Exhibit 10.1

                               RESEARCH AGREEMENT



                                     BETWEEN

                           PROFILE TECHNOLOGIES, INC.

                                       AND

                           PHILLIPS PETROLEUM COMPANY


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                               RESEARCH AGREEMENT


This Research Agreement, effective January 6, 2003, ("Effective Date"), is
between Profile Technologies, Inc., a Delaware Corporation ("PTI"), and Phillips
Petroleum Company, a Delaware corporation ("PHILLIPS"). In consideration of the
mutual covenants set forth in this Agreement, PTI and PHILLIPS agree as follows:

                             ARTICLE 1 - DEFINITIONS

1.1    "Agreement" means this Research Agreement, as may be amended from time to
       time according to Article 20, and any Schedules to this Agreement.

1.2    "Claim(s)" means any legal or equitable causes of action (including but
       not limited to negligence; strict liability; other tort; express or
       implied warranty, indemnity or contract; contribution; or subrogation)
       related to or arising out of the performance or nonperformance of this
       Agreement.

1.3    "Confidentiality Agreement" means the Confidentiality and Non-Disclosure
       Agreement dated as of March 5, 2001, by and between Phillips and PTI.

1.4    "Effective Date" means the date stated above.

1.5    "Force Majeure Event" means any event beyond the reasonable control of
       the party affected which significantly interferes with the party's
       performance hereunder. Force Majeure Events include any accident,
       mechanical breakdown of facilities, fire, flood, strike, labor trouble,
       riot, revolt, war, drought, action of governmental authority and laws,
       rules, ordinances and regulations (including, but not limited to, those
       dealing with pollution, health, ecology, or environmental matters), acts
       of God, a credible claim by a third-party that activity pursuant to this
       Agreement violates intellectual property rights of the third-party, or
       other similar types of contingencies.

1.6    "Month(s)" means a calendar month commencing on the first day of a month.

1.7    "PHILLIPS Background Technology" means technical information in PHILLIPS'
       possession, or which was conceived by an employee, agent or
       representative of PHILLIPS, before the effective date and is related to
       the Technical Area.

1.8    "Proprietary Information" shall have the meaning set forth in the
       Confidentiality Agreement.

1.9    "PTI Background Technology" means technical information in PTI's
       possession, or which was conceived by an employee, agent or
       representative of PTI before the effective date and is related to the
       Technical Area.

1.10   "Representative" means a parties' representative who shall be such
       parties' main contact for the research and development under this
       Agreement. Phillips' Representative shall be Randall Heald, (168 PL,
       Phillips Research Center, Bartlesville, Oklahoma 74004, Telephone:
       918/661-3156) or such other representative as it may designate from time
       to time. PTI's Representative shall be Scott Meaker, 2450 H. Street Road,
       Baine, WA 98230, Phone:360/366-3289,Facsimile:360/366-3294, or such other
       representative as it may designate from time to time.

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1.11   "Research Technology" means technical information which is generated
       during the parties' efforts under this Agreement.

1.12   "Technical Area" means electromagnetic methods and devices useful in
       detecting, evaluating and interpreting pipe, vessel, structure and
       equipment corrosion.

                               ARTICLE 2 - PURPOSE

2.1    The Parties agree to use reasonable efforts to improve the data
       interpretation methods currently being used to evaluate pipe corrosion
       data and/or develop new data interpretation methods. The goal of this
       project is to evaluate the use of pattern recognition tools available in
       chemometric software for improved analysis of PTI's corrosion data. Two
       key objectives are a) to use pattern recognition to improve the
       quantification of damage by this technique and b) improve the ability to
       distinguish corrosion from non-corrosion anomalies in the data sets. Both
       parties acknowledge that, as a result of this collaborative effort,
       additional research opportunities may arise that could improve PTI's
       proprietary EMW (Electro Magnetic Wave) testing services. The parties
       agree to make reasonable efforts to pursue said opportunities, as
       resources allow, if the anticipated results offer significant improvement
       in the services currently offered by PTI to Phillips.

2.2    PTI's primary responsibilities are:

       1. Provide raw data sets for the project (in a format that can be
       imported into pattern recognition software (e.g., ASCII format)).

       2. Provide a complete description of the testing and data processing
       procedures used to obtain the raw data sets.

       3. Provide specifications and corrosion information on the pipes tested
       to produce the raw data sets.

       4. Assist in evaluation of performance of new interpretation tools
       developed in this project.

2.3    PHILLIPS' primary responsibilities are:

       1. Provide pattern recognition tools (software).

       2. Provide functional understanding of pattern recognition tools.


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       3. Apply pattern recognition algorithms to raw data and attempt to
       identify location of corrosion from this approach.

       4. Assist in evaluation of performance of new interpretation tools
       developed in this project.

                                ARTICLE 3 - TERM

This Agreement shall terminate one year from the Effective Date unless extended
by the parties or terminated early in accordance with the terms of Article 9
below. The parties agree to attempt to meet the preliminary schedule attached
hereto as Exhibit A. The parties may alter the preliminary schedule by mutual
agreement of the Representative and will mutually agree to a forward plan for
additional research and development, if any, at the end of the preliminary
schedule.

                        ARTICLE 4 - INFORMATION EXCHANGE

The parties recognize that detailed and continuing exchanges of information may
be necessary in order to optimize the administration of this Agreement and to
perform the research provided hereunder. To that end, each party shall notify
the other of the individual representative or representatives responsible for
exchanging information and for resolving issues which arise affecting the
research. The designated representatives of PHILLIPS and PTI shall conduct
planning meetings as mutually agreed in order to address issues which shall
arise under this Agreement. The meetings need not take any particular form and
may include in person meetings (as mutually agreed upon), video conferences or
any combination thereof. The parties also agree to write a memorandum outlining
such targets, and other points of mutual agreement prior to concluding each of
said periodic meetings.

                                ARTICLE 5 - COSTS

5.1    Each party will be responsible for its own cost incurred in the
       performance under this Agreement without reimbursement from the other
       party. The Representatives of the parties will mutually agree in advance
       on the division of any cost determined to be joint cost.

                             ARTICLE 6 - WARRANTIES

6.1    Neither party makes any representations, extends any warranties of any
       kind (including freedom from alleged infringement of third party patents
       or trade secrets), either express or implied, and assumes no
       responsibility whatsoever with respect to the practice by the other
       party, its assignees or licensees of any Background Technology or
       Research Technology and each party agrees to indemnify and to hold the
       other party harmless from and assume all risk, liability, or lawsuits
       arising out of, or in the course of practice by such indemnifying party,
       its assignees or licensees of the Background Technology or Research
       Technology.

6.2    Each party hereto shall indemnify and hold harmless the other party and
       its officers, employees, agents, consultants, and subcontractors from and
       against any and all claims, demands, actions, liabilities, judgements,
       costs and expenses of whatever kind including, without limitations,
       attorney's fees and costs of defense, on account of damage to property of
       the indemnifying party or damage to personal property of or injury to our
       death of any officer, employee, agent, consultant or subcontractor of the
       indemnifying party arising out of, or related in any way to, this
       Agreement except to the extent that such damage, injury or death was
       caused by the sole negligence or wrongful act of the party indemnified or
       of its officers, employees, agents, consultants or subcontractors.

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                        ARTICLE 7 - INTELLECTUAL PROPERTY

7.1    PTI Proprietary Information and PTI Background Technology are owned by
       PTI.

7.2    PHILLIPS Proprietary Information and PHILLIPS Background Technology are
       owned by PHILLIPS.

7.3    PTI shall have first option to obtain any patent covering Research
       Technology. If PTI so elects, then all expenses related to obtaining and
       maintaining such patents shall be born solely by PTI and PTI will be sole
       owner of any such patents. PTI will notify PHILLIPS of its decision to
       obtain patent protection for any Research Technology within thirty (30)
       days from making its decision. Notwithstanding the foregoing, if PHILLIPS
       desires for patent protection to be obtained on an invention included in
       the Research Technology, it will notify PTI of such and PTI shall have
       sixty (60) days to evaluate whether it will file any patent applications
       relating to such invention and to notify PHILLIPS of its decision. For
       any patent applications filed by PTI under this Paragraph 7.3, PTI and
       PHILLIPS will consult on countries in which to file counterpart
       applications. If PHILLIPS desires to file such counterpart applications
       in countries other than those PTI desires to file counterpart
       applications, PHILLIPS will have the right to file and maintain such
       counterpart applications in PTI's name. In exchange for the first option
       to obtain and maintain patent(s), if any, covering Research Technology,
       PTI agrees to provide testing services to PHILLIPS at the lowest service
       price provided to any of PTI's customers This price protection excludes
       pipe testing demonstrations provided by PTI to potential customers or
       organizations free of charge or at cost.

7.4    If PTI elects not to attempt to obtain any patent coverage for an
       invention included in the Research Technology, then PHILLIPS shall have
       the option to obtain such patent. If PHILLIPS so elects, then all
       expenses shall be born solely by PHILLIPS and PHILLIPS will be sole owner
       of any such patents. PHILLIPS hereby grants to PTI a non-exclusive,
       perpetual, royalty-free license, with the right to grant sublicenses,
       under any such patents to make, use and sell any inventions covered by
       such patents.

7.5    Each party agrees to assist the other party in obtaining and protecting
       patents covering Research Technology including having its employees sign
       patent applications and assignment papers and otherwise cooperate in
       actions necessary for the prosecution and defense of patents resulting
       therefrom in all countries designated by such other party.

7.6    All non-patented Research Technology shall be owned by PTI and licensed
       to Phillips pursuant to Section 7.9.

7.7    PHILLIPS grants to PTI a non-exclusive, non-transferable, perpetual,
       royalty-free license to use PHILLIPS Background Technology for the
       purpose of performing PTI's obligations under this Agreement and as
       necessary for PTI to use the Research Technology.

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7.8    PTI grants to PHILLIPS a non-exclusive, perpetual, royalty-free license
       to use PTI Background Technology for the purpose of performing PHILLIPS'
       obligations under this Agreement and as necessary for PHILLIPS to use the
       Research Technology in accordance with the licenses set forth in
       Paragraph 7.9.

7.9    (a) PTI grants to PHILLIPS and its subsidiaries a non-exclusive,
       perpetual, royalty-free license to make, use and sell any inventions
       covered by the patented Research Technology and/or the non-patented
       Research Technology within the Technology Area for the limited purpose of
       interpreting PHILLIPS' or its affiliates data sets whether provided by
       PTI or by a PTI affiliate or licensee.

       (b) PTI grants to PHILLIPS a non-exclusive, perpetual, royalty-free
       license with the right to grant sublicenses to make, use and sell any
       inventions covered by the patented Research Technology and/or the
       non-patented Research Technology outside the Technology Area. This
       license shall survive termination of this Research Agreement.

7.10   The licenses granted under this Article 7 shall not be assigned or
       transferred by a party without the prior written consent of the other
       party, except that such licenses may be assigned or transferred by a
       party to its successor of its entire business to which this Agreement
       relates, or to a new business entity resulting from a merger, or to a
       person, firm or corporation acquiring all or substantially all of the
       business and assets of a party to which this Agreement relates.

                            ARTICLE 8 - FORCE MAJEURE

8.1    If the performance of the party impacted by a Force Majeure Event under
       this Agreement is delayed, such delay shall be without liability to such
       delayed party, for the duration of a Force Majeure Event.

8.2    The party whose performance is affected by a Force Majeure Event shall
       give prompt notice to the other party stating the details and expected
       duration of the vent. Once notice is given of a Force Majeure Event, the
       parties shall keep each other apprised of the situation until the Force
       Majeure Event terminates or this Agreement is terminated, whichever
       occurs first. Each party has full management discretion in dealing with
       its own labor issues, and in determining how and when to perform
       obligations (other than payment for work already performed) under this
       Agreement when the other party is involved in a strike, work stoppage or
       slowdown conditions.

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                          ARTICLE 9 - EARLY TERMINATION

Either party is entitled (without prejudice to its other rights and remedies
under this Agreement) to terminate this Agreement upon (a) written notice at any
time upon thirty (30) days notice to the other party (b) written notice by the
party not affected by a Force Majeure Event to the party affected by the Force
Majeure Event if a Force Majeure Event lasts for more than thirty (30) days.

                             ARTICLE 10 - ASSIGNMENT

This Agreement is not transferable or assignable by either party, except that it
may be assigned by a party to a successor of its entire business to which this
Agreement relates or to a new business entity resulting from a merger, or to a
person, firm, or corporation acquiring all or substantially all of the relevant
business and assets of a party to which this Agreement relates.

                               ARTICLE 11 - NOTICE

Any notice to be given under this Agreement shall be in writing and shall be
deemed given when received and may be sent by mail, express courier or facsimile
to:

       If to PHILLIPS:                              If the PTI:

       Phillips Petroleum Company                   Profile Technologies, Inc.
       132 PL, Phillips Research Center             2 Park Avenue, Suite 201
       Bartlesville, Oklahoma 74004                 Manhasset, NY 11030
       Attn: Mr. Randall Heald                      Attn: Mr. Henry Gemino
         918/662-2888     (FAX)                     516/365-6491 (FAX)

       With a copy to:                              With a copy to:

       Phillips Petroleum Company                   Profile Technologies, Inc.
       214 PLB, Phillips Research Center            2450 H, Street Road
       Bartlesville, Oklahoma 74004                 Blaine, WA  98230
       Attn: Ryan N. Cross                          Attn: Mr. Scott Meaker
       918/661-8739(FAX)                            360/366-3294 (FAX)

Either party may change its location or facsimile number to receive notices upon
ten (10) days prior written notice.

                   ARTICLE 12 - CONFIDENTIALITY OF INFORMATION

12.1   The parties agree that the terms of the Confidentiality Agreement are
       hereby incorporated into this Agreement by reference. Notwithstanding any
       provision therein or herein to the contrary, the parties' confidentiality
       obligations shall survive the termination of this Agreement and the
       stated term of the Confidentiality Agreement and shall remain in full
       force and effect as long as either party hereto uses or retains access to
       (including, without limitation, by virtue of one or more licenses granted
       hereunder) the Proprietary Information of the other party or any Research
       Technology.

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12.2   Each party may disclose the other party's Proprietary Information to
       subcontractors as long as such subcontractors agree in writing to be
       bound by obligations of confidence no less stringent than those contained
       herein. . Further, Phillips will not use PTI's Proprietary Information or
       any Research Technology to compete directly with PTI in its use of
       electromagnetic waves to detect and assess corrosion in or on pipelines,
       vessels and other structures and equipment and will likewise obligate all
       agents, assignees, sub-contractors and licencees to observe this
       prohibition; provided, however, that nothing herein shall be construed as
       preventing Phillips from applying its Proprietary Information and
       Research Technology to other inspection technologies that do not use
       electromagnetic waves..

                  ARTICLE 13 - EXPORT CONTROL OF TECHNICAL DATA

The parties acknowledge their obligations to adhere to the United States export
laws and regulations, such as Export Administration Regulations, International
Traffic in Arms Regulations and regulations promulgated by the Office of Foreign
Assets Control and the parties agree to adhere to such laws and regulations. No
law of conflicts or choice of law shall supersede this provision.

                       ARTICLE 14 - INDEPENDENT CONTRACTOR

It is the parties intent that they be independent contractors, with all the
attendant rights and liabilities, and not an agent or employee of the other
party. Any provision in this Agreement, or any action by a party, which may
appear to give such party the right to direct or control the other party in
performing under this Agreement means such other party shall use reasonable
efforts to follow the desires of the first party in results only.

                            ARTICLE 15 - SEVERABILITY

If any provision of this Agreement or the application thereof to any person or
circumstance shall, for any reason, and to the extent, be held to be invalid or
unenforceable under applicable law, such provision shall be deemed limited or
modified to the extent necessary to make the same valid and enforceable under
applicable law. Any invalid or unenforceable provision shall be replaced with
such new provision which shall allow the parties to achieve the intended
economic result in a legally valid and effective manner.

                       ARTICLE 16 - NON-WAIVER OF DEFAULTS

Any failure by either party at any time to enforce or require strict keeping and
performance of any of the terms and conditions of this Agreement shall not
constitute a waiver of such terms and conditions and shall not affect or impair
such terms or conditions in any way, or the right of either party at any time to
avail itself of such remedies as it may have for any breach or breaches of such
terms and conditions.

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                ARTICLE 17 - GOVERNING LAW AND DISPUTE RESOLUTION

17.1   The interpretation, validity and performance of this Agreement shall be
       governed by Delaware law, without regard to Delaware's conflict-of-law
       provisions, both as to interpretation and performance.

17.2   PTI and PHILLIPS shall attempt to resolve amicably any disputes that
       arise concerning the interpretation or operation of this Agreement
       according to the following principals.

       (a)    A representative of each party shall meet in an attempt to resolve
              any dispute.

       (b)    If the dispute is not resolved, then the commercial development
              manager of PTI responsible for the PHILLIPS relationship shall
              meet with the commercial manager for PHILLIPS responsible for the
              PTI relationship under this Agreement in an attempt to resolve any
              dispute. The persons nominated shall have 30 days to resolve the
              dispute.

       (c)    If the dispute is not resolved, then the PTI business director
              shall meet with the PHILLIPS business director responsible in an
              attempt to resolve any dispute. The person nominated shall have 30
              days to resolve the dispute.

17.3   Any dispute between PTI and PHILLIPS concerning the scope or
       interpretation of this Agreement that is not resolved pursuant to section
       17.2, including any dispute regarding the applicability of enforceability
       of this section 17.3, shall be submitted to binding arbitration according
       to the rules of Commercial Arbitration of the American Arbitration
       Association in effect on the date that a dispute is submitted to
       arbitration (the `Rules') except as the Rules are modified by this
       Agreement. Arbitration shall be in English before a panel of three
       arbitrators: one arbitrator will be selected by each party; the third
       arbitrator shall be selected by the arbitrators selected by the parties.

17.4   Not less than 60 days prior to the arbitration hearing, PTI and PHILLIPS
       shall submit to the other party the documents and a list of witnesses it
       intends to use in the arbitration. The arbitrators shall issue a written
       opinion stating the findings of fact and the conclusions of law upon
       which the decision is based. The decision of the arbitrators shall be
       final and binding, absent manifest error in the findings of fact or the
       conclusions of law. The decision of the arbitrators may be enforced in
       any court or competent jurisdiction. The arbitrators shall be instructed
       that the arbitration award shall not include punitive, special or
       consequential damages. Each party shall bear equally the administrative
       costs of the arbitration. Each party shall bear its own costs for
       preparation and presentation of the dispute to the arbitrators.

                              ARTICLE 18 - HEADINGS

The headings used in this Agreement are for the convenience of the reader and
are not intended to have any substantive meaning.

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                          ARTICLE 19 - ENTIRE AGREEMENT

This Agreement constitutes the full understanding of the parties, and is a
final, complete and exclusive statement of the terms and conditions of their
agreement regarding the subject of this Agreement. All representations, offers,
and undertakings, of the parties made prior to the effective date of this
Agreement are merged in this Agreement. All amendments or modifications to this
Agreement must be in writing, identified as an Amendment to this Agreement and
signed by an authorized representative of each party.

                             ARTICLE 20 - GRATUITIES

PTI will not itself, nor will PTI encourage or facilitate others, to pay any
commissions, fees, or grant any rebates to; favor with gifts or entertainment of
significant cost or value to; nor enter into any business arrangement with;
persons known to be employees, officers, or agents of PHILLIPS without the prior
written consent of PHILLIPS.

                              ARTICLE 21 - RECORDS

Both parties agree to keep true and correct records pertaining to this contract
and all transactions related thereto and to maintain such records for a period
of at least two (2) years after termination of this contract. On written request
by either party and at such party's expense, each party may have a firm of
independent certified public accountants audit any and all such records of the
other party at any time or from time to time for the purpose of confirming the
accuracy of such records and the manner in which such records have been used in
the administration of this contract; provided however, that such accountants
shall not disclose to the party requesting the audit any information obtained
during such audit and shall only report to such party the results of the audit
and whether same shows compliance with the terms of this contract, or as the
case may be, the respects in detail in which the terms of this contract have not
been complied with. The right to audit such records shall expire two (2) years
after termination of this contract.

                              ARTICLE 22 - SURVIVAL

The rights, obligations, and terms set forth in Articles 7, 12, and 13 shall
survive the termination or expiration of this Agreement.

The parties have caused this Agreement to be executed by their duly authorized
representatives. This Agreement shall be void if it is not executed by all
parties within thirty (30) days of the date on which the first party executes
this Agreement.

PHILLIPS PETROLEUM COMPANY                   PROFILE TECHNOLOGIES, INC.


By /S/ Jan R. Knud                           By Henry E. Gemino
-----------------------------                -----------------------------------
Title: Vice President, Upstream Technology   Title: Chief Executive Officer
Date: December 3, 2002                       Date: January 6, 2003

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                                    EXHIBIT A
                                    ---------


Preliminary Schedule

1.   Phillips and PTI schedule an extended session for detailed discussion and
     planning of project. Within two (2) weeks of the Agreement Date.

2.   PTI provides initial data set for screening existing pattern recognition
     tools.

3.   Phillips processes initial data set with existing tools. Within four (4)
     weeks of step 2.

4.   PTI and Phillips meet to review first set of results and develop a forward
     plan. Within 3 weeks of step 3.

5.   Agreement on forward plan after completion of Paragraph 4.