Document:

<PAGE>   1
                                                                   Exhibit 10.12

                           MASTER CONSULTING AGREEMENT

      THIS MASTER CONSULTING AGREEMENT (this "Agreement") is made and entered
into this 17th day of August, 2000, by and between ADLABS, INC. (hereinafter
"ADLabs"), a California corporation with offices at 1601 Dove Street, Suite 105
Newport Beach, CA 92660, and SUMMUS, LTD. (hereinafter "Summus"), a Delaware
corporation with offices at 434 Fayetteville Street Mall, Suite 600, Raleigh, NC
27601:

                                   WITNESSETH:

      WHEREAS, ADLabs desires to engage Summus from time to time pursuant to one
or more Work Statements to perform projects of different kinds, and Summus is
interested in accepting such engagements, subject to the parties' further
agreement on the scope and terms of each such Work Statement; and

      WHEREAS, ADLabs and Summus mutually desire to set forth in this Agreement
certain terms applicable to all such engagements;

      NOW, THEREFORE, in consideration of the premises and the mutual
obligations of the parties set forth below, ADLabs and Summus, intending to be
legally bound, hereby agree as follows:

                                    Section 1
                      SUBJECT AND PURPOSE OF THIS AGREEMENT

      This Agreement sets forth the terms and conditions applicable to projects
which may be performed by Summus and/or ADLabs pursuant to one or more Work
Statements. Each Work Statement shall be effective only when signed by both
parties. References to this Agreement shall include any Work Statements in
effect from time to time.

                                    Section 2
                                   DEFINITIONS

      Capitalized terms used in this Agreement and not elsewhere defined shall
have the meanings ascribed to them in the attached Glossary or in the Technology
License Agreement.

                                    Section 3
                                 WORK STATEMENTS

      3.1. SCOPE AND USE. A Work Statement is a project description for a
particular Phase which refers to this Agreement, describes work to be done in
connection with such Phase pursuant to this Agreement, identifies the
Deliverables to be produced there under, and provides a breakdown of
Deliverables into specific
<PAGE>   2
categories as further specified in Section 3.2(b) hereof. Each Work Statement
shall identify the services, functions, equipment, facilities and other
resources to be provided by each party in order for the tasks specified in such
Work Statement to be performed.

      3.1.  FORMAT AND TERMS.  Except for minor tasks which may be addressed in
summary form, each Work Statements will conform to substantially the following
format:

      (a)   The Work Statement shall be entitled "Work Statement No. [___] under
            Master Consulting Agreement, dated July 31, 2000. The contents of
            the Work Statement may be included in the body of the Work
            Statement, or in separately signed Attachments, as the parties
            consider most practical. The Work Statement shall include a
            provision for the dated signatures of authorized representatives of
            both parties.

      (b)   Principal terms of the Work Statement shall include, at a minimum,
            for any Phase:

            (i)   The "Phase Development Services" for such Phase which shall
                  include a description of the work to be done, specifications
                  of the expected Deliverable(s), and specification(s) of the
                  modifications to the Summus Code to be done,

            (ii)  A breakdown in the form of Exhibit "A" identifying the
                  classification of each Deliverable in accordance with the
                  following categories:

                        ADLabs Improvements
                        ADLabs Technology
                        Core Technology
                        Core Technology Improvement

                  Any Deliverable that has not been assigned to one of the above
            categories prior to commencement of work under any Work Statement
            shall be deemed Summus Technology unless otherwise agreed in writing
            by the parties.

            (iii) Services, equipment and facilities (if any) to be provided by
                  Summus.

            (iv)  Services, equipment and facilities (if any) to be provided by
                  ADLabs.
<PAGE>   3
            (v)   Third-party services, equipment, facilities and any Summus
                  Third Party Technology (if any) required to be obtained, which
                  will be ADLabs' responsibility unless otherwise indicated.

            (vi)  Target time schedules and delivery dates.

            (vii) Completion criteria, quality testing, and reports.

            (viii)Payments to be made.

      3.3.  TYPES OF WORK.  It is expected that the projects that Summus may
undertake pursuant to one (1) or more Work Statements will initially relate to:

      (a)   Phase I, Digital Image Consultation and Delivery of Base Technology

            (i)   Deliverables will generally include certain software based on
                  Summus' Wavelet Image Technology and certain enhancements
                  specifically related to the ADLabs' anatomical pathology
                  market segment.

            (ii)  Deliverables are planned to include, 12 or 14-bit RGB SDK,
                  registration and stitching of multiple images, and an
                  application interface to examine the slides at multiple
                  resolutions including a thumbnails and zoom functions.

            (iii) Early deliverables in Phase I are envisioned to be prototypes
                  of the foregoing to be used to identify and document final
                  requirements on functions and user interfaces. The Phase I
                  Work Statement shall specify the consulting fee payments and
                  the payment schedule for the Phase I Work.

      (b)   Phase II, Object Recognition and Slide Automation

            (i)   In this Phase, Summus will provide enhancements to its base
                  Wavelet Image Technology for purpose of a pattern recognition
                  from a catalogue of images developed to allow the ADLabs to
                  incorporate the delivered code into its ADPhase and ADSoft
                  products, end to end system consisting of object/pattern
                  recognition and database searching.

            (ii)  The Phase II Work Statement shall specify the consulting fee
                  payments and the payment schedule for the Phase II Work.

      (c)   Phase III, Multiple Spectrum Analysis and Diagnostics
<PAGE>   4
            (i)   In Phase III Summus will develop enhancements to its base
                  Wavelet Technology to assist ADLabs in developing its
                  ADBioScan product, which is envisioned to be a diagnostic tool
                  capable of multi-spectrum pattern recognition, imaging
                  cataloging and management, and multiple category searching.

            (ii)  Specifics of the Phase III effort will be delineated in the
                  specific Work Statement.

      3.4. ADOPTION OF WORK STATEMENTS; CHANGES. Work Statements, changes to
Work Statements, and amendments to this Agreement shall be effective only if in
a writing accompanied by dated signatures of authorized representatives of both
parties. Replacement pages initialed and dated by authorized representatives of
both parties will be sufficient for that purpose. Unless otherwise indicated, a
change or amendment shall be effective on the date signed by both parties.

                                     Section 4
                                    PERFORMANCE

      4.1. REASONABLE EFFORTS. The parties agree to use commercially reasonable
effort to perform the tasks assigned and to complete the Phase Development
Services specified in each applicable Work Statement. All services will be
rendered in a workmanlike manner by personnel having a level of skill
commensurate with their responsibilities.

      4.2. TARGET DATES. Scheduled performance dates are estimates only. Both
parties recognize such dates are dependent on development, resource
availability, funding, assistance, and other factors that may cause dates to
shift or interfere with completion. However, each Work Statement shall set forth
a date for completion of the Phase Development Services for a Phase and such
date shall be applicable for purposes of determining satisfaction of the
condition for timely completion of the Phase Development Services for any Phase
as contemplated in the Stock Warrant Agreement.

      4.3. THIRD-PARTY RESOURCES. References to Deliverable or the assignment to
Summus of responsibility for particular Phase Development Services shall not be
construed to make Summus responsible for securing any related Intellectual
Property Rights that may be owned or retained by third parties, unless (a) the
applicable Work Statement expressly makes Summus responsible for securing those
Intellectual Property Rights in the manner contemplated by Section 5 below or
(b) Summus has reason to believe at the time the Work Statement is
<PAGE>   5
executed that third party Intellectual Property Rights will be needed to avoid
infringement in ADLabs conduct of its Business using the Summus Code as modified
in accordance with the Work Statement. A statement or reference in a Work
Statement that Summus is responsible for obtaining third-party resources,
including services, equipment, facilities, or Intellectual Property Rights, is
subject to the availability of those resources. If during the rendering of Phase
Development Services under a Work Statement Summus has reason to believe that
third party Intellectual Property Rights will be needed to avoid infringement in
ADLabs conduct of its Business using the Summus Code as modified in accordance
with the Work Statement, Summus shall promptly notify ADLabs thereof in writing.

                                    Section 5
                               RESOURCES PROVIDED

      A Work Statement may state that Summus or ADLabs is responsible for
obtaining certain resources. Examples of resources that may be provided by
either party for use in work done under this Agreement include:

      (a)   Services, including development services, engineering services,
            training, manufacturing services, or administrative support.

      (b)   Software (programming and documentation) previously in existence,
            where the Intellectual Property Rights are owned by one of the
            parties.

      (c)   Software (programming and documentation) previously in existence,
            where the Intellectual Property Rights are owned by third parties
            and limited rights to such Software have been obtained by one of the
            parties under license.

            Note: In order to comply with restrictions imposed by third-party
            licensors, either party shall be entitled to limited disclosure to
            the other party of such software so that the other party is
            authorized only to provide programming assistance or testing in
            support of the licensed party, pursuant to designs owned or approved
            by the licensed party, under the direct and exclusive supervision
            and control of the licensed party, and with respect to interface
            programming or other development activity of a similarly narrow
            scope. When acting under those terms, the other party obtains no
            license or sublicense to the licensed software and, instead, the
            other party shall constitute solely an independent contractor acting
            for hire with respect to activities of the licensed party under a
            Work Statement.
<PAGE>   6
            Note: Where practical for the completion of the applicable work,
            programming may be provided in whole or in part only in object code
            form.

      (d)   Equipment.

            Unless otherwise agreed, any equipment provided by either party to
            the other party is loaned for use in performing the tasks specified
            in applicable Work Statements and, upon completion of those tasks,
            shall be returned in the same condition as received, fair wear and
            tear excepted. Any charges applicable for the loan of such equipment
            shall be set forth in the Work Statement.

                                    Section 6
                             CONTRACT ADMINISTRATION

      6.1. PRINCIPAL CONTACTS. The parties will designate and maintain Principal
Contacts for purposes of all work and business between them concerning this
Agreement and all notices required or permitted hereunder. These initially will
be:

      For Summus:

                  Principal Contact:  Michael Boyd or President
                  Business Phone:  (919) 807-5600
                  Business Mailing Address:
                        434 Fayetteville Street Mall, Suite 600
                        Raleigh, NC 27601

      For ADLabs:

                  Principal Contact: Charles T. Madden or Vito J. Palmieri
                  Business Phone:  (949) 250-3375
                  Business Mailing Address:
                        1601 Dove Street, Suite 105
                        Newport Beach, CA 92660

      6.2. AUTHORIZATIONS. The signature or initials of the Principal Contacts
on Work Statements or changes or amendments to Work Statements shall be deemed
the authorized signature of the respective party.

      6.3. REPLACEMENT OF PRINCIPAL CONTACT. If either party decides at any time
to replace the person serving as its Principal Contact, it may do so by written
notice to the other party.
<PAGE>   7
      6.4. NOTIFICATION. Any notice under this Agreement shall be deemed given
if sent by courier, facsimile or mail, directed to the principal contact of the
party being notified.

                                    Section 7
                         COMMUNICATIONS; REPORTS; ACCESS

      7.1. PROGRESS CONFERENCES. The parties shall confer no less frequently
than monthly, or at other times specified in the Work Statement, regarding the
progress of the work required under each Work Statement, any anticipated
problems (resolved or unresolved), and any indication of delay in fixed or
tentative schedules.

      7.2. ACCESS. Each party shall, from time to time and upon reasonable
notice, give the other party access to its facilities for purposes of design
reviews, discussion concerning the status and conduct of work being performed
under any Work Statements, and verification of compliance with the terms of this
Agreement.

                                    Section 8
                            COMPENSATION AND PAYMENT

      8.1.  METHOD OF COMPENSATION. Summus shall be entitled to compensation for
the performance of its obligations as stated in a Work Statement.

      8.2. RESPONSIBILITY FOR EXPENSES. Except for the payments to which Summus
may be entitled as stated in a Work Statement, each party will be responsible
for its own expenses incurred in rendering performance, including the cost of
facilities, work space, computers and computer time, development tools and
platforms, utilities management, personnel, supplies, travel, and the like.

      8.3. PAYMENT. Unless otherwise stated in a Work Statement, payment for
performance is due when and as performance is rendered. Summus shall issue
invoices to ADLabs for charges when and as they come due. Charges shall be paid
within thirty (30) days after receipt of the applicable invoice and if not then
paid, such past due amounts shall accrue interest at the rate of one and
one-half percent (1.5%) per month (prorated for partial periods). All payments
shall be made in U.S. currency by check or wire transfer as Summus shall direct.

      8.4. COMPENSATION UPON TERMINATION. In the event of any termination of any
Work Statement prior to completion, payment shall immediately be due for
performance rendered pursuant to such Work Statement, including expenses
<PAGE>   8
incurred in connection with discontinuance of the work in a mutually agreed,
orderly fashion.

      8.5. SUPPORTING DOCUMENTATION; AUDIT. Reasonable books of account in
support of charges shall be kept and maintained by SUMMUS. All such records
shall be open for review or audit by ADLabs at reasonable times and on
reasonable notice to support consulting fees owed or other payments due. An
audit of such records may be made, no more than twice each year, by an
independent firm of accountants or by such other individuals as may be
designated by ADLabs, at its expense; provided, however, that if such audit
reveals an overpayment of amounts owing to Summus in excess of five percent
(5%), Summus shall bear the cost of the audit.

      8.6. CONSULTING SUPPORT. In support of the Phase Development Services,
Summus agrees to provide ADLabs with technical consulting support equal to at
least two (2) full time equivalent persons, including a project/product manager
and developer, for the term of this Agreement. Such consulting support will be
provided to ADLabs at the prevailing rates that Summus charges for such services
under U.S. Government contracts. In addition to such consulting fee, ADLabs
shall reimburse Summus for any out-of-pocket expenses related to such consulting
support (including, without limitation, travel and lodging). To the extent
ADLabs requires additional consulting support beyond the two full time
equivalent persons, such additional support may be provided by Summus at its
customary hourly rate.

                                    Section 9
                   OWNERSHIP AND INTELLECTUAL PROPERTY RIGHTS

      9.1. THIRD-PARTY TECHNOLOGY. Except as otherwise stated herein, in the
Technology License Agreement or in a Work Statement, ADLabs shall approve the
use of any Third Party Technology necessary to enable it to produce and exploit
the Deliverable(s), subject to any royalty obligations as set forth in the
Technology License Agreement.

      9.2. FURTHER ASSURANCES. Each party agrees to take such action and
execute, or cause its employees, agents and contractors to execute, such further
instruments as may be necessary to give effect to the provisions of this
Agreement.

      9.3. OWNERSHIP OF DELIVERABLES; LICENSE RIGHTS. Ownership of the
intellectual property rights of any Deliverable hereunder, and any license
rights related thereto, shall be governed by the terms of the Technology License
Agreement between Summus and ADLabs, based on the category of each Deliverable
assigned pursuant to Section 3.1(b)(ii) hereof. In the event of any
<PAGE>   9
conflict regarding ownership rights between this Agreement and the Technology
License Agreement, the Technology License Agreement shall prevail.

                                   Section 10
                             WARRANTIES; LIMITATIONS

      10.1. WARRANTIES; INDEMNIFICATION.

            Ownership. Summus represents and warrants that as delivered to
            ADLabs, the Deliverable(s) is (are) in substantial conformity with
            the specifications applicable to such Deliverable(s).

      (a)   Exclusive Remedy. ADLabs' exclusive remedy for breach of any of
            Summus' warranties hereunder shall be: (1) to request Error
            Corrections in accordance with Section 10.3 of this Agreement, or
            (2) if such breach materially affects ADLabs' ability to conduct its
            Business, to recover the amount paid to Summus with respect to that
            portion of the Business effected by such breach. Summus shall have
            no liability to ADLabs' customers or Affiliated Entities with regard
            to the subject matter of this Agreement. Notwithstanding any other
            provision of this Agreement, under no circumstance may Summus'
            liability under or arising out of this Agreement exceed the total of
            payments received by Summus from ADLabs pursuant to this Agreement.

      10.2. LIMITATION OF LIABILITY

      (a)   Disclaimer. Summus makes no warranty that all errors have been or
            can be eliminated from the Deliverable(s), and Summus shall not be
            liable or responsible for losses of any kind resulting from the use
            of the Deliverable(s) by ADLabs for developmental or productive use
            or in its Business, including any liability for personal injury
            (including death), property damage, business expense, machine
            downtime, or other damages caused ADLabs, ADLabs' customers, or
            Affiliated Entities by any attendant or consequent deficiency,
            defect, error, or malfunction. EXCEPT AS SPECIFICALLY SET FORTH
            ABOVE, SUMMUS DISCLAIMS ANY AND ALL WARRANTIES, WHETHER EXPRESS OR
            IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF FITNESS
            FOR ANY PARTICULAR PURPOSE OR MERCHANTABILITY. IN NO EVENT SHALL
            SUMMUS BE LIABLE TO ADLABS FOR ANY LOST PROFITS OR OTHER INCIDENTAL
            OR CONSEQUENTIAL DAMAGES RELATING TO THE SUBJECT MATTER OF THIS
            AGREEMENT EVEN IF SUMMUS HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
            DAMAGES IN
<PAGE>   10
            ADVANCE OF THE CONDUCT GIVING RISE TO SUCH LOSSES OR DAMAGES.

      10.3. SUPPORT SERVICES. During the term of this Agreement, Summus will
provide reasonable technical support to ADLabs and will promptly affect
reasonable Error Correction in the Summus Code at Summus' expense. ADLabs'
access to technical support shall be via telephone, facsimile, or email during
each business day between the hour of 9:00 a.m. and 5:00 p.m. Eastern Standard
Time. Technical support in excess of a commercially reasonable amount will be
charged at a rate no greater than Summus' then current technical support rate.

                                   Section 11
                                TERM OF AGREEMENT

      11.1 TERM. This Agreement shall be effective upon the date specified at
the beginning of this Agreement, and shall remain in force until terminated as
provided herein; provided, however, this Agreement shall continue to remain in
effect with respect to any Work Statement entered into hereunder until such Work
Statement is itself terminated or performance thereunder is completed.

      11.2. TERM AND TERMINATION OF WORK STATEMENT. Unless otherwise stated in
the applicable Work Statement, the term of the Work Statement shall last until
performance thereunder is completed, except that ADLabs may, at its sole option
and for its own convenience, terminate any or all Work Statements in effect
and/or this Agreement upon sixty (60) days' prior written notice. Upon such
termination, the parties shall inform each other of the extent to which
performance has been completed through such date, and collect and deliver all
work in process. In the event of termination, the parties agree to wind up their
work in a commercially reasonable manner and to preserve and deliver items of
value created prior to termination.

      11.3. TERMINATION OF THIS AGREEMENT.

      (a)   Breach. Should either party commit a material breach of any
            obligation hereunder, except an obligation to make payments, the
            other party, at its option, may terminate this Agreement by sixty
            (60) days' prior notice to the other party. Such notice shall state
            the default upon which termination is based. Notwithstanding such
            notice, termination shall not occur and the defaulting party shall
            not be liable for any further remedy if (i) such default is cured,
            and notice of such cure is sent to the nonbreaching party within
            such sixty day period, or (ii) if such breach is incapable of being
            cured within such period and
<PAGE>   11
            the breaching party presents the nonbreaching party with its plan to
            cure and is diligently executing such plan.

      (b)   Special Grounds for Termination. Notwithstanding any other provision
            of this Agreement, (i) Summus may terminate this Agreement upon
            fifteen days' written notice for nonpayment of fees after the same
            shall have become a past due payment, unless such nonpayment is
            cured within such fifteen (15) day period, and (ii) this Agreement
            shall terminate immediately in the event of any (A) affirmative act
            of insolvency by ADLabs, (B) upon the appointment of any receive or
            trustee to take possession of the properties of ADLabs or upon the
            winding-up, or (C) upon the expiration or termination, for any
            reason, of the Technology License Agreement. In the event of any
            termination set forth in this Section, all rights of ADLabs that
            otherwise would survive expiration or termination shall immediately
            terminate, and Summus shall be entitled to pursue all available
            remedies under contract, copyright, tort, and other applicable law.

      11.4. SURVIVAL. Except as limited by Section 12.3(b) hereof, the
provisions of Sections 8, 9, 10, 11 and 13 shall remain in effect after
termination of this Agreement.

                                   Section 12
                                  MISCELLANEOUS

      12.1. FORCE MAJEURE. Either party shall be excused from delays in
performing or from its failure to perform hereunder to the extent that such
delays or failures result from causes beyond the reasonable control of such
party; provided that, in order to be excused from delay or failure to perform,
such party must act diligently to remedy the cause of such delay or failure.

      12.2. NO AGENCY. This Agreement and the Work Statements do not create any
relationship between the parties hereto other than as independent contractors.

      12.3. SEVERABILITY. If any provision of this Agreement is held to be
invalid, the other provisions will not be affected to the greatest extent
possible consistent with the parties' intent.

      12.4. MULTIPLE COUNTERPARTS. This Agreement may be executed in several
counterparts, all of which taken together shall constitute one single Agreement
between the parties.

      12.5. SECTION HEADINGS; EXHIBITS. The section and subsection headings used
herein are for reference and convenience only, and shall not enter into the
<PAGE>   12
interpretation hereof. The exhibits referred to herein and attached hereto, or
to be attached hereto, including all Work Statements issued hereunder from time
to time, are incorporated herein to the same extent as if set forth in full
herein.

      12.6. COMPLIANCE WITH LAW.

      (a)   Each party agrees to comply with all applicable laws, regulations,
            and ordinances relating to their performance hereunder.

      (b)   Neither party will knowingly export or re-export, directly or
            indirectly, any technical data (as defined by the U.S. Export
            Administration Regulations) produced or provided under this
            Agreement, or export or re-export, directly or indirectly, any
            direct product of such technical data, including software, to a
            destination to which such export or re-export is restricted or
            prohibited by U.S. or non-U.S. law, without obtaining prior
            authorization from U.S. Department of Commerce and other competent
            government authorities to the extent required by those laws.

      12.7. NO WAIVER. No delay or omission by either party hereto to exercise
any right or power occurring upon any noncompliance or default by the other
party with respect to any of the terms of this Agreement shall impair any such
right or power or be construed to be a waiver thereof. A waiver by either of the
parties hereto of any of the covenants, conditions, or agreements to be
performed by the other shall not be construed to be a waiver of any succeeding
breach thereof or of any covenant, condition, or agreement herein contained.
Unless stated otherwise, all remedies provided for in this Agreement shall be
cumulative and in addition to and not in lieu of any other remedies available to
either party at law, in equity, or otherwise.

      12.8. PREVAILING PARTIES. In case of litigation arising out of or in
connection with this License Agreement, the prevailing Party shall be entitled
to recover its reasonable attorneys' fees, costs and expenses from the other
Party.

      12.9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to
conflicts of laws principles.

      12.10. DISPUTE RESOLUTION. If a dispute arises out of or relates to this
License Agreement or the breach thereof (a "Dispute"), and if the Dispute cannot
be settled through negotiation between the parties for a period not to exceed
sixty (60) days, the parties agree first to try in good faith to settle the
Dispute by mediation administered by the American Arbitration Association under
its Commercial
<PAGE>   13
Mediation Rules before resorting to arbitration, litigation, or some other
dispute resolution procedure.

Notwithstanding anything to the contrary contained in this Section, the parties
hereby preserve, without diminution, certain remedies that any of them may
employ or exercise freely, in connection with or during a Dispute. Each of the
parties shall have the right to proceed in any court of proper jurisdiction to
exercise or prosecute the following remedies, as applicable: (i) obtaining
provisional or ancillary remedies, including injunctive relief, garnishment,
attachment, appointment of a receiver and filing an involuntary bankruptcy
proceeding, and (ii) a judgment obtained by confession of judgment. Preservation
of these remedies does not limit the power of a mediator to grant similar
remedies that may be requested by a party in a Dispute.

      12.11. ENTIRE AGREEMENT. This Agreement and the exhibits annexed hereto,
together with the Work Statements issued from time to time hereunder, the
Confidentiality Agreement dated February 16, 2000, and the Technology License
Agreement and the Stock Warrant Agreement each entered into by the parties
concurrently herewith, constitute the entire agreement between the parties with
respect to the subject matter hereof. No change, waiver, or discharge hereof
shall be valid unless it is in writing and is executed by the party against whom
such change, waiver, or discharge is sought to be enforced.

      12.12. NO ASSIGNMENT. Unless a party's rights and obligations under the
Technology License Agreement have been properly assigned pursuant to the terms
thereof, neither party may, without the prior written consent of the other
party, assign or transfer this Agreement or any obligation incurred hereunder.
If a party has properly assigned its rights and obligations under the Technology
License Agreement, such party may assign its rights and obligations hereunder to
the same assignee as the Technology License Agreement, provided that such
assignee expressly accepts, in writing, the obligations of the assignor
hereunder as if the assignee were a party to this Agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>   14
      IN WITNESS WHEREOF, ADLabs and Summus have caused this Agreement to be
signed and delivered by their duly authorized officers, all as of the date first
hereinabove written.

SUMMUS, LTD.,                            ADLABS, Inc.,
a Delaware corporation                   a California corporation

By:  /s/ Michael G. Boyd                 By:   /s/ Charles T. Madden
     ____________________________              _____________________________
     Michael G. Boyd                           Charles T. Madden
     Vice President, Business                  President and CEO
     Development

By:  /s/ W. Bradford Silvernail          By:   /s/ Glenn R. Ray
     ____________________________              _____________________________
     W. Bradford Silvernail                    Glenn R. Ray, Secretary
     Chief Executive Officer<PAGE>   1
                                                                   Exhibit 10.13
                            ONR CONT & GRANT AWARDS
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<S> <C>                              |<C>                                                          | <C>       |<C>      <C>
          AWARD/CONTRACT             |1. THIS CONTRACT IS A RATED ORDER UNDER DPAS (115 CFR 350)  | RATING    | PAGE   |   OF PAGES
                                     |                                                             | DO-???    |   1    |      20
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    CONTRACT (Proc. Incl. ??? No.    |3. EFFECTIVE DATE                   |4. REQUISITION/PURCHASE REQUEST/PROJECT NO.
    N00014-00-C-0023                 |   SEE BLK 20C                      |   00PRO1940-00/05 OCT 1999
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 5. ISSUED BY                     CODE |N00014                  |6. ADMINISTERED BY (if other than Item 5)    CODE   |   S1103A
    OFFICE OF NAVAL RESEARCH           |------------------------|   DCMC ATLANTA                                     |
    ONRZ51: GLYNIS FISHER 703-596-2602                          |   805 WALKER STREET SUITE 1                         -------------
    BALLSTON TOWER ONE                                          |   MARIETTA, GA 30060-2789
    800 NORTH QUINCY STREET                                     |
    ARLINGTON, VA 22217-5668                                    |
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 7. NAME AND ADDRESS OF CONTRACTOR (No., street, city, county, State and Zip Code)  |8. DELIVERY
                                                                                    |          See SECTION F of Schedule
    SUMMUS LIMITED                                                                  |   / / ??? ORIGIN    / / OTHER (See below)
    434 FAYETTEVILLE STREET MALL SUITE 600                                          |----------------------------------------------
    RALEIGH, NC 27601                                                               |9. DISCOUNT FOR PROMPT PAYMENT
                                                                                    |               N.A.
                                                                                    |----------------------------------------------
                                                                                    |10. SUBMIT INVOICES (4 copies  |ITEM
                                                                                    |    unless otherwise specified)|  SEE SEC. 6.2
------------------------------------------------------------------------------------|    TO THE ADDRESS SHOWN IN    |
CODE 0Y656                                | FACILITY CODE                           |                               |
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11. SHIP TO/MARK FOR                 CODE | N00014             |12. PAYMENT WILL BE MADE BY                    CODE | H0033?
    PROGRAM OFFICER                  --------------------------|    DFAS COLUMBUS CENTER                            ---------------
    SEE SECTION F - DELIVERIES OR PERFORMANCE                  |    DFAS CO SOUTH ENTITLEMENT OPERATIONS
                                                               |    PO BOX 182264
                                                               |    COLUMBUS, OH 43218-2264
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13. AUTHORITY FOR USING OTHER THAN FULL AND OPEN COMPETITION:  |14. ACCOUNTING AND APPROPRIATION DATA
    / / 18 U.S.C. 230??????        / / 41 U.S.C. 253???        |    See Attached Financial Accounting Data Sheet(s)
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</TABLE>
<TABLE>
<S>  <C>                <C>                                   <C>              <C>             <C>                <C>
-----------------------------------------------------------------------------------------------------------------------------------
15A.|ITEM NO.           |          15B. SUPPLIES/SERVICES     | 15C. QUANTITY |  15D. UNIT  |  15E. UNIT PRICE   |  15F. AMOUNT
-----------------------------------------------------------------------------------------------------------------------------------
                        |    See SECTION B of Schedule        |               |             |                    |
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                 | See SECTION B of
                                                                                  15G. TOTAL AMOUNT OF CONTRACT  | Schedule
-----------------------------------------------------------------------------------------------------------------------------------
                                                       TABLE OF CONTENTS
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S>  <C>   <C>                                       <C>        <C>         <C>                                           <C>
-----------------------------------------------------------------------------------------------------------------------------------
[*]|SEC. | DESCRIPTION                              | PAGE(S)|  [*] | SEC. |                   DESCRIPTION                | PAGES
-----------------------------------------------------------------------------------------------------------------------------------
                    PART I - THE SCHEDULE                    |                       PART II - CONTRACT CLAUSES
-----------------------------------------------------------------------------------------------------------------------------------
[*]| A   | SOLICITATION/CONTRACT FORM               |   1    |  [*] |  I   | CONTRACT CLAUSES                             |  8-20
-----------------------------------------------------------------------------------------------------------------------------------
[*]| B   | SUPPLIES OR SERVICES AND PRICES/COSTS    |   2    |       PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACH.
-----------------------------------------------------------------------------------------------------------------------------------
[*]| C   | DESCRIPTION/SPECS/WORK STATEMENT         |   2    |  [*] |  J   |  LIST OF ATTACHMENTS                         |  20
-----------------------------------------------------------------------------------------------------------------------------------
[*]  D   | PACKAGING AND ????????                   |   2    |              PART IV - REPRESENTATIONS AND INSTRUCTIONS
-----------------------------------------------------------------------------------------------------------------------------------
[*]  E   | INSPECTION AND ACCEPTANCE                |   2    |      |  K   |  REPRESENTATIONS, CERTIFICATIONS AND  OTHER |  20
                                                                                 STATEMENTS OF OFFERORS
-----------------------------------------------------------------------------------------------------------------------------------
                                                                    |  L   |  INSTRS., CONDS., AND NOTICES TO OFFERORS
[*]  F   | DELIVERIES OR PERFORMANCE                |   3    |

-----------------------------------------------------------------------------------------------------------------------------------
                                                                    |  M   |  EVAULATION FACTORS FOR AWARD
[*]  G   | CONTRACT ADMINISTRATION DATA             |  3-6   |

-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
         CONTRACTING OFFICER WILL COMPLETE ITEM 17 OR 18 AS APPLICABLE
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>

7.  /X/ CONTRACTOR'S NEGOTIATED AGREEMENT. Contractor is       | 18.  / / AWARD /(Contractor is not required to sign this document)
required to sign this document and return 2 copies to ???      | Your offer on Solicitation.
office.) Contractor agree to furnish and deliver all ??? or    | Member _____________________________.
perform all the services set forth or otherwise identified     | Including the additions or changes made by you which additions or
above and on any continuation ??? for the consideration        | changes are set forth in full share, is hereby accepted as to the
stated herein. The rights and // of the portion in this        | items listed above and on any continuation sheets. This award ???
contract shall be subject to and governed by the following     | the contract which consists of the following documents (a) the
documents: (a) this award/contract, (b) the solicitations, if  | Government's solicitation and your offer, and (b) this award/
any, and (k) such  ??? representations, certifications, and    | contract. No further contractual document is necessary.
specifications, as are attached or incorporated by reference   |
herein. (Attachments are listed herein.)                       |
-----------------------------------------------------------------------------------------------------------------------------------
19A NAME AND TITLE OF SIGNER (TYPE OR PRINT)                   | 20A NAME OF CONTRACTING OFFICER
    William B. Silvernail, CEO                                 |
-----------------------------------------------------------------------------------------------------------------------------------
19B NAME OF CONTRACTOR                      |  19C DATE SIGNED | 20B UNITED STATES OF AMERICA                    |  20C DATE SIGNED
    BY /S/ William B. Silvernail            |  1/4/2000        |     By ______________________________________   |
    (Signature of person authorized to sign)|                  |        (Signature of Contracting Officer)       |
-----------------------------------------------------------------------------------------------------------------------------------
??? 7340-01-152-????                                                                           STANDARD FORM 26 (REV. 4-85)
PREVIOUS EDITION UNUSABLE                                                                      Prescribed by GSA
MAYOR OVERPRINT (?-??)                                                                         FAR ??? ??????
</TABLE>

<PAGE>   2
SECTION B - SUPPLIES OR SERVICES AND PRICES/COSTS

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
                          SUPPLIES/                                                                 TOTAL ESTIMATED COST
ITEM NO.                  SERVICES                   ESTIMATED COST          FIXED FEE              & FIXED FEE
-------------------------------------------------------------------------------------------------------------------------
<S>                       <C>                        <C>                     <C>                    <C>
0001                      The Contractor shall       $565,980.00             $33,954                $599,862.00
                          furnish the
                          necessary personnel
                          and facilities to
                          perform the research
                          as described in
                          Section C.
-------------------------------------------------------------------------------------------------------------------------
0001AA                    Demo Software for                                                         NSP
                          Geometric Correction
-------------------------------------------------------------------------------------------------------------------------
0001AB                    Demo Navigation                                                           NSP
                          Software
-------------------------------------------------------------------------------------------------------------------------
0002                      Reports and Data in                                                       NSP
                          accordance with
                          Exhibit A (DD Form
                          1423)
-------------------------------------------------------------------------------------------------------------------------
Total Estimated
Contract Consideration:                              $565,980.00             $33,954                $599,862.00
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

SECTION C - DESCRIPTIONS/SPECIFICATIONS/WORK STATEMENT

1. The research work to be performed hereunder shall be subject to the
requirements and standards contained in Exhibit A and the following
paragraph(s).

2. The Contractor shall conduct the work in accordance with sections 1 through
3, pages 3 and 4, of its proposal entitled "Sea Floor Mapping Using Side-Scan
Sonar", dated 24 September, 1999, which sections are incorporated herein by
reference.

SECTION D - PACKAGING AND MARKING

Preservation, packaging, packing and marking of all deliverable contract line
items shall conform to normal commercial packing standards to assure safe
delivery at destination.
<PAGE>   3
SECTION E - INSPECTION AND ACCEPTANCE

Inspection and acceptance of the final delivery under this contract will be
accomplished by the Program Officer designed in Section F of this contract, who
shall have at least thirty (30) days after contractual delivery for acceptance.

SECTION F - DELIVERIES OR PERFORMANCE

1. The research work under this contract shall be conducted during the period
from date of award through twenty four months thereafter. A final report will be
prepared, submitted, reproduced and distributed by sixty days thereafter unless
the contract is extended, in which case, the final report will be prepared in
accordance with the terms of such extension.

      a. Item No. 0002 Section B (Reports and Data) shall be delivered within
the time periods stated in Exhibit A, F.O.B. Destination.

2. Distribution, consignment and marking instructions for all contract line
items shall be in accordance with the following:

      a. Items No. 0002, 0001AA and 0001AB shall be shipped F.O.B. Office of
Naval Research, Arlington, Virginia 22217-5660, consigned to:

         Program Officer
         Office of Naval Research
         Ballston Tower One
         800 North Quincy Street
         Arlington, Virginia 22217-5660

Attn:    Richard Lau
Ref: Contract N00014-00-C-0023

3.    Deliverables under SubCLINS 0001AA and 0001AB shall be delivered by the
following dates:

<TABLE>
<CAPTION>
            SUBCLIN                                               DATE
--------------------------------------------------------------------------------
<S>                                                          <C>
Demo Software for Geometric Correction                       01 August 2000
--------------------------------------------------------------------------------
Demo Navigation Software                                     01 May 2001
--------------------------------------------------------------------------------
</TABLE>
<PAGE>   4
SECTION G - CONTRACT ADMINISTRATION

1. NAPS 5252.232-9001 SUBMISSION OF INVOICES (COST REIMBURSEMENT,
TIME-AND-MATERIALS, LABOR-HOUR, OR FIXED PRICE INCENTIVE) (JUL 1992)

      a. "Invoice" as used in this clause contractor requests for interim
payments using public vouchers (SF 1034) but does not include contractor
requests for progress payments under fixed price incentive contracts.

      b. The Contractor shall submit invoices and any necessary supporting
documentation, in an original and 4 copies, to the contract auditor at the
following address:

Defense Contract Audit Agency
North Carolina Branch Office
415 North Edgeworth St. Suite A
Greensboro, NC 27401-2163

unless delivery order are applicable, in which case invoices will be segregated
by individual order and submitted to the address specified in the order. In
addition, an information copy shall be submitted to the Program Officer
identified in Section F.2a of this contract. Following verification, the
contract auditor will forward the invoice to the designated payment office for
payment in the amount determined to be owing, in accordance with the applicable
payment (and fee) clause(s) of this contract.

      c. Invoices requesting interim payments shall be submitted no more than
once every two weeks, unless another time period is specified in the Payments
clause of this contract. For indefinite delivery type contract, interim payment
invoices shall be submitted no more than once every two weeks for each delivery
order. There shall be a lapse of no more than 30 calendar days between
performance and submission of an interim payment invoice.

      d. In addition to the information identified in the Prompt Payment clause
herein, each invoice shall contain the following information, as applicable:

      1.    Contract line item number (CLIN)

      2.    Subline item number (SLIN)

      3.    Accounting Classification Reference Number (ACRN)

      4.    Payment terms

      5.    Procuring activity
<PAGE>   5
      6.    Date supplies provided or serviced performed

      7.    Costs incurred and allowable under the contract

      8.    Vessel (e.g., ship, submarine or other craft) or system for which
supply/service is provided.

      e. A DD Form 250, "Material Inspection and Receiving Report" is required
only with the final invoice.

      f. A Certificate of Performance shall be provided with each invoice
submittal.

      g. The Contractor's final invoice shall be identified as such, and shall
list all other invoices (if any) previously tendered under this contract.

      h. Costs of performance shall be segregated, accumulated and invoiced to
the appropriate ACRN categories to the extent possible. When such segregation of
costs by ACRN is not possible for invoices submitted with CLINS/SLINS with more
than one ACRN, an allocation ratio shall be established in the same ratio as the
obligations cited in the accounting data so that costs are allocated on a
proportional basis.

      In contracts with the Canadian Commercial Corporation, substitute
"Administrative Contracting Officer" for "contract auditor".

2.    Submission of Invoices Direct to Payment Office

      a. Pursuant to DFARS 242.803(b)1(C), if the cognizant Government auditor
has notified the contractor of its authorization to do so, the contractor may
submit interim vouchers under this contract direct to the payment office shown
in Block 12 of SF-26 instead of to the address shown in subparagraph (b) of
section G.1 above.

      b. Such authorization does not extend to the first and final vouchers. The
contractor shall continue to submit first vouchers to the cognizant auditor
shown in subparagraph (b) of section G.1. above. The final voucher shall be
submitted to the Administrative Contracting Officer (SF-26 block 6) with a copy
to the cognizant auditor.

3.    Method of Payment

As consideration for the proper performance of the work and services required
under this contract, the Contractor shall be paid as follows:

      a. Costs, as provided for under the contract clause entitled "Allowable
Cost and Payment," not to exceed the amount set forth as "Estimated Cost" in
<PAGE>   6
Section B, subject to the contract clause entitled "Limitation of Cost" or
"Limitation of Funds" whichever is possible.

      b. A fixed fee in the amount set forth as "Fixed Fee" in Section B, in
accordance with the contract clause entitled "Fixed Fee", which shall be paid
upon completion of the work and services required under this contract and upon
final acceptance by the Contracting Officer; however the Contractor may bill on
each voucher the amount of the fee bearing the same percentage to the total
fixed fee as the amount of cost billed bears to the total estimated cost.

4.    Procuring Office Representatives

      a. In order to expedite administration of this contract, the
Administrative Contracting Officer should direct inquiries to the appropriate
office listed below. Please do not direct routine inquiries to the person listed
in Item 20A on Standard Form 26.

Contract Negotiator - Glynis Fisher, ONR 251, (703) 6976-2602, DSN 426-2602,
E-Mail Address Fisherg@ONR.NAVY.MIL.

Inspection and Acceptance - Dr. Richard Lau, ONR 311, (703) 697-4316, DSN
426-4316.

Security Matters - Ms. Jennifer Ramsey, ONR 93, (703) 697-4618, DSN 426-4618

Patent Matters - Mr. Thomas McDonnell, ONR OOCC, (703) 697-4000, DSN 426-4000

      b. The Administrative Contracting Officer will forward invention
disclosures and reports directly to Corporate Counsel (Code OOCC), Office of
Navel Research, Department of the Navy, Arlington, VA 22217-5660. The Corporate
Counsel will return the reports along with a recommendation to the
Administrative Contracting Officer. The Corporate Counsel will represent the
Contracting Officer with regard to invention reporting matters arising under
this contract.

5.    Type of Contract

This is a cost-plus-fixed-fee completion contract.

SECTION H  - SPECIAL CONTRACT REQUIREMENTS

1.    ONR 5252.235-9714   REPORT PREPARATION (DEC 1988)

Scientific or technical reports prepared by the Contractor and deliverable under
the terms of this contract will be prepared in accordance with format
requirements contained in ANSI Z39.18, Scientific and Technical Reports:
Organization, Preparation and Production.
<PAGE>   7
[NOTE: ANSI Z39.18 may be obtained from NISO Press Fulfillment Center, P.O. Box
338, Oxon Hill, MD 20750-0338, Telephone: 1-800-282-6476]

2.    ONR 5252.210-9708 METRICATION REQUIREMENTS (DEC 1988)

      a. All scientific and technical reports delivered pursuant to the terms of
this contract shall identify units of measurement in accordance with the
International System of Units (SI) commonly referred to as the "Metric System".
Conversion to U.S. customary units may be also be given where additional clarity
is deemed necessary. Guidance for application of the metric system is contained
in the American Society of Testing Materials document entitled "Standard
Practice for Use of the International System of Units (The Modernized Metric
System)" (ASTM Designation E 380-89A)

      b. This provision also applies to journal article preprints, reprints,
commercially published books or chapters of books, theses or dissertations
submitted in lieu of a scientific and/or technical report.

3.    Invention Disclosure and Reports

The Contractor shall submit all invention disclosures and reports required by
the Patent Rights clause of this contract to the Administrative Contracting
Officer.

4.    ONR 5252.242-9718 TECHNICAL DIRECTION (DEC 1988)

      a. Performance of work hereunder is subject to the technical direction of
the Program Officer/COR designated in this contract, or duly authorized
representative. For the purposes of this clause, technical direction includes
the following:

      1. Direction to the Contractor which shifts work emphasis between work
areas or tasks, requires pursuit of certain lines of inquiry, fills in details
of otherwise serves to accomplish the objectives described in the statement of
work;

      2. Guidelines to the Contractor which assist in the interpretation of
drawing, specifications or technical portions of work description.

      b. Technical direction must be within the general scope of work stated in
the contracts. Technical direction may not be used to:

            1.    Assign additional work under the contract;

            2.    Direct a change as defined in the contract clause entitled
"Changes";

            3.    Increase or decrease the estimated contract cost, the fixed
fee, or the time required for contract performance; or
<PAGE>   8
            4.    Change any of the terms, conditions or specifications of
the contract.

      c. The only individual authorized to in any way amend or modify any of the
terms of this contract shall be the Contracting Officer. When, in the opinion of
the Contractor, any technical direction calls for effort outside the scope of
the contract or inconsistent with this special provision, the Contractor shall
notify the Contracting Officer in writing within ten working days after its
receipt. The Contractor shall not proceed with the work affected by the
technical direction until the Contractor is notified by the Contracting Officer
that the technical direction is within the scope of the contract.

      d. Nothing in the foregoing paragraphs may be construed to excuse the
Contractor from performing that portion of the work statement which is not
affected by the disputed technical direction.

5.    ONR 5252.237-9705  Key Personnel (DEC 88)

      a. The Contractor agrees to assign to the contract tasks those persons
whose resumes were submitted with its proposal and who are necessary to fulfill
the requirements of the contract as "key personnel". No substitution may be made
except in accordance with this clause.

      b. The Contractor understands that during the first ninety (90) days of
the contract performance period, no personnel substitutions will be permitted
unless these substitutions are unavoidable because of the incumbent's sudden
illness, death or termination of employment. In any of these events, the
Contractor shall promptly notify the Contracting Officer and provide the
information described in paragraph (c) below. After the initial ninety (90) day
period the Contractor must submit to the Contracting Officer all proposed
substitutions, in writing, at least 60 days in advance (120 days if security
clearance must be obtained) of any proposed substitution and provide the
information required by paragraphs (c) below.

      c. Any request for substitution must include a detailed explanation of the
circumstances necessitating the proposed substitution, a resume for the proposed
substitute, and any other information requested by the Contracting Officer. Any
proposed substitute must have qualifications equal to or superior to the
qualifications of the incumbent. The Contracting Officer or his/her authorized
representative will evaluate such requests and promptly notify the Contractor in
writing or his/her approval or disapproval thereof.

      d. In the event that any of the identified key personnel cease to perform
under the contract and the substitute is disapproved, the contract may be
immediately terminated in accordance with the Termination clause of the
contract.
<PAGE>   9
The following is identified as key personnel:

Dr. Jianguing Zhou

SECTION I - CONTRACT CLAUSES

Cost-Plus-Fixed-Fee - Research and Development (Aug 1999) (1)

      *     Applies when contract action exceeds $10,000.

      **    Applies when contract action exceeds $100,000.

      +     Applies when contract action exceeds $500,000.

      ++    Applies when contract action exceeds $500,000 and subcontracting
            possibilities exist.

            Small Business Exempt

      *     (DD 250)

(A)   FAR 52.252-02 CLAUSES INCORPORATED BY REFERENCE (FEB 1998)

This contract incorporates one or more clauses by reference, with the same force
and effect as if they were given in full text. Upon request, the Contracting
Officer will make their full text available. Also, the full text of a clause may
be accessed electronically at this address: http://www.arnet.gov/far/

I.    FEDERAL ACQUISITION REGULATION (FAR) (48 CFR CHAPTER 1) CLAUSES: -

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
<S>                         <C>                        <C>
**                          FAR 52.202-1               Definitions (OCT 1995)
----------------------------------------------------------------------------------
**                          FAR 52.203-3               Gratuities (APR 1984)
----------------------------------------------------------------------------------
**                          FAR 52.203-5               Covenant Against
                                                       Contingent Fees (APR 1984)
----------------------------------------------------------------------------------
**                          FAR 52.203-6               Restrictions on
                                                       Subcontractor Sales to
                                                       the Government (JUL 1995)
----------------------------------------------------------------------------------
**                          FAR 52.203-7               Anti-Kickback Procedures
                                                       (JUL 1995)
----------------------------------------------------------------------------------
</TABLE>
<PAGE>   10
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
<S>                         <C>                        <C>
                            FAR 52.203-8               Cancellation, Rescession,
                                                       and Recovery of Funds for
                                                       Illegal or Improper
                                                       Activity (JAN 1997)
----------------------------------------------------------------------------------
**                          FAR 52.203-10              Price or Fee Adjustment
                                                       for Illegal or Improper
                                                       Activity (JAN 1997)
----------------------------------------------------------------------------------
**                          FAR 52.203-12              Limitation on Payments to
                                                       Influence Certain Federal
                                                       Transactions (JUN 1997)
----------------------------------------------------------------------------------
**                          FAR 52.204-4               Printing/Copying
                                                       Double-Sided on Recycled
                                                       Paper (JUN 1996)
----------------------------------------------------------------------------------
                            FAR 52.211-15              Defense Priority and
                                                       Allocation Requirements
                                                       (SEP 1990)
----------------------------------------------------------------------------------
                            FAR 52.215-2               Audit and Records -
                                                       Negotiation (JUN 1999)
                                                       and Alternate II (APR
                                                       1998)
----------------------------------------------------------------------------------
                            FAR 52.215-8               Order of Precedence -
                                                       Uniform Contract Format
                                                       (OCT 1997)
----------------------------------------------------------------------------------
+                           FAR 52.215-10              Price Reduction for
                                                       Defective Cost or Pricing
                                                       Data (OCT 1997) (The
                                                       provisions of this Clause
                                                       have been waived by a
                                                       joint Determination and
                                                       Findings for the prime
                                                       contractor only.  The
                                                       clause is applicable to
                                                       subcontracts over
                                                       $500,000.)
----------------------------------------------------------------------------------
+                           FAR 52.215-12              Subcontractor Cost or
----------------------------------------------------------------------------------
</TABLE>
<PAGE>   11
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
<S>                         <C>                        <C>
                                                       Pricing Data (OCT 1997)
                                                       (Applicable to
                                                       subcontracts over
                                                       $500,000 only)
----------------------------------------------------------------------------------
                            FAR 52.215-14              Integrity of Unit Prices
                                                       (OCT 1997)
----------------------------------------------------------------------------------
                            FAR 52.215-14              Alternate I (OCT 1997)
                                                       (Applicable if action
                                                       contracted under Other Than
                                                       Full and Open Competition)
----------------------------------------------------------------------------------
                            FAR 52.215-15              Pension Adjustments and
                                                       Asset Reversions (DEC
                                                       1998)
----------------------------------------------------------------------------------
                            FAR 52.215-18              Reversion or Adjustment
                                                       of Plans for
                                                       Postretirement Benefits
                                                       (PRB) Other than Pensions
                                                       (OCT 1997)
----------------------------------------------------------------------------------
                            FAR 52.215-19              Notification of Ownership
                                                       Changes (OCT 1997)
                                                       (Applicable when Cost or
                                                       Pricing Data is required)
----------------------------------------------------------------------------------
                            FAR 52.216-7               Allowable Cost and
                                                       Payment (APR 1998)
----------------------------------------------------------------------------------
                            FAR 52.216-8               Fixed Fee (MAR 1997)
----------------------------------------------------------------------------------
**                          FAR 52.219-4               Notice of Price
                                                       Evaluation Preference for
                                                       HUBzone Small Business
                                                       Concerns (JAN 1999)
----------------------------------------------------------------------------------
**                          FAR 52.219-8               Utilization of Small
                                                       Business Concerns (OCT
                                                       1999)
----------------------------------------------------------------------------------
++                          FAR 52.219-9               Small Business
                                                       Subcontracting Plan (OCT
                                                       1999)
----------------------------------------------------------------------------------
</TABLE>
<PAGE>   12
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
<S>                         <C>                        <C>
**                          FAR 52.219-16              Liquidated Damages -
                                                       Subcontracting Plan (JAN
                                                       1999)
----------------------------------------------------------------------------------
                            FAR 52.222-1               Notice to the Government
                                                       of Labor Disputes (FEB
                                                       1997)
----------------------------------------------------------------------------------
**                          FAR 52.222-2               Payment for Overtime
                                                       Premiums (JUL 1990)
                                                       (Note: The word "zero" is
                                                       inserted in the blank
                                                       space indicated by an
                                                       asterisk)
----------------------------------------------------------------------------------
                            FAR 52.222-3               Convict Labor (AUG 1996)
                                                       (Reserved with FAR
                                                       52.222-20 Walsh Healy
                                                       Public Contracts Act is
                                                       applicable)
----------------------------------------------------------------------------------
                            FAR 52.222-4               Contract Work Hours and
                                                       Safety Standards Act -
                                                       Overtime Compensation
                                                       (JUL 1995)
----------------------------------------------------------------------------------
                            FAR 52.222-26              Equal Opportunity (FEB
                                                       1999)
----------------------------------------------------------------------------------
*                           FAR 52.222-35              Affirmative Action for
                                                       Disabled Veterans and
                                                       Veterans of the Vietnam
                                                       Era (APR 1998)
----------------------------------------------------------------------------------
*                           FAR 52.222.36              Affirmative Action for
                                                       Workers with Disabilities
                                                       (JUN 1998)
----------------------------------------------------------------------------------
*                           FAR 52.222-37              Employment Reports on
                                                       Disabled Veterans and
                                                       Veterans of the Vietnam
                                                       Era (JAN 1999)
----------------------------------------------------------------------------------
**                          FAR 52.223-2               Clean Air and Water (APR
                                                       1984)
----------------------------------------------------------------------------------
</TABLE>
<PAGE>   13
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
<S>                         <C>                        <C>
**                          FAR 52.223-14              Toxic Chemical Release
                                                       Reporting (OCT 1996)
----------------------------------------------------------------------------------
                            FAR 52.225-3               Buy American Act -
                                                       Supplies (JAN 1994)
----------------------------------------------------------------------------------
                            FAR 52.225-11              Restrictions on Certain
                                                       Foreign Purchases (Aug
                                                       1998)
----------------------------------------------------------------------------------
                            FAR 52.227-1               Authorization and Consent
                                                       (JUL 1995) and Alternate
                                                       1 (APR 1984)
----------------------------------------------------------------------------------
**                          FAR 52.227-2               Notice and Assistance
                                                       Regarding Patent and
                                                       Copyright Infringement
                                                       (AUG 1996)
----------------------------------------------------------------------------------
                            FAR 52.228-7               Insurance Liability to
                                                       Third Persons (MAR 1996)
                                                       (Further to paragraph
                                                       (a)(3), unless otherwise
                                                       stated in this contract,
                                                       type and limits of
                                                       insurance required are as
                                                       stated in FAR 28.307-2)
----------------------------------------------------------------------------------
                            FAR 52.232-9               Limitation on Withholding
                                                       of Payments (APR 1984)
----------------------------------------------------------------------------------
                            FAR 52.232-17              Interest (JUN 1996)
----------------------------------------------------------------------------------
                            FAR 52.232-23              Assignment of Claims (JAN
                                                       1986) and Alternate I
                                                       (APR 1984)
----------------------------------------------------------------------------------
                            FAR 52.232-25              Prompt Payment
                                                       (JUN 1997) (The words
                                                       "the 30th day" are
                                                       inserted in lieu of "the
                                                       7th day" at (a)(5)(i).)
----------------------------------------------------------------------------------
                            FAR 52.232-33              Payment by Electronic
                                                       Funds Transfer - Central
                                                       Contractor Registration
----------------------------------------------------------------------------------
</TABLE>
<PAGE>   14
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
<S>                         <C>                        <C>
                                                       (MAY 1999)
----------------------------------------------------------------------------------
                            FAR 52.233-1               Disputes (DEC 1998)
----------------------------------------------------------------------------------
                            FAR 52.233-3               Protest After Award (AUG
                                                       1996) and Alternate I
                                                       (JUN 1985)
----------------------------------------------------------------------------------
                            FAR 52.242-1               Notice of Intent to
                                                       Disallow Costs (APR 1984)
----------------------------------------------------------------------------------
+                           FAR 52.242-3               Penalties for Unallowable
                                                       Costs (OCT 1995)
----------------------------------------------------------------------------------
                            FAR 52.242-4               Certification of Final
                                                       Indirect Costs (JAN 1997)
----------------------------------------------------------------------------------
**                          FAR 242-13                 Bankruptcy (JUL 1995)
----------------------------------------------------------------------------------
                            FAR 52.242-15              Stop Work Order (AUG
                                                       1989) and Alternate I
                                                       (APR  1984)
----------------------------------------------------------------------------------
                            FAR 52.243-2               Changes Cost-Reimbursement
                                                       (AUG 1987) and Alternate V
                                                       (APR 1984)
----------------------------------------------------------------------------------
                            FAR 52.244-2               Subcontracts (AUG 1998)
                                                       and Alternate 1 (AUG 1998)
----------------------------------------------------------------------------------
**                          FAR 52.244-5               Competition in
                                                       Subcontracting (DEC 1996)
----------------------------------------------------------------------------------
                            FAR 52.244-6               Subcontracts for
                                                       Commercial Items and
                                                       Commercial Components
                                                       (OCT 1998)
----------------------------------------------------------------------------------
                            FAR 52.245-5               Government Property (Cost
                                                       Reimbursement, Time and
                                                       Material or Labor-Hour
                                                       Contracts) (Jan 1986) (As
                                                       modified by
----------------------------------------------------------------------------------
</TABLE>
<PAGE>   15
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
<S>                         <C>                        <C>
                                                       DoD Class
                                                       Deviation 99-00008 dated
                                                       13 July 1999)
----------------------------------------------------------------------------------
                            FAR 52.246-9               Inspection of Research
                                                       and Development (Short
                                                       Form) (APR 1984)
----------------------------------------------------------------------------------
**                          FAR 52.246-23              Limitation of Liability
                                                       (FEB 1997)
----------------------------------------------------------------------------------
                            FAR 52.247-63              Preference for U.S. Flag
                                                       Air Carriers (JAN 1997)
----------------------------------------------------------------------------------
                            FAR 52.249-6               Termination
                                                       (Cost-Reimbursement )(SEP
                                                       1996)
----------------------------------------------------------------------------------
                            FAR 52.249-14              Excusable Delays (APR
                                                       1984)
----------------------------------------------------------------------------------
                            FAR 52.251-1               Government Supply Sources
                                                       (APR 1984)
----------------------------------------------------------------------------------
                            FAR 52.253-1               Computer Generated Forms
                                                       (JAN 1991)
----------------------------------------------------------------------------------
</TABLE>

II.   DEPARTMENT OF DEFENSE FAR SUPPLEMENT (DFARS) (48 CRF CHAPTER 2)
      CLAUSES: -

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
<S>                         <C>                        <C>
                            DFARS 252.203-7001         Prohibition On Persons
                                                       Convicted of Fraud or
                                                       Other Defense-Contract-
                                                       Related Felonies (MAR 1999)
----------------------------------------------------------------------------------
                            DFARS 252.204-7003         Control of Government
                                                       Personnel Work Product
                                                       (APR 1992)
----------------------------------------------------------------------------------
                            DFARS 252.204-7004         Required Central
                                                       Contractor Registration
                                                       (MAR 1998)
----------------------------------------------------------------------------------
**                          DFARS 252.209-7000         Acquisition from
----------------------------------------------------------------------------------
</TABLE>
<PAGE>   16
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
<S>                         <C>                        <C>
                                                       Subcontractors subject
                                                       to On-Site Inspection
                                                       under the Intermediate
                                                       Range Nuclear Forces
                                                       (INF) Treaty (NOV 1995)
----------------------------------------------------------------------------------
+                           DFARS 252-215-7000         Pricing Adjustments (DEC
                                                       1991)
----------------------------------------------------------------------------------
                            DFARS 252-219-7003         Small, Small
                                                       Disadvantaged and
                                                       Women-owned Small
                                                       Business Subcontracting
                                                       Plan (DoD Contracts)
                                                       (APR 1996)
----------------------------------------------------------------------------------
                            DFARS 252.225-7012         Preference for Certain
                                                       Domestic Commodities
                                                       (MAY 1999)
----------------------------------------------------------------------------------
                            DFARS 252.225-7031         Secondary Arab Boycott
                                                       of Israel (JUN 1992)
----------------------------------------------------------------------------------
                            DFARS 252.227-7013         Rights in Technical Data
                                                       - Noncommercial Items
                                                       (NOV 1995), and
                                                       Alternate 1 (JUN 1995)
----------------------------------------------------------------------------------
                            DFARS 252.227-7014         Rights in Noncommercial
                                                       Computer Software and
                                                       Noncommercial Computer
                                                       Software Documentation
                                                       (JUN 1995)
----------------------------------------------------------------------------------
                            DFARS 252.227-7016         Rights in Bid or
                                                       Proposal Information
                                                       (JUN 1995)
----------------------------------------------------------------------------------
                            DFARS 252.227-7018         Rights in Noncommercial
                                                       Technical Data and
                                                       Computer Software -
                                                       Small Business
                                                       Innovation Research
                                                       (SBIR) Program (JUN 1995)
----------------------------------------------------------------------------------
</TABLE>
<PAGE>   17
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
<S>                         <C>                        <C>
                            DFARS 252.227-7019         Validation of Asserted
                                                       Restrictions - Computer
                                                       Software (JUN 1995)
----------------------------------------------------------------------------------
                            DFARS 252.227-7025         Limitations on the Use
                                                       or Disclosure of
                                                       Government-Furnished
                                                       Information Marked with
                                                       Restrictive Legends (JUN
                                                       1995)
----------------------------------------------------------------------------------
                            DFARS 252.227-7028         Technical Data or
                                                       Computer Software
                                                       Previously Delivered to
                                                       the Government (JUN 1995)
----------------------------------------------------------------------------------
                            DFARS 252.227-7030         Technical Data -
                                                       Withholding of Payment
                                                       (OCT 1988)
----------------------------------------------------------------------------------
                            DFARS 252.227-7036         Declaration of Technical
                                                       Data Conformity (JAN
                                                       1997)
----------------------------------------------------------------------------------
                            DFARS 252.227-7037         Validation of
                                                       Restrictive Markings on
                                                       Technical Data (SEP 1999)
----------------------------------------------------------------------------------
                            DFARS 252.231-7000         Supplemental Cost
                                                       Principles (DEC 1991)
----------------------------------------------------------------------------------
                            DFARS 252.235-7002         Animal Welfare (DEC 1991)
----------------------------------------------------------------------------------
                            DFARS 252.235-7011         Final Scientific or
                                                       Technical Report (SEP
                                                       1999) (Use in
                                                       solicitations and
                                                       contracts for R&D)
----------------------------------------------------------------------------------
                            DFARS 252.242-7000         Post-Award Conference
                                                       (DEC 1991)
----------------------------------------------------------------------------------
**                          DFARS 252.243-7002         Requests for Equitable
                                                       Adjustment (MAR 1998)
----------------------------------------------------------------------------------
</TABLE>

<PAGE>   18

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
<S>                         <C>                        <C>
                            DFARS 252.245-7001         Reports of Government
                                                       Property (MAY 1994)
----------------------------------------------------------------------------------
*                           DFARS 252.246-7000         Material Inspection and
                                                       Receiving Report (DEC
                                                       1991)
----------------------------------------------------------------------------------
                            DFARS 252.251-7000         Ordering from Government
                                                       Supply Services (MAY
                                                       1995)
----------------------------------------------------------------------------------
</TABLE>

(B) THE FOLLOWING CLAUSE APPLIES TO CONTRACT ACTIONS EXCEEDING $500,000, WHEN
SUBCONTRACTING POSSIBILITIES EXIST. THE CLAUSE IS SMALL BUSINESS EXEMPT.

FAR 52.219-10 INCENTIVE SUBCONTRACTING PROGRAM (JAN 1999)

(a) Of the total dollars it plans to spend under subcontracts, the Contractor
has committed itself in its subcontracting plan to try to award certain
percentages to small business, HUBZone small business, small disadvantaged
business, and women-owned small business concerns, respectively.

(b) If the Contractor exceeds its subcontracting goals for small business,
HUBZone small business and women-owned small business concerns in performing
this contract, it will receive __________ [insert the appropriate number between
0 and 10] percent of the dollars in excess of each goal in the plan, unless the
Contracting Officer determines that the excess was not due to the Contractor's
efforts (e.g., a subcontractor cost overrun caused the actual subcontract amount
to exceed that estimated in the subcontracting plan, or the award of
subcontracts that had been planned but had not been disclosed in the
subcontracting plan during contract negotiations). Determinations made under
this paragraph are not subject to the Disputes clause.

(c) If this is a cost-plus-fixed-fee contract, the sum of the fixed fee and the
incentive fee earned under this contract may not exceed the limitations in
15.404-4 of the Federal Acquisition Regulation.

FAR 52.219-26     SMALL DISADVANTAGED BUSINESS PARTICIPATION PROGRAM -
                  INCENTIVE SUBCONTRACTING (JAN 1999)

(a) Of the total dollars it plans to spend under subcontracts, the Contractor
has committed itself in its offer to try to award a certain amount to small
disadvantaged business concerns in the Standard Industrial Classification (SIC)
Major Groups as determined by the Department of Commerce.
<PAGE>   19
(b) If the Contractor exceeds its total monetary target for subcontracting to
small disadvantaged business concerns in the authorized SIC Major Groups, it
will receive _______________ [Contracting Officer to insert the appropriate
number between 0 and 10] percent of the dollars in excess of the monetary
target, unless the Contracting Officer determines that the excess was not due to
the Contractor's efforts (e.g., a subcontractor cost overrun caused the actual
subcontract amount to exceed that estimated in the offer, or the excess was
caused by the award of subcontracts that had been planned but had not been
disclosed in the offer during contract negotiations). Determinations made under
this paragraph are not subject to the Disputes clause of this contract.

(c) If this is a cost-plus-fixed-fee contract, the sum of the fixed fee and the
incentive fee earned under this contract may not exceed the limitations in
subsection 15.404-4 of the Federal Acquisition Regulation.

(C)   ADDITIONAL FAR AND DFARS CLAUSES

      This contract incorporates one or more clauses by reference, with the same
force and effect as if they were given in full text. Upon request, the
Contracting Officer will make their full text available. Also, the full text of
a clause may be accessed electronically at this address:
http://www.arnet.gov/far/

<TABLE>
<S>                             <C>
----------------------------------------------------------------------------------
       FAR 52.204-2             Security Requirements (AUG 1996)
                                (Applicable if contract will generate or require
                                access to classified information and DD Form
                                254, Contract Security Classification
                                Specification, is issued to the contractor)
----------------------------------------------------------------------------------
  X    FAR 52.209-6             Protecting the Government's Interest when
                                Subcontracting with Contractors Debarred,
                                Suspended, or Proposed for Debarment (JUL
                                1995) (Applicable to contracts exceeding
                                $25,000 in value)
----------------------------------------------------------------------------------
  X    FAR 52.215-17            Waiver of Facilities Capital Cost
                                of Money (OCT 1997) (Applicable if the
                                Contractor did not propose facilities capital
                                cost of money in the offer)
----------------------------------------------------------------------------------
  X    FAR 52.215-20            Requirements for Cost or Pricing Data or
                                Information Other Than Cost or Pricing Data (OCT
                                1997) (Applicable if cost or pricing data or
                                information other than cost or pricing data are
                                required.)
----------------------------------------------------------------------------------
       FAR 52.215-21            Requirements for Cost or Pricing Data or
----------------------------------------------------------------------------------
</TABLE>
<PAGE>   20
<TABLE>
<S>                             <C>
----------------------------------------------------------------------------------
                                Information Other Than Cost or Pricing Data -
                                Modifications (OCT 1997) (Applicable if cost
                                or pricing data or information other than
                                cost or pricing data will be required for
                                modifications.)
----------------------------------------------------------------------------------
       FAR 52.217-9             Option to Extend the Term of the Contract
                                (MAR 1989) (in paragraph (a), insert "", and
                                in paragraph (c), insert "").  (Applicable if
                                contract contains line item(s) for
                                option(s)).  (Complete the spaces in
                                parentheses).
----------------------------------------------------------------------------------
       FAR 52.219-3             Notice of Total HUBZone Set-Aside (JAN 1999)
----------------------------------------------------------------------------------
       FAR 52.219-5             Very Small Business Set-Aside (MAR 1999) (For
                                actions between $2,500 and $50,000)
----------------------------------------------------------------------------------
       FAR 52.219-6             Notice of Total Small Business Set-Aside
                                (JUL 1996), and Alternate I (OCT 1995)
                                (Applicable to total small business set-asides,
                                including SBIR)
----------------------------------------------------------------------------------
       FAR 52.219-25            Small Disadvantaged Business Participation Program
                                - Disadvantaged Status and Reporting (OCT 1999)
                                (Applicable if contract includes FAR 52.219-24)
----------------------------------------------------------------------------------
  X    FAR 52.222-20            Walsh Healy Public Contracts Act (DEC 1996)
                                (Applicable if the contract includes
                                deliverable materials, supplies, articles or
                                equipment in an amount that exceeds or may
                                exceed $10,000)
----------------------------------------------------------------------------------
       FAR 52.223-5             Pollution Prevention and Right-to-Know
                                Information (Apr 1998) (Applicable if contract
                                provides for performance, in whole or in part,
                                on a Federal facility.)
----------------------------------------------------------------------------------
  X    FAR 52.223-6             Drug-Free Workplace (JAN 1997) (Applies when
                                contract action exceeds $100,000 or at any value
                                when the contract is awarded to an individual)
----------------------------------------------------------------------------------
       FAR 52.226-1             Utilization of Indian Organizations and
                                Indian-Owned Economic Enterprises (MAY 1999)
                                (Applicable when FAR 52.219-9 Small Business
                                Subcontracting Plan, applies)
----------------------------------------------------------------------------------
       FAR 52.227-10            Filing of Patent Applications - Classified Subject
                                Matter (APR 1984) (Applicable if contract is
                                subject to FAR clauses 52.204-2 and either
                                FAR 52.227-11 or FAR 52.227-12)
----------------------------------------------------------------------------------
  X    FAR 52.227-11            Patent Rights - Retention by the Contractor
----------------------------------------------------------------------------------
</TABLE>
<PAGE>   21
<TABLE>
<S>                             <C>
----------------------------------------------------------------------------------
                                (Short Form) (JUN 1997) (Applicable if contractor
                                is a small business or nonprofit organization)
----------------------------------------------------------------------------------
       OR
----------------------------------------------------------------------------------
       FAR 52.227-12            Patent Rights - Retention by the Contractor
                                (Long Form) (JAN 1997) (Applicable if contractor
                                is a large business)
----------------------------------------------------------------------------------
       FAR 52.230-2             Cost Accounting Standards (APR 1998)
                                (Applicable when contract amount is over
                                $500,000, if contractor is subject to full CAS
                                coverage, as set forth in 48 CFR Chapter 99,
                                Subpart 9903.201-2(a) (FAR Appendix B)
----------------------------------------------------------------------------------
       FAR 52.230-3             Disclosure and Consistency of Cost Accounting
                                Practices (APR 1998) (Applicable when
                                contract amount is over $500,000 but less
                                than $25 million and the offeror certifies it
                                is eligible for and elects to use modified
                                CAS coverage as set forth in 48 CFR Chapter
                                99, Subpart 9903.201-2 (FAR Appendix B)
----------------------------------------------------------------------------------
       FAR 52.230-6             Administration of Cost Accounting Standards
                                (APR 1996) (Applicable if contract is subject to
                                either clause at FAR 52.230-02 or the clause at
                                FAR 52.230-03)
----------------------------------------------------------------------------------
       FAR 52.232-20            Limitation of Cost (APR 1984) (Applicable
                                only when contract action is fully funded)
----------------------------------------------------------------------------------
  X    FAR 52.232-22            Limitation of Funds (APR 1984) (Applicable
                                only when contract action is incrementally
                                funded)
----------------------------------------------------------------------------------
       FAR 52.245-5             Government Property (Cost-Reimbursement,
                                Time-and-Material, or Labor-Hour Contracts) ALT I
                                (JAN 1986) (Applicable if contractor is a
                                nonprofit organization whose primary purpose is
                                the conduct of scientific research)
----------------------------------------------------------------------------------
       DFARS 252.203-7002       Display of DoD Hotline Poster (DEC 1991)
                                (Applicable only when contract action exceeds $5
                                million or when any modification increases contract
                                amount to more than $5 million)
----------------------------------------------------------------------------------
       DFARS 252.204-7000       Disclosure of Information (DEC 1991) (Applies
                                when Contractor will have access to or generate
                                unclassified information that may be sensitive
                                and inappropriate for release to the public)
----------------------------------------------------------------------------------
</TABLE>
<PAGE>   22
<TABLE>
<S>                             <C>
----------------------------------------------------------------------------------
  X    DFARS 252.205-7000       Provision of Information to Cooperative Agreement
                                Holders (DEC 1991) (Applicable only when contract
                                action exceeds $500,000 or when any modification
                                increases total contract amount to more than
                                $500,000)
----------------------------------------------------------------------------------
  X    DFARS 252.215-7002       Cost Estimating System Requirements (OCT 1998)
                                (Applicable only to contract actions awarded on
                                the basis of certified cost or pricing data)
----------------------------------------------------------------------------------
       DFARS 252.223-7004       Drug-Free Work Force (SEP 1988) (Applicable
                                (a) if contract involves access to classified
                                information; or (b) when the Contracting
                                Officer determines that the clause is
                                necessary for reasons of national security or
                                for the purpose of protecting the health or
                                safety of those using or affected by the
                                product of, or performance of the contract.
----------------------------------------------------------------------------------
       DFARS 252.223-7006       Prohibition on Storage and Disposal of Toxic and
                                Hazardous Materials (APR 1993)(Applicable if work
                                requires, may require, or permits contractor
                                performance on a DoD installation)
----------------------------------------------------------------------------------
       DFARS 252.225-7001       Buy American Act and Balance of Payments Program
                                (MAR 1998) (Applicable if the contract includes
                                deliverable supplies)
----------------------------------------------------------------------------------
       DFARS 252.225-7002       Qualifying Country Sources as Subcontractors
                                (DEC 1991) (Applicable when clause at DFARS
                                252.225.7001 applies)
----------------------------------------------------------------------------------
       DFARS 252.225-7008       Supplies to be Accorded Duty-Free Entry (MAR
                                1998) (Applicable when clause at DFARS
                                252.225-7009 applies)
----------------------------------------------------------------------------------
       DFARS 252.225-7009       Duty-Free Entry - Qualifying Country Supplies
                                (End Products and Components) (MAR 1998) (Applicable
                                if contract includes deliverable supplies)
----------------------------------------------------------------------------------
       DFARS 252.225-7010       Duty Free Entry - Additional Provisions (MAR 1998)
                                (Applicable when clause at DFARS 252.225-7009 applies)
----------------------------------------------------------------------------------
       DFARS 252.225-7016       Restriction on Acquisition of Ball and Roller Bearings
                                (AUG 1998) (Applicable if contract includes deliverable
                                supplies, unless Contracting
----------------------------------------------------------------------------------
</TABLE>
<PAGE>   23
<TABLE>
<S>                             <C>
----------------------------------------------------------------------------------
                                Officer knows that items being acquired do not
                                contain ball or roller bearings)
----------------------------------------------------------------------------------
  X    DFARS 252.225-7026       Reporting of Contract Performance Outside the
                                United States (MAR 1998) (Applicable only when
                                contract value exceeds $500,000 or when any
                                modification increases contract value to more
                                than $500,000)
----------------------------------------------------------------------------------
  X    DFARS 252.227-7034       Patents - Subcontracts (APR 1984) (Applicable
                                when FAR 52.227-11 applies)
----------------------------------------------------------------------------------
       DFARS 252.225-7039       Patents - Reporting of Subject Inventions
                                (APR 1990) (Applies when FAR 52.227-11
                                applies)
----------------------------------------------------------------------------------
  X    DFARS 252.242-7004       Material Management and Accounting System (SEP 1996)
                                (Applicable to contract actions exceeding $100,000)
                                (Not applicable to contracts set aside for exclusive
                                participation by small business and small
                                disadvantaged business concerns)
----------------------------------------------------------------------------------
</TABLE>

(D)   THE FOLLOWING CLAUSE IS APPLICABLE TO CONTRACT ACTIONS OF $100,000 OR
      MORE:

DFARS 252.247-7023      TRANSPORTATION OF SUPPLIES BY SEA (NOV 1995)

      (a)   As used in this clause:

            (1) "Components" means articles, materials, and supplies
incorporated directly into end products at any level of manufacture, fabrication
or assembly by the Contractor or any subcontractor.

            (2) "Department of Defense" (DoD) means the Army, Navy, Air Force,
Marine Corps, and Defense agencies.

            (3) "Foreign flag vessel" means any vessel that is not a U.S.-flag
vessel.

            (4) "Ocean transportation" means any transportation aboard a ship,
vessel, boat, barge, or ferry through international waters.

            (5) "Subcontractor" means a supplier, materialman, distributor or
vendor at any level below the prime contractor whose contractual obligation to
perform results from, or is conditioned upon, award of the prime contract and
who is performing any part of the work or other requirement of the prime
contract. However, effective May 1, 1996, the term does not include a supplier,
materialman, distributor or vendor of commercial items or commercial components.
<PAGE>   24
            (6) "Supplies" means all property, except land and interests in
land, that is clearly identifiable for eventual use by or owned by the DoD at
the time of transportation by sea.

                  (i)   An item is clearly identifiable for eventual use by the
                        DoD if, for example, the contract documentation contains
                        a reference to a DoD contract number or a military
                        destination.

                  (ii)  "Supplies" includes (but is not limited to) public
                        works; buildings and facilities; ships; floating
                        equipment and vessels of every character, type and
                        description, with parts, subassemblies, accessories and
                        equipment; machine tools; material; equipment; stores of
                        all kinds; end items; construction materials; and
                        components of the foregoing.

            (7) "U.S.-flag vessel" means a vessel of the United States or
belonging to the United States, including any vessel registered or having
national status under the laws of the United States.

      (b) The Contractor shall employ United States-flag vessels in the
transportation by sea of any supplies to be furnished in the performance of this
contract. The Contractor and its subcontractors may request that the Contracting
Officer authorize shipment in foreign-flag vessels, or designate U.S.-flag
vessels, if the Contractor or a subcontractor believes that -

            (1)   U.S.-flag vessels are not available for timely shipment;

            (2)   The freight charges are inordinately excessive or
unreasonable;

       or

            (3) Freight charges are higher than charges to private persons for
transportation of like goods.

      (c) The Contractor must submit any request for use of other than U.S.-flag
vessels in writing to the Contracting Officer at least 45 days prior to the
sailing date necessary to meet its delivery schedules. The Contracting Officer
will process requests submitted after such date(s) as expeditiously as possible,
but the Contracting Officer's failure to grant approvals to meet the shipper's
sailing date will not of itself constitute a compensable delay under this or any
other clause of this contract. Requests shall contain at a minimum -

                  (1)   Type, weight, and cube of cargo.

                  (2)   Required shipping date.

                  (3)   Special handling and discharge requirements.

                  (4)   Loading and discharge points.
<PAGE>   25
                  (5)   Name of shipper and consignee.

                  (6)   Prime contract number; and

                  (7) A documented description of efforts made to secure
U.S.-flag vessels, including points of contact (with names and telephone
numbers) of at least two (2) U.S.-flag carriers contacted. Copies of telephone
notes, telegraphic and facsimile messages or letters will be sufficient for this
purpose.

      (d) The Contractor shall, within thirty (30) days after each shipment
covered by this clause, provide the Contracting Officer and the Division of
National Cargo, Office of Market Development, Maritime Administration, U.S.
Department of Transportation, Washington, DC 20590, one copy of the rated on
board vessel operating carrier's ocean-bill-of-lading, which shall contain the
following information:

                  (1)   Prime contract number;

                  (2)   Name of vessel;

                  (3)   Vessel flag of registry;

                  (4)   Date of loading;

                  (5)   Port of loading;

                  (6)   Port of final discharge;

                  (7)   Description of commodity;

                  (8)   Gross weight in pounds and cubic feet if available;

                  (9)   Total ocean freight in U.S. dollars; and

                  (10)  Name of the steamship company.

      (e) The Contractor agrees to provide with its final invoice under this
contract a representation that to the best of its knowledge and belief:

                  (1)   No ocean transportation was used in the performance
of this contract;
                  (2) Ocean transportation was used and only United States-flag

vessels were used for all ocean shipments under the contract.

                  (3)   Ocean transportation was used, and the Contractor had
the written consent of the Contracting Officer for all non-U.S.-flag ocean
transportation; or

                  (4) Ocean transportation was used and some or all of the
shipments were made on non-U.S.-flag vessels without the written consent of the
Contracting Officer. The Contractor shall describe these shipments in the
following format:

<TABLE>
<CAPTION>
                            ITEM              CONTRACT
                         DESCRIPTION         LINE ITEMS           QUANTITY
--------------------------------------------------------------------------------
<S>                      <C>                 <C>                 <C>
Total
--------------------------------------------------------------------------------
</TABLE>
<PAGE>   26
      (f) If the final invoice does not include the required representation, the
Government will reject it and return it to the Contractor as an improper invoice
for the purposes of Prompt Payment clause of this contract. In the event there
has been unauthorized use of non-U.S.-flag vessels in the performance of this
contract, the Contracting Officer is entitled to equitably adjust the contract,
based on the unauthorized use.

      (g) The Contractor shall include this clause, including this paragraph
(g), in all subcontracts under this contract, which exceed the simplified
acquisition threshold in Part 13 of the Federal Acquisition Regulations.

(E) THE FOLLOWING CLAUSE IS APPLICABLE WHEN THE CONTRACTOR HAS MADE A NEGATIVE
RESPONSE TO THE INQUIRY IN THE REPRESENTATION AT DFARS 252.247-7022 AND THE
CONTRACT ACTION IS FOR $100,000 OR MORE.

DFARS 252.247-7024      NOTIFICATION OF TRANSPORTATION OF SUPPLIES BY SEA
                        (NOV 1995)

      (a) The Contractor has indicated by the response to the solicitation
provision, Representation of Extent of Transportation by Sea, that it did not
anticipate transporting by sea any supplies. If, however, after the award of
this contract, the Contractor learns that supplies, as defined in the
Transportation of Supplies by Sea clause of this contract, will be transported
by sea, the Contractor -

            (1) Shall notify the Contracting Officer of that fact; and

            (2) Hereby agrees to comply with all the terms and conditions of the
Transportation of Supplies by Sea clause of this contract.

      (b) The Contractor shall include this clause, including this paragraph
(b), revised as necessary to reflect the relationship of the contracting
parties, in all subcontracts hereunder, except (effective May 1, 1996)
subcontracts for the acquisition of commercial items or components.

      SECTION J - LIST OF ATTACHMENTS

      1. EXHIBIT A, entitled "Contract Data Requirements List" (DD Form 1423) -
1 page(s) with Enclosure Number 1, entitled "Contract Data Requirements List -
Instructions for Distribution."
<PAGE>   27
      2.    Exhibit B, entitled, "Financial Accounting Data Sheet."

      SECTION K - REPRESENTATIONS, CERTIFICATIONS AND OTHER STATEMENTS OF
OFFEROR

      1. The Contractor's Representations and Certifications, dated 08 November
1999, are hereby incorporated into this contract by reference.

                              CHART TO BE INSERTED
<PAGE>   28
                              ENCLOSURE NUMBER 1
                       CONTRACT DATA REQUIREMENTS LIST
                        INSTRUCTIONS FOR DISTRIBUTION

DISTRIBUTION OF TECHNICAL REPORTS AND FINAL REPORT

The minimum distribution of technical reports and the final report submitted in
connection with this contract is as follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                                                     NUMBER OF COPIES
                                                                        -----------------------------------------
                                                          DODAAD        UNCLASSIFIED/        UNCLASSIFIED/LIMITED
                      ADDRESSEE                            CODE           UNLIMITED             AND CLASSIFIED
-----------------------------------------------------------------------------------------------------------------
<S>                                                       <C>           <C>                  <C>
Program Officer                                           N00014              1                       1
-----------------------------------------------------------------------------------------------------------------
Administrative Contracting Officer*                       S1103A              1                       1
-----------------------------------------------------------------------------------------------------------------
Director, Naval Research Laboratory                       N00173              1                       1
ATTN: Code 5227
Washington, D.C.  20375
-----------------------------------------------------------------------------------------------------------------
Defense Technical Information Center                      S47031              2                       2
8725 John J. Kingman Road
STE 0944
Ft. Belvoir, VA  22060-6218
-----------------------------------------------------------------------------------------------------------------
</TABLE>

If the Program Officer directs, the Contractor shall make additional
distribution of technical reports in accordance with a supplemental distribution
list provided by the Program Officer.

Distribution of Reports which are NOT Technical Reports

The minimum distribution for reports which are not technical reports is as
follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                                                     NUMBER OF COPIES
                                                                       ------------------------------------------
                                                          DODAAD        UNCLASSIFIED/        UNCLASSIFIED/LIMITED
                      ADDRESSEE                            CODE           UNLIMITED             AND CLASSIFIED
-----------------------------------------------------------------------------------------------------------------
<S>                                                      <C>            <C>                  <C>
Program Officer                                           N00014              1                       1
-----------------------------------------------------------------------------------------------------------------
Administrative Contracting Officer*                       S1103A              1                       1
-----------------------------------------------------------------------------------------------------------------
</TABLE>

*Send only a copy of the transmittal letter to the Administrative Contracting
Officer; do not send actual reports to the Administrative Contracting Officer.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00027-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00027-of-00352.parquet"}]]