Document:

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                                                                   Exhibit 10.19

          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.

                  CONTRACT FOR THE DEVELOPMENT AND APPLICATION
                OF A SEA WAVE ENERGY GENERATION SYSTEM IN FRANCE

This contract for the development of the application of a wave energy generation
system in France (hereinafter: "the Agreement") is signed as of June 17, 2005 by
and between:

IBERDROLA ENERGIAS RENOVABLES II, S.A. SOCIEDAD UNIPERSONAL (hereinafter:
"IBERENOVA"), a company existing and organised under the Spanish law, with Tax
Registration Number A-83028035, having its registered office located at Tomas
Redondo, 1, Madrid, Spain, represented by Ms ANA ISABEL BUITRAGO MONTORO with
National Identity Document No. 79.305.185-N and Mr. MIGUEL MARTIN SAEZ, with
National Identity Document No. 12.158.285-W, acting in their capacity as joint
and several representatives by virtue of the deed of power of attorney executed
on 29 May 2002 before the Notary Public of Bilbao, Mr. Arriola Arana, under
number 1.039 of his records.

                                       And

TOTAL ENERGIE DEVELOPPEMENT SA (hereinafter: "TED"), a company existing and
organised under the French law, having its registered office located in France,
92078 Paris la Defense Cedex, 2, Place de la Coupole, La Defense 6, represented
by Mr. GILLES COCHEVELOU acting in his capacity as President.

                                       And

OCEAN POWER TECHNOLOGIES LTD. (hereinafter: "OPT"), a company, wholly-owned by
OPT Inc. existing and organised under the laws of England and Wales having its
registered office located at Warwick Innovation Centre, Gallows Hill, CV34 6UW
Warwick, England, United Kingdom, represented by Mr. MARK DRAPER acting in his
capacity as Chief Executive.

                                       And

OCEAN POWER TECHNOLOGIES INC, (hereinafter: "OPT Inc") a company existing and
organised under the laws of United States of America having its registered
office located at Pennington, New Jersey, United States of America, represented
by Dr. George W. Taylor, acting as Chief Executive officer of the company.

IBERENOVA, TED and OPT being hereinafter individually referred to as a (Party)
and collectively referred to as the (Parties).

<PAGE>

                                    WHEREAS:

A.   OPT represents that it has all rights to (i) use the industrial and
     intellectual property rights of the technology for the generation of
     electrical power using energy from sea waves, registered under the name
     PowerBuoyTM System (hereinafter: together with any developments,
     improvements or derivatives thereof, the "Technology"), (ii) sell the
     PowerBuoys stations, and (iii) operate and maintain them.

B.   IBERENOVA is strongly active in the renewable energy sector.

C.   IBERENOVA and OPT Inc., inter alia, have entered into a Collaboration
     Agreement dated July 2, 2004 (hereinafter: the "Cantabria Agreement")
     whereby they are participating in the evaluation and possible development
     of a pilot project for a sea wave energy generation electricity power
     station with an initial power of 1.25 MW on the North coast of Spain
     (hereinafter: the "Cantabria Project") using the Technology. As of the date
     hereof, TOTAL EOLICA, S.A has joined the Cantabria Agreement in writing,
     with the remaining partners' prior consent.

D.   IBERENOVA and OPT, assuming that the results of the Cantabria Project were
     favourable, wish to develop a new project for a sea wave energy generation
     electricity power station using the Technology on the coast of France, in
     collaboration with an industrial company being active in the renewable
     energy sector in France.

E.   TED (a company of the TOTAL Group which is active world-wide in the energy
     sector) is conducting its business in the renewable energy sector
     especially in France and is interested in participating in generation
     electricity projects using sea wave energy both in France and in other
     countries including Spain.

F.   TOTAL EOLICA, S.A (a company of the TOTAL Group which is active in the
     energy sector) is conducting its business in the renewable energy sector in
     Spain and is interested in participating in generation electricity projects
     using sea wave energy in Spain.

G.   The Parties, based on the complementary nature of their skills, experience
     and resources, wish to enter into a collaboration to study and assess the
     technical and economical possibility to develop on the coast of France, one
     sea wave energy generation electricity power station with a capacity of
     around 2 to 5 MW (the exact number of MWs to be decided by the Steering
     Committee as provided below) using the Technology (hereinafter: the
     "Project").

H.   The Parties acknowledge that the French Authorities have enabled the
     development of Renewable Energy Projects through the issuance of
     "Competitive Calls for Tenders" (for example Competitive Calls for Tenders
     issued in year 2004 for Biomass Energy, Offshore Wind Energy, Onshore Wind
     Energy). The Parties acknowledge that the Project will not be a
     Demonstration Project (with little or no return on capital) and that the
     intention of this Agreement is to develop a project which will be submitted
     to the the first "Competitive Call for Tenders" to be issued by the French
     Authorities regarding Wave Energy.

I.   The Parties wish to set forth certain rules to regulate more precisely
     their collaboration and, in this regard, have entered into this Agreement.

<PAGE>

                       NOW IT IS HEREBY AGREED AS FOLLOWS.

1.   PURPOSE.

     Under the terms and subject to the conditions set forth in this Agreement,
     the Parties shall actively and closely co-operate in good faith to study
     and assess the feasibility of the Project. Such feasibility study shall
     include the research of potential sites on the coast of France whereon one
     sea wave energy generation electricity power station (hereinafter: the
     "Power Station") may be installed and shall concern all other aspects
     relating to the Project including but not limited to its economical,
     technical, legal, administrative, environmental, marketing and operational
     constraints, aspects and perspectives.

     Should the Parties conclude that the Project is feasible, they shall meet
     and discuss in good faith as to whether the Project should be implemented
     or not and, if the Parties decide to implement the Project, shall define
     the scheme for any such development and operation of the Project.

     For the purposes of this Agreement the Parties agree that "France" shall
     mean all French territories excluding the following: "Nouvelle-Caledonie",
     "Polynesie-Francaise", "Wallis et Futuna", and the "Terres australes et
     antarctiques francaises" (TAAF).

2.   RELATIONSHIP BETWEEN THE PARTIES.

2.1  Pursuant to the provisions of this Agreement, the interests, rights,
     duties, obligations and liabilities of the Parties shall be several and not
     joint, but without limitation to what is provided in section 10 below.

2.2  Nothing in this Agreement shall be construed as creating a partnership,
     association, joint venture or any other legal entity between the Parties.
     The Parties agree that their entering into any further agreements or their
     decision to proceed with the implementation of the Project (phase 2) are
     subject to the prior corporate approval by their respective Board of
     Directors (or equivalent) and, with respect to TED and IBERENOVA, to the
     prior approval by the Executive Committee of TOTAL S.A. and of the Steering
     Committee (Comite Operativo) and the Executive Committee of IBERDROLA, S.A.
     respectively. Nothing in this Agreement is intended to bind the Parties
     neither to enter into any further agreement nor to proceed with the
     implementation of the Project.

2.3  From the effective date of this Agreement, each Party shall not enter into
     any commitment or incur any liabilities or obligations for or on behalf of
     any other Party towards third parties in connection with the Project
     without the prior written consent of the relevant Party. In this regard, no
     Party shall be deemed to be a representative, agent, employee of any other
     Party for any purpose whatsoever.

2.4  During the duration of the Feasibility of Studies (phase 1 of this
     Agreement) including any written extension thereof, and until December 31,
     2008, OPT shall not, directly or indirectly, within France: (i) develop any
     power plant based on the Technology or any improvements or developments
     thereof; (ii) build and/or supply any equipment based on the PowerBuoy
     System other than as provided for in this Agreement.

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3.   FEASIBILITY STUDIES (PHASE 1)

     During an initial period of eighteen (18) months from the execution date of
     this Agreement, the Parties will jointly conduct studies (the "Feasibility
     Studies") in respect of the following aspects of the Project :

     (a)  Determination of the wave energy potential of the coast of France
          obtainable with the Technology;

     (b)  Establishment and development of a design and installation programme
          of the corresponding Power Station with a capacity of around 2 to 5
          MW, the exact capacity to be agreed to by the Steering Committee;

     (c)  Negotiation with the French authorities of the conditions and
          agreement required to implement the Project, including without
          limitation public marine domain concession, building consent,
          connection agreement and power purchase agreement;

     (d)  Obtaining all other necessary consents and permits;

     (e)  Assessment of the required engineering procurement and construction
          contract and related agreements;

     The Parties shall prepare a work program (including a project plan) and a
     budget in respect of the Feasibility Studies for approval by the Steering
     Committee.

     The Parties shall use reasonable efforts to complete the Feasibility
     Studies in accordance with the work program. If the Parties do not have
     sufficient information eighteen (18) months after signing this Agreement to
     make the decision contemplated in this section regarding the development of
     the Project, the Parties, through the Steering Committee, agree to extend
     the initial phase up to a maximum of further six (6) months.

     During this phase 1, IBERENOVA shall be the leader for promoting the
     Project and negotiating with the French authorities all necessary
     authorisations. However, IBERENOVA shall keep the other Parties informed of
     the content of its discussions with French Officials (including but not
     limited to: representatives of the French government, ministries, local and
     central administration, elected people etc...) regarding the Project.

     When the Feasibility Studies are completed, and if the Parties unanimously
     conclude that the Project would be economically, technically and
     financially feasible, the Parties will meet to discuss and decide in
     writing whether and how they will jointly develop such Project. The Party
     or Parties not agreeing in writing to develop the Project before the said
     90-day from completion of the Feasibility Studies will be considered, for
     all the purposes of this Agreement, as a Withdrawing Party and thus subject
     (without limitation) to Clauses 8.3.(b) and 8.3.(c) below. For the purposes
     herein, the Feasibilities Studies will be deemed to have been completed
     when so agreed to by the Steering Committee, but without limitation to
     Clause 8.2.(a) below.

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     The Parties shall exchange all relevant information necessary to perform
     the Feasibility Studies, provided that none of the Parties shall be
     required to furnish the others with non-proprietary data subject to
     confidentiality agreements vis-a-vis third parties until they obtain such
     third party's prior consent, provided that OPT will not be entitled to
     claim third parties' rights over the "Technology" to restrain the other
     Parties from having access thereto.

     Each Party shall be entitled to use the Feasibility Studies only pursuant
     to the terms of this Agreement and in accordance with the provisions of
     Exhibit 1 ("Confidential Information, Inventions and Trade Secrets
     Agreement") to this Agreement.

4.   PARTICIPATING INTERESTS IN THE PROJECT.

     At the time of execution of this Agreement, the undivided interest of each
     Party in the rights, benefits and obligations pursuant to this Agreement
     and in the Project (hereinafter: the "Participating Interest") shall be :

<TABLE>
<CAPTION>
PARTY       PARTICIPATING INTEREST
-----       ----------------------
<S>         <C>
IBERENOVA            [**]
TED                  [**]
OPT                   10%
</TABLE>

5.   COSTS AND EXPENSES.

     All costs and expenses incurred directly by the PARTIES in connection with
     the study and assessment of the Project, together with all other costs and
     expenses from external advisors for the purpose of carrying out the work
     contemplated by the PHASE 1 shall be shared between the PARTIES as per
     their respective PARTICIPATING INTEREST in the Project, provided they have
     been previously approved by the STEERING COMMITTEE and regardless of
     whether or not the PROJECT finally goes ahead and even if one or several of
     the PARTIES hereto decide not to go into the PROJECT, in which case section
     8.3 (b) shall apply.

     In that sense, an economic fund (hereinafter the "FUND") will be
     established and shall be payable by the PARTIES in the proportions of their
     PARTICIPATING INTEREST. The FUND will be managed by the STEERING COMMITTEE
     which will detail the contributions to be made by each of the PARTIES to
     the FUND, and the budget of expenses of each PARTY to be paid by the FUND,
     in the PHASE 1.

     The Steering Committee shall decide which of the Parties or a third party
     shall carry out the various aspects of work contemplated by this Agreement.

     The Fund shall be managed by IBERENOVA who also shall be the formal
     addressee of the invoices from the Parties. The invoices shall be paid
     within [**] days.

     If the decision to implement the Project is taken, said payments to the
     Fund by each Party shall be recoverable from the Special Purpose Company
     that may be created by the

<PAGE>

     Parties for the development and operation of the Project or shall be
     capitalised in this Special Purpose Company as appropriate.

     Each Party shall retain evidence, including supporting documentation such
     as invoices and timesheets, of all costs for inspection upon request. All
     costs to be incurred in accordance with this Agreement, shall be budgeted,
     presented and approved by the Steering Committee.

6.   STEERING COMMITTEE.

6.1  Upon execution of this Agreement, the Parties shall set up a Steering
     Committee (hereinafter: the "Steering Committee") composed of the following
     three (3) members (1 representative appointed by each Party):

     TED representative: [**]
     IBERENOVA representative: [**]
     OPT representative: [**]

     The representative appointed by [**] shall be the chairman of the Steering
     Committee. The Steering Committee shall have ultimate overall control and
     decision-making powers with regard to the activities under Phase 1 of this
     Agreement. A Party may change its representative or designate an alternate
     (who will need to be an employee of the appointing Party or of any company
     of its group of companies subject to the confidentiality obligations
     provided herein), subject to give prior written notice to the other
     Parties.

6.2  The Steering Committee shall meet as often as necessary, but at least [**].
     Any Party shall have the right to submit a proposal for consideration by
     the Steering Committee.

6.3  The meetings will be held alternately in Madrid and Paris (at the
     head-offices of IBERENOVA and TED) or at such other place as may be agreed
     from time to time by the Parties. The presence of all representatives of
     the Parties shall be required to constitute a quorum for any meeting of the
     Steering Committee. Each Party shall use its reasonable efforts to ensure
     the existence of a quorum at any duly called meeting of the Steering
     Committee.

6.4  The Parties intend that the members of the Steering Committee shall attend
     the meetings of the Steering Committee in person, but recognise that
     members may from time to time be prevented from doing so. Therefore,
     members of the Steering Committee may participate in a meeting of the
     Steering Committee by means of telephone or video conference or similar
     communications equipment by means of which all persons participating in the
     meeting can hear each other, and such participation shall constitute
     presence in person at such meeting. Each Party may also designate by
     written notice to the other Parties an alternate representative, who will
     need to be an employee of the appointing Party or of any company of its
     group companies subject to the confidentiality obligations provided herein,
     to act in the absence of a member unable to attend a meeting of the
     Steering Committee. Any action required or permitted to be taken at a
     meeting of

<PAGE>

     the Steering Committee may be taken without a meeting if a written consent,
     setting forth the action so taken, is signed by all members of the Steering
     Committee.

6.5  The Steering Committee shall be responsible for the following activities:

          -    reviewing, modifying and approving the budget for all costs and
               expenses to be incurred in accordance with clause 5 in connection
               with the Project;

          -    monitoring Project progress and adherence to the budget;

          -    engagement and termination of any external accountants,
               engineers, environmental consultants, financial advisors or legal
               counsel and all other external advisors providing services for
               the Project;

          -    approving the distribution or payment of any amount to any Party
               except pursuant to the approved budget;

          -    approving the selection of the site whereon Power Station may be
               installed;

          -    analysis of the conclusions of the Feasibility Studies and
               recommendation to the Parties as to the possible implementation
               of the Project;

          -    deciding that the Feasibility Studies of the Project are ended;

          -    extending the duration of the Feasibility Studies phase;

          -    approving a time schedule for the possible implementation of the
               Project;

          -    approving public announcements to be made in connection with the
               Project.

6.6  Decisions of the Steering Committee shall be made by unanimous approval of
     the representatives of the Parties (principle of consensus), it being
     understood that the representative of each Party shall have one (1) vote.
     If the Steering Committee is unable to reach agreement on any matter within
     its competence, at the request of either Party, a second meeting of the
     Steering Committee shall be convened to be held within [**] weeks from the
     date of the first meeting at which the Steering Committee failed to reach
     agreement. At this second meeting, the Steering Committee shall apply all
     possible means to resolve the disagreement.

6.7  All decisions taken during a meeting by the Steering Committee shall be
     recorded in minutes. Minutes of the meetings of the Steering Committee
     shall be drafted in English by the Chairman and a draft shall be sent to
     the Parties within [**] working days of the meeting. The minutes shall be
     deemed approved by the Parties if no comment is made within [**] working
     days from the sending of the draft to the Parties. All the important
     decisions taken during a meeting shall be recorded and signed upon at the
     end of the meeting.

<PAGE>

6.8  Relations with French media will be managed by TED as per the decision
     taken by the Steering Committee. Similar arrangements will be implemented
     for phase 2.

7.   IMPLEMENTATION OF THE PROJECT (PHASE 2).

     Provided that the Parties agree in writing that the Project should be
     implemented, they shall identify an optimal legal structure and in
     connection therewith, they (or any of their Affiliated Companies) shall
     incorporate a "Societe Anonyme"(S.A) or a "Societe par Actions Simplifiees"
     (S.A.S) under French law (or other legal vehicle as may be agreed by the
     Parties) for the implementation of the Project (hereinafter: the "Special
     Purpose Company" or the "SPC"). For the purpose of this Agreement,
     "Affiliated Company" shall mean any company or legal entity which (i)
     controls either directly or indirectly a Party, or (ii) which is controlled
     directly or indirectly by such Party, or (iii) is directly or indirectly
     controlled by a company or entity which directly or indirectly controls
     such Party. "Control" means the right to exercise one hundred percent
     (100%) of the voting rights.

     The Parties shall use their reasonable commercial efforts to negotiate in
     good faith and enter into the bylaws and shareholders agreement, and to
     incorporate the SPC no later than [**] months after a final decision (if
     any) is taken in writing to implement the Project.

     The Parties hereby agree on the following basic principles that shall
     govern the ownership and management of the SPC and the business
     relationships between the SPC and each Party (or its Affiliated Companies):

     (a)  The head-office of the SPC shall be located in the region of Paris,
          France.

     (b)  Share in the capital of the SPC shall be distributed between the
          Parties (or any Affiliated Company of each Party) as follows:

<TABLE>
<CAPTION>
PARTY       SHARE CAPITAL PERCENTAGE
-----       ------------------------
<S>         <C>
IBERENOVA             [**]
TED                   [**]
OPT                    10%
</TABLE>

          The shares shall be indivisible and shall give rise each to equal
          rights of participation in the collective decisions and in the annual
          income as well.

     (c)  The share capital of the SPC shall be in an amount sufficient so that
          external funding does not require sureties or guarantees of the
          Parties. Each Party shall contribute to the equity of the SPC in
          proportion to its percentage of share in the capital;

     (d)  The General Manager ("Directeur General" in a S.A. or "President" in a
          S.A.S. under French law), the Chairman and the Company Secretary shall
          be appointed amongst candidate(s) proposed by IBERENOVA. Subject to
          the overall supervision and control of the Board of Directors (or any
          equivalent corporate decision body in

<PAGE>

          the S.A.S.), the General Manager shall be responsible for the
          day-to-day management of the SPC;

     (e)  The Board of Directors shall be composed of five(5) members of whom
          three(3) shall be appointed by IBERENOVA, one(1) by TED and one(1) by
          OPT provided that the initial capital stake of each Party is in
          accordance with Clause 4 above. In case of change of the distribution
          of the share capital among the shareholders, the Board composition
          will be amended to reflect broadly the respective percentage held by
          each Party; in any case, each Party will have the right to appoint at
          least one(1) member of the Board of Directors. Except for the
          decisions mentioned below, all resolutions of the Board of Directors
          shall be adopted by a simple majority of the directors present or
          represented at the meeting;

     (f)  No action shall be taken by or on behalf of the SPC by the General
          Manager or any other person on any of the following matters, except by
          a resolution of the Board of Directors (or the general assembly of the
          shareholders as appropriate) adopted by not less than a 80% majority
          of the voting powers of the directors (i.e. for the foreseen initial
          composition of the Board, 4 out of 5 directors vote favourably) (or
          80% of the share capital, as the case may be):

          -    approval of the SPC's business plans, which shall include the
               investments to be carried out for implementing the Project and
               amendments to said investments exceeding 500,000 Euros;

          -    investment or divestitures other than in the ordinary course of
               business of the SPC or except expressly authorized in the
               business plan or in duly approved amendments thereto, including
               without limitation operation and maintenance investments directly
               addressed to enlarge the useful life or increase the production
               of the original Project;

          -    making of loans or borrowing by the SPC other than those
               addressed to financing the investments included in the SPC's
               business plans or its duly approved amendments or otherwise
               previously approved pursuant this Section (f);

          -    entering into, terminating or modifying any contract between the
               SPC and (i) any Party (or its Affiliated Companies), or (ii) any
               company or entity in which any Party has a direct or indirect
               interest, or (iii) any manager or director of the SPC;

          -    conversion, transformation, merger, split, dissolution and
               liquidation, save in the compulsory cases contemplated by law;

          -    establishment, closing down or winding up of branches and
               subsidiaries;

<PAGE>

          -    modification of the share capital, except those share capital
               increases required so that external financing of the Project does
               not entail personal guarantees by the Parties;

          -    elimination of the preferential subscription right in capital
               increases;

          -    issues of convertible debentures and execution of any loan
               agreement with rights to conversion to capital.

     (g)  The shareholder agreement shall contain "deadlock" provisions that may
          apply in the case at any decision listed in sub-paragraph (f) above is
          not approved by a vote satisfying the required supermajority;

     (h)  Bylaws and the shareholders agreement shall contain provisions
          granting the Parties pre-emption rights for the case of transfer of
          the SPC shares to third parties (other than to the transferring
          Party's Affiliated Companies).

          In any case, (i) OPT's prior written approval shall be required when
          the potential transferees is a competitor to OPT, (ii) TED's prior
          written approval shall be required when the potential transferee is an
          oil and gas company, (iii) IBERENOVA's prior written approval shall be
          required when the potential transferee is a utility.

     (i)  The SPC shall submit each year its financial statements for auditing
          by an independent accounting firm that will be chosen among the four
          top auditing firms in France.

     (j)  OPT shall supply and install the equipment based on the Technology,
          and provide the SPC with assistance and information, including
          operation and maintenance services, with the sufficient scope and
          extension so that the SPC may operate the Project, and any further
          projects as per Section 9 below, pursuant to state-of-the art
          standards during all its useful life (the "Supply"). Such Supply
          obligations shall be exclusive for France until 31st of December
          2008;

     (k)  In the design and construction phases, the SPC shall arrange with
          IBERENOVA or TED (or any of their Affiliated Companies), whichever
          company submits the best proposal in market conditions, a contract for
          the provision of promotion, management, direction, control,
          administrative and representation services. The SPC may decide to
          split this contract between IBERENOVA and TED.

     (l)  For the operation phase, the SPC shall have the minimum team necessary
          to perform the tasks that are required and to the extent feasible
          shall subcontract the other functions. Alternatively, the SPC may
          decide that the Parties will perform these tasks on its behalf.

     (m)  The SPC shall be responsible for the acquisition of all necessary
          supplies and services for the installation, start-up and operation of
          the Power Stations.
<PAGE>

          In that sense, on market conditions, the SPC shall contract with OPT
          for the supply and installation of the Power Stations. [**].

          Additionally, an Operation and Maintenance agreement shall be awarded
          to OPT, on market conditions, for the Power Stations over the first
          10 years of the projects' lifetime.

8.   EFFECTIVENESS / TERMINATION.

8.1  After its execution by the Parties, this Agreement shall become effective
     as from the day and year first above written.

8.2  This Agreement shall terminate upon the earliest to occur of the following
     events:

     (a)  27 months after the date of execution of this Agreement without a
          written decision having been passed to implement the Project (phase
          2), except if the Parties agree in writing on a time-extension of the
          Feasibility Studies, in which case this Agreement shall terminate 90
          days after the date of completion of the Feasibility Studies without
          such a written decision having been passed;

     (b)  at any time if the Parties jointly decide not to implement the Project
          (phase 2)

     (c)  on such other date as the Parties may mutually agree;

     (d)  following a material breach by a Party (the "Defaulting Party") of any
          material provision of this Agreement which has not been remedied
          within [**] days from the receipt by such Defaulting Party of a notice
          of default sent by the other Parties, the decision of such other
          Parties to terminate this Agreement;

     (e)  the decision by the Parties to enter into a new agreement which
          explicitly supersedes this Agreement;

8.3  Withdrawal of any Party.

     (a)  At any time following the date of this Agreement, any Party (the
          "Withdrawing Party") may withdraw from the Project in its sole
          discretion provided it gives 15 days prior written notice of its
          withdrawal to the other Parties (the "Non-Withdrawing Parties")
          indicating the date as from which such withdrawal shall be effective.

          The Non-Withdrawing Party or Parties shall be entitled to use the
          rights over the Feasibility Studies together with, any document or
          information prepared by the Withdrawing Party in connection with the
          Project which use will be free of charge. The Non-Withdrawing Party or
          Parties shall be entitled to complete the implementation of the
          Project exclusive of the Withdrawing Party.

     (b)  Upon its withdrawal from the Project, the Withdrawing Party shall be
          relieved from any obligations and liabilities to the Non-Withdrawing
          Party(ies) arising out

<PAGE>

          or in connection with such withdrawal. Therefore, except otherwise
          provided for in this Agreement, the Withdrawing Party will not be
          bound by the Agreement from the date of its withdrawal from the
          Project. However OPT shall remain bound by the Supply obligations
          under Section 7.(j) above. Furthermore, each Party shall remain bound
          by the confidentiality provisions stated in this Agreement and in the
          Confidential Information, Inventions and Trade Secrets Agreement
          attached to this Agreement as Exhibit 1, but without prejudice to the
          right of the Non-Withdrawing Parties to use the information disclosed
          hereunder by the Withdrawing Party for the purposes of the Project and
          enlarged collaboration set forth herein.

          However, the Withdrawing Party shall be obligated to pay on or prior
          to the date of effectiveness of withdrawal its Participating Interest
          share of External Costs for which it has become obligated to fund
          hereunder. For purposes hereof, External Costs shall include all such
          costs committed by the Steering Committee in accordance with this
          Agreement as of the date of the Non-Withdrawing Parties' actual
          receipt of the written notice of withdrawal and anticipated to be
          incurred within [**] days, whether or not actually incurred as of the
          date of the effectiveness of withdrawal.

          In addition, should OPT withdraw from this Agreement while IBERENOVA
          and/or TED decide to implement the Project, OPT shall nevertheless
          comply with its Supply Obligations toward the SPC or, in case only
          either IBERENOVA or TED decide to implement the Project, to the
          Non-Withdrawing Party. This Supply will be exclusive during a period
          expiring on December 31, 2008 and will be granted pursuant to the
          remaining terms and conditions provided for under Section 7(j) above.

     (c)  The Non-Withdrawing Party or Parties shall not have any cause of
          action against the Withdrawing Party acting in good faith and without
          breach of this Agreement or any other fault, for damages and losses
          which could directly or indirectly result from such withdrawal.
          However, if the Agreement is terminated pursuant to clause 8.2(e)
          (material breach), the non-defaulting Party (or Parties) may pursue
          any and all remedies that may be available against the Defaulting
          Party.

     (d)  The foregoing provisions, and specially 8.3(c) shall apply, mutatis
          mutandi, in case of termination of Agreement under section 8.2(d)
          (references to Withdrawing Party being understood made to the
          Defaulting Party and references to the Non-withdrawing Parties to the
          Non-defaulting Parties, respectively).

9.   ENLARGEMENT OF THE COLLABORATION.

     If either the Parties or IBERENOVA and TED decide in writing to enlarge
     their collaboration under this Agreement to the study and possible
     development of additional wave energy project(s) using the Technology on
     the coast of France up to [**], it is acknowledged that it should be
     beneficial for the Project that TED and IBERENOVA assumes, on an
     alternative basis, the leadership in the conduct of the operations relating

<PAGE>

     to the Phases 1 and 2 of each such additional projects. Furthermore, the
     Parties agree that the current Participating Interests of IBERENOVA and TED
     in the Project (as mentioned in article 4) [**].

     In accordance with the above mentioned, OPT agrees to supply and install
     the equipment based on the PowerBuoy System and its further improvements to
     the SPC(s) created between the Parties for the implementation of these
     additional Project(s), and provide the SPC(s) with assistance and
     information, including operation and maintenance services, with the
     sufficient scope and extension so that the SPC(s) may operate the
     Project(s) as per state-of-the art standards during all its useful life
     (the "Supply"). Such Supply obligations shall be exclusive for France until
     31st of December 2008.

10.  WARRANTY

10.1 OPT Inc hereby warrants the fulfilment by OPT of OPT's obligations under
     this Agreement, so that OPT Inc undertakes to fulfil all OPT's obligations
     under the Agreement, in the case that OPT does not fulfil them, immediately
     upon Iberenova and/or Total's demand, being able to oppose only the
     exceptions that OPT would be entitled to under this Agreement.

     In particular, and for OPT's obligations of payment under the Agreement,
     the Parties agrees that the guarantee will be governed by articles 2021 et
     seq of the Civil Code. OPT Inc. expressly waives the benefice de discussion
     and benefice de division (OPT Inc.'s rights to limit its liability and to
     require execution to be first directed against OPT) as provided in articles
     2021 and 2026 of the Civil Code.

     Furthermore, OPT Inc undertakes not to liquidate OPT and not to allow OPT
     to become bankrupt or insolvent or otherwise unable to meet its obligations
     hereunder.

11.  GOVERNING LAW & ARBITRATION

11.1 This Agreement shall be governed by and construed in accordance with the
     French law.

11.2 Any dispute arising out of or in connection with this Agreement shall be
     exclusively and finally settled under the Rules of Arbitration of the
     International Chamber of Commerce then in effect (the (ICC Rules)) by
     three (3) arbitrators appointed in accordance with the ICC Rules. The place
     of arbitration shall be Paris (France) and the language of arbitration
     shall be English.

12.  LIABILITY.

12.1 No Party shall be liable to the other Party for any special, indirect or
     consequential losses or damages, including but not limited to loss of
     profits, revenues, contracts, opportunities, goodwill or business, arising
     out of or in connection with this Agreement.

12.2 In case of a third party claim arising out of or in connection with this
     Agreement, each Party shall be liable in proportion to its Participating
     Interest in the Project.

<PAGE>

13.  NOTICES.

     Any notice which may be or is required to be given pursuant to this
     Agreement shall be in writing and may be delivered, by hand, or sent by
     registered post or fax to the relevant address set out below:

     TED

     2 place de la Coupole -- La Defense 6
     92400 Courbevoie, France
     Phone       (33-1) 01.47.44.30.96
     Fax         (33-1) 01.47.44.31.13
     E-mail      gilles.cochevelou@total.com
     Attention   Mr. Gilles Cochevelou

     IBERENOVA
     Tomas Redondo, 1
     28033 Madrid, Espana
     Phone       (34) 91 577 65 00
     Fax         (34) 91 784 37 03
     E-mail      roberto.legaz@iberdrola.es
     Attention   Mr. Roberto Legaz

     OPT
     Warwick Innovation Centre
     Gallows Hill
     Warwick
     CV34 6UW
     UK
     Phone       (44) 01926623371
     Fax         (44) 01926408190
     E-mail      mdraper@oceanpowertech.com
     Attention   Mr. Mark Draper

     OPT INC
     1590 Reed Road
     Pennington,
     New Jersey 08534
     USA
     Phone       6097300400
     Fax         6097300404
     E-mail      gtaylor@oceanpowertech.com
     Attention   Dr. George W. Taylor

14.  ASSIGNMENT.

14.1 The assignment by a Party of all or part of its Participating Interest
     under this Agreement to a third party requires the prior written approval
     of the other Parties.

<PAGE>

14.2 Notwithstanding the provisions of clause 14.1 hereabove, each Party may,
     without the prior written approval of the other Party, assign all or part
     of its Participating Interest under this Agreement to any of its Affiliated
     Companies subject however to first give written notice thereof to the other
     Parties, and provided the assignee is actually in a position to fulfill all
     assignor's obligations under this Agreement. Otherwise, the assignor's
     guaranty shall be required.

15.  INSTITUTIONAL COMMUNICATION.

     If any Party within the frame of its institutional communication, wishes to
     issue any public announcement or statement regarding this Agreement and/or
     in connection with the Project, it shall not do so without the prior
     written approval of the Steering Committee, except if it is necessary to do
     so in order to comply with applicable laws, decrees, rules or regulations
     of any government legal proceedings, or stock exchange, having jurisdiction
     over such Party.

16.  CONFIDENTIALITY.

16.1 The Parties shall keep confidential all information and data acquired,
     developed or disclosed in the course of implementation of this Agreement
     (hereinafter referred to as the (Confidential Information)) and shall not
     disclose it to third parties or use it for other purposes other than as
     provided herein except to the extent that such information and data:

     (i)  is, at the time of its disclosure, in the public domain; or

     (ii) becomes generally available to third parties by publication or
          otherwise after its disclosure, through no breach of this Agreement;
          or

     (iii) was lawfully in the possession of the receiving Party prior to its
          disclosure, as evidenced by the written records of such Party, and
          which was not acquired directly or indirectly from the other Party; or

     (iv) is disclosed independently by a third party that warrants to a
          good-faith Party that such disclosure does not infringe
          confidentiality obligations; or

     (v)  is subject to any legal or judiciary obligation to disclose.

16.2 Notwithstanding the provisions of clause 16.1, the Parties shall be
     entitled to disclose such Confidential Information (i) to their employees,
     officers and directors and to those of their Affiliates (ii) to any
     professional consultant or bank who requires these information and data for
     the evaluation and implementation of the Project, subject however to the
     prior execution by such consultant or bank of a confidentiality
     undertaking.

16.3 The disclosure of Confidential Information by any Party does not vest the
     other Party with a right of ownership on the said Confidential Information,
     which is and shall remain the property of the Party who disclosed it.

<PAGE>

16.4 The provisions of this clause 16 shall apply for the duration of this
     Agreement, and for a period of [**] years after the termination of this
     Agreement, howsoever caused.

16.5 With respect to the Confidential Information of technical nature disclosed
     by OPT to any of the other Parties to this Agreement, the PARTIES agree to
     sign the Confidential Information, Inventions and Trade Secrets Agreement
     attached to this Agreement as Exhibit 1. To the extent of any conflict
     between the terms of this Agreement and the terms of the Confidential
     Information, Inventions and Trade Secrets Agreement, the terms of the
     Confidential Information, Inventions and Trade Secrets Agreement shall
     prevail.

17.  MISCELLANEOUS.

17.1 No waiver by any Party of any one or more defaults by another Party in the
     performance of this Agreement shall operate or be construed as a waiver of
     any future defaults by the same Party, whether of a like or of a different
     character. Except as expressly provided for in this Agreement, no Party
     shall be deemed to have waived, released or modified any of its rights
     under this Agreement.

17.2 No amendments, changes or modifications to this Agreement shall be valid
     except if they are in writing and approved by the Parties.

17.3 Each of the Parties agrees to comply with, and to procure that each of
     their subcontractors complies with (i) the Total and IBERDROLA HSE Policies
     and (ii) the Total and IBERDROLA Codes of Conduct attached hereto.

This Agreement has been executed in four (4) originals by the duly authorised
representatives of each Party on the day and year first above written.

<PAGE>

FOR TED                                 FOR IBERENOVA

/s/ Gilles Cochevelou                   /s/ Ana Buitrago
-------------------------------------   ----------------------------------------
Signature
Name Gilles Cochevelou
                                        /s/ Miguel Martin
                                        ----------------------------------------
                                        Signature
                                        Name Ana Buitrago
                                             Miguel Martin

FOR OPT                                 FOR OPT, INC

/s/ Mark Draper                         /s/ George W. Taylor
-------------------------------------   ----------------------------------------
Signature                               Signature
Name Mr. Mark Draper                    Name Dr. George W. Taylor

<PAGE>

                                    EXHIBIT 1

             CONFIDENTIAL INFORMATION, INVENTIONS AND TRADE SECRETS
                                    AGREEMENT

     WHEREAS representatives of Ocean Power Technologies, Limited having its
offices in Warwick, UK, or Ocean Power Technologies, Inc, having an office at
Pennington, New Jersey, USA, ("OPT" or, the "Company" hereinafter) are about to
enter into discussions with Total Energie Development SA (hereinafter "TED") a
company existing and organized under French law, having its registered office
located in France, 2, Place de la Coupole, 92078 Paris la Defense Cedex, and
with Iberdrola Energias Renovables II, S.A., Sociedad Unipersonal (hereinafter
"IBERENOVA"), a company existing and organised under the Spanish law, with Tax
Registration Number A-83028035, having its registered office located at [ ],
(TED, and IBERENOVA, hereinafter, the "PARTIES"), concerning the use of certain
electrical power generation technology owned by OPT for the potential
construction and operation of power generation plant(s) based on the sea waves
energy in the coast of France (hereinafter, the "Power Plant"), and

     WHEREAS it is anticipated that the discussions will be mutually beneficial
to signatories hereto, and

     WHEREAS during the course of such discussions it is expected that
representatives of PARTIES will receive or have access to specifications,
designs, plans, drawings, data, prototypes, marketing plans or other technical
or business information belonging to OPT and which OPT considers to be
proprietary (hereinafter "INFORMATION"); the term INFORMATION also shall be
deemed to include all notes, analyses, compilations, studies, interpretations or
other documents prepared by PARTIES which contain, reflect or are based upon the
INFORMATION but expressly excluding those parts of such notes, analyses,
compilations, studies, interpretations or other documents or information
prepared by or on behalf of PARTIES relating to or in connection with the
analysis of waves resources, marine and coastal dynamics, performance
assessment, power output, stability of the system, environmental issues and any
other similar information furnished or obtained by the Parties in the course of
the development of the Power Plant.

     WHEREAS during the course of the discussions PARTIES may develop certain
inventions, improvements or discoveries based on the INFORMATION.

     NOW THEREFORE, in consideration of the mutual benefits to be derived from
the above discussions and other good and valuable consideration, receipt of
which is acknowledged, it is agreed by and between the parties hereto as
follows:

1.   PARTIES shall

     a.   Restrict disclosure of the INFORMATION solely to those of its
          employees (and those of Total SA) and consultants with a need to know
          and not disclose such INFORMATION to third parties; and

<PAGE>

     b.   Advise employees (including those of Total SA) and consultants who
          receive the INFORMATION of the obligation of confidentiality hereunder
          and take steps, which may include the execution of confidentiality
          contracts, in order to mitigate the risk of employees and consultants
          breaching this Confidential Information, Inventions and Trade Secrets
          Agreement (hereinafter "Agreement"), and

     c.   Use and require employees and consultants to use the same degree of
          care to protect the INFORMATION as is used with PARTIES' own
          proprietary INFORMATION, and

     d.   Use INFORMATION solely for the development by OPT of OPT wave power
          projects in France.

2.   Notwithstanding anything to the contrary herein, PARTIES shall have no
     obligation to preserve the confidentiality of any INFORMATION as set forth
     in clause 16.1 of the accompanying Contract for the Develoment and
     Application of a Sea Wave Energy Generation System in France.

3.   PARTIES and OPT agree that any company of the group of companies of each of
     the PARTIES, including any which are directly or indirectly controlled by
     such companies, and any employee and consultant of such companies, will be
     considered as third party for the purposes of the confidentiality
     obligations above-stated. Therefore, disclosure of INFORMATION to the third
     parties before-mentioned will require the approval of OPT. However,
     INFORMATION could be disclosed to Total SA pursuant to this Agreement.

4.   Upon termination of this Agreement, PARTIES will exercise reasonable
     efforts to return all INFORMATION received in tangible form and all copies
     thereof to OPT.

5.   Nothing contained in this Agreement shall be construed as granting or
     conferring any rights by license or otherwise in any INFORMATION disclosed
     or limiting the rights and obligations of the parties under the Contract.

6.   For the avoidance of doubt, nothing in this Agreement shall entitle any of
     the PARTIES or third parties to make or use, or have made or have used by
     any third parties, any invention derived from INFORMATION.

7.   Nothing in this Agreement shall prevent the PARTIES and/or third parties
     from using in any way they see fit, their general knowledge, skills and
     experience and any tools, skills and techniques acquired or used by them
     (together "PARTIES' GENERAL KNOWLEDGE") in the performance of this
     Agreement. Such PARTIES' GENERAL KNOWLEDGE shall not include INFORMATION or
     any tools, skills and techniques derived from INFORMATION.

8.   This Agreement shall be governed and construed in accordance with French
     Law. Any disputes between OPT and the Parties in connection with this
     Agreement and, in particular, concerning its interpretation, validity,
     compliance and termination (including the validity and compliance with this
     Clause) shall be submitted to arbitration of law, that shall be settled by
     three arbitrators pursuant to the Arbitration Regulations of the

<PAGE>

     International Chamber of Commerce. The arbitration proceedings will be held
     in Paris, in English. The nominating authority will be the Chairman of the
     ICC. The Parties agree to comply the arbitration award as soon as it is
     issued.

9.   In the event of a breach of this Agreement by PARTIES, PARTIES understands
     and agrees that OPT may suffer irreparable harm and will therefore be
     entitled to injunctive relief to enforce this Agreement.

10   This Agreement shall become effective on the date of execution and shall be
     in force for a period of five years from the date of execution.

/s/ Gilles Cochevelou
-------------------------------------
TOTAL ENERGIE DEVELOPMENT

/s/ Ana Isabel Buitrago Montoro
-------------------------------------

/s/ Miguel Martin Saez
-------------------------------------
IBERENOVA
Represented by
Mrs. Ana Isabel Buitrago Montoro and
Mr. Miguel Martin Saez

/s/ Mark Draper
-------------------------------------
Ocean Power Technologies Limited
Represented by Mark Draper

/s/ George W. Taylor
-------------------------------------
Ocean Power Technologies, Inc.
Represented by Dr. George W. Taylor<PAGE>

                                                                   Exhibit 10.20

LOCKHEED MARTIN                                    Post-Proposal Letter Contract

Subcontractor: Ocean Power Technologies (OPT)                      Date: 9/17/04
               1590 Reed Rd.
               Pennington, NJ 08534             Prime or Customer Contract
                                                No.: N00039-04-C-0035

Subject: LOCKHEED MARTIN CORPORATION- Maritime Systems & Sensors (MS2)

Letter Contract No. DM259735:

Reference:   a)   MS2 Request for Proposal (RFP)No. 29-RA-042904 dated April 8,
                  2004 and All Amendments

             b)   OPT Proposal dated April 29, 2004 (with pricing
                  update/correction provided 30-Apr-04 and 05-May-04) and
                  Revision dated August 4, 2004

1.   Authorization is hereby given to proceed with the Work against the subject
     contract, as follows:

     Tactical Interface System Buoy in Support of the Advanced Deployable System
     (ADS) Technology Development (TD) CLIN's 0001 and 0002 ("The Program").

2.   Delivery schedules shall be as follows: Period of Performance 9/14/04 -
     10/31/05

3.   Fact-finding of your proposal submitted in response to Lockheed Martin's
     Request for Proposal No. 29-RA-042904 is anticipated to begin on 9/22/04.
     Negotiations are anticipated to begin on 9/23/04. The target definitization
     date for the contract is 9/24/04, or before expenditure of 50% of the
     total estimated cost.

4.   The total Not-to-Exceed (NTE) price of this contract is: $1,511,686.00.

5.   This contract is incrementally funded. Lockheed Martin's limitation of
     obligation to pay under this authorization is $705,060.00. The funds are
     expected to be adequate for performance of the Work until 2/16/05.

6.   Payment Terms are: Net 30 Days.

7.   Lockheed Martin anticipates executing a cost plus fixed fee (CPFF) type
     contract. Contractual provisions applicable to this authorization are
     incorporated by reference, as follows:

     A.   General Provisions:

          i.   Lockheed Martin CORPDOC No.4, dated 10/03, pages 1 through 11,
               including Addendum No. 4A, dated 10/03, pages 1 through 3. Final
               terms and conditions to be mutually agreed to prior to contract
               definitization.

          ii.  Terminations. If this authorization is terminated for any reason
               before executing the definitive contract, the termination will be
               accomplished according lo the 'Termination' clause of the CORPDOC
               incorporated above. A definitive contract will be issued for the
               work accomplished up to the point of termination.

     B.   Special Provisions:

          i.   Quality Assurance clauses: Per MS2 RFP #29-RA-042904 - and as
               included in definitized contract.

          ii.  Government Prime Contract Flowdowns: Per MS2 RFP #29-RA-042904 -
               to be further refined prior to contract definitization.

     C.   Statement of Work No. Attachment G to RFP #29-RA-042904, entitled
          Advanced Deployable System (ADS) System Development and Demonstration
          (SDD) Phase, dated 07 June 2004, pages 1 through 26.

     D.   System Performance Specification No. Rev 8.4, and Interface
          Requirements Document Rev 3.2b.

8.   The CONTRACTOR is claiming the following Rights in Technical Data: The
     existing wave tank system design which will be used as the baseline for the
     Program was originally developed under an Small Business Innovation
     Research (SBIR) Phase II contract currently underway at OPT, Topic Number
     N00-116, entitled Modular l00kW Wave Powered Electric Generator (SBIR Phase
     I Contract Number N00014-01-M-0041 and Phase II Contract
     NumberN00014-02-C-0034).

S 860 (03/04)                                              TAB - LETTER CONTRACT

                                   PAGE 1 OF 2

<PAGE>

LOCKHEED MARTIN                                    Post-Proposal Letter Contract

          The proposed Program extends the work performed under these contracts,
     and as such is accorded all rights of an SBIR Phase III funding agreement.
     The rights are subject to Patent Rights, Rights in Data, and Rights in
     Technical Data provisions of FAR 52.227-11, 52.227-20 and DFARS
     252.227-7018.

9.   This contract is subject to the Cost Accounting Standards (CAS), as
     provided in Attachment A of MS2 RFP #29-RA-042904.

10.  This is a rated contract certified for National Defense. The Contractor is
     required to follow all provisions of the Defense Priorities and Allocations
     System (DPAS) regulations (15 CFR 700). The rating on this order is DO-A7.

11.  This authorization is subject to your prompt acceptance. Please return a
     signed copy by FAX no later than cob, Monday, September 20, 2004,
     confirming your acceptance of the contents herein and acknowledging that
     the effort authorized has been initiated.

Contractor: OCEAN POWER TECHNOLOGIES    LOCKHEED MARTIN CORPORATION

By: /s/ Charles F. Dunleavy             By: /s/ Brenda Aanderud
    ---------------------------------       ------------------------------------
Title: C.F.O.                           Title: Staff Subcontract Administrator
Date: 22 September 2004                 Date: 9/17/04

S 860 (03/04)                                              TAB - LETTER CONTRACT

                                   PAGE 2 OF 2
<PAGE>

Section A - PO #DM259735
LOCKHEED MARTIN CORPORATION

CORPDOC 4

                                                                 LOCKHEED MARTIN

      COST REIMBURSEMENT GENERAL PROVISIONS AND FAR FLOWDOWN PROVISIONS FOR
         SUBCONTRACTS/PURCHASE ORDERS (ALL AGENCIES) FOR NON-COMMERCIAL
                               ITEMS UNDER A U.S.
                            GOVERNMENT PRIME CONTRACT

SECTION I: GENERAL PROVISIONS
1    Acceptance of Contract/Terms and Conditions
2    Allowable Cost and Payment
3    Applicable Laws
4    Assignment
5    Communication With Lockheed Martin Customer
6    Contract Direction
7    Definitions
8    Disputes
9    Electronic Contracting
10   Export Control
11   Extras
12   Fee
13   Furnished Property
14   Gratuities/Kickbacks
15   Independent Contractor Relationship
16   Information of Lockheed Martin
17   Information of Seller
18   Insurance/Entry on Lockheed Martin Property
19   Intellectual Property
20   Offset Credit/Cooperation
21   Packing and Shipment
22   Parts Obsolescence
23   Payments, Taxes, and Duties
24   Precedence
25   Priority Rating
26   Quality Control System
27   Release of Information
28   Severability
29   Survivability
30   Timely Performance
31   Waivers, Approvals, and Remedies

SECTION II: FAR FLOWDOWN PROVIIONS
A    Incorporation of FAR Clauses
B    Government Subcontract
C    Notes
D    Amendments Required by Prime Contract
E    Preservation of the Government's Rights
F    FAR Flowdown Clauses
G    Certification and Representations

SECTION I: GENERAL PROVISIONS

1.   ACCEPTANCE OF CONTRACT/TERMS AND CONDITIONS

     (a)  This Contract integrates, merges, and supersedes any prior offers,
          negotiations, and agreements concerning the subject matter hereof and,
          together with Exhibits, Attachments, and any Task Order(s) issued
          hereunder, constitutes the entire agreement between the parties.

     (b)  SELLER's acknowledgment, acceptance of payment, or commencement of
          performance, shall constitute SELLER's unqualified acceptance of this
          Contract.

     (c)  ADDITIONAL OR DIFFERING TERMS OR CONDITIONS PROPOSED BY SELLER OR
          INCLUDED IN SELLER'S ACKNOWLEDGMENT ARE OBJECTED TO BY LOCKHEED MARTIN
          AND HAVE NO EFFECT UNLESS EXPRESSLY ACCEPTED IN WRITING BY LOCKHEED
          MARTIN.

2.   ALLOWABLE COST AND PAYMENT.

     (a) INVOICING. LOCKHEED MARTIN shall make payments to SELLER when requested
     as work progresses, but (except for Small Business Concerns) not more often
     than once every 2 weeks, in amounts determined to be allowable by LOCKHEED
     MARTIN in accordance with the terms of this Contract and Subpart 31.2 of
     the FAR, and agency supplements as appropriate, in effect on the date of
     this Contract. If the Contract is with an educational institution, FAR
     Subpart 31.3 shall apply; and if with a non-profit organization other than
     an educational institution, FAR Subpart 31.7 shall apply. SELLER may submit
     to the LOCKHEED MARTIN Procurement Representative, in such form and
     reasonable detail as the Representative may require, an invoice or voucher
     supported by a statement of the claimed allowable cost for performing this
     Contract.

     (b)  REIMBURSING COSTS.

          (1)  For the purpose of reimbursing allowable costs (except as
               provided in paragraph (b)(2) of the clause, with respect to
               pension, deferred profit sharing, and employee stock ownership
               plan contributions), the term "costs" includes only:

               (i)  Those recorded costs that, at the time of the request for
                    reimbursement, SELLER has paid by cash, check, or other form
                    of actual payment for items or services purchased directly
                    for this Contract;

                                       1

<PAGE>

               (ii) When SELLER is not delinquent in paying costs of contract
                    performance in the ordinary course of business, costs
                    incurred, but not necessarily paid, for--

                    (A)  Work purchased directly for the Contract and associated
                         financing payments to subcontractors, provided payments
                         determined due will be made--

                         (1)  In accordance with the terms and conditions of a
                              subcontract or invoice; and

                         (2)  Ordinarily within 30 days of prior to the
                              submission of SELLER's payment request to the
                              Government;

                    (B)  Materials issued from SELLER's inventory and placed in
                         the production process for use on this Contract;

                    (C)  Direct labor;

                    (D)  Direct travel;

                    (E)  Other direct in-house costs; and

                    (F)  Properly allocable and allowable indirect costs, as
                         shown in the records maintained by SELLER for purposes
                         of obtaining reimbursement under Government contracts;
                         and

               (iii) The amount of financing payments that have been paid by
                    cash, check, or other forms of payment to SELLER's
                    subcontractors.

          (2)  Accrued costs of SELLER contributions under employee pension
               plans shall be excluded until actually paid unless:

               (i)  SELLER's practice is to make contributions to the retirement
                    fund quarterly or more frequently; and

               (ii) The contribution does not remain unpaid 30 days after the
                    end of the applicable quarter or shorter payment period (any
                    contribution remaining unpaid shall be excluded from
                    SELLER's indirect costs for payment purposes).

          (3)  Notwithstanding the audit and adjustment of invoices or vouchers
               under paragraph (g) of this clause, allowable indirect costs
               under this contract shall be obtained by applying indirect cost
               rates established in accordance with paragraph (d) of this
               clause.

          (4)  Any statements in specifications or other documents incorporated
               in this Contract by reference designating performance of services
               or furnishing of materials at SELLER's expense or at no cost to
               LOCKHEED MARTIN shall be disregarded for purposes of
               cost-reimbursement under this clause.

     (c)  SMALL BUSINESS CONCERNS. A small business concern may receive more
          frequent payments than every 2 weeks.

     (d)  FINAL INDIRECT COST RATES. LOCKHEED MARTIN shall reimburse SELLER on
          the basis of final annual indirect cost rates and the appropriate
          bases established by SELLER and the Government in effect for the
          period covered by the indirect cost rate proposal. Such rates and
          bases shall not change any monetary ceiling, contract obligation, or
          specific cost allowance or disallowance provided for in this Contract.
          The rates and bases shall be deemed incorporated into this Contract
          upon execution.

     (e)  BILLING RATES. There shall be included as allowable indirect costs
          such overhead rates as may be established by SELLER and the cognizant
          Government agency in accordance with the principles of the FAR and
          applicable FAR supplement. Pending establishment of final indirect
          overhead rates for any period, SELLER shall be reimbursed at billing
          rates approved by the cognizant Government agency, which billing rates
          may be revised from time to time subject to such approval and subject
          to appropriate adjustment when the final rates for that period are
          established.

     (f)  QUICK-CLOSEOUT PROCEDURES. When SELLER and LOCKHEED MARTIN agree,
          quick-closeout procedures of Subpart 42.7 of the FAR may be used.

     (g)  AUDIT. At any time or times before final payment, LOCKHEED MARTIN or
          the Contracting Officer may have SELLER's invoices or vouchers and
          statements of cost audited. Any payment may be (1) reduced by amounts
          found not to constitute allowable costs or (2) adjusted for prior
          overpayments or underpayments.

                                       2

<PAGE>

     (h)  FINAL PAYMENT.

          (1)  SELLER shall submit a completion invoice or voucher, designated
               as such, promptly upon completion of the Work, but no later than
               one year (or longer, as LOCKHEED MARTIN may approve in writing)
               from the completion date. Upon approval of that completion
               invoice or voucher and upon SELLER's compliance with all terms of
               this Contract, LOCKHEED MARTIN shall promptly pay any balance of
               allowable costs and that part of the fee (if any) not previously
               paid.

          (2)  SELLER shall pay to LOCKHEED MARTIN any refunds, rebates,
               credits, or other amounts (including interest, if any) accruing
               to or received by SELLER or any assignee under this Contract to
               the extent that those amounts are properly allocable to costs for
               which SELLER has been reimbursed by LOCKHEED MARTIN. Reasonable
               expenses incurred by SELLER for securing refunds, rebates,
               credits, or other amounts shall be allowable costs if approved by
               LOCKHEED MARTIN: Before final payment under this contract, SELLER
               and each assignee whose assignment is in effect at the time of
               final payment shall execute and deliver:

               (i)  An assignment to LOCKHEED MARTIN, in form and substance
                    satisfactory to LOCKHEED MARTIN, of refunds, rebates,
                    credits, or other amounts (including interest, if any)
                    properly allocable to costs for which SELLER has been
                    reimbursed by LOCKHEED MARTIN under this Contract; and

               (ii) A release discharging LOCKHEED MARTIN, the Government, its
                    officers, agents, and employees from all liabilities,
                    obligations, and claims arising out of or under this
                    Contract, except:

                    (A)  Specified claims stated in exact amounts, or in
                         estimated amounts when the exact amounts are not known;

                    (B)  Claims (including reasonable incidental expenses) based
                         upon liabilities of SELLER to third parties arising out
                         of the performance of this Contract; provided, that the
                         claims are not known to SELLER on the date of the
                         execution of the release, and that SELLER gives notice
                         of the claims in writing to LOCKHEED MARTIN within 6
                         years following the release date or notice of final
                         payment date, whichever is earlier; and

                    (C)  Claims for reimbursement of costs, including reasonable
                         incidental expenses, incurred by SELLER under the
                         patent clauses of this Contract, excluding, however,
                         any expenses arising from SELLER's indemnification of
                         LOCKHEED MARTIN and the Government against patent
                         liability.

     (i)  SUBCONTRACTS. No subcontract placed under this Contract shall provide
          for payment on a cost-plus-a-percentage-of-cost basis, and any fee
          payable under cost-reimbursements type subcontracts shall not exceed
          the fee limitations in paragraph 15.404-4(c) of the FAR.

3.   APPLICABLE LAWS

     (a)  This Contract shall be governed by and construed in accordance with
          the laws of the State from which this Contract is issued, excluding
          its choice of law rules, except that any provision in this Contract
          that is (i) incorporated in full text or by reference from the Federal
          Acquisition Regulations (FAR) or (ii) incorporated in full text or by
          reference from any agency regulation that implements or supplements
          the FAR or (iii) that is substantially based on any such agency
          regulation or FAR provision, shall be construed and interpreted
          according to the federal common law of Government contracts as
          enunciated and applied by federal judicial bodies, boards of contracts
          appeals, and quasi-judicial agencies of the federal Government.

     (b)  (1)  SELLER agrees to comply with all applicable laws, orders,
               rules, regulations, and ordinances. SELLER shall procure all
               licenses/permits and pay all fees and other required charges.
               SELLER shall comply with all applicable guidelines and directives
               of any local, state, and/or federal governmental authority.

          (2)  If: (i) LOCKHEED MARTIN's contract cost or fee is reduced; (ii)
               LOCKHEED MARTIN's costs are determined to be unallowable; (iii)
               any fines, penalties, or interest are assessed on LOCKHEED
               MARTIN; or (iv) LOCKHEED MARTIN incurs any other costs or
               damages; as a result of any violation of applicable laws, orders,
               rules, regulations, or ordinances by SELLER, its officers,
               employees, agents, suppliers, or subcontractors at any tier,
               LOCKHEED MARTIN may proceed as provided for in (4) below.

          (3)  Where submission of cost or pricing data is required or requested
               at any time prior to or during performance of this Contract, if
               SELLER or its lower-tier subcontractors: (i) submit and/or
               certify cost or pricing data that are defective; (ii) with notice
               of applicable cutoff dates and upon LOCKHEED MARTIN's request to
               provide cost or pricing data, submit cost or pricing data,
               whether certified or not certified at the time of submission, as
               a prospective subcontractor, and any such data are defective as
               of the applicable cutoff date on LOCKHEED MARTIN's Certificate of
               Current Cost or Pricing Data; (iii) claim an exception to a
               requirement to submit cost or pricing data and such exception is
               invalid; (iv) furnish data of any description that is inaccurate;
               or if (v) the U.S. Government alleges any of the foregoing; and,
               as a result, (1) LOCKHEED MARTIN's Contract price or fee is
               reduced; (2) LOCKHEED MARTIN's costs are determined to be
               unallowable; (3) any fines, penalties, or interest are assessed
               on

                                       3

<PAGE>

               LOCKHEED MARTIN; or (4) LOCKHEED MARTIN incurs any other costs or
               damages; LOCKHEED MARTIN may proceed as provided for in paragraph
               (4) below.

          (4)  UPON THE OCCURRENCE OF ANY OF THE CIRCUMSTANCES IDENTIFIED IN
               PARAGRAPHS (2) AND (3) ABOVE, LOCKHEED MARTIN MAY MAKE A
               REDUCTION OF CORRESPONDING AMOUNTS (IN WHOLE OR IN PART) IN THE
               COSTS AND FEE OF THIS CONTRACT OR ANY OTHER CONTRACT WITH SELLER,
               AND/OR MAY DEMAND PAYMENT (IN WHOLE OR IN PART) OF THE
               CORRESPONDING AMOUNTS. SELLER SHALL PROMPTLY PAY AMOUNTS SO
               DEMANDED.

     (c)  SELLER represents that each chemical substance constituting or
          contained in Work sold or otherwise transferred to LOCKHEED MARTIN
          hereunder is on the list of chemical substances compiled and published
          by the Administrator of the Environmental Protection Administration
          pursuant to the Toxic Substances Control Act (15 U.S.C. Sec. 2601 et
          seq.) as amended.

     (d)  SELLER shall provide to LOCKHEED MARTIN with each delivery any
          Material Safety Data Sheet applicable to the Work in conformance with
          and containing such information as required by the Occupational Safety
          and Health Act of 1970 and regulations promulgated thereunder, or its
          state approved counterpart.

4.   ASSIGNMENT

     Any assignment of SELLER's Contract rights or delegation of SELLER's duties
     shall be void, unless prior written consent is given by LOCKHEED MARTIN.
     SELLER may assign rights to be paid amounts due, or to become due, to a
     financing institution if LOCKHEED MARTIN is promptly furnished a signed
     copy of such assignment reasonably in advance of the due date for payment
     of any such amounts. Amounts assigned shall be subject to setoff or
     recoupment for any present or future claims of LOCKHEED MARTIN against
     SELLER. LOCKHEED MARTIN shall have the right to make settlements and/or
     adjustments in the estimated cost and fee without notice to any assignee.

5.   COMMUNICATION WITH LOCKHEED MARTIN CUSTOMER

     LOCKHEED MARTIN shall be solely responsible for all liaison and
     coordination with the LOCKHEED MARTIN customer, including the U.S.
     Government, as it affects the applicable prime contract, this Contract, and
     any related contract

6.   CONTRACT DIRECTION

     (a)  Only the LOCKHEED MARTIN Procurement Representative has authority to
          make changes in or amendments to this Contract. Changes and amendments
          must be in writing.

     (b)  LOCKHEED MARTIN engineering and technical personnel may from time to
          time render assistance or give technical advice or discuss or effect
          an exchange of information with SELLER's personnel concerning the Work
          hereunder. No such action shall be deemed to be a change under the
          "Changes" clause of this Contract and shall not be the basis for
          equitable adjustment.

     (c)  Except as otherwise provided herein, all notices to be furnished by
          the SELLER shall be sent to the LOCKHEED MARTIN Procurement
          Representative.

7.   DEFINITIONS

     The following terms shall have the meanings set forth below:

     (a)  "Contract" means the instrument of contracting, such as "PO",
          "Purchase Order", or "Task Order", or other such type designation,
          including all referenced documents, exhibits and attachments. If these
          terms and conditions are incorporated into a "master" agreement that
          provides for releases, (in the form of a purchase order or other such
          document) the term "Contract" shall also mean the release document for
          the Work to be performed.

     (b)  "FAR" means the Federal Acquisition Regulation, issued as Chapter 1 of
          Title 48, Code of Federal Regulations.

     (c)  "LOCKHEED MARTIN", means LOCKHEED MARTIN CORPORATION, acting through
          its companies or business units as identified on the face of this
          Contract. If a subsidiary or affiliate of LOCKHEED MARTIN CORPORATION
          is identified on the face of this Contract, then "LOCKHEED MARTIN"
          means that subsidiary or affiliate.

     (d)  "LOCKHEED MARTIN Procurement Representative" means a person authorized
          by LOCKHEED MARTIN's cognizant procurement organization to administer
          and/or execute this Contract.

     (e)  "PO" or "Purchase Order" means this Contract.

     (f)  "SELLER" means the party identified on the face of this Contract with
          whom LOCKHEED MARTIN is contracting.

     (g)  "Task Order" means a separate order issued under this Contract.

                                       4

<PAGE>

     (h)  "Work" means all required labor, articles, materials, supplies, goods
          and services constituting the subject matter of this Contract.

8.   DISPUTES

     All disputes under this Contract which are not disposed of by mutual
     agreement may be decided by recourse to an action at law or in equity.
     Until final resolution of any dispute hereunder, SELLER shall diligently
     proceed with the performance of this Contract as directed by LOCKHEED
     MARTIN.

9.   ELECTRONIC CONTRACTING

     The parties agree that if this Contract is transmitted electronically
     neither party shall contest the validity of this Contract, or any
     Acknowledgement thereof, on the basis that this Contract or Acknowledgement
     contains an electronic signature.

10.  EXPORT CONTROL

     (a)  SELLER agrees to comply with all applicable U.S. export control laws
          and regulations, specifically including, but not limited to, the
          requirements of the Arms Export Control Act, 22 U.S.C.2751-2794,
          including the International Traffic in Arms Regulation (ITAR), 22
          C.F.R. 120 et seq.; and the Export Administration Act, 50 U.S.C. app.
          2401-2420, including the Export Administration Regulations, 15 C.F.R.
          730-774; including the requirement for obtaining any export license or
          agreement, if applicable. Without limiting the foregoing, SELLER
          agrees that it will not transfer any export controlled item, data, or
          services, to include transfer to foreign persons employed by or
          associated with, or under contract to SELLER or SELLER's lower-tier
          suppliers, without the authority of an export license, agreement, or
          applicable exemption or exception.

     (b)  SELLER agrees to notify LOCKHEED MARTIN if any deliverable under this
          Contract is restricted by export control laws or regulations.

     (c)  SELLER shall immediately notify the LOCKHEED MARTIN Procurement
          Representative if SELLER is, or becomes, listed in any Denied Parties
          List or if SELLER's export privileges are otherwise denied, suspended
          or revoked in whole or in part by any U.S. Government entity or
          agency.

     (d)  If SELLER is engaged in the business of either exporting or
          manufacturing (whether exporting or not) defense articles or
          furnishing defense services, SELLER represents that it is registered
          with the Office of Defense Trade Controls, as required by the ITAR,
          and it maintains an effective export/import compliance program in
          accordance with the ITAR. NOTE: IT IS UNDERSTOOD THAT THIS PARAGRAPH
          DOES NOTE APPLY UNTIL SUCH TIME AS THE TWO PARTIES AFFIRMLY AGREE THAT
          THE PARAGRAPH WILL APPLY.

     (e)  Where SELLER is a signatory under a LOCKHEED MARTIN export license or
          export agreement (e.g., TAA, MLA), SELLER shall provide prompt
          notification to the LOCKHEED MARTIN Procurement Representative in the
          event of changed circumstances including, but not limited to,
          ineligibility, a violation or potential violation of the ITAR, and the
          initiation or existence of a U.S. Government investigation, that could
          affect the Seller's performance under this Contract.

     (f)  SELLER SHALL BE RESPONSIBLE FOR ALL LOSSES, COSTS, CLAIMS, CAUSES OF
          ACTION, DAMAGES, LIABILITIES AND EXPENSE, INCLUDING ATTORNEYS' FEES,
          ALL EXPENSE OF LITIGATION AND/OR SETTLEMENT, AND COURT COSTS, ARISING
          FROM ANY ACT OR OMISSION OF SELLER, ITS OFFICERS, EMPLOYEES, AGENTS,
          SUPPLIERS, OR SUBCONTRACTORS AT ANY TIER, IN THE PERFORMANCE OF ANY OF
          ITS OBLIGATIONS UNDER THIS CLAUSE.

11.  EXTRAS

     Work shall not be supplied in excess of quantities specified in this
     Contract. SELLER shall be liable for handling charges and return shipment
     costs for any excess quantities.

12.  FEE (Applicable only if this Contract includes a fee.)

     LOCKHEED MARTIN shall pay the SELLER for performing this Contract the fee
     as specified in this Contract.

13.  FURNISHED PROPERTY

     (a)  LOCKHEED MARTIN may provide to SELLER property owned by either
          LOCKHEED MARTIN or its customer (Furnished Property). Furnished
          Properly shall be used only for the performance of this Contract.

     (b)  Title to Furnished Property shall remain in LOCKHEED MARTIN or its
          customer. SELLER shall clearly mark (if not so marked) all Furnished
          Property to show its ownership.

     (c)  Except for reasonable wear and tear, SELLER shall be responsible for,
          and shall promptly notify LOCKHEED MARTIN of, any loss or damage.
          SELLER shall manage, maintain, and preserve Furnished Property in
          accordance with good commercial practice.

     (d)  At LOCKHEED MARTIN's request, and/or upon completion of this Contract,
          the SELLER shall submit, in an acceptable form, inventory lists of
          Furnished Property and shall deliver or make such other disposal as
          may be directed by LOCKHEED MARTIN.

                                       5

<PAGE>

     (e)  The Government Property Clause contained in Section II shall apply in
          lieu of paragraphs (a) through (d) above with respect to
          Government-furnished property, or property to which the Government may
          take title under this Contract.

14.  GRATUITIES/KICKBACKS

     (a)  No gratuities (in the form of entertainment, gifts or otherwise) or
          kickbacks shall be offered or given by SELLER, to any employee of
          LOCKHEED MARTIN for the purpose of obtaining or rewarding favorable
          treatment as a supplier.

     (b)  BY ACCEPTING THIS CONTRACT, SELLER CERTIFIES AND REPRESENTS THAT IT
          HAS NOT MADE OR SOLICITED AND WILL NOT MAKE OR SOLICIT KICKBACKS IN
          VIOLATION OF FAR 52.203-7 OR THE ANTI-KICKBACK ACT OF 1986 (41 USC
          51-58), BOTH OF WHICH ARE INCORPORATED HEREIN BY THIS SPECIFIC
          REFERENCE, EXCEPT THAT PARAGRAPH (C)(1) OF FAR 52.203-7 SHALL NOT
          APPLY.

15.  INDEPENDENT CONTRACTOR RELATIONSHIP

     (a)  SELLER is an independent contractor in all its operations and
          activities hereunder. The employees used by SELLER to perform Work
          under this Contract shall be SELLER's employees exclusively without
          any relation whatsoever to LOCKHEED MARTIN.

     (b)  SELLER SHALL BE RESPONSIBLE FOR ALL LOSSES, COSTS, CLAIMS, CAUSES OF
          ACTION, DAMAGES, LIABILITIES, AND EXPENSES, INCLUDING ATTORNEYS' FEES,
          ALL EXPENSES OF LITIGATION AND/OR SETTLEMENT, AND COURT COSTS, ARISING
          FROM ANY ACT OR OMISSION OF SELLER, ITS OFFICERS, EMPLOYEES, AGENTS,
          SUPPLIERS, OR SUBCONTRACTORS AT ANY TIER, IN THE PERFORMANCE OF ANY OF
          ITS OBLIGATIONS UNDER THIS CONTRACT. THIS INDEMNITY AND HOLD HARMLESS
          SHALL NOT BE CONSIDERED AN ALLOWABLE COST UNDER ANY PROVISIONS OF THIS
          CONTRACT EXCEPT WITH REGARD TO ALLOWABLE INSURANCE COSTS.

16.  INFORMATION OF LOCKHEED MARTIN

     Information provided by LOCKHEED MARTIN to SELLER remains the property of
     LOCKHEED MARTIN. SELLER agrees to comply with the terms of any proprietary
     information agreement with LOCKHEED MARTIN and to comply with all
     proprietary information markings and restrictive legends applied by
     LOCKHEED MARTIN to anything provided hereunder to SELLER. SELLER agrees not
     to use any LOCKHEED MARTIN provided information for any purpose except to
     perform this Contract and agrees not to disclose such information to third
     parties without the prior written consent of LOCKHEED MARTIN.

17.  INFORMATION OF SELLER

     SELLER shall not provide any proprietary information to LOCKHEED MARTIN
     without prior execution of a proprietary information agreement by the
     parties.

18.  INSURANCE/ENTRY ON LOCKHEED MARTIN PROPERTY

     (a)  In the event that SELLER, its employees, agents, or subcontractors
          enter the site(s) of LOCKHEED MARTIN or its customers for any reason
          in connection with this Contract then SELLER and its subcontractors
          shall procure and maintain for the performance of this Contract
          worker's compensation, comprehensive general liability, bodily injury
          and property damage insurance in reasonable amounts, and such other
          insurance as LOCKHEED MARTIN may require. In addition, SELLER and its
          subcontractors shall comply with all site requirements. SELLER shall
          provide LOCKHEED MARTIN thirty (30) days advance written notice prior
          to the effective date of any cancellation or change in the term or
          coverage of any of SELLER's required insurance, provided however such
          notice shall not relieve SELLER of its obligations to procure and
          maintain the required insurance. If requested, SELLER shall send a
          "Certificate of Insurance" showing SELLER's compliance with these
          requirements, provided however such notice shall not relieve SELLER's
          of its obligations to procure and maintain the required insurance.
          SELLER shall name LOCKHEED MARTIN as an additional insured for the
          duration of this Contract. Insurance maintained pursuant to this
          clause shall be considered primary as respects the interest of
          LOCKHEED MARTIN and is not contributory with any insurance which
          LOCKHEED MARTIN may carry. "Subcontractor" as used in this clause
          shall include SELLER's subcontractors at any tier. SELLER's
          obligations for procuring and maintaining insurance coverages are
          freestanding and are not affected by any other language in this
          Contract.

     (b)  SELLER SHALL INDEMNIFY AND BOLD HARMLESS LOCKHEED MARTIN, ITS
          OFFICERS, EMPLOYEES, AND AGENTS FROM ANY LOSSES, COSTS, CLAIMS, CAUSES
          OF ACTION, DAMAGES, LIABILITIES, AND EXPENSES, INCLUDING ATTORNEYS'
          FEES, ALL EXPENSES OF LITIGATION AND/OR SETTLEMENT, AND COURT COSTS,
          BY REASON OF PROPERTY DAMAGE OR LOSS OR PERSONAL INJURY TO ANY PERSON
          CAUSED IN WHOLE OR IN PART BY THE ACTIONS OR OMISSIONS OF SELLER, ITS
          OFFICERS, EMPLOYEES, AGENTS, SUPPLIERS, OR SUBCONTRACTORS.

19.  INTELLECTUAL PROPERTY

     (a)  SELLER WARRANTS THAT THE WORK PERFORMED OR DELIVERED UNDER THIS
          CONTRACT WILL NOT INFRINGE OR OTHERWISE VIOLATE THE INTELLECTUAL
          PROPERTY RIGHTS OF ANY THIRD PARTY IN THE UNITED STATES OR ANY FOREIGN
          COUNTRY. SELLER AGREES TO DEFEND, INDEMNIFY, AND HOLD HARMLESS
          LOCKHEED MARTIN AND ITS CUSTOMERS FROM AND AGAINST ANY CLAIMS,
          DAMAGES, LOSSES, COSTS, AND EXPENSES, INCLUDING REASONABLE ATTORNEYS
          FEES, ARISING OUT OF ANY ACTION BY A THIRD PARTY THAT IS BASED UPON A
          CLAIM THAT THE WORK PERFORMED OR DELIVERED UNDER THIS CONTRACT
          INFRINGES OR OTHERWISE VIOLATES THE INTELLECTUAL PROPERTY RIGHTS OF
          ANY PERSON OR ENTITY. THIS INDEMNITY AND HOLD HARMLESS SHALL NOT BE
          CONSIDERED AN ALLOWABLE COST UNDER ANY PROVISIONS OF THIS CONTRACT
          EXCEPT WITH REGARD TO ALLOWABLE INSURANCE COSTS.

                                       6

<PAGE>

     (b)  Unless LOCKHEED MARTIN's Prime Contract contains 52.227-3, "Patent
          Indemnity", then SELLER's obligation to defend, indemnify, and hold
          harmless LOCKHEED MARTIN and its customers under this Paragraph 17(a)
          shall not apply to the extent FAR 52.227-1 "Authorization and
          Consent", applies to LOCKHEED MARTIN's contract

     (c)  Seller shall provide to LOCKHEED MARTIN only such rights as are
          reasonably necessary to meet and perform the requirements of LOCKHEED
          MARTIN's Prime Contract.

20.  OFFSET CREDIT/COOPERATION

     This Contract has been entered into in direct support of LOCKHEED MARTIN's
     international offset programs. All offset benefit credits resulting from
     this Contract are the sole property of LOCKHEED MARTIN to be applied to the
     offset program of its choice. SELLER agrees to assist LOCKHEED MARTIN in
     securing appropriate offset credits from the respective country government
     authorities.

21.  PACKING AND SHIPMENT

     (a)  Unless otherwise specified, all Work is to be packed in accordance
          with good commercial practice.

     (b)  A complete packing list shall be enclosed with all shipments. SELLER
          shall mark containers or packages with necessary lifting, loading, and
          shipping information, including the LOCKHEED MARTIN Contract number,
          item number, dates of shipment, and the names and addresses of
          consignor and consignee. Bills of lading shall include this Contract
          number.

     (c)  Unless otherwise specified, delivery shall be FOB Place of Shipment.

22.  PARTS OBSOLESCENCE

     LOCKHEED MARTIN may desire to place additional orders for Work purchased
     hereunder. SELLER shall provide LOCKHEED MARTIN with a "Last Time Buy
     Notice" at least twelve (12) months prior to any action to discontinue any
     Work purchased under this Contract.

23.  PAYMENTS, TAXES, AND DUTIES

     (a)  Unless otherwise provided, terms of payment shall be net 30 days from
          the latest of the following: (i) LOCKHEED MARTIN's receipt of the
          SELLER's proper invoice; (ii) Scheduled delivery date of the Work; or
          (iii) Actual delivery of the Work. LOCKHEED MARTIN shall have a right
          of setoff against payments due or at issue under this Contract or any
          other contract between the parties.

     (b)  Each payment made shall be subject to reduction to the extent of
          amounts which are found by LOCKHEED MARTIN not to have been properly
          payable, and shall also be subject to reduction for overpayments.

     (c)  Payment shall be deemed to have been made as of the date of mailing
          LOCKHEED MARTIN's payment or electronic funds transfer.

     (d)  Unless otherwise specified, estimated costs include all applicable
          federal, state, and local taxes, duties, tariffs, and similar fees
          imposed by any government, all of which shall be listed separately on
          the invoice.

24.  PRECEDENCE

     Any inconsistencies in this Contract shall be resolved in accordance with
     the following descending order of precedence: (i) Face of the Purchase
     Order and/or Task Order, release document or schedule, (including any
     continuation sheets), as applicable, including any special provisions; (ii)
     This CORPDOC ; (iii) Statement of Work.

25.  PRIORITY RATING

     If so identified, this Contract is a "rated order" certified for national
     defense use, and the SELLER shall follow all the requirements of the
     Defense Priorities and Allocation System Regulation (15 CFR Part 700).

26.  QUALITY CONTROL SYSTEM

     (a)  SELLER shall provide and maintain a quality control system to an
          industry recognized Quality Standard and in compliance with any other
          specific quality requirements identified in this Contract. NOTE: IT IS
          UNDERSTOOD THAT THIS PARAGRAPH DOES NOTE APPLY UNTIL SUCH TIME AS THE
          TWO PARTIES AFFIRMLY AGREE THAT THE PARAGRAPH WILL APPLY.

     (b)  Records of all quality control inspection work by SELLER shall be kept
          complete and available to LOCKHEED MARTIN and its customers.

27.  RELEASE OF INFORMATION

     Except as required by law, no public release of any information, or
     confirmation or denial of same, with respect to this Contract or the
     subject matter hereof, will be made by SELLER without the prior written
     approval of LOCKHEED MARTIN.

                                       7

<PAGE>

28.  SEVERABILITY

     Each paragraph and provision of this Contract is severable, and if one or
     more paragraphs or provisions are declared invalid, the remaining
     paragraphs and provisions of this Contract will remain in full force and
     effect.

29.  SURVIVABILITY

     (a)  If this Contract expires, is completed or terminated, SELLER shall not
          be relieved of those obligations contained in the following
          provisions:

          Allowable Cost and Payment
          Applicable Laws
          Electronic Contracting
          Export Control
          Independent Contractor Relationship
          Information of Lockheed Martin
          Insurance/Entry on Lockheed Martin Property
          Intellectual Property
          Release of Information

     (b)  Those U. S. Government flowdown provisions that by their nature should
          survive.

30.  TIMELY PERFORMANCE

     (a)  SELLER's timely performance is a critical element of this Contract.

     (b)  Unless advance shipment has been authorized in writing by LOCKHEED
          MARTIN, LOCKHEED MARTIN may store at SELLER's expense, or return,
          shipping charges collect, all Work received in advance of the
          scheduled delivery date.

     (c)  If SELLER becomes aware of difficulty in performing the Work, SELLER
          shall timely notify LOCKHEED MARTIN, in writing, giving pertinent
          details. This notification shall not change any delivery schedule.

     (d)  In the event of a termination or change, no claim will be allowed for
          any manufacture or procurement in advance of SELLER's normal flow time
          unless there has been prior written consent by LOCKHEED MARTIN.

31.  WAIVERS, APPROVALS, AND REMEDIES

     (a)  Failure by LOCKHEED MARTIN to enforce any provisions of this Contract
          shall not be construed as a waiver of the requirements of such
          provisions, or as a waiver of the right of LOCKHEED MARTIN thereafter
          to enforce each such provision.

     (b)  LOCKHEED MARTIN's approval of documents shall not relieve SELLER of
          its obligation to comply with the requirements of this Contract

     (c)  The rights and remedies of LOCKHEED MARTIN in this Contract are in
          addition to any other rights and remedies provided by law or in
          equity.

                                       8

<PAGE>

SECTION II: FAR FLOWDOWN PROVISIONS

A.   INCORPORATION OF FAR CLAUSES

     The Federal Acquisition Regulation (FAR) clauses referenced below are
     incorporated herein by reference, with the same force and effect as if they
     were given in full text, and are applicable, including any notes following
     the clause citation, to this Contract. If the date or substance of any of
     the clauses listed below is different from the date or substance of the
     clause actually incorporated in the Prime Contract referenced by number
     herein, the date or substance of the clause incorporated by said Prime
     Contract shall apply instead. The Contracts Disputes Act shall have no
     application to this Contract Any reference to a "Disputes" clause shall
     mean the "Disputes" clause of this Contract.

B.   GOVERNMENT SUBCONTRACT

     This Contract is entered into by the parties in support of a U.S.
     Government Contract. As used in the FAR clauses referenced below and
     otherwise in this Contract:

     1.   "Commercial Item" means a commercial item as defined in FAR 2.101.

     2.   "Contract" means this contract

     3.   "Contracting Officer" shall mean the U.S. Government Contracting
          Officer for LOCKHEED MARTIN's government prime contract under which
          this Contract is entered.

     4.   "Contractor" and "Offerer" means the SELLER, as defined in this
          CORPDOC 4, acting as the immediate (first-tier) subcontractor to
          LOCKHEED MARTIN.

     5.   "Prime Contract" means the contract between LOCKHEED MARTIN and the
          U.S. Government or between LOCKHEED MARTIN and its higher-tier
          contractor who has a contract with the U.S. Government

     6.   "Subcontract" means any contract placed by the Contractor or
          lower-tier subcontractors under this Contract.

C.   NOTES

     1.   Substitute "LOCKHEED MARTIN" for "Government" or "United States"
          throughout this clause.

     2.   Substitute "LOCKHEED MARTIN Procurement Representative" for
          "Contracting Officer", "Administrative Contracting Officer", and "ACO"
          throughout this clause.

     3.   Insert "and LOCKHEED MARTIN" after "Government" throughout this
          clause.

     4.   Insert "or LOCKHEED MARTIN" after "Government" throughout this clause.

     5.   Communication/notification required under this clause from/to the
          SELLER to/from the Contracting Officer shall be through LOCKHEED
          MARTIN.

     6.   Insert "and LOCKHEED MARTIN" after "Contracting Officer" throughout
          the clause.

     7.   Insert "or LOCKHEED MARTIN Procurement Representative" after
          "Contracting Officer" throughout the clause.

D.   AMENDMENTS REQUIRED BY PRIME CONTRACT

     Contractor agrees that upon the request of LOCKHEED MARTIN it will
     negotiate in good faith with LOCKHEED MARTIN relative to amendments to this
     Contract to incorporate additional provisions herein or to change
     provisions hereof, as LOCKHEED MARTIN may reasonably deem necessary in
     order to comply with the provisions of the applicable Prime Contract or
     with the provisions of amendments to such Prime Contract. If any such
     amendment to this Contract causes an increase or decrease in the estimated
     cost of, or the time required for, performance of any part of the Work
     under this Contract, an equitable adjustment shall be made pursuant to the
     "Changes" clause of this Contract.

E.   PRESERVATION OF THE GOVERNMENT'S RIGHTS

     If LOCKHEED MARTIN furnishes designs, drawings, special tooling, equipment,
     engineering data, or other technical or proprietary information (Furnished
     Items) to which the U.S. Government owns or has the right to authorize the
     use of, nothing herein shall be construed to mean that LOCKHEED MARTIN,
     acting on its own behalf, may modify or limit any rights the Government may
     have to authorize the Contractor's use of such Furnished Items in support
     of other U.S. Government prime contracts.

                                       9
<PAGE>

F.   FAR FLOWDOWN CLAUSES

<TABLE>
<CAPTION>
    REFERENCE       TITLE
    ---------       -----
<S>                 <C>
1.   THE FOLLOWING FAR CLAUSES APPLY TO THIS CONTRACT:

(a)  52.211-5       MATERIAL REQUIREMENTS (AUG 2000) (Note 2 applies.)

(b)  52.215-20      REQUIREMENTS FOR COST OR PRICING DATA OR INFORMATION OTHER
                    THAN COST OR PRICING DATA (OCT 1997) (Note 2 applies.)

(c)  52.215-21      REQUIREMENTS FOR COST OR PRICING DATA OR INFORMATION OTHER
                    THAN COST OR PRICING DATA - MODIFICATIONS (OCT 1997) (Note 2
                    applies.)

(d)  52.216-8       FIXED FEE (MAR 1997) (Applicable only if this Contract
                    includes a fixed fee. Notes 1 and 2 apply. Delete the last
                    two sentences of the clause.)

(e)  52.216-10      INCENTIVE FEE (MAR 1997) (Applicable only if this Contract
                    includes an incentive fee. Notes 1 and 2 apply, except in
                    subparagraphs (e) (v) and (e) (vi) where "Government" is
                    unchanged. In subparagraph (e) (iv) and the last two
                    sentences of paragraph (c) is deleted. The amounts in
                    paragraph (e) are set forth on the face of the contract.)

(f)  52.219-8       UTILIZATION OF SMALL BUSINESS CONCERNS (OCT 2000)

(g)  52.222-2       PAYMENT FOR OVERTIME PREMIUMS (JUL 1990) (Insert ZERO in the
                    Blank. Notes 2 and 3 apply.)

(f)  52.222-21      PROHIBITION OF SEGREGRATED FACILITIES (FEB 1999)

(g)  52.222-26      EQUAL OPPORTUNITY (APR 2002) (Only paragraphs (b)(1)-(11)
                    applies.)

(h)  52.225-13      RESTRICTIONS ON CERTAIN FOREIGN PURCHASES (OCT 2003)

(i)  52.227-14      RIGHTS IN DATA - GENERAL (JUN 1987)

(j)  52.232-20      LIMITATION OF COST (APR 1984) (Applicable when this Contract
                    becomes fully funded. Notes 1 and 2 apply.)

(k)  52.232-22      LIMITATION OF FUNDS (APR 1984) (Applicable if this Contract
                    is incrementally funded. When the Contract becomes fully
                    funded 52.232-20 shall apply in lieu of this clause. Notes 1
                    and 2 apply.)

(l)  52.234-1       INDUSTRIAL RESOURCES DEVELOPED UNDER DEFENSE PRODUCTION ACT
                    TITLE III (DEC 1994) (Notes 1 and 2 apply.)

(m)  52.242-13      BANKRUPTCY (JUL 1995)(Notes 1 and 2 apply.)

(n)  52.242-15      STOP-WORK ORDER (AUG 1989) with ALT I (APR 1984) (Notes 1
                    and 2 apply.)

(o)  52.243-2       CHANGES - COST REIMBURSEMENT (AUG 1987) (Notes 1 and 2
                    apply.)

(p)  52.244-6       SUBCONTRACTS FOR COMMERCIAL ITEMS (APR 2003).

(q)  52.246-3       INSPECTION OF SUPPLIES - COST REIMBURSEMENT (MAR 2001) (Note
                    1 applies, except in paragraphs (b), (c), and (d) where Note
                    3 applies, and in paragraph (k) where the term is unchanged.
                    In paragraph (e), change "60 days" to "120 days", and in
                    paragraph (f) change "6 months" to "12 months".)

(r)  52.246-5       INSPECTION OF SERVICES - COST REIMBURSEMENT (APR 1984) (Note
                    3 applies in paragraphs (b) and (c). Note 1 applies in
                    paragraphs (d) and(e).)

(s)  52.247-64      PREFERENCE FOR PRIVATELY OWNED U.S.-FLAG COMMERCIAL VESSELS
                    (APR 2003)

(t)  52.249-6       TERMINATION (COST-REIMBURSEMENT) (SEP 1996) (Notes 1 and 2
                    apply. Substitute "90 days" for "120 days" and "90-day" for
                    "120-day" in paragraph (d). Substitute "180 days" for "1
                    year" in paragraph (f). In paragraph (j) "right of appeal",
                    "timely appeal" and "on an appeal" shall mean the right to
                    proceed under the
</TABLE>

                                       10

<PAGE>

<TABLE>
<S>                 <C>
                    "Disputes" clause of this Contract. Settlements and payments
                    under this clause may be subject to the approval of the
                    Contracting Officer.)

(u)  52.249-14      EXCUSABLE DELAYS (APR 1984) (Note 2 applies; Note 1 applies
                    to (c). In (a)(2) delete "or contractual".)

2.   THE FOLLOWING FAR CLAUSES APPLY TO THIS CONTRACT IF THE VALUE OF THIS
     CONTRACT EQUALS OR EXCEEDS $10,000:

(a)  52.222-36      AFFIRMATIVE ACTION FOR WORKERS WITH DISABILITIES (JUN 1998)

3.   THE FOLLOWING FAR CLAUSES APPLY TO THIS CONTRACT IF THE VALUE OF THIS
     CONTRACT EQUALS OR EXCEEDS $25,000:

(a)  52.222-35      EQUAL OPPORTUNITY FOR SPECIAL DISABLED VETERANS, VETERANS OF
                    THE VIETNAM ERA, AND OTHER ELIGIBLE VETERANS (DEC 2001)

(b)  52.222-37      EMPLOYMENT REPORTS ON SPECIAL DISABLED VETERANS, VETERANS OF
                    THE VIETNAM ERA, AND OTHER ELIGIBLE VETERANS (DEC 2001)

4.   THE FOLLOWING FAR CLAUSES APPLY TO THIS CONTRACT IF THE VALUE OF THIS
     CONTRACT EQUALS OR EXCEEDS $100,000:

(a)  52.203-6       RESTRICTIONS ON SUBCONTRACTOR SALES TO THE GOVERNMENT
                    (JUL 1995)

(b)  52.203-12      LIMITATION ON PAYMENTS TO INFLUENCE CERTAIN FEDERAL
                    TRANSACTIONS (JUN 2003)

(c)  52.215-2       AUDIT AND RECORDS-NEGOTIATION (JUN 1999) (Applicable if: (1)
                    Contractor is required to furnish cost or pricing data, or
                    (2) the Contract requires Contractor to furnish cost,
                    funding, or performance reports. If this is a cost type
                    contract with an educational institution or other non-profit
                    organization, add ALT II (APR 1998). Note 3 applies.)

(d)  52.215-14      INTEGRITY OF UNIT PRICES (OCT 1997) (Delete paragraph (b)
                    of the clause.)

(e)  52.222-4       CONTRACT WORK HOURS AND SAFETY STANDARDS ACT - OVERTIME
                    COMPENSATION (SEP 2000)

(f)  52.223-14      TOXIC CHEMICAL RELEASE REPORTING (AUG 2003) (Note 2 applies.
                    Delete paragraph (e).)

(g)  52.227-1       AUTHORIZATION AND CONSENT (JUL 1995) (Applicable only if the
                    Prime Contract contains this clause.)

(h)  52.227-2       NOTICE AND ASSISTANCE REGARDING PATENT AND COPYRIGHT
                    INFRINGEMENT (AUG 1996) (Notes 2 and 4 apply.)

(i)  52.248-1       VALUE ENGINEERING (FEB 2000) (Note 1 applies, except in
                    paragraphs (c)(5) and (m), where note 3 applies and where
                    "Government" proceeds "cost" throughout. Note 2 applies.)

5.   THE FOLLOWING FAR CLAUSES APPLY TO THIS CONTRACT IF THE VALUE OF THIS
     CONTRACT EQUALS OR EXCEEDS $500,000:

(a)  52.219-9       SMALL BUSINESS SUBCONTRACTING PLAN (JAN 2002) (Applicable if
                    the Contractor is not a small business. Note 2 is,
                    applicable to paragraph (c) only. The Contractor's
                    subcontracting plan is incorporated herein by reference.)

6.   THE FOLLOWING FAR CLAUSES APPLY TO THIS CONTRACT IF THE VALUE OF THIS
     CONTRACT EQUALS OR EXCEEDS $550,000:

(a)  52.215-12      SUBCONTRACTOR COST OR PRICING DATA (OCT 1997) (Applicable if
                    not otherwise exempt under FAR 15.403.)

(b)  52.215-13      SUBCONTRACTOR COST OR PRICING DATA - MODIFICATIONS (OCT
                    1997) (Applicable for modifications if not otherwise exempt
                    under FAR 15.403.)

7.   THE FOLLOWING FAR CLAUSES APPLY TO THIS CONTRACT AS INDICATED:

(a)  52.204-2       SECURITY REQUIREMENTS (AUG 1996) (Applicable if the Work
                    requires access to classified information.)
</TABLE>

                                       11

<PAGE>

<TABLE>
<S>                 <C>
(b)  52.215-10      PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA (OCT
                    1997) (Applicable if submission of cost or pricing data is
                    required. Notes 2 and 4 apply. Note 7 applies to paragraph
                    (c)(1). Rights and obligations under this clause shall
                    survive completion of the Work and final payment under this
                    Contract.)

(c)  52.215-11      PRICE REDUCTION FOR DEFECTIVE COST OR PRICING DATA -
                    MODIFICATIONS (OCT 1997) (Applicable if submission of cost
                    or pricing data is required for modifications. Notes 2 and 4
                    apply. Note 7 applies to paragraph (d)(1) Rights and
                    obligations under this clause shall survive completion of
                    the Work and final payment under this Contract.)

(d)  52.215-15      PENSION ADJUSTMENTS AND ASSET REVERSIONS (DEC 1998)
                    (Applicable if this Contract meets the applicability
                    requirements of FAR 15.408(g). Note 5 applies.)

(e)  52.215-16      FACILITIES CAPITAL COST OF MONEY (JUN 2003) (Applicable only
                    if this Contract is subject to the Cost Principles at FAR
                    Subpart 31.2 and the Contractor proposed facilities capital
                    cost of money in its offer.)

(f)  52.215-17      WAIVER OF FACILITIES CAPITAL COST OF MONEY (OCT 1997)
                    (Applicable only if this Contract is subject to the Cost
                    Principles at FAR Subpart 31.2 and the Contractor did not
                    propose facilities capital cost of money in its offer.)

(g)  52.215-18      REVERSION OR ADJUSTMENT OF PLANS FOR POST-RETIREMENT
                    BENEFITS (PRB) OTHER THAN PENSIONS (OCT 1997) (Applicable if
                    this Contract meets the applicability requirements of FAR
                    15.408(j). Note 5 applies.)

(h)  52.215-19      NOTIFICATION OF OWNERSHIP CHANGES (OCT 1997) (Applicable if
                    this Contract meets the applicability requirements of FAR
                    15.408(k). Note 5 applies.)

(i)  52.223-3       HAZARDOUS MATERIAL IDENTIFICATION AND MATERIAL SAFETY DATA
                    (JAN 1997) (Applicable if this Contract involves hazardous
                    material. Notes 2 and 3 apply, except for paragraph (f)
                    where Note 4 applies.)

(j)  52.223-7       NOTICE OF RADIOACTIVE MATERIALS (JAN 1997) (Applicable to
                    Work containing covered radioactive material. In the blank
                    insert "30". Notes 1 and 2 apply.)

(k)  52.223-11      OZONE-DEPLETING SUBSTANCES (MAR 2001) (Applicable if the
                    Work was manufactured with or contains ozone-depleting
                    substances.)

(l)  52.225-1       BUY AMERICAN ACT--SUPPLIES (JUN 2003) (Applicable if the
                    Work contains other than domestic components. Note 2 applies
                    to the first time "Contracting Officer" is mentioned in
                    paragraph (c).)

(m)  52.225-5       TRADE AGREEMENTS (OCT 2003) (Applicable if the Work contains
                    other than domestic components U.S. made, designated
                    country, Caribbean or NAFTA country end products.)

(n)  52.225-8       DUTY FREE ENTRY (FEB 2000) (Applicable if supplies will be
                    imported into the Customs Territory of the United States.
                    Note 2 applies.)

(o)  52.227-9       REFUND OF ROYALTIES (APR 1984) (Applicable when reported
                    royalty exceeds $250. Note 1 applies except for the first
                    two times "Government" appears in paragraph (d). Note 2
                    applies.)

(p)  52.227-10      FILING OF PATENT APPLICATIONS-CLASSIFIED SUBJECT MATTER (APR
                    1984) (Applicable if the Work or any patent application may
                    cover classified subject matter.)

(q)  52.227-11      PATENT RIGHTS-RETENTION BY THE CONTRACTOR (SHORT FORM) (JUN
                    1997) (Applicable if this Contract is for experimental,
                    developmental, or research Work and Contractor is a small
                    business concern or domestic nonprofit organization. Reports
                    required by this clause shall be filed with the agency
                    identified in this Contract. If no agency is identified,
                    contact the LOCKHEED MARTIN Procurement Representative
                    identified on the face of this Contract.)

(r)  52.227-12      PATENT RIGHTS-RETENTION BY THE CONTRACTOR (LONG FORM) (JAN
                    1997) (Applicable if this Contract is for experimental,
                    developmental, or research Work and Contractor is a large
                    business concern. Reports required by this clause shall be
                    filed with the agency identified in this Contract. If no
                    agency is identified, contact the LOCKHEED MARTIN
                    Procurement Representative identified on the face of this
                    Contract)

(s)  52.228-5       INSURANCE - WORK ON A GOVERNMENT INSTALLATION (JAN 1997)
                    (Applicable if this Contract involves Work on a Government
                    installation. Note 2 applies. Note 4 applies to paragraph
                    (b).)
</TABLE>

                                       12

<PAGE>

<TABLE>
<S>                 <C>
(t)  52.230-2       COST ACCOUNTING STANDARDS (APR 1998) (When referenced in the
                    Contract, full CAS coverage applies. "United States" means
                    "United States or Lockheed Martin." Delete paragraph (b) of
                    the clause.)

(u)  52.230-3       DISCLOSURE AND CONSISTENCY OF COST ACCOUNTING PRACTICES (APR
                    1998) (When referenced in this Contract, modified CAS
                    coverage applies. "United States" means "United States or
                    Lockheed Martin". Delete paragraph (b) of the clause.)

(v)  52.230-6       ADMINISTRATION OF COST ACCOUNTING STANDARDS (NOV 1999)
                    (Applicable if FAR 52.230-2 or FAR 52.230-3 applies.)

(w)  52.233-3       PROTEST AFTER AWARD (AUG 1996) ALTI(JUN 1985) (In the event
                    LOCKHEED MARTIN's customer has directed LOCKHEED MARTIN to
                    stop performance of the Work under the Prime Contract under
                    which this Contract is issued pursuant to FAR 33.1, LOCKHEED
                    MARTIN may, by written order to Contractor, direct
                    Contractor to stop performance of the Work called for by
                    this Contract. "30 days" means "20 days" in paragraph
                    (b)(2). Note 1 applies, except the first time "Government"
                    appears in paragraph (f). In paragraph (f) add after
                    "33.104(h)(1)" the following: "and recovers those costs from
                    LOCKHEED MARTIN". Note 2 applies.)

(x)  52.237-2       PROTECTION OF GOVERNMENT BUILDINGS, EQUIPMENT AND VEGETATION
                    (APR 1984) (Applicable if Work is performed on a Government
                    installation. Note 2 applies. Note 4 applies to the second
                    time "Government" appears in the clause.)

(y)  52.243-6       CHANGE ORDER ACCOUNTING (APR 1984) (Applicable only if Prime
                    Contract requires Change Order Accounting. Note 2 applies. )

(z)  52.245-5       GOVERNMENT PROPERTY (COST-REIMBURSEMENT, TIME-AND-MATERIAL,
                    OR LABOR-HOUR CONTRACTS) (JUN 2003) (Applicable if
                    Government Property is furnished in the performance of this
                    Contract. Note 1 applies, except in the phrases "Government
                    property", "Government-furnished property", and in
                    references to title to property. Note 2 applies. Paragraphs
                    (g)(1), (g)(2), and (g)(3) are deleted and replaced with the
                    following: "Contractor assumes the risk of, and shall be
                    responsible for, any loss or destruction, or damage to,
                    Government property covered by this clause. Contractor shall
                    not be liable for reasonable wear and tear to Government
                    property or for Government Property properly consumed in the
                    performance of this Contract." The following is added as
                    paragraph (m): "Contractor shall provide to LOCKHEED MARTIN
                    immediate notice of any disapproval, withdrawal of approval,
                    or non-acceptance by the Government of its property control
                    system.")

(aa) 52.245-18      SPECIAL TEST EQUIPMENT (FEB 1993) (Applicable if this
                    Contract involves the acquisition or fabrication of Special
                    Test Equipment. Note 4 applies, except in paragraphs (b),
                    (c) and (d). Note 2 applies to paragraphs (b) and (d). Note
                    5 applies. In paragraph (b) and (e), change "30 days" to "60
                    days".)

(bb) 52.247-63      PREFERENCE FOR U.S.-FLAG AIR CARRIERS (JUN 2003) (Applicable
                    if this Contract involves international air transportation.)
</TABLE>

G.   CERTIFICATIONS AND REPRESENTATIONS

     (1)  THIS CLAUSE CONTAINS CERTIFICATIONS AND REPRESENTATIONS THAT ARE
          MATERIAL REPRESENTATIONS OF FACT UPON WHICH LOCKHEED MARTIN WILL RELY
          IN MAKING AWARDS TO CONTRACTOR. BY SUBMITTING ITS WRITTEN OFFER, OR
          PROVIDING ORAL OFFERS/QUOTATIONS AT THE REQUEST OF LOCKHEED MARTIN, OR
          ACCEPTING ANY CONTRACT, CONTRACTOR CERTIFIES TO THE REPRESENTATIONS
          AND CERTIFICATIONS AS SET FORTH BELOW IN THIS CLAUSE. THESE
          CERTIFICATIONS SHALL APPLY WHENEVER THESE TERMS AND CONDITIONS ARE
          INCORPORATED BY REFERENCE IN ANY CONTRACT, AGREEMENT, OTHER
          CONTRACTUAL DOCUMENT OR ANY QUOTATION, REQUEST FOR QUOTATION (ORAL OR
          WRITTEN), REQUEST FOR PROPOSAL OR SOLICITATION (ORAL OR WRITTEN),
          ISSUED BY LOCKHEED MARTIN. CONTRACTOR SHALL IMMEDIATELY NOTIFY
          LOCKHEED MARTIN OF ANY CHANGE OF STATUS WITH REGARD TO THESE
          CERTIFICATIONS AND REPRESENTATIONS.

          (a)  FAR 52.203-11 CERTIFICATION AND DISCLOSURE REGARDING PAYMENTS TO
               INFLUENCE CERTAIN FEDERAL TRANSACTIONS (Applicable to
               solicitations and contracts exceeding $100,000)

               (1)  The definitions and prohibitions contained in the clause at
                    FAR 52.203-12, Limitation on Payments to Influence Certain
                    Federal Transactions are hereby incorporated by reference in
                    paragraph (b) of this certification.

               (2)  Contractor certifies that to the best of its knowledge and
                    belief that on and after December 23,1989-

                    (a)  No Federal appropriated funds have been paid or will be
                         paid to any person for influencing or attempting to
                         influence an officer or employee of any agency, a
                         Member of Congress, an officer or employee of Congress,
                         or an employee of a Member of Congress on his or her
                         behalf in connection with the awarding of any Federal
                         contract, the making of any Federal grant, the making
                         of any Federal loan, the entering into of any
                         cooperative agreement, and the extension, continuation,
                         renewal, amendment or modification of any Federal
                         contract, grant, loan, or cooperative agreement;

                                       13

<PAGE>

                    (b)  If any funds other than Federal appropriated funds
                         (including profit or fee received under a covered
                         Federal transaction) have been paid, or will be paid,
                         to any person for influencing or attempting to
                         influence an officer or employee of any agency, a
                         Member of Congress, an officer or employee of Congress,
                         or an employee of a Member of Congress on his or her
                         behalf in connection with a solicitation or order, the
                         offeror shall complete and submit, with its offer, OMB
                         standard form LLL, Disclosure of Lobbying Activities,
                         in accordance with its instructions, and

                    (c)  Contractor will include the language of this
                         certification in all subcontracts at any tier and
                         require that all recipients of subcontract awards in
                         excess of $100,000 shall certify and disclose
                         accordingly.

               (3)  Submission of this certification and disclosure is a
                    prerequisite for making or entering into a contract as
                    imposed by section 1352, title 31, United States Code. Any
                    person who makes an expenditure prohibited under this
                    provision or who fails to file or amend the disclosure form
                    to be filed or amended by this provision, shall be subject
                    to a civil penalty of not less than $10,000, and not more
                    than $100,000, for each such failure.

          (b)  FAR 52.209-5 CERTIFICATION REGARDING DEBARMENT, SUSPENSION,
               PROPOSED DEBARMENT, AND OTHER RESPONSIBILITY MATTERS.

               (1)  Contractor certifies that, to the best of its knowledge and
                    belief, that Contractor and/or any of its Principals, (as
                    defined in FAR 52.209-5,) are not presently debarred,
                    suspended, proposed for debarment, or declared ineligible
                    for the award of contracts by any Federal agency.

               (2)  Contractor shall provide immediate written notice to
                    LOCKHEED MARTIN if, any time prior to award of any contract,
                    it learns that its certification was erroneous when
                    submitted or has become erroneous by reason of changed
                    circumstances.

          (c)  FAR 52.222-22 PREVIOUS CONTRACTS AND COMPLIANCE REPORTS.

          Contractor represents that if Contractor has participated in a
          previous contract or subcontract subject to the Equal Opportunity
          clause (FAR 52.222-26) and (i) Contractor has filed all required
          compliance reports and (ii) that representations indicating submission
          of required compliance reports, signed by proposed subcontractors,
          will be obtained before subcontract awards.

          (d)  FAR 52.222-25 AFFIRMATIVE ACTION COMPLIANCE.

          Contractor represents (1) that Contractor has developed and has on
          file at each establishment, affirmative action programs required by
          the rules and regulations of the Secretary of Labor (41 CFR 60-1 and
          60-2), or (2) that in the event such a program does not presently
          exist, Contractor will develop and place in operation such a written
          Affirmative Action Compliance Program within 120 days from the award
          of this Contract.

          (e)  FAR 52.323-13 CERTIFICATION OF TOXIC CHEMICAL RELEASE REPORTING
               (Applicable to competitive solicitations/contracts which exceed
               $100,000)

               (1)  Submission of this certification is a prerequisite for
                    making or entering into this contract imposed by Executive
                    Order 12969, August 8, 1995.

               (2)  Contractor certifies that--

                    (a)  As the owner or operator of facilities that will be
                         used in the performance of this contract that are
                         subject to the filing and reporting requirements
                         described in section 313 of the Emergency Planning and
                         Community Right-to-Know Act of 1986(EPCRA) (42 U.S.C.
                         11023) and section 6607 of the Pollution Prevention Act
                         of 1990 (PPA) (42 U.S.C. 13106),Contractor will file
                         and continue to file for such facilities for the life
                         of the contract the Toxic Chemical Release Inventory
                         Form (Form R) as described in sections 313(a) and (g)
                         of EPCRA and section 6607 of PPA; or

                    (b)  None of its owned or operated facilities to be used in
                         the performance of this contract is subject to the Form
                         R filing and reporting requirements because each such
                         facility is exempt for at least one of the following
                         reasons:

                         (i)  The facility does not manufacture, process or
                              otherwise use any toxic chemicals listed in 40
                              C.F.R. 372.65;

                         (ii) The facility does not have 10 or more full-time
                              employees as specified in section 313(b)(1)(A) of
                              EPCRA, 42 U.S.C. 11023(b)(1)(A);

                         (iii)The facility does not meet the reporting
                              thresholds of toxic chemicals established under
                              section 313(f) of EPCRA, 42 U.S.C. 11023(f)
                              (including the alternate thresholds at 40 CFR
                              372.27, provided an appropriate certification form
                              has been filed with EPA);

                         (iv) The facility does not fall within Standard
                              Industrial Classification Code (SIC) codes or
                              their corresponding North American Industry
                              Classification System (NAICS); or

                                       14

<PAGE>

                              (A)  Major group code 10 (except 1011, 1081, and
                                   1094).

                              (B)  Major group code 12 (except 1241).

                              (C)  Major group codes 20 through 39.

                              (D)  Industry code 4911, 4931, or 4939 (limited to
                                   facilities that combust coal and/or oil for
                                   the purpose of generating power for
                                   distribution in commerce).

                              (E)  Industry code 4953 (limited to facilities
                                   regulated under the Resource Conservation and
                                   Recovery Act, Subtitle C (42 U.S.C. 6921, et
                                   seq.), 5169, 5171, or 7389 (limited to
                                   facilities primarily engaged in solvent
                                   recovery services on a contract or fee
                                   basis); or

                         (v)  The facility is not located in the United States
                              or its outlying areas.

                                       15

<PAGE>

Section A - PO #DM259735
LOCKHEED MARTIN CORPORATION

CORPDOC 4A

                                                                 LOCKHEED MARTIN

  COST REIMBURSEMENT DEFENSE FEDERAL ACQUISITION REGULATION SUPPLEMENT (DFARS)
  FLOWDOWN PROVISIONS FOR SUBCONTRACTS/PURCHASE ORDERS FOR NON-COMMERCIAL ITEMS
                     UNDER A U.S. GOVERNMENT PRIME CONTRACT

A.   INCORPORATION OF DFARS CLAUSES

     The Defense Federal Acquisition Regulation Supplement (DFARS) clauses
     referenced below are incorporated herein by reference, with the same force
     and effect as if they were given in full text, and are applicable,
     including any notes following the clause citation, to this Contract. If the
     date or substance of any of the clauses listed below is different from the
     date or substance of the clause actually incorporated in the Prime Contract
     referenced by number herein, the date or substance of the clause
     incorporated by said Prime Contract shall apply instead. The Contracts
     Disputes Act shall have no application to this Contract. Any reference to a
     "Disputes" clause shall mean the "Disputes" clause of this Contract

B.   GOVERNMENT SUBCONTRACT

     This Contract is entered into by the Parties in support of a U.S.
     Government contract.

     As used in the clauses referenced below and otherwise in this Contract:

     1.   "Commercial Item" means a commercial item as defined in FAR 2.101.

     2.   "Contract" means this contract.

     3.   "Contracting Officer" shall mean the U.S. Government Contracting
          Officer for LOCKHEED MARTIN's government prime contract under which
          this Contract is entered.

     4.   "Contractor" or "Offeror" means the SELLER, as defined in CORPDOC 4,
          acting as the immediate (first-tier) subcontractor to LOCKHEED MARTIN.

     5.   "Prime Contract" means the contract between LOCKHEED MARTIN and the
          U.S. Government or between LOCKHEED MARTIN and its higher-tier
          contractor who has a contract with the U.S. Government.

     6.   "Subcontract" means any contract placed by the Contractor or
          lower-tier subcontractors under this Contract.

C.   NOTES

     1.   Substitute "LOCKHEED MARTIN" for "Government" or "United States"
          throughout this clause.

     2.   Substitute "LOCKHEED MARTIN Procurement Representative" for
          "Contracting Officer", "Administrative Contracting Officer", and "ACO"
          throughout this clause.

     3.   Insert "and LOCKHEED MARTIN" after "Government" throughout this
          clause.

     4.   Insert "or LOCKHEED MARTIN" after "Government" throughout this clause.

     5.   Communication/notification required under this clause from/to
          Contractor to/from the Contracting Officer shall be through LOCKHEED
          MARTIN.

     6.   Insert "and LOCKHEED MARTIN" after "Contracting Officer" throughout
          the clause.

     7.   Insert "or LOCKHEED MARTIN Procurement Representative" after
          "Contracting Officer" throughout the clause.

                                        1

<PAGE>

D.   AMENDMENTS REQUIRED BY PRIME CONTRACT

     Contractor agrees that upon the request of LOCKHEED MARTIN it will
     negotiate in good faith with LOCKHEED MARTIN relative to amendments to this
     Contract to incorporate additional provisions herein or to change
     provisions hereof, as LOCKHEED MARTIN may reasonably deem necessary in
     order to comply with the provisions of the applicable Prime Contract or
     with the provisions of amendments to such Prime Contract. If any such
     amendment to this Contract causes an increase or decrease in the estimated
     cost of, or the time required for, performance of any part of the Work
     under this Contract, an equitable adjustment shall be made pursuant to the
     "Changes" clause of this Contract.

E.   PRESERVATION OF THE GOVERNMENT'S RIGHTS

     If LOCKHEED MARTIN furnishes designs, drawings, special tooling, equipment,
     engineering data, or other technical or proprietary information (Furnished
     Items) which the U.S. Government owns or has the right to authorize the use
     of, nothing herein shall be construed to mean that LOCKHEED MARTIN, acting
     on its own behalf, may modify or limit any rights the Government may have
     to authorize the Contractor's use of such Furnished Items in support of
     other U.S. Government prime contracts.

F.   DOD FAR SUPPLEMENT (DFARS) FLOWDOWN CLAUSES

<TABLE>
<CAPTION>
    REFERENCE       TITLE
    ---------       -----
<S>                 <C>
1.   THE FOLLOWING DFARS CLAUSES APPLY TO THIS CONTRACT:

(a)  252.225-7001   BUY AMERICAN ACT AND BALANCE OF PAYMENTS PROGRAM (APR 2003)
                    (Applicable if the Work contains other than domestic
                    components. Applicable in lieu of FAR 52.225-1 and FAR
                    52.225-5.)

(b)  252.225-7014   PREFERENCE FOR DOMESTIC SPECIALTY METALS (MAR 1998) and ALT
                    I (MAR 1998) (Applicable if the Work to be furnished
                    contains specialty metals.)

(c)  252.225-7021   TRADE AGREEMENTS (AUG 2003) (Applicable if the Work contains
                    other than domestic components. Applicable in lieu of FAR
                    52.225-1 and FAR 52.225-5.)

(d)  252.227-7013   RIGHTS IN TECHNICAL DATA - NON-COMMERCIAL ITEMS (NOV 1995)
                    (Applicable in lieu of FAR 52.227-14.)

(e)  252.227-7014   RIGHTS IN NON-COMMERCIAL COMPUTER SOFTWARE AND
                    NON-COMMERCIAL COMPUTER SOFTWARE DOCUMENTATION (JUN 1995)
                    (Applicable in lieu of FAR 52.227-14.)

(f)  252.227-7016   RIGHTS IN BID OR PROPOSAL INFORMATION (JUN 1995)

(g)  252.227-7019   VALIDATION OF ASSERTED RESTRICTIONS - COMPUTER SOFTWARE (JUN
                    1995)

(h)  252.227-7025   LIMITATIONS ON THE USE OR DISCLOSURE OF GOVERNMENT-FURNISHED
                    INFORMATION MARKED WITH RESTRICTIVE LEGENDS (JUN 1995) (For
                    paragraph (c)(1), Note 3 applies.)

(i)  252.227-7026   DEFERRED DELIVERY OF TECHNICAL DATA OR COMPUTER SOFTWARE
                    (APR 1988) (Note 1 applies.)

(j)  252.227-7027   DEFERRED ORDERING OF TECHNICAL DATA OR COMPUTER SOFTWARE
                    (APR 1988) (Note 1 applies, only the first time "Government
                    appears.)

(k)  252.227-7028   TECHNICAL DATA OR COMPUTER SOFTWARE PREVIOUSLY DELIVERED TO
                    THE GOVERNMENT (JUN 1995) (The term "contract" and
                    "subcontract" shall not change in meaning, except for the
                    first reference to "contract".)

(l)  252.227-7030   TECHNICAL DATA - WITHHOLDING OF PAYMENT (MAR 2000) (Notes 1
                    and 2 apply to (a). Note 4 applies to (b))

(m)  252.227-7036   DECLARATION OF TECHNICAL DATA CONFORMITY (JAN 1997)

(n)  252.227-7037   VALIDATION OF RESTRICTIVE MARKINGS ON TECHNICAL DATA (SEP
                    1999)

(o)  252.228-7005   ACCIDENT REPORTING AND INVESTIGATION INVOLVING AIRCRAFT,
                    MISSILES, AND SPACE LAUNCH VEHICLES (DEC 1991) (In paragraph
                    (a), Note 5 applies. In paragraph (b), Note 3 applies.)
</TABLE>

                                       2

<PAGE>

<TABLE>
<S>                 <C>
(p)  252.231-7000   SUPPLEMENTAL COST PRINCIPLES (DEC 1991)

(q)  252.243-7001   PRICING OF CONTRACT MODIFICATIONS (DEC 1991)

(r)  252.247-7024   NOTIFICATION OF TRANSPORTATION OF SUPPLIES BY SEA (MAR 2000)
                    (Applicable if this Contract meets the criteria set forth in
                    paragraph (b) (2) (ii) of the clause. Notes 1 and 2 apply)

2.   THE FOLLOWING DFARS CLAUSES APPLY TO THIS CONTRACT IF THE VALUE OF THIS
     CONTRACT EQUALS OR EXCEEDS $100,000:

(a)  252.203-7001   PROHIBITION ON PERSONS CONVICTED OF FRAUD OR OTHER DEFENSE
                    CONTRACT-RELATED FELONIES (MAR 1999) (In this clause, the
                    terms "contract", "contractor", and "subcontract" shall not
                    change in meaning in paragraphs (a) thru (d). Delete
                    paragraph g. Note 5 applies.)

(b)  252.209-7000   ACQUISITION FROM SUBCONTRACTORS SUBJECT TO ON-SITE
                    INSPECTION UNDER THE INTERMEDIATE RANGE NUCLEAR FORCES (INF)
                    TREATY (NOV 1995) (Note 5 applies.)

(c)  252.247-7023   TRANSPORTATION OF SUPPLIES BY SEA (MAY 2002) (Applicable in
                    lieu of FAR 52.247-64 in all Contracts for ocean
                    transportation of supplies. In the first sentence of
                    paragraph (g) insert a period after "Contractor" and delete
                    the balance of the sentence. Paragraphs (f) and (g) shall
                    not apply if this Contract is at or below $100,000. Notes 1
                    and 2 apply to paragraph (g).)

3.   THE FOLLOWING DFARS CLAUSES APPLY TO THIS CONTRACT IF THE VALUE OF THIS
     CONTRACT EQUALS OR EXCEEDS $500,000:

(a)  252.225-7026   REPORTING OF CONTRACT PERFORMANCE OUTSIDE THE UNITED STATES
                    (APR 2003) (Delete paragraph (c).)

(b)  252.249-7002   NOTIFICATION OF ANTICIPATED CONTRACT TERMINATION OR
                    REDUCTION (DEC 1996) (Note 2 applies. Delete paragraph (d)
                    (1) and the first five words of paragraph (d) (2).)

4.   THE FOLLOWING DFARS CLAUSES APPLY TO THIS CONTRACT IF THE VALUE OF THIS
     CONTRACT EQUALS OR EXCEEDS $1,000,000:

(a)  252.211-7000   ACQUISITION STREAMLINING (DEC 1991) (Note 1 applies.)

5.   THE FOLLOWING DFARS CLAUSES APPLY TO THIS CONTRACT AS INDICATED:

(a)  252.215-7000   PRICING ADJUSTMENTS (DEC 1991) (Applicable if FAR 52.215-12
                    or 52.215-13 applies to this Contract.)

(b)  252.219-7003   SMALL, SMALL DISADVANTAGED AND WOMEN-OWNED SMALL BUSINESS
                    SUBCONTRACTING PLAN (DoD CONTRACTS) (APR 1996) (Applicable
                    if FAR 52.219-9 applies to this Contract. Delete paragraph
                    (g).)

(c)  252.223-7001   HAZARD WARNING LABELS (DEC 1991) (Applicable if this
                    Contract requires the delivery of hazardous materials.)

(d)  252.223-7002   SAFETY PRECAUTIONS FOR AMMUNITION AND EXPLOSIVES (MAY 1994)
                    (Applicable only if the articles furnished under this
                    Contract contain ammunition or explosives, including liquid
                    and solid propellants. Notes 2, 3, and 5 apply to paragraphs
                    g(1)(i) and e(1)(ii). Note 3 applies. Delete "prime" to
                    g(1)(ii) and add "and LOCKHEED MARTIN Procurement
                    Representative". Delete in g(1)(ii) "substituting its name
                    for references to the Government".)

(e)  252.223-7003   CHANGE IN PLACE OF PERFORMANCE - AMMUNITION AND EXPLOSIVES
                    (DEC 1991) (Applicable if DFARS 252.223-7002 applies to this
                    Contract. Notes 2 and 4 apply.)

(f)  252.223-7007   SAFEGUARDING SENSITIVE CONVENTIONAL ARMS, AMMUNITION, AND
                    EXPLOSIVES (SEP 1999) (Applicable if this Contract is for
                    the development, production, manufacture, or purchase of
                    arms, ammunition, and explosives or when arms, ammunition,
                    and explosives will be provided to Contractor as Government
                    Furnished Property.)

(g)  252.225-7001   BUY AMERICAN ACTBALANCE OF PAYMENTS PROGRAM (APR 2003)
                    (Applicable if the Work contains other than domestic
                    components. Applicable in lieu of FAR 52.225-1 and FAR
                    52.225-5.)

(h)  252.225-7016   RESTRICTION ON ACQUISITION OF BALL AND ROLLER BEARINGS (APR
                    2003) (Applicable if Work supplied under this Contract
                    contains ball or roller bearings. Note 2 applies.)
</TABLE>

                                       3

<PAGE>

<TABLE>
<S>                 <C>
(i)  252.225-7021   TRADE AGREEMENTS (AUG 2003) (Applicable if the Work contains
                    other than domestic components. Applicable in lieu of FAR
                    52.225-1 and FAR 52.225-5.)

(j)  252.225-7033   WAIVER OF UNITED KINGDOM LEVIES (OCT 1992) (Applicable if
                    this Contract is with a United Kingdom firm. Note 2 applies.
                    Note 3 applies to (c)(3).)

(k)  252.225-7043   ANTI-TERRORISM/FORCE PROTECTION FOR DEFENSE CONTRACTORS
                    OUTSIDE THE UNITED STATES (JUN 1998) (Applies where
                    contractor will be performing or traveling outside the U.S.
                    under this Contract. For paragraph (c), see applicable
                    information cited in DFARS 225.7401.)

(l)  252-226-7001   UTILIZATION OF INDIAN ORGANIZATIONS, AND INDIAN-OWNED
                    ECONOMIC ENTERPRISES AND NATIVE HAWAIIN SMALL BUSINESS
                    CONCERNS (OCT 2003) (This clause is applicable only when
                    included in LOCKHEED MARTIN's Prime Contract and if this
                    contract is more than $500,000. In e(l), "Contractor" shall
                    mean "LOCKHEED MARTIN". Note 2 applies to (c) the first time
                    "Contracting Officer" appears.)

(m)  252.235-7003   FREQUENCY AUTHORIZATION (DEC 1991) (Applicable if this
                    Contract requires developing, producing, constructing,
                    testing, or operating a device requiring a frequency
                    authorization. Note 2 applies.)

(n)  252.245-7001   REPORTS OF GOVERNMENT PROPERTY (MAY 1994) (Applicable if
                    Government Property is provided or acquired under this
                    Contract. Contractor shall submit its required reports to
                    LOCKHEED MARTIN. In paragraph (a)(3), change October 31 to
                    October 10.)
</TABLE>

                                       4

<PAGE>

PURCHASE ORDER NO. DM259735 - SECTION A

Date:      March 24, 2005

Seller:    Ocean Power Technologies (OPT)   Payment Terms:      Net 30
           1590 Reed Rd.
           Pennington, NJ 08534             Govt. Contract No.: N00039-04-C-0035

Attention: Ms. Debbie Montagna              DPAS Rating:        DO-A7

1.   PARTIES/TYPE OF CONTRACT

     This cost plus fixed fee (CPFF) Purchase Order between Lockheed Martin
     Maritime Systems & Sensors, a business unit of Lockheed Martin Corporation
     (hereinafter referred to as "Buyer") located at 9500 Godwin Drive,
     Manassas, VA 20110 and Ocean Power Technologies (OPT), (hereinafter
     referred to as "Seller") located at 1590 Reed Rd., Pennington, NJ 08534
     definitizes Letter Contract #DM259735 and is placed on the basis set forth
     herein.

     The Buyer's procurement representative is the only person authorized to
     approve changes to the terms and conditions or the requirements of the
     Purchase Order. If the Seller complies with any order, direction,
     interpretation, approval, or disapproval, conditional approval, or
     determination (written or oral), from someone other than the Buyer's
     procurement representative, it shall be at Seller's own risk and Buyer
     shall not be liable for any increased cost or delay in performance in
     accordance with the requirements set forth herein. The Seller shall ensure
     that all Seller's personnel are aware of this provision.

     Buyer is a signatory to the Defense Industry Initiatives on Business
     Conduct and Ethics (DII).

     The Seller agrees to indemnify Buyer for any amounts required to be paid to
     the United States Government by virtue of the Seller's violation of Public
     Law 100-679 (see FAR 52.203- 10(c)). This applies to Purchase Orders over
     $50,000 or Purchase Order modifications over $50,000.

2.   PRODUCT/SERVICES

     Seller will provide articles, services and/or data as set forth in Schedule
     A of this purchase order (copy attached).

3.   REQUIREMENTS/DATA

     This is a rated order certified for national defense use, and Seller shall
     follow all requirements of the Defense Priorities and Allocations System
     Regulation (15 CFR Part 350). Seller accepts said rating unless rejected in
     writing within ten (10) days if "DO" rating, or five (5) days if "DX"
     rating from the date of order receipt.

     -    Government Contract Number   N00039-04-C-0035

     -    DPAS Rating:                 DO-A7

     Seller will provide work effort as set forth in Attachment 3, Statement of
     Work #2005-PC4-4 for the Advanced Deployable System (ADS) Aboard the
     Littoral Combat Ship (LCS) Development dated 22 February 2005 which is
     incorporated herein and made a part hereof by reference.

     All drawings, specifications or other documents referenced in this Purchase
     Order, but not attached are incorporated and made a part by this reference.

<PAGE>

4.   PERIOD OF PERFORMANCE AND/OR DELIVERY SCHEDULE

     Work under this Purchase Order shall commence on September 14, 2004
     (authorized via the Letter Contract) and continue through October 31, 2005
     or as amended by Buyer in accordance with Terms and Conditions herein.

     Articles, services and/or data shall be delivered in accordance with the
     delivery dates contained in the Statement of Work, Attachment 3 and the
     Integrated Master Plan (IMP) and Integrated Master Schedule (IMS).

     All articles, services and/or data shall be delivered as directed by the
     ADS LCS Program Manager, the SOW or other attachments to this Purchase
     Order.

     A.   Packing Slip

          Seller shall submit a packing slip with each shipment of supplies
          against this Purchase Order/Release. At a minimum, the packing slip
          shall contain the following information:

          1.   Purchase Order Number/Release Number

          2.   Itemized list of supplies within the shipment

          3.   List of back-order items remaining to be delivered

          4.   Date of shipment

5.   CONSIDERATION AND PAYMENT

     The total agreed price for the work identified in this Purchase Order is
     $1,527,212.00. Seller is not authorized to incur any costs, obligations, or
     liabilities, of any nature whatsoever for the amount and any such
     additional costs, obligations, or liabilities incurred or assumed by Seller
     shall be at his sole risk and account and the Buyer and/or the Government
     shall not be liable in any manner to pay or reimburse Seller on account
     thereof. Seller shall notify Buyer when the amount of costs incurred is
     within eighty five (85%) of the above-cited ceiling.

     In the event of a termination or cancellation of this Purchase Order or
     part thereof, Buyer's sole obligation shall be to pay Seller for
     satisfactory services performed prior to the date of termination or
     cancellation. Such payment is subject, in the case of termination for
     material breach, to a setoff and/or payment of damages or losses incurred
     by Buyer as a result of any breach.

     This purchase order is incrementally funded with respect to both cost and
     fee in accordance with FAR 52.232-20 and 52.232-22. The amounts presently
     available and allotted to this purchase order for payment of cost and fee
     are as follows:

<TABLE>
<S>            <C>                       <C>             <C>
Line Item 001   Allocated to Cost        $1,388,375.00   Line Item 002 Not Separately Priced
                Allocated to Fixed Fee   $  138,837.00
                                         -------------
                   Total                 $1,527,212.00
</TABLE>

     Buyer shall make payments on account of fixed fee equal to the stated
     amount for work performed and submitted by Seller under FAR clauses
     52.216-7 entitled "Allowable Cost and Payment" and 52.216-8 entitled "Fixed
     Fee" of the attached FAR Supplemental Terms and Conditions for cost
     reimbursement type subcontracts, subject to withholding provisions of said
     clauses.

6.   INVOICING

     All invoice originals and one (1) copy shall be submitted to the following:

         Lockheed Martin Shared Services
         Accounts Payable

<PAGE>

         Attention: OHM Desk - MANPUR
         PO Box 33064
         Lakeland, FL 33807-3064

     INVOICES

     Each invoice submitted for payment shall indicate complete Purchase Order
     number and be set up in accordance with the line items specified in this
     Purchase Order and Schedule A.

     One (1) copy of each invoice and all correspondence pertaining to this
     Purchase Order shall be sent via e-mail to the Subcontract Administrator:
     Brenda Aanderud brenda.aanderud@lmco.com.

7.   INSPECTION AND ACCEPTANCE

     Inspection and acceptance criteria shall be as set forth in the SOW and
     Systems Engineering Management Plan (SEMP).

8.   TERMS AND CONDITIONS

     This Purchase Order is subject to the following terms and conditions:

     -    Lockheed Martin Corporation, CORPDOC 4 and 4A dated 10/03, Cost
          Reimbursement General Provisions and FAR Flowdowns for
          Subcontracts/Purchase Orders (All Agencies) for Non- Commercial Items
          under a U.S. Government Prime Contract.

     -    Proprietary Information Exchange Agreement No. MAN2004048.

9.   SPECIAL PROVISIONS

     The following special provisions shall apply to this Purchase Order:

     -    Sections B - J of this purchase order including reference attachments.

10.  ORDER OF PRECEDENCE

     In the event of an inconsistency in this Purchase Order, unless otherwise
     provided herein, the inconsistency shall be resolved by giving precedence
     in the following order.

     (a)  Body of the Purchase Order Section A Including Schedule A and CORPDOC
          4 & 4A

     (b)  Sections B - J of the Purchase Order

     (c)  Statement of Work and Contract Data Requirements List

     (d)  Specifications

     (e)  All Other Documents

11.  ACCEPTANCE

     This Purchase Order is the entire agreement between Buyer and Seller. It
     supersedes all prior agreements, oral or written and all other
     communications relating to the subject matter of this Purchase Order.

     Any terms contained in Seller's invoices, acknowledgments, shipping
     instructions or other forms that are inconsistent with or different from
     this Purchase Order, shall be void and of no effect.

     This Purchase Order is executed in duplicate originals as of the date
     specified on page one (1).

     Please sign and return this Purchase Order to Buyer within ten (10) working
     days after receipt.

<PAGE>

Lockheed Martin Maritime System &       Oceans Power Technologies, Inc.
Sensors                                 1590 Reed Rd.
                                        Pennington, NJ 08534

By: /s/ Brenda Aanderud                 By: /s/ Charles F. Dunleavy
    ---------------------------------       ------------------------------------
    Brenda Aanderud                     Title: C.F.O.
Title: Staff Subcontract                Date: 4/6/2005
       Administrator
Date: 3/27/05
<PAGE>

Lockheed Martin Manassas
9500 Godwin Drive Manassas, VA 20 -415
Telephone 703-367-2121

                                                                 LOCKHEED MARTIN

In Reply Refer To: LM05-ADSLCS031-BKA079

January 19, 2005

Ocean Power Technologies
1590 Reed Rd.
Pennington, NJ 08534

Attention: Ms. Debbie Montagna

Subject:   Letter Contract Definitization

Reference: a)   LM MS2 Letter #LM04-ADSLCS027-BKA075 dated December 22, 2004

           b)   OPT Proposal dated April 29, 2004 (with pricing
                update/correction provided 30-Apr-04 and 05-May-04), Revision
                dated August 4, 2004 and Update Provided on 11/15/04

           c)   LM MS2 Letter Contract #DM259735

Dear Ms. Montagna

This letter is to revise the offer presented in the reference a) letter. An
offer of $1,527,212 is extended for the definitized subcontract based on OPT's
proposal update on 11/15/04.

Please indicate your acceptance of this offer by signing below and returning a
copy of this letter. Acceptance will also indicate confirmation that the fee
included in the updated proposal/offer does not exceed 10%. OPT is also
required to provide certified cost or pricing data in accordance with the
attached form F 630.

Please contact me at 703/367-3223 if you have any questions regarding this
information.

Sincerely,                              ACCEPTED AND AGREED TO:

                                        Ocean Power Technologies (OPT)

/s/ Brenda Aanderud                     /s/ Charles F. Dunleavy
-------------------------------------   ----------------------------------------
Brenda Aanderud                         By: Charles F. Dunleavy
Subcontract Administrator               Title: CFO
                                        Date: 20 January 2005

Attachment - Form F 630

<PAGE>

LOCKHEED MARTIN

       Certificate of Current Cost or Pricing Data--FAR-Covered Contracts

This is to certify that, to the best of my knowledge and belief, cost or pricing
data (as defined in section 2.101 of the Federal Acquisition Regulation (FAR)
and required under FAR subsection 15.403-4) submitted, either actually or by
specific identification in writing, to Lockheed Martin in support of

Cost proposal by Ocean Power Technologies, Inc., as

revised November 15, 2004 for ADS on LCS

are accurate, complete, and current as of   20     January    2005
                                           (day)   (month)   (year)

This certification includes the cost or pricing data supporting any advance
agreements and forward pricing rate agreements between the offeror and the
Government or Lockheed Martin that are part of the proposal.

                                        Firm Ocean Power Technologies, Inc.
                                        Name Charles F. Dunleavy

                                        Signature /s/ Charles F. Dunleavy
                                                  ------------------------------
                                        Title C.F.O.

Date of Execution 20 January 2005

*    Describe the proposal, quotation, request for price adjustment, or other
     submission involved, giving the appropriate identifying number (for
     example, RFP No. _____).

**   Insert the day, month, and year when price negotiations were concluded and
     price agreement was reached. Or, if applicable, an earlier date agreed upon
     between the parties that is as close as practicable to the date of
     agreement on price.

***  Insert the day, month, and year of signing, which should be as close as
     practicable to the date when price negotiations were concluded and the
     contract price was agreed to.

F 630 (03/04)                  Tab - Certificate of Current Cost of Pricing Data

<PAGE>

                                                   Post-Proposal Letter Contract

LOCKHEED MARTIN

Subcontractor: Ocean Power Technologies (OPT)  Date: 3/10/05
               1590 Reed Rd.
               Pennington, NJ 08534            Prime or Customer Contract
                                               No.: N00039-04-C-0035

Subject: LOCKHEED MARTIN CORPORATION- Maritime Systems & Sensors (MS2)

Modification 02 to Letter Contract No. DM259735:

Reference:   a)   MS2 Request for Proposal (RFP) No. 29-RA-042904 dated April 8,
                  2004 and All Amendments

             b)   OPT Proposal dated April 29, 2004 (with pricing
                  update/correction provided 30-Apr-04 and 05-May-04) and
                  Revision dated August 4, 2004

             c)   Letter Contract No. DM259735 dated 9/17/04

             d)   Confirmation of Negotiations dated January 19, 2005

     Refer to Letter Contract #DM259735 dated 9/17/04 and make the following
     addition, deletions, changes and modifications hereinafter set forth:

          -    Revise Paragraph 4 as follows: "The total Not-to-Exceed (NTE)
               price of this contract is $1,527,212.00."

          -    Revise Paragraph 5 as follows:

               "This contract is incrementally funded. Lockheed Martin's
               limitation of obligation to pay under this subcontract is
               $1,145,409.00. The funds are expected to be adequate for
               performance of the Work until June 18, 2005.

     Except as hereby amended, all provisions of the letter contract, including
     modifications thereto, shall remain unmodified and in full force and effect
     and shall also apply in carrying out the provisions of this modification.

     This authorization is subject to your prompt acceptance. Please return a
     signed copy by FAX no later than cob, Tuesday, March 15, 2005, confirming
     your acceptance of the contents herein and acknowledging that the effort
     authorized has been initiated.

Contractor: OCEAN POWER TECHNOLOGIES    LOCKHEED MARTIN CORPORATION

By: /s/ Charles F. Dunleavy             By: /s/ Bruce Gaines
    ---------------------------------       ------------------------------------
Title: C.F.O.                           Title: Staff Subcontract Administrator
Date: 3/11/05                           Date: 3/10/05

F 860 (03/04)                                              Tab - Letter Contract

                                   Page 1 of 1
<PAGE>

Lockheed Martin Corporation
Maritime Systems & Sensors
9500 Godwin Drive
Manasaas, Va. 20110-4157

Modification 01
To Purchase Order No. DM259735

Date:      April 27, 2005

Seller:    Ocean Power Technologies
           1590 Reed Rd.
           Pennington, NJ 08534

Attention: Ms. Debbie Montagna

This modification is subject to the terms and conditions contained in the
original purchase order and subsequent modifications and the additional
instructions hereinafter set forth:

Articles/services and/or data provided hereunder will be used on Government
Contract Number N00039-04-C-0035.

This is a rated order certified for National Defense use, and seller shall
follow all requirements of the Defense Priorities and Allocations System
Regulation (15 CFR part 700). Seller accepts said rating unless rejected in
writing within 10 days if DO rating, or 5 days if DX rating from the date of
order receipt.

     DPAS Rating: DO-A7.

                               BODY OF ALTERATION

Refer to the above Purchase Order Number DM259735 and make the additions,
deletions, changes and/or modifications hereinafter set forth:

     1.   Refer to the PO Para 5 Consideration and Payment and add the following
          statement:

          "This PO is fully funded at the total price of $1,527,212.00."

     2.   Schedule A

          Delete the existing Schedule A dated March 24, 2005 and update with
          the revised Schedule A dated April 24,2005 - copy attached.

                                       1

<PAGE>

PO #DM259735, Modification 03
September 2, 2005

ACCEPTANCE

Except as hereby amended, all provisions of the purchase order, including
modifications thereto, shall remain unmodified and in full force and effect and
shall also apply in carrying out the provisions of this modification.

This modification is executed in duplicate originals as of the effective date of
Buyer's signature on last page.

This modification must be signed and returned to the buyer within ten (10)
working days after receipt.

BUYER:  Lockheed Martin Corporation
        Maritime Systems & Sensors
        9500 Godwin Drive
        Manassas, VA 20110-4157

        /s/ Bruce Gaines
        -------------------------------
BY:     Bruce Gaines
TITLE:  Staff Subcontract Administrator
DATE:   April 27, 2005

SELLER: Ocean Power Technologies
        1590 Reed Rd.
        Pennington, NJ 08534

BY:     /s/ Charles F. Dunleavy
        -------------------------------
TITLE:  CFO
DATE:   April 27, 2005

                                        2

<PAGE>

                     Purchase Order Number DM259735 - Mod 01
                                  SCHEDULE "A"
                              DATED APRIL 27, 2005

<TABLE>
<CAPTION>
                                                    AUTHORIZED FUNDING
                                   ---------------------------------------------------
P.O.
LINE                                                          FIXED          TOTAL
ITEM   CLIN       DESCRIPTION           COST        COM        FEE            CPFF
----   ----   ------------------   -------------   -----   -----------   -------------
<S>    <C>    <C>                  <C>             <C>     <C>           <C>
 001   0001   ADS LCS
              Technology
              Development Phase    $1,388,375.00               ###       $1,527,212.00

 002   0002   Data for CLIN 0001        NSP         NSP        NSP            NSP

       Total Contract              $1,388,375.00   $0.00   $138,837.00   $1,527,212.00
              Total Authorized
              Funding - All Line
              Items =              $1,527,212.00

<CAPTION>

P.O.
LINE                                   PERIOD OF         ESTIMATED        FIXED          TOTAL
ITEM   CLIN       DESCRIPTION         PERFORMANCE        COST + COM        FEE        TARGET COST
----   ----   ------------------   -----------------   -------------   -----------   -------------
<S>    <C>    <C>                  <C>                 <C>             <C>           <C>
 001   0001   ADS LCS
              Technology
              Development Phase    9/14/04- 10/31/05   $1,388,375.00   $138,837.00   $1,527,212.00

 002   0002   Data for CLIN 0001   9/14/04-10/31/05         NSP             NSP            NSP

       Total Contract                                  $1,388,375.00   $138,837.00   $1,527,212.00
              Total Authorized
              Funding - All Line
              Items =
</TABLE>

CORPDOC 4(10/03)
                                        1
<PAGE>

Lockheed Martin Corporation
Maritime Systems & Sensors
9500 Godwin Drive
Manasaas, Va. 20110-4157

Modification 02
To Purchase Order No. DM259735

Date:      August 5, 2005

Seller:    Ocean Power Technologies
           1590 Reed Rd.
           Pennington, NJ 08534

Attention: Ms. Debbie Montagna

This modification is subject to the terms and conditions contained in the
original purchase order and subsequent modifications and the additional
instructions hereinafter set forth:

Articles/services and/or data provided hereunder will be used on Government
Contract Number N00039-04-C-0035.

This is a rated order certified for National Defense use, and seller shall
follow all requirements of the Defense Priorities and Allocations System
Regulation (15 CFR part 700). Seller accepts said rating unless rejected in
writing within 10 days if DO rating, or 5 days if DX rating from the date of
order receipt.

     DPAS Rating: DO-A7.

                               BODY OF ALTERATION

Refer to the above Purchase Order Number DM259735 and make the additions,
deletions, changes and/or modifications hereinafter set forth:

     1.   LINE IREM 001

          Incremental funding for Line Item 001 is increased by $98,000.00 from
          $1,527,212.00 to $1,625,212.00.

<TABLE>
<S>                        <C>
Allocated to Costs         $1,486,375
Allocated to Fixed Fee     $  138,837
Ttoal Authorized Funding   $1,625,212
</TABLE>

     2.   Schedule A

          Delete the existing Schedule A dated April 27, 2005 and update with
          the revised Schedule A dated August 5, 2005 - copy attached.

<PAGE>

PO #DM259735, Modification 03
September 2, 2005

ACCEPTANCE

Except as hereby amended, all provisions of the purchase order, including
modifications thereto, shall remain unmodified and in full force and effect and
shall also apply in carrying out the provisions of this modification.

This modification is executed in duplicate originals as of the effective date of
Buyer's signature on last page.

This modification must be signed and returned to the buyer within ten (10)
working days after receipt.

BUYER:  Lockheed Martin Corporation
        Maritime Systems & Sensors
        9500 Godwin Drive
        Manassas, VA 20110-4157

        /s/ Bruce Gaines
        -------------------------------
        Bruce Gaines
        Staff Subcontract Administrator

DATE:   August 5, 2005

SELLER: Ocean Power Technologies
        1590 Reed Rd.
        Pennington, NJ 08534

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

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

DATE:
        -------------------------------

                                        2

<PAGE>

                     Purchase Order Number DM259735 - Mod 02
                                  SCHEDULE "A"
                              DATED AUGUST 5, 2005

<TABLE>
<CAPTION>
                                                    AUTHORIZED FUNDING
                                   ---------------------------------------------------
P.O.
LINE                                                           FIXED           TOTAL
ITEM   CLIN       DESCRIPTION           COST       COM          FEE             CPFF
----   ----   ------------------   -------------   -----   -------------   -------------
<S>    <C>    <C>                  <C>             <C>     <C>             <C>
 001   0001   ADS LCS
              Technology
              Development Phase    $1,462,691.00                ###        $1,625,212.00

 002   0002   Data for CLIN 0001        NSP         NSP         NSP             NSP

       Total Contract              $1,486,375.00   $0.00    $138,837.00   $1,625,212.00
              Total Authorized
              Funding - All Line
              Items =              $1,625,212.00

<CAPTION>

P.O.
LINE                                   PERIOD OF         ESTIMATED        FIXED          TOTAL
ITEM   CLIN       DESCRIPTION         PERFORMANCE        COST + COM        FEE        TARGET COST
----   ----   ------------------   -----------------   -------------   -----------   -------------
<S>    <C>    <C>                  <C>                 <C>             <C>           <C>
 001   0001   ADS LCS
              Technology
              Development Phase    9/14/04- 10/31/05   $1,388,375.00   $138,837.00   $1,527,212.00

 002   0002   Data for CLIN 0001   9/14/04-10/31/05         NSP             NSP            NSP

       Total Contract                                  $1,388,375.00   $138,837.00   $1,527,212.00
              Total Authorized
              Funding - All Line
              Items =
</TABLE>

                                        1

<PAGE>

Lockheed Martin Corporation
Maritime Systems & Sensors
9500 Godwin Drive
Manasaas, Va. 20110-4157

Modification 03
To Purchase Order No. DM259735

Date:      September 2, 2005

Seller:    Ocean Power Technologies
           1590 Reed Rd.
           Pennington, NJ 08534

Attention: Ms. Debbie Montagna

This modification is subject to the terms and conditions contained in the
original purchase order and subsequent modifications and the additional
instructions hereinafter set forth:

Articles/services and/or data provided hereunder will be used on Government
Contract Number N00039-04-C-0035.

This is a rated order certified for National Defense use, and seller shall
follow all requirements of the Defense Priorities and Allocations System
Regulation (15 CFR part 700). Seller accepts said rating unless rejected in
writing within 10 days if DO rating, or 5 days if DX rating from the date of
order receipt.

     DPAS Rating: DO-A7.

                               BODY OF ALTERATION

Refer to the above Purchase Order Number DM259735 and make the additions,
deletions, changes and/or modifications hereinafter set forth:

     1.   LINE IREM 001

          Incremental funding for Line Item 001 is increased by $3,293.00 from
          $1,625,212.00 to $1,628,505.00.

     2.   Schedule A

          Delete the existing Schedule A dated August 5, 2005 and update with
          the revised Schedule A dated September 2, 2005 - copy attached.

<PAGE>

PO #DM259735, Modification 03
September 2, 2005

ACCEPTANCE

Except as hereby amended, all provisions of the purchase order, including
modifications thereto, shall remain unmodified and in full force and effect and
shall also apply in carrying out the provisions of this modification.

This modification is executed in duplicate originals as of the effective date of
Buyer's signature on last page.

This modification must be signed and returned to the buyer within ten (10)
working days after receipt.

BUYER:  Lockheed Martin Corporation
        Maritime Systems & Sensors
        9500 Godwin Drive
        Manassas, VA 20110-4157

        /s/ Bruce Gaines
        -------------------------------
        Bruce Gaines

TITLE:  Staff Subcontract Administrator

DATE:   September 2, 2005

SELLER: Ocean Power Technologies
        1590 Reed Rd.
        Pennington, NJ 08534

BY:
        -------------------------------
TITLE:
        -------------------------------

                                       2
<PAGE>

                     Purchase Order Number DM259735 - Mod 02
                                  SCHEDULE "A"
                             DATED SEPTEMBER 2, 2005

<TABLE>
<CAPTION>
                                                    AUTHORIZED FUNDING
                                   ---------------------------------------------------
P.O.
LINE                                                          FIXED          TOTAL
ITEM   CLIN       DESCRIPTION           COST       COM         FEE            CPFF
----   ----   ------------------   -------------   -----   -----------   -------------
<S>    <C>    <C>                  <C>             <C>     <C>           <C>
 001   0001   ADS LCS
              Technology
              Development Phase    $1,489,668.00               ###       $1,625,212.00
 002   0002   Data for CLIN 0001        NSP         NSP        NSP            NSP
                                   -------------   -----   -----------   -------------
       Total Contract              $1,489,668.00   $0.00   $138,837.00   $1,628,505.00
                                   =============   =====   ===========   =============
              Total Authorized
              Funding - All Line
              Items =              $1,628,505.00

<CAPTION>

P.O.                                                                                     TOTAL
LINE                                   PERIOD OF         ESTIMATED        FIXED       TARGET COST
ITEM   CLIN       DESCRIPTION         PERFORMANCE        COST + COM        FEE        & FIXED FEE
----   ----   ------------------   -----------------   -------------   -----------   -------------
<S>    <C>    <C>                  <C>                 <C>             <C>           <C>
 001   0001   ADS LCS
              Technology
              Development Phase    9/14/04- 10/31/05   $1,388,375.00   $138,837.00   $1,527,212.00
 002   0002   Data for CLIN 0001   9/14/04-10/31/05         NSP             NSP            NSP
                                                       -------------   -----------   -------------
       Total Contract                                  $1,388,375.00   $138,837.00   $1,527,212.00
                                                       =============   ===========   =============
              Total Authorized
              Funding - All Line
              Items =
</TABLE>

                                       1

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