Investment Engineers, LTD., Robert S. McGlamery, A Partner Other than the Tax Matters Partner - Page 8

                                                 - 8 -                                                    
                        I.  Inasmuch as Knox has substantially exceeded                                   
                  original projections of the time in which a marketable                                  
                  product was to be delivered to the Partnership, and,                                    
                  while acknowledging that he made no warranties, other                                   
                  than to perform in good faith, as to the fruits of his                                  
                  efforts, he acknowledges his imput [sic] into the                                       
                  projections which comprised a pertinent part of the                                     
                  offering materials.                                                                     
                        II.  The Partnership acknowledges dramatic changes                                
                  in political, economic and engineering environments                                     
                  which have all impacted the progress of the research                                    
                  contemplated by the Research Agreements, and, certifies                                 
                  that Knox has thus far performed his duties in good                                     
                  faith.  (Substantial progress having been made toward                                   
                  all research goals).                                                                    
                        III.  Knox hereby makes the following concessions:                                
                               (a) To forgive all interest due on all                                     
                        Partnership Notes assigned to him as payment for                                  
                        the Research Agreements; (except those that have                                  
                        been sold, optioned, or borrowed against)                                         
                        acknowledging that interest was charged in the                                    
                        first place in light of anticipated high, “1970's”                                
                        inflation rates, which have not materialized.                                     
                               (b) To push back the due dates of said Notes                               
                        until either December 1, 1994, (approximately one                                 
                        year after the conclusion of the original research                                
                        agreement), or, one year after a completed product                                
                        is delivered to the Partnership, whichever occurs                                 
                        first.  Payments on the Notes are to be made over                                 
                        the same number of annual installments as stated                                  
                        therein, and the amount of each installment shall                                 
                        be the remaining balance on the Note, less                                        
                        interest, divided by the number of payments                                       
                  Knox determined the amounts of compensation that he was to                              
            receive for his services under the Research Agreement.                                        
                  No companies were organized or contacted to market any                                  
            potential products created under the Research Agreement, and the                              
            partnership did not enter into any contracts with third parties                               

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