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                                                                  EXHIBIT 10.17
                            SUPPLEMENTAL AGREEMENT


THIS AGREEMENT, effective this 31ST the day of December 1997 ("Effective Date")
is made between Catalytica Advanced Technologies, Inc., a Delaware corporation
(CATI") being a wholly owned subsidiary of Catalytica, Inc., a publicly held
Delaware corporation ("CATALYTICA"), both corporations having their principal
offices in Mountain View, California and Microfluidics International
Corporation, a Delaware corporation having its principal offices in Newton,
Massachusetts, together with its wholly owned subsidiary, Microfluidics
Corporation, (collectively referred to hereinafter as "MFIC").

WHEREAS, CATALYTICA and MFIC previously entered into a License Agreement with
Worcester Polytechnic Institute  ("WPI") dated October 18, 1993 pursuant to
which WPI licensed to MFIC and CATALYTICA certain "Inventions" and "Licensed
Patents" within the "Licensed Field" (the "WPI License Agreement"), and

WHEREAS, CATALYTICA and MFIC previously entered into a development agreement
dated October 18, 1993, as amended from time to time, (the "Development
Agreement") directed to the development for commercialization of certain jointly
licensed WPI technology and know-how within the Licensed Field using MFIC's then
available Microfluidizer materials processor devices (the "Original Program"),
and

WHEREAS, several amendments have been executed among the Parties modifying the
Development Agreement, in particular altering from time to time the proportion
of cost sharing and allocation of benefits, if any, to be derived from
commercialization revenues which may arise during the course of the development
and commercialization of technology within the Licensed Field, and

WHEREAS, CATALYTICA and MFIC were jointly awarded a $2.2 million Advanced
Technology Program Grant from the U.S. Department of Commerce (the "Grant") and
have entered into an agreement relating to management of such Grant program (the
"National Institute of Standards and Technology ("NIST") Cooperative
Agreement"), and

WHEREAS, WPI's applied-for-patents have issued in the United States and
elsewhere since the date of the WPI License Agreement and the Development
Agreement thus defining the "Licensed Field" and patent estate licensed to the
Parties, and

WHEREAS, collaborative efforts between the Parties have since the date of the
Development Agreement, as agreed upon and provided for, focused almost solely on
catalysis as the single area of development, and

WHEREAS, MFIC has developed a new Microfluidizer "Multi-Stream Continuous
Chemical Reactor" (the "New Device") which has been utilized by CATALYTICA and
MFIC under the Development Agreement, and for which novel device MFIC, as sole
inventor, has filed with the United States Patent and Trademark Office (the
"USPTO") a patent application on August 5, 1997 (the "Multi-Stream
Application"), and

WHEREAS, CATALYTICA desires to substitute CATI in its place in this Agreement
and under the Program and through CATI desires to file certain Continuation In
Part Applications ("CIP's") to the Multi-Stream Application utilizing MFIC's
priority filing date, and

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WHEREAS, CATALYTICA, CATI and MFIC believe that it would be: (1) beneficial to
effect certain modifications of, additions to, and consolidation of certain
existing agreements among the Parties including the Development Agreement, and
(2)  to resolve and clarify certain issues relating to (a) the scope of the
technology and the collaborative program goals to be pursued during the balance
of the Development Agreement, and (b) the sharing of benefits from
commercialization of the technology, which issues have arisen during the course
of the collaborative development program, and (3)  to make provision for
CATALYTICA's filing and prosecution with MFIC of the CIP's to the Multi-Stream
Application.


NOW THEREFORE, in consideration of the mutual premises, terms and conditions
hereinafter set forth, CATI and MFIC agree to the following:


1.   Relationship to Previous Agreements

     1.1  The terms and conditions of this Agreement shall supersede
and replace the terms and conditions of the Development Agreement, as amended by
Amendments No. 1 and No. 2 dated respectively July 1994 and February 1995
(hereinafter the "1993 Agreement"), the agreement between CATALYTICA and MFIC
dated January 1, 1995 (hereinafter the "1995 Agreement") all of which will
become null and void as of the effective date of this Agreement.
Notwithstanding the foregoing, the Confidentiality and Non-Disclosure Agreement
between the Parties dated April 6, 1995 (the "Confidentiality Agreement") will
survive in full force and effect unaltered by this Agreement except that it will
also be binding upon CATI. All Confidential Information communicated hereunder
to either Party, its officers, employees, consultants and agents, either through
the time of execution of this Agreement or disclosed hereafter, will be governed
and protected by the provisions of such Confidentiality Agreement.
Notwithstanding the substitution of CATI in place of CATALYTICA, CATALYTICA
shall be jointly and severally liable for any and all obligations, damages or
other claims or causes of actions that MFIC now has or will have in the future
against CATI, and CATI specifically warrants and represents that it has the
proper authority and capacity to so bind CATALYTICA.


2.   Definitions

     2.1  The following terms shall have the following meanings
within the context of this Agreement and the collaboration:

(a) The Revised Field of collaboration shall mean the development and
commercialization of catalyst materials, catalyst support materials, excluding
zeolites, prepared using a Microfluidizer materials processing device or New
Device, which in the case of the excluded zeolites will be solely owned by the
inventing party.

(b)  The Technology shall mean the Licensed Patents and know-how within the
Revised Field and/or the Licensed Field granted under a joint license to the
Parties under the WPI License Agreement for commercialization utilizing either
or both the Microfluidizer materials processor or the New Device.

(c) Restated Program shall mean the continued collaborative efforts by
CATALYTICA, through CATI, and MFIC to develop the Technology within the Revised
Field.

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     2.2  Program Management

          a. The Restated Program will be directed by a Management Committee
consisting of two representatives of each Party. The work plans and budgets will
be mutually agreed upon on a semi-annual basis. MFIC and CATI will each provide
to the other timely reports of their evaluations and development efforts.

          b. CATALYTICA, through CATI, shall continue to serve as administrator
(the "Administrator") for the collaborative venture between the Parties and for
the purposes of the Grant, MFIC has granted to CATALYTICA a Power of Attorney
for the sole purpose of binding MFIC to those terms and conditions of the NIST
Cooperative Agreement. As Administrator CATALYTICA has and through CATI will
perform day-to-day management and administration of the Grant in accordance with
all legal and regulatory requirements, including the NIST Cooperative Agreement.

          c. MFIC, after reviewing the Cooperative Marketing Agreement between
CATALYTICA and Mitsubishi Corporation ("MC") for commercial exploitation of
certain technologies/products in Japan, has granted to CATALYTICA the sole and
exclusive right within Japan to represent the collaborative interests of both
Parties in technology resulting from the collaboration under such agreement
insofar as CATALYTICA elects to include such technology in the list of
technologies/products which MC shall market to potential customers in Japan on
CATALYTICA's behalf. In this regard, MFIC has agreed to be bound by, and to
otherwise honor, the terms of such agreement as it applies to technology
resulting from the collaboration under the agreement, and to take action which
may be reasonable necessary to take advantage of any commercial opportunity
identified by MC.


     2.3  Restated Program Costs   Except for the patent costs which
are covered as set forth in paragraph 4.1 below, each Party shall be responsible
for its own Restated Program costs (and reimbursement thereof under the Grant)
pursuant to work plan and an annual budget mutually agreed upon prior to
execution of this Agreement and attached hereto as SCHEDULE A. Such budget and
schedule will be revised annually on or by February 15th and attached to the
Agreement as a new SCHEDULE A.  In this regard, the Parties agree that the
ownership of commercial benefits shall be allocated based on the cumulative
approved Program costs (including any patent costs incurred pursuant to
paragraph 4.1 hereof) for each Party as follows:

          a. Option Exercise
MFIC has agreed to exercise its option not to make a payment to CATALYTICA for
one-half of the difference between CATALYTICA's and MFIC's actual approved Phase
I research costs from inception through December 1997, accordingly, CATALYTICA's
and CATI's ownership of the commercial benefits of the collaboration shall be
adjusted in proportion to the total approved costs incurred by each Party for
the collaboration up to December 31, 1997.   In this regard, it is agreed that
as of December 31, 1997, CATALYTICA's and CATI's total approved expense costs
are $4,087,775 whereas MFIC's total approved costs are $1,244,545 (inclusive of
patent costs of $90,246), and therefore the ownership of commercialization
benefits is reallocated such that CATALYTICA and CATI own approximately seventy
seven percent (77%) and MFIC owns approximately twenty-three percent (23%) of
such benefits. Notwithstanding the foregoing and the provisions of Paragraph 2.4
(b) below MFIC and CATALYTICA and CATI agree that despite the relative actual
amount of expenditures of the respective Parties during the term of this
Agreement MFIC's allocable ownership of commercialization benefits shall not
fall below twenty percent (20%) except as provided under Section 7.4
hereinafter.

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          b. Commercial Benefits : Ownership : Allocation for Remainder of
             Restated Program
The Parties hereby agree that for the period which commenced on January 1, 1995
and for the remainder of the Restated Program, or until earlier termination as
provided for hereunder, that the ownership of the commercial benefits and
division of any profits of the collaboration shall be divided on an ongoing
basis in accordance with the cumulative approved Restated Program costs for each
Party at the time regardless of whether such costs are paid or reimbursed by a
third party to the Party incurring those costs.


     2.4  Term of Restated Program  The Restated Program shall continue until
December 31, 1998 unless extended for additional one year periods as provided
for under Section 7 hereinafter (the "Termination Date").  In this regard, the
Parties may agree to continue the Development Phase of the Restated Program for
other areas in the Revised Field even though an agreement has been reached for
commercialization of one or more business opportunities and/or technical areas
within the Revised Field.


     2.5  when and if the Parties agree that any aspect of the Technology within
the Revised Field has been developed to a stage suitable for commercial
utilization, the Parties shall promptly, and in good faith, negotiate a budget
and terms covering the commercialization efforts for that particular product or
project which budget will be attached to this Agreement (such budgets
collectively being referred to as the "Commercialization Budgets"). Such
Commercialization Budgets will be based on the following principles.

          (a) the commercialization effort shall be carried out, pursuant to a
commercialization plan which is mutually agreed to by the Parties.

          (b) The benefits of commercialization, for example, the gross profit
from any commercialization effort, shall be shared between the Parties on a
proportional basis in accordance with the ratio of each Parties approved
Restated Program costs at the time that the commercialization or project is
initiated (see paragraph 2.3 above).

          (c) If the event that Parties both agree to a specific
commercialization effort of the Technology within the Revised Field then the
costs of such effort or project shall be shared pro rata according to the
ownership of benefits allocation at the time that the first license for
commercialization is granted to a third party and each Party shall supply goods
and services to the commercialization effort based upon a budget for such
commercialization activities at its respective cost plus fifteen percent (15%).
In the event that the Parties do not agree on participation in the project then
such project and the costs thereof shall be treated as though an undertaking
outside of the Revised Field.

          (d) In the event that CATI wishes to commercialize Technology that is
outside the Revised Field using MFIC's equipment, MFIC agrees to provided to
CATI then commercially available equipment and supporting services therewith at
prices and under terms consistent with those it customarily provides to its
customers. However, in the event that CATI wants equipment which is
developmental or experimental in nature MFIC will not be obligated to build or
furnish such equipment but will in good faith make any determination as to its
availability. CATI is free to propose a collaboration to MFIC in areas outside
of the Revised Field but MFIC shall be under no obligation to participate in
such undertaking(s).  In the event of any collaboration by CATI and MFIC in such
undertakings the sharing of costs and benefits among the Parties shall be
negotiated in good faith and in a commercially reasonable manner.

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          (e) MFIC will have the sole and absolute right to supply its
Microfluidizer equipment and/or New Device for industrial utilization of the
Technology within the Revised Field on behalf of MFIC and CATI.

          (f) CATI will have the first right to out-license Technology (other
than equipment related Technology) and to sell catalysts and other materials
resulting from the use of the Technology within the Revised Field on behalf of
MFIC and CATI according to a mutually agreed-upon mechanism.

          (g) The Parties will make available to the collaboration all
Technology needed to commercialize Technology within the Revised Field to the
extent that each is legally able to do so, except that MFIC reserves the right
to withhold certain disclosure as is provided for in the Confidentiality
Agreement.

          (h) Termination provisions will allow the non-terminating Party to
complete the development and commercialization of Technology within the Revised
Field.  The terminating Party will receive remuneration, at an appropriate level
in consideration of the contributions of the terminating Party, from net profits
received by the non-terminating Party from commercialization of Technology
within the Revised Field subsequent to the termination.


3.  Technology Rights and Ownership : Inventions :  Ownership and Assignment :
    Licenses: Assignment of Intellectual Property Rights : Disclosure :
    Cooperation in Prosecution of Rights and Patents


    3.1  The Parties agree that only Technology relating to the Revised Field
shall be included within the Restated Program under this Agreement.


    3.2  Any technology, whether patentable or not, brought by CATALYTICA or
CATI to the Restated Program, or developed solely by CATALYTICA or CATI under
the Restated Program shall be owned by CATI.  Any technology, whether patentable
or not, brought by MFIC to the Restated Program, or developed solely by MFIC
under the Restated Program shall be owned by MFIC.  Any technology or know-how,
whether patentable or not, developed jointly by the Parties under the Restated
Program shall be jointly owned by MFIC and CATI subject to the provisions of
Paragraph 3.3 below.


    3.3 In the event CATI invents, develops or acquires an ownership interest in
technology, whether patentable or not, to modifications or improvements to the
Microfluidizer(R) equipment or the New Device as a result of collaborating on
the Program or any other result until such time as CATALYTICA or CATI purchases
a Microfluidizer(R) processor or New Device from MFIC for use outside the
Program, CATI agrees (i) to promptly disclose to MFIC all such modifications and
improvements, and (ii) transfer and assign to MFIC CATI's ownership interest
therein. This provision is intended to enable MFIC and its customers to freely
use, without payment, any such CATALYTICA or CATI modifications or improvements.

If MFIC develops or acquires an ownership interest in Technology or know-how to
production of catalysts or catalyst supports, exclusive of zeolites, as a result
of collaborating on the Restated Program, MFIC agrees to: (i) promptly grant to
CATI a non-exclusive royalty-free license, worldwide license, with rights to
sublicense, to practice under MFIC's ownership interest in such Technology
within the Revised Field.

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    3.4  If either Party elects to practice outside of the Revised Field,
Technology which (a) is covered by a patent of which it acquires ownership of,
or (b) it has license rights to under this Agreement or the WPI License
Agreement then such Party will retain exclusive rights and ownership of such
technology, except that in the case of equipment related inventions or
discoveries made by CATI an exclusive royalty-free license, worldwide (with
rights to sublicense) to practice such technology or invention will be granted
to MFIC.  Such uses by either Party shall be subject to an independent
requirement of reporting to WPI on such commercialization activities, the
payment of royalties therefore to WPI, and, if applicable, any payment or
financial obligation due to Professor William A. Moser, unless the Parties
mutually agree to expand the Revised Field to encompass the use in question.



4.  Patent Costs and Filing Procedures

    4.1  MFIC shall be responsible for paying all patent-related costs under
the WPI License Agreement and each Party shall pay all of the patent-related
costs for any patent application which they own separate and apart from the
other Party hereto under Paragraphs 3.2 or 3.4 above.  Further, all patent
related costs for jointly-owned patents and/or patent applications hereunder
shall be shared on the basis of proportional ownership of commercialization
benefits unless an different arrangement is negotiated between the parties.  For
the purposes of this Agreement "patent-related costs" shall be defined to
include all costs relating to filing, prosecution, allowance and maintenance of
patent applications and issued patents.  All patent costs incurred under this
paragraph shall be included in approved Restated Program costs to determine
ownership of commercial benefits under paragraph 2.3 hereof.

    4.2  In all cases, the non-filing Party shall cooperate reasonably, on a no
cost basis, with the filing Party to assure that such patent rights are
perfected.  Further, in case of joint inventions, the Parties shall mutually
agree as to which Party shall take control of the filing, prosecution and
maintenance of the maintenance of the proposed patent application in any given
case.

    4.3  MFIC, as sole inventor, has filed the Multi-Stream Application for
the New Device with the USPTO and CATALYTICA through CATI wishes to file and
prosecute CIP's to that patent application utilizing MFIC's priority application
date (a "Unified Filing").

         (a)  For the filing of such CIP's within the Revised Field MFIC will
cooperate with CATI in such CIP filings in the U.S. and in Unified Filings in
selected foreign jurisdictions.  If MFIC wishes to participate in such foreign
filings then MFIC and CATI will share the filing and prosecution costs of such
foreign Unified Filing applications on an equal basis.  The rights to new claims
arising from issuance of CIP claims will be controlled cooperatively by MFIC and
CATALYTICA within the framework and guidelines of the collaboration and this
Agreement, however, MFIC and CATI will each retain non-exclusive rights with
right to sublicense under such Unified Filings, provided however, that neither
CATALYTICA nor CATI shall have any rights with regard to equipment related
inventions. In the event of MFIC's participation in such CIP's, MFIC's
obligation to cost share in patent applications shall extend to no more
countries than the Moser/WPI patents were filed and not subsequently abandoned.
In the event that MFIC does not participate in the costs of the filing of a
particular application then MFIC will not receive any royalty or licensing
income derived from the issuance of a patent in that jurisdiction but will
receive protection of its New Device in that jurisdiction to the extent that
MFIC has obtained such protection.

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         (b)  For the filing of such CIP's outside of the Revised Field CATI
will present to MFIC for confidential review on a case by case basis all
findings, data and information.  MFIC will review such information and inform
CATI of its desire to either jointly proceed with CATI on a negotiated basis
(irrespective of the Parties' ownership percentages in the collaboration within
the Revised Field) or will allow CATI to proceed alone (using MFIC's priority
filing date) in which case CATI will retain exclusive rights to such inventions.
In the event of MFIC's participation in such CIP's, the Parties will negotiate
in good faith as to the countries for filing within and/or establish a limit on
the total expenditures for such patent filings.  Also, in the event of MFIC's
participation in such CIP's MFIC and CATI will each retain non-exclusive rights
with right to sublicense under such Unified Filings, provided however that
neither CATALYTICA or CATI shall have any rights with regard to equipment
related inventions.


5. Confidentiality : First Right of Opportunity to Purchase

   5.1  The Parties have made provision for the protection of their
respective proprietary and confidential information that they have and may
continue to disclose to each other pursuant to a Confidentiality and Non-
Disclosure Agreement between the Parties dated April 6, 1995. Such agreement is
hereby incorporated by reference and modified only by stating that the receiving
Party under such agreement may use Confidential Information disclosed from this
date forward thereunder only for the purposes of this Agreement and the
collaborative effort in the Revised Field under the Refined Program.


6. REPRESENTATIONS, WARRANTIES AND COVENANTS
CATI and MFIC each warrant, represent and covenant to each other as follows:

   (a)  it has the full right and corporate authority to enter into this
Agreement and to perform all of its obligations hereunder, and neither this
Agreement nor the performance of any of its obligations hereunder or of any
related agreement are in violation of any other agreement or instrument to which
it is a party or by which it may be bound.

   (b)  it shall not willfully or recklessly make any proprietary claims
or use any technology or invention that would infringe on the patent, copyright
or other proprietary intellectual property rights of any third party, without
first obtaining written permission or license from such party.


7.  TERM AND TERMINATION

    7.1  The term of this Agreement shall begin on the Effective Date and
shall automatically terminate without notice or other further requirement on the
first anniversary hereof if the Parties have not by such date agreed in writing
to an annual extension hereof and adopted a new annual budget to be attached as
SCHEDULE A.  Such requirement shall continue annually during the term of this
Agreement.

    7.2  This Agreement may be terminated at any time upon the provision
of written notice from either of the Parties.

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    7.3  Either party shall have the right to terminate this Agreement in
the event that the other Party:

         (a) is in default or breach of any material provision of this
         Agreement, (and with the exception of breaches of confidentiality
         provided for in subsection (b) hereunder) providing the non-breaching
         Party has given the breaching Party written notice specifying such
         breach and the breaching Party has failed to cure such breach within
         sixty (60) days of receipt of such written notice. The non-breaching
         Party shall retain or be granted all rights necessary to commercialize
         the Technology in the Revised Field (which are held by the breaching
         Party) and the breaching Party shall have no rights to utilize the
         Technology commercially in the Revised Field without written consent of
         the non-breaching Party.

         (b)  breaches any of the provisions of the Confidentiality Agreement
         by CATALYTICA or CATI.

         (c) is the subject of voluntary or involuntary bankruptcy or insolvency
         proceedings, or its winding up of business, sale or merger of
         substantially all of its assets. For the purposes of this Section
         CATALYTICA shall be deemed to be a Party.

         (d)  breach of any warranty, representation or covenant by either
         Party.


    7.4  In the event that this Agreement is terminated pursuant to paragraphs
7.1 or 7.2 above and either Party subsequently wants to continue its development
and/or commercialization efforts with the Technology in the Revised Field, it
shall notify the other Party of its intention to so continue and provide with
said notice a summary of any relevant information available since the date of
termination. Within thirty (30) days of such notice, the receiving Party shall
either agree to resume the cooperation under the terms of this Agreement or
otherwise be deemed to have agreed to allow the offering Party to continue
development and commercialization efforts without the receiving Party. In this
case the receiving (and declining) Party shall continue to have rights to
Technology within the Revised Field. If MFIC is the receiving (and declining)
Party it shall, when requested, provide equipment and services on an arm's
length basis under terms consistent with those customarily afforded by MFIC to
its customers but will not be obligated to build or furnish equipment which is
developmental or experimental in nature. The offering Party shall be entitled to
adjust the allocation of ownership of commercialization benefits by the amounts
of such reasonable expenditures as it incurs in unilaterally pursuing its
efforts within the Revised Field. MFIC shall be entitled to include in any such
alteration of the allocation of such benefits any and all post-termination
expenditures relating to prosecution, modification, defense or maintenance of
the WPI Patents. In the event that no notice of intent to proceed is issued
within one (1) year of such termination, then each Party will grant to the other
Party a royalty-free, non-exclusive license with right to sublicense to
manufacture, have goods manufactured, sell, use, or import then existing
Technology within the Revised Field owned by the granting Party to the extent
that it is legally able to do so. Further, each Party will from time to time
deliver to each other summary of any materially relevant information or
developments occurring since the date of termination.


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    7.5  Notwithstanding the foregoing, no termination shall alter or affect
the obligations of CATI or MFIC under Subparagraph 3.3 or under Paragraph 5 of
this Agreement whether arising prior to or after termination, which obligations
shall specifically survive termination and continue in full force and effect.

    7.6  Damages:  Legal and Equitable Relief   All legal and equitable rights,
remedies and damages available to the Parties shall be considered cumulative and
the use or choice of a particular remedy, damage or relief shall not preclude
either Party's further exercise of other rights, remedies and damages.  Damages
and relief available to the Parties shall specifically include an equitable
accounting of all earnings, profits and other benefits arising from breach or
violation including lost income potential and lost business opportunity.  No
delay or omission in exercising any rights under this Agreement shall operate as
a waiver of that or any other right; a waiver or consent given by either Party
on a certain occasion is effective only in that instance and shall not
constitute or be construed as a bar to or a waiver of any right on any other
occasion, unless otherwise agreed to by in writing.


8.  ASSIGNMENT : BINDING NATURE OF OBLIGATIONS

    8.1  This Agreement is personal in its character, and no Party hereto shall
assign, sell, transfer or encumber this Agreement or the interest therein, or
permit any other arrangement having a similar effect, without the express
written consent of the remaining Party, except as a result of sale,
consolidation, reorganization or other transfer involving a Party's business or
assets relating to the Primary Field, provided further that the Party's assignee
in such case gives the other Party hereto written assurance of its commitment to
fulfill the transferring Party's obligations under this Agreement.

    8.2  This Agreement shall be binding on and inure to the benefit of the
successors or permitted assigns of the Parties hereto, and all entities
controlled by them.


9.  NOTICE
All notices of any kind and description whatsoever required, permitted or
provided for under this Agreement shall be in writing and shall be deemed to
have been received when personally deliver or when mailed through the United
States Postal Service, postage prepaid, certified mail with return receipt, or
by Federal Express or other recognized private expedited carrier or delivery
service with signature required with all charges prepaid to the parties at their
respective addresses below:


If to MFIC to:         Microfluidics International Corporation
                       Attention: Michael A. Lento, President
                       30 Ossipee Road
                       Newton, MA 02164-9101


If to CATALYTICA to:   Catalytica, Inc.
                       Attention: Peter H. Kilner,
                       Director, Business Development
                       430 Ferguson Drive
                       Mountain View, CA 94043

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10.  MISCELLANEOUS PROVISIONS

     10.1  In the event of acts of God, action of the elements, war, invasion,
civil commotion, insurrection, labor disturbance, fire, flood, earthquake, or
governmental restriction, interruption or delay in raw material supplies or
supply of substandard raw material which is beyond the control of a Party
hereto, which render performance under this Agreement impossible, failure on
that account during each period shall be excused during such period or periods
of inability to perform.

     10.2  Each performing Party warrants that it will use all reasonable
efforts to carry out the Restated Program using professionally qualified
personnel in accordance with generally accepted professional standards.
However, the Parties recognize that the Restated Program to be performed by the
performing Party is experimental and/or developmental in nature and, therefore,
the performing Party can make no warranty or representation with regard to the
successful completion of the Restated Program can be completed in a time
certain.

     10.3  This Agreement and the documents incorporated herein contain the
entire understanding between the Parties with respect to the Restated Program
and may be modified only by a written instrument duly executed by each Party's
authorized representative.  If a Party hereto shall, on any occasion, fail to
perform any term of this Agreement and the other Party shall not enforce that
term, the failure to enforce on that occasion shall not preclude enforcement on
any other occasion.

     10.4  The Parties agree that the provisions of this Agreement are
severable.  If any provision hereof shall be held to be invalid or unenforceable
by any law, rule, order, or regulation of any government or by the final
determination of any state or federal court, such invalidity or unenforceability
shall not effect the enforceability of the remaining provisions of the
Agreement, and such provision shall be reformed and construed to the extent
permitted by law so that the remainder is valid and enforceable.  Such
invalidity shall not affect the enforceability of such provision in any
jurisdiction where such provision has not been held to be invalid.

     10.5  This Agreement shall be governed by laws of the State of California,
except for breaches of the confidentiality provisions hereof by CATALYTICA or
CATI in which event MFIC may apply the laws of the Commonwealth of Massachusetts
or such other jurisdiction as MFIC may determine is more effective for the
prosecution of an action hereunder.  All other disputes arising or resulting
from this Agreement which cannot be settled by mutual consent by the Parties
shall be subject to arbitration in San Francisco, California if MFIC is the
complaining Party or Boston, Massachusetts if CATALYTICA is the complaining
Party, pursuant to the American Arbitration Association's Rules for Commercial
Arbitration in effect at the time arbitration is initiated.

     10.6  Paragraph headings and captions used herein in this Agreement are for
convenience of reference only and shall not to be considered in the construction
or interpretation any term or provision of this Agreement.  This Agreement has
been jointly prepared on the basis of the mutual understanding of the Parties
and shall not be construed against either Party by reason of such Party's being
the drafter hereof.

     10.7  The Parties are acting as independent contractors and shall not be
considered partners, joint venturers or agents of the other except as expressly
provided hereunder or in writing.

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     10.8  Unless otherwise expressly provided herein, no right, express or
implied, is granted by this Agreement to either party to use in any manner the
trade name(s), service mark(s) or trademark(s) owned by, or licensed to the
other in connection with the performance of this Agreement.

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


IN WITNESS WHEREOF, the Parties hereto have each caused this Agreement to be
executed as a sealed instrument, and to be delivered one to another as of the
day, month and year first written above.


                                 ACCEPTED FOR:

                    MICROFLUIDICS INTERNATIONAL CORPORATION


                             /s/ Michael A. Lento
                    By:____________________________________

                                Michael A. Lento
                       ____________________________________
                                     Name

                                   President
                       ____________________________________
                                     Title



                                 ACCEPTED FOR:

                                CATALYTICA, INC.


                               /s/ Norman Smith
                     By:___________________________________

                                 Norman Smith
                        ___________________________________
                                     Name

                                   President
                        ___________________________________
                                     Title



                                 11 of 12 Pages
<PAGE>

                                  SCHEDULE A


                            RESTATED PROGRAM BUDGET

                           JANUARY TO DECEMBER 1998

                                  Catalytica




<TABLE>
<S>                                     <C>
-------------------------------------------------------
Salary and Fringe                        $200,000
-------------------------------------------------------
Overhead @ 210%                          $420,000
-------------------------------------------------------
Analytical Services                      $100,000
-------------------------------------------------------
Lab Supplies and Other                   $100,000
-------------------------------------------------------
   Total                                 $820,000
-------------------------------------------------------
</TABLE>

                                 12 of 12 Pages