EXHIBIT 10.8


                                Revised Proposal
                                       to
                              Sigma Elektroteknisk
                                      for
                                    Phase 1
                Detail Design and Procurement of Prototype Parts
                  Of the Sigma MCHP Stirling engine Lower end

Proposal: F0208
Archive: C01-0200
Date: 16 February 2001
Client Confidential

Approval: By: /s/   Peter Brown
-------------------------------
                    Peter Brown           Tel: 734-397-666
                    Vice President        Fax: 734-397-6677
                    Powertrain Projects   Email pbrown@ricardo-us/com

Technical Contact:  Bill Brogdon          Tel: 630-789-0033x233
                    Design Manager        Fax:    630-789-0127
                                          Email:    jbrogdon@ricardo-us/com

Commercial Contact: Doug Sinclair         Tel: 734-397-6666
                    Director, Business    Fax:   734-397-6677
                    Develpment            Email   dsinclair@ricardo-us.com

Client Contact:     Svein Hestevik        Tel: 01147 64982412
                    Chief Executive       Fax:   01147 64982401
                    Officer               Email   svein@sigma-el.com

<PAGE>

1.  INTRODUCTION

Ricardo has performed an initial  conceptual  feasibility study (Phase 0) of the
Sigma PCP Stirling  Energy  Convener.  The Ricardo work  verifies that the Sigma
original  concept  can  be  developed  to  meet  the  technical  and  commercial
requirements  of the Sigma Functional  Specification. The Sigma concept has been
refined  by  Ricardo  and  will be  developed  into a  design  in Phase 1 of the
program.  Ricardo  recommends  that Sigma continue the design and development of
the. PCP lower end through Phase 1 as the next step towards production release.

Sigma has an aggressive plan for the  commercialization of the PCP. To meet this
plan, Ricardo proposes a three-phase program as follows: E

o  Detail design and procurement of prototype parts (Phase 1)

o  Prototype development (Phase 2)

o  Production release (Phase 3)

(GRAPH OMITTED)

This proposal is for Phase 1, prototype design and parts procurement.

The fixed price and budgetary  costs for Phase 1 totals $1, 657,000 (see section
a)

2. OBJECTIVES

To provide

o  Delivery  of 30  prototype  engines  to  support  the  2001 /  2002  seasonal
   field-tests

o  A safety conscious  prototype  design that is capable of being  developed  to
   achieve the Sigma functional specification

o  Technology transfer to Sigma


<PAGE>

3. DELIVERABLES

o 30  assembled  prototype  engine  sets of lower  end  hardware  to  Sigma  for
  field-testing

o Transfer of technology to Sigma through the following
       - Resident engineer located at Ricardo throughout Phase 1
       - Technical training
       - Detailed reports and engineering calculations
       - Software developed for the project and identification of other software
         used

o A safety conscious detailed design of the lower end of a Stirling engine based
  on Ricardo's F003a Phase 0 concepts including
      - Prototype  drawings for each component in the Bill of Materials
      - Specifications
      - Electronic models in ProE 2000i2 format

o Support for Kockums (or Sigma's selected supplier) In engineering a lower cost
  Stirling cooler and a written report on cooler design concepts

o A report  (with an emphasis  on safety and  regulatory  compliance)  detailing
  engineering  analysis  methods,  identification of computer software used, and
  results on the following engine components or systems:

      - Crankcase and bottom cover pressure vessel structure
      - Crankshaft structure
      - Power and displacer piston cross head structure
      - Power and displacer piston cross head sliding  bearing  life
      - Power and  displacer  piston connecting rod structure
      - Displacer  piston rod structure
      - Crankshaft torsional  vibrations
      - Engine  main,  connecting  rod and  wrist  pin bearing life
      - Updated  component  and assembly  FMEA report

o A report  detailing manufacturing  considerations for the engine
      - Detailed  manufacturing cost book to support the Sigma business plan
      - Cost estimates from approved  manufacturing partners
      - Initial  production  strategy  including  in-process and end function
        test plan
      - Production torque strategy

The drawings and specifications  provided will be of sufficient quality that the
prototype   engine  can  be  manufactured   independently   of  further  Ricardo
engineering input. The prototype design represented In the drawings will require
validation and normal development testing in Phase 2 of the project.

As with Phase 0, close  liaison  will he  maintained  between  Sigma and Ricardo
throughout  the  project  by  telephone,  fax,  videoconference,  and  E-mail as
appropriate.  In addition,  Ricardo  will make  regular  reports to Sigma on the
program status based on the following schedule:

      o  Phase 7 kickoff meeting and further technical exchange. This meeting is
         planned for Sigma's facility in Norway
      o  Weekly phone meeting minutes
      o  Monthly project status report


<PAGE>

4. PRICE

The  fixed  price  for the  Phase 1 scope of work as  defined  in  section  6 is
51,087,000,

The price has been broken down into the  following  divisions  according  to the
scope of work,  The items in the breakdown are  interdependent  and one item can
not be deleted without changing the price of others.

        o  Engine Lower End Detail Design                            $ 500,600
        o  Stirling Cooler design Support                            $  15,900
        o  Engineering Analysis                                      $ 321,300
        o  Manufacturing Technology                                  $  88,400
        o  Procure 30 engine lower end sets (labor only)             $  70,800
        o  Technology transfer (separate office not included,
            see below)                                               $  90,000
                                   Total (fixed price)              $1,087,000

        o  Budgetary price for construction of a separate project
           office for Sigma (costs plus 8% to be billed to Sigma)    $  20.000
        o  Budgetary price for the cost 30 lower end engine sets
           (costs plus 8(degree)7o to be billed to Sigma)            $ 450,000
        o  Budgetary price for international travel (costs plus 8%
           to be billed to Sigma, approval by Sigma prior to foreign
           travel is required)                                       $  30,000
        o  Budgetary price for Phase 1 bearing development           $  70,000

                                                 Total (Budgetary)   $ 570.000

                                   Total (Fixed Price + Budgetary)  $1,657.000

6. SCHEDULE

The  detailed  Gantt chart for the project is given at the end of this  proposal
(Home Run timing as  detailed  in  November  15 00 meeting at Sigma).  The major
project milestones are,

     Project start                                5 February 2001      (Week 1)
     Regulatory data required                     5 March              (Week 5)
     Generator & Stirling interface required     16 March              (Week 6)
     Release of long lead items                   3 May                (Week 13)
     Risk release of other components             4 June               (Week 18)
     RP Engine lower end assembly (3 sets)       16 July               (Week 24)
     RP Engine running (3 sets) (Sigma)          20 September          (Week 33)
     RP delivery to partner (3 sets) (Sigma)      1 October            (Week 35)
     Prototype castings                          30 July               (Week 26)
     Finish assembly of lower end (27 sets)      29 November           (Week 43)
     Finish BIPO (27 sets) (Sigma)               14 December 2001      (Week 45)

<PAGE>

6. SCOPE OF WORK

Engine Lower End Detail Design

The Phase 0 concept design provides a strong basis for meeting the  requirements
of Sigma's  functional  specification.  The concept  design will be developed to
further improve the engine lower end height,  length,  weight,  durability,  and
manufacturability.

The very short schedule for production of prototype  parts requires a compressed
design  schedule and early  (risk)  release of models and drawings for long lead
time  components.  The design process will consist of several tasks.  These will
be:

     o Phase 0 model refinement
     o Incorporation of cross head bearing development testing and latest design
       information
     o Incorporation  of analysis and FMEA results in the design
     o Release  of  electronic  models or  specifications  for long  lead  items
     o Preparation of detailed drawings
     o Checking of detail drawings and assembly fits and clearances
     o Support for prototype procurement
     o Assembly support.

Phase 0 model refinement
------------------------
The models of the engine lower end components  from Phase 0 will be examined for
further  weight and cost  reduction and prepared for analysis by FE or classical
methods.  The engine rolling  element  bearings will be further  analyzed with a
view to increasing life and service interval. Design studies will be made of the
interaction  of the various  component to provide a more nearly optimum blend of
weight. size, cost and durability. Assembly and clearance considerations will be
a part of this work.

The  crankcase  section  thickness  will be  refined  based  on a  study  of the
regulatory  codes to be supplied by Sigma,  This  refinement to the models Is in
preparation for Finite Element  Analysis of the crankcase and bottom cover.  The
connections  for the  electrical  generator  and the  helium  fill valve will be
engineered.

Further  engine  balance  calculations  and  methods  for  reduction  of  engine
transmitted  vibration such as engine mounts and vibration reduction  mechanisms
will be a part of the design  refinement  task. The results of this work will be
incorporated Into the design of the various components.

Definition  of the  Interface  to the upper end of the engine  will be a part of
this refinement  task.  This will be in conjunction  with Sigma and Kockum's (or
Sigma's selected supplier).

The  refinement  phase will also  involve the Ricardo  cross-functional  team of
Design,  Analysis,  Test and  Manufacturing  engineers in regular reviews of the
design,  These reviews by the cross  functional team and their  contributions to
the FMEA are expected to drive the design in the direction of lower cost, longer
life, better NVH, lower weight, smaller size and a shortened development period.

<PAGE>

Incorporation  of cross  head  bearing  development  testing  or  latest  design
--------------------------------------------------------------------------------
information
-----------
The  crosshead  sliding  bearings  are  the  critical  design  feature  of  this
unlubricated engine. A large bearing area tends to provide a longer service life
at the expense of increased size.  weight.  vibration,  and cost. The results of
further  discussions  with DuPont and similar  suppliers as well as  development
testing  results  will be used to design the  bearings  for  adequate  life with
reduced size, weight, vibration and cost.

Incorporation of analysis results in the design
-----------------------------------------------
The results of engineering analysis as described in other parts of this proposal
will be incorporated into the design of the components. Of particular importance
will be the  crankcase FE analysis.  The results of the FE of the refined  model
will be used to guide a redesign of the  crankcase.  The revised  crankcase will
also be analyzed to confirm that  regulatory  requirements  will be met when the
engine is tested.  An analysis of the final prototype  design will be presented.
Updates to the FMEA started in Phase 0 will be made by the cross functional team
and the results of the FMEA incorporated in the design.

Release of electronic models or specifications for long lead items
------------------------------------------------------------------
Electronic  models of the long lead time  items  such as the  crankcase.  bottom
cover,  and cross heads will be risk  released  before  completion of the detail
design  in  order  to  meet  the  prototype  manufacturing  schedule.  The  risk
associated with this approach is that some components may need to be reworked or
remade to be functional.

Preparation of detailed drawings
--------------------------------
Detailed  drawings  will be produced  for each of the designed  components  with
appropriate  tolerances  and  specifications.  The drawings  will be numbered in
accordance with a Sigma and Ocean Power supplied system.

Checking of detail drawings and assembly, fits and clearances
-------------------------------------------------------------
The fits and  clearances  of engine  components  In the engine  assembly will be
checked from the dimensions given on the detail drawings. This step is to insure
appropriate  component  fits.  This checking  process is best  performed  before
release of detailed  drawings but the  manufacturing  schedule may call for risk
release  of  components,  Risk  released  components  will be checked as soon as
feasible.

Support for prototype procurement and assembly
----------------------------------------------
During the  prototype  procurement  phase there will be requests  from the parts
manufacturers  for  material  changes,  minor  design  changes,  clarifications,
acceptance of non-conforming  parts, assembly information and information on the
detail design. This task is to support those manufacturing requests.

Bill of Materials
-----------------
The  following  are the major engine lower end  components.  A detailed  Bill of
Materials is included in the Phase 0 report.

     o  Crankcase & bearing cap
     o  Bottom cover
     o  Rolling element bearings
     o  Crankshaft

<PAGE>

     o  Power piston crosshead 8 pin including sliding bearing
     o  Displacer piston crosshead & pin including sliding bearing
     o  Cross head guide plate and fasteners
     o  Crankshaft
     o  Diplacer connecting rod
     o  Power piston connecting rods
     o  Power cylinder
     o  Power piston
     o  Displacer piston lower end (not including SS cylinder & dome)
     o  Flywheel
     o  Engine vibration  reduction  mechanism
     o  Cross head sleeve
     o  Displacer cross head to piston rod
     o  0 rings
     o  Fasteners

Stirling Cooler Design Support

A senior Ricardo Design Engineer will work with Sigma and their chosen suppliers
to engineer the cooler design for lower cost.

Engineering Analysis

Crankcase
---------
A high-cycle  fatigue analysis will be performed on the structure where the mean
and  alternating  stresses at all points in the  structure are  predicted.  This
analysis will consider the effects of assembly loads, varying gas pressure.  and
the reciprocating  forces in the cranktrain.  Goodman fatigue  calculations will
then be performed on the structure to ensure sufficient cover against high-cycle
fatigue failures.

Additionally,  the integrity of the crankcase  joints will be assessed to reduce
the risk of leaks. A finite element analysis of the assembled  crankcase will be
performed to determine the contact pressure  distribution  between the upper and
lower crankcase  halves and between the upper  crankcase and the top flange.  In
addition to the assembly loads induced by the bolts,  the analysis will consider
how the joints  will behave when  subjected  to  fluctuating  gas  pressure  and
cranktrain  inertia  loads.  This  analysis  will  demonstrate  that the sealing
pressures at the joints  sufficiently  meet pressure vessel standards as defined
by Sigma.

Power Piston and Cross-head Assembly
------------------------------------
Stress and  deformation  in this  structure  will be predicted by finite element
analysis for the conditions of maximum differential  pressure across the piston.
The analysis will also consider the effects of  reciprocating  forces and thrust
forces so that all significant  loading  conditions are identified and analyzed,
Goodman fatigue  calculations  will then be performed on the structure to ensure
sufficient cover against high-cycle fatigue failures.

<PAGE>

Displacer Piston and Cross-head Assembly
----------------------------------------
The analysis for this  component  will be similar to that proposed for the power
piston.  However,  as there will be a large  temperature  difference  across the
displacer, the effects of thermal distortion and stress will also be considered.
Goodman fatigue  calculations  will then be performed on the structure to ensure
sufficient cover against high-cycle fatigue failures.

Power and Displacer Crosshead Pins
----------------------------------
Nigh pin bending  deflection  can cause  edge-loading  problems at the small end
bearings and cross-head bearings. Excessive ovalizing deflection can lead to pin
boss cracking in the crosshead. Large altenating stresses in the pin can lead to
high  cycle  fatigue  failure.   Classical  calculations  of  pin  bending,  pin
ovalization.  and pin stress will be performed to help ensure  durability of the
pin and associated bearings.

Power and Displacer Connecting Rods
-----------------------------------
A set of  classical  calculations  will be  performed  to  guide  design  of the
connecting rods. Cover factors against high cycle fatigue will be calculated for
critical  locations  on both  the  power  and  displacer  connecting  rods.  The
proportions  of the connecting  rods will be adjusted as  appropriate  either to
reduce weight and cost or to increase the margin against fatigue failure.

The cover factor  against  buckling will be calculated  for both  connecting rod
shanks as well as the displaces  piston rod. The proportions of these components
will be refined to strike a favorable balance between weight and design margin.

In  addition  to the  classical  analyses  used to develop  the  connecting  rod
designs,  a detailed  finite element  analysis will be performed to confirm that
the designs have acceptable cover factors against high-cycle fatigue failures.

Roller Bearings
---------------
Predicted  life  calculations  will be performed for all of the rolling  element
bearings  associated   with  the  cranktrain  assembly.  Although  bearing  life
calculations have been performed in support of the current (phase 0) design, the
life  calculations,  must  be  revisited  as  the  design  of  other  cranktrain
components  is  revised  in an effort to  minimize  the  weight  and cost of the
assembly.

Crankshaft
----------
The crankshaft  design will be developed by  application of torsional  vibration
analysis and  classical  stress  calculations.  The  torsional  vibration of the
crankshaft  system will be calculated as a means of accurately  determining  the
maximum torque loading in the crankshaft.  This maximum torque loading will then
be combined  with bending loads due to inertia and cylinder  pressure  forces to
determine  the high cycle  fatigue  cover  factors at critical  locations on the
crankshaft  geometry.  The crankshaft  proportions will be adjusted according to
the aim of minimizing weight and cost while maintaining sufficient design margin
and  accommodating  various other design  features  such as the selected  roller
bearings.

Due to the support  configuration  of the  generator  rotor,  a  calculation  of
critical speed for crankshaft whirl will be performed,  Shaft whirl vibration is
a concern  that arises when a  relatively  large mass is supported on a rotating
shaft with  relatively  low  bending  stiffness  or when a shaft is  required to
rotate at very high speed.  Although the  rotational  speed  requirement  is not
great in this case. the crankshaft is required to support the generator rotor in
a cantilever or overhung  configuration.  Hence,  confirmation of the crankshaft
critical speed for whirl vibration is necessary.

<PAGE>

In addition to the classical  analysis used to develop the crankshaft  design. a
detailed  finite element  analysis will be performed to confirm that all fillets
have acceptable cover factors against high-cycle fatigue failures.

Engine Fasteners
----------------
The engine fasteners  including the bottom cover bolts,  main bearing cap bolts,
and the bolts at the  interface  to the upper end of the engine will be designed
and analyzed for Ricardo  standard  fatigue  cover  factors or the cover factors
specified in the regulatory requirements.

Manufacturing Technology

During this phase of the program Ricardo  Manufacturing  Technology  specialists
will support the design and development activities. This will include but not be
limited to the following

    o  Support concept design development through manufacturing and cost studies
    o  Develop the Phase 0 concept design cost study into a manufacturing  cost
       book including the various production volumes
    o  Contact approved  potential  component  manufacturing  partners for cost
       estimates
    o  Prepare  initial  manufacturing  strategy
    o  Support design and process FMEA
    o  Prepare an initial production and end function test plan
    o  Develop production torque strategy

Ricardo Manufacturing Technology engineers will support regular project meetings
and design reviews.  They will work with design and  development  engineers in a
cross-functional team to provide a suitable design to complete field-testing and
progress into Phase 2 of the program.

Technology Transfer

Ricardo  will work with one Sigma  representative  on site at Ricardo to involve
the  representative  in the design  and  analysis  process  being  performed.  A
physically  separate  project office will be  constructed  in Ricardo's  Chicago
office to maintain the  confidentiality  of Ricardo work for other clients.  The
core Sigma  project  team and the Sigma  representative  will have desk space in
this project office. A computer and software  training  material used by Ricardo
in the  particular  design and analysis  work being  performed for Sigma will be
provided.  All software  used for design and analysis  will be  identified,  The
representative may participate in all Ricardo technical and project discussions,
Ricardo  will  explain  the design as it  evolves.  The  representative  will be
invited to participate in design and analysis to the extent of their ability. It
is expected  that Sigma will rotate  representatives  at Ricardo,  Ricardo  will
provide  office space and a computer  with access to Email and Sigma  electronic
design  files. Sigma will be  responsible  for living  expenses,  any  insurance
requirements and visa compliance.

<PAGE>

Procure 30 (Thirty) Engine Lower End Sets

Ricardo will procure 30 engine lower end sets of hardware,  assemble and ship by
air to Sigma.  This proposal  provides for Ricardo's labor in the procurement of
the parts and for their assembly into engine sets. The cost of the parts, taxes,
customs fees,  shipping and any other costs incurred (plus a percentage to cover
Ricardo costs as given in the Price section of this  proposal) are to be paid by
Sigma in addition to the fixed price Phase 1 scope of work.  The estimated  cost
for the components is also given in the Price section of this proposal.

The first four crankcases may be built by rapid prototype methods, the remaining
crankcases will be made using  conventional  casting tooling.  The rapid program
schedule will require flexibility in choice of materials,  manufacturing methods
and design  features.  Requests for deviations  from the design drawings will be
processed  according to Ricardo standard  procedures  (Project Variation Request
(PVR)),  which require  approval of the Design  Department  for each  deviation.
Sigma will be consulted on significant  deviations and will be provided with all
approved deviation request documents.  Also because of the rapid schedule. parts
will be  procured to drawings  released by design  before all final  checking is
completed  (risk  released  drawings).  This risk release  method  significantly
reduces the time to procure the parts but it also  increases the risk that parts
will require modification or re-making in order to provide a functional machine.
The  cost  estimate  for  parts  given  in  the  Price  section  includes  a 10%
contingency to provide for some level of part re-work. (Note that the cost given
is an estimate and that costs incurred  Including rework costs are to be paid by
Sigma) An  additional  70 engine lower end  assemblies  can be produced from the
tooling.  The cost of the additional  components and assembly is not included in
this proposal.

Tooling and component  cost  estimates for budgetary  purposes of the individual
procurement  items  will be  supplied  in a  separate  document  to follow  this
proposal.

7. ASSUMPTIONS

o  The development testing is not included in this proposal Ricardo will provide
   a separate  proposal  for a test program for the cross head bearing and solid
   lubrication  rolling  element  bearings.  This work will prove the details of
   surface finish and solid lubricant  durability  needed for more durable field
   test engines
o  There are a number of  regulatory  codes,  which  could  govern the  pressure
   vessel, and other aspects of the engine lower end design. Sigma will identify
   the specific  codes,  including  resolution of which items of the code apply,
   and  supply  these to  Ricardo  within  four  working  weeks  of the  project
   initiation.  In the event that the code requirements are not provided.  Sigma
   can  provide  additional  project  scope to Ricardo to  identify  appropriate
   specifications that will be the agreed design analysis criteria
o  Sigma will define the details of the  interface  between the engine lower and
   upper ends within six working weeks of the project  Initiation.  Ricardo will
   cooperate  with Sigma in  resolution  of the detailed  interface.  Sigma will
   define  the  details  of  the  electrical  and  mechanical  interface  to the
   generator within six working weeks of the project initiation
o  Support for engineering of the Stirling cooler will be limited to 80 hours of
   senior engineering time
o  Within 4 weeks of project initiation sigma will provide to Ricardo

<PAGE>

o  The results of the Kockums  Stirling engine cycle analysis or provide similar
   engine pressure and temperature design data
o  Electronic  models  and/or  drawings  of the engine  upper end  suitable  for
   providing an interface for an FE analysis of the engine lower end o
o  Sigma  will  provide  to  Ricardo  timely  updates  on the  results  of their
   development testing.
o  Sigma will supply the part numbering requirements far the detail drawings
o  The engine Bill of Materials will be kept in Excel format.  Sigma will supply
   any special  requirements  for the format of the BOM,  otherwise,  the format
   will be Ricardo standard
o  For  Engineering  Analysis  all  material  will be  assumed  to  behave  in a
   linear-elastic  manner.  Any anticipated  plasticity will be accounted for in
   the results post-processing using equivalent strain-energy assumptions
o  The  Engineering  Analysis  Is not  intended  to replace  any safety  testing
   required  by  regulatory  bodies.  The  purpose is to insure  that the design
   provided to Sigma when built and operated to specification will be capable of
   meeting the safety testing requirements.  Rotor and stator components for the
   engine  assemblies  will be  supplied  by  Sigma  in time to  support  engine
   assembly
o  Sigma  confirm  the  mature  production  volumes at the start of the phase to
   enable Ricardo to establish a manufacturing  cost book for the chosen concept
   design
o  Sigma will approve the potential  manufacturing  partners to allow  component
   sourcing estimates to be completed
o  Sigma will provide  Ricardo  with the  necessary  information  to support the
   development of the preliminary manufacturing strategy
o  Sigma will assign a point of contact for Ricardo to develop the manufacturing
   strategy
o  No international  travel costs are included in this fixed price quotation for
   any visits by Ricardo staff to Sigma.  Travel,  accommodation and subsistence
   expenses of Ricardo  engineers  visiting  Sigma will be billed at actual cost
   plus an 8% handling  charge.  It is estimated that travel expenses will range
   between  $20.000 - $40,000  depending  on the  number of  visits,  timing and
   duration  of each  visit,  and the number of  engineers  making  the  visits,
   (Engineering  time for these  visits are  included in the fixed price Phase 1
   scope of work)
o  The lower end  procurement  costs will be billed to Sigma at actual cost plus
   an 8% handling charge
o  The following terminology and assumptions will be used throughout the program

     PCP          Personal Combustion powerplant = Sigma engine
     Package      End product (Micro CHP System) featuring the PCP as the Key
                  Component (energy converter
     Generation 1 PCP unit based on the 1-125B design
     Generation 2 Production intent PCP (Ricardo involvement)
     Package 1    Prototype MCHP end product engineered with Generation 1 PCP to
                  be tested with generation 2 PCP
     Package 2    Production intent package with generation 2 PCP
     OEM          Original Equipment Manufacturer
     EC           Energy Company
     MCHP         Micro combined Heat and Power
     Program      Activities outlined in the sigma Master Plan
     Project      Interim phase of the program

<PAGE>


     M1          Sigma  delivery  of  Generation  1 PCPs to OEMs
     M2          OEMs  delivery  of Package  1 to ECs
     MG2         Sigma  delivery  of  Generation  2 PCP to OEMs
     M3          Design  Freeze  for  Generation  2 PCP
     M4          Start  of  Production  (SOP) Generation 2 PCP

8. PROGRAM MANAGEMENT

Ricardo will adhere to the IS09000 quality procedures for project management and
execution.

The existing Ricardo  cross-functional  team will continue to be the core of the
project  team.  Additional  technical  specialists  to ensure the  technical and
commercial  success of the project will strengthen the team. A proposed  project
organization chart is included.  This chart shows the principle  participants in
the project.  Each of these  participants  will contribute  substantially to the
program  although  each may not devote  full time to the  project.  They will be
supported by various  other  Ricardo  personnel  in a matrix type  organization.
After the project  start a contact list  including  phone  numbers,  fax,  email
address and  functional  specialty  for each member of the Ricardo  team will be
provided.

A Ricardo Chief Engineer will lead the project  supported by a dedicated project
manager.  The  Ricardo  Chief  Engineer  will be the main  point of  contact  at
Ricardo.   Ricardo  will  follow  standard  project   management   practices  to
co-ordinate  activities,  track the project schedule.  ensure timely delivery of
requirements and provide regular project updates to Sigma.

[GRAPHIC OMITTED]

<PAGE>

9. TERMS AND CONDITIONS

The price quoted labor is firm and fixed.  is valid for 90 days from the date of
issuance and assumes work commences before the offer period expires. Procurement
cost will be passed through with an 8% handling charge and is in addition to the
fixed price.

Invoices for  engineering  labor  according to the Phase 1 scope of work will be
submitted  monthly according to the value of work completed during the preceding
month up to the price of the  project.  Procurement  invoices  will be submitted
when accumulated cost equals $100,000. Payment terms are 30 days not.

Purchase  order or a letter of intent to issue a purchase  order Is required for
project start.

All data and design  information  provided  by.  SIGMA  ELEKTROTEKNISK  would be
treated as confidential by Ricardo unless specifically  designated  otherwise by
SIGMA ELEKTROTEKNISK.

Any  equipment  supplied by SIGMA  ELEKTROTEKNISK  would  remain the property or
SIGMA  ELECKTROTEKNISK  and be  disposed  of on  completion  of the  project  as
directed by SIGMA  ELEKTROTEKNISK.  Any costs  Incurred by the disposal would be
additional to the quotation.

Any tooling, components or equipment purchased on behalf of SIGMA ELEKTROTEKNISK
would  remain  the  property  of  SIGMA  ELEKTROTEKNISK  and be  disposed  of on
completion  of the  project  as  directed  by SIGMA  ELEKTROTEKNISK.  Any  costs
incurred by the disposal would be additional to the quotation.

If delays  occur in the project as a result of delays in the  provision by SIGMA
ELEKTROTEKNISK to Ricardo of information  and/or  ,equipment,  or as a result of
inadequate  quality of this  information  and/or  equipment,  the parties  would
discuss and agree on any required  changes to the scope of work. time scale and,
if necessary. price.

Any variations to the scope of work would only be made after mutual agreement in
writing.  The parties would, at the same time, discuss and agree to any required
changes to the time scale and, if necessary, price.

If a decision  were made to suspend or  terminate  the  project,  Ricardo  would
invoice SIGMA ELEKTROTEKNISK for work completed to that date plus all reasonable
costs associated with bringing the project to suspension or termination.