<PAGE>

                                                                   EXHIBIT 10.26


                           U.S. DEPARTMENT OF ENERGY
                     NOTICE OF FINANCIAL ASSISTANCE AWARD
                         (See Instructions on Reverse)

Under the authority of Public Law 95-91, U.S. Department of Energy Organization
                                  ---------------------------------------------
Act and subject to legislation, regulations and policies applicable to (cite
---
legislative program title): Advanced Automotive Technologies

<TABLE>
<S>                                                             <C>
-----------------------------------------------------------------------------------------------------------------------------------
1. PROJECT TITLE                                                2.  INSTRUMENT TYPE
Development of Fuel Processor, Durability Demonstration and              [_] GRANT     [X] COOPERATIVE AGREEMENT
10kW System
-----------------------------------------------------------------------------------------------------------------------------------
3. RECIPIENT (Name, address, zip code, area code and            4.  INSTRUMENT NO.                5. AMENDMENT NO.
    telephone no.)                                                  DE-FC02-99EE50580                A000
    Arthur D. Little, Inc.                                      -------------------------------------------------------------------
    Acorn Park                                                  6.  BUDGET     FROM: 07/15/1999   7. PROJECT     FROM: 07/15/1999
    Cambridge, MA 02140-2390                (617) 498-5636          PERIOD     THRU: 01/14/2003       PERIOD     THRU: 01/14/2003
-----------------------------------------------------------------------------------------------------------------------------------
8. RECIPIENT PROJECT DIRECTOR (Name and telephone no.)          10. TYPE OF AWARD
William L. Mitchell [(617) 498-5097]                            [X]   New         [_]    Continuation       [_]    Renewal
--------------------------------------------------------------  [_]   Revision    [_]    Supplement         [_]    Other
9. RECIPIENT BUSINESS OFFICER (Name and telephone no.)
Judith Blinn [(617) 498-5636]
-----------------------------------------------------------------------------------------------------------------------------------
11. DOE PROJECT OFFICER (Name, address, zip code,               12. ADMINISTERED FOR DOE BY (Name, address, zip code,
     telephone no.)                                                  telephone no.)
Pat Davis         U.S. Department of Energy                     Denise Clarke                               (630) 252-2107
EE-321            Washington, DC 20585-0121                     U.S. Department of Energy/ACQ
202/586-8061                                                    9800 South Cass Avenue
                                                                Argonne, IL 60439
-----------------------------------------------------------------------------------------------------------------------------------
13. RECIPIENT TYPE
                    [_] STATE GOV'T   [_] INDIAN TRIBAL GOV'T    [_] HOSPITAL      [X] FOR PROFIT              [_] INDIVIDUAL
                                                                                       ORGANIZATION

                    [_] LOCAL GOV'T   [_] INSTITUTION OF         [_] OTHER NONPROFIT                           [_] OTHER (Specify)
                                           HIGHER EDUCATION          ORGANIZATION       [X] C  [_] P  [_] SP   ___________________
-----------------------------------------------------------------------------------------------------------------------------------
14. ACCOUNTING AND APPROPRIATIONS DATA                                                                          15. EMPLOYER I.D.
                                                                                                                    NUMBER/SSN
--------------------------------------------------------------------------------------------------------------
   a. Appropriation Symbol             b. B & R Number               c. FT/AFP/OC             d. CFA Number         04-1549700
-----------------------------------------------------------------------------------------------------------------------------------
         89X0215.91                       EE-02-04                     HA/CH/410                   N/A
-----------------------------------------------------------------------------------------------------------------------------------
16. BUDGET AND FUNDING INFORMATION
-----------------------------------------------------------------------------------------------------------------------------------
a.   CURRENT BUDGET PERIOD INFORMATION                                     b. CUMULATIVE DOE OBLIGATIONS
-----------------------------------------------------------------------------------------------------------------------------------
(1) DOE Funds Obligated This Action                       $   800,000.00   (1) This Budget Period                    $ 800,000.00
                                                          --------------                                             ------------
(2) DOE Funds Authorized for Carry Over                   $         0.00       [Total of lines a.(1) and a.(3)]
                                                          --------------
(3) DOE Funds Previously Obligated in this Budget Period

                                                          $         0.00   (2) Prior Budget Periods                  $       0.00
                                                          --------------                                             ------------
(4) DOE Share of Total Approved Budget                    $13,244,698.00
                                                          --------------
(5) Recipient Share of Total Approved Budget              $ 6,609,313.00   (3) Project Period to Date                $ 800,000.00
                                                          --------------                                             ------------
(6) Total Approved Budget                                 $19,854,011.00       [Total of lines b.(1) and b.(2)]
                                                          --------------
-----------------------------------------------------------------------------------------------------------------------------------
17.   TOTAL ESTIMATED COST OF PROJECT       N/A
                                      -------------------------------------------------------------------------
      (This is the current estimated cost of the project. It is not a promise to award nor an authorization to expend funds in this
      amount.)
-----------------------------------------------------------------------------------------------------------------------------------
18. AWARD/AGREEMENT TERMS AND CONDITIONS
This award/agreement consists of this form plus the following:
a.  Special terms and conditions (if grant) or schedule, general provisions, special provisions (if cooperative agreement)
b.  Applicable program regulations (specify)       N/A                                         (Date) ____________________
                                            ---------------------------------------------------
c.  DOE Assistance Regulations, 10 CFR Part-600, as amended Subparts A and [X] B (Other than State and Local Governments) or
                                                                           [_] C (State and Local Governments)
d.  Application/proposal dated   10/29/98, Negotiated on 7/9/99               , [_] as submitted   [X] with changes as negotiated
                              ------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
19. REMARKS

See attached Page No. 2 of this Notice of Financial Assistance Award.

-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<S>                                                             <C>
20. EVIDENCE OF RECIPIENT ACCEPTANCE                            21. AWARDED BY

/s/ Judith Blinn                                    7/21/99     /s/ Charles G. Frazier                                Jul 14 1999
-------------------------------------------------------------   -------------------------------------------------------------------
(Signature of Authorized Recipient Official)         (Date)                                (Signature)                  (Date)

          Judith Blinn                                                Charles G. Frazier
-------------------------------------------------------------   -------------------------------------------------------------------
                        (Name)                                                                (Name)

          Contracting Officer                                         Acquisition and Assistance Group Contracting Officer
-------------------------------------------------------------   -------------------------------------------------------------------
                        (Title)                                                               (Title)
</TABLE>
<PAGE>

                                    Cooperative Agreement No.
                                    DE-FC02-99EE50580
                                    Page No. 2

REMARKS (continued)

a.   The following terms and conditions, attached hereto, are made a part
     hereof:

     (1)    Budget Page - DOE F 4620.1;

     (2)    Statement of Work;.

     (3)    Special Terms and Conditions for Research Financial Assistance
            Awards, coded SPRG-0299/APM;

     (4)    Additional Special Provisions;

     (5)    Federal Assistance Reporting Checklist, dated 1/28/99;

     (6)    Intellectual Property Provisions - Research, Development, or
            Demonstration Large Business, State and Local Governments, and
            Foreign Organizations, coded LB-498.

b.   All references to the terms "grant(s)" or "contract(s)" shall be read as
     "cooperative agreement" or "agreement;" the terms "grantee" or "contractor"
     shall be read as "participant, recipient or awardee;" the term "subgrant"
     shall be read as "subaward;" and the terms "subcontract" or "contract"
     awarded under a grant shall be read as "contract" under a cooperative
     agreement.
<PAGE>

                           U.S. Department of Energy
                                  Budget Page
                        (See reverse for Instructions)
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
ORGANIZATION
  Arthur D. Little, Inc.                                                           Budget Page No:           Summary
------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL INVESTIGATOR/PROJECT DIRECTOR
  William Mitchell Subtopic 1a; 1j; 1l                                                     Requested Duration:   42 months
------------------------------------------------------------------------------------------------------------------------------------
A. SENIOR PERSONNEL: PI/PD, Co-PI's, Faculty and Other Senior Associates                                    COST SHARE
                                                                      -------------                            BY          TOTAL
  (List each separately with  title; A.6. show number in brackets)     Hrs    $ hr.      DOE SHARE          APPLICANT      COSTS
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>                <C>            <C>
1.                                                                                       $    3,328,111  $        0    $   3,328,111
------------------------------------------------------------------------------------------------------------------------------------
2.
------------------------------------------------------------------------------------------------------------------------------------
3.
------------------------------------------------------------------------------------------------------------------------------------
4.
------------------------------------------------------------------------------------------------------------------------------------
5.
------------------------------------------------------------------------------------------------------------------------------------
6. ( ) OTHERS (LIST INDIVIDUALLY ON BUDGET EXPLANATION PAGE)
------------------------------------------------------------------------------------------------------------------------------------
7. ( ) TOTAL SENIOR PERSONNEL (1-6)
------------------------------------------------------------------------------------------------------------------------------------
8. OTHER PERSONNEL (SHOW NUMBERS IN BRACKETS)
------------------------------------------------------------------------------------------------------------------------------------
1. (0) POST DOCTORAL ASSOCIATES
------------------------------------------------------------------------------------------------------------------------------------
2. (0) OTHER PROFESSIONAL (TECHNICIAN, PROGRAMMER, ETC.)
------------------------------------------------------------------------------------------------------------------------------------
3. (0) GRADUATE STUDENTS
------------------------------------------------------------------------------------------------------------------------------------
4. (0) UNDERGRADUATE STUDENTS
------------------------------------------------------------------------------------------------------------------------------------
5. (0) SECRETARIAL - CLERICAL
------------------------------------------------------------------------------------------------------------------------------------
6. ( ) OTHER
------------------------------------------------------------------------------------------------------------------------------------
   TOTAL SALARIES AND WAGES (A+B)                                                        $    3,328,111  $        0    $   3,328,111
------------------------------------------------------------------------------------------------------------------------------------
C. FRINGE BENEFITS (IF CHARGED AS DIRECT COSTS)
------------------------------------------------------------------------------------------------------------------------------------
   TOTAL SALARIES, WAGES AND FRINGE BENEFITS (A+B+C)                                     $    3,328,111  $        0    $   3,328,111
------------------------------------------------------------------------------------------------------------------------------------
D. PERMANENT EQUIPMENT (LIST ITEM AND DOLLAR AMOUNT
   FOR EACH ITEM)                                                                        -------------------------------------------

                                                                                         -------------------------------------------

                                                                                         -------------------------------------------

                                                                                         -------------------------------------------
 TOTAL PERMANENT EQUIPMENT
------------------------------------------------------------------------------------------------------------------------------------
E. TRAVEL                    1. DOMESTIC (INCL. CANADA AND U.S. POSSESSIONS)             $       93,230  $        0    $      93,230
------------------------------------------------------------------------------------------------------------------------------------
                             2. FOREIGN
                           ---------------------------------------------------------------------------------------------------------
     TOTAL TRAVEL                                                                        $       93,230  $        0    $      93,230
------------------------------------------------------------------------------------------------------------------------------------
F. TRAINEE/PARTICIPANT COSTS
                                                                                         -------------------------------------------
 1. STIPENDS (Itemize levels, types + totals on budget justification page)
                                                                                         -------------------------------------------
 2. TUITION & FEES
                                                                                         -------------------------------------------
 3. TRAINEE TRAVEL
                                                                                         -------------------------------------------
 4. OTHER (fully explain on justification page)
------------------------------------------------------------------------------------------------------------------------------------
 TOTAL PARTICIPANTS  (   ) TOTAL COST
------------------------------------------------------------------------------------------------------------------------------------
G. OTHER DIRECT COSTS
------------------------------------------------------------------------------------------------------------------------------------
 1. MATERIALS AND SUPPLIES                                                               $    2,412,201  $   18,000    $   2,430,201
------------------------------------------------------------------------------------------------------------------------------------
 2. PUBLICATION COSTS/DOCUMENTATION/DISSEMINATION
------------------------------------------------------------------------------------------------------------------------------------
 3. CONSULTANT SERVICES                                                                  $            0  $        0    $           0
------------------------------------------------------------------------------------------------------------------------------------
 4. COMPUTER (ADPE) SERVICES
------------------------------------------------------------------------------------------------------------------------------------
 5. SUBCONTRACTS                                                                         $    4,526,793  $1,438,147    $   5,964,940
------------------------------------------------------------------------------------------------------------------------------------
 6. OTHER (fully explain on justification page)  (Supp Exp & Misc ODCs)                  $      851,713  $    4,000    $     855,713
------------------------------------------------------------------------------------------------------------------------------------
     TOTAL OTHER DIRECT COSTS                                                            $    7,790,707  $1,460,147    $   9,250,854
------------------------------------------------------------------------------------------------------------------------------------
H.  TOTAL DIRECT COSTS (A THROUGH G)                                                     $   11,212,048  $1,460,147    $  12,672,195
------------------------------------------------------------------------------------------------------------------------------------
I.  INDIRECT COSTS (SPECIFY RATE AND BASE) Labor OH @ 150% on DL & FB
                                                                                         -------------------------------------------
        Material OH @ 4% on G1 & G5   G&A @ 20% DL, FB, DLOH & ODC                       $    2,032,652  $5,149,165    $   7,181,818
                                                                                         -------------------------------------------
    TOTAL INDIRECT COSTS                                                                 $    2,032,652  $5,149,165    $   7,181,818
------------------------------------------------------------------------------------------------------------------------------------
J.  TOTAL DIRECT AND INDIRECT COSTS (H+I)                                                $   13,244,698  $6,609,313    $  19,854,011
------------------------------------------------------------------------------------------------------------------------------------
K.  AMOUNT OF ANY REQUIRED COST SHARING FROM NON-
    FEDERAL SOURCES
------------------------------------------------------------------------------------------------------------------------------------
L. TOTAL COST OF PROJECT (J+K)                                                           $   13,244,698  $6,609,313    $  19,854,011
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                                             DOE             APPLICANT     TOTAL
                                  ----------------------------------------------
<PAGE>

                                                           COOPERATIVE AGREEMENT
                                                           NO. DE-FC02-99EE50580

                               STATEMENT OF WORK

1.  Statement of Work

Based on our current in-depth understanding of fuel processing and fuel cell
systems, Arthur D. Little, Inc. (Epyx) shall perform a three-part program that
will yield a fully optimized fuel processing subsystem. In the first part of the
program, Epyx will work with Energy Partners to integrate existing hardware into
a 10 kWe multi-fuel power system in order to identify key system level trade-
offs in the design of a fuel processing subsystem and to allow validation of
computer models developed both internally and by Argonne National Laboratories.
In the second part of the program, Epyx will utilize existing integrated and
disintegrated fuel processors to perform endurance testing that will identify
and address material and catalyst degradation mechanisms. The output of this
part of the program will feed directly into the final fuel processor design in
the third part of the program. The major element of the third part of the
program will be an in-depth catalysis R&D program that has been constructed to
identify high-activity, low--cost catalysts. The new catalysts and supports will
be integrated into a fuel processor package specifically suited to the optimized
catalyst suite. The output of this program will be a fully integrated fuel
processing subsystem that meets or exceeds 2004 PNGV targets.

2.  Project Description
The work to be performed consists of the following tasks:

Task 1.        Development of an Integrated State-of-the-Art Fuel Cell Power
               System - Topic 1A
Task 2.        Fuel Processor Durability -Topic 1L
Task 3.        Advanced Fuel Processor Development - Topic 1J

3.  Performance Schedule
Task 1.        Completed 9 months after start of work (except support during
               testing at Argonne)
Task 2.        Completed 24 months after start of work
Task 3.        Completed 42 months after start of work

4.  Reporting Requirement
Epyx will provide a final report describing:
 .   Performance of the fuel processor system and PROX reactor
 .   Data from the experiments performed along with analyses based on these data
 .   Identification of key issues

                                       1
<PAGE>

Additionally, Epyx will provide periodic updates and quarterly reports as per
the requirements set forth in this SFAA.

5.  Deliverables
In addition to the reporting requirements, Epyx will deliver:
 .   A 10 kWe fuel cell power system as DOE property for delivery to a TBD
    location,
 .   A 50 kWe fuel processor for delivery to Los Alamos National Laboratory, and
 .   The demonstration of a 50 kWe fuel processing subsystem that meets or
    exceeds the 2004 DOE/PNGV targets. This fuel processing subsystem will
    remain the property of DOE.

                                       2
<PAGE>

          Special Terms and Conditions for Financial Assistance Awards
          ------------------------------------------------------------

The requirements of this attachment take precedence over all other requirements
of this award found in regulations, the general terms and conditions, DOE
orders, etc., except requirements of statutory law. Any apparent contradiction
of statutory law stated herein should be presumed to be in error until recipient
has sought and received clarification from the Contracting Officer.

1.   PAYMENT OFFICE
     --------------

          CR-54/CHO
          Account Payable Division
          U. S. Department of Energy
          P.O. Box 500
          Germantown, MD 20874-0500

2.   FINANCE OFFICE
     --------------

          U. S. Department of Energy
          Chicago Operations Office
          Financial Services Group
          9800 South Cass Avenue
          Argonne, Illinois 60439

3.   PAYMENT - Advance Payment under this award will be made by:
     -------

     [_]  Department of Health & Human Services (DHHS) Payment Management System
          (PMS), formerly DOE Letter of Credit.

          The recipient shall request cash only as needed for immediate
          disbursements, shall report cash disbursements in a timely manner, and
          shall impose the same standards of timing and amount, including
          reporting requirements, on secondary recipients.


     [X]  Automated Clearing House (ACH)

          An original Request for Advance or Reimbursement, SF 270, shall be
          submitted as necessary to the Payment Office specified in Section 1
          above, and one copy of the SF 270 shall be submitted to the Contract
          Specialist specified in Block 12 of the Notice of Financial Assistance
          Award (DOE F 4600.1). The timing and amount of advances shall be as
          close as is administratively feasible to the actual disbursements.
          Such
<PAGE>

                                      -2-

          requests shall not be made in excess of reasonable estimates of
          cash outlays for a 30 day period.

                                                                   SPRG-0299/APM
<PAGE>

                                      -3-

          Payment under this award will be accomplished by the Payment Office
          via ACH, an electronic funds transfer. A completed "Automated Clearing
          House (ACH) Vendor Miscellaneous Payment Enrollment Form" must be on
          file with the Finance Office prior to processing your payment.

4.   DECONTAMINATION AND/OR DECOMMISSIONING D&D COSTS
     ------------------------------------------------

     Notwithstanding any other provisions of this Agreement, including but not
     limited to FAR 31.205-31, when applicable, as incorporated by Financial
     Assistance Rule 600.127(a), the Government shall not be responsible for or
     have any obligation to the recipient for (i) Decontamination and/or
     Decommissioning (D&D) of any of the Recipient's facilities, or (ii) any
     costs which may be incurred by the Recipient in connection with the D&D of
     any of its facilities due to the performance of the work under this
     Agreement, whether said work was performed prior to or subsequent to the
     effective date of this Agreement.

5.   FEDERALLY-OWNED PROPERTY
     ------------------------

     If you acquire federally-owned property under this award whether
     fabricated, furnished or purchased with Capital Equipment Funds, then a
     listing of such property shall be submitted on DOE F 4300.3, Summary Report
     of DOE-Owned Plant & Capital Equipment, to the Contracting Officer within
     45 days after August 31 of each year and within 30 days after the project
     period ends. The report must separately identify items which were
     fabricated, furnished, or purchased with Capital Equipment funds under this
     award.

     Any Capital Equipment funds and the equipment to be purchased, fabricated,
     or furnished with such funds are indicated on Page No. 2 of the Notice of
     Financial Assistance Award.

6.   NOTICE REGARDING PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS - SENSE
     -------------------------------------------------------------------------
     OF CONGRESS
     -----------

     It is the sense of the Congress that, to the greatest extent practicable,
     all equipment and products purchased with funds made available under this
     award should be American-made.
<PAGE>

                                      -4-

                                                                   SPRG-0299/APM
<PAGE>

                                      -5-

7.   NOTICE REGARDING UNALLOWABLE COSTS AND LOBBYING ACTIVITIES
     ----------------------------------------------------------

     Recipients of financial assistance are cautioned to carefully review the
     allowable cost and other provisions applicable to expenditures under their
     particular award instruments. If financial assistance funds are spent for
     purposes or in amounts inconsistent with the allowable cost or any other
     provisions governing expenditures in an award instrument, the government
     may pursue a number of remedies against the recipient, including in
     appropriate circumstances, recovery of such funds, termination of the
     award, suspension or debarment of the recipient from future awards, and
     criminal prosecution for false statements.

     Particular care should be taken by the recipient to comply with the
     provisions prohibiting the expenditure of funds for lobbying and related
     activities. Financial assistance awards may be used to describe and promote
     the understanding of scientific and technical aspects of specific energy
     technologies, but not to encourage or support political activities such as
     the collection and dissemination of information related to potential,
     planned or pending legislation.

8.   ADDITIONAL PROVISIONS
     ---------------------

     If the appropriation symbol contained in Block 14.a. of the Notice of
     Financial Assistance Award for this award is listed below, paragraph 8.a.
     is applicable to this award, otherwise paragraph 8.b. applies:

          89X0213.91     89X0215.91      89X0218.91
          89X0214.91     89X0216.91      89X0235.91

     a.   Department of Interior Appropriations Act Funding:
          -------------------------------------------------

          1.   Lobbying Restriction (Department of Interior & Related Agencies
               ---------------------------------------------------------------
               Appropriations Act, 1999)
               -------------------------

               The contractor or awardee agrees that none of the funds obligated
               on this award shall be made available for any activity or the
               publication or distribution of literature that in any way tends
               to promote public support or opposition to any legislative
               proposal on which Congressional action is not complete. This
               restriction is in addition to those prescribed elsewhere in
               statute and regulation.
<PAGE>

                                      -6-

                                                                   SPRG-0299/APM
<PAGE>

                                      -7-

          2.   Compliance With Buy American Act
               --------------------------------

               In accepting this award, the recipient agrees to comply with
               sections 2 through 4 of the Act of March 3, 1933 (41 U.S.C. 10a-
               10c, popularly known as the "Buy American Act"). The recipient
               should review the provisions of the Act to ensure that
               expenditures made under this award are in accordance with it.

     b.   Energy & Water Development Appropriations Act Funding:
          -----------------------------------------------------

          Lobbying Restriction (Energy and Water Development Appropriations Act,
          ----------------------------------------------------------------------
          1999)
          -----

               The contractor or awardee agrees that none of the funds obligated
               on this award shall be expended, directly or indirectly, to
               influence congressional action on any legislation or
               appropriation matters pending before Congress, other than to
               communicate to Members of Congress as described in 18 U.S.C.
               1913. This restriction is in addition to those prescribed
               elsewhere in statute and regulation.

9.   REPORTING
     ---------

     Failure to comply with the reporting requirements contained in this award
     will be considered a material noncompliance with the terms of the award.
     Noncompliance may result in a withholding of future payments, suspension or
     termination of the current award, and withholding of future awards. A
     willful failure to perform, a history of failure to perform or of
     unsatisfactory performance of this and/or other financial assistance
     awards, may also result in a debarment action to preclude future awards by
     Federal agencies.

                                                                   SPRG-0299/APM
<PAGE>

                         ADDITIONAL SPECIAL PROVISIONS

                               TABLE OF CONTENTS


<TABLE>
<CAPTION>

CLAUSE    SUBJECT                                                                                                PAGE
------    -------                                                                                                ----

<S>                                                                                                               <C>
  1.      Cost Share Contributions...........................................................................      1

  2.      Fee................................................................................................      1

  3.      Statement of Substantial Involvement...............................................................      1

  4.      Technical Direction................................................................................      2

  5.      Continuation of Work...............................................................................      4

  6.      Restriction on Transfer of Fuel Cell Technology to Foreign Entities................................      4

  7.      Ceiling on Rate for Allowable Labor Indirect Costs to be Reimbursed by the Government..............      4

  8.      Partial Funding....................................................................................      4
</TABLE>
<PAGE>

                         ADDITIONAL SPECIAL PROVISIONS

1.   COST SHARE CONTRIBUTIONS
     ------------------------

     It is the intention of the Government and the Participant to share the
     allowable and allocable costs of performance of the work during this
     Agreement as set forth herein.

     The Government's contribution and support for this Agreement during the
     project period July 15, 1999 through January 14, 2003 will be
     $13,244,698.00. The Participant will contribute $6,609,313.00 toward the
     aforementioned project period. Notwithstanding any other provision in this
     Agreement, it is the intention of the Government and the Participant to
     share the total allowable and allocable costs of performance during the
     project period on a 66.7 percent (Government) and 33.3 percent
     (Participant) basis. It is understood by the parties that the DOE share of
     this project period is $13,244,698.00 and notwithstanding any other
     provision in this Agreement to the contrary, no additional Federal funding
     will be provided notwithstanding the total cost of the project at
     completion.

     In keeping with the cost share requirements set forth under this
     cooperative agreement the following cost sharing is necessary under each
     Topic:

     Development of an Integrated State-of-the-Art Fuel Cell Power System -
         Topic 1A (Cost Share 20%)
     Fuel Processor Durability - Topic 1L (Cost Share 35%)
     Advanced Fuel Processor Development - Topic 1J (Cost Share 40%)

     In the event the project is terminated early or not funded to its
     completion, the Participant understands and specifically agrees that the
     Government is not waiving the Participant's requisite cost share
     requirement and that in the event the project is not funded to its
     completion or otherwise terminated prior to completion, the Participant is
     still obligated to meet its requisite cost share. Participant further
     agrees that upon termination or at the completion of the project, upon
     notification by the Government, it will promptly submit to the Government
     all such sums due and owing to satisfy its requisite cost share. Failure to
     make such payment shall result in the Government undertaking collection
     action against the Participant. This understanding and agreement shall also
     apply to any additional budget periods within the project period wherein
     the Participant's aggregate cost share contribution to that date has not
     met the requisite cost share.

                                       1
<PAGE>

2.   FEE
     ---

     No fee shall be paid to the Recipient.

3.   STATEMENT OF SUBSTANTIAL INVOLVEMENT
     ------------------------------------

     The Department of Energy (Department, DOE) will be substantially involved
     in all Tasks of the Statement of Work. The Department will collaborate with
     the participant in evaluating, accepting, and achieving the milestones for
     research as proposed by the respondent.

     The Department will provide technical direction to the overall program, as
     well as the individual program elements as it is determined to be necessary
     and appropriate by DOE. The Department will participate during the full
     duration of the project, and will have continuing rights to conduct ongoing
     negotiations with the participant regarding the technical direction of the
     work conducted under this Agreement. The Department staff members will
     attend meetings and participate in the formation and direction of scope of
     the key development activities. The DOE Project Officer will participate in
     the development, review and approval of all proposed statements of work,
     including subcontractor statements of work, prior to the execution of any
     subcontract. The Department will review technical progress reports and
     provide input to these reports as deemed necessary. In addition, the
     Department will have the right to have National Laboratories or selected
     private organizations perform independent tests and evaluations of the
     cooperative agreement's deliverables, thus providing an additional measure
     of technical progress.

     The Department may collaborate with the participant in the allocation of
     funds budgeted for this Agreement. Further, as work progresses, funding
     needs may change and depending upon availability of funds, the Department
     may collaborate with the participant to reallocate funds budgeted between
     the different programs and projects.

     The Department will thus be actively monitoring all phases of the
     participant's research and development activities, including participation
     in the participant's reviews of its contractor's activities and review of
     the contractor's reports to the participant. The Department will actively
     participate in the participant's process of reviewing and approving each
     phase of the proposed programs and projects.

     The substantial involvement by the Department under this Agreement will
     remain in effect for the term of the cooperative agreement award unless
     otherwise amended in writing by the Contracting Officer. Moreover, this

                                       2
<PAGE>

     statement of substantial involvement by the Department does not increase
     the Department of Energy's liability under the Agreement award.

4.   TECHNICAL DIRECTION
     -------------------

     A.   The work to be performed by the Participant under this Cooperative
          Agreement is subject to the surveillance and written Technical
          Direction of a "DOE Project Officer," identified in block 11 of the
          face page. The term "Technical Direction" is defined to include,
          without limitation, the following:

          1. Directions to the Participant which redirects the work effort,
             shifts work emphasis between work areas or tasks, require pursuit
             of certain lines of inquiry, fill in details or otherwise provide
             technical guidance to the Participant in order to accomplish the
             tasks and requirements stated in the Statement of Work as contained
             in the agreement.

          2. Provision of information to the Participant which assists in the
             interpretation of drawings, specifications or technical portions of
             the Statement of Work as contained in the Agreement.

          3. Review and, where required by the Cooperative Agreement, approval
             of technical reports, drawings, specifications or technical
             information to be delivered by the Participant to DOE under the
             Cooperative Agreement.

          4. The DOE Project Officer shall monitor the Participant's performance
             with respect to compliance with the requirements of this
             Cooperative Agreement.

     B.   Technical direction and management surveillance shall not impose tasks
          or requirements upon the Participant additional to or different from
          the tasks and requirements stated in the Statement of Work of this
          Agreement. The Technical Direction to be valid:

          1. Must be issued in writing consistent with the tasks and
             requirements stated in the Statement of Work of this Agreement; and

          2. May not:

                                       3
<PAGE>

               a. constitute an assignment of additional work outside the tasks
                  and requirements stated in the Statement of Work of this
                  Agreement;

               b. in any manner cause an increase or decrease in the total
                  estimated project cost or the time required for project
                  performance;

               c. change any of the expressed terms, conditions or specification
                  of the Cooperative Agreement; or

               d. accept non-conforming work.

     C. The Participant shall proceed promptly with the performance of Technical
        Directions duly issued by the DOE Project Officer in the manner
        prescribed by paragraph B. above and which are within his authority
        under the provisions of paragraph A. above; provided, however, that the
        Participant shall immediately cease the performance of any Technical
        Direction upon receipt of a written instruction to that effect from the
        Contracting Officer.

     D. If in the opinion of the Participant any Technical Direction issued by
        the DOE Project Officer is within one of the categories as defined in B.
        2. (a) through (d) above, the Participant shall not proceed but shall
        notify the Contracting Officer in writing within five working days after
        the receipt of any such Technical Direction and shall request the
        Contracting Officer to rescind such direction or mutually agree to
        modify the agreement accordingly.

     E. The only persons authorized to give Technical Direction to the
        Participant under this Agreement are the Contracting Officer and any
        "DOE Project Officer" as listed in Block 11 of the face page. Any action
        taken by the Participant in response to any direction given by any
        person other than the Contracting Officer or DOE Project Officer shall
        not be binding upon the Government.

5.   CONTINUATION OF WORK
     --------------------

     There will be an evaluation of the progress near the end of each year of
     the work to determine to either continue, redirect, or terminate the
     project.

                                       4
<PAGE>

6.   RESTRICTION OF TRANSFER OF FUEL CELL TECHNOLOGY TO FOREIGN ENTITIES
     -------------------------------------------------------------------

     It is agreed that the Participant shall obtain adequate recognition of the
     United States support for the technology developed under this Program in
     any contracts, assistance, licenses, or other agreements which involve the
     transfer to foreign entities of the fuel cell technology developed in whole
     or in part at Government expense. The Participant agrees to notify DOE, as
     represented by DOE Patent Counsel, in writing, of the adequate recognition
     obtained prior to entering into any such contracts, assistance, licenses,
     or other agreements. The Participant shall not enter into any such
     contracts, assistance, licenses, or other agreements without the
     concurrence shall be at the sole discretion of DOE and is not subject to
     the Disputes or Appeals (at 10 CFR 600.22) or otherwise subject to
     litigation under the Contracts Disputes Act of 1978 (41 U.S.C. 601 et
     seq.). The determination shall be in writing and shall be furnished to the
     Participant by the Contracting Officer. Examples of such an adequate
     recognition could include: (1) a commitment to manufacture in the U.S.A.,
     (2) a requirement to reimburse the U.S. Government for its R&D costs,
     and/or (3) a commitment to jointly sponsor the R&D program.

7.   CEILING ON RATES FOR ALLOWABLE LABOR INDIRECT COSTS TO BE REIMBURSED BY THE
     ---------------------------------------------------------------------------
     GOVERNMENT
     ----------

     Reimbursement to the Participant for labor indirect costs shall be subject
     to a ceiling rate of 150% of allowable Direct Labor and Fringe Benefits
     costs. Any and all labor overhead costs in excess the aforesaid ceiling
     rate shall be unallowable under this agreement and shall be absorbed by the
     Participant without reimbursement by the Government under this agreement or
     any other Government award.

8.   PARTIAL FUNDING
     ---------------

     This cooperative agreement is partially funded on a cost reimbursement
     basis without fee or profit. The total estimated cost of the project to be
     conducted during the current budget period is $19,854,011.00 of which the
     estimated cost to DOE is $13,244,698.00 and the estimated cost to the
     Participant is $6,609,313.00. The Cumulative DOE Obligation for the current
     budget period is $800,000.00 and, subject to the availability of additional
     funds, DOE anticipates obligating an additional $12,444,698.00 hereunder
     for the current budget period. The Participant shall not be obligated to
     continue performance of the project beyond the total of: (a) the amount of
     funds set forth as the Cumulative DOE Obligation for the current budget
     period in Block 16.b.(1) of

                                       5
<PAGE>

     the face page, (b) the amount, if any, set forth as DOE Funds Authorized
     for Carry Over in Block 16.a.(2) of the face page, and (c) the amount of
     the Participant's corresponding obligation for the current budget period,
     viz., $399,212.00; provided, however, that once the Cumulative DOE
     Obligations for the current budget period have been increased by DOE to
     $13,244,698.00, the Participants' obligation for the current budget period
     shall be increased to a total of $6,609,313.00, and the Participant shall
     be expected to bring the project (covered by the current budget period) to
     its conclusion within the amount of $13,244,698.00, and there is no
     commitment by DOE to provide any additional funding to the Participant.
     This cooperative agreement is subject to a refund of unexpended funds to
     DOE.

                                       6
<PAGE>

                           U.S. Department of Energy
                    FEDERAL ASSISTANCE REPORTING CHECKLIST

<TABLE>
-----------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>
1.  Identification Number: DE-FC02-99EE50580                          2.  Program/Project Title:
                                                                          Development of Fuel Processor,
                                                                          Durability Demonstration and
                                                                          10kW System
-----------------------------------------------------------------------------------------------------------------

3.  Recipient:   Arthur D. Little, Inc.
-----------------------------------------------------------------------------------------------------------------
4.  Reporting Requirements:
                                                                      Frequency     No. of Copies     Addressees
-----------------------------------------------------------------------------------------------------------------
PROGRAM/PROJECT MANAGEMENT REPORTING

[X] Program Management Plan, See Attachment 1                             Y        Original + 2    Orig + 2cys, B
                                                                                      copies
[_] DOE F 4600.3A, "Milestone Log"

[_] DOE F 4600.4, "Federal Assistance Budget Information"

[_] DOE F 4600.5, "Federal Assistance Management Summary Report"

[_] DOE F 4600.6, "Federal Assistance Program/Project Status Report"

[X] SF-269, "Federal Assistance Program/Project Status Report"            Q      Original + 1 copy Orig A, (1) B

TECHNICAL INFORMATION REPORTING

[_] DOE F 1430.22, Notice of Energy RD&D Project

[X] Technical Progress Report                                             Y*     Original + 2      Orig + 2cys B
                                                                                   copies

[X] Topical Report                                                        A      Original + 2      Orig + 2cys B
                                                                                   copies

[X] Final Technical Report                                                F**    Original + 2       Orig + 1  A
                                                                                   copies                 (1) B
-----------------------------------------------------------------------------------------------------------------
FREQUENCY CODES AND DUE DATES:

    A -  As Necessary; within 5 calendar days after events.

    F -  Final; 90 calendar days after the performance of the effort ends.

    Q -  Quarterly; within 30 days after end of calendar quarter or portion thereof.

    O -  One time after project starts; within 30 days after award.

    X -  Required with proposals or the application or with significant planning changes.

    Y -  Yearly; 30 days after the end of program year.  (Financial Status Reports 90 days).

    S -  Semiannually; within 30 days after end of program fiscal half year.
-----------------------------------------------------------------------------------------------------------------

5.  Special Instructions:

Technical Progress Report: An original and 2 copies of the report must be
-------------------------
submitted annually. The report must be accompanied by two copies of DOE F 241.1, "Announcement of U.S. Department
 of Energy (DOE) Scientific and Technical Information (STI)."
-----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

<TABLE>
<S>                                                    <C>
*Final Report:  An original and 2 copies must be submitted within 90 days after the expiration
 ------------
date of the total performance period, if the project is not to be renewed or extended, and
must be accompanied by two copies of DOE F241.1 "Announcement of U.S. Department of Energy
(DOE) Scientific and Technical Information (STI)."

MAIL REPORTS TO:      A.  Contract Specialist, ACQ     B.  See Block No. 11 of the face page
                          U.S. Department of Energy        Department of Energy
                          Chicago Operations Office        1000 Independence Avenue, S.W.
                          9800 South Cass Avenue           Washington, D.C. 20585-0121
                          Argonne, Illinois 60439

                                                                                     JAN 28 1999
------------------------------------------------------------------------------------------------
6.  Prepared by: (Signature and Date)                   /s/ Ronald J. Fiskum         Jan 28 1999


------------------------------------------------------------------------------------------------
</TABLE>


                                                                    ATTACHMENT 1


                      PROGRAM MANAGEMENT PLAN GUIDELINES
                      ----------------------------------

The following guidelines indicate the information to be prepared in submitting a
Program Management Plan. As a minimum, the Program Management Plan shall contain
the following sections:

1.   Purpose of R&D Effort
     ---------------------

     The Participant shall briefly describe the overall purpose, objectives and
     scope of the R&D effort described in the plan.

2.   Remaining Technology Development Areas
     --------------------------------------

     The Participant shall clearly outline the remaining problem areas in
     technology development in a few descriptive paragraphs. These areas will be
     described in order of importance and priority.

3    Description of Tasks
     --------------------

     The Participant shall provide a detailed work breakdown structure (WBS)
     defining different areas of activity as discrete tasks and the
     interrelation among the tasks. A written description of each task including
     objective, planned activities and clearly defined milestones shall also be
     provided. The Awardee shall also provide the following:

          a.   A schedule and milestone plan
<PAGE>

          b.   A cost plan by task and month

4.   Schedule
     --------

     The Participant shall prepare a baseline detailed activity schedule
     (critical path network schedule or equivalent).

5.   Deliverables
     ------------

     In addition to the hardware to be delivered, the Participant shall provide
     a description of the reports to be supplied under the agreement and provide
     a schedule of their delivery dates.
<PAGE>

                       Intellectual Property Provisions
                    Research, Development, or Demonstration
    Large Business, State and Local Governments, and Foreign Organizations



01.  FAR  52.227-1   Authorization and Consent (JUL 1995), Alternate I

02.  FAR  52.227-2   Notice and Assistance Regarding Patent and Copyright
                         Infringement (AUG 1996)
                         This clause is not
                         applicable if the
                         award is for less
                         than $100,000.

03.  FAR  52.227-14  Rights in Data - General, as modified by DEAR 927.409
                         (Effective Apr 1998)
                         If this award requires the use or delivery of limited
                         rights data and/or restricted computer software,
                         Alternates II and III are incorporated, unless modified
                         upon recommendation of Patent Counsel.

04.  FAR  52.227-16  Additional Data Requirements (JUN 1987)

05.  FAR  52.227-23  Rights to Proposal Data (Technical) (JUN 1987)

06.  DEAR 952.227-9  Refund of Royalties (MAR 1995)

07.  DEAR 952.227-13 Patent Rights - Acquisition by the Government
                     (MAR 1995)

Attachment 1 (for reference only):   Patent Rights - Retention by Contractor
                                     (Short Form) (MAR 1995); DEAR 952.227-11

<PAGE>

                                                                          LB-498
<PAGE>

01.  FAR 52.227-1 Authorization and Consent; Alternate I

     AUTHORIZATION AND CONSENT (JUL 1995)

(a) The Government authorizes and consents to all use and manufacture of any
invention described in and covered by a United States patent in the performance
of this contract or any subcontract at any tier.

(b) The Contractor agrees to include, and require inclusion of, this clause,
suitably modified to identify the parties, in all subcontracts at any tier for
supplies or services (including construction, architect-engineer services, and
materials, supplies, models, samples, and design or testing services expected to
exceed the simplified acquisition threshold); however, omission of this clause
from any subcontract, including those at or below the simplified acquisition
threshold, does not affect this authorization and consent.

(End of clause)

02. FAR 52.227-2 Notice and Assistance Regarding Patent and Copyright
Infringement

   NOTICE AND ASSISTANCE REGARDING PATENT AND COPYRIGHT INFRINGEMENT (AUG 1996)

(a) The Contractor shall report to the Contracting Officer, promptly and in
reasonable written detail, each notice or claim of patent or copyright
infringement based on the performance of this contract of which the Contractor
has knowledge.

(b) In the event of any claim or suit against the Government on account of any
alleged patent or copyright infringement arising out of the performance of this
contract or out of the use of any supplies furnished or work or services
performed under this contract, the Contractor shall furnish to the Government,
when requested by the Contracting Officer, all evidence and information in
possession of the Contractor pertaining to such suit or claim. Such evidence and
information shall be furnished at the expense of the Government except where the
Contractor has agreed to indemnify the Government.

(c) The Contractor agrees to include, and require inclusion of, this clause in
all subcontracts at any tier for supplies or services (including construction
and architect-engineer subcontracts and those for material, supplies, models,
samples, or design or testing services) expected to exceed the simplified
acquisition threshold at FAR 2.101.

(End of clause)

                                       1
<PAGE>

03. FAR 52.227-14 Rights in Data - General, as modified by DEAR 927.409
(Effective Apr 1998)

     RIGHTS IN DATA - GENERAL (JUN 1987)

(a) Definitions.
    -----------

     (1) Computer data bases, as used in this clause, means a collection of data
in a form capable of, and for the purpose of, being stored in, processed, and
operated on by a computer. The term does not include computer software.

     (2) Computer software, as used in this clause, means (i) computer programs
which are data comprising a series of instructions, rules, routines, or
statements, regardless of the media in which recorded, that allow or cause a
computer to perform a specific operation or series of operations and (ii) data
comprising source code listings, design details, algorithms, processes, flow
charts, formulae, and related material that would enable the computer program to
be produced, created, or compiled. The term does not include computer data
bases.

     (3) Data, as used in this clause, means recorded information, regardless of
form or the media on which it may be recorded. The term includes technical data
and computer software. For the purposes of this clause, the term does not
include data incidental to the administration of this contract, such as
financial, administrative, cost and pricing, or management information.

     (4) Form, fit, and function data, as used in this clause, means data
relating to items, components, or processes that are sufficient to enable
physical and functional interchangeability, as well as data identifying source,
size, configuration, mating, and attachment characteristics, functional
characteristics, and performance requirements; except that for computer software
it means data identifying source, functional characteristics, and performance
requirements but specifically excludes the source code, algorithm, process,
formulae, and flow charts of the software.

     (5) Limited rights data, as used in this clause, means data, other than
computer software, developed at private expense that embody trade secrets or are
commercial or financial and confidential or privileged. The Government's rights
to use, duplicate, or disclose limited rights data are as set forth in the
Limited Rights Notice of subparagraph (g)(2) of this section if included in this
clause.

     (6) Restricted computer software, as used in this clause, means computer
software developed at private expense and that is a trade secret; is commercial
or financial and is confidential or privileged; or is published copyrighted
computer software, including minor modifications of any such computer software.
The Government's rights to use, duplicate, or disclose restricted computer
software are as set forth in the Restricted Rights Notice of subparagraph (g)(3)
of this section if included in this clause.

     (7) Technical data, as used in this clause, means recorded data, regardless
of form or characteristic, that are of a scientific or technical nature.
Technical data does

                                       2
<PAGE>

not include computer software, but does include manuals and instructional
materials and technical data formatted as a computer data base.

(8)   Unlimited rights, as used in this clause, means the rights of the
Government to use, disclose, reproduce, prepare derivative works, distribute
copies to the public, including by electronic means, and perform publicly and
display publicly, in any manner, including by electronic means, and for any
purpose whatsoever, and to have or permit others to do so.

(b)   Allocation of rights.
      --------------------

      (1) Except as provided in paragraph (c) below regarding copyright, the
Government shall have unlimited rights in:

          (i)   Data first produced in the performance of this contract;

          (ii)  Form, fit, and function data delivered under this contract;

          (iii) Data delivered under this contract (except for restricted
computer software) that constitute manuals or instructional and training
material for installation, operation, or routine maintenance and repair items,
components, or processes delivered or furnished for use under this contract; and

          (iv)  All other data delivered under this contract unless provided
otherwise for limited rights data or restricted computer software in accordance
with paragraph (g) below.

      (2) The Contractor shall have the right to:

          (i)   Use, release to others, reproduce, distribute, or publish any
data first produced or specifically used by the Contractor in the performance of
this contract, unless provided otherwise in paragraph (d) below;

          (ii)  Protect from unauthorized disclosure and use those data which
are limited rights data or restricted computer software to the extent provided
in paragraph (g) below;

          (iii) Substantiate use of, add or correct limited rights, restricted
rights, or copyright notices and to take other appropriate action, in accordance
with paragraphs (e) and (f) below; and

          (iv)  Establish claim to copyright subsisting in data first produced
in the performance of this contract to the extent provided in subparagraph
(c)(1) below.

(c) Copyright.
    ---------

    (1) Data first produced in the performance of this contract. Unless provided
otherwise in subparagraph (d) below, the Contractor may establish, without prior
approval of the Contracting Officer, claim to copyright subsisting in scientific
and technical articles based on or containing data first produced in the
performance of this contract and published in academic, technical or
professional journals, symposia proceedings or similar works. The prior, express
written permission of the Contracting Officer is required to establish claim to
copyright subsisting in all other data first produced in the performance of this
contract. When claim to copyright is made, the

                                       3
<PAGE>

Contractor shall affix the applicable copyright notices of 17 U.S.C. 401 or 402
and acknowledgment of Government sponsorship (including contract number) to the
data when such data are delivered to the Government, as well as when the data
are published or deposited for registration as a published work in the U.S.
Copyright Office. For data other than computer software the Contractor grants to
the Government, and others acting on its behalf, a paid-up, nonexclusive,
irrevocable worldwide license in such copyrighted data to reproduce, prepare
derivative works, distribute copies to the public, and perform publicly and
display publicly, by or on behalf of the Government. For computer software, the
Contractor grants to the Government and others acting in its behalf, a paid-up
nonexclusive, irrevocable worldwide license in such copyrighted computer
software to reproduce, prepare derivative works, and perform publicly and
display publicly by or on behalf of the Government.

    (2) Data not first produced in the performance of this contract. The
Contractor shall not, without prior written permission of the Contracting
Officer, incorporate in data delivered under this contract any data not first
produced in the performance of this contract and which contains the copyright
notice of 17 U.S.C. 401 and 402, unless the Contractor identifies such data and
grants to the Government, or acquires on its behalf, a license of the same scope
as set forth in subparagraph (1) above; provided, however, that if such data are
computer software the Government shall acquire a copyright license as set forth
in subparagraph (g)(3) below if included in this contract or as otherwise may be
provided in a collateral agreement incorporated in or made part of this
contract.

    (3) Removal of copyright notices. The Government agrees not to remove any
copyright notices place on data pursuant to this paragraph (c), and to include
such notices on all reproductions of the data.

(d) Release, publication and use of data.
    ------------------------------------

    (1) The Contractor shall have the right to use, release to others,
reproduce, distribute, or publish any data first produced or specifically used
by the Contractor in the performance of this contract, except to the extent such
data may be subject to the Federal export control or national security laws or
regulations, or unless otherwise provided below in this paragraph or expressly
set forth in this contract.


    (2) The Contractor agrees that to the extent it receives or is given access
to data necessary for the performance of this contract which contain restrictive
markings, the Contractor shall treat the data in accordance with such markings
unless otherwise specifically authorized in writing by the Contracting Officer.


    (3) The Contractor agrees not to assert copyright in computer software first
produced in the performance of this contract without prior written permission of
the DOE Patent Counsel assisting the contracting activity. When such permission
is granted, the Patent Counsel shall specify appropriate terms, conditions, and
submission requirements to assure utilization, dissemination, and
commercialization of the data. The

                                       4
<PAGE>

Contractor, when requested, shall promptly deliver to Patent Counsel a duly
executed and approved instrument fully confirmatory of all rights to which the
Government is entitled.

(e) Unauthorized marking of data.
    ----------------------------

     (1)  Notwithstanding any other provisions of this contract concerning
inspection or acceptance, if any data delivered under this contract are marked
with the notices specified in subparagraphs (g)(2) or (g)(3) below and use of
such is not authorized by this clause, or if such data bears any other
restrictive or limiting markings not authorized by this contract, the
Contracting Officer may at any time either return the data to the Contractor, or
cancel or ignore the markings. However, the following procedures shall apply
prior to canceling or ignoring the markings.

          (i)   The Contracting Officer shall make written inquiry to the
contractor affording the Contractor 30 days from receipt of the inquiry to
provide written justification to substantiate the propriety of the markings;

          (ii)  If the Contractor fails to respond or fails to provide written
justification to substantiate the propriety of the markings within the 30-day
period (or a longer time not exceeding 90 days approved in writing by the
Contracting Officer for good cause shown), the Government shall have the right
to cancel or ignore the markings at any time after said period and the data will
not longer be made subject to any disclosure prohibitions.

          (iii) If the Contractor provides written justification to substantiate
the propriety of the markings within the period set in subdivision (i) above,
the Contracting Officer shall consider such written justification and determine
whether or not the markings are to be canceled or ignored. If the Contracting
Officer determines that the markings are authorized, the Contractor shall be so
notified in writing. If the Contracting Officer determines, with concurrence of
the Head of the Contracting Activity, that the markings are not authorized, the
Contracting Officer shall furnish the Contractor a written determination, which
determination shall become the final agency decision regarding the
appropriateness of the markings unless the Contractor files suit in a court of
competent jurisdiction within 90 days of receipt of the Contracting Officer's
decision. The Government shall continue to abide by the markings under this
subdivision (iii) until final resolution of the matter either by the Contracting
Officer's determination becoming final (in which instance the Government shall
thereafter have the right to cancel or ignore the markings at any time and the
data will no longer be made subject to any disclosure prohibitions), or by final
disposition of the matter by court decision if suit is filed.

          (2)   The time limits in the procedures set forth in subparagraph (1)
above may be modified in accordance with agency regulations implementing the
Freedom of Information Act (5 U.S.C. 552) if necessary to respond to a request
thereunder.

          (3)   This paragraph (e) does not apply if this contract is for a
major system or for support of a major system by a civilian agency other than
NASA and the U.S. Coast

                                       5
<PAGE>

Guard subject to the provisions of Title III of the Federal Property and
Administrative Services Act of 1949.

      (4) Except to the extent the Government's action occurs as the result of
final disposition of the matter by a court of competent jurisdiction, the
Contractor is not precluded by this paragraph (e) from bringing a claim under
the Contract Disputes Act, including pursuant to the Disputes clause of this
contract, as applicable, that may arise as the result of the Government removing
or ignoring authorized markings on data delivered under this contract.

(f)   Omitted or incorrect markings.
      -----------------------------

      (1) Data delivered to the Government without either the limited rights or
restricted rights notice as authorized by paragraph (g) below, or the copyright
notice required by paragraph (c) above, shall be deemed to have been furnished
with unlimited rights, and the Government assumes no liability for disclosure,
use, or reproduction of such data. However, to the extent the data has not been
disclosed without restriction outside the Government, the Contractor may
request, within 6 months (or a longer time approved by the Contracting Officer
for good cause shown) after delivery of such data, permission to have notices
placed on qualifying data at the Contractor's expense, and the Contracting
Officer may agree to do so if the Contractor:

          (i)   Identifies the data to which the omitted notice is to be
applied;

          (ii)  Demonstrates that the omission of the notice was inadvertent;

          (iii) Establishes that the use of the proposed notice is authorized;
and

          (iv)  Acknowledges that the Government has no liability with respect
to the disclosure, use, or reproduction of any such data made prior to the
addition of the notice or resulting from the omission of the notice.

      (2) The Contracting Officer may also (i) permit correction at the
Contractor's expense of incorrect notices if the Contractor identifies the data
on which correction of the notice is to be made, and demonstrates that the
correct notice is authorized, or (ii) correct any incorrect notices.

(g) Protection of limited rights data and restricted computer software.
    ------------------------------------------------------------------

      (1) When data other than that listed in subparagraphs (b)(1)(i), (ii), and
(iii) above are specified to be delivered under this contract and qualify as
either limited rights data or restricted computer software, if the Contractor
desires to continue protection of such data, the Contractor shall withhold such
data and not furnish them to the Government under this Contract. As a condition
to this withholding, the Contractor shall identify the data being withheld and
furnish form, fit, and function data in lieu thereof. Limited rights data that
are formatted as a computer data base for delivery to the Government is to be
treated as limited rights data and not restricted computer software.

    (2) [Reserved.]

                                       6
<PAGE>

    (3) [Reserved.]

(h) Subcontracting.
    --------------

    The Contractor has the responsibility to obtain from its subcontractors all
data and rights therein necessary to fulfill the Contractor's obligations to the
Government under this contract. If a subcontractor refuses to accept terms
affording the Government such rights, the Contractor shall promptly bring such
refusal to the attention of the Contracting Officer and not proceed with
subcontract award without further authorization.

(i) Relationship to patents.
    -----------------------

    Nothing contained in this clause shall imply a license to the Government
under any patent or be construed as affecting the scope of any license or other
right otherwise granted to the Government.

(j) The Contractor agrees, except as may be otherwise specified in this contract
for specific data items listed as not subject to this paragraph, that the
Contracting Officer or an authorized representative may, up to three years after
acceptance of all items to be delivered under this contract, inspect at the
Contractor's facility any data withheld pursuant to paragraph (g)(1) above, for
purposes of verifying the Contractor's assertion pertaining to the limited
rights or restricted rights status of the data or for evaluating work
performance. Where the Contractor whose data are to be inspected demonstrates to
the Contracting Officer that there would be a possible conflict of interest if
the inspection where made by a particular representative, the Contracting
Officer shall designate an alternate inspector.

(End of clause)

Alternate II (Jun 1987)

    (g)(2) Notwithstanding subparagraph (g)(1) of this clause, the contract may
identify and specify the delivery of limited rights data, or the Contracting
Officer may require by written request the delivery of limited rights data that
has been withheld or would otherwise be withholdable. If delivery of such data
is so required, the Contractor may affix the following "Limited Rights Notice"
to the data and the Government will thereafter treat the data, subject to the
provisions of paragraphs (e) and (f) of this clause, in accordance with such
Notice:

                       LIMITED RIGHTS NOTICE (JUN 1987)

   (a) These data are submitted with limited rights under Government contract
No. __________________ (and subcontract No. ________________, if appropriate).

                                       7
<PAGE>

These data may be reproduced and used by the Government with the express
limitation that they will not, without written permission of the Contractor, be
used for purposes of manufacture nor disclosed outside the Government; except
that the Government may disclose these data outside the Government for the
following purposes, if any, provided that the Government makes such disclosure
subject to prohibition against further use and disclosure:

   -[Agencies may list additional purposes as set forth in 27.404(d)(1) or if
none, so state]

    (b) This Notice shall be marked on any reproduction of these data, in whole
or in part.
                                (End of notice)

Alternate III(Jun 1987)

    (g)(3)(i) Notwithstanding subparagraph (g)(1) of this clause, the contract
may identify and specify the delivery of restricted computer software, or the
Contracting Officer may require by written request the delivery of restricted
computer software that has been withheld or would otherwise be withholdable. If
delivery of such computer software is so required, the Contractor may affix the
following "Restricted Rights Notice" to the computer software and the Government
will thereafter treat the computer software, subject to paragraphs (e) and (f)
of this clause, in accordance with the Notice:

                      RESTRICTED RIGHTS NOTICE (JUN 1987)

    (a) This computer software is submitted with restricted rights under
Government Contract No. _____ (and subcontract ______________________________,
if appropriate). It may not be used, reproduced, or disclosed by the Government
except as provided in paragraph (b) of this Notice or as otherwise expressly
stated in the contract.

    (b) This computer software may be:

        (1) Used or copied for use in or with the computer or computers for
which it was acquired, including use at any Government installation to which
such computer or computers may be transferred;

        (2) Used or copied for use in a backup computer if any computer for
which it was acquired is inoperative;

        (3) Reproduced for safekeeping (archives) or backup purposes;

        (4) Modified, adapted, or combined with other computer software,
provided that the modified, combined, or adapted portions of the derivative
software incorporating restricted computer software are made subject to the same
restricted rights;

        (5) Disclosed to and reproduced for use by support service Contractors
in accordance with subparagraphs (b)(1) through (4) of this clause, provided the

                                       8
<PAGE>

Government makes such disclosure or reproduction subject to these restricted
rights; and

        (6) Used or copied for use in or transferred to a replacement computer.

   (c)  Notwithstanding the foregoing, if this computer software is published
copyrighted computer software, it is licensed to the Government, without
disclosure prohibitions, with the minimum rights set forth in paragraph (b) of
this clause.

   (d)  Any others rights or limitations regarding the use, duplication, or
disclosure of this computer software are to be expressly stated in, or
incorporated in, the contract.

   (e)  This Notice shall be marked on any reproduction of this computer
software, in whole or in part.

                                (End of notice)

(ii) Where it is impractical to include the Restricted Rights Notice on
restricted computer software, the following short-form Notice may be used in
lieu thereof:

                RESTRICTED RIGHTS NOTICE SHORT FORM (JUN 1987)

Use, reproduction, or disclosure is subject to restrictions set forth in
Contract No. __________________ (and subcontract __________________, if
appropriate) with __________________ (name of Contractor and subcontractor)."

                                (End of notice)

   (iii) If restricted computer software is delivered with the copyright notice
of 17 U.S.C. 401, it will be presumed to be published copyrighted computer
software licensed to the Government without disclosure prohibitions, with the
minimum rights set forth in paragraph (b) of this clause, unless the Contractor
includes the following statement with such copyright notice: "Unpublished-rights
reserved under the Copyright Laws of the United States."

04. FAR 52.227-16 Additional Data Requirements

    ADDITIONAL DATA REQUIREMENTS (JUN 1987)

(a) In addition to the data (as defined in the clause at 52.227-14, Rights in
Data-General clause or other equivalent included in this contract) specified
elsewhere in this contract to be delivered, the Contracting Officer may, at any
time during contract performance or within a period of 3 years after acceptance
of all items to be delivered under this contract, order any data first produced
or specifically used in the performance of this contract.

(b) The Rights in Data-General clause or other equivalent included in this
contract is applicable to all data ordered under this Additional Data
Requirements clause. Nothing

                                       9
<PAGE>

contained in this clause shall require the Contractor to deliver any data the
withholding of which is authorized by the Rights in Data-General or other
equivalent clause of this contract, or data which are specifically identified in
this contract as not subject to this clause.

(c) When data are to be delivered under this clause, the Contractor will be
compensated for converting the data into the prescribed form, for reproduction,
and for delivery.

(d) The Contracting Officer may release the Contractor from the requirements of
this clause for specifically identified data items at any time during the 3-year
period set forth in paragraph (a) of this clause.

(End of clause)

05. FAR 52.227-23 Rights to Proposal Data

RIGHTS TO PROPOSAL DATA (TECHNICAL)(JUN 1987)

Except for data contained on pages 3-26, it is agreed that as a condition of
award of this contract, and notwithstanding the conditions of any notice
appearing thereon, the Government shall have unlimited rights (as defined in the
"Rights in Data--General" clause contained in this contract) in and to the
technical data contained in the proposal dated 10/29/98, upon which this
contract is based.

06. DEAR 952.227-9 Refund of Royalties

    REFUND OF ROYALTIES (FEB 1995)

(a) The contract price includes certain amounts for royalties payable by the
Contractor or subcontractors or both, which amounts have been reported to the
Contracting Officer.

(b) The term "royalties" as used in this clause refers to any costs or charges
in the nature of royalties, license fees, patent or license amortization costs,
or the like, for the use of or for rights in patents and patent applications in
connection with performing this contract or any subcontract here-under. The term
also includes any costs or charges associated with the access to, use of, or
other right pertaining to data that is represented to be proprietary and is
related to the performance of this contract or the copying of such data or data
that is copyrighted.

                                      10
<PAGE>

(c) The Contractor shall furnish to the Contracting Officer, before final
payment under this contract, a statement of royalties paid or required to be
paid in connection with performing this contract and subcontracts hereunder
together with the reasons.

(d) The Contractor will be compensated for royalties reported under paragraph
(c) of this clause, only to the extent that such royalties were included in the
contract price and are determined by the Contracting Officer to be properly
chargeable to the Government and allocable to the contract. To the extent that
any royalties that are included in the contract price are not, in fact, paid by
the Contractor or are determined by the Contracting Officer not to be properly
chargeable to the government and allocable to the contract, the contract price
shall be reduced. Repayment or credit to the Government shall be made as the
Contracting Officer directs. The approval by DOE of any individual payments or
royalties shall not prevent the Government from contesting at any time the
enforceability, validity, scope of, or title to, any patent or the proprietary
nature of data pursuant to which a royalty or other payment is to be or has been
made.

(e) If, at any time within 3 years after final payment under this contract, the
Contractor for any reason is relieved in whole or in part from the payment of
the royalties included in the final contract price as adjusted pursuant to
paragraph (d) of this clause, the Contractor shall promptly notify the
Contracting Officer of that fact and shall reimburse the Government in a
corresponding amount.

(f) The substance of this clause, including this paragraph (f), shall be
included in any subcontract in which the amount of royalties reported during
negotiation of the subcontract exceeds $250.

(End of clause)

07.  DEAR 952.227-13 Patent Rights -Acquisition by the Government

     PATENT RIGHTS-ACQUISITION BY THE GOVERNMENT (FEB 1995)

(a)  Definitions.

     "Invention", as used in this clause, means any invention or discovery which
is or may be patentable or otherwise protectable under title 35 of the United
States Code or any novel variety of plant that is or may be protectable under
the Plant Variety Protection Act (7 U.S.C. 2321, et seq.).

     "Practical application", as used in this clause, means to manufacture, in
the case of a composition or product; to practice, in the case of a process or
method; or to operate, in the case of a machine or system; and, in each case,
under such conditions as

                                      11
<PAGE>

to establish that the invention is being utilized and that its benefits are, to
the extent permitted by law or Government regulations, available to the public
on reasonable terms.

     "Subject invention", as used in this clause, means any invention of the
Contractor conceived or first actually reduced to practice in the course of or
under this contract.

     "Patent Counsel", as used in this clause, means the Department of Energy
Patent Counsel assisting the procuring activity.

     "DOE patent waiver regulations", as used in this clause, means the
Department of Energy patent waiver regulations at 41 CFR 9-9.109-6 or successor
regulations. See 10 CFR part 784.

     "Agency licensing regulations" and "applicable agency licensing
regulations", as used in this clause, mean the Department of Energy patent
licensing regulations at 10 CFR Part 781.

(b)  Allocations of principal rights.

     (1)  Assignment to the Government. The Contractor agrees to assign to the
Government the entire right, title, and interest throughout the world in and to
each subject invention, except to the extent that rights are retained by the
Contractor under subparagraph (b)(2) and paragraph (d) of this clause.

     (2)  Greater rights determinations.

          (i)  The contractor, or an employee-inventor after consultation with
the Contractor, may request greater rights than the nonexclusive license and the
foreign patent rights provided in paragraph (d) of this clause on identified
inventions in accordance with the DOE patent waiver regulations. A request for a
determination of whether the Contractor or the employee-inventor is entitled to
acquire such greater rights must be submitted to the Patent Counsel with a copy
to the Contracting Officer at the time of the first disclosure of the invention
pursuant to subparagraph (e)(2) of this clause, or not later than 8 months
thereafter, unless a longer period is authorized in writing by the Contracting
Officer for good cause shown in writing by the Contractor. Each determination of
greater rights under this contract shall be subject to paragraph (c) of this
clause, unless otherwise provided in the greater rights determination, and to
the reservations and conditions deemed to be appropriate by the Secretary of
Energy or designee.

                                      12
<PAGE>

          (ii)  Within two (2) months after the filing of a patent application,
the Contractor shall provide the filing date, serial number and title, a copy of
the patent application (including an English-language version if filed in a
language other than English), and, promptly upon issuance of a patent, provide
the patent number and issue date for any subject invention in any country for
which the Contractor has been granted title or the right to file and prosecute
on behalf of the United States by the Department of Energy.

          (iii) Not less than thirty (30) days before the expiration of the
response period for any action required by the Patent and Trademark Office,
notify the Patent Counsel of any decision not to continue prosecution of the
application.

          (iv)  Upon request, the Contractor shall furnish the Government an
irrevocable power to inspect and make copies of the patent application file.

(c)  Minimum rights acquired by the Government.

     (1)  With respect to each subject invention to which the Department of
Energy grants the Contractor principal or exclusive rights, the Contractor
agrees as follows:

          (i)   The Contractor hereby grants to the Government a nonexclusive,
nontransferable, irrevocable, paid-up license to practice or have practiced each
subject invention throughout the world by or on behalf of the Government of the
United States (including any Government agency).

          (ii)  The Contractor agrees that with respect to any subject invention
in which DOE has granted it title, DOE has the right in accordance with the
procedures in the DOE patent waiver regulations (10 CFR part 784) to require the
Contractor, an assignee, or exclusive licensee of a subject invention to grant a
nonexclusive, partially exclusive, or exclusive license in any field of use to a
responsible applicant or applicants, upon terms that are reasonable under the
circumstances, and if the Contractor, assignee, or exclusive licensee refuses
such a request, DOE has the right to grant such a license itself if it
determines that--

               (A)  Such action is necessary because the Contractor or assignee
has not taken, or is not expected to take within a reasonable time, effective
steps to achieve practical application of the subject invention in such field of
use;

               (B)  Such action is necessary to alleviate health or safety needs
which are not reasonably satisfied by the Contractor, assignee, or their
licensees;

                                      13
<PAGE>

               (C)  Such action is necessary to meet requirements for public use
specified by Federal regulations and such requirements are not reasonably
satisfied by the Contractor, assignee, or licensees; or

               (D)  Such action is necessary because the agreement required by
paragraph (i) of this clause has neither been obtained nor waived or because a
licensee of the exclusive right to use or sell any subject invention in the
United States is in breach of such agreement.

          (iii) The Contractor agrees to submit on request periodic reports no
more frequently than annually on the utilization of a subject invention or on
efforts at obtaining such utilization of a subject invention or on efforts at
obtaining such utilization that are being made by the Contractor or its
licensees or assignees. Such reports shall include information regarding the
status of development, date of first commercial sale or use, gross royalties
received by the Contractor, and such other data and information as DOE may
reasonably specify. The Contractor also agrees to provide additional reports as
may be requested by DOE in connection with any march-in proceedings undertaken
by that agency in accordance with subparagraph (c)(1)(ii) of this clause. To the
extent data or information supplied under this section is considered by the
Contractor, its licensee, or assignee to be privileged and confidential and is
so marked, the Department of Energy agrees that, to the extent permitted by law,
it will not disclose such information to persons outside the Government.

          (iv)  The Contractor agrees, when licensing a subject invention, to
arrange to avoid royalty charges on acquisitions involving Government funds,
including funds derived through a Military Assistance Program of the Government
or otherwise derived through the Government, to refund any amounts received as
royalty charges on a subject invention in acquisitions for, or on behalf of, the
Government, and to provide for such refund in any instrument transferring rights
in the invention to any party.

          (v)   The Contractor agrees to provide for the Government's paid-up
license pursuant to subparagraph (c)(1)(i) of this clause in any instrument
transferring rights in a subject invention and to provide for the granting of
licenses as required by subparagraph (c)(1)(ii) of this clause, and for the
reporting of utilization information as required by subparagraph (c)(1)(iii) of
this clause, whenever the instrument transfers principal or exclusive rights in
a subject invention.

     (2)  Nothing contained in this paragraph (c) shall be deemed to grant to
the Government any rights with respect to any invention other than a subject
invention.

(d) Minimum rights to the Contractor.

                                      14
<PAGE>

     (1)  The Contractor is hereby granted a revocable, nonexclusive, royalty-
free license in each patent application filed in any country on a subject
invention and any resulting patent in which the Government obtains title, unless
the Contractor fails to disclose the subject invention within the times
specified in subparagraph (e)(2) of this clause. The Contractor's license
extends to its domestic subsidiaries and affiliates, if any, within the
corporate structure of which the Contractor is a part and includes the right to
grant sublicenses of the same scope to the extent the Contractor was legally
obligated to do so at the time the contract was awarded. The license is
transferable only with the approval of DOE except when transferred to the
successor of that part of the Contractor's business to which the invention
pertains.

     (2)  The Contractor's domestic license may be revoked or modified by DOE to
the extent necessary to achieve expeditious practical application of the subject
invention pursuant to an application for an exclusive license submitted in
accordance with applicable provisions in 37 CFR Part 404 and agency licensing
regulations. This license will not be revoked in that field of use or the
geographical areas in which the Contractor has achieved practical applications
and continues to make the benefits of the invention reasonably accessible to the
public. The license in any foreign country may be revoked or modified at the
discretion of DOE to the extent the Contractor, its licensees, or its domestic
subsidiaries or affiliates have failed to achieve practical application in that
foreign country.

     (3)  Before revocation or modification of the license, DOE will furnish the
Contractor a written notice of its intention to revoke or modify the license,
and the Contractor will be allowed 30 days (or such other time as may be
authorized by DOE for good cause shown by the Contractor) after the notice to
show cause why the license should not be revoked or modified. The Contractor has
the right to appeal, in accordance with applicable agency licensing regulations
and 37 CFR Part 404 concerning the licensing of Government-owned inventions, any
decision concerning the revocation or modification of its license.

     (4)  The Contractor may request the right to acquire patent rights to a
subject invention in any foreign country where the Government has elected not to
secure such rights, subject to the conditions in subparagraphs (d)(4)(i) through
(d)(4)(vii) of this clause. Such request must be made in writing to the Patent
Counsel as part of the disclosure required by subparagraph (e)(2) of this
clause, with a copy to the DOE Contracting Officer. DOE approval, if given, will
be based on a determination that this would best serve the national interest.

          (i)  The recipient of such rights, when specifically requested by DOE,
and three years after issuance of a foreign patent disclosing the subject
invention, shall furnish DOE a report stating:

                                      15
<PAGE>

               (A)  The commercial use that is being made, or is intended to be
made, of said invention, and

               (B)  The steps taken to bring the invention to the point of
practical application or to make the invention available for licensing.

          (ii)  The Government shall retain at least an irrevocable,
nonexclusive, paid-up license to make, use, and sell the invention throughout
the world by or on behalf of the Government (including any Government agency)
and States and domestic municipal governments, unless the Secretary of Energy or
designee determines that it would not be in the public interest to acquire the
license for the States and domestic municipal governments.

          (iii) If noted elsewhere in this contract as a condition of the grant
of an advance waiver of the Government's title to inventions under this
contract, or, if no advance waiver was granted but a waiver of the Government's
title to an identified invention is granted pursuant to subparagraph (b)(2) of
this clause upon a determination by the Secretary of Energy that it is in the
Government's best interest, this license shall include the right of the
Government to sublicense foreign governments pursuant to any existing or future
treaty or agreement with such foreign governments.

          (iv)  Subject to the rights granted in subparagraphs (d)(1), (2), and
(3) of this clause, the Secretary of Energy or designee shall have the right to
terminate the foreign patent rights granted in this subparagraph (d)(4) in whole
or in part unless the recipient of such rights demonstrates to the satisfaction
of the Secretary of Energy or designee that effective steps necessary to
accomplish substantial utilization of the invention have been taken or within a
reasonable time will be taken.

          (v)   Subject to the rights granted in subparagraphs (d)(1), (2), and
(3) of this clause, the Secretary of Energy or designee shall have the right,
commencing four years after foreign patent rights are accorded under this
subparagraph (d)(4), to require the granting of a nonexclusive or partially
exclusive license to a responsible applicant or applicants, upon terms
reasonable under the circumstances, and in appropriate circumstances to
terminate said foreign patent rights in whole or in part, following a hearing
upon notice thereof to the public, upon a petition by an interested person
justifying such hearing:

               (A)  If the Secretary of Energy or designee determines, upon
review of such material as he deems relevant, and after the recipient of such
rights or other interested person has had the opportunity to provide such
relevant and material information as the Secretary or designee may require, that
such foreign patent rights have tended

                                      16
<PAGE>

substantially to lessen competition or to result in undue market concentration
in any section of the United States in any line of commerce to which the
technology relates; or

               (B)  Unless the recipient of such rights demonstrates to the
satisfaction of the Secretary of Energy or designee at such hearing that the
recipient has taken effective steps, or within a reasonable time thereafter is
expected to take such steps, necessary to accomplish substantial utilization of
the invention.

          (vi)  If the contractor is to file a foreign patent application on a
subject invention, the Government agrees, upon written request, to use its best
efforts to withhold publication of such invention disclosures for such period of
time as specified by Patent Counsel, but in no event shall the Government or its
employees be liable for any publication thereof.

          (vii) Subject to the license specified in subparagraphs (d)(1), (2),
and (3) of this clause, the contractor or inventor agrees to convey to the
Government, upon request, the entire right, title, and interest in any foreign
country in which the contractor or inventor fails to have a patent application
filed in a timely manner or decides not to continue prosecution or to pay any
maintenance fees covering the invention. To avoid forfeiture of the patent
application or patent, the contractor or inventor shall, not less than 60 days
before the expiration period for any action required by any patent office,
notify the Patent Counsel of such failure or decision, and deliver to the Patent
Counsel, the executed instruments necessary for the conveyance specified in this
paragraph.

(e)  Invention identification, disclosures, and reports.

     (1)  The Contractor shall establish and maintain active and effective
procedures to assure that subject inventions are promptly identified and
disclosed to Contractor personnel responsible for patent matters within 6 months
of conception and/or first actual reduction to practice, whichever occurs first
in the performance of work under this contract. These procedures shall include
the maintenance of laboratory notebooks or equivalent records and other records
as are reasonably necessary to document the conception and/or the first actual
reduction to practice of subject inventions, and records that show that the
procedures for identifying and disclosing the inventions are followed. Upon
request, the Contractor shall furnish the Contracting Officer a description of
such procedures for evaluation and for determination as to their effectiveness.

     (2)  The Contractor shall disclose each subject invention to the DOE Patent
Counsel with a copy to the Contracting Officer within 2 months after the
inventor discloses it in writing to Contractor personnel responsible for patent
matters or, if earlier, within 6 months after the Contractor becomes aware that
a subject invention has been made, but in any event before any on sale, public
use, or publication of such

                                      17
<PAGE>

invention known to the Contractor. The disclosure to DOE shall be in the form of
a written report and shall identify the contract under which the invention was
made and the inventor(s). It shall be sufficiently complete in technical detail
to convey a clear understanding, to the extent known at the time of the
disclosure, of the nature, purpose, operation, and physical, chemical,
biological, or electrical characteristics of the invention. The disclosure shall
also identify any publication, on sale, or public use of the invention and
whether a manuscript describing the invention has been submitted for publication
and, if so, whether it has been accepted for publication at the time of
disclosure. In addition, after disclosure to DOE, the Contractor shall promptly
notify Patent Counsel of the acceptance of any manuscript describing the
invention for publication or of any on sale or public use planned by the
Contractor. The report should also include any request for a greater rights
determination in accordance with subparagraph (b)(2) of this clause. When an
invention is disclosed to DOE under this paragraph, it shall be deemed to have
been made in the manner specified in Sections (a)(1) and (a)(2) of 42 U.S.C.
5908, unless the Contractor contends in writing at the time the invention is
disclosed that is was not so made.

     (3)  The Contractor shall furnish the Contracting Officer the following:

          (i)  Interim reports every 12 months (or such longer period as may be
specified by the Contracting Officer) from the date of the contract, listing
subject inventions during that period, and certifying that all subject
inventions have been disclosed (or that there are not such inventions) and that
the procedures required by subparagraph (e)(1) of this clause have been
followed.

          (ii) A final report, within 3 months after completion of the
contracted work listing all subject inventions or certifying that there were no
such inventions, and listing all subcontracts at any tier containing a patent
rights clause or certifying that there were no such subcontracts.

     (4)  The Contractor agrees to require, by written agreement, its employees,
other than clerical and nontechnical employees, to disclose promptly in writing
to personnel identified as responsible for the administration of patent matters
and in a format suggested by the Contractor each subject invention made under
contract in order that the Contractor can comply with the disclosure provisions
of paragraph (c) of this clause, and to execute all papers necessary to file
patent applications on subject inventions and to establish the Government's
rights in the subject inventions. This disclosure format should require, as a
minimum, the information required by subparagraph (e)(2) of this clause.

     (5)  The Contractor agrees, subject to FAR 27.302(j), that the Government
may duplicate and disclose subject invention disclosures and all other reports
and papers furnished or required to be furnished pursuant to this clause.

                                      18
<PAGE>

(f)  Examination of records relating to inventions.

     (1)  The Contracting Officer or any authorized representative shall, until
3 years after final payment under this contract, have the right to examine any
books (including laboratory notebooks), records, and documents of the Contractor
relating to the conception or first actual reduction to practice of inventions
in the same field of technology as the work under this contract to determine
whether--

          (i)   Any such inventions are subject inventions;

          (ii)  The Contractor has established and maintains the procedures
required by subparagraphs (e)(1) and (4) of this clause;

          (iii) The Contractor and its inventors have complied with the
procedures.

     (2)  If the Contracting Officer learns of an unreported Contractor
invention which the Contracting Officer believes may be a subject invention, the
Contractor may be required to disclose the invention to DOE for a determination
of ownership rights.

     (3)  Any examination of records under this paragraph will be subject to
appropriate conditions to protect the confidentiality of the information
involved.

(g)  Withholding of payment (NOTE: This paragraph does not apply to
subcontracts).

     (1)  Any time before final payment under this contract, the Contracting
Officer may, in the Government's interest, withhold payment until a reserve not
exceeding $50,000 or 5 percent of the amount of this contract, whichever is
less, shall have been set aside if, in the Contracting Officer's opinion, the
Contractor fails to--

          (i)   Convey to the Government, using a DOE-approved form, the title
and/or rights of the Government in each subject invention as required by this
clause.

          (ii)  Establish, maintain, and follow effective procedures for
identifying and disclosing subject inventions pursuant to subparagraph (e)(1) of
this clause;

          (iii) Disclose any subject invention pursuant to subparagraph (e)(2)
of this clause;

          (iv)  Deliver acceptable interim reports pursuant to subparagraph
(e)(3)(i) of this clause; or

                                      19
<PAGE>

          (v)  Provide the information regarding subcontracts pursuant to
subparagraph (h)(4) of this clause.

     (2)  Such reserve or balance shall be withheld until the Contracting
Officer has determined that the Contractor has rectified whatever deficiencies
exist and has delivered all reports, disclosures, and other information required
by this clause.

     (3)  Final payment under this contract shall not be made before the
Contractor delivers to the Contracting Officer all disclosures of subject
inventions required by subparagraph (e)(2) of this clause, and acceptable final
report pursuant to subparagraph (e)(3)(ii) of this clause, and the Patent
Counsel has issued a patent clearance certification to the Contracting Officer.

     (4)  The Contracting Officer may decrease or increase the sums withheld up
to the maximum authorized above. No amount shall be withheld under this
paragraph while the amount specified by this paragraph is being withheld under
other provisions of the contract. The withholding of any amount or the
subsequent payment thereof shall not be construed as a waiver of any Government
rights.

(h)  Subcontracts.

     (1)  The contractor shall include the clause at 48 CFR 952.227-11 (suitably
modified to identify the parties) in all subcontracts, regardless of tier, for
experimental, developmental, demonstration, or research work to be performed by
a small business firm or domestic nonprofit organization, except where the work
of the subcontract is subject to an Exceptional Circumstances Determination by
DOE. In all other subcontracts, regardless of tier, for experimental,
developmental, demonstration, or research work, the contractor shall include
this clause (suitably modified to identify the parties). The contractor shall
not, as part of the consideration for awarding the subcontract, obtain rights in
the subcontractor's subject inventions.

     (2)  In the event of a refusal by a prospective subcontractor to accept
such a clause the Contractor--

          (i)  Shall promptly submit a written notice to the Contracting Officer
setting forth the subcontractor's reasons for such refusal and other pertinent
information that may expedite disposition of the matter; and

          (ii) Shall not proceed with such subcontract without the written
authorization of the Contracting Officer.

                                      20
<PAGE>

     (3)  In the case of subcontracts at any tier, DOE, the subcontractor, and
Contractor agree that the mutual obligations of the parties created by this
clause constitute a contract between the subcontractor and DOE with respect to
those matters covered by this clause.

     (4)  The Contractor shall promptly notify the Contracting Officer in
writing upon the award of any subcontract at any tier containing a patent rights
clause by identifying the subcontractor, the applicable patent rights clause,
the work to be performed under the subcontract, and the dates of award and
estimated completion. Upon request of the Contracting Officer, the Contractor
shall furnish a copy of such subcontract, and, no more frequently than annually,
a listing of the subcontracts that have been awarded.

     (5)  The contractor shall identify all subject inventions of the
subcontractor of which it acquires knowledge in the performance of this contract
and shall notify the Patent Counsel, with a copy to the contracting officer,
promptly upon identification of the inventions.

(i)  Preference United States industry. Unless provided otherwise, no Contractor
that receives title to any subject invention and no assignee of any such
Contractor shall grant to any person the exclusive right to use or sell any
subject invention in the United States unless such person agrees that any
products embodying the subject invention will be manufactured substantially in
the United States. However, in individual cases, the requirement may be waived
by the Government upon a showing by the Contractor or assignee that reasonable
but unsuccessful efforts have been made to grant licenses on similar terms to
potential licensees that would be likely to manufacture substantially in the
United States or that under the circumstances domestic manufacture is not
commercially feasible.

(j)  Atomic energy.

     (1)  No claim for pecuniary award of compensation under the provisions of
the Atomic Energy Act of 1954, as amended, shall be asserted with respect to any
invention or discovery made or conceived in the course of or under this
contract.

     (2)  Except as otherwise authorized in writing by the Contracting Officer,
the Contractor will obtain patent agreements to effectuate the provisions of
subparagraph (e)(1) of this clause from all persons who perform any part of the
work under this contract, except nontechnical personnel, such as clerical
employees and manual laborers.

(k)  Background Patents.

                                      21
<PAGE>

     (1)  Background Patent means a domestic patent covering an invention or
discovery which is not a subject invention and which is owned or controlled by
the Contractor at any time through the completion of this contract:

          (i)  Which the contractor, but not the Government, has the right to
license to others without obligation to pay royalties thereon, and

          (ii) Infringement of which cannot reasonably be avoided upon the
practice of any specific process, method, machine, manufacture, or composition
of matter (including relatively minor modifications thereof) which is a subject
of the research, development, or demonstration work performed under this
contract.

     (2)  The Contractor agrees to and does hereby grant to the Government a
royalty-free, nonexclusive license under any background patent for purposes of
practicing a subject of this contract by or for the Government in research,
development, and demonstration work only.

     (3)  The Contractor also agrees that upon written application by DOE, it
will grant to responsible parties, for purposes of practicing a subject of this
contract, nonexclusive licenses under any background patent on terms that are
reasonable under the circumstances. If, however, the Contractor believes that
exclusive rights are necessary to achieve expeditious commercial development or
utilization, then a request may be made to DOE for DOE approval of such
licensing by the Contractor.

     (4)  Notwithstanding subparagraph (k)(3) of this clause, the contractor
shall not be obligated to license any background patent if the Contractor
demonstrates to the satisfaction of the Secretary of Energy or designee that:

          (i)  a competitive alternative to the subject matter covered by said
background patent is commercially available or readily introducible from one or
more other sources; or

          (ii) the Contractor or its licensees are supplying the subject matter
covered by said background patent in sufficient quantity and at reasonable
prices to satisfy market needs, or have taken effective steps or within a
reasonable time are expected to take effective steps to so supply the subject
matter.

(l)  Publication. It is recognized that during the course of the work under this
contract, the Contractor or its employees may from time to time desire to
release or publish information regarding scientific or technical developments
conceived or first actually reduced to practice in the course of or under this
contract. In order that public disclosure of such information will not adversely
affect the patent interests of DOE or

                                      22
<PAGE>

the Contractor, patent approval for release of publication shall be secured from
Patent Counsel prior to any such release or publication.

(m)  Forfeiture of rights in unreported subject inventions.

     (1)  The Contractor shall forfeit and assign to the Government, at the
request of the Secretary of Energy or designee, all rights in any subject
invention which the Contractor fails to report to Patent Counsel within six
months after the time the Contractor:

          (i)  Files or causes to be filed a United States or foreign patent
application thereon; or

          (ii)  Submits the final report required by subparagraph (e)(2)(ii) of
this clause, whichever is later.

     (2)  However, the Contractor shall not forfeit rights in a subject
invention if, within the time specified in subparagraph (m)(1) of this clause,
the Contractor:

          (i)   Prepares a written decision based upon a review of the record
that the invention was neither conceived nor first actually reduced to practice
in the course of or under the contract and delivers the decision to Patent
Counsel, with a copy to the Contracting Officer; or

          (ii)  Contending that the invention is not a subject invention, the
Contractor nevertheless discloses the invention and all facts pertinent to this
contention to the Patent Counsel, with a copy to the Contracting Officer; or

          (iii) Establishes that the failure to disclose did not result from the
Contractor's fault or negligence.

     (3)  Pending written assignment of the patent application and patents on a
subject invention determined by the Secretary of Energy or designee to be
forfeited (such determination to be a final decision under the Disputes clause
of this contract), the Contractor shall be deemed to hold the invention and the
patent applications and patents pertaining thereto in trust for the Government.
The forfeiture provision of this paragraph (m) shall be in addition to and shall
not supersede other rights and remedies which the Government may have with
respect to subject inventions.

(End of clause)

                                      23
<PAGE>

Attachment 1: 952.227-11 Patent Rights - Retention by the Contractor (short
form)

     PATENT RIGHTS - RETENTION BY THE CONTRACTOR (SHORT FORM) (FEB 1995)

(a)  Definitions.

     (1)  "Invention" means any invention or discovery which is or may be
patentable or otherwise protectable under title 35 of the United States Code, or
any novel variety of plant which is or may be protected under the Plant Variety
Protection Act (7 U.S.C. 2321, et seq.).

     (2)  "Made" when used in relation to any invention means the conception of
first actual reduction to practice of such invention.

     (3)  "Nonprofit organization" means a university or other institution of
higher education or an organization of the type described in section 501(c)(3)
of the Internal Revenue Code of 1954 (26 U.S.C. 501(c)) and exempt from taxation
under section 501 (a) of the Internal Revenue Code (26 U.S.C. 501(a)) or any
nonprofit scientific or educational organization qualified under a state
nonprofit organization statute.

     (4)  "Practical application" means to manufacture, in the case of a
composition or product; to practice, in the case of a process or method; or to
operate, in the case of a machine or system; and, in each case, under such
conditions as to establish that the invention is being utilized and that its
benefits are, to the extent permitted by law or Government regulations,
available to the public on reasonable terms.

     (5)  "Small business firm" means a small business concern as defined at
section 2 of Pub. L. 85-536 (15 U.S.C. 632) and implementing regulations of the
Administrator of the Small Business Administration. For the purpose of this
clause, the size standards for small business concerns involved in Government
procurement and subcontracting at 13 CFR 121.3-8 and 13 CFR 121.3-12,
respectively, will be used.

     (6)  "Subject invention" means any invention of the contractor conceived or
first actually reduced to practice in the performance of work under this
contract, provided that in the case of a variety of plant, the date of
determination (as defined in section 41(d) of the Plant Variety Protection Act,
7 U.S.C. 2401(d)) must also occur during the period of contract performance.

                                      24
<PAGE>

     (7)  "Agency licensing regulations" and "agency regulations concerning the
licensing of Government-owned inventions" mean the Department of Energy patent
licensing regulations at 10 CFR Part 781.

(b)  Allocation of principal rights. The Contractor may retain the entire right,
title, and interest throughout the world to each subject invention subject to
the provisions of this clause and 35 U.S.C. 203. With respect to any subject
invention in which the Contractor retains title, the Federal Government shall
have a nonexclusive, nontransferable, irrevocable, paid-up license to practice
or have practiced for or on behalf of the United States the subject invention
throughout the world.

(c)  Invention disclosure, election of title, and filing of patent application
by Contractor.

     (1)  The Contractor will disclose each subject invention to the Department
of Energy (DOE) within 2 months after the inventor discloses it in writing to
Contractor personnel responsible for patent matters. The disclosure to DOE shall
be in the form of a written report and shall identify the contract under which
the invention was made and the inventor(s). It shall be sufficiently complete in
technical detail to convey a clear understanding to the extent known at the time
of the disclosure, of the nature, purpose, operation, and the physical,
chemical, biological or electrical characteristics of the invention. The
disclosure shall also identify any publication, on sale or public use of the
invention and whether a manuscript describing the invention has been submitted
for publication and, if so, whether it has been accepted for publication at the
time of disclosure. In addition, after disclosure to the DOE, the Contractor
will promptly notify that agency of the acceptance of any manuscript describing
the invention for publication or of any on sale or public use planned by the
Contractor.

     (2)  The Contractor will elect in writing whether or not to retain title to
any such invention by notifying DOE within 2 years of disclosure to DOE.
However, in any case where publication, on sale or public use has initiated the
1-year statutory period wherein valid patent protection can still be obtained in
the United States, the period for election of title may be shortened by DOE to a
date that is no more than 60 days prior to the end of the statutory period.

     (3)  The Contractor will file its initial patent application on a subject
invention to which it elects to retain title within 1 year after election of
title or, if earlier, prior to the end of any statutory period wherein valid
patent protection can be obtained in the United States after a publication, on
sale, or public use. The Contractor will file patent applications in additional
countries or international patent offices within either 10 months of the
corresponding initial patent application or 6 months from the date permission is
granted by the Commissioner of Patents and Trademarks to file foreign patent
applications where such filing has been prohibited by a Secrecy Order.

                                      25
<PAGE>

     (4)  Requests for extension of the time for disclosure, election, and
filing under subparagraphs (c)(1), (2), and (3) of this clause may, at the
discretion of the agency, be granted.

(d)  Conditions when the Government may obtain title. The Contractor will convey
to the Federal agency, upon written request, title to any subject invention--

     (1)  If the Contractor fails to disclose or elect title to the subject
invention within the times specified in paragraph (c) of this clause, or elects
not to retain title; provided, that DOE may only request title within 60 days
after learning of the failure of the Contractor to disclose or elect within the
specified times.

     (2)  In those countries in which the Contractor fails to file patent
applications within the times specified in paragraph (c) of this clause;
provided, however, that if the Contractor has filed a patent application in a
country after the times specified in paragraph (c) of this clause, but prior to
its receipt of the written request of the Federal agency, the Contractor shall
continue to retain title in that country.

     (3)  In any country in which the Contractor decides not to continue the
prosecution of any application for, to pay the maintenance fees on, or defend in
reexamination or opposition proceeding on, a patent on a subject invention.

(e)  Minimum rights to Contractor and protection of the Contractor right to
file.

     (1)  The Contractor will retain a nonexclusive royalty-free license
throughout the world in each subject invention to which the Government obtains
title, except if the Contractor fails to disclose the invention within the times
specified in paragraph (c) of this clause. The Contractor's license extends to
its domestic subsidiary and affiliates, if any, within the corporate structure
of which the Contractor is a party and includes the right to grant sublicenses
of the same scope to the extent the Contractor was legally obligated to do so at
the time the contract was awarded. The license is transferable only with the
approval of the Federal agency, except when transferred to the successor of that
part of the Contractor's business to which the invention pertains.

     (2)  The Contractor's domestic license may be revoked or modified by DOE to
the extent necessary to achieve expeditious practical application of subject
invention pursuant to an application for an exclusive license submitted in
accordance with applicable provisions at 37 CFR Part 404 and agency licensing
regulations. This license will not be revoked in that field of use or the
geographical areas in which the Contractor has achieved practical application
and continues to make the benefits of the invention reasonably accessible to the
public. The license in any foreign country may be revoked or modified at the
discretion of DOE to the extent the Contractor, its licensees, or the

                                      26
<PAGE>

domestic subsidiaries or affiliates have failed to achieve practical application
in that foreign country.

     (3)  Before revocation or modification of the license, DOE will furnish the
Contractor a written notice of its intention to revoke or modify the license,
and the Contractor will be allowed 30 days (or such other time as may be
authorized by DOE for good cause shown by the Contractor) after the notice to
show cause why the license should not be revoked or modified. The Contractor has
the right to appeal, in accordance with applicable regulations in 37 CFR Part
404 and agency regulations concerning the licensing of Government owned
inventions, any decision concerning the revocation or modification of the
license.

(f)  Contractor action to protect the Government's interest.

     (1)  The Contractor agrees to execute or to have executed and promptly
deliver to DOE all instruments necessary to (i) establish or confirm the rights
the Government has throughout the world in those subject inventions to which the
Contractor elects to retain title, and (ii) convey title to DOE when requested
under paragraph (d) of this clause and to enable the government to obtain patent
protection throughout the world in that subject invention.

     (2)  The Contractor agrees to require, by written agreement, its employees,
other than clerical and nontechnical employees, to disclose promptly in writing
to personnel identified as responsible for the administration of patent matters
and in a format suggested by the Contractor each subject invention made under
contract in order that the Contractor can comply with the disclosure provisions
of paragraph (c) of this clause, and to execute all papers necessary to file
patent applications on subject inventions and to establish the Government's
rights in the subject inventions. This disclosure format should require, as a
minimum, the information required by subparagraph (c)(1) of this clause. The
Contractor shall instruct such employees, through employee agreements or other
suitable educational programs, on the importance of reporting inventions in
sufficient time to permit the filing of patent applications prior to U.S. or
foreign statutory bars.

     (3)  The Contractor will notify DOE of any decision not to continue the
prosecution of a patent application, pay maintenance fees, or defend in a
reexamination or opposition proceeding on a patent, in any country, not less
than 30 days before the expiration of the response period required by the
relevant patent office.

     (4)  The Contractor agrees to include, within the specification of any
United States patent application and any patent issuing thereon covering a
subject invention, the following statement, "This invention was made with
Government support under (identify

                                      27
<PAGE>

the contract) awarded by the United States Department of Energy. The Government
has certain rights in the invention."

(g)  Subcontracts.

     (1)  The Contractor will include this clause, suitably modified to identify
the parties, in all subcontracts, regardless of tier, for experimental,
developmental, or research work to be performed by a small business firm or
domestic nonprofit organization. The subcontractor will retain all rights
provided for the Contractor in this clause, and the Contractor will not, as part
of the consideration for awarding the subcontract, obtain rights in the
subcontractor's subject inventions.

     (2)  The contractor shall include in all other subcontracts, regardless of
tier, for experimental, developmental, demonstration, or research work the
patent rights clause at 952.227-13.

     (3)  In the case of subcontracts, at any tier, DOE, subcontractor, and the
Contractor agree that the mutual obligations of the parties created by this
clause constitute a contract between the subcontractor and DOE with respect to
the matters covered by the clause; provided, however, that nothing in this
paragraph is intended to confer any jurisdiction under the Contract Disputes Act
in connection with proceedings under paragraph (j) of this clause.

(h)  Reporting on utilization of subject inventions. The Contractor agrees to
submit, on request, periodic reports no more frequently than annually on the
utilization of a subject invention or on efforts at obtaining such utilization
that are being made by the Contractor or its licensees or assignees. Such
reports shall include information regarding the status of development, date of
first commercial sale or use, gross royalties received, by the Contractor, and
such other data and information as DOE may reasonably specify. The Contractor
also agrees to provide additional reports as may be requested by DOE in
connection with any march-in proceeding undertaken by that agency in accordance
with paragraph (j) of this clause. As required by 35 U.S.C. 202(c)(5), DOE
agrees it will not disclose such information to persons outside the Government
without permission of the Contractor.

(i)  Preference for United States industry. Notwithstanding any other provision
of this clause, the Contractor agrees that neither it nor any assignee will
grant to any person the exclusive right to use or sell any subject invention in
the United States unless such person agrees that any product embodying the
subject invention or produced through the use of the subject invention will be
manufactured substantially in the United States. However, in individual cases,
the requirement for such an agreement may be waived by DOE upon a showing by the
Contractor or its assignee that reasonable but unsuccessful

                                      28
<PAGE>

efforts have been made to grant licenses on similar terms to potential licensees
that would be likely to manufacture substantially in the United States or that
under the circumstances domestic manufacture is not commercially feasible.

(j)  March-in rights. The Contractor agrees that, with respect to any subject
invention in which it has acquired title, DOE has the right in accordance with
the procedures in 37 CFR 401.6 and any supplemental regulations of the agency to
require the Contractor, an assignee or exclusive licensee of a subject invention
to grant a nonexclusive, partially exclusive, or exclusive license in any field
of use to a responsible applicant or applicants, upon terms that are reasonable
under the circumstances, and, if the Contractor, assignee, or exclusive licensee
refuses such a request, DOE has the right to grant such a license itself if DOE
determines that-- (1) Such action is necessary because the Contractor or
assignee has not taken, or is not expected to take within a reasonable time,
effective steps to achieve practical application of the subject invention in
such field of use; (2) Such action is necessary to alleviate health or safety
needs which are not reasonably satisfied by the Contractor, assignee, or their
licensees; (3) Such action is necessary to meet requirements for public use
specified by Federal regulations and such requirements are not reasonably
satisfied by the Contractor, assignee, or licensees; or (4) Such action is
necessary because the agreement required by paragraph (i) of this clause has not
been obtained or waived or because a licensee of the exclusive right to use or
sell any subject invention in the United States is in breach of such agreement.

(k)  Special provisions for contracts with nonprofit organizations. If the
Contractor is a nonprofit organization, it agrees that--

     (1)  Rights to a subject invention in the United States may not be assigned
without the approval of the Federal agency, except where such assignment is made
to an organization which has as one of its primary functions the management of
inventions; provided, that such assignee will be subject to the same provisions
as the Contractor;

     (2)  The Contractor will share royalties collected on a subject invention
with the inventor, including Federal employee co-inventors (when DOE deems it
appropriate) when the subject invention is assigned in accordance with 35 U.S.C.
202(e) and 37 CFR 401.10;

     (3)  The balance of any royalties or income earned by the Contractor with
respect to subject inventions, after payment of expenses (including payments to
inventors) incidental to the administration of subject inventions will be
utilized for the support of scientific research or education; and

                                      29
<PAGE>

     (4)  It will make efforts that are reasonable under the circumstances to
attract licensees of subject inventions that are small business firms, and that
it will give a preference to a small business firm when licensing a subject
invention if the Contractor determines that the small business firm has a plan
or proposal for marketing the invention which, if executed, is equally as likely
to bring the invention to practical application as any plans or proposals from
applicants that are not small business firms; provided, that the Contractor is
also satisfied that the small business firm has the capability and resources to
carry out its plan or proposal. The decision whether to give a preference in any
specific case will be at the discretion of the contractor. However, the
Contractor agrees that the Secretary of Commerce may review the Contractor's
licensing program and decisions regarding small business applicants, and the
Contractor will negotiate changes to its licensing policies, procedures, or
practices with the Secretary of Commerce when that Secretary's review discloses
that the Contractor could take reasonable steps to more effectively implement
the requirements of this subparagraph (k)(4).

(l)  Communications.

     (1)  The contractor shall direct any notification, disclosure, or request
to DOE provided for in this clause to the DOE patent counsel assisting the DOE
contracting activity, with a copy of the communication to the Contracting
Officer.

     (2)  Each exercise of discretion or decision provided for in this clause,
except subparagraph (k)(4), is reserved for the DOE Patent Counsel and is not a
claim or dispute and is not subject to the Contract Disputes Act of 1978.

     (3)  Upon request of the DOE Patent Counsel or the contracting officer, the
contractor shall provide any or all of the following:

          (i)  a copy of the patent application, filing date, serial number and
title, patent number, and issue date for any subject invention in any country in
which the contractor has applied for a patent;

          (ii) a report, not more often than annually, summarizing all subject
inventions which were disclosed to DOE individually during the reporting period
specified; or

          (iii)a report, prior to closeout of the contract, listing all subject
inventions or stating that there were none.

(End of clause)

                                      30