<PAGE>

                                                                   EXHIBIT 10.28

                             SUBCONTRACT AGREEMENT

                                    BETWEEN

                            ARTHUR D. LITTLE, INC.

                                      AND

                             UNITED CATALYSTS INC.

                             AGREEMENT NO. A11792

This Subcontract is entered into between Arthur D. Little, Inc. Acorn Park,
Cambridge, Massachusetts 02140 (hereinafter refereed to as "ADL or EPYX") and
United Catalysts Inc., 1600 West Hill Street, Louisville, KY 40210 (hereinafter
referred to as "UCI", "SUBCONTRACTOR", or "Seller").

                              W I T N E S S E T H

WHEREAS, ADL has entered into a Subcontract with UCI under Prime Cooperative
Agreement No. DE-FC02-99EE50580 with the United States Government, Department of
Energy, and

WHEREAS, ADL desires to enter into a subcontract with UCI under said prime
contract on a 35% Cost Sharing basis for assistance on the program entitled "New
Millennium Fuel Processor for Transportation Fuel Cell Power System, Subtopic
1.j.,"

NOW THEREFORE, the parties hereto mutually agree as follows:

                             SCHEDULE OF ARTICLES
                             --------------------

ARTICLE I - STATEMENT OF WORK
-----------------------------

UCI shall furnish the necessary personnel, materials, services, equipment,
facilities, and do all things necessary or incident to perform the tasks
specified in the attached Statement of Work identified as Exhibit A, which is
incorporated herein and made a part hereof.

ARTICLE II - PERIOD OF PERFORMANCE
----------------------------------
<PAGE>

                                                            Agreement No. A11792
                                                                     Page 2 of 6


The period of performance of this subcontract shall be from December 1, 1999
through January 14, 2003, inclusive of all reports.

ARTICLE III - COST-SHARING ARRANGEMENT
--------------------------------------

A.   Estimated Cost - The total estimated cost for the work to be
     --------------
     accomplished under this subcontract is $1,168,218. UCI agrees to cost-share
     35% of its estimated contribution to the project. Therefore, if UCI incurs
     costs of $1,168,218 it will cost share $408,877 and be reimbursed $759,341.

B.   Cost Overrun/Additional Work - If ADL approves a cost overrun or
     ----------------------------
     additional work under this subcontract, UCI agrees that it will share 35%
     of the overrun cost or additional work.

ARTICLE IV - INVOICES
---------------------

Invoices shall be submitted monthly, in original and one copy referencing this
Subcontract number and mailed to the following addressees for approval and
payment:

     Original to:                             Copy to:
     -----------                              -------
     Arthur D. Little, Inc.                   Arthur D. Little, Inc.
     Attn.: Mr. Prashant S. Chintawar         Attn.: Ms. Hieu Do
     15 Acorn Park                            20 Acorn Park
     Cambridge, MA 02140-2390                 Cambridge, MA 02140-2390

The invoices will contain, by element, actual expenditures for the current
period, total cumulated billings to date, and will also indicate cost share
amount and amount due. The period of services and agreement number should also
be cited. Each current month's actual charges will be reduced by the 35% cost
share amount.

ARTICLE V - PROVISIONAL BILLING RATES
-------------------------------------

Pending establishment of final overhead rates for any fiscal period, UCI shall
invoice at such provisional overhead rates as agreed upon between UCI and ADL
and/or the Government for application to this subcontract, subject to
appropriate adjustment when the final rates for that period are established. To
prevent substantial over- and under-payments, provisional billing rates may, at
the request of either party, be revised by mutual agreement, either
retroactively or
<PAGE>

                                                            Agreement No. A11792
                                                                     Page 3 of 6



prospectively. Please refer to "Additional Special Provisions, Item No. 7 for
additional information regarding this subject.

ARTICLE VI - SUBCONTRACT SURVEILLANCE
-------------------------------------

Authorized representatives of ADL and/or DOE shall have access to UCI's
facilities in order to review the progress, discuss problems or failures, and
witness testing pertaining to the requirements of this subcontract. UCI shall
provide adequate information on subcontract performance in response to
reasonable requests by ADL and/or DOE representatives. Our surveillance shall be
during normal business hours and will be with reasonable notice, provided, in no
event, will the exercise of rights under this Article include access to or
observation of UCI's proprietary manufacturing processes.

ARTICLE VII - TECHNICAL DIRECTION AND SUBCONTRACT ADMINISTRATION
----------------------------------------------------------------

ADL's Program Manager and Subcontract Administrator for this subcontract are:



     Program Manager                      Subcontract Administrator
     ---------------                      -------------------------
     Mr. Prashant S. Chintawar            Ms. Judith Blinn
     Arthur D. Little, Inc.               Arthur D. Little, Inc.
     15 Acorn Park                        20 Acorn Park
     Cambridge, MA 02140-2390             Cambridge, MA 02140-2390

The Program manager will act as ADL's representative for technical matters
providing technical direction and discussion as necessary with respect to the
Statement of Work, and monitoring the progress and quality of UCI's performance.
The Program manager is not authorized to take any action, either directly or
indirectly, that would change the pricing, quantity, quality, place of
performance, delivery schedule or any other terms and conditions of the basic
subcontract, or to direct the accomplishment of effort which goes beyond the
scope of the basic contractual Statement of Work.

When, in the opinion of UCI, the Program Manager requests efforts outside the
existing scope of the subcontract, UCI shall promptly notify Judith Blinn, the
ADL Subcontract Administrator, in writing. No action shall be taken by UCI under
such direction until the ADL Subcontract Administrator has issued a subcontract
modification or otherwise resolved the issue.
<PAGE>

                                                            Agreement No. A11792
                                                                     Page 4 of 6


ARTICLE VIII - INSPECTION AND ACCEPTANCE
----------------------------------------

ADL shall inspect and provisionally accept the materials and services provided
under this subcontract and shall advise of any defect in materials and services
not in accordance with the SOW or requested changes therein. In addition, the
Contracting Officer under the prime contract, or his duly authorized
representative is authorized to perform inspection and to accept the materials
and services provided under the prime contract including those provided under
this subcontract. Any provisional acceptance by ADL is subject to final
acceptance by the Contracting Officer. For the purposes of this Article,
materials and services shall be considered defective if there is a defect in the
physical nature of any catalyst samples submitted by UCI. Materials and services
shall not be considered defective because of catalyst performance failures, if
UCI complied with industry standards of due care in its work on such materials
and services.

ARTICLE IX - INDEMNIFICATION FOR DEFECTIVE COST OR PRICING DATA
---------------------------------------------------------------

In the event ADL suffers a price reduction under the prime contract as a result
of defective cost or pricing data furnished by UCI in connection with this
subcontract or any modification thereof, UCI shall indemnify ADL in the full
amount of such reduction.

ARTICLE X - ADDITIONAL PROVISIONS
---------------------------------

The clauses set forth in Attachment I, ADL Standard Provisions for Services and
Supply Contracts (1998), Attachment II, Special Terms and Conditions for
Research Financial Assistance Awards, Attachment III, Additional Special
Provisions, Attachment IV, Federal Assistance Reporting Checklist, dated
1/28/99, Attachment V, Intellectual Property Provisions - Research, Development,
or Demonstration Large Business, State and Local Governments, and Foreign
Organizations, coded LB-498, Attachment VI, DOE Assistance Regulations, 10 CRF
Part-600, as amended Subparts A and B (Other than State and Local Governments),
and Attachment VII, Guidelines for Intellectual Property Agreement for SFAA
1.j., apply to this subcontract and are made a part hereof.

ARTICLE XI - AUDIT RESTRICTIONS
-------------------------------

Nothing of this subcontract shall be construed as granting to ADL the right of
access to the financial books and records of UCI for purposes of this
subcontract and ADL's compliance with its obligations to the Government Prime
Contract
<PAGE>

                                                            Agreement No. A11792
                                                                     Page 5 of 6

Excluded from terms' substitution of "ADL" for the "Government" or the
"Contracting Officer," in the DOE provisions are all of the provisions that
would allow ADL access to UCI's financial books and records. For purposes of
those excluded clauses, the terms "Government," "Controller General,"
"Department of Energy," or "Contracting Officer" shall remain unchanged, and any
required access to such UCI financial books and records shall be limited to the
cognizant Government activity and its authorized representatives.

ARTICLE XII - ORDER OF PRECEDENCE
---------------------------------

In the event of an inconsistency in this subcontract, unless otherwise provided
herein, the inconsistency shall be resolved by giving precedence in the
following descending order (i.e. a. has highest priority, b. has next to highest
priority, etc.):

a.   Agreement No. A11792 and Exhibit A, Statement of Work
b.   Attachment I - ADL Standard Provisions for Services and Supply Contracts
     (1998)
c.   Attachment II - Special Terms and Conditions for Research Financial
     Assistance Awards
d.   Attachment III - Additional Special Provisions
e.   Attachment IV - Federal Assistance Reporting Checklist, dated 1/28/99
f.   Attachment V - Intellectual Property Provisions - Research, Development, or
     Demonstration Large Business, State and Local Governments, and Foreign
     Organizations, coded LB-498
g.   Attachment VI - DOE Assistance Regulations, 10 CFR Part-600, as amended
     Subparts A and B (Other than State and Local Governments)
h.   Attachment VII - Guidelines for Intellectual Property Agreement for SFAA
     1.j.,

All references to the terms "grant(s)" or "contracts(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.

BOTH PARTIES HERETO WARRANT and REPRESENT that they have full right, power
and authority to execute this subcontract.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day of year last specified below.
<PAGE>

                                                            Agreement No. A11792
                                                                     Page 6 of 6



ARTHUR D. LITTLE, INC.                   UNITED CATALYSTS INC.

By:    /s/ Judith Blinn                  By: /s/ Robert E. Stockwell
       ------------------------              ------------------------------

Typed                                    Typed
Name: Judith Blinn                       Name:  Robert E. Stockwell
      -------------------------                 ---------------------------

Title: Contracting Officer               Title: V.P./Business Manager
       ------------------------                 ---------------------------

Date: 27 January 00                      Date:  14 Jan 00
      -------------------------                 ---------------------------
<PAGE>

                                                                   Exhibit 10.28

                                    EXHIBIT A



                                    STATEMENT

                                       OF

                                      WORK
<PAGE>

                                Epyx confidential


                              Agreement No. A11792
                                STATEMENT OF WORK
                  Period: January 17, 2000 -- November 30, 2000
                                    EXHIBIT A

       Fuel Processor Catalysts and Adsorbents Development Program between
               United Catalysts, Inc. and Epyx/A. D. Little, Inc.

Introduction

     Over the past few years, fuel cell power systems for stationary and mobile
applications have made tremendous advances. These advances have been possible
due to fundamental understanding of catalysis, thermodynamics, reaction
engineering, reactor design, and controls. Consequently, transportation fuel
cell power systems are on the verge of commercialization. For example, current
performance of the Epyx fuel processor on gasoline exceeds PNGV (Partnership for
New Generation Vehicles) 2004 targets for energy efficiency and steady state
emissions. Dry hydrogen concentrations of --45% have been observed at the LTS
exit corresponding to --85% efficiency of the fuel processor (based on LHV of
H2). However, there is still substantial work that must be performed in order
for the Epyx fuel processor to meet the most stringent PNGV 2004 targets of
power density, specific power, start-up time, transient response, endurance, and
cost.

     The objective of this joint development program between United Catalysts,
Inc. (UCI) and A. D. Little, Inc./Epyx (Epyx) is to develop next generation
state-of-the-art catalyst and adsorbent technology suitable for Epyx Next
Millennium Fuel Processor(TM). The work to be conducted is a part of Department
of Energy SFAA program with the objective to develop, design, fabricate, and
demonstrate two PEM fuel cell integrated 50 kWe multi-fuel processors for the
transportation application. In addition to UCI, there will be other
subcontractors and UCI is expected to work closely with them. An important
feature of this program is a close interaction among Epyx and all the
subcontractors. The duration of Phase I of the program is July 15, 1999 to July
31, 2001 with a go/no-go after Phase I. This SOW covers the period 10/1/1999 --
11/30/2000; Epyx and UCI will draft the SOW for 12/1/2000 -- 7/31/2001 in
December 2000. UCI's commitment to total program has been agreed to be
$1,168,218 for the period October 1, 1999 to January 14, 2003. For FY2000
(October 1, 1999 -- September 30, 2000), UCI will receive $0.45 MM and for
October 1, 2000 -- November 30, 2000 period,


                                       1
<PAGE>

                                Epyx confidential


$50,000; contingent upon DOE funding. All figures include UCI's cost share,
which is minimum 35%.

Importance of catalysts and adsorbents

     Epyx fuel processing approach consists of series of chemical reactions,
which are assisted by catalysts and adsorbents. These material play a crucial
role in obtaining satisfactory performance and UCI's role will crucial to the
overall success of the program. The catalysts and adsorbents developed in this
program will be dramatically different in size, shape, form, and composition
from the conventional syn gas catalysts and adsorbents. For a transportation
specific fuel processor application, some of the desired characteristics of
catalysts are:

1.   Activity per unit mass and volume about an order of magnitude higher than
     that of conventional syn gas catalysts

2.   High thermal and mechanical integrity/longevity

3.   High selectivity towards desired product(s) of reaction

4.   Ability for rapid startup, shut-down and transients

5.   Ability to withstand intermittent operation

6.   Heat transfer capability

7.   High tolerance for contaminant(s) such as sulfur, chlorine, etc.

8.   Ability to process multiple fuels such as reformulated gasoline, natural
     gas, ethanol, etc.

9.   Ability to operate under high humidity conditions

10.  Low cost

     To meet these goals, new catalysts and adsorbents - different from pelleted
base metal syn gas catalysts - will be developed by UCI. They will be based on
advanced substrates such as very high cell density ceramic/metallic monoliths,
reticulates, and foams, which offer high potential for weight, volume reduction
of the catalysts and reduced system pressure drop. The advanced substrates and
their properties will be provided by Corning and UCI will washcoat suitable
compositions onto these substrates. Washcoating is an extremely important part
of this program and UCI is expected to have/acquire world-class expertise in
this area. UCI will work


                                       2
<PAGE>

                                Epyx confidential


closely with its subsidiary -- Prototech Company - and will also get assistance
from Corning, when and if needed.

Overview of Phase I SOW

     The transportation fuel cell power system, of which the fuel processor is a
component, is expected to meet or exceed PNGV 2004 targets. These performance
and cost targets for fuel processor have been established for operation on
California Phase II reformulated gasoline (RFG) and are shown in Table 1; fuel
processor performance for other fuels is expected to exceed the target values
for gasoline. Based on proprietary automotive fuel cell system model, Epyx is
currently establishing independent fuel processor performance and cost targets,
which may be more stringent, and will be available soon.


Table 1. PNGV technical targets: fuel-flexible fuel processors(a)
(Excludes fuel storage, includes controls, shift reactors, CO clean-up, heat
exchangers)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
                                                                             Calendar Year
                                                                   ------------------------------------
          Characteristics                       Units                 1997                    2000                     2004
-----------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>                    <C>                    <C>                    <C>
-----------------------------------------------------------------------------------------------------------------------------
Energy Efficiency(b)                                %                     70                     75                     80
-----------------------------------------------------------------------------------------------------------------------------
Power Density                                     W/L                    400                    600                    750
-----------------------------------------------------------------------------------------------------------------------------
Specific Power                                   W/kg                    400                    600                    750
-----------------------------------------------------------------------------------------------------------------------------
Cost(c)                                          $/kW                     50                     30                     10
-----------------------------------------------------------------------------------------------------------------------------
Start-up to Full Power                            Min                      2                      1                    0.5
-----------------------------------------------------------------------------------------------------------------------------
Transient Response
  (time from 10 to 90% power)                     Sec                     30                     20                     10
-----------------------------------------------------------------------------------------------------------------------------
Emissions(d)                                                less than Tier 2       less than Tier 2       less than Tier 2
-----------------------------------------------------------------------------------------------------------------------------
Durability(e)                                   Hours                   1000                   2000                   5000
-----------------------------------------------------------------------------------------------------------------------------
CO Content Steady State(f)                        PPM                    100                     10                     10
-----------------------------------------------------------------------------------------------------------------------------
CO Content Transient(f)                           PPM                   5000                    500                    100
-----------------------------------------------------------------------------------------------------------------------------
H2S Content in Product Stream                     PPM                      0                      0                      0
-----------------------------------------------------------------------------------------------------------------------------
NH3 Content in Product Stream                     PPM           less than 10           less than 10           less than 10
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

(a)  Targets pertain to gasoline fuel and are consistent with those of the PNGV.

(b)  fuel processor efficiency = total fuel cell system efficiency/fuel cell
     stack system efficiency, where total fuel cell system efficiency accounts
     for thermal integration.

(c)  High-volume production: 500,000 units per year.

(d)  Emission levels will comply with emission regulations projected to be in
     place when the technology is available for market introduction.

(e)  Time between catalyst replacement.

(f)  Dependent on stack development (CO tolerance) progress.


                                       3
<PAGE>

                                Epyx confidential


     To meet the PNGV 2004 targets, the following technologies are needed from
UCI, in the descending order of their importance, for Phase I of the SFAA:

1.   Ultra-low-temp-shift (ULTS) catalyst: Desired outlet CO (dry) concentration
     from the reformer is less than or equal to 500 ppm or equilibrium, under
     conditions stated in Table 2. In the future, UCI and Epyx may jointly
     decide to pursue an alternative technology, such as selective CO
     methanation.

2.   Pre-FPA multi-fuel (liquid and gaseous) hydrocarbon sulfur removal trap:
     Desired sulfur removal efficiency is greater than or equal to 85%.

3.   Polishing sulfur trap (inside the FPA): Desired outlet sulfur concentration
     is less than or equal to 10 ppb.

4.   RFG reforming catalyst that can operate in the presence of sulfur with >98%
     approach to equilibrium under conditions stated in Table 5.

5.   High temp shift (HTS) catalyst which can operate over a wide temperature
     range (650-1200(degree)F).

6.   Consultation to Epyx on ammonia removal technology for automotive
     application.

All shift catalysts are expected to have greater than or equal to 30,000 h-1
design wet gas space velocity (WGSV) and greater than or equal to 50,000 h-1 for
reforming catalyst. Only catalysts which can be transferred onto high density
substrates are of interest here. With respect to these new technologies, UCI's
role in this program will be:

1.   Conceptualization, synthesis, and washcoating of catalysts onto suitable
     substrates

2.   Washcoating optimized catalyst compositions on other components of the fuel
     processor

3.   Pre- and post reaction characterization which includes, but is not limited
     to, XRD, XRF, BET, SEM/TEM, acidity, composition, thermal techniques, etc.
     These techniques will be used only when necessary for selected
     catalyst/adsorbents.

4.   Analyses of the performance data generated by Epyx

5.   Consultation to Epyx regarding screening, contaminant tolerance testing,
     kinetic evaluation, and (accelerated) aging studies of catalysts and
     adsorbents

6.   Consultation to Epyx related to the performance of the fuel processor

7.   Cost analyses of preferred catalyst/adsorbent system(s)


                                       4
<PAGE>

                                Epyx confidential


     In Phase I of this program, Epyx will evaluate these novel catalysts and
adsorbents based on advanced substrates in micro/meso reactor, MPR (modular
pressurized reformer -- a disintegrated 50 kWe fuel processor), and integrated
50 kWe fuel processor. The performance data obtained from such testing under
simulated and real reformate conditions will be conveyed to UCI in order for UCI
to improve the material performance. Epyx will also collect kinetic data, design
the reactor, and integrate them with the Next Millennium Fuel Processor(TM) -
all with guidance from UCI. Although UCI will be dependent upon Epyx for
performance testing, if it performs evaluation of catalysts (which are being
developed as a part of this program), it will share the results with Epyx.

Detailed description of SOW

     Task 1. ULTS development: A shift catalyst is needed which will meet the
specifications listed in Table 2. Additionally, it must be compatible with trace
contaminants of the FPA or fuel, able to withstand frequent start-up and
shut-down with minimal care (no N2 purge, etc.), resistant to water condensation
and air seepage, and environmentally friendly (non-pyrophoric). It is preferred
to have a catalyst which does not need activation. Copper containing catalysts
(e.g., Cu/Zn/A1, Cu/CeOx, etc.) are not of any interest in this program.

Table 2. Requirement matrix for Epyx ULTS

   -----------------------------------------------------------------------------
   Outlet CO (dry)                less than or equal to 500 ppm or equilibrium
   -----------------------------------------------------------------------------
   Operating conditions*          S/C: 2.25 -- 3.00, temp: 300-400 F
   -----------------------------------------------------------------------------
   Trace contaminant              less than or equal to 10 ppb H2S
   -----------------------------------------------------------------------------
   Design wet gas space velocity  greater than or equal to 30,000 h-1
   -----------------------------------------------------------------------------
   Lifetime                       greater than or equal to 2000 h with less than
                                  10% decrease in performance
   -----------------------------------------------------------------------------
   Selectivity                    No formation trace species and loss of H2
   -----------------------------------------------------------------------------

*    in the worst case, S/C is 1.4 and WGSV is 10,000 h-1.


1.   UCI will conceive and synthesize less than 50 powdered/pelleted catalysts -
     greater than or equal to 5% of which must be washcoated.

2.   Epyx will screen these catalysts in the ureactor.

3.   Epyx and UCI will jointly select six or less most promising candidates
     (WGSV greater than or equal to 10,000 h-1).

4.   UCI will improve these candidates and washcoat them on low/medium cell
     density substrate.

5.   Epyx will perform screening and contaminant tolerance testing of washcoated
     catalysts.


                                       5
<PAGE>

                                Epyx confidential


6.   Epyx and UCI will jointly select two or less most promising washcoated
     candidates (WGSV greater than or equal to 20,000 h-1).

7.   UCI will washcoat this composition onto high cell density substrates.

8.   Epyx will perform kinetic evaluation of the most promising candidate (WGSV
     greater than or equal to 30,000 h-1).

9.   UCI will make catalyst for the MPR testing.

10.  Epyx will perform MPR testing.

11.  UCI will make catalyst for Phase I FPA.


Task 2. Pre-FPA sulfur trap development: UCI will develop a pre-FPA multi-fuel
(liquid and gaseous) hydrocarbon sulfur removal trap suitable for Epyx multifuel
processor. This trap is envisioned to be similar to the conventional automotive
"oil filter" and will be replaced every 3000 miles. The requirements of the
pre-FPA trap are given in Table 3.

Table 3. Requirement matrix for Epyx pre-FPA sulfur trap

        -----------------------------------------------------------------
        Sulfur removal efficiency         greater than or equal to 5%
        -----------------------------------------------------------------
        Weight and volume (for 3 kmiles)  less than or equal to 2 L
        -----------------------------------------------------------------
        Pressure drop                     less than or equal to 10 psi
        -----------------------------------------------------------------

1.   Based on its industrial sulfur removal knowledge, UCI will prepare a
     comprehensive report on potential technologies for removal of greater than
     or equal to 85% sulfur from the RFG; the composition of which is given in
     Appendix A. The list will include mini hydro-desulfurization (HDS) with and
     without H2 recycle, catalytic distillation, hot gas desulfurization (zinc
     titanate, etc.), adsorbents (mol sieve, alumina, etc.). The mini-HDS report
     should include recommended catalyst type, amount of catalyst, hydrogen
     partial pressure requirements, temperature, total pressure, lifetime, etc.
     for two feeds -- RFG and US natural gas.

2.   Based on results of Task 1, UCI and Epyx will jointly select the technology
     for development in SFAA. The selection criteria will include removal
     efficiency, weight, volume and pressure drop of the technology, energy (and
     H2) requirements, ease of operation, and ability to handle multiple fuels.
     We will also jointly decide the test conditions to be used by Epyx to
     evaluate this new technology in the reactor lab.

3.   If adsorbent is the preferred choice, UCI will prepare less than 15
     powdered/pelleted samples (less than l lb. each).


                                       6
<PAGE>

                                Epyx confidential


4.   Epyx will test these powdered samples per the protocols defined in Task 2.

5.   Epyx and UCI will jointly select three candidates for extrusion.

6.   Coming will perform the extrusion and Epyx will test the extruded versions
     of the sulfur trap and perform sizing studies for 50 kWe Phase I FPA.

7.   UCI will prepare 2X amount of the required sulfur trap material
     (powdered/pelleted form) and Corning will extrude two large pieces for
     testing in 50 kWe MPR.

8.   Epyx will perform MPR testing and return the used material to UCI for
     characterization. This testing will involve accelerated aging, multiple
     fuels, frequent start-up and shut-down, transient drive cycle testing, etc.
     Upon completion of testing, Epyx will discuss data with all subs and find
     avenues for improvement for Phase I FPA build. UCI will characterize the
     sulfur trap.

9.   UCI and Corning will prepare two new sulfur traps for Phase I 50 kWe fuel
     processor testing.

Task 3: Development of polishing (FPA internal) sulfur trap: High reformate
purity (low concentrations of H2S, CO, and NH3) is important for satisfactory
performance of the PEM fuel cell. An FPA internal/polishing trap is needed, the
requirements of which are given in Table 4, to remove the last traces of sulfur
from the reformate. UCI's assistance is also needed in defining the location of
this trap, based on kinetics and thermodynamics of sulfur (mainly H2S) removal
from the humid reformate and Epyx' expected gas composition and operating
conditions.

Table 4. Requirement matrix for Epyx polishing sulfur trap

     --------------------------------------------------------------------
     Exit H2S concentration             less than or equal to 10 ppb
     --------------------------------------------------------------------
     Operating conditions               TBD
     --------------------------------------------------------------------
     Design wet gas space velocity      TBD
     --------------------------------------------------------------------
     Lifetime                           greater than or equal to 2000 h
     --------------------------------------------------------------------


1.   Epyx and UCI will follow steps 2-9 as listed in task 2.

Task 4. Gasoline reforming catalyst development: A reforming catalyst is needed
which will meet the specifications listed in Table 5. Additionally, it must be
compatible with trace contaminants of the FPA, able to withstand frequent
start-up and shut-down, resistant to water condensation & air seepage, and
environmentally friendly (non-pyrophoric).


                                       7
<PAGE>

                                Epyx confidential


1.   Based on its industrial steam reforming knowledge, UCI will prepare a
     comprehensive report on the feasibility of steam reforming RFG for
     automotive fuel processor application. The report should include ease of
     operation, energy and fuel purity requirements, S/C requirements, ability
     to handle upsets in desulfurizer, carbon formation, catalyst requirements,
     etc. The report is expected from UCI before November 1, 1999.

Table 5. Requirement matrix for Epyx reforming catalyst

   -----------------------------------------------------------------------------
   Methane and higher HC slip       greater than 98% approach to equilibrium
   -----------------------------------------------------------------------------
   Operating conditions             S/C: 2.25-3.00, temp: 1250-2300 F, 0/C:
                                    0.40-0.45
   -----------------------------------------------------------------------------
   Trace contaminant                Sulfur (leakage from pre-FPA sulfur trap)
   -----------------------------------------------------------------------------
   Design wet gas space velocity    greater than or equal to 50,000 h-1
   -----------------------------------------------------------------------------
   Lifetime                         greater than or equal to 2000 h with less
                                    than l0% decrease in performance
   -----------------------------------------------------------------------------

*    in the worst case, S/C is 1.4 and WGSV is 17,000 h-1.

2.   Epyx and UCI will follow steps 1-11 as listed in task 1. However, Epyx will
     test greater than or equal to 25 powdered reforming catalysts and final
     WGSV goal greater than or equal to 50,000 h-1.


Task 5. HTS development: A WGS catalyst is needed which will meet the
specifications listed in Table 6. Additionally, it must be compatible with trace
contaminants of the FPA, able to withstand frequent start-up and shut-down,
resistant to water condensation & air seepage, and environmentally friendly
(non-pyrophoric). Copper containing catalysts (e.g., Cu/Zn/Al, Cu/CeOx, etc.)
are not of any interest in this program.

Table 6. Requirement matrix for Epyx HTS

   -----------------------------------------------------------------------------
   Operating conditions*            S/C: 2.25-3.00, temp: 650-1200 F
   -----------------------------------------------------------------------------
   Design wet gas space velocity    greater than or equal to 30,000 h-1
   -----------------------------------------------------------------------------
   Trace contaminant                H2S (leakage from pre-FPA sulfur trap)
   -----------------------------------------------------------------------------
   Lifetime                         greater than or equal to 2000 h with
                                    less than 10% decrease in performance
   -----------------------------------------------------------------------------
   Selectivity                      No formation of CH4 and other trace species
   -----------------------------------------------------------------------------

*    in the worst case, S/C is 1.4 and WGSV is 10,000 h-1.

1.   Epyx and UCI will follow steps 1-11 as listed in task 1


                                       8
<PAGE>

                                Epyx confidential


Task 6: Ammonia removal/suppression: Ammonia has been shown to be a irreversible
poison to PEMFCs at >30 ppm levels. It is suspected that lower levels are also
detrimental to the performance. Ammonia control is therefore an important issue
for ATR/POX based fuel processor systems.

1.   Based on its industrial ammonia control knowledge, UCI will prepare a
     comprehensive report summarizing ammonia control and suppression
     technologies. This should include the likelihood of ammonia formation over
     various reforming and shift catalyst materials, as well as options for
     ammonia clean-up following its formation. UCI will recommend the best
     option(s) for achieving ammonia targets listed in Table 7.

Table 7. Requirement matrix for Epyx ammonia clean-up technology

   -----------------------------------------------------------------------------
   Exit NH3 concentration*          less than or equal to 10 ppm
   -----------------------------------------------------------------------------
   Design wet gas space velocity    TBD
   -----------------------------------------------------------------------------
   Lifetime                         greater than or equal to 2000 h with
                                    less than 10% decrease in performance
   -----------------------------------------------------------------------------

*subject to change given input from fuel cell subcontractor. Can be achieved by
suppression or clean-up or combination of the two.

Reporting Requirements

     Throughout the program, UCI will provide the following support to Epyx:

1.   Biweekly progress reports through telephone conversation/video conferencing
     and e-mail.

2.   Support for quarterly DOE meetings

3.   Monthly financial report and bi-monthly progress report

     The key contact at Epyx will be Dr. Prashant S. Chintawar. The management
of the intellectual property generated during this program will be governed by
the agreement reached between Epyx and UCI.


                                       9
<PAGE>

                             Gantt Chart for period
                      October 1, 1999 - November 30, 2000


                                   [GRAPHIC]
<PAGE>

                             Gantt Chart for period
                      October 1, 1999 - November 30, 2000
                                  (CONTINUED)

                                   [GRAPHIC]
<PAGE>

                                  ATTACHMENT I


                             ARTHUR D. LITTLE, INC.
            STANDARD PROVISIONS FOR SERVICES AND SUPPLY SUBCONTRACTS
                                      1998




Arthur D Little
<PAGE>

                                                                     Page 1 of 5


                                  ATTACHMENT I

                             ARTHUR D. LITTLE, INC.
            STANDARD PROVISIONS FOR SERVICES AND SUPPLY SUBCONTRACTS
                                      1998


1.   INDEPENDENT CONTRACTOR

Subcontractor shall perform under this Subcontract as an independent contractor.
Nothing herein contained shall be construed as creating the relationship of
employer and employee or principal and agent between ADL and Subcontractor or
any employee or agent of Subcontractor. Neither Subcontractor nor any of its
employees or agents have any authority to represent, commit, or bind ADL to any
person, firm, association, corporation or government agency.

2.   INDEMNITY AGAINST CLAIMS

Subcontractor hereby agrees to indemnify and save harmless ADL, its agents and
employees, against any and all liability, obligations, claims, loss and expense,
(a) caused or created by Subcontractor, its suppliers, or the agents and
employees of either, arising (i) as a result of willful misconduct or gross
negligence, or (ii) directly or indirectly out of the performance of the work;
or (b) arising directly or indirectly out of injuries suffered or allegedly
suffered by employees of Subcontractor or its suppliers (i) in the course of
their employment, (ii) in the performance of work hereunder, or (iii) upon
premises owned or controlled by ADL.

3.   PATENT INDEMNITY

Subcontractor warrants that all products and materials which it furnishes to ADL
hereunder which are not of ADL's design, composition or manufacture do not
infringe any valid patent, copyright or trademark. Subcontractor shall indemnify
and save ADL harmless from any and all expense, liability and/or loss, including
attorney's fees, arising out of claims, suits or actions alleging such
infringement.

4.   INSURANCE

If in the performance of this Subcontract Subcontractor's employees are required
to enter premises owned or controlled by ADL or the prime contractor,
Subcontractor shall maintain Workmen's Compensation and Comprehensive Public
Liability and Property Damage, including Automobile Public Liability and
Property Damage coverage in amounts, in forms and with carriers satisfactory to
ADL, and shall on request furnish certificates attesting to such insurance or
submit the policies for inspection by ADL.


Arthur D Little
<PAGE>

                                                                     Page 2 of 5


5.   RELEASE OF INFORMATION

No news release, including photographs and films, public announcements or
confirmation of same, or any part of the subject matter of this Subcontract, or
any phase of any program hereunder shall be made without the prior written
approval of ADL. Such approval will not be unreasonably withheld.

The Subcontractor further agrees to insert the provisions of this clause in any
of its subcontracts, purchase orders, or consulting agreements issued under this
Subcontract.

6.   NOTICE OF LABOR DISPUTES

Whenever an actual or potential labor dispute is delaying or threatens to delay
the performance of the work, Subcontractor shall immediately notify ADL in
writing. Such notice shall include all relevant information concerning the
dispute and its background.

7.   TAXES

Subcontractor agrees that, unless otherwise indicated in this Subcontract, (a)
the prices herein do not include any state or local sales, use or other tax from
which an exemption is available for purposes of this Subcontract, and (b) the
prices herein include all other applicable federal, state and local taxes in
effect at the date of this Subcontract. Subcontractor agrees to accept any use
tax exemption certificates when supplied by ADL if acceptable to the taxing
authorities. In case it shall ever be determined that any tax included in the
prices herein was not required to be paid by Subcontractor, Subcontractor agrees
to notify ADL and to make prompt application for the refund thereof, to take all
proper steps to procure the same and when received to pay the same to ADL.

8.   ASSIGNMENT OF CLAIMS

Subcontractor shall not assign any rights or claims under this Subcontract or
for breach thereof, without prior written consent of ADL. Attempted assignments
not having ADL approval shall be void.

In no event shall copies of this Subcontract, specification or other similar
documents relating to work under this Subcontract be furnished to any assignees
of claim arising under this Subcontract without the prior written consent of the
ADL Subcontract Administrator.

9.   SUBCONTRACTING

None of the work to be performed by the Subcontractor under this Subcontract
shall be subcontracted without the prior written consent of ADL; however, this
limitation shall not apply CO to the purchase of standard commercial supplies or
raw material.


Arthur D Little
<PAGE>

                                                                     Page 3 of 5


10.  CONFIDENTIAL UNDERSTANDING

In the performance of the work under this Subcontract, ADL and Subcontractor
(the parties) and their employees may be exposed to, or have contact with, or
knowledge of developments, research projects, manufacturing or trade secrets,
identification of clients or business confidences of the other party.
Accordingly, the parties agree to hold in confidence all such matters both
during and after completion of the work called for under this Subcontract and to
secure a like agreement from any of their personnel assigned to perform services
related to this Subcontract. Excluded from the foregoing restriction is
information which has become a part of the public domain, information which the
other party can reasonably show is in its possession at the time of disclosure
and was not acquired directly or indirectly from the other party, and
information received by either party from a third party having the legal right
to transmit the same. The obligations of confidentiality hereunder shall remain
in force for a period of five years after the date of termination or expiration
of this Subcontract.

11.  WAIVER

The failure of ADL to insist upon the performance of any provision of this
Subcontract, to exercise any right or privilege granted to ADL under this
Subcontract shall not be construed as waiving any such provision, and the same
shall continue in force.

12.  COMPLIANCE WITH LAWS/PERMITS

Subcontractor agrees to comply with the requirements of the Fair Labor Standards
Act of 1938, as amended, and of regulations and orders of the United States
Department of Labor under Section 14 thereof.

Except as otherwise directed by ADL, Subcontractor shall procure all necessary
permits or licenses and abide by all applicable laws, regulations and ordinances
required by the political subdivision in which the work and/or services under
this Subcontract is performed.

13.  SUBCONTRACT SURVEILLANCE

Authorized representatives of ADL and/or the prime contractor shall have access
to Subcontractor's facilities in order to review progress and discuss problems
pertaining to the requirements of this Subcontract. Subcontractor shall provide
adequate information on Subcontract performance in response to reasonable
requests by ADL and/or the prime contractor.


Arthur D Little
<PAGE>

                                                                     Page 4 of 5


14. INSPECTION AND ACCEPTANCE

All material and work, including raw materials, component, and end products,
shall be subject to inspection and test by ADL and the Government to the extent
practicable at all times and places, and the plants of Subcontractor and its
subcontractors of any tier shall be subject to inspection by ADL and the
Government. The exercise of this right of inspection and test, however, shall in
no way relieve Subcontractor of its obligation to furnish all material and work
in strict accordance with this order. In case any material or work is found to
be defective, ADL shall have the right to reject, rework or sort the same or
require that it be corrected or replaced promptly, all at Subcontractor's
expense. If inspection and test are made on the premises of Subcontractor or any
subcontractor of Subcontractor, Subcontractor or such subcontractor shall
furnish without additional charge all reasonable facilities and assistance for
the safe and convenient inspections and tests required. All inspections and
tests shall be performed in such manner as not to delay the work unduly.

ADL shall inspect and provisionally accept the materials and services provided
under this Subcontract and shall advise Subcontractor of any defect or required
changes therein. In addition, the Contracting Officer under the prime contract
or his duly authorized representative is authorized to perform inspection and to
accept the materials and services provided under the prime contract, including
those provided under this Subcontract. Any provisional acceptance by ADL is
subject to final acceptance by the Government Contracting Officer.

Provided, in no event will the exercise of rights under this Article include
access to or observation of UCI's proprietary manufacturing processes. For
purposes of this Article, materials and services shall be considered defective
if there is a defect in the physical nature of any catalyst samples submitted by
UCI. Materials and services shall not be considered defective because of
catalyst performance failures, if UCI complied with industry standards of due
care in its work on such materials and services.

15.  GOVERNMENT-FURNISHED PROPERTY

If any Government property is furnished to Subcontractor in connection with
performance of this order, title thereof shall remain in the Government and the
Government shall have access thereto, at all reasonable times. Subcontractor
shall return such property in the condition in which it was received, except for
reasonable wear and tear and except to the extent that such property has been
incorporated in material delivered under this order or has been consumed in
normal performance of this order. Subcontractors shall comply with the
provisions of FAR Part 45.

16.  DISPUTES

Either party may litigate any dispute arising under or relating to this
Subcontract before any court of competent jurisdiction. Pending resolution of
any such dispute by settlement or by final judgment, the parties shall proceed
diligently with performance. Subcontractor's performance shall be in accordance
with ADL's written instructions. All references to disputes procedures in
Government clauses incorporated by reference shall be deemed to be superseded by
this clause.


Arthur D Little
<PAGE>

                                                                     Page 5 of 5


17.  CHANGES

ADL may at any time, by a written notice, make changes in the specifications,
designs or drawings, samples or other description to which the articles are to
conform, in methods of shipment and packaging, place of delivery, or the amount
of ADL/Government-furnished property. If any such change causes an increase or
decrease in the cost of, or the time required for, the performance of any part
of the work under this order, whether changed or not changed by any such order,
an equitable adjustment shall be made in the price or delivery schedule, or
both, and this order modified in writing accordingly. Any claim by Subcontractor
for an adjustment must be made in writing within thirty (30) days of the receipt
of any such notice, provided, however, that ADL may, at its discretion, receive
and act upon any such claim so made at any time prior to final payment under
this order. Nothing in this clause shall excuse the Subcontractor from
proceeding without delay to perform this Subcontract as changed.

18.  TERMINATION

(a) ADL may terminate this Subcontract, in whole or in part if Subcontractor
fails to comply with any of the provisions hereof, or if Subcontractor becomes
the subject of a proceeding under state or federal law for relief of debtors or
makes an assignment for the benefit of creditors. (b) Without effecting its
right to terminate this order under paragraph (a) hereof, ADL may, for any
reason, terminate this Subcontract in whole or, from time to time, in part.

19.  FOREIGN NATIONALS

RESERVED


                                                  -----------------
                                                     Last Item


Arthur D Little
<PAGE>

                      ATTACHMENT II - ADDITIONAL PROVISIONS


        (Flow-down from DOE Cooperative Agreement No. DE-FCO2-99-EE50580)


The Federal Acquisition Regulation (FAR) clauses, Department of Energy
Regulations (DEAR) clauses set forth on the attached listing are hereby
incorporated by reference in this subcontract. All such clauses shall, with
respect to rights, duties and obligations of ADL and the Subcontractor
hereunder, be interpreted and construed in such manner as to recognize and give
effect to the contractual relationship between ADL and the Subcontractor under
this subcontract and the rights of the U.S. Government with respect thereto
under the Prime Contract from which such clauses are derived. As used therein
the terms "the Contractor" and equivalent terms shall mean the Subcontractor and
the terms "the Government" and "the Contracting Officer" shall include ADL and
Ad's authorized representative hereunder, respectively, except under those
clauses relating to the rights to audit or examine the Subcontractor's financial
records in which case the terms "the Government" and "the Contracting Officer"
shall mean the U.S. Government and the Contracting Officer under the Prime
Contract, respectively. The word "contract" and like terms shall mean this
subcontract.


Arthur D Little
<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

     N/A

2.   FINANCE OFFICE

     N/A

3.   PAYMENT

     N/A
<PAGE>

                                       -2-


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>

                                       -3-


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>

                                       -4-


          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.
               1Oa-1Oc, 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.
<PAGE>

                                 ATTACHMENT III


                          ADDITIONAL SPECIAL PROVISIONS


        (Flow-down from DOE Cooperative Agreement No. DE-FCO2-99-EE50580)


The Federal Acquisition Regulation (FAR) clauses, Department of Energy
Regulations (DEAR) clauses set forth on the attached listing are hereby
incorporated by reference in this subcontract. All such clauses shall, with
respect to rights, duties and obligations of ADL and the Subcontractor
hereunder, be interpreted and construed in such manner as to recognize and give
effect to the contractual relationship between ADL and the Subcontractor under
this subcontract and the rights of the U.S. Government with respect thereto
under the Prime Contract from which such clauses are derived. As used therein
the terms "the Contractor" and equivalent terms shall mean the Subcontractor and
the terms "the Government" and "the Contracting Officer" shall include ADL and
ADL's authorized representative hereunder, respectively, except under those
clauses relating to the rights to audit or examine the Subcontractor's financial
records in which case the terms "the Government" and "the Contracting Officer"
shall mean the U.S. Government and the Contracting Officer under the Prime
Contract, respectively. The word "contract" and like terms shall mean this
subcontract.


Arthur D Little
<PAGE>

                          ADDITIONAL SPECIAL PROVISIONS

                                TABLE OF CONTENTS


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

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 ...........................      4
          Technology to Foreign Entities

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

8.       Partial Funding ................................................      4

     GOV'T/DOE = ADL
     PARTICIPANT = UCI
     CONTRACTING OFFICER/DOE PROJECT OFFICER = ADL
<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 OCT. 1, 1999 through January 14, 2003 will be $759,341. The
     Participant will contribute $408,877 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 tota1
     allowable and allocable costs of performance during the project period on a
     65 percent (Government) and 35 percent (Participant) basis. It is
     understood by the parties that the DOE share of this project period is
     $759,341 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 1.J. (Cost Share 35%)

     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.

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.


                                       1
<PAGE>

     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
     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." 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.


                                       2
<PAGE>

          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:

               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." 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.


                                       3
<PAGE>

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.

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 *% 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 $1,168,218 of which the
     estimated cost to DOE is $759,341 and the estimated cost to the Participant
     is $408,877. The Cumulative DOE Obligation for the current budget period is
     $292,500, subject to the availability of additional funds, DOE anticipates
     obligating an additional $ -0- 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 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,
     ______________, provided, however, that once the Cumulative DOE Obligations
     for the current budget period have been

     *    Whatever rate was included in UCI's cost proposal on which this award
          is based.


                                       4
<PAGE>

increased by DOE to $759,341, the Participants' obligation for the current
budget period shall be increased to a total of $408,877, and the Participant
shall be expected to bring the project (covered by the current budget period) to
its conclusion within the amount of $759,341, 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.


                                       5
<PAGE>

                                  ATTACHMENT IV


                     FEDERAL ASSISTANCE REPORTING CHECKLIST

                                  DATED 1/28/99


        (Flow-down from DOE Cooperative Agreement No. DE-FCO2-99-EE50580)


The Federal Acquisition Regulation (FAR) clauses, Department of Energy
Regulations (DEAR) clauses set forth on the attached listing are hereby
incorporated by reference in this subcontract. All such clauses shall, with
respect to rights, duties and obligations of ADL and the Subcontractor
hereunder, be interpreted and construed in such manner as to recognize and give
effect to the contractual relationship between ADL and the Subcontractor under
this subcontract and the rights of the U.S. Government with respect thereto
under the Prime Contract from which such clauses are derived. As used therein
the terms "the Contractor" and equivalent terms shall mean the Subcontractor and
the terms "the Government" and "the Contracting Officer" shall include ADL and
ADL's authorized representative hereunder, respectively, except under those
clauses relating to the rights to audit or examine the Subcontractor's financial
records in which case the terms "the Government" and "the Contracting Officer"
shall mean the U.S. Government and the Contracting Officer under the Prime
Contract, respectively. The word "contract" and like terms shall mean this
subcontract.


Arthur D Little
<PAGE>

                           U.S. Department of Energy
                     FEDERAL ASSISTANCE REPORTING CHECKLIST

<TABLE>
--------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>
Identification Number: DE-FCO2-99EE50580                       2.  Program/Project Title
                                                               Development of Fuel Processor,
                                                               Durability Demonstration and
                                                               10kW System
--------------------------------------------------------------------------------------------------------------------
Recipient: Arthur D. Little, Inc.

<CAPTION>
--------------------------------------------------------------------------------------------------------------------
Reporting Requirements:                                          Frequency    No. of Copies           Addressees
                                                               -----------------------------------------------------
<S>                                                                  <C>      <C>                     <C>
GRAM/PROJECT MANAGEMENT REPORTING

Program Management Plan, See Attachment 1                            Y        Original + 2 copies     Orig + 2cys, B

DOE F 4600.3A, "Milestone Log"

D0E F 4600.4, "Federal Assistance Budget Information"

DOE F 4600.5, "Federal Assistance Management Summary Report"

D0E F 4600.6, "Federal Assistance Program/Project Status Report"

SF-269, "Financial Status Report" (Long Form)                        Q        Original + 1 Copy       Orig A, (1) B

FINANCIAL INFORMATION REPORTING

DOE F 1430.22, Notice of Energy RD&D Project

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

Topical Report                                                       A        Original + 2 copies     Orig + 2cys B

Final Technical Report                                               F**      Original + 2 copies     Orig + 1 A

                                                                                                            (1) B
--------------------------------------------------------------------------------------------------------------------
</TABLE>

FREQUENCY CODES AND DUE DATES:

-    As Necessary: within 5 calendar days after events.

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

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

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

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

-    Year1y: 30 days after the end of program year. (Financial Status Reports 90
     days).

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

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

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)."

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 F 1.
"Announcement of U.S. Department of Energy (DOE) Scientific and Technical
Information (STI)."

<TABLE>
<S>                 <C>                             <C>
FINAL REPORTS TO:   A. Contract Specialist, ACQ     B. See Block No. 11 of the
                       U.S. Department of Energy       face page
                       Chicago Operations Office       Department of Energy
                       9800 South Cass Avenue          1000 Independence Avenue. S.W.
                       Argonne, Illinois 60439         Washington, D.C. 20585-0121
</TABLE>
                                                                     JAN 28 1999
--------------------------------------------------------------------------------

Prepared by: (Signature and Date)             /s/ Ronald J. Fiskum

--------------------------------------------------------------------------------
<PAGE>

                                                                    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
          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>

                                  ATTACHMENT V


                       INTELLECTUAL PROPERTY PROVISIONS--

                     RESEARCH, DEVELOPMENT, OR DEMONSTRATION

                  LARGE BUSINESS, STATE AND LOCAL GOVERNMENTS,

                     AND FOREIGN ORGANIZATION, CODED LB-498


        (Flow-down from DOE Cooperative Agreement No. DE-FCO2-99-EE50580)


The Federal Acquisition Regulation (FAR) clauses, Department of Energy
Regulations (DEAR) clauses set forth on the attached listing are hereby
incorporated by reference in this subcontract. All such clauses shall, with
respect to rights, duties and obligations of ADL and the Subcontractor
hereunder, be interpreted and construed in such manner as to recognize and give
effect to the contractual relationship between ADL and the Subcontractor under
this subcontract and the rights of the U.S. Government with respect thereto
under the Prime Contract from which such clauses are derived. The word
"contract" and like terms shall mean this subcontract.


Arthur D Little
<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 1

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 of 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>

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)

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 Co 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


                                       1
<PAGE>

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 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 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,


                                       2
<PAGE>

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. Where
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 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 ignore. 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 Officers decision. The Government shall
     continue to abide by the markings under this subdivision (iii) until final
     resolution of the matter either by the Contracting Officers 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 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.


                                       3
<PAGE>

(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
Contractors 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.]

     (3) [Reserved.]

(h)  Subcontracting.

     The Contractor has the responsibility to obtain from its subcontractors all
data and rights therein necessary to fulfill the Contractors 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)(l) 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


                                       4
<PAGE>

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). 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)Q) 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 (1)
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 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)


                                       5
<PAGE>

     (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 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.

(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.


                                       6
<PAGE>

(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 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


                                       7
<PAGE>

     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.

          (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;

               (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


                                       8
<PAGE>

     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.

     (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 Contractors 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 Contractors business to which the invention
pertains.

     (2) The Contractors 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 an
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:

               (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 00 invention available for
          licensing.


                                       9
<PAGE>

          (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
          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 o 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.


                                       10
<PAGE>

     (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 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.

(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.


                                       11
<PAGE>

(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 Officers 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

          (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 subcontractors 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 subcontractors 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.

     (3) In the case of subcontracts at any tier, DOE, the subcontractor, and
Contractor agree that the mutual 1.0 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.


                                       12
<PAGE>

     (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.

     (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


                                       13
<PAGE>

public disclosure of such information will not adversely affect the patent
interests of DOE or 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)




                                       14
<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 is
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. 85-538 (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.

     (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 CO 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.
<PAGE>

     (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.

     (4) Requests for extension of the time for disclosure, election, and filing
under subparagraphs (c)(l), (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 Contractors 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 Contractors 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 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.
<PAGE>

     (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 mailers
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 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
subcontractors 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 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
<PAGE>

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

     (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 Contractors
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)
<PAGE>

                                  ATTACHMENT VI


       DOE ASSISTANCE REGULATIONS, 10 CFR PART-600, AS AMENDED SUBPARTS A
                 AND B (OTHER THAN STATE AND LOCAL GOVERNMENTS)


The Department of Energy Assistance Regulations as set forth in 10 CFR Part-600,
as Amended Subparts A and B (Other than State and Local Governments) are hereby
incorporated by reference in this subcontract. All such clauses shall, with
respect to rights, duties and obligations of ADL and the Subcontractor
hereunder, be interpreted and construed in such manner as to recognize and give
effect to the contractual relationship between ADL and the Subcontractor under
this subcontract and the rights of the U.S. Government with respect thereto
under the Prime Contract from which such clauses are derived. As used therein
the terms "the Contractor" and equivalent terms shall mean the Subcontractor and
the terms "the Government" and "the Contracting Officer" shall include ADL and
Ad's authorized representative hereunder, respectively, except under those
clauses relating to the rights to audit or examine the Subcontractor's financial
records in which case the terms "the Government" and "the Contracting Officer"
shall mean the U.S. Government and the Contracting Officer under the Prime
Contract, respectively. The word "contract" and like terms shall mean this
subcontract.


Arthur D Little
<PAGE>

                                 ATTACHMENT VII


                      GUIDELINES FOR INTELLECTUAL PROPERTY
                             AGREEMENT FOR SFAA 1.j.
<PAGE>

1.   "Program" means the joint development program between Contractor and
     Subcontractor described in Exhibit A to Agreement No. A11792.

2.   "Program Invention" means any invention, patentable or otherwise, relating
     to the Contractor Field of Use or the Subcontractor Field of Use, and
     conceived and/or made during the course of work performed under the Program
     by employees or agents of Contractor and/or Subcontractor.

3.   "Sole Program Invention" means any Program Invention which is made
     exclusively by one or more employees or agents of only one of the parties.

4.   "Joint Program Invention" means any Program Invention which is jointly made
     by one or more employees or agents of both parties. A Joint Program
     Invention requires an inventive contribution to the conception or reduction
     to practice of the invention by each inventor (and not merely an
     implementation of the suggestions or instructions of the inventor); and can
     be made even though the inventors did not physically work together or at
     the same time, did not each make the same type or amount of contribution,
     or did not each make a contribution to the subject matter of every claim of
     any patent covering the invention.

5.   "Background Invention" means any invention in the possession of one of the
     parties created, acquired and/or developed either prior to the start of the
     Program or during the term of Agreement No. A11792 but independently of the
     work carried out under the Program.

6.   "Contractor Field of Use" means business activities and opportunities on a
     world-wide basis relating to the manufacture and sale of hydrocarbon
     conversion devices.

7.   "Subcontractor Field of Use" means business activities and opportunities on
     a world-wide basis relating to the manufacture and sale of catalysts,
     adsrobents and/or washcoat for catalysts.

1.   All Background Inventions owned or controlled by either party before the
     effective date of Agreement No. A11792 or owned or controlled by a party
     during the course of the Program shall continue to be owned or controlled
     by such party to the full extent permitted by law.

2.   The entire right, title and interest throughout the world in and to any
     Sole Program Invention will be vested in the party whose employees or
     agents made the invention.

3.   The right, title and interest throughout the world in and to any Joint
     Program Invention will be vested jointly in Contractor and Subcontractor,
     subject to the following:


Arthur D Little
<PAGE>

          (i) if the Joint Program Invention is a catalyst or adsorbent, then
          Subcontractor will have the following rights: (A) Subcontractor will
          be free to supply catalyst or adsorbent samples to third parties for
          testing under non-disclosure/non-analysis agreements, (B)
          Subcontractor will have exclusive rights to manufacture and sell the
          catalyst or adsorbent, with protection to Contractor on price and
          availability, and (C) Subcontractor will be free to supply the
          catalyst or adsorbent commercially to third parties, with a reasonable
          royalty paid to Contractor.

          (ii) if the Joint Program Invention is a process in the Contractor
          Field of Use, then ADL shall have a royalty free, exclusive license
          (including the exclusion of UCI and the right to grant sublicenses of
          equal or lesser scope) under any such Joint Program Invention covering
          the manufacture and sale of hydrocarbon conversion devices.


                                       2
<PAGE>

Arthur D. Little
                                                Arthur D. Little, Inc.
                                                Acorn Park
                                                Cambridge, Massachusetts
                                                02140-2390 U.S.A.

                                                Telephone (1) 617.498.5000
                                                Fax (1) 617.498.7200


December 1, 1999

Mr. Jon P. Wagner
United Catalysts, Inc.
1600 West Hill Street
Louisville, KY 40210

Subject: Agreement A11792

Dear Mr. Wagner:

Please find enclosed three (3) copies of Agreement No. A11792 for your review.
If you take no exceptions to the agreement, please sign all three (3) copies and
return two (2) to my attention for full execution.

We look forward to working with you on this exciting program. If you have any
questions, please call me at (617) 498-5636.

Very truly yours,

ARTHUR D. LITTLE, INC.


/s/ Judith Blinn

Judith Blinn
Contracting Officer

JB:amh
Enclosures