SELECTED EXCERPTS FROM THE TRANSCRIPT OF
              3 VIDEOTAPES RECORDING MEETINGS BETWEEN 
            ROY HARRIGAN AND BILL HONES IN SEPTEMBER, 1993.

The videotapes commemorating almost the totality of the two days of meetings
between Harrigan and Hones run just over five hours, and there are only a
few breaks in the otherwise continuous recording.  The video camera was
aimed at one of Roy's Levitron prototypes, which was sitting on a coffee
table.  It is clear that the prototype has a square base-magnet, just like
Hones' levitron.  Neither man's face is ever visible, although their hands
and legs are often in camera view.  Present too was Roy's wife, Karin, who
is also heard in the audio recording captured on the videotapes.  Although
Bill Hones has claimed that he wasn't aware of the taping, Roy maintains
that he told Bill up-front that he was recording.  On the tape, at one
point, Bill does indeed comment on the video recorder:

Bill:  Are you running something backwards?  Or something here?  The video?
Karin:  Running it backwards?
Bill:  This video player is running right now.  It looks like it's running
forward -- this machine.
Karin:  Oh, it's still ... yeah, it's still on ... it's not going backwards.
Bill:  Sounds like it's running.  
Karin:  Yeah, it is running ... it's still on.
Bill:  Oh ... oh, it is on play.  Oh, okay.

*********************************************************************
Early in their meeting, Bill acknowledges the essence and uniqueness of
Roy's invention:

Roy:  There's some law that says it's impossible.
Bill:  Well, actually, it's a stationary magnet, one magnet floating
stationary ... it's actually a theorem that says it's not possible.
Roy:  Right.
Bill:  But what you did, though, is you threw in a spin axis.

*******************************************************************
And again, later, Bill makes clear the magnitude of Roy's accomplishment:

Karin:  Whoever-- I mean, real genius is to figure out how to do something
that was supposed to be impossible to do.  You know, this was like ... wow!
Bill:  I would say, a combination of genius and, I would think, actually,
even a stronger trait would be tenacity.  I mean after a day of playing with
it, look at it this way and there-
Karin:  Enormous determination.
Bill:  The normal person would say, well--
Karin:  It's not going to work.
Bill:  It's not going to work, and even if it does work it's going to drive
me crazy before I can ever get it going, so I'll move on to something else
that's less frustrating.  But not Roy.

*********************************************************************
Bill confides to Roy his own failed attempts at permanent magnet levitation:

Bill:  For me, the reason I like this product so much is because this is
something, exactly, what I was working on.  I was working on suspending a
magnet in space.
Roy:  Every kid has tried to do that, I think.  I mean, not to the point
where you were doing, but every kid--
Bill:  Not to the point where--
Roy:   -- tried to do it--
Bill:  Not to the point where they used the Los Alamos Laboratory computer
to design a field!

**********************************************************************
Bill tells Roy that nobody could operate the levitron that Bill had
attempted to construct from Roy's patent before they met.  Bill also notes
that his business associate didn't believe that Roy's prototype - even after
seeing it in a video that Roy sent Bill - was for real.

Bill:  He didn't believe me actually.
Roy:  About what?
Bill:  About this thing really floating.  He was spending many hours in the
office spinning this thing, and he'd just look at me for a while, and say
something like, well, you know, it doesn't look like it works.  And I said,
but it does Alan, it does.
Karin:  Did he see the tape, the videotape?
Bill:  I told you, he's a doubting Thomas.

**********************************************************************
Even with the benefit of having Roy's patent and a videotape of Roy's
prototype to work from, Bill admits his own complete lack of success getting
any levitron to fly.

Bill:  I can't get it more stable if I can't get it even started.  And I
can't say, okay, I did this and it became more stable, because I can't get
it to work.  I can't get to first base.  But that seems like it should be
easy to do.

*******************************************************************
After watching Roy fly his prototype again and again, Bill admits to Roy:

Bill:  You sure don't seem to have any problem of ever getting this thing
going.  I guess you've done it a few thousand hours.

*******************************************************************
Bill notes the unique design of Roy's top spindle - the distinctive rounded
tip of which is still incorporated into Bill's own levitron top spindle design:

Bill:  That's a neat little piece of wood you got.
Roy:  Yeah, I had to figure out how tops work as well as magnetics, and the
round bottom is the key to this - having the top work right. 

*******************************************************************
Roy painstakingly explains to Bill all the basics for operating the
levitron, including, for instance, how a lifter-plate works:

Roy:  You spin the magnet on this thing, and you gradually lift it up, and
then let this back down again, and the magnet stays up there.

******************************************************************
Besides describing the levitron in detail, Roy shows Bill his prototype of a
hand-held starter, and also gives Bill the basic idea that became Bill's
Levitron Perpetuator:

Roy:  And there's a million ways to keep this thing spinning if you wanted
to.  I mean, to have it powered.  Or, with using very little power, but
something that kept kicking it around.  There's even the --  what you could
do is ... gyromagnetic ratio.  If you put a coil, electric coil, around a
magnet - let's see - it will, it will turn, it will rotate, it'll start the
right magnet rotating, I think.

******************************************************************
As Bill repeatedly tries and fails to fly Roy's prototype, he expresses his
opinion that Roy's device needs improvement. 

Bill:  Once you get something stabilized, and you get something that's
dependable, then you can say, ah-haa, I see how this works and that works,
and from here we can go there, and we could maybe do a few more patents.
Roy:  That's what I think should be done.
Karin:  Um-hmm.
Bill:  But the thing is, it's difficult at this point to do additional
patents because you're really not quite sure where this is leading.
Roy:  I know where it's leading!
Bill:  Well, I mean, yeah, you have--
Roy:  I know exactly where it's leading and I know exactly how to do it.
Bill:  Possibly you'll come up with other ideas though, when you actually
have something that's working, that you can play with, that's easily usable.
Roy:  But I already know.  I know how easy it is.

******************************************************************
In contrast to Bill's later assertions, it is he, not Roy, who keeps
emphasizing a dish-base.:

Bill:  My first thought is to patch those squares together to give you a
bigger bowl.

******************************************************************
And, later:

Bill:  So what I was thinking is maybe you could, maybe there was some
sheet, if some place may have had sheets of this stuff, they could just heat
up enough so you can sort of make a bowl shape.

******************************************************************
And again, later:

Bill:  The very first thing is to, I'd sort of like to make a mosaic with
these squares in a completely rounded bowl, like a salad bowl.

******************************************************************
And yet again:

Bill:  I'm just saying that if you bring up the-- common sense would tell you
that if you bring up the sides and continue to make them bigger and around a
little bit more, that would add to the stability because the forces are
working now.

******************************************************************
In fact, it is Roy who repeatedly tells Bill that a flat base-magnet will work:

Roy:  It's also possible to have a flat piece, a flat magnet, but just have
it magnetized in such a way that it's stronger on the outside than it is in
the center.  And maybe, it's magnetized where it's angled inward, north,
south, you know.  But it wouldn't have to be bent, and yet it would act as
if it was.
Bill:  Let's see.
Roy:  You could.  You could have the same effect with a flat piece of material.

******************************************************************
Roy even tells Bill that a circular base with a center hole will work (as
taught in the Harrigan Patent) - which Bill later, in his own patent,
specifically asserts would not work:

Roy:  You may not need the center of the base.  You may be able to get away
with a circle, a curved circle.

******************************************************************
Finally, after much coaching from Roy, Bill gets his first levitron flight
and then revises his estimation of the need for "improvement":

Bill:  I can now get this thing to go, and I think-- I can tell that there's
a learning curve here.

******************************************************************
And, at another point, Bill acknowledges the real secret of
dependable levitron operation:

Bill:  This is an art form.

******************************************************************
Bill gives Roy his opinion about the commerciality of Roy's existing prototype:

Bill:  I would say it's quite marketable.
Karin:  Just that high?
Bill:  I mean, that's, that's pretty miraculous. 

******************************************************************
And, again, later:

Bill:  I think that's pretty dramatic really just the way it is.

******************************************************************
And, yet again, later:

Bill:  I think that it's very saleable.

******************************************************************
And again, finally:

Bill:  I really expect it to do extremely well.

******************************************************************
While Roy is eager to tell Bill about a number of his other inventions, Bill
just wants Roy to sign the contract that he has brought with him:

Bill:  We both need to sign this so we can go into business together.

******************************************************************
Bill describes to Roy his plan for co-developing the levitron:

Bill:  We'll be trying things and, as you think of ideas, you can pass them
on to us so that by January, we have a useful product.

******************************************************************
Bill assures Karin that Roy will be intimately involved in the development
process:

Bill:  But actually, Roy would be working with us, and it's essentially his
product.

******************************************************************
And, later again, Bill touts the advantages of Roy doing business with his
company:

Bill:  It would be nice to be able to have somebody to work on ideas with^Å
I think, one thing, that it would be nice dealing with us, is that we're not
a fly-by-night shyster group.

******************************************************************
As Roy continues to tell Bill his ideas for more products, Bill reassures
him again:

Bill:  Well, it's nice that you now have an outlet for ideas, and you don't
have to worry about somebody disappearing into the night with it. 

******************************************************************
Bill tells Roy how he will benefit from the publicity attendant to Bill
marketing his device:

Bill:  If we bring this thing to market, it opens up for you.  Well, one, it
gives you personal exposure as a person with a very unique item and, two, it
probably puts you in enough of a limelight where people would start to...  If
it's a successfully presented product, then you've got, here's a success,
anybody can see that this is a success.  You can look at it in the
marketplace, here it is, it's successful. Then, people would be coming to
see you, say, either for variations on this particular item, or other things. 

******************************************************************
Bill clarifies that their agreement covers all developments stemming from
Roy's patent:

Roy:  Anything related to this, even if somebody else develops it, should--
Bill:  Well, actually, it says in there, the agreement talks about
"levitation products" being the Patent, and all associated, or that type of
stuff.

******************************************************************
Bill even spells out the conditions of his use of Roy's not-yet-patented ideas:

Bill:  We would be willing to pay 3%, just, in other words, if we used a
concept like that, with nothing, you know, no formalization, no patent, no
time spent on patenting, and uh--
Roy:  You're talking about the car, the game thing?
Bill:  Yeah.  And then, if you came up with any sort of protection at all,
we could, you know, it would be 5% of, uh, and that's the total, that's all
sales of the product that exists.
Roy:  Um-hmm.  But, you think, wouldn't--
Bill:  So, in other words, you could call up with an idea and say, "I have
an idea."
Roy:  Right.
Bill:  And, that in itself is good enough, if it's used.

******************************************************************
Bill again reiterates their contractual understanding concerning the entire
field of spin-stabilized permanent magnet levitation:

Bill:  It mentions this whole area, that we recognize the uniqueness of not
just this particular application, but that whole genre of stuff, is uniquely
your area.

******************************************************************
Karin asks Bill what their agreement is regarding sub-licensing:

Karin:  Say, if you license it to someone?
Bill:  No, actually, we can't license unless you say it's okay to license.
Karin:  Okay, all right.

******************************************************************
Bill specifies Roy's profit participation - even if Roy were somehow "out of
the picture":

Bill:  If you were to say "I think that this should be patented" and we
should do this, and then you're out of the picture at that point, then
probably ... unless you argued otherwise ... it wouldn't be much different than
you coming to us and saying "I have an idea," in which case, if we used that
idea at that point, just the vague idea, that that would be a 3% license.
If, on the other hand, it would be 5% if it were something that was somehow
concise ... possibly, if you actually had a working model of it.  You know, in
other words, if you had something, and this thing works^Å If you were to say,
well this is exactly what it is, here are the drawings, this is what--  I
don't actually have it patented, but this is the exact way it would
function, and it would work like this.  Then you'd have to say, okay, well
then that's probably a 5% deal.

******************************************************************
And at another point, Bill confirms:

Bill:  If the contract were terminated, that we'd still have, of course, the
obligation to pay the royalties.

******************************************************************
Finally, Karin specifically asks Bill about other patentable ideas inspired
by Roy's work that Bill, or one of his associates, might develop:

Karin:  All right, what would happen if, say, Alan comes up with an idea on
this?  I mean, is he going to run out and patent it?  That type of thing?
Bill:  Well, actually, every contingency ... you can't cover every
contingency.  But you can ... all you can ... you can try to work with what you
want to work with, but the final ... but the bottom line is, the integrity of
both sides ... what they say is, what an agreement is only as good as--
Karin:  The people.

******************************************************************
Karin shares their concerns about the confidential and proprietary nature of
Roy's ideas:

Karin:  We have had very bad experiences.

******************************************************************
Bill presses Roy to sign the contract, however Roy is reluctant to do so
without first showing it to a lawyer friend:

Karin:  We haven't been able to show it to him yet.  We wanted to have him
look at it but he's been unavailable.  I know you're disappointed, you want
us to sign it.

******************************************************************
Bill expresses reservations about getting lawyers involved:

Bill:  The only thing that bothers me about attorneys is^Å I always feel that
attorneys are--  they've always got to put in their two-cents worth^Å  It's
sort of like, if they don't change anything or make any critical comments,
it is sort of like they feel that they haven't earned their money.

******************************************************************
Though Roy doesn't sign Bill's contract, Roy and Bill conclude that they
have an agreement in principle:

Roy:  It seems like we have--  We've got a good fit here.
Bill:  Yeah.
Roy:  I mean, its unusual.
Bill:  Well, okay, so I'd like you to just go ahead and, after you talk to
him, go ahead and sign it unless, you know, there's some basic problem.
Roy:  Yeah.
Bill:  But, I mean, everything ... we discussed this, and we're of agreement here.

******************************************************************
Bill, based on their understanding, presses Roy to let him take Roy's
working prototype:

Bill:  Would it be possible to take this thing with me or, if not, could we
get something else that works? 

******************************************************************
Though Roy is hesitant, Bill reassures him by spelling out the conditions
for his taking Roy's prototype - which Roy has claimed was not returned to
him for over a year:

Bill:  Well, we need to sign an agreement today, but why don't we also put
on there something like, this is supposed to come back to you within a week
or two weeks, and which ... you know, otherwise we would pay you, just as some
sort of security^Å Anyway, as soon as I get something else working, I'd just
go ahead and return this to you. 

******************************************************************
Bill emphasizes the need for his having a working prototype in hand before
anything else:

Bill:  What I was planning on doing when I was here, was making sure that I
go back with a working sample, and then I would start experimenting.  Before
you can do a theoretical model and a mathematical model, you actually need
to come up with working data.  You know, so that you can say, okay, if I
doubled this, or if I raised that this amount, so that you can see trends,
and then you can find out whether or not your model's correct because ... your
mathematical model ... because then you can always make adjustments to the
mathematical model to reflect what is actually happening in the physical world.
Roy:  I think you could calculate all this stuff.
Bill:  Right.  But, for instance, my father and I, when we were working on a
permanent magnet that had something float above it ... which didn't work ... we
really weren't quite sure.  We tried to get as much physical data as
possible, but we didn't have a lot to go with.  What's nice here is, once
you get it to float, now you've got something that works.

******************************************************************
And, again, Bill reiterates the importance of having a working prototype:

Bill:  I'm going to try every combination available until I get this thing,
so I can just maximize it.  I'm going to try different shapes, and--
Roy:  But, knowing the concept, can't you run it through the computers at
Los Alamos again?
Bill:  Yeah, but you've got to at least have something. 

******************************************************************
Bill repeatedly reassures Roy that he will keep all of Roy's ideas confidential:

Bill:  Well, you've got all these ideas that you've been telling me, I'm
going to probably write them all down on the plane tonight, discuss them
with our people in greater detail when I get home, and have some time to
sort of review it in my mind.
Karin:  Well, I mean, these are confidential, right?
Bill:  It's part of our contract.
Karin:  Other than your--
Roy:  Right.
Karin:  --your intimate cohorts.
Bill:  Right.

*********************************************************************
The last videotape ends as Bill leaves the contract with Roy, and goes off
with Roy's levitron:

Bill:  Well, I best be going.
Roy:  Okay, great.
Bill:  Get that thing signed to me, so--
Roy:  As soon as possible.
Karin:  Okay, bye-bye.
Bill: --I can get you some money.
[sound of door closing]
Karin:  Well, it seems like he's for real.

END OF TRANSCRIPT