Document:

EXHIBIT 10.3
                                      SB-2
                               MACHINETALKER, INC.
<PAGE>

June 22, 2004

Machine Talker, Inc.
513 De La Vina Street
Santa Barbara, CA  93101

Attention:            Mr. Roland Bryan

Subject:              Request for Proposal (RFP) No. 140-05RFP062204-99

Science  Applications  International  Corporation  (SAIC)  hereby  solicits your
proposal for five (5) controllers and wireless  network  interfaces for a UAV as
described in Attachment I Statement of Work, in support of their Prime Contract,
NAS1-02058, with the NASA Langley Research Center, located in Hampton, VA.

Proposal Instructions and Information

 1.      Type of Subcontract:  Firm Fixed-Price.

         1a.      Period of Performance:  July 1, 2004 through November 30, 2004

         1b.      Terms and  Conditions:  Any  subcontract  resulting  from this
                  solicitation  shall  resemble  the sample  agreement  enclosed
                  including  all clauses  required by SAIC's prime  contract and
                  all clauses  required by law on the date of  execution  of the
                  subcontract.  The terms and conditions set forth or referenced
                  herein by SAIC shall  apply and SAIC  objects to and shall not
                  be bound by any  additional or different  terms and conditions
                  proposed by the offeror.  Your proposal  shall be inclusive of
                  all costs  associated  with  performing the work in accordance
                  with the attached terms and conditions

2.       Cost/Price Submittal Requirements:

         2a.      Please  submit an  itemized  firm  fixed  price  quotation  to
                  provide all  materials  and services  required by Attachment I
                  Statement of Work.

         2b.      The  following  cost detail is necessary to properly  evaluate
                  your  proposal.  Please  provide the following  information as
                  applicable:

                  1) Labor Hours and Rates:  Please provide a detailed breakdown
                  of all proposed  labor  hours,  categories  and  corresponding
                  labor rates.

                  2) Other Direct Costs:  Travel - Itemized travel costs such as
                  mileage,  hotel,  and per diem  shall be based on the  current
                  Federal  Travel  Regulations.  Air Fare  shall be based on the
                  most economical commercial rates. In addition,  please provide

                                      SAIC
                               140-05RFP062204-99
                                       1
<PAGE>

                  departure/destination, number of people and number of days per
                  trip.  Materials  -  All  proposed  material  costs  shall  be
                  itemized and supported by vendor quotes,  price lists or other
                  substantiation acceptable to SAIC.

                  3) A copy of your current  price list  showing the  applicable
                  rates/prices  associated with the requested items and services
                  if you have one.  If the  proposed  costs are  different  than
                  those   included  in  the  price  list,   please   include  an
                  explanation of the difference (i.e. x% volume discount).

3.       Proposal Contents: Please include the following with your proposal:

         3a.      Price/Cost Information: See  section 2 above

         3b.      Forms/Certifications:

                  1. Annual Master Certifications & Representations
                  2. Government Property Questionnaire
                  3. Vendor Master Template
                  4.   Certificate   of   Insurance  in   accordance   with  the
                  requirements of Attachment 3, Schedule A, Paragraph 6.

         3c.      Points of Contact:  Please provide  technical and  contractual
                  points of  contact  including:  phone,  fax,  e-mail and Fed-X
                  address.

4.       Proposal Submission:

         4a.      You are requested to submit an proposal no later than close of
                  business,  June  28,  2004  via  e-mail  or  facsimile  to the
                  following:

                 Science Applications International Corporation
                           Attention: Leah K. Brummett
                                Tel: 757/827-4851
                                FAX: 757/825-4968
                        e-mail: leah.k.brummett@saic.com

         Any exceptions to the requirements  stated herein,  including terms and
         conditions,  must be addressed and submitted in writing with  alternate
         language or justification for deletion with your proposal.

5.       Proposal  Validity:  To be  considered  valid,  your  proposal  must be
         addressed    to   the    undersigned,    reference    SAIC    RFP   No.
         140-05RFP062204-485 and remain firm through July 28, 2004.

6.       Questions regarding this solicitation: Questions should be addressed to
         the following individuals:

                  Technical:                            Contractual:
                  Walter Miller                         Leah K. Brummett
                  (757) 827-4886                       (757) 827-4851
                                   FAX  (757) 825-4968

                                      SAIC
                               140-05RFP062204-99
                                       2
<PAGE>

Please be advised that this RFP does not commit SAIC to pay any cost  associated
with  preparation  and  submission  of a proposal and that the SAIC  CONTRACTUAL
REPRESENTATIVE  IS THE ONLY INDIVIDUAL  AUTHORIZED TO LEGALLY COMMIT SAIC TO THE
EXPENDITURE OF FUNDS RELATED TO THIS SOLICITATION.  This is not an authorization
to proceed with work.

BY  ACKNOWLEDGMENT OF RESPONSE TO THIS RFP, THE OFFEROR HEREBY CERTIFIES THAT NO
GRATUITIES WERE OFFERED BY THE SUPPLIER OR SOLICITED BY ANY SAIC EMPLOYEE EITHER
DIRECTLY OR INDIRECTLY.  ANY SITUATION  WHERE A GRATUITY IS SOLICITED  SHOULD BE
REPORTED  IMMEDIATELY TO THE VICE  PRESIDENT AND DEPUTY  DIRECTOR OF PROCUREMENT
MR. ROBERT G. BERG, JR. AT (619) 535-7451.

Sincerely,

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Leah K. Brummett
Sr. Subcontract Administrator

                       RFP 140-05RFP062204-99 ATTACHMENTS

         1. Attachment I Statement of Work
         2. RFQ/P General Provisions
         3. Sample Subcontract Agreement - Schedule A.
         4. Schedule B Contract Clauses Parts I and II.

         COMPLETE AND RETURN THE FOLLOWING WITH YOUR PROPOSAL:
         5. Annual Master Certifications and Representations
         7. Government Property Questionnaire.
         8. Vendor Master Template

                                      SAIC
                               140-05RFP062204-99
                                       3
<PAGE>
SAIC            Science Applications
                International Corporation
                An Employee-Owned Company

                         SUBCONTRACT AGREEMENT (SAMPLE)
                                Firm Fixed Price
---------------------------------- ---------------------------------------------
SUBCONTRACTOR:                     SUBCONTRACT #:
---------------------------------- ---------------------------------------------
MachineTalker, Inc.                MODIFICATION #:
---------------------------------- ---------------------------------------------
ADDRESS:                           SUBPROJECT #:
---------------------------------- ---------------------------------------------
513 De La Vina Street              DPAS RATING:
---------------------------------- ---------------------------------------------
Santa Barbara, CA  93103           TYPE:  Firm Fixed Price
---------------------------------- ---------------------------------------------
                                   VALUE: $55,000
---------------------------------- ---------------------------------------------

                                  INTRODUCTION

This  Subcontract  Agreement,  effective  July 1, 2004 is made  between  SCIENCE
APPLICATIONS   INTERNATIONAL  CORPORATION  (hereinafter  known  as  "Buyer"),  a
Delaware  corporation  with  principal  offices  in San Diego,  California,  and
MachineTalker,  Inc.  (hereinafter known as "Seller"),  a Delaware  corporation,
with principal offices in Santa Barbara, California. The effort to be performed
by  Seller  under  this  Subcontract  will  be part of  Buyer's  Prime  Contract
#(number)  which  has been  issued  by  (insert  name).  The  work,  defined  in
Attachment  I  (Statement  of Work and  Schedule)  will be  performed  on a Firm
Fixed-Price   basis,   in  accordance   with  Schedule  A  (Specific  Terms  and
Conditions),  and any  referenced  documents  listed in 16.0 Order of Precedence
section of this agreement.

                                   SCHEDULE A
                          SPECIFIC TERMS AND CONDITIONS
1.0    PRICE

The total firm fixed price for the work to be performed  under this  Subcontract
is $55,000 This  Subcontract  is fully  funded in the amount of  $55,000ncluding
profit, through November 30, 2004

1.1    DELIVERY

The goods and  services  required  by this  subcontract  shall be  delivered  in
accordance with the delivery schedule  contained in this agreement.  The time of
delivery  stated is of the essence of this  Subcontract.  The date specified for
delivery  is the  required  delivery  date at Buyer's  plant,  unless  otherwise
specifically  noted herein.  All items furnished under this subcontract shall be
delivered FOB Destination,  unless specified otherwise in writing by the Buyer's
contractual  representative.  Delivery  shall not be deemed  complete  until the
goods  have been  actually  received  and  accepted  by  Buyer,  notwithstanding
delivery to any  carrier,  or until  orders for  services  have been  performed,
received, and accepted by Buyer.

1.2    INSPECTION

All goods supplied and services  performed  pursuant  hereto shall be subject to
inspection  and test by buyer and its agents and by its  customers  at all times
and places,  whether during or after  manufacture as to goods, or performance as
to  services,  and  notwithstanding  the terms of  delivery or payment or, as to
goods, that title has not yet passed to Buyer or to its customers.  In the event
that goods supplied are not performed in accordance with the  specifications and
instructions of Buyer,  Buyer may require prompt  correction  thereof,  or as to
services, require that the services be rendered again at Seller's expense. Buyer
may terminate the subcontract for default If such defects exist and if Seller is
unable or refuses to replace the goods or render the services again promptly.

1.3    INVOICES

Invoices  shall be prepared in duplicate and contain the following  information;
subcontract  number,  subproject number,  item number,  description of articles,
sizes, quantities, unit prices and extended totals. Invoices will be mailed to:
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SAIC Federal Procurement Procedures                             Page 1 of 8
Section III, Supplement 1: Pro forma Agreements
             Pro forma #9-932-024 Firm Fixed Price (rev. 9/19/2003)

<PAGE>
SAIC            Science Applications
                International Corporation
                An Employee-Owned Company

         Science Applications International Corporation
         Attention: (Subcontract Administrator name)
         Street Address
                      ---------------------------------------------------------
         City, State, Zip Code
                              -----------------------------------------

Invoices shall clearly  reference a unique  invoice number on each invoice,  and
the date of the invoice.  Invoices shall include the "Amount Previously Billed,"
the "Amount of this Invoice," and the "Total Amount Billed to Date."

1.4    PAYMENT

Payment terms will be NET 30 (or 60) Days and paid within Thirty 30 (or 60) Days
after receipt of a proper  invoice or acceptance of delivered  items or services
rendered by the Buyer,  which ever occurs later,  unless otherwise  specified in
this  subcontract.  Buyer may make any  adjustments in Seller's  invoices due to
shortages,  late  delivery,  rejections,  or other  failure  to comply  with the
requirements of this  subcontract  before payment.  Cash Discounts will be taken
from date of  acceptance  of delivered  items,  or date of  acceptable  invoice,
whichever is later.  Payment shall not constitute  final  acceptance.  Buyer may
offset against any payment hereunder any amount owed to Buyer by Seller.

1.5    WARRANTY

Seller  represents  and warrants (1) that the price charged for the goods and/or
services  purchased  pursuant  hereto shall be no higher than  Seller's  current
price to any other  customer  for the same quality and quantity of such goods or
services; (2) that all goods and services delivered pursuant hereto will be new,
unless otherwise  specified,  and free from defects in material and workmanship;
(3) that all goods and  services  will  conform  to  applicable  specifications,
drawings,  and standards of quality and performance,  and that all items will be
free from defects in design and suitable for their  intended  purpose;  (4) that
the  goods  covered  by this  order  are fit and safe for  consumer  use,  if so
intended. All representations and warranties of Seller together with its service
warranties and guarantees, if any, shall run to Buyer and Buyer's customers. The
foregoing  warranties  shall survive any delivery,  inspection,  acceptance,  or
payment by Buyer.

2.0    TECHNICAL AND CONTRACTUAL REPRESENTATIVES

The  following  authorized   representatives  are  hereby  designated  for  this
Subcontract:

SELLER:                                            BUYER:
        TECHNICAL:  Gerald A. Nadler                   TECHNICAL:
                    -------------------------                   ----------------
        CONTRACTUAL:  Roland F. Bryan              CONTRACTUAL:
                    -------------------------                   ----------------

2.1    CONTACTS

Contacts with Buyer that affect the subcontract prices,  schedule,  statement of
work, and  subcontract  terms and  conditions  shall be made with the authorized
contractual representative. No changes to this Subcontract shall be binding upon
Buyer unless  incorporated  in a written  modification  to the  Subcontract  and
signed by Buyer's contractual representative.

2.2    CHANGES

Buyer may, by written notice to Seller at any time before  complete  delivery is
made under this  subcontract,  make  changes  within the  general  scope of this
subcontract  in  any  one  of  the   following:   (a)  drawings,   designs,   or
specifications;  (b) quantity;  (c) delivery; (d) method of shipment or routing;
and (e) make  changes in the  amount of Buyer  furnished  property.  If any such
change  causes a  material  increase  or  decrease  in the cost of,  or the time
required for the performance of any part of the work under this subcontract, the
Buyer shall make an equitable  adjustment in the  subcontract  price or delivery
schedule, or both, and shall modify the subcontract. As a condition precedent to
any equitable adjustment, the Seller must notify Buyer in writing of any request
for adjustment within twenty (20) days from the date Seller receives notice from
Buyer of a change, or from the date of any act of Buyer that Seller considers to
constitute a change. Failure to agree to any adjustment shall be a dispute under
the Disputes clause of this subcontract.  However, Seller shall proceed with the
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SAIC Federal Procurement Procedures                                 Page 2 of 8
Section III, Supplement 1: Pro forma Agreements
             Pro forma #9-932-024 Firm Fixed Price (rev. 9/19/2003)
<PAGE>

SAIC            Science Applications
                International Corporation
                An Employee-Owned Company

work as changed without interruption and without awaiting settlement of any such
claim.

3.0    DISCLOSURE

Seller shall not disclose information  concerning work under this Subcontract to
any third party,  unless such disclosure is necessary for the performance of the
subcontract   effort.  No  news  releases,   public   announcement,   denial  or
confirmation of any part of the subject matter of this  Subcontract or any phase
of any program  hereunder  shall be made without prior written consent of Buyer.
The  restrictions  of this paragraph shall continue in effect upon completion or
termination  of this  Subcontract  for such  period  of time as may be  mutually
agreed upon in writing by the parties.  In the absence of a written  established
period,  no disclosure is  authorized.  Failure to comply with the provisions of
this Clause may be cause for termination of this subcontract.

4.0    KEY PERSONNEL

(a)      For purposes of this clause, Buyer and Seller define "Key Personnel" as
         those  individuals  who are  mutually  recognized  as  essential to the
         successful completion and execution of this Subcontract.

(b)      Personnel designated as "Key Personnel" shall be assigned to the extent
         necessary for the timely completion of the task to which assigned.  Any
         substitution  or  reassignment   involving   Seller's  "Key  Personnel"
         assigned  to this  work  shall  be made  only  with  persons  of  equal
         abilities and qualifications and is subject to prior approval of Buyer,
         in writing.

(c)      Buyer  reserves  the  right to direct  the  removal  of any  individual
         assigned to this Subcontract.

(d)      Seller's Key  Personnel  are:  Gerald A. Nadler,  Principal  Scientist;
         Peter Wolf, Senior Software Engineer

5.0    ASSIGNMENTS AND SUBCONTRACTS

This  Subcontract  is not assignable and shall not be assigned by Seller without
the prior written  consent of Buyer.  Further,  Seller agrees to obtain  Buyer's
approval before  subcontracting  this order or any substantial  portion thereof;
provided,  however,  that this  limitation  shall not apply to the  purchase  of
standard commercial supplies or raw materials.

6.0    INSURANCE

Without  prejudice to Seller's  liability  to  indemnify  Buyer as stated in the
INDEMNIFICATION  provision  of this  Agreement,  Seller  shall  procure,  at its
expense, and maintain for the duration of the Agreement,  the insurance policies
described below with financially  responsible  insurance  companies,  reasonably
acceptable  to Buyer,  with policy limits not less than those  indicated  below.
Notwithstanding  any provision  contained herein, the Seller, and its employees,
agents,   representatives,   consultants  and  lower-tier   subcontractors   and
suppliers,  are not insured by Buyer,  and are not  covered  under any policy of
insurance that Buyer has obtained or has in place.

Special Provisions Applicable to Seller's Insurance coverage:

1.   ADDITIONAL  INSURED  - Seller  shall  have all  policies,  except  Workers'
     Compensation  and  Employer's  Liability,  endorsed  to  name  Buyer  as an
     Additional Insured with respect to the work to be performed by the Seller.

2.   WAIVER OF  SUBROGATION  - Seller shall have all policies  endorsed to waive
     the insurer's rights of subrogation in favor of Buyer.

3.   DEDUCTIBLES - Subject to the reasonable  review and approval of Buyer,  the
     Seller may arrange  deductibles or self-insured  retention's as part of the
     required  insurance  coverage's.  However,  it is expressly agreed that all
     deductibles or self-insured  retention's are the sole responsibility of the
     Seller.

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SAIC Federal Procurement Procedures                             Page 3 of 8
Section III, Supplement 1: Pro forma Agreements
             Pro forma #9-932-024 Firm Fixed Price (rev. 9/19/2003)

<PAGE>
SAIC            Science Applications
                International Corporation
                An Employee-Owned Company

4.   ADEQUACY OF INSURANCE  LIMITS - The insurance  coverage limits stated below
     are minimum coverage requirements,  not limits of liability,  and shall not
     be  construed in any way as Buyer's  acceptance  of  responsibility  of the
     Seller.

5.   CERTIFICATES  OF INSURANCE - Prior to  commencement  of any work under this
     Agreement,  the Seller shall furnish Buyer with  Certificates of Insurance,
     in a format acceptable to Buyer, evidencing the insurance coverage required
     in this Agreement and containing the following information:

         a.       Identify Buyer as an "Additional  Insured" with respect to all
                  policies   except   Workers'   Compensation   and   employers'
                  liability.
         b.       State  that  all   policies   have  been   endorsed  to  waive
                  subrogation in favor of Buyer.
         c.       State that the  underwriters  agree to  provide  Buyer with at
                  least 30 days  prior  written  notice of any  cancellation  or
                  material change in the coverage.

6.   WORK WITHIN 50' OF A RAILROAD - Exclusion  deleted.  (If  applicable due to
     performance of work within 50 feet of a railway)

6.1    COVERAGE

A.   WORKERS'  COMPENSATION - Insurance for statutory obligations imposed by law
     including,  where applicable,  coverage under United States  Longshoremen's
     and Harbor Workers' Act and Jones Act. (if applicable, Defense Base Act for
     those  employees  working on a U.S.  Military  installation  outside of the
     United States).

B.   EMPLOYERS LIABILITY - Insurance with limits of $1,000,000 for bodily injury
     by accident and  $1,000,000  for bodily  injury by disease,  including,  if
     applicable, maritime coverage endorsement.

C.   COMMERCIAL  GENERAL  LIABILITY - (Standard ISO occurrence form) - including
     products and completed operations  coverage,  full fire legal liability and
     contractual liability, with a per occurrence limit of $1,000,000.

D.   BUSINESS AUTO  LIABILITY - Coverage for bodily  injury and property  damage
     liability for all owned, hired or non-owned vehicles, with an each accident
     limit of $1,000,000.

The following clauses are applicable to this Agreement if checked:

___E. PROFESSIONAL LIABILITY - $1,000,000 per occurrence and aggregate providing
coverage for claims  arising out of the  performance of  professional  services,
resulting from any error, omission or negligent act of the Seller.

___F.  AIRCRAFT LIABILITY - Covering liability arising out of the use, operation
or  maintenance  of any  aircraft,  including  passenger  liability,  with a per
occurrence limit of not less than $10,000,000.

___G. VESSEL LIABILITY - Covering  liability arising out of the use,  operation,
or charter of a vessel.  Protection  and  Indemnity  (including  Jones Act) with
limits of liability not less than $5,000,000.

         VESSEL HULL & Machinery - Covering  damage or destruction to the vessel
hull or machinery. Hull and Machinery insurance for the replacement value of the
vessel. Waiver of subrogation in favor of Buyer provided.

___H. SHIP REPAIRERS  LEGAL LIABILITY - Covering legal liability  arising out of
ship  repair or ship  maintenance  operations,  with a per  occurrence  limit of
liability of not less than $1,000,000.

___I. CONTRACTOR POLLUTION LIABILITY - Covering sudden and non-sudden release of
pollutants  resulting in damage to the  environment  or in bodily injury arising
out of the operations or services of Seller.  Minimum per  occurrence  limits of
liability of $1,000,000.

___J.  CONSTRUCTION CONTRACTS - All-Risk Builders risk insurance covering Seller
and Buyer as their interests may appear, on the work, to the full value thereof,
and for loss to Seller's equipment.

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SAIC Federal Procurement Procedures                             Page 4 of 8
Section III, Supplement 1: Pro forma Agreements
             Pro forma #9-932-024 Firm Fixed Price (rev. 9/19/2003)

<PAGE>
SAIC            Science Applications
                International Corporation
                An Employee-Owned Company

___L.  AIRCRAFT  PRODUCTS  LIABILITY  - Covering  liability  arising  out of the
manufacture, sale, servicing, repair, distribution, instruction and operation of
aircraft related products or services with a per occurrence limit of $1,000,000.

___M.  NUCLEAR S&T LIABILITY - Covering legal  liability due to bodily injury or
property damage caused by the nuclear energy hazard, excluding work performed at
or for a nuclear facility, with a per occurrence limit of $1,000,000.

7.0    INDEMNIFICATION

(a)  Seller shall indemnify,  defend and hold SAIC and SAIC's customers harmless
     from and against any and all  damages,  losses,  liabilities  and  expenses
     (including  reasonable  attorneys'  fees) arising out of or relating to any
     claims,  causes of action,  lawsuits or other  proceedings,  regardless  of
     legal theory,  that result,  in whole or in part,  from Seller's (or any of
     Seller's subcontractors,  suppliers, employees, agents or representatives):
     (i)  intentional  misconduct,  negligence,  or  fraud,  (ii)  breach of any
     representation,  warranty or covenant  made  herein,  or (iii)  products or
     services including,  without  limitation,  any claims that such products or
     services  infringe any United States patent,  copyright,  trademark,  trade
     secret or any other proprietary  right of any third party.  Notwithstanding
     the foregoing,  Seller's  obligations under this Section shall not apply to
     any  claims  which  are  finally   determined   by  a  court  of  competent
     jurisdiction  to be occasioned by the  negligence or willful  misconduct of
     SAIC.

(b)  Buyer  shall  promptly  notify  Seller of any claim  against  Buyer that is
     covered   by   this   indemnification   provision   and   shall   authorize
     representatives of Seller to settle or defend any such claim or suit and to
     represent  Buyer in, or to take  charge of, any  litigation  in  connection
     therewith.

8.0    INFRINGEMENT INDEMNITY

(a)  In lieu of any warranty by Buyer or Seller against infringement,  statutory
     or otherwise,  it is agreed that Seller shall defend,  at its expense,  any
     suit  against  Buyer  or its  customers  based  on a claim  that  any  item
     furnished under this order or the normal use or sale thereof  infringes any
     U.S.  Letters patent or copyright,  and shall pay costs and damages finally
     awarded in any such suit,  provided  that  Seller is notified in writing of
     the suit and given  authority,  information,  and  assistance  at  Seller's
     expense  for the  defense  of  same.  If the  use or  sale of said  item is
     enjoined as a result of such suit,  Seller,  at no expense to Buyer,  shall
     obtain for Buyer and its  customers  the right to use and sell said item or
     shall  substitute  an equivalent  item  acceptable to Buyer and extend this
     patent indemnity thereto.

(b)  Notwithstanding the foregoing paragraph, when this order is performed under
     the  Authorization  and Consent of the U.S.  Government  to  infringe  U.S.
     Patents,  Seller's  liability  for  infringement  of such  Patents  in such
     performance  shall be limited to the extent of the  obligation  of Buyer to
     indemnify the U.S. Government.

9.0    PROPRIETARY INFORMATION, TOOLS, MATERIALS, ETC.

(a)  Seller agrees it will keep  confidential  and not use any  material,  jigs,
     dies, fixtures,  molds, patterns,  taps, gauges, other equipment,  designs,
     sketches,  specifications,  drawings,  computer  programs and software,  or
     other data or  information  furnished  by Buyer for any purpose  whatsoever
     other  than  as  herein  specified,   including  but  not  limited  to  the
     manufacture of large  quantities,  without prior written  consent of Buyer.
     All materials,  jigs, dies, fixtures,  molds, patterns, taps, gauges, other
     equipment, designs, sketches,  specifications,  drawings, computer programs
     and  software,  or other data or  information  furnished by Buyer,  whether
     loaned to Seller  or  fabricated,  manufactured,  purchased,  or  otherwise
     acquired by Seller for the performance of this Subcontract and specifically
     charged  to Buyer  are the  property  of Buyer.  They are to be marked  for
     identification  as Buyer may designate,  and upon completion or termination
     of  this  Subcontract  shall  be  returned  to  Buyer  in  good  condition,
     reasonable  wear only  excepted,  together  with all  spoiled  and  surplus
     material,  unless otherwise directed in writing by Buyer.  Seller agrees to
     replace, at its expense, all such items not so returned.  Seller shall make
     no charge for any storage,  maintenance  or  retention of such  property of
     Buyer.  Seller  shall bear all risk of loss for all of Buyer's  property in
     Seller's possession.

(b)  If Buyer furnishes any material for fabrication  hereunder,  Seller agrees:
     (i) not to  substitute  any  other  material  in such  fabrication  without
     Buyer's prior written  consent,  (ii) that title to such material shall not
     be affected by  incorporation  in or attachment to any other property;  and
     (iii) to state and  warrant  on its  packing  sheet and  invoice  for final
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SAIC Federal Procurement Procedures                             Page 5 of 8
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<PAGE>
SAIC            Science Applications
                International Corporation
                An Employee-Owned Company

     parts:  "All materials  furnished by Buyer on this order (except that which
     becomes normal  industrial  waste or was replaced at Seller's  expense) has
     been  returned in the form of parts or held as unused  material for Buyer's
     disposition."

10.0   DISPUTES

Any dispute not disposed of in accordance with the "Disputes Clause" of Schedule
B, if any, shall be determined in the following manner.

(a)  Buyer and Seller  agree to enter into  Negotiation  to resolve any dispute.
     Both parties agree to negotiate in good faith to reach a mutually agreeable
     settlement within a reasonable amount of time.

(b)  If  negotiations  are  unsuccessful,  Buyer and Seller  agree to enter into
     binding Arbitration.  The American Arbitration Association (AAA) Commercial
     Arbitration Rules (most recent edition) are to govern this Arbitration. The
     Arbitration  shall  take  place  in the  County  of  San  Diego,  State  of
     California.  The  Arbitrator  shall  be  bound  to  follow  the  applicable
     subcontract  provisions and California law in adjudicating the dispute.  It
     is agreed by both parties that the Arbitrator's decision is final, and that
     no party may take any action, judicial or administrative,  to overturn this
     decision.  The judgment  rendered by the  Arbitrator  may be entered in any
     court having jurisdiction thereof.

     Pending any decision,  appeal or judgment  referred to in this provision or
     the settlement of any dispute arising under this Subcontract,  Seller shall
     proceed diligently with the performance of this Subcontract.

11.0   DEFAULT

(a)  The Buyer may, by written  notice of default to the Seller,  terminate  the
     whole  or  any  part  of  this  Subcontract  in any  one  of the  following
     circumstances:  (i) if Seller fails to make  delivery of the supplies or to
     perform the  services  within the time  specified  herein or any  extension
     thereof;  or (ii) if Seller fails to perform any of the other provisions of
     this  Subcontract in accordance with its terms,  and in either of these two
     circumstances  does not cure  such  failure  within a period of 10 days (or
     such longer  period as Buyer may  authorize  in writing)  after  receipt of
     notice from the Buyer  specifying  such  failure;  or (iii) Seller  becomes
     insolvent  or  the  subject  of  proceedings  under  any  law  relating  to
     bankruptcy  or the relief of debtors or admits in writing its  inability to
     pay its debts as they become due.

(b)  If this  Subcontract  is so  terminated,  Buyer may  procure  or  otherwise
     obtain,  upon such terms and in such manner as Buyer may deem  appropriate,
     supplies or services similar to those  terminated,  Seller,  subject to the
     exceptions  set forth below,  shall be liable to Buyer for any excess costs
     of such similar supplies or services.

(c)  Seller shall transfer title and deliver to Buyer,  in the manner and to the
     extent requested in writing by Buyer at or after  termination such complete
     articles,  partially completed articles and materials,  parts, tools, dies,
     patterns, jigs, fixtures, plans, drawings,  information and contract rights
     as Seller has produced or acquired for the  performance  of the  terminated
     part of this Subcontract,  and Buyer will pay Seller the contract price for
     complete articles  delivered to and accepted by Buyer and the fair value of
     the other property of Seller so requested and delivered.

(d)  Seller shall  continue  performance  of this  Subcontract to the extent not
     terminated.  Buyer shall have no  obligations to Seller with respect to the
     terminated part of this Subcontract  except as herein provided.  In case of
     Seller's  default,  Buyer's rights as set forth herein shall be in addition
     to Buyer's other rights although not set forth in this Subcontract.

(e)  Seller shall not be liable for damages resulting from default due to causes
     beyond the  Seller's  control and  without  Seller's  fault or  negligence,
     provided,  however,  that if Seller's default is caused by the default of a
     subcontractor or supplier, such default must arise out of causes beyond the
     control of both Seller and subcontractor or supplier, and without the fault
     or  negligence  of either of them and,  provided  further,  the supplies or
     services  to be  furnished  by  the  subcontractor  or  supplier  were  not
     obtainable from other sources.
================================================================================
SAIC Federal Procurement Procedures                             Page 6 of 8
Section III, Supplement 1: Pro forma Agreements
             Pro forma #9-932-024 Firm Fixed Price (rev. 9/19/2003)

<PAGE>
SAIC            Science Applications
                International Corporation
                An Employee-Owned Company

12.0   GENERAL RELATIONSHIP

The Subcontractor is not an employee of SAIC for any purpose whatsoever.  Seller
agrees that in all matters relating to this Subcontract it shall be acting as an
independent  contractor and shall assume and pay all liabilities and perform all
obligations imposed with respect to the performance of this Subcontract.  Seller
shall have no right,  power or authority to create any obligation,  expressed or
implied, on behalf of Buyer and/or the Government and shall have no authority to
represent Buyer as an agent.

13.0   NON-WAIVER OF RIGHTS

The failure of Buyer to insist upon strict  performance  of any of the terms and
conditions in the Subcontract,  or to exercise any rights or remedies, shall not
be  construed  as a waiver of its rights to assert any of the same or to rely on
any such terms or conditions at any time thereafter.  The invalidity in whole or
in part of any term or  condition  of this  subcontract  shall  not  affect  the
validity of other parts hereof.

14.0   APPLICABLE STATE LAW AND COMPLIANCE

This Subcontract  shall be governed by and construed in accordance with the laws
of the  State of  California.  Seller  agrees  to  comply  with  the  applicable
provisions of any federal, state or local law or ordinance and all orders, rules
and regulations issued there under.

15.0 EXPORT CONTROL COMPLIANCE FOR FOREIGN PERSONS

The subject technology of this Subcontract  (together including data,  services,
and hardware provided hereunder) may be controlled for export purposes under the
International  Traffic  in  Arms  Regulations  (ITAR)  controlled  by  the  U.S.
Department of State or the Export Administration  Regulations ("EAR") controlled
by the U.S.  Department  of  Commerce.  ITAR  controlled  technology  may not be
exported without prior written authorization and certain EAR technology requires
a prior license  depending upon its  categorization,  destination,  end-user and
end-use.  Exports or re-exports of any U.S. technology to [any destination under
U.S. sanction or embargo are forbidden.

Access to  certain  technology  ("Controlled  Technology")  by  Foreign  Persons
(working  legally in the U.S.), as defined below,  may require an export license
if the  Controlled  Technology  would require a license prior to delivery to the
Foreign Person's country of origin.  SELLER is bound by U.S. export statutes and
regulations and shall comply with all U.S.  export laws.  SELLER shall have full
responsibility  for obtaining any export licenses or  authorization  required to
fulfill its obligations under this Subcontract.

SELLER  hereby  certifies  that all  SELLER  employees  who have  access  to the
Controlled  Technology are U.S. citizens,  have permanent U.S. residency or have
been granted  political  asylum or refugee  status in  accordance  with 8 U.S.C.
1324b(a)(3). Any non-citizens who do not meet one of these criteria are "Foreign
Persons" within the meaning of this clause but have been authorized under export
licenses to perform their work hereunder.

16.0   ORDER OF PRECEDENCE

The documents listed below are hereby incorporated by reference. In the event of
an   inconsistency   or  conflict  between  or  among  the  provisions  of  this
Subcontract,  the  inconsistency  shall be resolved by giving  precedence in the
following order:

1.   Attachment I: Statement of Work and Schedule dated ________.
2.   Schedule A: Specific Terms and Conditions Form 9-932-024 (Rev. ____).
3.   Schedule B: Part I U.S.  Government  Terms and  Conditions  Form  9-932-031
     (Rev. ____).
4.   Schedule B: Part II Contract  Clauses  (specific for the Government  Agency
     Rev. ____).
5.   Small Business Subcontracting Plan dated ________.
6.   U.S. Government Property Enclosure (Rev._____).
7.   Any Referenced Specifications (current edition).
================================================================================
SAIC Federal Procurement Procedures                             Page 7 of 8
Section III, Supplement 1: Pro forma Agreements
             Pro forma #9-932-024 Firm Fixed Price (rev. 9/19/2003)

<PAGE>
SAIC            Science Applications
                International Corporation
                An Employee-Owned Company

17.0 ENTIRE AGREEMENT

The  parties  hereby  agree  that  this  Subcontract,  including  all  documents
incorporated  herein by reference,  shall  constitute  the entire  agreement and
understanding between the parties hereto and shall supersede and replace any and
all prior or  contemporaneous  representations,  agreements or understandings of
any kind, whether written or oral, relating to the subject matter hereof.

In witness whereof, the duly authorized  representatives of Buyer and the Seller
have executed this Subcontract on the Dates shown.

SELLER:                           Science Applications International Corporation
          MACHINETALKER, INC.
------------------------------
          (Company Name)

x /s/Roland F. Bryan              x
------------------------------    ----------------------------------------------
(Signature)                      (Signature)

NAME:  ROLAND F. BRYAN            NAME:
------------------------------    ----------------------------------------------
(Type or Print)                   (Type or Print)

TITLE:      PRESIDENT             TITLE:
------------------------------    ----------------------------------------------
DATE:      23 JUNE 2004           DATE:
------------------------------    ----------------------------------------------

================================================================================
SAIC Federal Procurement Procedures                             Page 8 of 8
Section III, Supplement 1: Pro forma Agreements
             Pro forma #9-932-024 Firm Fixed Price (rev. 9/19/2003)
<PAGE>
                                      SAIC
                           An Employee-Owned Company

                           ANNUAL MASTER CERTIFICATION

   52.203-11 -- Certification and Disclosure Regarding Payments to Influence
                          Certain Federal Transactions
                                   (Apr 1991)

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

(b)  The offeror,  by signing its offer,  hereby certifies to the best of his or
     her knowledge and belief that on or after December 23, 1989 -

     (1)  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;

     (2)  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 this  solicitation,
          the offeror shall  complete and submit,  with its offer,  OMB standard
          form  LLL,  Disclosure  of  Lobbying  Activities,  to the  Contracting
          Officer; and

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

(c)  Submission  of this  certification  and  disclosure is a  prerequisite  for
     making or entering  into this contract  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.

                 52.204-3 -- Taxpayer Identification (Oct 1998)

(a)  Definitions.

"COMMON PARENT," as used in this  solicitation  provision,  means that corporate
entity that owns or controls an affiliated group of corporations  that files its
Federal income tax returns on a consolidated  basis, and of which the offeror is
a member.

"TAXPAYER  IDENTIFICATION  NUMBER (TIN)," as used in this  provision,  means the
number required by the Internal  Revenue Service (IRS) to be used by the offeror
in  reporting  income  tax and  other  returns.  The TIN may be  either a Social
Security Number or an Employer Identification Number.

(b) All offerors must submit the information  required in paragraphs (d) through
(f) of this provision to comply with debt  collection  requirements of 31 U.S.C.
7701(c) and 3325(d),  reporting requirements of 26 U.S.C. 6041, 6041A, and 6050M
and  implementing  regulations  issued by the IRS. If the resulting  contract is
subject  to  the  reporting   requirements   described  in  Federal  Acquisition
Regulation  (FAR)  4.904,  the  failure or refusal by the offeror to furnish the
information may result in a 31 percent reduction of payments otherwise due under
the contract.

(c) The  TIN  may be  used  by the  Government  to  collect  and  report  on any
delinquent amounts arising out of the offeror's relationship with the government
(31 U.S.C.  7701(c)(3)).  If the  resulting  contract  is subject to the payment
reporting requirements described in FAR 4.904, the TIN provided hereunder may be
matched with IRS records to verify the accuracy of the offeror's TIN.

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<PAGE>
                                     SAIC
                           An Employee-Owned Company

(d)  TAXPAYER  IDENTIFICATION  NUMBER (TIN) X TIN:  01-0592299  ;__ TIN has been
applied for; ___ TIN is not required  because;  Offeror is a nonresident  alien,
foreign   corporation,   or  foreign  partnership  that  does  not  have  income
effectively  connected  with the  conduct of a trade or  business  in the United
States and does not have an office or place of business or a fiscal paying agent
in the United States;  __ Offeror is an agency or  instrumentality  of a foreign
government;   __  Offeror  is  an  agency  or  instrumentality  of  the  Federal
Government.

(e) TYPE OF ORGANIZATION.  __ Sole proprietorship;  __ Partnership;  X Corporate
entity (not tax-exempt); __ Corporate entity (tax-exempt);  __ Government entity
(Federal,  State, or local); Foreign government;  __ International  organization
per 26 CFR 1.6049-4; __ Nonprofit  Organization;  __ Javits-Wagner-O'Day  (JWOD)
per 41 U.S.C. 46-48c; Other ___.

(f) COMMON  PARENT.  X Offeror is not owned or  controlled by a common parent as
defined in paragraph (a) of this  provision;  ___ Name and TIN of common parent:
Name_____, TIN ____ .

      52.204-5 -- Women-Owned Business Other Than Small Business (May 1999)

(a)  Definition.  "WOMEN-OWNED  BUSINESS  CONCERN,"  as used in this  provision,
     means a concern that is at least 51 percent owned by one or more women;  or
     in the case of any  publicly  owned  business,  at least 51  percent of its
     stock  is  owned by one or more  women;  and  whose  management  and  daily
     business operations are controlled by one or more women.

(b)  Representation.  [Complete  only if the offeror is a  women-owned  business
concern and has not represented  itself as a small business concern in paragraph
(b)(1)  of  FAR  52.219-1,  Small  Business  Program  Representation,   of  this
solicitation.]  The offeror  represents  that it ___ is a  women-owned  business
concern.

      52.204-6 -- Data Universal Numbering System (DUNS) Number (Jun 1999)

(a) The offeror shall enter, in the block with its name and address on the cover
page of its offer,  the  annotation  "DUNS"  followed  by the DUNS  number  that
identifies  the offeror's name and address  exactly as stated in the offer.  The
DUNS number is a nine-digit  number  assigned by Dun and Bradstreet  Information
Services.
(b) If the  offeror  does not have a DUNS  number,  it  should  contact  Dun and
Bradstreet directly to obtain one. A DUNS number will be provided immediately by
telephone  at no charge to the  offeror.  For  information  on  obtaining a DUNS
number,  the offeror,  if located within the United States,  should call Dun and
Bradstreet  at  1-800-333-0505.  The  offeror  should be prepared to provide the
following information:

(1) Company name.
(2) Company address.
(3) Company telephone number.
(4) Line of business.
(5) Chief executive officer/key manager.
(6) Date the company was started.
(7) Number of people employed by the company.
(8) Company affiliation.
(b)  Offerors  located  outside the United  States may obtain the  location  and
     phone number of the local Dun and Bradstreet  Information  Services  office
     from the Internet home page at  http://www.customerservices@dnb.com.  If an
     offeror is unable to locate a local service  center,  it may send an e-mail
     to Dun and Bradstreet at globalinfo@mail.dnb.com.

Note: For purposes of proposals  submitted to SAIC, enter your DUNS number here:
#122797629
---------

52.209-5 -- Certification Regarding Debarment,  Suspension,  Proposed Debarment,
and Other Responsibility Matters (Dec 2001)

(a)(1) The Offeror certifies,  to the best of its knowledge and belief, that the
Offeror and/or any of its Principals:
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i.   __ are, X are not presently debarred, suspended, proposed for debarment, or
     declared ineligible for the award of contracts by any Federal agency;

ii.  __ have, X have not within a three-year period preceding the signature date
     of  this  document,  been  convicted  of or had a civil  judgment  rendered
     against them for:  commission of fraud or a criminal  offense in connection
     with  obtaining,  attempting to obtain,  or  performing a public  (Federal,
     State,  or local)  contract or  subcontract;  violation of Federal or state
     antitrust  statutes  relating to the submission of offers; or commission of
     embezzlement,  theft,  forgery,  bribery,  falsification  or destruction of
     records, making false statements, or receiving stolen property; and

iii. __ are, X are not  presently  indicted  for,  or  otherwise  criminally  or
     civilly  charged by a  governmental  entity with  commission  of any of the
     offenses enumerated in subdivision (b) of this provision.

iv.  __ has, X has not within a three-year  period  preceding the signature date
     of this document,  had one or more contracts  terminated for default by any
     Federal agency.

(2)  "PRINCIPALS,"  for the  purposes  of this  certification,  means  officers;
directors;   owners;   partners;  and,  persons  having  primary  management  or
supervisory  responsibilities  within a business entity (e.g.,  general manager;
plant manager; head of a subsidiary,  division, or business segment, and similar
positions).

THIS CERTIFICATION CONCERNS A MATTER WITHIN THE JURISDICTION OF AN AGENCY OF THE
UNITED STATES AND THE MAKING OF A FALSE, FICTITIOUS, OR FRAUDULENT CERTIFICATION
MAY RENDER THE MAKER SUBJECT TO PROSECUTION UNDER SECTION 1001, TITLE 18, UNITED
STATES CODE.

(b) The  offeror  shall  provide  immediate  written  notice to the  Contracting
Officer if, at any time prior to  contract  award,  the offeror  learns that its
certification  was erroneous when submitted or has become erroneous by reason of
changed  circumstances.
(c) A  certification  that any of the items in paragraph  (a) of this  provision
exists  will not  necessarily  result  in  withholding  of an award  under  this
solicitation. However, the certification will be considered in connection with a
determination of the offeror's responsibility. Failure of the offeror to furnish
a  certification  or provide  such  additional  information  as requested by the
Contracting Officer may render the offeror nonresponsible.
(d)  Nothing   contained  in  the  foregoing   shall  be  construed  to  require
establishment  of a system of  records in order to render,  in good  faith,  the
certification  required by paragraph  (a) of this  provision.  The knowledge and
information  of an  offeror is not  required  to exceed  that which is  normally
possessed by a prudent person in the ordinary course of business  dealings.
(e)  The  certification  in  paragraph  (a)  of  this  provision  is a  material
representation  of fact upon which reliance was placed when making award.  If it
is  later   determined  that  the  offeror   knowingly   rendered  an  erroneous
certification,  in addition to other remedies  available to the Government,  the
Contracting  Officer may terminate the contract resulting from this solicitation
for default.

                   52.215-6 -- Place of Performance (Oct 1997)

(a) The offeror or respondent, in the performance of any contract resulting from
this  solicitation,  __ intends,  X does not intend to use one or more plants or
facilities  located at a  different  address  from the address of the offeror or
respondent as indicated in this proposal or response to request for information.
(b) If the offeror or  respondent  checks  "intends"  in  paragraph  (a) of this
provision, it shall insert in the following spaces the required information:

                   Place of                         Name and Address of Owner
                 Performance                      and Operator of the Plant or
  (Street Address, City, State, County, Zip      Facility if Other Than Offeror
                    Code)                                 Respondent

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                                      SAIC
                           An Employee-Owned Company

          52.219-1 -- Small Business Program Representations (Apr 2002)

(a)  (1)  The  North  American  Industry  Classification  System (NAICS) code(s)
          applicable to this document is/are 334513 [insert NAICS code(s)].

     (2)  The small business size standard is 500

     (3)  The small  business size standard for a concern which submits an offer
          in its own name, other than on a construction or service contract, but
          which   proposes  to  furnish  a  product  which  it  did  not  itself
          manufacture, is 500 employees.

(b) Representation-

(1) The offeror  represents as part of its offer that it X is, __ is not a small
business concern.

(2)(Complete only if the offeror  represented itself as a small business concern
in paragraph  (b)(1) of this  provision.)  The offeror  represents,  for general
statistical  purposes,  that it __ is, X is not a small  disadvantaged  business
concern as defined in 13 CFR 124.1002. (Must be SBA certified)

(3)(Complete only if the offeror  represented itself as a small business concern
in paragraph  (b)(1) of this  provision.) The offeror  represents as part of its
offer that it __ is, X is not a women-owned small business concern.

(4)(Complete only if the offeror  represented itself as a small business concern
in paragraph  (b)(1) of this  provision.) The offeror  represents as part of its
offer that it __ is, X is not a veteran-owned small business concern.

(5)(Complete  only if the  offer  represented  itself as a  veteran-owned  small
business concern in paragraph (b)(4) of this provision.) The offeror  represents
as part of its offer  that it __ is, X is not a  service-disabled  veteran-owned
small business concern.

(6)(Complete only if offeror  represented  itself as a small business concern in
paragraph  (b)(1) of this  provision.)  The offeror  represents,  as part of its
offer,  that it __ is, X is not a HUBZone small business concern listed,  on the
date of this  representation,  on the List of Qualified  HUBZone Small  Business
Concerns maintained by the Small Business Administration, and no material change
in ownership and control,  principal office, or HUBZone employee  percentage has
occurred  since  it  was  certified  by the  Small  Business  Administration  in
accordance with 13 CFR part 126; (Must be SBA certified)

The offeror  represents,  as part of its offer,  that it __ is, X is not a joint
venture  that  complies  with  the  requirements  of 13 CFR  part  126,  and the
representation  in  paragraph  (b)(6)(i)  of this  provision is accurate for the
HUBZone small business  concern or concerns that are  participating in the joint
venture.  [The  offeror  shall  enter  the name or names  of the  HUBZone  small
business concern or concerns that are  participating in the joint  venture:___.]
Each HUBZone small  business  concern  participating  in the joint venture shall
submit a separate signed copy of the HUBZone representation.

(c)      Definitions. As used in this provision--

"Service-disabled veteran-owned small business concern"-
 -----------------------------------------------------
(1) Means a small business concern-

     (i)  Not  less  than  51   percent  of  which  is  owned  by  one  or  more
     service-disabled  veterans or, in the case of any publicly owned  business,
     not  less  than 51  percent  of the  stock of which is owned by one or more
     service-disabled veterans; and
     (ii) The management  and daily business  operations of which are controlled
     by one or more service-disabled  veterans or, in the case of a veteran with
     permanent and severe disability,  the spouse or permanent caregiver of such
     veteran.

(2)  Service-disabled  veteran means a veteran, as defined in 38 U.S.C.  101(2),
with a disability that is service-connected, as defined in 38 U.S.C. 101(16).

"Small  business  concern," means a concern,  including its affiliates,  that is
independently  owned and  operated,  not  dominant in the field of  operation in
which it is bidding on Government  contracts,  and qualified as a small business
under the criteria in 13 CFR Part 121 and the size  standard in paragraph (a) of
this provision.
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                                      SAIC
                           An Employee-Owned Company

"VETERAN-OWNED SMALL BUSINESS CONCERN" means a small business concern-
 ------------------------------------
(1) Not less  than 51  percent  of which  is owned by one or more  veterans  (as
defined at 38 U.S.C. 101(2)) or, in the case of any publicly owned business, not
less than 51 percent of the stock of which is owned by one or more veterans; and
(2) The management and daily business  operations of which are controlled by one
or more veterans.

"WOMEN-OWNED SMALL BUSINESS CONCERN," means a small business concern --
 ----------------------------------
(1) That is at least 51 percent  owned by one or more women;  or, in the case of
any publicly owned business,  at least 51 percent of the stock of which is owned
by one or more women; and (2) Whose management and daily business operations are
controlled by one or more women.

(d) Notice.

(1)If this  solicitation  is for supplies and has been set aside, in whole or in
part,  for  small  business  concerns,  then  the  clause  in this  solicitation
providing notice of the set-aside contains restrictions on the source of the end
items to be furnished.
(2)Under 15 U.S.C.  645(d),  any person who  misrepresents  a firm's status as a
small, HUBZone small, small disadvantaged, or women-owned small business concern
in order to  obtain a  contract  to be  awarded  under the  preference  programs
established  pursuant to section 8(a),  8(d), 9, or 15 of the Small Business Act
or any other provision of Federal law that specifically  references section 8(d)
for a definition of program eligibility, shall --

     (i) Be punished by imposition of fine, imprisonment, or both;
     (ii) Be  subject  to  administrative  remedies,  including  suspension  and
     debarment; and
     (iii) Be  ineligible  for  participation  in programs  conducted  under the
     authority of the Act.

Alternate  I (Apr  2002).  As  prescribed  in  19.307(a)(2),  add the  following
paragraph (b)(7) to the basic provision:

(7) [Complete if offeror represented itself as disadvantaged in paragraph (b)(2)
of this  provision.] The offeror shall check the category in which its ownership
falls:

__ Black American.
__ Hispanic American.
__ Native American (American Indians, Eskimos, Aleuts, or Native Hawaiians).
__ Asian-Pacific  American (persons with origins from Burma, Thailand, Malaysia,
Indonesia,  Singapore, Brunei, Japan, China, Taiwan, Laos, Cambodia (Kampuchea),
Vietnam,  Korea,  The  Philippines,  U.S. Trust Territory of the Pacific Islands
Republic  of Palau),  Republic of the  Marshall  Islands,  Federated  States of
Micronesia,  the  Commonwealth of the Northern  Mariana  Islands,  Guam,  Samoa,
Macao, Hong Kong, Fiji, Tonga, Kiribati, Tuvalu, or Nauru).
__ Subcontinent Asian (Asian-Indian)  American (persons with origins from India,
Pakistan, Bangladesh, Sri Lanka, Bhutan, the Maldives Islands, or Nepal).
__Individual/concern, other than one of the preceding

           52.222-21 - Prohibition of Segregated Facilities (Feb 1999)

(a) "SEGREGATED  FACILITIES,"  as used in this clause,  means any waiting rooms,
work areas, rest rooms and wash rooms,  restaurants and other eating areas, time
clocks, locker rooms and other storage or dressing areas, parking lots, drinking
fountains,  recreation  or  entertainment  areas,  transportation,  and  housing
facilities provided for employees,  that are segregated by explicit directive or
are in fact segregated on the basis of race,  color,  religion,  sex or national
origin because of written or oral policies or employee custom. The term does not
include  separate or  single-user  rest rooms or necessary  dressing or sleeping
areas provided to assure privacy between sexes.

(b) The contractor  agrees that it does not and will not maintain or provide for
its employees any segregated  facilities at any of its establishments,  and that
it does not and will not permit its employees to perform  their  services at any
location  under its control where  segregated  facilities  are  maintained.  The
Contractor  agrees  that a breach  of this  clause is a  violation  of the Equal
Opportunity clause in the contract.

(c) The Contractor  shall include this clause in every  subcontract and purchase
order that is subject to the Equal Opportunity clause of this contract.

        52.222-22 -- Previous Contracts and Compliance Reports (Feb 1999)

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                                      SAIC
                           An Employee- Owned Company

The offeror represents that

(a) It __has,  X has not  participated  in a previous  contract  or  subcontract
subject to the Equal Opportunity clause of this document;
(b) It __has, X has not filed all required compliance reports; and
(c) Representations indicating submission of required compliance reports, signed
by proposed subcontractors, will be obtained before subcontract awards.

              52.222-25 -- Affirmative Action Compliance (Apr 1984)

The offeror represents that

(a) It X has developed and has on file, __has not developed and does not have 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
(b) It X has not  previously  had contracts  subject to the written  affirmative
action  programs  requirement  of the rules and  regulations of the Secretary of
Labor.

    52.223-13 -- Certification of Toxic Chemical Release Reporting (Oct 2000)

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

(b) By signing this offer, the offeror certifies that --

(1)  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), the offeror 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

(2)  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: [Check each block that is applicable.]

          X (i) The facility does not manufacture, process, or otherwise use any
     toxic chemicals listed under section 313(c) of EPCRA, 42 U.S.C. 11023(c);
          X (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) major groups 20 through 39 or their corresponding
     North American  Industry  Classification  System (NAICS) sectors 31 through
     33; or
          __(v) The  facility  is not  located  within  any State of the  United
     States,  the District of Columbia,  the  Commonwealth of Puerto Rico, Guam,
     American  Samoa,  the United States Virgin  Islands,  the Northern  Mariana
     Islands,  or any other territory or possession over which the United States
     has jurisdiction.

  52.226-2 --Historically Black College or University and Minority Institution
                           Representation (May 2001)

(a) Definitions. As used in this provision --

"HISTORICALLY  BLACK COLLEGE OR UNIVERSITY"  means an institution  determined by
the  Secretary of Education to meet the  requirements  of 34 CFR 608.2.  For the
Department of Defense,  the National Aeronautics and Space  Administration,  and
the Coast Guard, the term also includes any nonprofit research  institution that
was an integral part of such a college or university before November 14, 1986.

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                                      SAIC
                           An Employee-Owned Company

"MINORITY  INSTITUTION"  means an  institution of higher  education  meeting the
requirements of Section  1046(3) of the Higher  Education Act of 1965 (20 U.S.C.
1067k, including a Hispanic-serving  institution of higher education, as defined
in Section 316(b)(1) of the Act (20 U.S.C. 1101a)).

 (b)Representation.   The offeror represents that it --
__is, X is not a historically black college or university;
__is, X is not a minority institution.

                   52.227-6 -- Royalty Information (Apr 1984)

(a) Cost or  charges  for  royalties.  When the  response  to this  solicitation
contains  costs or charges for royalties  totaling more than $250, the following
information  shall be included in the response relating to each separate item of
royalty or license fee:
     (1) Name and address of licensor.
     (2) Date of license agreement.
     (3) Patent numbers,  patent application  serial numbers,  or other basis on
     which the royalty is payable.
     (4) Brief description, including any part or model numbers of each contract
     item or component on which the royalty is payable.
     (5) Percentage or dollar rate of royalty per unit.
     (6) Unit price of contract item.
     (7) Number of units.
     (8) Total dollar amount of royalties.
(b) Copies of current licenses.  In addition,  if specifically  requested by the
Contracting Officer before execution of the contract,  the offeror shall furnish
a copy of the current  license  agreement  and an  identification  of applicable
claims of specific patents.

Alternate I (Apr 1984). Substitute the following for the introductory portion of
paragraph (a) of the basic clause: When the response to this solicitation covers
charges for special  construction  or special  assembly  that  contain  costs or
charges for royalties  totaling more than $250, the following  information shall
be included in the response relating to each separate item of royalty or license
fee:

        252.209-7001 Disclosure of Ownership or Control by the Government
                       of a Terrorist Country (Mar 1998)

(a)      Definitions. As used in this provision-

(1) "GOVERNMENT OF A TERRORIST COUNTRY" includes the state and the government of
a  terrorist  country,  as  well  as  any  political  subdivision,   agency,  or
instrumentality thereof.

(2) "TERRORIST  COUNTRY"  means a country  determined by the Secretary of State,
under  section  6(j)(1)(A) of the Export  Administration  Act of 1979 (50 U.S.C.
App.  2405(j)(i)(A)),  to be a country the  government  of which has  repeatedly
provided  support for acts of  international  terrorism.  As of the date of this
provision,  terrorist  countries include:  Cuba, Iran, Iraq, Libya, North Korea,
Sudan, and Syria.

(3)"SIGNIFICANT INTEREST" means-

(i)  Ownership of or  beneficial  interest in 5 percent or more of the firm's or
subsidiary's securities.  Beneficial interest includes holding 5 percent or more
of any class of the firm's  securities in "nominee  shares,"  "street names," or
some other method of holding  securities  that does not disclose the  beneficial
owner;
(ii) Holding a management position in the firm, such as a director or officer;
(iii) Ability to control or influence the  election,  appointment,  or tenure of
directors or officers in the firm;
(iv)  Ownership of 10 percent or more of the assets of a firm such as equipment,
buildings, real estate, or other tangible assets of the firm; or
(v) Holding 50 percent or more of the indebtedness of a firm.

(b) Prohibition on award. In accordance with 10 U.S.C.  2327, no contract may be
awarded to a firm or a  subsidiary  of a firm if the  government  of a terrorist
country has a significant  interest in the firm or subsidiary or, in the case of
a subsidiary,  the firm that owns the subsidiary,  unless a waiver is granted by
the Secretary of Defense.

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                                      SAIC
                           An Employee-Owned Company

(c)  Disclosure.  If the  government  of a terrorist  country has a  significant
interest in the  Offeror or a  subsidiary  of the  Offeror,  the  Offeror  shall
disclose  such  interest  in an  attachment  to its offer.  If the  Offeror is a
subsidiary,  it shall also disclose any significant interest the government of a
terrorist  country has in any firm that owns or  controls  the  subsidiary.  The
disclosure  shall  include-

(1) Identification of each government holding a significant interest; and
(2) A description of the significant interest held by each government.

                 252.209-7002 Disclosure of Ownership or Control
                       by a Foreign Government (Sep 1994)

(a)Definitions. As used in this provision-

(1)"EFFECTIVELY  OWNED OR  CONTROLLED"  means that a foreign  government  or any
entity  controlled by a foreign  government  has the power,  either  directly or
indirectly,   whether  exercised  or  exercisable,   to  control  the  election,
appointment,  or tenure of the Offeror's officers or a majority of the Offeror's
board of directors by any means, e.g., ownership,  contract, or operation of law
(or equivalent power for unincorporated organizations).

(2) "ENTITY  CONTROLLED  BY A FOREIGN  GOVERNMENT"-  (A) Any domestic or foreign
organization or corporation that is effectively owned or controlled by a foreign
government; or (B) Any individual acting on behalf of a foreign government.
(ii) Does not include an organization or corporation  that is owned,  but is not
controlled,  either  directly  or  indirectly,  by a foreign  government  if the
ownership of that  organization  or corporation  by that foreign  government was
effective before October 23, 1992.

(3)"FOREIGN  GOVERNMENt"  includes the state and the  government  of any country
(other than the United States and its possessions and trust territories) as well
as any political subdivision, agency, or instrumentality thereof.

(4)"PROSCRIBED INFORMATION" means-
(i) Top Secret information;
(ii) Communications  Security (COMSEC) information,  except classified keys used
to operate secure  telephone units (STU IIIs);
(iii)  Restricted  Data as defined  in the U.S.  Atomic  Energy Act of 1954,  as
amended;
(iv) Special Access Program (SAP) information; or
(v) Sensitive Compartmented Information (SCI).

(b) Prohibition on award. No contract under a national  security  program may be
awarded to an entity controlled by a foreign  government if that entity requires
access to proscribed  information to perform the contract,  unless the Secretary
of Defense or a designee has waived application of 10 U.S.C. 2536(a).

(c) Disclosure. The offeror shall disclose any interest a foreign government has
in the offeror when that interest constitutes control by a foreign government as
defined  in this  provision.  If the  offeror  is a  subsidiary,  it shall  also
disclose any  reportable  interest a foreign  government  has in any entity that
owns or controls the subsidiary,  including  reportable  interest concerning the
offeror's immediate parent,  intermediate  parents, and the ultimate parent. Use
separate paper as needed, and provide the information in the following format:

Offeror's Point of Contact for Questions about Disclosure:
(a)Name  and  Phone  Number  with  Country  Code,  City Code and Area  Code,  as
applicable)
(b)Name and Address of Offeror
(c)Name and Address of Entity Controlled Description of Interest, Ownership by a
Foreign Government Percentage, and Identification of Foreign Government

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<PAGE>
                                      SAIC
                           An Employee-Owned Company

      252.225-7017 Prohibition on Award to Companies Owned by the People's
                          Republic of China (Feb 2000)

(a)Definition.  "PEOPLE'S  REPUBLIC OF CHINA," as used in this provision,  means
the  government  of the  People's  Republic of China,  including  its  political
subdivisions, agencies, and instrumentalities.

(b)   Prohibition   on  award.   Section  8120  of  the  Department  of  Defense
Appropriations Act for fiscal year 1999 (Pub. L. 105-262), as amended by Section
144  of  Title  I,  Division  C,  of  the  Omnibus  Consolidated  and  Emergency
Supplemental Appropriations Act, 1999 (Pub. L. 105-277),  prohibits the award of
a contract  under this  solicitation  to any  company in which the  Director  of
Defense  Procurement  (Office of the Under  Secretary  of Defense  (Acquisition,
Technology,  and Logistics)) has determined that the People's  Republic of China
or the People's Liberation Army of the People's Republic of China owns more than
50 percent interest.

(c)  Representation.  By submission of an offer, the offeror represents that the
People's  Republic  of China or the  People's  Liberation  Army of the  People's
Republic of China does not own more than 50 percent interest in the offeror.

<TABLE>
<CAPTION>
REPRESENTATION AND CERTIFICATION
<S>                                                                          <C>

                       MachineTalker, Inc.                                                513 De La Vina Street,
                                                                                          Santa Barbara, CA 93101
-------------------------------------------------------------------          ----------------------------------------------
                   COMPANY NAME (TYPE OR PRINT)                                               COMPANY ADDRESS
                                                                                       (Street, City, State and Zip)

                      www.machinetalker.com                                             rfb@machinetalker.com
-------------------------------------------------------------------          ---------------------------------------------
                 COMPANY'S WEB SITE (URL) ADDRESS                                    CONTACT'S EMAIL ADDRESS

                         Roland F. Bryan                                                     805-957-1680
-------------------------------------------------------------------          ---------------------------------------------
       NAME AND TITLE OF PERSON AUTHORIZED TO BIND OFFEROR                                 TELEPHONE NUMBER

                                                                                          6/ 23 /2004
----------------------------------------------------------------------       ---------------------------------------
           SIGNATURE OF PERSON AUTHORIZED TO BIND OFFEROR                                     DATE
</TABLE>

The Offeror  shall  provide  immediate  written  notice to Science  Applications
International  Corporation if, at any time prior to contract award,  the Offeror
learns  that its  certification  was  erroneous  when  submitted  or has  become
erroneous by reason of changed circumstances.

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<PAGE>
SAIC            Science Applications
                International Corporation
                An Employee-Owned Company

                          SCHEDULE B - CONTRACT CLAUSES
                                     (NASA)
             PART II, NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
                    ACQUISITION REGULATION (NASA FAR) CLAUSES

1.   REFERENCES TO NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA)
     FAR SUPPLEMENT
     All references herein to "National Aeronautics and Space Administration FAR
     Supplement"  or "NASA FAR" shall mean the  National  Aeronautics  and Space
     Administration  Acquisition Regulation which implements and supplements the
     Federal Acquisition Regulation.

2.   NASA FAR CLAUSES APPLICABLE TO THIS ORDER
     The clauses in NASA FAR Subpart 18-52.2  referenced in subparagraph (a) and
     those clauses  referenced and checked in subparagraph (b), below, in effect
     on the date of this Order, are incorporated  herein and made a part of this
     Order. To the extent that an earlier version of any such clause is included
     in the Prime Contract or Subcontract under which this Order is issued,  the
     date of the  clause is it appears in such  Prime  Contract  or  Subcontract
     shall be controlling and said version shall be incorporated therein. In all
     such clauses,  unless the context of a clause requires otherwise,  the term
     "Contractor"  shall mean Seller, the term "Contract" shall mean this Order,
     and the terms  "Government,"  "Contracting  Officer" and equivalent phrases
     shall mean Buyer and Buyer's Purchasing Representative, respectively. It is
     intended that the referenced clause shall apply to Seller in such manner as
     is necessary to reflect the position of Seller as a subcontractor to Buyer,
     to  insure  Seller's   obligations  to  Buyer  and  to  the  United  States
     Government,  and to enable  Buyer to meet its  obligations  under its Prime
     Contract or Subcontract.
<TABLE>
<CAPTION>

(a) The following clauses are applicable to this Order:

<S>                   <C>
NASA Reference        Title of Clause
--------------        ---------------
18-52.204-70          Report on NASA Subcontracts (If subcontract exceeds $500,000)
18-52.204-76          Security Requirements for Unclassified Automated Information Resources
18-52.204-77          Submission of Security Plan for Unclassified Automated Information Resources
18-52.208-81          Printing and Duplicating
18-52.219-74          Use of Rural Area Small Business
18-52.219-76          NASA Small Disadvantaged Business Goal
18-52.244-70          Geographic Participation in the Aerospace Program (if SubK exceeds $100,000)
</TABLE>

<TABLE>
<CAPTION>
(b) DIAR clauses applicable to this Order if checked:

<S>                     <C>
NASA Reference          Title of Clause
--------------          ---------------
__18-52.204-71          NASA Contractor Financial Management Reporting
__18-52.204-72          NASA Contractor Financial Management Reporting (Performance Analysis Report)
X 18-52.204-75          Security Classification Requirements
__18-52.208-70          Rates
__18-52.208-73          Contractor's Facilities
__18-52.208-74          Technical Provisions
__18-52.208-75          Renewal of Contract
__18-52.208-76          Change in Rates
__18-52.209-70          Product Removal from Qualified Products List
__18-52.209-71          Limitation of Future Contracting
__18-52.210-70          Brand Name or Equal
__18-52.210-75          Packaging and Marking
__18-52.212-70          Notice of Delay
__18-52.216-80          Task Ordering Procedure
</TABLE>

================================================================================
SAIC Federal Procurement Procedures                                 Page 1 of 2
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================================================================================
                                  Enclosure 12
================================================================================
              9-932-040 Schedule B - Part II, NASA (rev. 8/01/2002)
<PAGE>
<TABLE>
<CAPTION>
<S>                   <C>
NASA Reference        Title of Clause
--------------        ---------------
X 18-52.223-70        Safety and Health
__18-52.223-71        Frequency Authorization
__18-52.223-72        Potentially Hazardous Items
X 18-52.227-11        Patent Rights
X 18-52.227-70        New Technology
__18-52.227-71        Request for Waiver of Rights of Inventions
X 18-52.227-72        Designation  of  New  Technology   Representative  and  Patent Representative
__18-52.227-85        Invention   Reporting   and   Rights  -  Foreign
__18-52.227-87        Transfer  of  Technical  Data Under  Space  Station  International Agreement
__18-52.227-72        Inter-party  Waiver of Liability  during STS Operations
__18-52.228-76        Cross-Waiver   of  Liability  for  Space  Station   Activities
X 18-52.242-72        Observance of Legal Holidays - Alternate I
__18-52.245-73        Financial Reporting of Government Owned/Contractor Held Property
                      (The date "July 31" in paragraph (c) is changed to "July 15")
__18-52.247-71        Protection of the Florida Manatee
__18-52.250-70        Indemnification Under P.L. 85-804 - NASA Contracts

X 1852.203-70         Display of Inspector General Hotline Posters (June 2001)
X 1852.215-84         Ombudsman (Jun 2000)
X 1852.228-75         Minimum Insurance Coverage (Oct 1988)
X 1852.223.75         Major Breach of Safety or Security
X 1852.225-70         Export Licenses
</TABLE>

================================================================================
SAIC Federal Procurement Procedures                                 Page 2 of 2
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================================================================================
                                  Enclosure 12
================================================================================
              9-932-040 Schedule B - Part II, NASA (rev. 8/01/2002)

<PAGE>
SAIC            Science Applications
                International Corporation
                An Employee-Owned Company

                SCHEDULE B - U.S. GOVERNMENT TERMS AND CONDITIONS
                 Applicable to all U.S. Government subcontracts
                              PART I - FAR CLAUSES

1.   DEFINITIONS
In all such clauses,  unless the context of the clause requires  otherwise,  the
term "Contractor"  shall mean Seller, the term "Contract" shall mean this Order,
and the terms "Government,"  "Contracting  Officer" and equivalent phrases shall
mean Buyer and Buyer's Purchasing Representative,  respectively.  It is intended
that the referenced clauses shall apply to Seller in such manner as is necessary
to  reflect  the  position  of Seller  as a  subcontractor  to Buyer,  to insure
Seller's obligations to Buyer and to the United States Government, and to enable
Buyer to meet its obligations under its Prime Contract or Subcontract.
The following definitions apply unless otherwise specifically stated:

"Buyer" - the legal entity issuing this Order.
"Purchasing Representative" - Buyer's authorized representative.
"Seller" - the legal entity which contracts with the Buyer.
"This Order" - this contractual instrument, including changes.
"Prime Contract" - the Government contract under which this Order is issued.
"FAR" - the Federal Acquisition Regulation.

2.   IDENTIFICATION OF CONTRACT NUMBERS
Government   contract   numbers  shown  on  this  Order  shall  be  included  in
subcontracts and purchase orders issued by Seller hereunder.

3.   DISPUTES
(a)  Notwithstanding any provisions herein to the contrary:

     (1) If a decision relating to the Prime Contract is made by the Contracting
         Officer and such decision is also related to this Order, said decision,
         if binding upon Buyer under the Prime Contract shall in turn be binding
         upon Buyer and Seller with respect to such matter;  provided,  however,
         that if Seller disagrees with any such decision made by the Contracting
         Officer and Buyer elects not to appeal such decision, Seller shall have
         the  right  reserved  to  Buyer  under  the  Prime  Contract  with  the
         Government  to  prosecute  a timely  appeal  in the name of  Buyer,  as
         permitted by the  contract or by law,  Seller to bear its own legal and
         other  costs.  If Buyer elects not to appeal any such  decision,  Buyer
         agrees  to notify  Seller in a timely  fashion  after  receipt  of such
         decision and to assist Seller in its  prosecution of any such appeal in
         every reasonable manner. If Buyer elects to appeal any such decision of
         the Contracting Officer, Buyer agrees to furnish Seller promptly with a
         copy of such appeal.  Any decision upon appeal,  if binding upon Buyer,
         shall  in turn be  binding  upon  Seller.  Pending  the  making  of any
         decision,  either by the Contracting Officer or on appeal, Seller shall
         proceed diligently with performance of this Order.

     (2) If, as a result of any  decision  or  judgment  which is  binding  upon
         Seller and Buyer, as provided above,  Buyer is unable to obtain payment
         or  reimbursement  from the Government under the Prime Contract for, or
         is  required  to refund or credit to the  Government,  any amount  with
         respect to any item or matter for which  Buyer has  reimbursed  or paid
         Seller,  Seller shall, on demand,  promptly repay such amount to Buyer.
         Additionally,  pending the final  conclusion  of any appeal  hereunder,
         Seller  shall,  on  demand,  promptly  repay any such  amount to Buyer.
         Buyer's maximum  liability for any matter  connected with or related to
         this  Order  which was  properly  the  subject of a claim  against  the
         Government  under the Prime  Contract  shall not  exceed  the amount of
         Buyer's recovery from the Government.

     (3) If this Order is issued by Buyer under a Government  Subcontract rather
         than  a  Prime  Contract,  and  if  Buyer  has  the  right  under  such
         Subcontract to appeal a decision made by the Contracting  Officer under
         the Prime Contract in the name of the Prime  Contractor (or if Buyer is
         subject  to  any   arbitrator's   decision   under  the  terms  of  its
         subcontract),  and said  decision is also  related to this Order,  this
         Disputes Clause shall also apply to Seller in a manner  consistent with
         its intent and similar to its application had this Order been issued by
         Buyer under a Prime Contract with the Government.

================================================================================
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================================================================================
                                   Enclosure 6
================================================================================
                  9-932-031 Schedule B, Part I (Rev. 7/01/2002)

<PAGE>
SAIC            Science Applications
                International Corporation
                An Employee-Owned Company

     (4) Seller agrees to provide  certification  that data supporting any claim
         made by Seller  hereunder is made in good faith and that the supporting
         data is accurate  and  complete to the best of  Seller's  knowledge  or
         belief,  all in  accordance  with  the  requirements  of  the  Contract
         Disputes Act of 1978  (41USC601-613) and implementing  regulations.  If
         any  claim  of  Seller  is   determined  to  be  based  upon  fraud  or
         misrepresentation,  Seller  agrees to defend,  indemnify and hold Buyer
         harmless for any and all  liability,  loss,  cost or expense  resulting
         therefrom.

(b) Any dispute not  addressed  in paragraph  (a) above,  will be subject to the
disputes clause of Schedule A of this subcontract agreement.

4.   OTHER GOVERNMENT PROCUREMENT
Nothing  contained  herein  shall be  construed  as  precluding  the Seller from
producing  items for direct  sale to the  Government,  utilizing  therefore  all
hardware and/or software, including designs, drawings, engineering data or other
technical or proprietary  information  furnished  Seller by Buyer,  provided the
Government  has the  unrestricted  right  to  permit  the use  thereof  for such
purpose.

5.   INDEMNIFICATION - COST OR PRICING DATA - COST ACCOUNTING STANDARDS
Seller  agrees to  indemnify  and hold Buyer  harmless to the full extent of any
cost or price reduction effected by Buyer's customer,  which may result from (i)
certified   cost  or  pricing  data   submitted  by  Seller  or  its  lower-tier
subcontractors  which is not  accurate,  current or  complete  as  certified  by
Seller; (ii) the failure by Seller or its lower-tier  subcontractors to disclose
and consistently  follow  applicable cost accounting  practices and standards or
otherwise comply with pertinent parts of the FAR,  applicable agency supplements
thereto, and regulations promulgated by the Cost Accounting Standards Board.

6.   TERMINATION FOR CONVENIENCE
The Buyer may terminate  performance of work under this subcontract in whole, or
in part if the Purchasing Representative determines that a termination is in the
Buyer's interest. The Buyer shall terminate by delivering to the Seller a Notice
of Termination  specifying the extent of termination  and the effective date. If
this is a Fixed Price  subcontract,  the termination  will be in accordance with
FAR 52.249-2 and FAR 52.249-4. If this is a Cost Reimbursable  subcontract,  the
termination  will  be in  accordance  with  FAR  52.249-6.  If  this  is a  Cost
Reimbursement subcontract for Educational or Other Nonprofit Institutions,  then
termination will be in accordance with FAR 52.249-5.

7.   GOVERNMENT PROPERTY
Seller shall comply with the Government Property  requirements  contained in FAR
clause  52.245-2  if this is a fixed  priced  contract  and FAR clause  52.245-5
(substituting 52.245-2 subparagraph (g) for 52.245-5 subparagraphs (g) (1), (2),
and (3) if this is a cost reimbursement contract.

8.   CONTRACT COST PRINCIPLES AND PROCEDURES
Seller agrees that to the extent  applicable,  costs  allocated to this contract
shall  be in  full  compliance  with  Subpart  31.2  of FAR  (Subpart  31.3  for
Educational Institutions) and the applicable agency supplements thereto, if any,
set forth in Part II hereof.  In the event such  compliance  is not  maintained,
Seller  agrees to  compensate  Buyer to the full  extent of any prices or costs,
including any penalties or interest, which are determined by Buyer's customer to
be unallowable or unreasonable or not allocable, under Buyer's contract with its
customer.

9.   FAR CLAUSES APPLICABLE TO THIS ORDER
The clauses in FAR Subpart  52.2  referenced  in  subparagraph  (a), the clauses
applicable  at the dollar  thresholds  in  subparagraph  (b), and those  clauses
referenced and checked in subparagraph  (c) below, in effect on the date of this
Order, are incorporated herein and made a part of this Order. To the extent that
an earlier  version of any such  clause is  included  in the Prime  Contract  or
Subcontract  under  which  this  Order is  issued,  the date of the clause as it
appears in such Prime  Contract or  Subcontract  shall be  controlling  and said
version shall be incorporated herein.

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                                   Enclosure 6
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                  9-932-031 Schedule B, Part I (Rev. 7/01/2002)

<PAGE>
SAIC            Science Applications
                International Corporation
                An Employee-Owned Company

<TABLE>
<CAPTION>
(a)  The following clauses are applicable to this Order:
<S>                        <C>
Clause # & FAR Ref.        Title of Clause
------------------         ---------------
52.203-3                   Gratuities
52.211-5                   Material Requirements
52.211-15                  Defense Priority and Allocation Requirements
52.222-1                   Notice to the Government of Labor Disputes
52.222-26                  Equal Opportunity (Only Paragraphs (b)(1) through (b)(11)
52.223-3                   Hazardous Material Identification and Material Safety Data
52.225-13                  Restrictions on Certain Foreign Purchases
52.229-3                   Federal, State, and Local Taxes
</TABLE>
<TABLE>
<CAPTION>
(b) The following  clauses are applicable to this Order at the indicated  dollar
values:
<S>                        <C>
Clause # & FAR Ref.        Title of Clause
------------------         ---------------
52.203-5                   Covenant Against Contingent Fees* (*if order exceeds $50,000)
52.203-6                   Restrictions on Subcontractor Sales to the Government*
                           (*if order exceeds $100,000)
52.203-7                   Anti-Kickback Procedures* (*if order exceeds $100,000)
52.203-8                   Cancellation, Rescission, and Recovery of Funds for Illegal or Improper Activity
52.203-10                  Price or Fee Adjustment for Illegal or Improper Activity *   (*If order exceeds
                           $50,000)
52.203-11                  Certification  and Disclosure  Regarding  Payments to
                           Influence  Certain Federal  Transactions*  (*if order
                           exceeds or is expected to exceed $100,000)
52.203-12                  Limitation on Payments to Influence Certain Federal Transactions*
                           (*if order exceeds or is expected to exceed $100,000)
52.209-6                   Protecting the Governments Interest when Subcontracting with Contractors Debarred,
                           Suspended, or Proposed for Debarment*
                           (*if Order exceeds $25,000)
52.215-2                   Audit and Records-Negotiation* (*if Order exceeds $50,000)
52.219-8                   Utilization of Small Business Concerns* (*if Order exceeds $100,000)
52.219-9                   Small Business Subcontracting Plan*
                           (*if Subcontract exceeds or is expected to exceed $500,000)
52.222-4                   Contract Work Hours & Safety Standards Act - Overtime Compensation*
                           (*if Order exceeds $100,000)
52.222-35                  Affirmative Action for Disabled Veterans & Veterans of the Vietnam Era*
                           (*if Order exceeds $10,000)
52.222-36                  Affirmative Action for Workers with Disabilities*
                           (*if Order exceeds $2,500)
52.222-37                  Employment Reports on Special Disabled Veterans and Veterans of the Vietnam Era* (*if
                           Order exceeds $10,000)
52.227-2                   Notice and Assistance Regarding Patent and Copyright Infringement*
                           (*if Order exceeds $50,000)
52.246-16                  Responsibility for Supplies* (*if order exceeds $50,000)
52.247-63                  Preference for U.S. Flag Air Carriers* (*if order exceeds $50,000)
</TABLE>
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                                   Enclosure 6
================================================================================
                  9-932-031 Schedule B, Part I (Rev. 7/01/2002)

<PAGE>
SAIC            Science Applications
                International Corporation
                An Employee-Owned Company

<TABLE>
<CAPTION>
(c)  The following clauses are applicable to this Order if checked:
<S>                          <C>
Clause # & FAR Ref.          Title of Clause
------------------           ---------------
__52.203-10                  Price or Fee Adjustment for Illegal or Improper Activity*
                             (*If Order exceeds $50,000)
__52.204-2                   Security Requirements
X 52.204-4                   Printing/Copying Double Sided on Recycled Paper
__52.207-3                   Right of First Refusal of Employment Openings
__52.214-26                  Audit and Records-Sealed Bidding
__52.214-27                  Price Reduction for Defective Cost or Pricing Data Modifications - Sealed Bidding
__52.214-28                  Subcontractor Cost or Pricing Data - Modifications - Sealed Bidding
__52.215-10                  Price Reduction for Defective Cost or Pricing Data
__52.215-11                  Price Reduction for Defective Cost or Pricing Data -Modifications
__52.215-12                  Subcontractor Cost or Pricing Data
__52.215-13                  Subcontractor Cost or Pricing Data - Modifications
X 52.215-15                  Pension Adjustments and Asset Reversions
__52.215-16                  Facilities Capital Cost of Money
X 52.215-18                  Reversion or Adjustment of Plans for Post-Retirement Benefits Other Than Pensions
__52.215-19                  Notification of Ownership Changes
__52.215-20                  Requirements for Cost or Pricing Data or Information Other Than Cost or Pricing Data
X 52.215-21                  Requirements for Cost or Pricing Data or Information Other Than Cost or Pricing Data - Modifications
X 52.216-7                   Allowable Cost and Payment
X 52.216-8                   Fixed Fee
__52.216-18                  Ordering
__52.216-22                  Indefinite  Quantity
X 52.217-8                   Option to Extend Services
X 52.217-9                   Option to Extend the Term of the Contract
                            (a) within the current  contract  year
                            (b) not to  exceed  60  months  or 5  years
X 52.219-16                  Liquidated  Damages  - Subcontracting Plan
X 52.222-2                   Payment for Overtime Premiums -Subparagraph (a) Add "0"
X 52.222-3                   Convict Labor
__52.222-6                   Davis-Bacon Act (if order is for construction exceeding $2,000)
__52.222-11                  Subcontracts (Labor Standards)
__52.222-20                  Walsh-Healy Public Contracts Act (if Order exceeds $10,000)
X 52.222-21                  Prohibition of Segregated Facilities
X 52.222-29                  Notification of Visa Denial
X 52-222-41                  Service Contract Act of 1965, as Amended* (*if Order exceeds $2,500)
__52.222-42                  Statement of Equivalent Rates by Federal Hires
X 52.222-43                  Fair Labor Standards Act and Service Contract Act - Price Adjustment*
                             (*Multiple Year and Option Contracts)
__52.222-46                  Evaluation of Compensation for Professional Employees
__52.223-5                   Pollution Prevention and Right-to-Know Information
X 52.223-6                   Drug-Free Workplace
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                                   Enclosure 6
================================================================================
                  9-932-031 Schedule B, Part I (Rev. 7/01/2002)

<PAGE>
SAIC            Science Applications
                International Corporation
                An Employee-Owned Company

__52.223-7                   Notice of Radioactive Materials
X 52.223-14                  Toxic Chemical Release Reporting
__52.224-2                   Privacy Act
</TABLE>

<TABLE>
<CAPTION>
<S>                          <C>
Clause # & FAR Ref.          Title of Clause
------------------           ----------------
__52.225-1                   Buy American Act -Balance of Payments Program - Supplies
__52.225-5                   Trade Agreements
__52.225-8                   Duty-Free Entry
__52.226-1                   Utilization of Indian Organizations and Indian -Owned Economic Enterprises
X 52.227-1                   Authorization and Consent (if order exceeds $50,000)
X 52.227-1                   Authorization and Consent -Alternate I
__52.227-3                   Patent Indemnity (if order exceeds $50,000)
__52.227-9                   Refund of Royalties
__52.227-10                  Filing of Patent Applications - Classified Subject Matter
__52.227-11                  Patent Rights - Retention by the Contractor (Short Form)
__52.227-12                  Patent Rights - Retention by the Contractor (Long Form)
__52.227-13                  Patent Rights - Acquisition by the Government
X 52.227-14                  Rights in Data - General (Alternate I, II, III, IV, or V)
__52.227-16                  Additional Data Requirements
__52.227-17                  Rights in Data - Special Works
__52.227-18                  Rights in Data - Existing Works
__52.227-19                  Commercial Computer Software - Restricted Rights
__52.227-20                  Rights in Data SBIR Program
__52.227-21                  Technical Data, Certification, Revision and Withholding of Payment - Major Systems
__52.227-22                  Major System - Minimum Rights
__52.227-23                  Rights to Proposal Data (Technical)
__52.228-3                   Worker's Compensation Insurance (Defense Base Act)
__52.228-4                   Worker's Compensation and War-Hazard Insurance Overseas
__52.228-5                   Insurance - Work on a Government Installation
X 52.228-7                   Insurance - Liability to Third Persons
__52.229-6                   Taxes - Foreign Fixed-Price Contracts
__52.229-7                   Taxes - Fixed-Price Contracts with Foreign Governments
__52.229-8                   Taxes - Foreign Cost-Reimbursement Contracts
__52.229-9                   Taxes - Cost-Reimbursement Contracts with Foreign Governments
__52.229-10                  State of New Mexico Gross Receipts and Compensating Tax
__52.230-2                   Cost Accounting Standards
__52.230-3                   Disclosure and Consistency of Cost Accounting Practices
__52.230-5                   Cost Accounting Standards -Educational Institution
__52.230-6                   Administration of Cost Accounting Standards
__52.232-7                   Payments Under Time-and-Materials and Labor-Hour Contracts
__52.232-16                  Progress Payments (Notwithstanding paragraph 8 above,
                             in  paragraph (d),"Government" means the "U.S. Government" except in subdivision (d)(2)(iv).
X 52.232-17                  Interest
__52.232-18                  Availability of Funds
__52.232-19                  Availability of Funds for the Next Fiscal Year
X 52.232-20                  Limitation of Cost
__52.232-22                  Limitation of Funds
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                                   Enclosure 6
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                  9-932-031 Schedule B, Part I (Rev. 7/01/2002)

<PAGE>
SAIC            Science Applications
                International Corporation
                An Employee-Owned Company

X 52.232-23                  Assignment of Claims
X 52.232-23                  Assignment of Claims Alternate 1
__52.232-32                  Performance-Based Payments
__52.236-2                   Differing Site Conditions
__52.236-13                  Accident Prevention
</TABLE>

<TABLE>
<CAPTION>
<S>                          <C>
Clause # & FAR Ref.          Title of Clause
------------------           ---------------
X 52.237-2                   Protection of Government Buildings, Equipment & Vegetation
X 52.237-3                   Continuity of Services
__52.237-7                   Indemnification and Medical Liability Insurance
__52.237-10                  Identification of Uncompensated Overtime
__52.239-1                   Privacy or Security Safeguards
X 52.242-1                   Notice of Intent to Disallow Costs
X 52.242-3                   Penalties for Unallowable Costs
X 52.242-4                   Certification of Final Indirect Costs
__52.242-12                  Report of Shipment
X 52.242-13                  Bankruptcy
__52.242-15                  Stop-Work Order
X 52.242-15                  Stop-Work Order Alternate 1
__52.243-1                   Changes - Fixed-Price
__52.243-1                   Changes - Fixed- Price - Alternate I
__52.243-2                   Changes - Cost-Reimbursement
__52.243-2                   Changes - Cost-Reimbursement - Alternate I
__52.243-2                   Changes - Cost-Reimbursement - Alternate II
__52.243-2                   Changes - Cost-Reimbursement - Alternate V
__52.243-3                   Changes - Changes - Time-and-Materials or Labor-Hours
__52.243-6                   Change Order Accounting
X 52.244-2                   Subcontracts
X 52.244-5                   Competition in Subcontracting
X 52.244-6                   Subcontracts for Commercial Items and Commercial Components
__52.245-4                   Government-Furnished Property (Short Form)
__52.245-8                   Liability for the Facilities
__52.245-16                  Facilities Equipment Modernization
__52.245-17                  Special Tooling
__52.245-18                  Special Test Equipment
X 52.245-19                  Government Property Furnished "As Is"
__52.246-1                   Contractor Inspection Requirements
__52.246-2                   Inspection of Supplies - Fixed Price
__52.246-3                   Inspection of Supplies - Cost-Reimbursement
__52.246-4                   Inspection of Services - Fixed-Price
X 52.246-5                   Inspection of Services - Cost-Reimbursement
__52.246-6                   Inspection of Time-and- Material and Labor-Hour
__52.246-8                   Inspection of Research and Development - Cost-Reimbursement
__52.246-20                  Warranty of Services
__52.246-23                  Limitation of Liability
__52.246-24                  Limitation of Liability - High-Value Items
X 52.246-25                  Limitation of Liability - Services
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                                   Enclosure 6
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                  9-932-031 Schedule B, Part I (Rev. 7/01/2002)

<PAGE>
SAIC            Science Applications
                International Corporation
                An Employee-Owned Company

X 52.247-1                   Commercial Bill of Lading Notation
__52.247-55                  F.O.B. Point for Delivery of Government-Furnished Property
X 52.247-64                  Preference for Privately Owned U.S. Flag Commercial Vessels
__52.248-1                   Value Engineering
__52.249-8                   Default -(Fixed-Price Supply and Services)
X 52.249-14                  Excusable Delays
__52.253-1                   Computer Generated Forms
</TABLE>

Other Flow Down Clauses:

__52.215-8                   Order of Precedence - Uniform  Contract Format
__52.215-9                   Price Reduction for Defective cost or Pricing Data
__52.223-10                  Waste Reduction  Program
__52.232-1                   Payments
__52.232-8                   Discounts  for  Prompt  Payment
__52.232-9                   Limitation  on Withholding of Payments
__52.232-10                  Extras
__52.232-25                  Prompt Payment
__52.242-14                  Suspension  of Work
__52.249-2                   Termination  for  Convenience  of the  Government
__52.252-6                   Authorized Deviations in Clauses

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                                   Enclosure 6
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                  9-932-031 Schedule B, Part I (Rev. 7/01/2002)<PAGE>

                                                                Exhibit 10.1

                                  AGREEMENT

         AGREEMENT by and between Solutia Inc., a Delaware corporation (the
"Company"), and James R. Voss (the "Executive"), dated as of the 1st day of
August, 2005 (the "Effective Date").

         The Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company and its stakeholders to
assure that the Company will have the continued dedication of the Executive
until and for a period of time following the Emergence Date (as defined
below). To induce the Executive to continue to serve the Company through and
beyond the Emergence Date, the Company will provide the Executive with,
among other things, a special emergence bonus. It is the Board's judgment
that such a special emergence bonus arrangement is in the best interest of
the Company and its stakeholders, and is consistent with the desire of the
Board to maximize the value of the Company. Therefore, in order to
accomplish these objectives, the Board has caused the Company to enter into
this Agreement.

         NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

         1.       Special Emergence Bonus.
                  ------------------------

                  At such time, if ever (the "Emergence Date"), at which the
United States Bankruptcy Court for the Southern District of New York (the
"Bankruptcy Court") shall have confirmed a plan of reorganization of the
Company under Chapter 11 of the United States Bankruptcy Code (the "Chapter
11 Case") and such plan shall have become effective, if the Executive is
employed by the Company on the Emergence Date the Executive shall be
eligible to receive a special emergence bonus as follows:

                  (a) If the Executive is employed by the Company on the
six-month anniversary of the Emergence Date, or if, on or subsequent to the
Emergence Date but prior to the six-month anniversary thereof, Executive
shall have been terminated by the Company without Cause, shall have resigned
for Good Reason, or shall have died or been terminated for Disability, then
Executive shall be entitled to receive from the Company a special emergence
bonus of up to $1,000,000, being the maximum amount of the bonus pool
established hereunder for the Executive and which bonus shall be determined
pursuant to and in accordance with the performance measures and payment
terms of the Solutia Inc. Emergence Incentive Bonus Program in which the
Company's Chief Executive Officer participates.

                  (b) If the Executive shall voluntarily terminate his
employment other than for Good Reason or shall be terminated by the Company
for Cause, in either case between the Emergence Date and the six-month
anniversary thereof, then Executive shall forfeit any and all right to
receive a special emergence bonus hereunder.

         2.       Employment Period. The Company hereby agrees to continue
                  -----------------
the Executive in its employ, and the Executive hereby agrees to remain in the
employ of the Company subject to the terms and conditions of this Agreement,
for the period (the "Employment Period") commencing on the Effective Date
and ending on the date that is the six month anniversary of the Emergence
Date. Where the context permits, all references to the Company shall include
an affiliate of the Company by which the Executive is employed. As used in
this Agreement, the term "affiliate"

<PAGE>
<PAGE>

or "affiliated companies" shall include any company controlled by,
controlling or under common control with the Company. The obligations of the
Company and the Executive under this Agreement including, without
limitation, the obligations under Sections 1, 5, 6 and 7, shall survive the
termination of the Employment Period to the extent necessary to accomplish
the purposes thereof.

         3.       Terms of Employment.
                  -------------------

                  (a)      Position and Duties.
                           -------------------

                           (i)      During the Employment Period, (A) the
         Executive shall serve as Senior Vice President - Business
         Operations reporting directly to the Company's Chief Executive
         Officer, with authority, duties and responsibilities consistent
         with such position and as may be reasonably assigned to him from
         time to time by the Company's Chief Executive Officer and (B) the
         Executive's services shall be performed at the location where the
         Executive was employed immediately preceding the Effective Date or
         at any office or location of the Company not more than 50 miles
         from the Company's headquarters in St. Louis, Missouri.

                           (ii)     During the Employment Period, the
         Executive shall serve the Company faithfully, diligently and to the
         best of his ability, and shall devote substantially all of his time
         and efforts during normal business hours to the business and
         affairs of the Company. During the Employment Period it shall not
         be a violation of this Agreement for the Executive to (A) deliver
         lectures, fulfill speaking engagements or teach at educational
         institutions, and (B) manage personal investments, so long as such
         activities described in clauses A and B do not interfere with the
         performance of the Executive's responsibilities as an employee of
         the Company in accordance with this Agreement, and (C) with the
         advance approval of the Board, serve on corporate, civic or
         charitable boards or committees.

                  (b)      Compensation.
                           ------------

                           (i)      Base Salary. During the Employment
                                    -----------
         Period, the Executive shall receive an annual base salary ("Annual
         Base Salary") of not less than $300,000, which shall be paid in
         accordance with the Company's normal payroll practices.

                           (ii)     Annual Bonuses. In addition to Annual
                                    --------------
         Base Salary, the Executive shall participate in the Company's
         Annual Incentive Program, or any successor annual bonus plan(s),
         with a target annual bonus opportunity of 75% of his Annual Base
         Salary. In addition, during the Employment Period, the Executive
         shall be entitled to participate in all long-term and other
         incentive plans, practices, policies and programs generally
         applicable to senior executive officers of the Company and its
         affiliated companies.

                            (iii)   Savings and Retirement Plans. During
                                    ----------------------------
         the Employment Period, the Executive shall be entitled to
         participate in all savings and retirement plans, practices,
         policies and programs generally applicable to senior executive
         officers of the Company and its affiliated companies, subject to
         the Board's authority to modify or terminate any such plans,
         practices, policies or programs on a Company-wide basis at any
         time.

                                     2

<PAGE>
<PAGE>

                           (iv)     Welfare Benefit Plans. During the
                                    ---------------------
         Employment Period, the Executive and/or the Executive's family, as
         the case may be, shall be eligible for participation in and shall
         receive all benefits under welfare benefit plans, practices,
         policies and programs provided by the Company and its affiliated
         companies (including, without limitation, medical, prescription,
         dental, disability, salary continuance, employee life, group life,
         accidental death and travel accident insurance plans and programs)
         to the extent generally applicable to senior executive officers of
         the Company and its affiliated companies, subject to the Board's
         authority to modify or terminate any such plans, practices,
         policies or programs on a Company-wide basis at any time.

                           (v)      Expenses. During the Employment Period,
                                    --------
         the Executive shall be entitled to receive prompt reimbursement,
         in accordance with Company policy, for all reasonable expenses
         incurred by the Executive in performing his duties hereunder.

                           (vi)     Vacation. During the Employment Period,
                                    --------
         the Executive shall be entitled to paid vacation in accordance with
         the plans, policies, programs and practices of the Company and its
         affiliated companies as in effect from time to time.

         4.       Termination of Employment.
                  -------------------------

                  (a)      Death or Disability. The Executive's employment
                           -------------------
shall terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith that the
Disability of the Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), it may give to
the Executive written notice in accordance with Section 9(b) of this
Agreement of its intention to terminate the Executive's employment. In such
event, the Executive's employment with the Company shall terminate effective
on the 30th day after receipt of such notice by the Executive (the
"Disability Effective Date"), provided that, within the 30 days after such
receipt, the Executive shall not have returned to full-time performance of
the Executive's duties. For purposes of this Agreement, "Disability" shall
mean the Executive's long term disability for purposes of any reasonable
occupation as determined under the Company's disability plan that is
applicable to the Executive.

                  (b)      Cause. The Company may terminate the Executive's
                           -----
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean:

                           (i)      the willful and continued failure of the
         Executive to perform substantially the Executive's duties with the
         Company or one of its affiliates (other than any such failure
         resulting from incapacity due to physical or mental illness), after
         a written demand for substantial performance is delivered to the
         Executive by the Board of the Company which specifically identifies
         the manner in which the Board believes that the Executive has not
         substantially performed the Executive's duties,

                           (ii)     the willful engaging by the Executive in
         illegal conduct or gross misconduct which is materially and
         demonstrably injurious to the Company;

                                     3

<PAGE>
<PAGE>

                           (iii)    the Executive's conviction of, or plea
         of guilty or no contest to, a felony or any other crime involving
         moral turpitude, fraud, theft, embezzlement or dishonesty; or

                           (iv)     the Executive's habitual drug or alcohol
         abuse.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of the Company. The
cessation of employment of the Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to the Executive a copy of
a resolution duly adopted by the affirmative vote of not less than a
majority of the entire membership of the Board at a meeting of the Board
called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel,
in the case of conduct described in subparagraph (i) or (ii) above, to be
heard before the Board), finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in subparagraph
(i),(ii), (iii) or (iv) above, and specifying the particulars thereof in
detail.

                  (c)      Good Reason. The Executive's employment may be
                           -----------
terminated by the Executive for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean:

                           (i)      a material failure by the Company to
         comply with any of the provisions of Section 3(b) of this Agreement
         relating to compensation, other than an isolated, insubstantial and
         inadvertent failure not occurring in bad faith and which is
         remedied by the Company promptly after receipt of notice thereof
         given by the Executive;

                           (ii)     the assignment to the Executive of any
         duties inconsistent in any respect with the Executive's position as
         Senior Vice President - Business Operations and the authority,
         duties and responsibilities contemplated by Section 3(a) of this
         Agreement, or any other action by the Company which results in a
         material diminution in such position, authority, duties or
         responsibilities, excluding for this purpose an isolated,
         insubstantial and inadvertent action not taken in bad faith and
         which is remedied by the Company promptly after receipt of notice
         thereof given by the Executive; provided, that, a sale by the
         Company of subtantially all of its assets shall constitute a
         diminution in Executive's position, authority, duties and
         responsibilities for purposes of this Section 4(c)(ii);

                           (iii)    the Company's requiring the Executive to
         be based at any office or location other than as provided in Section
         3(a)(i)(B) hereof or the Company's requiring the Executive to
         travel on Company business to a substantially greater extent than
         required immediately prior to the Effective Date; provided,
         however, that the requirement that Executive undertake such
         additional travel away from St. Louis, Missouri as is

                                     4

<PAGE>
<PAGE>

         reasonably required to enable him to fulfill his responsibilities
         in connection with the Chapter 11 case shall not constitute "Good
         Reason"; or

                           (iv)     the failure of the Company and the
         Executive to enter into a new employment agreement by the last day
         of the Employment Period.

If the Executive terminates his employment for Good Reason pursuant to
subparagraph (ii) above as a result of a sale by the Company of
substantially all of its assets, then the Executive shall make himself
available to the Company as a paid independent consultant for such fee, at
such times, over such period of time and for such number of hours as the
parties shall reasonably agree, taking account of any new employment that
the Executive may undertake.

                  (d)      Notice of Termination. Any termination by the
                           ---------------------
Company for Cause, or by the Executive for Good Reason, shall be
communicated by Notice of Termination to the other party hereto given in
accordance with Section 9(b) of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon,
(ii) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than
thirty days after the giving of such notice). The failure by the Executive
or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause shall
not waive any right of the Executive or the Company, respectively, hereunder
or preclude the Executive or the Company, respectively, from asserting such
fact or circumstance in enforcing the Executive's or the Company's rights
hereunder.

                  (e)      Date of Termination. "Date of Termination" means
                           -------------------
(i) if the Executive's employment is terminated by the Company for Cause, or
by the Executive for Good Reason, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be, (ii) if
the Executive's employment is terminated by the Company other than for Cause
or Disability, the Date of Termination shall be the date on which the
Company notifies the Executive of such termination and (iii) if the
Executive's employment is terminated by reason of death or Disability, the
Date of Termination shall be the date of death of the Executive or the
Disability Effective Date, as the case may be.

         5.       Obligations of the Company upon Termination.
                  -------------------------------------------

                  (a)      Good Reason; Other Than for Cause. If, during the
                           ---------------------------------
Employment Period, the Company shall terminate the Executive's employment
other than for Cause or the Executive shall terminate employment for Good
Reason:

                           (i)      the Company shall pay to the Executive
                  in a lump sum in cash within ten days of the Date of
                  Termination (or, solely with respect to any payment to be
                  made pursuant to Section 5(a)(i)(C) below, such other time
                  as specified therein), the aggregate of the following
                  amounts:

                                     5

<PAGE>
<PAGE>

                                    A.    the sum of (1) the Executive's
                  accrued Annual Base Salary through the Date of
                  Termination, (2) any annual bonus earned by the Executive
                  with respect to the previous year, and (3) any accrued
                  vacation pay, in each case to the extent not theretofore
                  paid (the sum of the amounts described in clauses (1), (2)
                  and (3) shall be hereinafter referred to as the "Accrued
                  Obligations"); and

                                    B.    an amount equal to 200% of the
                  Executive's Annual Base Salary immediately prior to the
                  Date of Termination (the "Severance Payment"), provided
                  that if the Executive's Date of Termination occurs prior
                  to the date that any amount is paid or becomes payable to
                  the Executive under the Solutia Inc. Emergence Incentive
                  Bonus Program (whether pursuant to Section 1 or Section
                  5(a)(i(C) hereof or otherwise), the amount of the
                  Severance Payment shall be credited against any amounts
                  subsequently paid to (or due to be paid to) the Executive
                  under the Solutia Inc. Emergence Incentive Bonus Program;
                  and

                                    C.    if the Date of Termination is on or
                  subsequent to the Emergence Date, subject to the
                  provisions of Section 5(a)(i)(B) hereof, the Executive
                  shall receive the amount, if any, to which he is entitled
                  under the Solutia Inc. Emergence Incentive Bonus Program
                  at such time as amounts are payable.

                            (ii)    subject to the provisions of Section 9(f)
         hereof, to the extent not theretofore paid or provided, the Company
         shall timely pay or provide to the Executive any other amounts or
         benefits, excluding any severance or separation pay or benefits,
         required to be paid or provided or which the Executive is eligible
         to receive under any plan, program, policy, practice, contract or
         agreement of the Company and its affiliated companies, including,
         without limitation, the vested benefit, if any, of the Executive
         under any qualified defined benefit or defined contribution
         retirement plan of the Company and its affiliated companies in
         which the Executive participates, in accordance with the terms of
         such plan (such other amounts and benefits shall be hereinafter
         referred to as the "Other Benefits");

                           (iii)    the Company shall continue to provide
         at its expense (on the same basis as at the Executive's Date of
         Termination) for the continued participation of the Executive and,
         to the extent applicable, his family, in the Company's medical,
         dental, vision and life insurance plans and programs, for a period
         of four months commencing with the Date of Termination; and

                           (iv)     the Company shall provide the Executive
         with outplacement services during the twelve month period commencing
         with the Date of Termination up to an aggregate cost of $25,000.

                  (b)      Death. If the Executive's employment is terminated
                           -----
by reason of the Executive's death during the Employment Period, this
Agreement shall terminate without further obligations to the Executive's
legal representatives under this Agreement, other than for timely payment or
provision of the following:

                                     6

<PAGE>
<PAGE>

                  (i)      Accrued Obligations;

                  (ii)     Other Benefits; and

                  (iii)    if such termination occurs on or after the
Emergence Date but not later than the six-month anniversary thereof, the
amount, if any, to which Executive is entitled under the Solutia Inc.
Emergence Incentive Bonus Program.

Accrued Obligations shall be paid to the Executive's estate or beneficiary,
as applicable, in a lump sum in cash within 30 days of the Date of
Termination.

Amounts to be paid under Section 5(b)(ii), other than benefits due from
retirement plans tax qualified under Section 401(a) of the Internal Revenue
Code of 1986, as amended ("Code")("TQ Plans"), and 5(b)(iii) shall be paid
no later than 2 1/2 months after the end of the year in which the Executive
dies.

                  (c)      Disability. If the Executive's employment is
                           ----------
terminated by reason of the Executive's Disability during the Employment
Period, this Agreement shall terminate without further obligations to the
Executive, other than for timely payment or provision of the following:

                  (i)      Accrued Obligations;

                  (ii)     Other Benefits; and

                  (iii)    if such termination occurs on or after the
Emergence Date but not later than the six-month anniversary thereof, the
amount, if any, to which Executive is entitled under the Solutia Inc.
Emergence Incentive Bonus Program.

Accrued Obligations shall be paid to the Executive in a lump sum in cash
within 30 days of the Date of Termination.

Amounts to be paid under Sections5(c)(ii), other than TQ Plans, and
5(c)(iii) shall be paid no later than 2 1/2 months after the year in which
the Executive's employment terminates by reason of Disability.

                  (d)      Cause; Other than for Good Reason. If the
                           ---------------------------------
Executive's employment shall be terminated for Cause during the Employment
Period, or if the Executive voluntarily terminates employment during the
Employment Period, excluding a termination for Good Reason, this Agreement
shall terminate without further obligations to the Executive, other than for
Accrued Obligations and the timely payment or provision of Other Benefits.
In such case, all Accrued Obligations shall be paid to the Executive in a
lump sum in cash within 30 days of the Date of Termination.

         6.       Full Settlement; Legal Fees. The Company's obligation to
                  ---------------------------
make the payments provided for in this Agreement and otherwise to perform
its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by
way of mitigation of the amounts

                                     7

<PAGE>
<PAGE>

payable to the Executive under any of the provisions of this Agreement, and
such amounts shall not be reduced whether or not the Executive obtains other
employment. The Company agrees to pay, to the full extent permitted by law,
all legal fees and expenses which the Executive may reasonably incur as a
result of any contest, in which the Executive is the prevailing party, by
the Company, the Executive or others of the validity or enforceability of,
or liability under, any provision of this Agreement or any guarantee of
performance thereof (whether such contest is between the Company and the
Executive or between either of them and any third party, and including as a
result of any contest by the Executive about the amount of any payment
pursuant to this Agreement), plus in each case interest on any payment from
the time at which the liability for the applicable legal fees and expenses
was incurred by Executive, at the applicable Federal rate provided for in
Section 7872(f) (2)(A) of the Internal Revenue Code of 1986, as amended (the
"Code").

         7.       Confidential Information and Competitive Activity.
                  -------------------------------------------------

                  (a)      Confidential Information. As used herein,
                           ------------------------
"Confidential Information" means all technical and business information of
the Company and its affiliated companies, whether patentable or not, which
is of a confidential, trade secret and/or proprietary character and which is
either developed by the Executive (alone or with others) or to which the
Executive has had access during the Executive's employment. "Confidential
Information" shall also include confidential evaluations of, and the
confidential use or non-use by the Company or any affiliated company of,
technical or business information in the public domain.

         The Executive shall use the Executive's best efforts and diligence
both during and after employment by the Company to protect the confidential,
trade secret and/or proprietary character of all Confidential Information.
The Executive shall not, directly or indirectly, use (for the Executive or
another) or disclose any Confidential Information, for so long as it shall
remain proprietary or protectible as confidential or trade secret
information, except as may be necessary for the performance of the
Executive's duties with the Company.

         The Executive shall deliver promptly to the Company, at the
termination of the Executive's employment, or at any other time at the
Company's request, without retaining any copies, all documents and other
material in the Executive's possession relating, directly or indirectly, to
any Confidential Information.

         Each of the Executive's obligations in this Section shall also
apply to the confidential, trade secret and proprietary information learned
or acquired by the Executive during the Executive's employment from others
with whom the Company or any affiliated company has a business relationship.

         The Executive understands that the Executive is not to disclose to
the Company or any affiliated company, or use for its benefit, any of the
confidential, trade secret or proprietary information of others, including
any of the Executive's former employers.

                  (b)      Competitive Activity; Nonsolicitation. In the
                           -------------------------------------
event that, during the Employment Period, Executive shall voluntarily
terminate his employment hereunder, be terminated by the Company without
Cause, or terminate his employment hereunder for Good

                                     8

<PAGE>
<PAGE>

Reason, then the Executive shall not, directly or indirectly (whether as
owner, partner, consultant, employee or otherwise), at any time during the
six months following termination of his employment with the Company or any
affiliate for any reason, engage in or contribute his knowledge to any work
or activity that involves a product, process, apparatus, service or
development which is then competitive with or similar to a product, process,
apparatus, service or development on which he worked or with respect to
which he had access to Confidential Information while employed by the
Company or an affiliate at any time during the period of five years
immediately prior to his Date of Termination ("Competitive Work"). However,
the Executive shall be permitted to engage in such proposed work or
activity, and the Company shall furnish him a written consent to that effect
signed by an officer of the Company, if the Executive shall have furnished
to the Company clear and convincing written evidence, including assurances
from the Executive and his new employer, that the fulfillment of his duties
in such proposed work or activity would not likely cause him to disclose,
base judgment upon, or use any Confidential Information. In addition, during
his employment by the Company or an affiliate and for a period of six months
thereafter, the Executive shall not, directly or indirectly, (i) induce or
attempt to induce a salaried employee of the Company or any of its
affiliates to accept employment or affiliation involving Competitive Work
with another firm or corporation of which the Executive is an employee,
owner, partner or consultant, or (ii) induce or attempt to induce any
customer, supplier, licensee or other person having a business relationship
with the Company to cease doing business with the Company or interfere
materially with the relationship between the Company and any such customer,
supplier, licensee or other person having a business relationship with the
Company.

                  (c)      Injunctive Relief. Executive agrees that the
                           -----------------
restrictions imposed upon him by this Section 7 are fair and reasonable
considering the nature of the Company's business and are reasonably required
for the protection of the Company. Executive also acknowledges that a breach
of any of the provisions of this Section 7 may result in continuing and
irreparable damages to the Company for which there may be no adequate remedy
at law, and that the Company, in addition to all other relief available to
it, shall be entitled to the issuance of a temporary restraining order,
preliminary injunction and permanent injunction restraining the Executive
from committing or continuing to commit any breach of the provisions of this
Section 7.

                  (d)      Blue Pencil. If, at any time, the provisions of
                           -----------
this Section 7 shall be determined to be invalid or unenforceable under any
applicable law, by reason of being vague or unreasonable as to area,
duration or scope of activity, this Agreement shall be considered divisible
and shall become and be immediately amended to only such area, duration and
scope of activity as shall be determined to be reasonable and enforceable by
the court or other body having jurisdiction over the matter and the
Executive and the Company agree that this Agreement as amended shall be
valid and binding as though any invalid or unenforceable provision had not
been included herein.

         8.       Successors.
                  ----------

                  (a)      This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by
the Executive otherwise than by will or the

                                     9

<PAGE>
<PAGE>

laws of descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by the Executive's legal representatives.

                  (b)      This Agreement shall inure to the benefit of and
be binding upon the Company and its successors and assigns.

         9.       Miscellaneous.
                  -------------

                  (a)      This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect. This Agreement
may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.

                  (b)      All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the other party
or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

                  If to the Executive:

                  James R. Voss

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

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

                  If to the Company:

                  Rosemary L. Klein
                  Senior Vice President, General Counsel and Corporate Secretary
                  Solutia Inc.
                  P.O. Box 66760
                  St. Louis, MO 63166-6760

or to such other address as either party shall have furnished to the other
in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.

                  (c)      The invalidity or unenforceability of any one or
more provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain
in full force and effect.

                  (d)      The Company may withhold from any amounts payable
under this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.

                  (e)      The Executive's or the Company's failure to insist
upon strict compliance with any provision of this Agreement or the failure
to assert any right the Executive or the

                                     10

<PAGE>
<PAGE>

Company may have hereunder shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement.

                  (f)      This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all prior agreements, oral and written, between the parties hereto with
respect to the subject matter hereof. Further, this Agreement also
supersedes, without limitation, and any other prior employment agreement
between the Company and the Executive and the Executive waives all rights
with respect to such agreements, including, without limitation, any claims
for damages related to such agreements; provided, that this Agreement shall
have no effect on the Executive's rights under any plan, program, policy or
practice provided by the Company or any of its affiliated companies except
that the benefits and other payments provided for pursuant to Section 5
hereof shall be in lieu of any severance or separation pay or benefits to
which the Executive might otherwise be entitled under any plan, program,
policy or arrangement of the Company and its affiliates.

                  (g)      No amounts shall be payable pursuant to Section
5(a)(i)(B), 5(a)(i)(C) or 5(d) of this Agreement unless and until the
Executive shall have executed and delivered a waiver and release of claims
against the Company substantially in the form attached hereto as Exhibit A.

                  (h)      Except as otherwise provided by Section 7(c), in
the event of any dispute, controversy or claim arising out of or relating to
this Agreement or Executive's employment or termination thereof, the parties
hereby agree to settle such dispute, controversy or claim in a binding
arbitration by a single arbitrator in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, which arbitration
shall be conducted in St. Louis, Missouri. The parties agree that the
arbitral award shall be final and non-appealable and, except as otherwise
provided by Section 7(c), shall be the sole and exclusive remedy between the
parties hereunder. The parties agree that judgment on the arbitral award may
be entered in any court having competent jurisdiction over the parties or
their assets.

         10.      Code Section 409A. Compliance. The arrangements under this
                  -----------------------------
Agreement are not intended to create "deferred compensation" within the
meaning of Section 409A of the Internal Revenue Code of 1986, as amended
(the "Code") and any rulings or regulations thereunder, including IRS Notice
2005-1, and all provisions of this Agreement shall be interpreted
consistently with such intent. Further, in the event that (a) the Company
determines that there is an ambiguity with respect to any provision of this
Agreement that could cause such provision to result in an obligation to pay
deferred compensation subject to Section 409A of the Code, such ambiguity
shall be interpreted and resolved in the manner that the Company deems
necessary to either avoid the obligation to pay deferred compensation within
the meaning of Section 409A of the Code or to comply with timing and payment
provisions of Section 409A of the Code, and (b) the Company determines, in
good faith, that any amendment to this Agreement is necessary or appropriate
in order to comply with timing and payment provisions of Section 409A of the
Code or to avoid the obligation to pay deferred compensation within the
meaning of Section 409A of the Code, the Company shall have the right to
make such amendment, on a prospective or retroactive basis, in its sole
discretion.

       11.        Counterparts. This Agreement may be executed in separate
                  ------------
counterparts, each of which is deemed to be an original and all of which
taken together constitute one and the same

                                     11

<PAGE>
<PAGE>

agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other party in original
or facsimile form.

IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of
the day and year first above written.

                                      /s/ James R. Voss
                                      -------------------------------
                                      James R. Voss

                                      SOLUTIA INC.

                                      By /s/ Rosemary L. Klein
                                         ----------------------------
                                         Rosemary L. Klein

                                     12

<PAGE>
<PAGE>

                                                                   Exhibit A
                                                                   ---------

                             WAIVER AND RELEASE

         Reference is made to that Agreement (the "Agreement"), dated as of
August 1, 2005, by and between Solutia, Inc., a Delaware Corporation (the
"Company"), and James R. Voss (the "Executive"). This Waiver and Release
(this "Waiver") is made as of the __ day of ____________, 200_, by the
Executive pursuant to Section 9(g) of the Agreement.

              Release and Waiver of Claims Against the Company
              ------------------------------------------------

         (a) The Executive, on behalf of himself, his agents, heirs,
successors, assigns, executors and administrators, in consideration for the
payments and other consideration provided for under the Agreement, hereby
forever releases and discharges the Company and its successors, their
affiliated entities, and their past and present directors, employees,
agents, attorneys, accountants, representatives, plan fiduciaries,
successors and assigns from any and all known and unknown causes of action,
actions, judgments, liens, indebtedness, damages, losses, claims,
liabilities, and demands of whatsoever kind and character in any manner
whatsoever arising on or prior to the date of this Waiver, including but not
limited to (i) any claim for breach of contract, breach of implied covenant,
breach of oral or written promise, wrongful termination, intentional
infliction of emotional distress, defamation, interference with contract
relations or prospective economic advantage, negligence, misrepresentation
or employment discrimination, and including without limitation alleged
violations of Title VII of the Civil Rights Act of 1964, as amended,
prohibiting discrimination based on race, color, religion, sex or national
origin; the Family and Medical Leave Act; the Americans With Disabilities
Act; the Age Discrimination in Employment Act; other federal, state and
local laws, ordinances and regulations; and any unemployment or workers'
compensation law, excepting only those obligations of the Company expressly
recited in the Agreement or this Waiver and any claims to benefits under the
Company's employee benefit plans as defined exclusively in written plan
documents; (ii) any and all liability that was or may have been alleged
against or imputed to the Company by the Executive or by anyone acting on
his behalf; (iii) all claims for wages, monetary or equitable relief,
employment or reemployment with the Company in any position, and any
punitive, compensatory or liquidated damages; and (iv) all rights to and
claims for attorneys' fees and costs except as otherwise provided herein or
in the Agreement.

         (b) The Executive shall not file or cause to be filed any action,
suit, claim, charge or proceeding with any federal, state or local court or
agency relating to any claim within the scope of this Waiver. In the event
there is presently pending any action, suit, claim, charge or proceeding
within the scope of this Waiver, or if such a proceeding is commenced in the
future, the Executive shall promptly withdraw it, with prejudice, to the
extent he has the power to do so. The Executive represents and warrants that
he has not assigned any claim released herein, or authorized any other
person to assert any claim on his behalf.

         (c) In the event any action, suit, claim, charge or proceeding
within the scope of this Waiver is brought by any government agency,
putative class representative or other third party to vindicate any alleged
rights of the Executive, (i) the Executive shall, except to the extent

                                     13

<PAGE>
<PAGE>

required or compelled by law, legal process or subpoena, refrain from
participating, testifying or producing documents therein, and (ii) all
damages, inclusive of attorneys' fees, if any, required to be paid to the
Executive by the Company as a consequence of such action, suit, claim,
charge or proceeding shall be repaid to the Company by the Executive within
ten (10) days of his receipt thereof.

         (d) In the event of a breach of this Waiver by the Executive, the
Company's obligations pursuant to the Agreement shall cease as of the date
of such breach. Furthermore, the Executive understands that his breach of
the provisions of this Waiver will cause monetary damages to the Company.
Thus, should the Executive breach the provisions of this Waiver, he shall be
required to pay the Company, as liquidated damages, the amount of the
consideration paid by the Company to the Executive pursuant to the Agreement
plus all costs and expenses, including all attorneys' fees and expenses,
that the Company incurs in enforcing this Waiver. The Executive agrees that
the foregoing amount of liquidated damages is reasonable and necessary, and
does not constitute a penalty.

         Voluntary Execution of Waiver.
         -----------------------------

         BY HIS SIGNATURE BELOW, THE EXECUTIVE ACKNOWLEDGES THAT:

         (A) I HAVE RECEIVED A COPY OF THIS WAIVER AND WAS OFFERED A PERIOD
OF TWENTY-ONE (21) DAYS TO REVIEW AND CONSIDER IT;

         (B) IF I SIGN THIS WAIVER PRIOR TO THE EXPIRATION OF TWENTY-ONE
(21) DAYS, I KNOWINGLY AND VOLUNTARILY WAIVE AND GIVE UP THIS RIGHT OF
REVIEW;

         (C) I HAVE THE RIGHT TO REVOKE THIS WAIVER FOR A PERIOD OF SEVEN
(7) DAYS AFTER I SIGN IT BY MAILING OR DELIVERING A WRITTEN NOTICE OF
REVOCATION TO THE COMPANY'S GENERAL COUNSEL, NO LATER THAN THE CLOSE OF
BUSINESS ON THE SEVENTH DAY AFTER THE DAY ON WHICH I SIGNED THIS WAIVER;

         (D) THIS WAIVER SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
SEVEN DAY REVOCATION PERIOD HAS EXPIRED WITHOUT THE WAIVER HAVING BEEN
REVOKED;

         (E) THIS WAIVER WILL BE FINAL AND BINDING AFTER THE EXPIRATION OF
THE REVOCATION PERIOD REFERRED TO IN (C). I AGREE NOT TO CHALLENGE ITS
ENFORCEABILITY;

         (F) I AM AWARE OF MY RIGHT TO CONSULT AN ATTORNEY, HAVE BEEN
ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY, AND HAVE HAD THE OPPORTUNITY
TO CONSULT WITH AN ATTORNEY, IF DESIRED, PRIOR TO SIGNING THIS WAIVER;

                                     14

<PAGE>
<PAGE>

         (G) NO PROMISE OR INDUCEMENT FOR THIS WAIVER HAS BEEN MADE EXCEPT
AS SET FORTH IN THIS WAIVER;

         (H) I AM LEGALLY COMPETENT TO EXECUTE THIS WAIVER AND ACCEPT FULL
RESPONSIBILITY FOR IT; AND

         (I) I HAVE CAREFULLY READ THIS WAIVER, ACKNOWLEDGE THAT I HAVE NOT
RELIED ON ANY REPRESENTATION OR STATEMENT, WRITTEN OR ORAL, NOT SET FORTH IN
THIS DOCUMENT OR THE AGREEMENT, AND WARRANT AND REPRESENT THAT I AM SIGNING
THIS WAIVER KNOWINGLY AND VOLUNTARILY.

         Intending to be legally bound, I have signed this Waiver as of the
date first set forth above.

                                            -------------------------------
                                            James R. Voss

                                     15

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