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                                                                    Exhibit 10.6



                            COLLABORATION AGREEMENT




                                    between


                           BALLARD POWER SYSTEMS INC.


                                      and


                            UCAR CARBON COMPANY INC.
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                            COLLABORATION AGREEMENT

THIS AGREEMENT is made May 3, 1999

BETWEEN:

           BALLARD POWER SYSTEMS INC., a Canadian corporation having an office
           at 9000 Glenlyon Parkway, Burnaby, British Columbia, Canada, V5J 5J9

           ("BPS")

AND:

           UCAR CARBON COMPANY INC., a Delaware corporation having an office at
           3102 West End Avenue, Suite 1100, Nashville, Tennessee 37203, USA

           ("UCAR CARBON")

WHEREAS:

(A)   BPS has developed, is in the possession of and is the beneficial owner
of, substantial and valuable expertise, know-how and certain intellectual
property rights relating to the field of PEM Fuel Cells and the design,
manufacture and marketing of PEM Fuel Cells and components therefor for the
generation of electrical power for a variety of applications;

(B)   BPS wishes to enhance its PEM Fuel Cell technology through the
development of improved fuel cell components;

(C)   UCAR CARBON has developed, is in the possession of and is the
beneficial owner of, substantial and valuable expertise, know-how and certain
intellectual property rights relating to the field of flexible graphite and
treated natural graphite and sells such materials and articles made therefrom
having mechanical, physical, chemical and electrical properties suitable for a
wide variety of industrial uses;

(D)   BPS and UCAR CARBON wish to co-operate in the research and development
of the Target Products for use in PEM Fuel Cells and derivatives thereof and
have entered into this Agreement for the purposes of the Collaboration;

(E)   BPS intends to procure its supply of the Materials from UCAR CARBON for
itself and possibly also for certain of its Affiliates and licensees if the
development of the Target Products pursuant to the collaboration under this
Agreement is successful;

(F)   UCAR and BPS are parties to the Mutual Secrecy Agreement;

NOW THEREFORE this Agreement witnesses that the parties mutually covenant and
agree as follows:
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                                     PART 1

                        DEFINITIONS AND INTERPRETATIONS

DEFINITIONS

1.1        In this Agreement, including the recitals, except as otherwise
expressly provided or unless the context otherwise requires,

           AFFILIATE, in relation to a specified Person, means a Person that
           directly or indirectly controls, is under common control with, or is
           controlled by the specified Person, and for the purposes hereof, a
           Person will be deemed to control a corporation if

                   (a)   securities of the corporation to which are attached
                   more than 50% of the votes that may be cast to elect
                   directors of the specified corporation or other rights to
                   elect a majority of the directors are held, other than by
                   way of security only, by or for the benefit of the Person,
                   and

                   (b)   the votes attached to those securities are sufficient,
                   if exercised, to elect a majority of the directors of the
                   corporation,

           ARISING IPR means, collectively, BPS Arising IPR and UCAR Arising
           IPR arising pursuant to the Collaboration,

           BACKGROUND IPR means, collectively, BPS Background IPR and UCAR
           Background IPR,

           BPS ARISING IPR means all IPR arising pursuant to the Collaboration
           concerning any of the following:

                   (a)   PEM Fuel Cells and PEM Fuel Cell components and
                   assemblies, including electrically conductive fuel cell
                   separator plates, the design, composition, manufacturing
                   techniques and methodology respecting any of the foregoing,
                   and applications thereof; and

                   (b)   the use of any of the Materials in electrically
                   conductive fuel cell separator plates and manufacturing
                   techniques and methodology for fabrication of such plates
                   incorporating the Materials,

           BPS BACKGROUND IPR means all IPR concerning any of the following:

                   (a)   PEM Fuel Cells and PEM Fuel Cell components and
                   assemblies, including electrically conductive fuel cell
                   separator plates, the design composition, manufacturing
                   techniques and methodology respecting any of the foregoing,
                   and applications thereof, owned or controlled by BPS before
                   the Effective Date; and





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                   (b)   the use of any of the Materials, in electrically
                   conductive fuel cell separator plates, owned or controlled
                   by BPS before the Effective Date,

           BUSINESS DAY means a day that is not a Saturday or a Sunday or a
           British Columbia provincial, Canadian federal, a United States
           national or Tennessee state, holiday,

           CHIEF EXECUTIVE OFFICER means, in the case of BPS, BPS's Chief
           Operating Officer and in the case of UCAR CARBON, UCAR CARBON's
           President,

           COLLABORATION means the collaboration between the parties described
           in Section 2.1 and includes the collaborative activities of the
           parties set forth in the SOW which occur from and after the
           Effective Date,

           COLLABORATION PERIOD has the meaning ascribed to it in Section 2.3,

           COMMITTEE has the meaning ascribed to it in Section 2.4,

           CONFIDENTIAL INFORMATION means, in relation to a Person, information
           known or used by such Person in connection with its business and
           technology, including, but not limited to, such Person's
           Intellectual Property, customer information, financial information,
           marketing information, and information as to business opportunities
           and research and development,

           DISPUTE NOTICE has the meaning ascribed to it in Section 6.1,

           EFFECTIVE DATE has the meaning ascribed to it in Section 2.3,

           EVENT OF DEFAULT in relation to a party means an event of default
           arising as a result of a party being subject to one or more of the
           following circumstances:

                   (a)   an order is made or a resolution is passed or a
                   petition is filed by such party for the liquidation,
                   dissolution or winding-up of such party,

                   (b)   such party is in material breach of its obligations
                   under Part 4,

                   (c)   such party commits a material default in observing or
                   performing any other material covenant, agreement or
                   condition of this Agreement on its part to be observed or
                   performed and, where such default is curable, such party
                   does not rectify or cure such default within 30 days after
                   receipt of written notice from the other party to this
                   Agreement specifying such default;

                   (d)   an execution, sequestration or any other process of
                   any court becomes enforceable against such party or any
                   distress or analogous process is levied upon any material
                   part of the property, assets and undertaking of such party
                   and any such process or distress is not stayed or otherwise
                   suspended by a court of competent jurisdiction within 30
                   days and has, or could have, a material adverse effect on
                   the business or condition, financial or otherwise, of such
                   party;





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                   (e)   such party applies to be put in bankruptcy, takes any
                   action that would permit its creditors to make an
                   application to put such party in bankruptcy, is adjudged or
                   declared bankrupt or makes an assignment for the benefit of
                   creditors, consents to a proposal or similar action under
                   any bankruptcy or insolvency legislation applicable to it,
                   or commences any other proceedings relating to it under any
                   reorganization, arrangement, readjustment of debt,
                   dissolution or liquidation law or statute of any
                   jurisdiction whether now or hereafter in effect, or consents
                   to any such proceeding;

                   (f)   a custodian, liquidator, receiver, receiver and
                   manager, receiver-manager, trustee or any other person with
                   similar powers is appointed for such party or in respect of
                   any material property or assets or material part of the
                   property or assets of such party and not discharged within
                   30 days after its appointment and before any action is taken
                   by it in respect of such property or assets which will
                   materially affect the rights of the parties to this
                   Agreement thereto; or

                   (g)   a final, non-appealable, decision of any judicial,
                   administrative, governmental or other authority or
                   arbitrator is made which enjoins or restrains, or renders
                   illegal or unenforceable, the performance or observance by
                   such party of any material term of this Agreement,

           EXCLUSIVE PERIOD has the meaning ascribed to it in Section 2.9,

           INTELLECTUAL PROPERTY means in relation to a Person, each patent,
           patent application, industrial design, invention, design, trade
           secret, idea, work, methodology, technology, innovation, creation,
           concept, moral right, development drawing, research, analysis,
           know-how, experiment, copyright, data, formula, method, procedure,
           process, system or technique of such Person but does not include
           trademarks or tradenames,

           IPR means Intellectual Property rights,

           MATERIALS means any one or more of treated graphite flakes, expanded
           graphite flakes and flexible graphite (commonly referred to as
           graphite sheet or foil) [text redacted] as well as such materials
           developed by UCAR CARBON before the Effective Date, including, but
           not limited to the materials listed in Schedule B,

           MUTUAL SECRECY AGREEMENT means the secrecy agreement made effective
           May 17, 1996, a copy of which is annexed hereto as Schedule C,

           NOTICE has the meaning ascribed to it in Section 8.4,

           PEM FUEL CELL means a solid polymer fuel cell and includes a direct
           oxidation fuel cell,

           PERSON means an individual, corporation, body corporate, firm,
           limited liability company, partnership, syndicate, joint venture,
           society, association, trust or unincorporated organization or
           trustee or other such legal representative,





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           PROJECT MANAGER has the meaning ascribed to it in Section 2.7,

           SOW means the Statement of Work annexed hereto as Schedule A,

           SUPPLY AGREEMENT DEADLINE DATE has the meaning ascribed to it in
           Section 5.1,

           TARGET PRODUCT means an electrically conductive fuel cell separator
           plate developed pursuant to the Collaboration utilizing any of the
           Materials,

           UCAR ARISING IPR means all IPR arising pursuant to the Collaboration
           concerning

                   (a)   any of the Materials,

                   (b)   articles made from the Materials, other than
                   electrically conductive fuel cell separator plates,

                   (c)   compositions which include one or more of the
                   Materials for use in applications other than in electrically
                   conductive fuel cell separator plates,

                   (d)   methodology relating to, or relating to the use of,
                   any of the foregoing other than methodology relating to, or
                   relating to the use of any of the foregoing in, electrically
                   conductive fuel cell separator plates,

           but excludes IPR concerning electrically conductive fuel cell
           separator plates as well as everything comprising the BPS Arising
           IPR, and

           UCAR BACKGROUND IPR means all IPR concerning any of the following:

                   (a)   treated graphite flakes, expanded graphite flakes and
                   flexible graphite [text redacted] by UCAR CARBON, its
                   Affiliates or subcontractors [text redacted], compositions
                   which include one or more of the foregoing, and articles made
                   therefrom and methodology relating thereto, and methodology
                   relating to the use of any of the foregoing, which were owned
                   or controlled by UCAR CARBON before the Effective Date; and

                   (b)   the materials described in Schedule B, but excludes
                   everything comprising the BPS Background IPR.

INTERPRETATION

1.2        In this Agreement, except as otherwise expressly provided or unless
the context otherwise requires,

           (a)      "this Agreement" means this Collaboration Agreement as from
           time to time supplemented or amended by one or more agreements
           entered into pursuant to the applicable provisions hereof,





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           (b)     the headings in this Agreement are inserted for convenience
           only and do not form a part of this Agreement and are not intended
           to interpret, define or limit the scope, extent or intent of this
           Agreement or any provision hereof,

           (c)     the word "including", when following any general statement
           or term, is not to be construed as limiting the general statement or
           term to the specific items or matters set forth or to similar items
           or matters, but rather as permitting the general statement or term
           to refer to all other items or matters that could reasonably fall
           within its broadest possible scope,

           (d)     except where otherwise specified, all references to currency
           mean currency of the United States of America,

           (e)     a reference to a statute includes all regulations made
           thereunder, all amendments to the statute or regulations in force
           from time to time, and any statute or regulation that supplements or
           supersedes such statute or regulations,

           (f)     a reference to an entity includes any successor to that
           entity,

           (g)     words importing the masculine gender include the feminine or
           neuter, words in the singular include the plural, words importing a
           corporate entity include individuals, and vice versa,

           (h)     a reference to "approval", "authorization" or "consent"
           means written approval, authorization or consent,

           (i)     a reference to a Part is to a Part of this Agreement and the
           symbol Section followed by a number or some combination of numbers
           and letters refers to the section, paragraph, subparagraph, clause
           or subclause of this Agreement so designated.

SCHEDULES

1.3        The following schedules are incorporated in to this Agreement by
reference and form a part hereof:

                   Schedule A - Statement of Work
                   Schedule B - List of Materials
                   Schedule C - Mutual Secrecy Agreement

                                     PART 2

                                 COLLABORATION

COLLABORATION

2.1        BPS and UCAR CARBON will work jointly and individually at their
respective facilities and will co-operate in their research and development
activities as may be required or expedient





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to produce or create commercially viable versions of the Target Products
primarily for use in PEM Fuel Cells.

LIMITED PURPOSE

2.2        The Collaboration will be for the purposes of research and
development only, will include the activities described in the SOW, and will
encompass all research, design, development, improvement and other
experimentation and performance testing of the Target Products during the
Collaboration Period and the provision of reports and advice by the parties to
one another with respect to the development of such products and techniques and
methods of their manufacture and exploitation.

COLLABORATION TERM

2.3        The term of the Collaboration (the "Collaboration Period") will be
three years commencing on the date set forth on page 1 of this Agreement (the
"Effective Date") subject to extension or earlier termination as provided in
this Agreement or as may be mutually agreed to by the parties.

STEERING COMMITTEE

2.4        The parties will establish a steering committee (the "Committee")
comprising two representatives of each party. Each party may replace, from time
to time, any member appointed by it on the Committee by giving written notice
thereof to the other party. The Committee will meet regularly but not less than
twice per year and meetings of the Committee may be held by telephone
conference. The decisions of the Committee will be made unanimously by all of
its members. All proceedings and decisions of the Committee will be recorded in
minutes which will be signed by at least one member of the Committee appointed
by each party.

DUTIES OF COMMITTEE

2.5        The Committee will, among other things,

           (a)     monitor the progress and review the performance of each of
           the parties,

           (b)     oversee all work to be performed by each of the parties
           pursuant to the Collaboration (including, but not limited to, the
           work for which each party is responsible as may be described in any
           work-plan pertaining to the Collaboration),

           (c)     review patent-related and other intellectual property issues
           and define the parties' general strategy concerning the same,

           (d)     promptly resolve problems and disputes submitted to the
           Committee by either party,

           (e)     evaluate the results of each phase of the Collaboration and
           discuss all technical issues arising with regard to the
           Collaboration,





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           (f)     determine the ownership of Arising IPR which may result
           pursuant to the Collaboration but only to the extent the same is not
           provided for in this Agreement,

           (g)     modify the SOW as and when deemed necessary,

           (h)     review, on a regular basis, the cost of developing and
           producing the Materials and the projected date of commercialization
           of PEM Fuel Cells containing Target Products and make
           recommendations to the parties regarding the same, and

           (i)     review, and where appropriate approve the written summaries
           prepared by the Project Managers pursuant to Section 2.7(d).

WORK AND COSTS

2.6        Each party will use all reasonable efforts to successfully,
diligently and on a timely basis, carry out the portion of the work for which
it is responsible as set forth in the SOW for the achievement of the objectives
of the Collaboration. Unless otherwise agreed, each party will bear all its own
costs and expenditures in connection with its activities pursuant to the
Collaboration except that jointly incurred costs will be borne by the parties
equally.

PROJECT MANAGER

2.7        Each of the parties will appoint and maintain, until the expiry of
the Collaboration Period, a project manager ("Project Manager") and may from
time to time change its Project Manager, upon prior written notice to the other
party. Each party's Project Manager will be responsible for that party's
performance under this Agreement and will coordinate and cooperate with the
Committee concerning the management, coordination and administration of the
activities of such party under this Agreement. Specifically, the Project
Managers will

           (a)     exchange results and all other relevant information arising
           pursuant to the Collaboration,

           (b)     specify detailed objectives of the Collaboration, the work
           to be performed by each party and relevant specifications and
           appropriate targets, to the extent deemed necessary for the success
           of the Collaboration,

           (c)     maintain books and written records of the dates on which
           technology is disclosed by one party to the other pursuant to the
           Collaboration, and

           (d)     jointly prepare a written summary for the Committee every
           six months on the results and progress of the Collaboration.

PRODUCT DEVELOPMENT LEAD TIME

2.8        During the Collaboration Period,

           (a)     UCAR CARBON will not, and it will ensure that its Affiliates
           will not, directly or indirectly,





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                 (i)      be involved with any Person other than BPS in any
                 development of electrically conductive fuel cell separator
                 plates or enter into any negotiations with any Person
                 regarding the same, or

                 (ii)     develop or manufacture fuel cells or electrically
                 conductive fuel cell separator plates or market, or offer for
                 sale or sell fuel cells or electrically conductive fuel cell
                 separator plates, whether for development, testing or other
                 purposes, except for and on behalf of and at the request of
                 BPS, and

         (b)     BPS will not, and it will ensure that its Affiliates will not,
         directly or indirectly,

                 (i)      be involved with any Person other than UCAR CARBON in
                 any development of the Materials for use in electrically
                 conductive fuel cell separator plates or enter into any
                 negotiations with any Person regarding the same, or

                 (ii)     except as specifically permitted under Section 2.9
                 and Part 7, develop or manufacture the Materials for use in
                 electrically conductive fuel cell separator plates or market,
                 or offer for sale or sell the same, whether for development,
                 testing or other purposes.

LICENSE BY UCAR

2.9      Subject to Section 7.2(d) and the confidentiality obligations under
Part 4, UCAR hereby grants to BPS, for the period (the "Exclusive Period")
commencing the Effective Date and ending six years after the end of the
Collaboration Period, which period shall automatically continue for 1 year
periods thereafter unless written notice is given by one party to the other 60
days prior to the end of the current period, an exclusive (even as to UCAR),
worldwide, royalty-free and paid-up right and license, sublicensable by BPS, to
exploit the UCAR Arising IPR and the UCAR Background IPR, solely to enable BPS
to make, have made, use or sell the Materials only in connection with the
development, manufacture, use or sale of electrically conductive fuel cell
separator plates and for no other purpose.

SUBLICENSE BY BPS

2.10     Subject to the confidentiality obligations under Part 4, BPS hereby
grants to UCAR, for the Exclusive Period, a non-exclusive, worldwide,
royalty-free and paid-up right and license, by way of sublicense, solely to use
the UCAR Arising IPR and the UCAR Background IPR to produce the Materials
exclusively for and on behalf of BPS, and where requested by BPS, BPS's
Affiliates and licensees. So long as UCAR CARBON is not subject to an Event of
Default, BPS will not grant any other sublicense of UCAR CARBON's license to
BPS under Section 2.9.

2.11     From and after the expiration of the Exclusive Period, as defined in
Section 2.9 above, BPS covenants not to sue UCAR CARBON on account of any sale
by UCAR CARBON of Materials included in Arising IPR for use in PEM Fuel Cells
and electrically conductive fuel cell separator plates and BPS further
covenants not to sue any purchaser from UCAR CARBON of such Materials on
account of such use.





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                                     PART 3

                             INTELLECTUAL PROPERTY

DISCLOSURE OF IPR FOR THE COLLABORATION

3.1      Each party will disclose to the other its Background IPR but only to
the extent strictly necessary for the Collaboration.

BPS'S LICENSE TO UCAR CARBON FOR COLLABORATION

3.2      BPS hereby grants to UCAR CARBON a non-exclusive, non-transferable,
royalty-free, right (without the right to sub-license) to use, subject to
Section 3.1, the BPS Background IPR and the BPS Arising IPR (in each case
subject to the confidentiality obligations contained in Part 4) until the end
of the Collaboration Period for the sole purpose of carrying out the work under
the Collaboration. For greater certainty the license granted by BPS to UCAR
CARBON under this Section 3.2 does not include any right to manufacture, sell
or distribute products using, or to otherwise exploit, the BPS Background IPR
or the BPS Arising IPR for any other purpose.

UCAR CARBON'S LICENSE TO BPS FOR COLLABORATION

3.3      UCAR CARBON hereby grants to BPS a non-exclusive, non-transferable,
royalty-free, right (without the right to sub-license) to use, subject to
Section 3.1, the UCAR Background IPR and the UCAR Arising IPR (in each case
subject to the confidentiality obligations contained in Part 4) until the end
of the Collaboration Period for the sole purpose of carrying out the work under
the Collaboration. For greater certainty, except as otherwise set forth in
Section 2.9 and Part 7, the license granted by UCAR CARBON to BPS under this
Section 3.3 does not include any right to manufacture, sell or distribute
products using, or to otherwise exploit, the UCAR Background IPR or the UCAR
Arising IPR for any other purpose.

OWNERSHIP OF ARISING IPR

3.4      Where pursuant to the Collaboration any Intellectual Property which
specifically relates to the Materials or the Target Products is invented,
discovered, improved or otherwise developed or made by one party, such party
will disclose the same to the other. Regardless of inventorship, ownership of
all Intellectual Property in any such invention, discovery, improvement or
development will vest immediately and is hereby assigned in accordance with the
definitions of BPS Arising IPR and UCAR Arising IPR.  To this end the parties
will execute or cause to be executed such deeds, documents, instruments,
assignments and moral rights waivers as may be necessary to effect the intent
of this Section 3.4.

PATENTS

3.5      Each party that is entitled to ownership of any Intellectual Property
created pursuant to the Collaboration as described in Section 3.4 will, at its
option, prosecute patents with respect to the same. Each party will execute all
such documents, execute or obtain such assignments and waivers, including
waivers of moral rights, and do all such other things as are reasonably
requested by the owner of such Intellectual Property in connection with any
application or





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prosecution of patents in respect of the same and will assist the owner in all
respects necessary to enable filing and prosecution of any such application.
The owner will be responsible for filing, prosecuting and maintaining patent
applications it files.

CONSENT TO USE OF CONFIDENTIAL INFORMATION

3.6      Neither party's patent applications may include any Background IPR,
Arising IPR or Confidential Information of the other without the express
written consent of the other party.

INFRINGEMENT CLAIM

3.7      If during the Collaboration Period either party discovers any third
party infringement of IPR belonging to either party, it will promptly notify
the other party.

                                     PART 4

                                CONFIDENTIALITY

CONFIDENTIALITY OBLIGATIONS

4.1      Each party (for purposes of this Part 4, the "Recipient"), at all
times during the Collaboration Period and for a period of ten years after the
expiry thereof,

         (a)     will, and will ensure that each of its directors, officers,
         employees, Affiliates, licensees, including sublicensees
         (collectively, the "Recipient's Agents") will, hold in confidence and
         keep confidential the Confidential Information of a party (the
         "Disclosing Party") disclosed to it by the Disclosing Party,

         (b)     will not, and will ensure that the Recipient's Agents will
         not, directly or indirectly, use or disclose any such Confidential
         Information except to the extent that it is strictly necessary for the
         Collaboration,

         (c)     will cause the Recipient's Agents that are recipients of or
         exposed to such Confidential Information, to execute confidentiality
         agreements to protect the same,

         (d)     will not, and will ensure that the Recipient's Agents will
         not, except to the extent necessary for the Collaboration, make copies
         of or otherwise reproduce such Confidential Information, and

         (e)     will, and will ensure that each of the Recipient's Agents
         will, use commercially reasonable best efforts to maintain all such
         Confidential Information in a manner so as to protect the same against
         wrongful disclosure, misuse, espionage and theft.

EXCEPTIONS FOR CONFIDENTIALITY

4.2      Nothing in this Agreement will prevent the Recipient or the
Recipient's Agents from making use of or disclosing any Confidential
Information disclosed to them by the Disclosing Party





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         (a)     which is or becomes generally available to the public through
         no breach of this Agreement or any other obligation of the Recipient
         or the Recipient's Agents to the Disclosing Party,

         (b)     of which the Recipient or the Recipient's Agents had knowledge
         before the date of this Agreement, as evidenced by competent proof,
         unless the same was disclosed to the Recipient or the Recipient's
         Agents by the Disclosing Party,

         (c)     of which the Recipient or the Recipient's Agents obtained
         knowledge from a third party, as evidenced by competent proof, unless
         such third party obtained such Confidential Information in violation
         of any duty of confidence owed to the Disclosing Party, or

         (d)     which is required to be disclosed pursuant to law or a rule,
         regulation, policy or order of a governmental authority having
         jurisdiction or pursuant to a final order or judgment of a court of
         competent jurisdiction and in such case the parties will cooperate
         with one another to obtain an appropriate protective order or other
         reliable assurance that confidential treatment will be afforded to
         such Confidential Information.

EMPLOYMENT RELATIONS

4.3      Neither party will, during the Collaboration Period and for a period
of two years next after the expiry thereof, solicit for employment any
individual who is, at the time of such solicitation, employed by the other
party or its Affiliates nor will such party, directly or indirectly, induce any
such individual to leave his or her employment.  Nothing herein will prevent a
party from employing any such employee so long as no solicitation or inducement
has been made to such employee by or on behalf of such party.

REASONABLE RESTRICTION

4.4      Each party agrees that the restrictions contained in this Part 4 are
reasonable for the protection of the respective legitimate business interests
of the parties.

NON-DISCLOSURE OF COLLABORATION

4.5      Except as may be required by law or applicable securities regulatory
authorities, neither party will make public the existence of this Agreement or
the Collaboration hereunder or the negotiations leading to or pursuant to this
Agreement, without the written consent of the other party. Notwithstanding the
foregoing, as soon as reasonably practicable after the execution by the parties
of an agreement governing the supply of the Materials by UCAR CARBON to BPS as
contemplated in Section 5.1, each party will be entitled to make public the
existence of such agreement provided that the form and substance of any such
publicity is first approved by the other party.

MUTUAL SECRECY AGREEMENT

4.6      The provisions of the Mutual Secrecy Agreement (and not Section 4.1
and Section 4.2 hereof) will apply to all "Proprietary Information" (as defined
in such agreement) disclosed by the parties to





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one another before the Effective Date notwithstanding that such Proprietary
Information may be disclosed again as Confidential Information under this
Agreement.

ADDITIONAL CONFIDENTIALITY OBLIGATION OF UCAR CARBON

4.7      During the Exclusive Period, UCAR CARBON will not use or disclose, or
permit the use or disclosure of, any IPR that are the subject matter of the
license granted by UCAR to BPS under Section 2.9 other than for the purposes
specified in Section 2.9 and Section 2.10.

                                     PART 5

                                     SUPPLY

SUPPLY

5.1      UCAR CARBON will manufacture and supply to BPS, and BPS will purchase
from UCAR CARBON, all of BPS's requirements of the Materials during the
Collaboration Period; provided that BPS may acquire the Materials from sources
other than UCAR CARBON for electrically conductive fuel cell separator plates
during that period, but solely for benchmarking. The parties will negotiate in
good faith and use all commercially reasonable best efforts to conclude, within
90 days after the Effective Date or such other date as may be agreed to by the
parties in writing (the "Supply Agreement Deadline Date"), an agreement
governing the supply of the Materials, both during and beyond the Collaboration
Period, by UCAR CARBON to BPS and, where required by BPS, to BPS's Affiliates
and licensees.

                                     PART 6

                               DISPUTE RESOLUTION

INITIATION OF PROCESS

6.1      If at any time a dispute between the parties with respect to any
matter relating to this Agreement arises, a party that wishes that the issue be
considered further may give written notice (the "Dispute Notice") to the other
and to the Committee requiring that such issue or dispute be decided pursuant
to this Part 6.

REFERRAL TO COMMITTEE

6.2      If a Dispute Notice is given, either party may, in the first instance,
ask the Committee to initiate discussions with a view to settling the issue or
matter. A decision reached by the Committee and communicated by it in writing
to the parties will be binding on the parties and will be implemented.

REFERRAL TO CHIEF EXECUTIVE OFFICERS

6.3      If no decision is communicated by the Committee within 30 days after
such issue or dispute is referred to it, either party may at any time before a
decision thereon is so communicated, ask the Chief Executive Officers of each
of the parties to initiate discussions with





                                       13
<PAGE>   15
a view to settling the issue or matter. Once the issue or dispute is referred
to the Chief Executive Officers, the Committee will no longer have jurisdiction
to decide on the issue. A decision reached by such Chief Executive Officers and
communicated by them in writing to the parties will be binding on the parties
and will be implemented.

SUBMISSION TO ARBITRATION

6.4      If no decision is communicated by the Chief Executive Officers within
30 days after such issue or dispute is referred to them, either party may at
any time before a decision thereon is so communicated and less than 120 days
after delivery of the Dispute Notice, by further notice given to the other,
submit the issue or dispute for determination by a three member arbitration
panel in accordance with the rules of arbitration of the International Chamber
of Commerce.

ACCEPTANCE AND IMPLEMENTATION

6.5      Each of the parties will accept and proceed in good faith diligently
to implement the award or decision of the arbitrators on an arbitration
pursuant to Section 6.4.

PLACE OF ARBITRATION

6.6      All arbitration proceedings will be conducted in San Francisco,
California or in such other place as the parties may agree.

LEGAL PROCEEDINGS

6.7      A legal proceeding commenced by a party to this Agreement in respect
of an issue or dispute that may be arbitrated under this Agreement will be
stayed until the time during which arbitration may be initiated has expired or,
if arbitration is initiated, a decision on the arbitration is delivered or the
arbitration process has otherwise ended.

EXCLUSIONS

6.8      This Part 6 will not apply to the grant of provisional remedies,
including injunctions, restraining orders and specific performance, and each
party reserves its right to commence such action or seek such remedies from a
court of competent jurisdiction.

                                     PART 7

                                  TERMINATION

TERMINATION

7.1      Subject to earlier termination as provided in this Section 7.1, the
Collaboration hereunder will end as provided in Section 2.3. Thereafter the
Collaboration may be renewed year-to-year by mutual agreement. Notwithstanding
the foregoing, the Collaboration hereunder may be terminated by either party,

         (a)     without cause, upon 90 days' written notice to the other to
         that effect, or





                                       14
<PAGE>   16
         (b)     by written notice to the other, if the other becomes the
         subject to an Event of Default, or

         (c)     by written notice to the other, if no agreement for the supply
         of the Materials by UCAR CARBON to BPS has been concluded by the
         Supply Agreement Deadline Date, or

         (d)     by written notice to the other, if the parties

                 (i)      have completed the work required of them under the
                 SOW before the end of the Collaboration Period, and

                 (ii)     cannot agree on additional work to be done or the
                 milestones or other deliverables to be met, during the balance
                 of the Collaboration Period.

RIGHTS AND OBLIGATIONS OF THE PARTIES AFTER TERMINATION

7.2      Notwithstanding the foregoing, all rights and obligations of the
parties accruing before the effective date of the termination of the
Collaboration herein and all rights and obligations expressly stated to
continue after or accrue as a result of, the termination of the Collaboration,
will survive the effective date of such termination and will continue in full
force and effect, provided that

         (a)     if UCAR CARBON terminates the Collaboration herein without
         cause, or BPS terminates the Collaboration as a result of UCAR CARBON
         being the subject of an Event of Default,

                 (i)      Section 2.10 will cease to apply, and

                 (ii)     subject to the confidentiality obligations under Part
                 4, BPS will have, and UCAR CARBON will be deemed to have
                 granted to BPS, a perpetual, irrevocable, worldwide,
                 non-exclusive, royalty-free and paid-up right and license,
                 sublicensable by BPS, to exploit the UCAR Arising IPR and, to
                 the extent reasonably necessary, the UCAR Background IPR, to
                 enable BPS to make, have made, use or sell the Materials, in
                 connection with the development, manufacture, use or sale of
                 electrically conductive fuel cell separator plates. The grant
                 of the license under this Section 7.2(a)(ii) will be without
                 prejudice and in addition to the license granted under Section
                 2.9 and includes the right by BPS to disclose UCAR CARBON's
                 Confidential Information to BPS's sublicensees in connection
                 with the production, use or sale of the Materials. UCAR CARBON
                 will promptly, upon request, transfer to and provide BPS with
                 all relevant technology, information, training and technical
                 assistance as may be necessary for such purpose at a fee that
                 reflects no more than the reasonable cost of effecting such
                 technology transfer, training and technical assistance,

         (b)     if BPS terminates the Collaboration herein without cause, or
         UCAR CARBON terminates the Collaboration as a result of BPS being the
         subject of an Event of Default,





                                       15
<PAGE>   17
                 (i)      Section 2.9 and Section 2.10 will cease to apply, and

                 (ii)     subject to the confidentiality obligations under Part
                 4, BPS will provide UCAR CARBON with such irrevocable consents
                 as may be necessary to permit UCAR CARBON to make, have made
                 and sell the Materials,

         (c)     if the supply agreement contemplated in Section 5.1 is not
         concluded on or before the Supply Agreement Deadline Date, UCAR will,
         if so requested by BPS, continue supplying the Materials to BPS on
         commercially reasonable terms, at commercially reasonable prices for a
         period not exceeding 6 months. If the parties fail to agree on such
         terms or prices within 60 days after the Supply Agreement Deadline
         Date, the matter will be determined by arbitration pursuant to Section
         6.4, mutatis mutandis,

         (d)     Section 7.2(a) and (b), Section 2.8, Section 2.9 and Section
         2.10 will be suspended if the agreement for the supply of the
         Materials by UCAR CARBON to BPS, as contemplated in Section 5.1 has
         not been concluded on or before the Supply Agreement Deadline Date;
         provided that

                 (i)      subject to Section 7.2(d)(ii), such provisions will
                 reapply immediately following the execution of any such
                 agreement at any time after such date, and

                 (ii)     such provisions will be deemed cancelled if such an
                 agreement has not been concluded within 9 months after the
                 Supply Agreement Deadline Date, and

         (e)     for greater certainty, Section 7.2(a) and Section 7.2(b) will
         not apply if the Collaboration is terminated pursuant to Section
         7.1(d).

RETURN OF CONFIDENTIAL INFORMATION

7.3      Except as may be required for the purposes of effectively utilizing
any licensing rights arising upon or continuing after the end of the
Collaboration, forthwith upon termination of the Collaboration, each party
will, upon request, return or cause to be returned to the other all
Confidential Information of the other in its possession or under its control,
regardless of form, including all known and existing copies and reproductions
thereof.

                                     PART 8

                                    GENERAL

MODIFICATIONS, APPROVALS AND CONSENTS

8.1      No amendment, modification, supplement, termination or waiver of any
provision of this Agreement will be effective unless in writing signed by the
appropriate party and then only in the specific instance and for the specific
purpose given.





                                       16
<PAGE>   18
FURTHER ASSURANCES

8.2      The parties will execute such further assurances and other documents
and instruments and do such further and other things as may be necessary to
implement and carry out the intent of this Agreement.

ENTIRE AGREEMENT

8.3      The provisions in this Agreement constitute the entire agreement
between the parties hereto and supersede all previous expectations,
understandings, communications, representations and agreements whether verbal
or written between the parties.

NOTICES

8.4      Every notice, request, demand, direction or other communication (each,
for the purposes of Section 8.4, Section 8.5 and Section 8.6, a "Notice")
required or permitted to be given pursuant to this Agreement will be deemed to
be well and sufficiently given if in writing and delivered by hand (including
recognized overnight courier service) or transmitted by facsimile, in each case
addressed as follows:

         (a)     if to BPS at:

                 9000 Glenlyon Parkway
                 Burnaby, British Columbia
                 Canada V5J 5J9
                 Attention:    Chief Operating Officer
                 Facsimile:    (604) 412-3131

                 with a copy to BPS's Vice-President and General Counsel at the
                 same address and facsimile number; and

         (b)     if to UCAR CARBON at:

                 3102 West End Avenue,
                 Suite 1100
                 Nashville, Tennessee
                 USA 37203
                 Attention:    The President
                 Facsimile:    (615) 760-7797

                 with a copy to UCAR CARBON's Vice-President and General
                 Counsel at the same address and facsimile number;

or to such other address or transmission receiving station as is specified by
the particular party by Notice to the others.





                                       17
<PAGE>   19
DEEMED RECEIPT

8.5      Any Notice delivered or sent as aforesaid will be deemed conclusively
to have been effectively given and received on the day Notice was delivered or
sent as aforesaid if it was delivered or sent on a day that was a Business Day
or on the next day that is a Business Day if it was delivered or sent on a day
that was not a Business Day.

CHANGE OF ADDRESS

8.6      A party may at any time, by Notice to the others, change its address
to some no less convenient address and will so change its address whenever its
address ceases to be suitable for delivery by hand.

ENUREMENT

8.7      This Agreement will enure to the benefit of and be binding upon the
parties and their respective successors and permitted assigns.

APPLICABLE LAW

8.8      This Agreement will be deemed to have been made in British Columbia,
Canada and the construction, validity and performance of this Agreement will be
governed in all respects by the laws of British Columbia and applicable laws of
Canada. The application of the provisions of the United Nations Convention on
Contracts for the International Sale of Goods are hereby excluded.

ATTORNMENT

8.9      Each party irrevocably attorns to the exclusive jurisdiction of the
courts of British Columbia, Canada and all courts having appellate jurisdiction
thereover in respect of any proceeding arising out of or relating to this
Agreement.

FORCE MAJEURE

8.10     Neither party will be liable to the other for default or delay in the
performance of its obligations under this Agreement if such default or delay is
caused by fire, strike, riot, war, act of God, delay of carriers, governmental
orders or regulation, complete or partial shutdown of plant by reason of
inability to obtain sufficient raw material or power, or any other occurrence
beyond the reasonable control of such party. The party whose performance is
prevented by any such occurrence will notify the other party of the same in
writing as soon as is reasonably possible after the commencement thereof, will
provide the other with full written particulars of such occurrence and attempts
made to remedy the same, will use commercially reasonable best efforts to
remedy such occurrence with all reasonable dispatch and, upon cessation of the
occurrence, will give prompt written notice to the other party of the same.





                                       18
<PAGE>   20
SEVERABILITY

8.11     If any provision contained in this Agreement is found by any court or
arbitrator for any reason, to be invalid, illegal or unenforceable in any
respect in any jurisdiction,

         (a)     the validity, legality and enforceability of such provision
         will not in any way be affected or impaired thereby in any other
         jurisdiction and the validity, legality and enforceability of the
         remaining provisions contained herein will not in any way be affected
         or impaired thereby, unless in either case as a result of such
         determination this Agreement would fail in its essential purpose, and

         (b)     the parties will use their best efforts to substitute for any
         provision that is invalid, illegal or unenforceable in any
         jurisdiction a valid and enforceable provision which achieves to the
         greatest extent possible the economic, legal and commercial objectives
         of such invalid, illegal or unenforceable provision and of this
         Agreement and, failing the agreement of the parties on such a
         substitution within 30 days after the finding of the court or
         arbitrator, either party may refer the matter for dispute resolution
         under Part 6.

COUNTERPARTS

8.12     This Agreement may be executed in counterparts or by facsimile, each
of which will together, for all purposes, constitute one and the same
instrument, binding on the parties, and each of which will together be deemed
to be an original, notwithstanding that both parties are not signatories to the
same counterpart or facsimile.

ASSIGNMENT

8.13     Neither party may assign any right, benefit or interest in this
Agreement without the written consent of the other party, and any purported
assignment without such consent will be void.

IN WITNESS WHEREOF the parties have executed this Agreement as of the day and
year first above written.

BALLARD POWER SYSTEMS INC.


By:      /s/
   ----------------------------------------

Its:     Vice President and General Counsel
         ----------------------------------


UCAR CARBON COMPANY INC.


By:      /s/ Peter B. Mancino
   ----------------------------------------

Its:     Vice President
    ---------------------------------------





                                       19
<PAGE>   21
                                   Schedule A

                               Statement of Work

Project Plan For Materials and Target Products Development
__________________________________________________________

BACKGROUND

The development of Materials for electrically conductive fuel cell separator
plates has taken several years and demonstrates that BPS and, where applicable,
one or more of its Affiliates (collectively "Ballard") and UCAR CARBON can work
together successfully.  Because of the past success of the co-operative effort
and the technical aspects of the material we now need to enter into a closer
relationship and to focus our efforts on taking this product into high volume
production. To this end we have entered into a Collaboration Agreement and in
support of that agreement a detailed Development Plan has been constructed.
This plan has been developed in a series of meetings with UCAR CARBON, BPS and
Ballard Power Systems GmbH ("Ballard Germany"). This plan is intended to guide
the development and outline the resources needed to achieve our goals.

THE DEVELOPMENT PLAN

The work over the next few years has been divided into 5 programs. For each
program a "champion" has been selected at both Ballard and UCAR CARBON. Each of
these programs has interactions with the others and it will be a significant
challenge to co-ordinate the activities at the three work locations. [text
redacted] Telephone meetings will be held by the team to discuss progress.

The plan will be guided by the Committee which will set goals and priorities.
The Committee will consist of a manager and one of the technical team leaders
from each of Ballard and UCAR CARBON. The Committee will meet [text redacted] to
evaluate progress and set or adjust the goals. The individual teams will be
responsible for detailed scheduling and planning.

Each of the programs discussed below (with the exception of the production
preparation study) has an iterative nature. Each program also has associated
technical risks. It is expected that each iteration will produce an improvement
than can be integrated with the results of other programs and used in the
continued development of the fuel cell. A second series of programs will then
be planned and executed to make further improvements. For this reason specific
deliverables have been identified for 1999 but not for future years. The
Committee should set these based on the progress made in 1999.

1.       Material [text redacted]
         ________

Goal:    To improve the ability of a Material [text redacted]

Ballard Champion
UCAR Champion     [text redacted]
<PAGE>   22
Methodology:  [text redacted]


Deliverables:

1.       UCAR CARBON will supply Ballard with different grades of Materials to
         [text redacted]  by   [text redacted]
2.       Ballard will finish evaluation by  [text redacted]
3.       Preliminary specification for new grade Materials  [text redacted]
         will be issued by the team before      .  This specification will
         then be integrated in to other projects.
2.       [text redacted]

Goal:  To reduce the cost of Materials  [text redacted]

Ballard Champion:   [text redacted]
UCAR Champion:

Methodology:

[text redacted]  Each of these parameters interact with the final properties of
the Materials. New grades which meet the overall technical requirements must be
developed based on a broader supply base as well as less costly treatment
processes.  [text redacted]  UCAR CARBON will produce series of test grades of
Materials and screen them using  [text redacted] tests. Ballard will then check
the leading Materials for performance in Target Products. From the initial
matrix of grades the most promising grades will integrated into the other
programs. The aim will be to qualify multiple grades from UCAR CARBON's existing
sources.

Deliverables

1.       UCAR CARBON will supply Ballard with  [text redacted]
                                                   Materials by  [text redacted]



                                       2
<PAGE>   23
2.       Ballard and UCAR CARBON will evaluate these grades of Materials Ex
         Situ by [text redacted].
3.       UCAR CARBON will deliver a new grade of Material [text redacted] and
         lower cost grades by [text redacted].

Goal: [text redacted]

Ballard Champion: [text redacted]
UCAR Champion:

Methodology:

[text redacted] It is now necessary to study the process and optimize the
process parameters to give the highest rate with the best plate properties.
[text redacted] A set of tools will be commissioned and used to test a matrix
of starting Materials. As new grades are developed in the other studies they
will be integrated into this program. This is the expected process for
[text redacted] parts electrically conductive fuel cell separator plates.

Deliverables

1.
2.    [text redacted]
4.

Goal:  To develop a [text redacted] Material based on [text redacted] which can
be formed [text redacted] into a Target Product.

Ballard Champion: [text redacted]
UCAR Champion:

Methodology:

[text redacted] Further work is needed to define the actual composition of the
new Material. As the composition is refined, [text redacted] will be carried out
to determine the processing characteristics. Initially this will be done with
[text redacted] and when the Material is more developed [text redacted] into
Target Products. As work progresses in developing lower cost grades of Materials
[text redacted], these concepts will be integrated into this program.





                                       3
<PAGE>   24
1.      UCAR CARBON will deliver to Ballard 4 [text redacted] Materials in 1999.
2.      UCAR CARBON will demonstrate [text redacted] at a laboratory scale on
        [text redacted].
3.      Ballard will examine each set of [text redacted] Material and report on
        its suitability for use in Target Products within 2 months after the
        delivery date.
4.      UCAR CARBON and Ballard will issue a preliminary specification [text
        redacted] in the Material on [text redacted].

5.      Target Product [text redacted]

Goal:  To determine what infrastructure will be needed for high volume
production of Target Products. [text redacted]

Ballard Champion:
UCAR Champion:

Methodology: [text redacted]

Deliverables

1.      [text redacted]

2.      Ballard and UCAR CARBON to define milestones and critical dates by
        for implementation activities to meet commercial production goals.

3.      [text redacted]





                                       4
<PAGE>   25
                                   Schedule B

                               List of Materials


<TABLE>
<CAPTION>
Grade              Date Sent               Description
<S>                  <C>                   <C>
</TABLE>


                    [text redacted]
<PAGE>   26
                                   Schedule C

                            MUTUAL SECRECY AGREEMENT

         This AGREEMENT effective as of the 17th day of May, 1996, is between
UCAR CARBON COMPANY INC., a Delaware corporation, having offices at 39 Old
Ridgebury Road, Danbury, Connecticut 06817 (hereinafter referred to as "UCAR
CARBON"); and BALLARD POWER SYSTEMS INC., having an office at 9000 Glenlyon
Parkway, Burnaby, B.C. Canada V5J 5J9 (hereinafter referred to as "BALLARD").

         WHEREAS, UCAR CARBON possesses certain proprietary information
(hereinafter UCAR CARBON Proprietary Information) relating to the manufacture
of flexible graphite for use in fuel cells.

         WHEREAS, BALLARD possesses certain proprietary information
(hereinafter BALLARD Proprietary Information) relating to fuel cells and
components for fuel cells.

         WHEREAS, UCAR CARBON and BALLARD desire to exchange such proprietary
information (hereinafter individually and collectively referred to as
"Proprietary Information") for the purpose of UCAR CARBON supplying flexible
graphite produced employing UCAR CARBON Proprietary Information to BALLARD
under a separate purchase order.

         WHEREAS, each party is willing to disclose to the other party its
Proprietary Information for the specific purposes of this Agreement under the
following conditions:

         1.      During the term of this Agreement, the receiving party agrees
to hold in confidence and not disclose to any person or persons, other than its
employees with a need to know, or use except for the purpose of this agreement,
for a period of fifteen (15) years from the date of each disclosure, any and
all Proprietary Information disclosed in writing and identified as Proprietary
Information by the disclosing party.  If Proprietary Information is disclosed
orally or in other than written form, it must be identified as Proprietary
Information at the time of
<PAGE>   27
disclosure and summarized in writing and identified as Proprietary Information
by the disclosing party within thirty (30) days from the date of the
disclosure.  It is understood that the foregoing obligation of confidentiality
does not apply to:

         a)      information which at the time of disclosure is in the public
                 domain;

         b)      information which is published or otherwise becomes part of
                 the public domain through no fault of the receiving party
                 after the disclosure hereunder;

         c)      information which the receiving party can demonstrate by
                 reasonably convincing evidence is already known or in the
                 possession of the receiving party at the time of disclosure
                 hereunder;

         d)      information that the receiving party can show was received by
                 it after the time of the disclosure hereunder from a third
                 party on a non-confidential basis who did not acquire such
                 information directly or indirectly from the disclosing party
                 under an obligation of confidence; or

         e)      information that is developed by an employee of the receiving
                 party independent of any such disclosure under this Agreement.

         2.      The receiving party agrees to use at least the same degree of
care in maintaining the other party's Proprietary Information confidential as
it does for maintaining the confidentiality of its own Proprietary Information
of a similar nature.

         3.      The receiving party agrees not to copy any Proprietary
Information without the written permission of the disclosing party, and shall
return such Proprietary Information and any copies when requested to do so by
the disclosing party during the term of this Agreement

         4.      No license, express or implied, is granted by either party to
the other party under any patent, trade secret or copyright now or hereafter
owned by either party under this Agreement.

         5.      This Agreement shall be construed and interpreted, and its
performance shall be governed by substantive laws of the state of Connecticut,
U.S.A., without recourse to its conflict of laws, rules or principles.
<PAGE>   28
         6.      Either party upon thirty (30) days notice given in writing to
the other party may terminate this Agreement.  However, termination of the
Agreement will not affect the confidentiality and non-use obligations of either
party.

AGREED:

BALLARD POWER SYSTEMS INC.                 UCAR CARBON COMPANY INC.


By  /s/ Keith B. Prater                    By  /s/ R.M. Flowers
    -------------------------------            --------------------------------

Name  Keith B. Prater                      Name  R.M. Flowers
      -----------------------------              ------------------------------

Title  Vice President                      Title  Dir.-Worldwide Tech.
       ----------------------------               -----------------------------

Date  21 Jun 96                            Date  July 2, 1996
      -----------------------------              ------------------------------

<PAGE>   29
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                           PAGE
<S>                                                                                                         <C>
PART 1   DEFINITIONS AND INTERPRETATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2

     Definitions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2

     Interpretation   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5

     Schedules  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6

PART 2   COLLABORATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6

     Collaboration  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6

     Limited Purpose  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  7

     Collaboration Term   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  7

     Steering Committee   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  7

     Duties of Committee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  7

     Work and Costs   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

     Project Manager  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

     Product Development Lead Time  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

     License by UCAR  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9

     Sublicense by BPS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9

PART 3   INTELLECTUAL PROPERTY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10

     Disclosure of IPR for the Collaboration  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10

     BPS's License to UCAR CARBON for Collaboration   . . . . . . . . . . . . . . . . . . . . . . . . . .   10

     UCAR CARBON's License to BPS for Collaboration   . . . . . . . . . . . . . . . . . . . . . . . . . .   10

     Ownership of Arising IPR   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10

     Patents  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10

     Consent to Use of Confidential Information   . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11

     Infringement Claim   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11

PART 4   CONFIDENTIALITY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11

     Confidentiality Obligations  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11

     Exceptions for Confidentiality   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11

     Employment Relations   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12

     Reasonable Restriction   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12

     Non-Disclosure of Collaboration  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12

     Mutual Secrecy Agreement   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   12

     Additional Confidentiality Obligation of UCAR CARBON   . . . . . . . . . . . . . . . . . . . . . . .   13
</TABLE>





                                      -i-
<PAGE>   30
                              TABLE OF CONTENTS
                                 (CONTINUED)
<TABLE>
<CAPTION>
                                                                                                           PAGE
<S>                                                                                                         <C>
PART 5   SUPPLY   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13

     Supply   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13

PART 6   DISPUTE RESOLUTION   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13

     Initiation of Process  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13

     Referral to Committee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13

     Referral to Chief Executive Officers   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13

     Submission to Arbitration  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14

     Acceptance and Implementation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14

     Place of Arbitration   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14

     Legal Proceedings  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14

     Exclusions   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14

PART 7   TERMINATION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14

     Termination  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14

     Rights and Obligations of the Parties After Termination  . . . . . . . . . . . . . . . . . . . . . .   15

     Return of Confidential Information   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16

PART 8   GENERAL  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16

     Modifications, Approvals and Consents  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16

     Further Assurances   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   17

     Entire Agreement   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   17

     Notices  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   17

     Deemed Receipt   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   18

     Change of Address  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   18

     Enurement  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   18

     Applicable Law   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   18

     Attornment   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   18

     Force Majeure  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   18

     Severability   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   19

     Counterparts   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   19

     Assignment   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   19
</TABLE>





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