LICENSE AND ROYALTY AGREEMENT


      THIS  AGREEMENT, made and entered into this 6th day of April, 2000,  by

and  between  Richard  L.  Ballard and Janet J. Pettitt,  husband  and  wife,

(referred  to  herein  as  "Ballard"), and  Knowledge  Foundations,  Inc.,  a

Delaware corporation ("KFI").

      WHEREAS, Ballard has developed technology, including computer software,

related to knowledge engineering, which Ballard has named the Mark I, Mark II

and  Mark  III  Technology  (collectively "Mark  X"),  and  owns  copyrights,

confidential information, trade secrets, and proprietary know-how relating to

such technology; and

      WHEREAS,  Ballard seeks the expanded development and mass marketing  of

this technology as a commercial standard for knowledge capture, storage,  and

use; and

      WHEREAS,  KFI  desires  an exclusive license  under  Ballard's  Mark  X

technology  for  use in software implementations and Ballard  is  willing  to

grant such a license.

      NOW,  THEREFORE,  in  consideration of  the  mutual  covenants,  terms,

conditions and provisions set forth herein, the parties agree as follows:

1.   DEFINITIONS

     1.1. "Mark  X  Technology"  shall mean all confidential  or  proprietary

    information, trade secrets and know how relating to the Mark X technology as

    such technology is further described on Exhibit A to this Agreement.  The

    Mark  X Technology is sometimes referred to herein as the "Licensed

    Technology").

    1.2. "Licensed Rights" means all rights under any patent, copyright,

confidential or proprietary information, trade secrets and know-how relating

to the Mark X Technology, and includes the Licensed Technology.



    1.3. "Licensed Tool(s)" shall include coding systems, proprietary file

systems, computer software program, communications protocols, development

methodologies, and documentation that encompass or incorporate or are based

on any of the Mark X Technology, but do not include software products, and

services that result from "Authorized Use" of the Licensed Tools.  Licensed

Tools specifically excludes hardware implementations of the Mark X

Technology.

    1.4. "Authorized Use" refers to those activities and Licensed Rights granted

by KFI under this Agreement to everyone who purchases or sub-licenses a

Licensed Tool.

    1.5. "Net Sales" means the gross amounts received by KFI worldwide, from the

sales, license or disposal of Licensed Tools, less commissions, credit for

returns, customary trade discounts, deductions for transportation charges,

and taxes and duties directly imposed on the sale.  Except for customary

trade discounts, should KFI sell, rent or dispose of any Licensed Tool in a

non arm's-length transaction, the Net Sales shall be computed based on

proceeds from sales of a similar product in an arms-length transaction.

    1.6. "Reasonable Effort" means a reasonable program of supporting technology

improvements and marketing that expands industry adoptions, installed base,

and commercial use of the Mark X Technology.

     1.7. "Improvement(s)" shall mean inventions, modifications, adaptations or

improvements, which relate to or are based on the Mark X Technology.

    1.8. "Sublicensee" shall mean a person or entity to whom KFI has granted the

right under the Licensed Technology to develop,  manufacture, have

manufactured, use, market and/or sell the Licensed Tools.



   1.9. "Sublicense Income" shall mean the gross amount (net of tax withholdings

for taxes which KFI is obligated to pay) received by KFI from Sublicensees

for or on account of sublicenses of any of the rights granted KFI hereunder

and the sale of Licensed Tools, including royalties, license fees, milestone

payments, option fees and other amounts paid or other non-monetary financial

benefit provided to KFI by Sublicensees.  Sublicensee Income shall not

include amounts received by KFI from a Sublicensee for an equity investment

in KFI.

2.   GRANT OF LICENSE

     2.1. Exclusive  License.  Ballard hereby grants to KFI, subject  to  the

     conditions set forth in this Agreement, an exclusive transferable license

     under the Licensed Rights to make, have made, use, market, import, have

     imported, lease, sell, distribute, offer for sale, or otherwise dispose of

     Licensed Tools throughout the world, including the right to make copes of,

     make derivative works based on, and distribute any copyrighted works within

     the Mark X Technology.

     2.2. Sublicense.  KFI shall have the right to grant sublicenses to third

parties, subject to the terms of this Agreement.

     2.3. Reservation of Rights.  Ballard expressly reserves all rights not

granted to KFI in this Agreement for his own  purposes.

3.   CONSIDERATION

     3.1. Royalty Payments.  Commencing on the date of this Agreement, KFI shall

     pay to Ballard a royalty of two percent (2%) of Net Sales of the Licensed

     Tools in the manner described in Article 5.  If a Licensed Tool is sold or



     otherwise disposed of by any Sublicensee of KFI, KFI shall pay to Ballard a

     royalty of 5% of all Sublicensee Income for sublicenses of any of the

     Licensed Technology.

     3.2. Price List.  KFI shall maintain a Board of Director's approved

discernable price list of all Licensed Tools.  Such listed prices, or other

price actually obtained if higher, shall act as the basis for calculation of

the royalty payable to Ballard.  For a bundled product being delivered to

KFI's customer without the specific pricing of Licensed Tools to the

customer, the approved price list shall be the royalty base for the Licensed

Tools delivered to customers.  No more than one royalty payment shall be due

with respect to a sale of a particular Licensed Tool.

     3.3. Royalty Cap.  The royalties paid by KFI to Ballard shall be payable

until Ballard has received $50,000,000.00 at which time all royalties and

other payments to Ballard pursuant to this Agreement shall terminate.

4.   COMMITMENTS OF KFI.  KFI agrees to use its reasonable efforts to achieve

     the development and commercialization of the Licensed Technology.

5.   ACCOUNTING

     5.1. Quarterly Report.  Within forty-five days (45) after the end of each

   calendar quarter, KFI shall submit to Ballard a written report identifying

   the software tools, products, and components that shall be pertinent to a

   royalty accounting hereunder, stating the number sold or otherwise disposed

   of in the calendar quarter, the gross billing price for each, all pertinent

   deductions, and the amount of NET SALES during the quarter.  Ballard agrees

   to hold all information in such royalty reports in confidence pursuant to the

   provisions of Section 9.



     5.2. Quarterly Payment.  Payment of the royalties shown to be due shall

     accompany each quarterly report.

    5.3. Maintenance of Records.  KFI shall keep records in sufficient detail to

enable the royalties payable by KFI to be determined and verified.  Records

for each quarter shall be retained by KFI for a period of not less than three

(3) years after the end of the fiscal year containing that quarter.

     5.4. Audits.  Upon reasonable notice and during regular business hours, KFI

shall make available the records referred to in Section 5.3 for audit by an

independent accountant acceptable to KFI to verify the accuracy of the

reports and royalties provided to Ballard.  If any such audit discloses an

underpayment of royalties of more than 3% in any year, such audit shall be at

the expense of  KFI.  Otherwise such audit shall be at the expense of

Ballard.  Audits shall occur no more frequently than once each calendar year.

6.   OWNERSHIP

   6.1. Licensed Rights.  KFI acknowledges that Ballard is the sole owner of the

   Licensed Rights.  Except as provided in this Agreement, KFI agrees not to

   take any action challenging or opposing, on any grounds whatsoever, Ballard's

   ownership of the Licensed Rights, or the validity thereof.

   6.2. Improvements.  Any Improvements  and derivative works made by KFI, to or

   based on the Mark X Technology, whether or not patented or patentable, shall

   be the property of KFI and KFI shall be entitled to pursue intellectual

   property protection for such improvements, and no additional royalty shall be

   payable to Ballard for the Improvement portion of a Licensed Tool.  Ballard

   agrees not to take any action challenging or opposing, on any grounds



   whatsoever, KFI's ownership of such Improvements or derivative works, or the

   validity of intellectual property rights therein.

   6.3. New Inventions of Ballard:  For new inventions or technology that relate

to the Licensed Technology that were developed by Ballard (i) during his

employment with KFI on Ballard's own time, without using KFI's equipment,

supplies, facilities or trade secret information, or (ii) within two (2)

years after Ballard's employment with KFI terminates, KFI shall have a right

of first offer for a license under such new inventions.  Failure of KFI to

respond to a request from Ballard for an offer to pursue a license under any

such new invention within 90 days of receipt of written disclosure from

Ballard to KFI of such new invention, shall be deemed denial of such right of

offer by KFI, and Ballard may pursue such technology without obligation to

KFI.

7.   TERM AND TERMINATION

     7.1. Term.  The term of the license granted hereunder shall commence as of

       the date of this Agreement and shall remain in force until terminated in

       accordance with the provisions of this Agreement.

     7.2. Termination by KFI.  KFI shall have the right to terminate this

Agreement upon written notice delivered to Ballard.  The effective date of

termination shall be the end of the quarter in which notice was delivered,

whereupon KFI shall be relieved of all further obligations under this

Agreement and all rights granted to KFI under this Agreement shall be

canceled and revert to Ballard.

     7.3. Termination by Ballard; Conversion to Non-Exclusive License.



7.3.1.    Should KFI fail to perform any material covenant of this Agreement

   on its part to be performed, then upon written notice of such failure from

   Ballard, KFI shall have thirty (30) days from the date of such notice to

   correct a breach which relates to the timely payment of funds to Ballard, and

   shall have ninety (90) days from the date of such notice to correct any other

   breach, and upon the failure of KFI to do so, Ballard may terminate this

   Agreement upon ten (10) days further written notice.

7.3.2.    Should KFI fail to commence sales of Licensed Tools within three

(3) years from the date of this Agreement, Ballard shall have the option to

convert the license hereunder to a non-exclusive license upon sixty (60) days

prior written notice to KFI.

7.3.3.    In the event of a Loss of Founder Control- KFI's continued

commitment to the development, mass marketing, and commercial acceptance of

this technology will be assessed annually, given the failure of KFI to meet

either of the following milestones, Ballard shall have the option to convert

the license hereunder to a non-exclusive license  upon sixty (60) days prior

written notice:
               MILESTONES:

                    Annual growth in sales of Licensed Tools > 10 %

                    Annual Sales of Licensed Tools > 150,000,000 by 2008.

     For purposes of this Section 7.3.3, a Loss of-Founder Control shall mean

any transaction or combination of events that cause the total combined voting

power  of  KFI's  founders  to fall below 50% of the  outstanding  securities

immediately following such transaction or events.



   7.4. Rights After Termination.  No termination of this Agreement shall affect

        the rights of Ballard to any royalties due and owing or to statements of

        account to and including the date of termination.  Upon termination, all

        rights  granted to KFI in this Agreement, shall revert to  Ballard.

    Notwithstanding anything herein to the contrary, upon KFI's failure to meet

    the reasonable efforts requirements of Section 4, KFI shall maintain a non-

    exclusive license to the Licensed Technology., but shall not receive a

   license to new Improvements.  Termination of this Agreement for any reason

    shall not release any party hereto from any liability which, at the time of

    such termination, has already accrued to the other party or which is

   attributable to a period prior to such termination, nor preclude either party

   from pursuing any rights and remedies it may have hereunder or at law or in

   equity which accrued or are based upon any event occurring prior to such

   termination.  The rights provided for in this Section 7.4 shall be in

   addition and without prejudice to any other rights which the parties may have

   with respect to any breach or violations of the provisions of this Agreement.

   In the event that the license granted to KFI under this Agreement is

  terminated, any granted Sublicenses shall remain in full force and effect,

  provided that the Sublicensee is not then in breach of its sublicense

  agreement, in which case Ballard and Sublicense shall enter into appropriate

  agreements or amendments.

8.   REPRESENTATIONS AND WARRANTIES

  8.1. Representations and Warranties of Ballard.  Ballard represents, warrants

       and covenants to KFI as follows:

          (a)   Ballard  has  the  full power and authority  to  execute  and

     deliver  this Agreement and to perform his obligations hereunder.   This



     Agreement  constitutes  the  valid and  legally  binding  obligation  of

     Ballard,  enforceable  in  accordance with  its  terms  and  conditions.

     Ballard need not give any notice to, make any filing with, or obtain any

     authorization,  consent, or approval of any government  or  governmental

     agency  in  order  to consummate the transactions contemplated  by  this

     Agreement.

          (b)   Ballard has heretofore developed the Licensed Technology  and

     owns  the  Licensed Technology free and clear of all liens,  claims  and

     encumbrances.

          (c)  Except for existing licenses which have been disclosed to KFI,

     the  license  granted to KFI under this Agreement is  the  only  license

     granted with respect to the Licensed Technology, and during the term  of

     this   Agreement  Ballard  shall  not  grant  any  third  party   rights

     inconsistent  with the rights granted KFI herein, and  Ballard  has  the

     right to grant the rights and licenses granted herein.

          (d)   There are no pending, and to the knowledge of Ballard  as  of

     the  Effective  Date,  any threatened, actions,  suits,  investigations,

     claims or proceedings in any way relating to the Licensed Technology.

     8.2. Representations and Warranties of KFI.  KFI represents, warrants and

          covenants to Ballard that:

          (a)  KFI is a corporation, duly organized, validly existing and  in

     good  standing  under  the  laws of the State of  Delaware  having  full

     corporate power to conduct its business as presently conducted,  and  to

     enter  into  and  consummate  the  transactions  contemplated  by   this

     Agreement.

          (b)   The  execution, delivery and performance under this Agreement

     by  KFI  have been duly authorized by all required corporate action,  do

     not  constitute a breach, default or violation of any of the  provisions

     of  KFI's  articles of incorporation, bylaws or other charter documents,



     or any indenture, agreement, contract, order, law or regulation to which

     it may be a party or by the terms of which it may be bound.

9.   CONFIDENTIALITY

     9.1.   Confidential Information. .  Except as expressly provided herein, or

   as agreed by the Board of Directors of KFI of which Ballard is a member, the

   parties agree that, for the term of this Agreement and for five (5) years

   thereafter, the receiving party shall keep completely confidential and shall

   not publish or otherwise disclose and shall not use for any purpose except

   for the purposes contemplated by this Agreement any Confidential Information

   furnished to it by the disclosing party hereto pursuant to this Agreement,

   except to the extent that it can be established by the receiving party by

   competent proof that such Confidential Information:

          (a)  was already known to the receiving party, other than under  an

     obligation of confidentiality, at the time of disclosure;

          (b)  was generally available to the public or otherwise part of the

     public domain at the time of its disclosure to the receiving party;

          (c)  became generally available to the public or otherwise part  of

     the public domain after its disclosure and other than through any act or

     omission of the receiving party in breach of this Agreement;

          (d)   was  independently  developed  by  the  receiving  party   as

     demonstrated by documented evidence prepared contemporaneously with such

     independent  development;  or

          (e)   was subsequently lawfully disclosed to the receiving party by a

     person other than a party hereto.



     Each party hereto may use or disclose information disclosed to it by the

     other party to the extent such use or disclosure is reasonably necessary

     in  filing  or prosecuting patent applications, prosecuting or defending

     litigation,  complying  with  applicable  governmental  regulations   or

     otherwise   submitting   information  to  tax  or   other   governmental

     authorities,  or  making a permitted sublicense or otherwise  exercising

     its  rights hereunder, provided that if a party is required to make  any

     such  disclosure of another party's Confidential Information, other than

     pursuant to a confidentiality agreement, it will give reasonable advance

     notice  to  the latter party of such disclosure and, save to the  extent

     inappropriate  in  the case of patent applications  or  compliance  with

     federal  and state securities laws, will use its best efforts to  secure

     confidential  treatment  of such information  prior  to  its  disclosure

     (whether  through  protective  orders or otherwise.)   As  used  herein,

     "Confidential   Information"  shall  mean   (i)   any   proprietary   or

     confidential   information  or  material  in  tangible  form   disclosed

     hereunder  that is marked as "confidential" at the time it is  delivered

     to  the  receiving party, and/or (ii) any written reports  furnished  by

     either party to the other pursuant to the terms of this Agreement.



10.  ENFORCEMENT OF LICENSED RIGHTS

     10.1.     Notice.  Each party shall promptly give the other party written

    notice of any apparent infringement of any of the Licensed Rights of which

    such party becomes aware.

     10.2.      Legal  Action.  KFI shall have the first right, but  not  the

    obligation, to bring any legal action with respect to any  apparent

    infringement, at KFI's own expense and for its own benefit.  In such event,

    Ballard agrees to cooperate with KFI and to join in such action as a party

    plaintiff if requested to do so by KFI, and at KFI'S reasonable request, to

    give KFI all needed information, assistance and authority to file and

    prosecute such suit; provided that KFI shall reimburse Ballard for all

   verified out-of-pocket expenses incurred by him in providing such assistance,

   including attorney's fees, expenses and expert witness fees.  To ensure that

   no rights of Ballard are compromised in any such action, KFI shall not settle

   any such claim, or enter into any settlement agreement that admits that any

   third party product does not infringe the Licensed Rights or that any of the

   Licensed Rights is invalid or unenforceable, without Ballard's prior written

   consent, which consent shall not be unreasonable withheld.  If there is a

   recovery in any such action, after recovery of all direct out of pocket

   expenses incurred by KFI and Ballard in connection with any such legal

   action, KFI shall pay Ballard an amount of monies received from any alleged

   infringer equivalent to royalties which Ballard would have received under

   this Agreement, if such alleged infringer had been a Sublicensee of KFI.

11.  INDEMNIFICATION

     11.1.      Indemnification by KFI.  KFI shall indemnify and hold Ballard

    harmless from and against all losses, claims and damages arising out of or

    based upon the sale of the Licensed Products by KFI.  If a claim is made by



    any third party against Ballard and Ballard intends to seek indemnification

   from KFI with respect to such claim, (i) Ballard shall promptly notify KFI of

   such claim, and (ii) if KFI acknowledges such right to indemnification, KFI

   shall  have  sole control of the defense and all related settlement

   negotiations.

11.2.     Indemnification by Ballard.  Ballard shall indemnify and hold KFI

harmless from and against all losses, claims and damages to the extent that

such loss, claim or damage arises out of or is based upon the breach of the

representations and warranties granted by Ballard in Section 8.1.   If a

claim is made by any third party against KFI and KFI intends to seek

indemnification from Ballard with respect to such claim, (i) KFI shall

promptly notify Ballard of such claim, and (ii) if Ballard acknowledges such

right to indemnification, Ballard shall have sole control of the defense and

all related settlement negotiations.

12.  MISCELLANEOUS PROVISIONS

     12.1.     Prior Customer Projects.  KFI may utilize prior customer projects

          for marketing referenceable deployments of the Mark X Technology.

     12.2.     Successors And Assigns.  This Agreement shall be binding upon and

inure to the benefit of the parties named herein and their respective

successors and permitted assigns, including, without limitation, any

corporation which is surviving corporation in the event of a merger involving

KFI.

      12.3.     Waiver.  Any failure by either party to enforce at any time any

term or condition of this Agreement shall not be considered a waiver of that

party's right thereafter to enforce each and every term and condition of this

Agreement.



      12.4.     Patent Marking.  If Ballard obtains any patents, on the Mark X

Technology, KFI agrees to mark each Licensed Tool with a patent notice in

compliance with applicable statutory requirements.

      12.5.     Entire Agreement.  This Agreement and the exhibits and schedules

referred to herein sets forth the entire intent of and understanding between

the parties with respect to the subject matter of this Agreement and

supersedes all prior discussions, negotiations, and agreements between them.

Neither party shall be bound by any agreement or representation other than as

expressly provided herein or as subsequently set forth in writing and

executed by each party.

     12.6.     Bankruptcy.  In the event that either KFI or Ballard is adjudged

bankrupt, it is the intention of the parties that this Agreement shall be

governed by and construed in accordance with the U.S. Bankruptcy Code.

     12.7.     Notices.  All notices or other communications relating to this

Agreement shall be deemed to be properly served when sent in written form by

United States certified mail, postage prepaid, or, when delivered by courier

to the respective party at the following address or to each substitute

address as either party may from time-to-time designate in writing to the

other.

     To KFI:                  Michael W. Dochterman
                              CEO and President
                              Knowledge Foundations, Inc.
                              5325 Glickman Avenue
                              Temple City, CA  91784

     To Ballard:              Richard Ballard
                              7852 Colgate Avenue
                              Westminster, CA  92683

     cc:                      Stephen C. Jensen
                              Knobbe, Martens, Olson & Bear



                              620 Newport Center Drive, Sixteenth Floor
                              Newport Beach, CA  92660

     12.8.     Applicable Law.  It is understood and agreed that this Agreement

    shall be construed, governed, and interpreted in accordance with the laws of

    the State of California.

     12.9.     Severability of Provisions:  Reformation.  If any term, clause,

word, condition, provision or agreement in this Agreement or the application

thereof or any portion thereof to any person or circumstance, shall be held

invalid, void or unenforceable, the remainder of the term, clause, word,

condition, provision or agreement and the application thereof shall remain in

full force and effect, and the invalid, void or unenforceable term, clause,

word, condition, provision or agreement shall be reformed to the extent

possible in order to give its intended effect and/or meaning.

     12.10.    Construction.  The parties have participated jointly in the

negotiation and drafting of this Agreement.  In the event an ambiguity or

question of intent or interpretation arises, the Agreement shall be construed

as if drafted jointly by the parties and no presumption or burden of proof

shall arise favoring or disfavoring any party by virtue of the authorship of

any of the provisions of this Agreement.

     12.11.    Further Assurances/Cooperation.  At any time or from time to time

on and after the date of this Agreement, each party agrees to (i) deliver to

the other party such records, data or other documents consistent with the

provisions of this Agreement, (ii) execute, and deliver or cause to be

delivered, all such consents, documents or further instruments of transfer or

license, and (iii) take or cause to be taken all such actions, as each party

may reasonably deem necessary or desirable in order for such party to obtain

the full benefits of this Agreement and the transactions contemplated hereby.



      IN WITNESS WHEREOF, the parties have caused this Agreement to be signed

in duplicate by their respective duly authorized officers, effective this 6th

day of April, 2000.



BALLARD                         KNOWLEDGE FOUNDATIONS, INC.




/s/ Richard L. Ballard          /s/ Michael W. Dochterman
Richard L. Ballard              By:  Michael W. Dochterman
                                Its: CEO and President

/s/ Janet J. Pettitt
Janet J. Pettitt

Date:                           Date:





                                  EXHIBIT A

                      Documentation & Source Codes for
                            Mark "X" Technologies

Dr. Richard L. Ballard -- Business & Academic Vita (5/25/1999) -- provides  a
     complete  history  of all employment, publications,  software  projects,
     fellow development team members, and their job descriptions (1970-1999).

Legal  History and Origins of Knowledge Foundations (KRHistry.doc 5/23/97) --
     document   tracing  the  history  of  Dr.  Richard  Ballard's   software
     development and licensing agreements from earliest work through Mark 1 &
     2 development and Mark 3 design.

MARK 1 ARTIFACTS AND SOURCE CODES:

Fiction  Shell  Block  Design  from TALMIS Fall 1984 Conference  Presentation
     (35mm Slide Photos)

Project Storyboard Proposals to Nichols Research Corporation:
     APIRS Algorithm Testbed Proposal (Apple Mac documents) Vita ref. 94
     SURCON Feasibility Study (Lotus Manuscript, Micrografx Designer) ref. 98
     [Manuscript & Designer documents accessed in past week]

Detailed  Design Documents and Drawings delivered to BRAT Project: Vita  ref.
     100-104  [Manuscript  & Designer documents accessed  in  past  week]  --
     primary  value  in (Natural Language) Dialog Engine, SuperSet  Knowledge
     Representation,  and  Automated  Trace Operation  copyrights  and  prior
     practice.

BRAT Source  Codes  (2-3  existing sets on 5.25"  and  3.5"  floppies,  @  16
     floppies/set, possible hard copy, last accessed 1988-1990)  Microsoft  C
     and Windows 1 SDK -- little or no value assumed.

MARK 2 ARTIFACTS AND SOURCE CODES:

Project Storyboard & Pseudo-Code Proposals to Media Share/Joestens Learning:
     Natural  Language  Interface Module (NLIM) -- licensed,  became  Mark  2
          Concept Finder
     Outliner -- not licensed, became Mark 2 EditForm Tool
     BookReader -- Media Share reorganized before license granted

Detailed  Mark  2  Design Documents & User Guides licensed to PSR,  US  Navy,
     USAF, & General Research, & Vector Data Systems. (Manuscript Fact Sheets
     converted to MS-Word, Micrografx Designer & BMP graphics.) [All recently
     accessed  via  hard  disks]  -- immediate departure  point  for  Mark  3
     implementation.



Mark 2 Source Codes and Compile Environment Microsoft C and C++, Windows 2.00
     through  Windows 2000. -- Provides immediate licensable product for  new
     development  services contracts. Previously $50K - $100K per development
     seat per license.

Knowledge  Research  Proposal  Development Binder -- Multi-phase  development
     system,  statements  of  work, schedules, deliverables,  work  breakdown
     structure,  job  descriptions, and accounting  for  project  development
     processes  created  by Knowledge Research -- models future  KFI  service
     projects  and  licensee  income expectations. Existing  Mark  2  license
     models.

Knowledge  Base  Demonstrations, Project Boxes, AllDocs Legacy Work Products,
     and  Production  Macros -- legacy of operating systems and  applications
     from decade of knowledge base and tool development
     10 Demo  Knowledge  Bases -- operate in any Windows 2 +  environment  --
          unmatchable demonstration of technologies unique capabilities
     18 Project  Boxes -- original source documents & databases used in prior
          projects, very valuable in government markets
     AllDocs  Work  Products  Hard  Disk @ 1 GB  --  original  sources,  work
          products, macros, edited knowledge developed in previous projects -
          - used in modeling theory, practice, and training -- test cases for
          tool use
     Production  Macros -- starting point for production services and Mark  3
          tool definition
          [All recently accessed on hard discs]

Mark 2.5 APT Virtual Database Detailed Design, Briefings, & Tool Source Codes
     --  Most  recent  technology project licensed to the Naval  Air  Systems
     Command.  Feasibility  test  for future corporate  database  integration
     technology and systems integration "plug and play". Tests early  Builder
     and VDB architectures for Mark 3.

MARK 3 DESIGNS AND ARTIFACTS:

Naval   Air   Warfare   Browser  Series  Briefing  6/8/92   (Taylor01.DRW   -
     Taylor05.DRW)-- briefing developed to demonstrate to PSR the creation of
     a  new Mark 3 tool design during a previous 6 month unpaid leave. Led to
     a  licensing agreement for copies of Mark 2 & 3, which they subsequently
     broke by not paying agreed 15% profit sharing on APT project.

Mark 3 -- 91 Proprietary Design Notes
Mark 3 -- 95 Proprietary Design Notes
Mark 3 -- 96 Proprietary Design Notes
Mark 3 -- 97 Proprietary Design Notes
Mark 3  --  99  Proprietary  Design  Notes  (MS-Word  &  Micrografx  Designer
     documents  & binders -- electronic & hardcopy) -- detail the  continuing
     design  evolution  in  keeping with the system  block  diagram  used  to
     negotiate PSR license agreements.
Mark 3  --  99 & Mark 3 -- 2000 Fact Sheets, Architectural Drawings, & Screen
     Layouts (MS-Word & Micrografx Designer documents & binders -- electronic



     &  hardcopy)  --  working  specifications and final  designs  to  launch
     programming  and  patent  applications. Sets framework  for  future  KFI
     sponsored programming and modeling work.

Knowledge  Mapping  System Versions (Mark 3 Components.doc) --  initial  tool
     development  plan  and  teaming  assignments  for  first  two  years  of
     releases.