE OF ANY LICENSED PATENTS OR LICENSED KNOW-HOW WILL
NOT INFRINGE THE PATENT OR PROPRIETARY RIGHTS OF ANY OTHER PERSON.  FURTHERMORE,
SRI OR SARNOFF MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH
RESPECT TO THE LICENSED PATENTS OR LICENSED KNOW-HOW, INCLUDING WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

                                  ARTICLE 15

                                 FORCE MAJEURE
                                 -------------

          No party shall be held liable or responsible to the other parties nor
be deemed to have defaulted under or breached the Agreement for failure or delay
in fulfilling or performing any term of the Agreement to the extent, and for so
long as, such failure or delay is caused by or results from causes beyond the
reasonable control of the affected party including but not limited to fires,
earthquakes, floods, embargoes, wars, acts of war (whether war is declared or
not),

                                      -30-
<PAGE>

insurrections, riots, civil commotions, strikes, lockouts or other labor
disturbances, acts of God or actions, omissions or delays in acting by any
governmental authority or other party.

                                  ARTICLE 16

                              DISPUTE RESOLUTION
                              ------------------

          Subject to Section 16.4 hereof, any controversy or claim arising out
of or relating to the Agreement, or the breach thereof, or any failure to agree
where agreement of the parties is necessary pursuant hereto, including the
determination of the scope of this agreement to arbitrate, shall be resolved by
the following procedures:

          16.1.  Attempt to Resolve Dispute.  The parties shall use all
                 --------------------------
reasonable efforts to amicably resolve the dispute through direct discussions.
The senior management of each party commits itself to respond promptly to any
such dispute.  Either party may send written notice to the other party
identifying the matter in dispute and invoking the procedures of this article.
If said dispute cannot be settled through direct discussions, the parties agree
to first endeavor to settle the dispute in an amicable manner by mediation in
Philadelphia, Pennsylvania and administered by the American Arbitration
Association ("AAA"), 417 Montgomery Street, San Francisco, California 94104-
1113, pursuant to the Commercial Mediation Rules of the AAA at the time of
submission prior to resorting to binding arbitration.

          16.2.  Application to Binding Arbitration.  If after ninety (90) days
                 ----------------------------------
from the first written notice of dispute, the parties fail to resolve the
dispute by written agreement or mediation, either party may submit the dispute
to final and binding arbitration administered by the American Arbitration
Association ("AAA"), 417 Montgomery Street, San Francisco, California 94104-
1113, pursuant to the Commercial Arbitration Rules of the AAA at the time of
submission. California Arbitration Law shall govern except in the event a stay
is sought pursuant to the California Code of Civil Procedure Section 1281.2(c),
in which event the parties agree that the issue shall be resolved under the
United States Arbitration Act.  The arbitration shall be held in San Francisco,
California before a single neutral, independent, and impartial arbitrator (the
"Arbitrator").

          16.3.  Binding Arbitration Procedure.  Unless the parties have agreed
                 -----------------------------
upon the selection of the Arbitrator before then, the AAA shall appoint the
Arbitrator as soon as practicable, but in any event within thirty (30) days
after the submission to AAA for binding arbitration.  The Arbitrator's award
shall be a final and binding determination of the dispute and shall be fully
enforceable as an arbitration award by the California courts in accordance with
the California Arbitration Law.  The prevailing party shall be entitled to
recover its reasonable attorneys' fees and expenses, including arbitration
administration fees, incurred in connection with such proceeding.  Neither party
nor the Arbitrator may disclose the existence, content, or results of any
arbitration hereunder without the prior written consent of both parties.

                                      -31-
<PAGE>

          16.4  Injunctive Relief.  To the extent that any controversy or claim
                -----------------
gives rise to a prayer for injunctive relief, equitable action or specific
performance, the aggrieved party shall have the right to commence such an action
in any court of competent jurisdiction, notwithstanding anything contained in
Sections 16.1, 16.2 or 16.3 to the contrary.

                                  ARTICLE 17

                                 MISCELLANEOUS

          17.1.  Notices.  Any consent, notice or report required or permitted
                 -------
to be given or made under the Agreement by one party to the other party shall be
in writing, delivered personally or by facsimile (and promptly confirmed by
personal delivery, U.S. first class mail, courier or nationally-recognized
delivery service), U.S. first class mail postage prepaid, courier or nationally-
recognized delivery service, and addressed to the other party at its address
indicated below, or to such other address as the addressee shall have last
furnished in writing to the addressor.  Except as otherwise provided in the
Agreement, such consent, notice or report shall be effective upon receipt by the
addressee.

          If to Sarnoff, for
          all technical matters:  David Sarnoff Research Center
                         201 Washington Road
                                    Princeton, NJ 08540-6449
                                    Attention:  John Aceti

          If to SRI, for
          all other matters:    SRI International
                                    333 Ravenswood Avenue
                                    Menlo Park, CA  94025-3493
                                    Attention:  General Counsel

          If to STC, for
          all matters:          SolarCare Technologies
                                     Corporation
                                    1745 Eaton Avenue
                                    Bethlehem, PA 18018
                                    Attention:  Michael Gausling

          17.2.  Governing Law.  The Agreement, including the decision to
                 -------------
arbitrate and any decision by an arbitrator pursuant to Article 16, shall be
governed by and construed in accordance with the laws of the State of
California, without regard to the conflicts of law principles thereof.

                                      -32-
<PAGE>

          17.3.   U.S. Export Laws and Regulations.  Each party hereby
                  --------------------------------
acknowledges that the rights and obligations of the Agreement are subject to the
laws and regulations of the United States relating to the export of products and
technical information.  Without limitation, each party shall comply with all
such laws and regulations.

          17.4.   Relationship of Parties.  The obligations and liabilities of
                  -----------------------
SRI and Sarnoff hereunder shall be joint and several.

          17.5.   Assignment.  Except as set forth in this Section 17.5 and in
                  ----------
Section 17.11, no party shall assign its rights or obligations under the
Agreement, in whole or in part, by operation of law or otherwise, without the
prior written consent of the other parties.  Any purported assignment in
violation of this section shall be null and void.  The rights of STC hereunder
may be assigned without the prior written consent of SRI or Sarnoff (a) to GIB
Laboratories, Inc. ("GIB") and/or its Affiliates, upon the resolution,
satisfactory to the Licensors and GIB, of the scope of the indemnification set
forth in Section 14.1(c) hereof and (b) in connection with the direct or
indirect sale of all or part of STC or the line of STC's business which is the
subject of this Agreement.  STC and/or its assignee shall give Licensors prompt
written notice of any such assignment.

          17.6.   Waivers and Amendments.  No change, modification, extension,
                  ----------------------
termination or waiver of the Agreement, or any of the provisions herein
contained, shall be valid unless made in writing and signed by duly authorized
representatives of the parties hereto.

          17.7.   Entire Agreement.  The Agreement embodies the entire
                  ----------------
understanding between the parties and supersedes any prior understanding and
agreements between and among them respecting the subject matter hereof.  There
are no representations, agreements, arrangements or understandings, oral or
written, between the parties hereto relating to the subject matter of the
Agreement which are not fully expressed herein.

          17.8.   Severability.  Any of the provisions of the Agreement which
                  ------------
are determined to be invalid or unenforceable in any jurisdiction shall be
ineffective to the extent of such invalidity or unenforceability in such
jurisdiction, without rendering invalid or unenforceable the remaining
provisions hereof and without affecting the validity or enforceability of any of
the terms of the Agreement in any other jurisdiction.

          17.9.   Waiver.  The waiver by either party hereto of any right
                  ------
hereunder or the failure to perform or of a breach by the other party shall not
be deemed a waiver of any other right hereunder or of any other breach or
failure by said other party whether of a similar nature or otherwise.

          17.10.  Counterparts.  The Agreement may be executed in two or more
                  ------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                                      -33-
<PAGE>

          17.11.  GIB Laboratories, Inc.
                  ---------------------

                  17.11.1.  Notwithstanding anything to the contrary set forth
in Section 13.3 to the contrary, and subject to the next sentence of this
Section 17.11.1, in the event that Licensors terminate this Agreement due to a
default by STC, Licensors shall give prompt written notice to GIB at 41 Spring
Street, New Providence, New Jersey 07974 (or to such other address as previously
communicated, in writing, by GIB to Licensors) and GIB shall have the right,
during a period of forty-five (45) days from the date that Licensors so
terminate this Agreement, to cure such default, which, if so cured, shall fully
reinstate STC's rights under this Agreement. In the event that such default is
not capable of cure within such forty-five (45) day period and GIB is using all
diligent efforts to cure such default, such cure period shall be extended for an
additional period, not to exceed thirty (30) days.

                  17.11.2.  Licensors hereby consent to the assignment, if any,
by STC to GIB in accordance with clause (a) of Section 17.5. and agree that GIB
shall have no liability for STC's pre-assignment obligations in excess of STC's
payment obligations arising under Article 6 and Sections 3.2, 3.3 and 12.3.3
during the fifteen (15) month period preceding the date of the assignment and
shall have no liability under the indemnification set forth in Section 14.1(c)
until the resolution, satisfactory to Licensors and GIB, of the scope of such
indemnification.

          IN WITNESS WHEREOF, the parties have executed the Agreement as of the
Effective Date hereof.

For:  SRI International            For:  David Sarnoff Research
                                                 Center

By:  /s/ John K. Clemens        By:  /s/ Carmen A. Catenese
     ------------------------        --------------------------

Title:  Senior Vice President   Title:  Vice President
        Science & Technology            -----------------------
        Group

For:  SolarCare Technologies
      Corporation

By:  /s/ Michael J. Gausling
     -----------------------

Title:  President
        --------------------
                                      -34-
<PAGE>

                                   EXHIBIT A
                                   ---------

                                 RESEARCH PLAN
                                 -------------

                               [TO BE COMPLETED]

                                      A-1

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