Sample Business Contracts


Technology Transfer Agreement - Molecular Analytical Systems Inc. and Illumesys Pacific Inc.


                         TECHNOLOGY TRANSFER AGREEMENT
                                     BETWEEN
                       MOLECULAR ANALYTICAL SYSTEMS, INC.
                                       AND
                             ILLUMESYS PACIFIC, INC.

         THIS TECHNOLOGY TRANSFER AGREEMENT (the "Agreement") is made and
entered into on this 7th day of April, 1997 (the "Effective Date") and is
retroactive to September 16, 1996 (the "Retroactive Date"), by and between
MOLECULAR ANALYTICAL SYSTEMS, INC. ("MAS"), a Texas corporation with an address
c/o Wagner, Kirkman & Blaine, 1792 Tribute Road, Suite 450, Sacramento, CA
95815, and ILLUMESYS PACIFIC, INC. ("IllumeSys"), a California corporation with
an address c/o Wagner, Kirkman & Blaine, 1792 Tribute Road, Suite 450,
Sacramento, CA 95815.

                                   WITNESSETH

         WHEREAS, pursuant to the Baylor Technology Transfer Agreement, MAS is
the exclusive licensee of certain rights and interest in and to the Baylor
Technology (as such terms are defined below); and

         WHEREAS, MAS desires to grant to IllumeSys and IllumeSys desires to
obtain rights under the Baylor Technology and the MAS Technology to make, use,
sell, offer for sale and import products in the Life Sciences Market and, under
certain circumstances, in the Drug Discovery Market (as such terms are defined
below); and

         WHEREAS, MAS and CTI are, simultaneous with the execution of this
Agreement, entering into that Technology Transfer Agreement dated as of April 7,
1997 (the "MAS/CTI Agreement") granting certain license rights from MAS to CTI
for the Other Markets and the Drug Discovery Market.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

1.       DEFINITIONS

         As used herein, the terms "AGREEMENT," "MAS," "ILLUMESYS," "MAS/CTI
AGREEMENT," "EFFECTIVE DATE" AND "RETROACTIVE DATE" shall have the meanings
indicated above. As used herein, the following terms shall have the following
meanings:

         1.1 "AFFILIATE" shall mean any person, corporation, association or
other entity which directly or indirectly controls, is controlled by or is under
common control with the party in question. As used in this definition of
"Affiliate", the term "control" shall mean direct or indirect beneficial
ownership of more than 50% of the voting or income interest in such corporation
or other business entity.

                                       1.

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         1.2 "BAYLOR" shall mean the Baylor College of Medicine, a Texas
non-profit corporation having its Principal place of business at One Baylor
Plaza, Houston, Texas 77030.

         1.3 "BAYLOR TECHNOLOGY" shall mean all Technology (as defined in the
Baylor Technology Transfer Agreement) which is licensed from Baylor to MAS
pursuant to the Baylor Technology Transfer Agreement.

         1.4 "BAYLOR TECHNOLOGY TRANSFER AGREEMENT" shall mean that Technology
Transfer Agreement, dated September 14, 1993, between MAS and Baylor. A copy of
the Baylor Technology Transfer Agreement is attached hereto as Exhibit A.

         1.5 "CIPHERGEN" shall mean Ciphergen Biosystems, Inc., a California
corporation having its principal place of business at 490 San Antonio Road,
Palo Alto, CA 94306.

         1.6 "CTI" shall mean ISP Acquisition Corporation, a California
corporation.

         1.7 "DATE OF FIRST COMMERCIAL SALE" shall mean the date on which
IllumeSys or any Sublicensee or Affiliate first transfers title to a Licensed
Product to a Third Party (other than an Affiliate of such Sublicensee) for
monetary consideration.

         1.8 "DRUG DISCOVERY MARKET" shall mean Laboratories engaged in
discovering new drugs for potential preclinical development, clinical
development and commercialization.

         1.9 "DRUG DISCOVERY PRODUCT" shall mean any device, instrument or
consumable for use by a Third Party in the Drug Discovery Market. This term does
not include any drug discovered by use of a Drug Discovery Product.

         1.10 "ILLUMESYS FIELD OF USE" shall mean the scope of the license and
sublicense grant to IllumeSys set forth in Sections 2.1(a), 2.1(b), 2.1(c) and
2.1(d) herein.

         1.11 "IMPROVEMENT" shall have the meaning set forth in the Baylor
Technology Transfer Agreement.

         1.12 "LABORATORIES" shall mean all laboratories and laboratory
environments.

         1.13 "LICENSED PRODUCT" shall mean any product made, used, sold,
imported or offered for sale or any service used, sold or offered for sale,
using all or any part of the Licensed Technology.

         1.14 "LICENSED TECHNOLOGY" shall mean the Baylor Technology,
Improvements and the MAS Technology.

         1.15 "LIFE SCIENCES MARKET" shall mean all Laboratories doing
bioanalytical or biological measurements or assays. It is understood that "Life
Sciences Market" includes, without limiting the foregoing, Laboratories
developing clinical diagnostics. It is further

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understood that "Life Sciences Market" does not include (i) Laboratories
performing clinical diagnostics for patients or other Third Party customers,
(ii) entities involved in making, using and selling instruments, devices,
consumables, services and information for use by individual XXX (e.g. the
consumer market), and (iii) Laboratories engaged in discovering new drugs for
the potential preclinical development, clinical development and
commercialization.

         1.16 "MAS TECHNOLOGY" shall mean all inventions, know-how, information,
processes, formulae, patterns, compilations, programs, devices, methods,
techniques, compounds, products, data, preparations and usage information or
materials and sources thereof, whether or not patentable, which have been
developed or otherwise acquired by MAS (i) prior to the Effective Date or (ii)
after the Effective Date and prior to the four-year anniversary of the Effective
Date. "MAS Technology" shall not include the Baylor Technology or Improvements.

         1.17 "NET SALES" shall mean all monies and/or equivalent goods and
services received directly by IllumeSys or an Affiliate of IllumeSys from the
manufacture, use, sale, offer for sale or import of Royalty-Bearing Products by
IllumeSys or an Affiliate of IllumeSys, less any separately identified
discounts and allowances to customers (actually granted), refunds for returned
or damaged goods, excise and sales taxes, customs duties and costs of
transportation (including without limitation packing and insurance) actually
paid.

         1.18 "OTHER MARKETS" shall mean all Laboratories doing bioanalytical or
biological measurements or assays which are not part of the Life Sciences Market
or the Drug Discovery Market.

         1.19 "PATENT RIGHTS" shall have the meaning set forth in the Baylor
Technology Transfer Agreement.

         1.20 "PATENTS AND PATENT APPLICATIONS" shall mean (i) any U.S. patent
application, and any patent issuing therefrom, covering the Licensed Technology;
(ii) any divisionals, continuations, continuations-in-part, extensions and
reissues of the foregoing and (iii) any foreign equivalents of the applications
or patents described in clause (i) or (ii).

         1.21 "ROYALTY-BEARING PRODUCTS" shall mean any Licensed Products which
use all or any part of the Baylor Technology.

         1.22 "SUBLICENSEE" shall mean any Third Party to whom IllumeSys grants
a further sublicense under the Licensed Technology, as permitted by Sections 2.1
and 2.2 of this Agreement.

         1.23 "THIRD PARTY" shall mean any party other than MAS, IllumeSys or
any Affiliate of MAS or IllumeSys.

2.       GRANT OF LICENSE AND LICENSE FEE

         2.1 (a) EXCLUSIVE LICENSE GRANT TO ILLUMESYS FOR LIFE SCIENCES MARKET.
MAS hereby grants to IllumeSys:

                                       3.

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                 (i) a royalty-bearing (for such time period as is set forth in
Section 2.2), exclusive, worldwide sublicense, with a right to further
sublicense, under the Baylor Technology and Improvements to make, use, sell,
offer for sale and import any instrumentation, device or non-drug consumable for
use by customers in the Life Sciences Market; and

                 (ii) a royalty-free, exclusive, worldwide license, with a right
to sublicense, under the MAS Technology to make, use, sell, offer for sale and
import any instrumentation, device or non-drug consumable for use by customers
in the Life Sciences Market.

             (b) EXCLUSIVE LICENSE GRANT TO ILLUMESYS TO SELL DRUG
DISCOVERY PRODUCTS. MAS hereby grants to IllumeSys:

                 (i) a royalty-bearing (for such time period as is set forth in
Section 2.2), exclusive, worldwide sublicense, with a right to further
sublicense, under the Baylor Technology and Improvements to sell and offer for
sale Drug Discover Products; and

                 (ii) a royalty-free, exclusive, worldwide license, with a right
to sublicense, under the MAS Technology to sell and offer for sale Drug
Discovery Products.

             (c) CO-EXCLUSIVE LICENSE GRANT TO ILLUMESYS TO MAKE DRUG DISCOVERY
PRODUCTS. Subject only to those rights granted to CTI by way of the MAS/CTI
Agreement, MAS hereby grants to IllumeSys:

                 (i) a royalty-bearing, coexclusive (with CTI), worldwide
sublicense, under the Baylor Technology and Improvements to make, use and import
Drug Discovery Products; and

                 (ii) a royalty-free, coexclusive (with CTO, worldwide license,
under the MAS Technology to make, use and import Drug Discovery Products.

IllumeSys shall not have the right to grant a sublicense under the sublicensee
and license contained in this Subsection 2.1(c) to a Third Party except to grant
sublicensee to subcontractors of IllumeSys who will make Drug Discovery Products
(or components thereof) for sale by IllumeSys to the Drug Discovery Markets. In
addition, IllumeSys may use the Baylor Technology, Improvements and the MAS
Technology in the Drug Discovery Market but only for the purpose of developing
and providing data and other information to Third Parties about the
characteristics of compounds which IllumeSys may be asked to analyze for such
Third Parties.

             (d) LIMITATIONS. Each of the foregoing sublicenses in Section
2.1(a), 2.1(b) and 2.1(c) shall be subject to the terms of subsection (a), (b)
and (c) of Section 2.1 of the Baylor Technology Transfer Agreement.

                                       4.

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         2.2 LICENSE FEE. In consideration for the grant of the sublicenses set
forth in Section 2.1, IllumeSys agrees to pay MAS an amount equal to two percent
(2%) of Net Sales received by IllumeSys or an IllumeSys Affiliate from the Date
of First Commercial Sale until the fourth anniversary of the Date of First
Commercial Sale. Notwithstanding the foregoing, the obligation of IllumeSys to
make payments under this Section 2.2 shall not exceed $500,000 per twelve-month
period commencing on each of (i) the Date of First Commercial Sale, (ii) the
first anniversary of the Date of First Commercial Sale, (iii) the second
anniversary of the Date of First Commercial Sale and (iv) the third anniversary
of the Date of First Commercial Sale. This Section 2.2 shall have no further
force and effect as of the fourth anniversary of the Date of First Commercial
Sale and, as of such date, no further royalties shall be owed to MAS by
IllumeSys under this Agreement.

3.       WARRANTIES AND REPRESENTATIONS

         3.1 MAS. Except as set forth on Schedule 3.1 attached hereto, MAS
represents and warrants that:

             (a) MAS is validly existing and in good standing under the laws of
the State of Texas.

                  (b) the execution, delivery and authority to execute and
deliver this Agreement has been duly authorized by all necessary action on the
part of MAS.

             (c) MAS has the power and authority to execute and delivery this
Agreement and to perform its obligations under this Agreement.

             (d) as of the date of this Agreement, it is not a party to any
agreement or arrangement with any third party or under any obligation or
restriction, including pursuant to its Articles of Incorporation or By-Laws,
which in any way limits or conflicts with its ability to fulfill any of its
obligations under this Agreement.

             (e) it is the owner of the entire right, title, and interest in and
to the MAS Technology, that it has the sole right to grant licenses thereunder,
and that it has not granted, and will not grant, licenses thereunder to any
other entity that would restrict the rights granted to IllumeSys hereunder. MAS
also further represents that there are no agreements, written or oral, relating
to the MAS Technology and that it has delivered to IllumeSys and its counsel all
written agreements relating to the MAS Technology.

             (f) it is the exclusive licensee of the entire right, title, and
interest in and to the Baylor Technology and the Improvements, that it has the
sole right to grant sublicenses thereunder, and that it has not granted, and
will not grant, sublicenses thereunder to any other entity that would restrict
the rights granted to IllumeSys hereunder. MAS also further represents that
there are no agreements, written or oral, involving the Baylor Technology or the
Improvements and that it has delivered to IllumeSys and its counsel all written
agreements relating to the Baylor Technology and the Improvements.

                                       5.

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             (g) to the best of its knowledge, MAS owns or possesses sufficient
legal rights to all patents, trade secrets, licenses, information, and
proprietary rights and processes necessary for its business as now conducted and
as proposed to be conducted without any conflict with, or infringement of the
rights of, others. There are no outstanding options, licenses, or agreements of
any kind relating to the foregoing, nor is MAS bound by or a party to any
options, licenses or agreements of any kind with respect to the patents, trade
secrets, licenses, information and proprietary rights and processes of any other
person or entity. MAS has not received any communications alleging that MAS has
violated or, by conducting its business as proposed would violate, any of the
patents, trade secrets, or other proprietary rights or processes of any other
person or entity. MAS is not aware of any infringement, unauthorized use or
other violation by a Third Party of any of MAS's patents, licenses, trade
secrets or other proprietary rights.

             (h) to the best of its knowledge, there is no action, suit,
proceeding, or investigation pending or currently threatened against MAS that
questions the validity of this Agreement, the exclusive rights of MAS to the
Licensed Technology or the right of MAS to enter into this Agreement, or to
consummate the transactions contemplated hereby, or that might result, either
individually or in the aggregate, in any material adverse change in the assets,
business, properties, prospects, or financial condition of MAS. The foregoing
includes, without limitation, any action, suit, proceeding, or investigation
pending or currently threatened involving the prior employment of any of MAS's
employees, their use in connection with MAS's business of any information or
techniques allegedly proprietary to any of their former employers, their
obligations under any agreements with prior employers, or negotiations by MAS
with potential backers of, or investors in MAS or its proposed business. MAS is
not a party to or, to the best of its knowledge, named in or subject to any
order, writ, injunction, judgment, or decree of any court, government agency, or
instrumentality. There is no action, suit, proceeding or investigation by MAS
currently pending or that MAS currently intends to initiate.

             (i) on the date hereof, it is not aware of any infringement or by
the Patent Rights or any claims by any other party in and to the Licensed
Technology.

             (j) it is not currently in breach of the Baylor Technology Transfer
Agreement, knows of no grounds for early termination of the Baylor Technology
Transfer Agreement and will not breach the Baylor Technology Transfer Agreement
during the term of this Agreement. Within two (2) business days of receipt of
any notice from Baylor or delivery of any notice to Baylor under the Baylor
Technology Transfer Agreement, it will provide a copy of such received or
delivered notice to IllumeSys.

             (k) except as may be as may be expressly set forth herein, MAS
hereby disclaims and negates any and all warranties, whether express or implied,
with respect to the Licensed Technology or any rights hereunder transferred,
including but not limited to, any IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE. Without limiting the generality of the foregoing,
MAS makes no representations or warranties as to the patentability,
noninfringement, use or other application of the Licensed Technology,

                                       6.

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or as to the likelihood of the success of any research, development, testing,
marketing or other utilization of the Licensed Technology.

         3.2 ILLUMESYS. IllumeSys represents and warrants that as of the
Effective Date:

             (a) It is a corporation duly organized, validly existing and in
good standing under the laws of the State of California.

             (b) The execution, delivery and performance of this Agreement have
been authorized by all necessary corporate action on the part of IllumeSys.

             (c) IllumeSys has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations under this Agreement.

         3.3 NO ASSURANCE OF PATENTS. MAS represents and warrants to IllumeSys
that, and IllumeSys represents and warrants to MAS that it understands that,
there is no assurance that any patents included in the Patent Rights or any
patent applications subsequently filed on the Licensed Technology will
actually be issued.  In the event that any claim within the Patent Rights is
disallowed in a final rejection by the United States Patent Office, then the
provisions of Section 2.2 relating to such claim will be effectively deleted
from this Agreement. However, with respect to Section 2.2, there shall be no
retroactive adjustment.

4. FINANCIAL STATEMENTS. At the close of each calendar quarter from the Date of
First Commercial Sale through the fourth anniversary of the Date of First
Commercial Sale, the Net Sales shall be computed by IllumeSys, and the amounts
due thereon pursuant to Section 2.2 shall be paid to MAS within sixty (60) days
after the close of said quarter. With each royalty payment, IllumeSys shall
furnish to MAS a written accounting report for the closed quarter stating the
Net Sales, the amounts due to MAS and the amounts already paid to MAS. IllumeSys
agrees, for three (3) years following a given calendar quarter, to maintain
written records with respect to its operations pursuant to this Agreement for
such calendar quarter, in sufficient detail to enable MAS or its designated
certified public accountants to compute the amount of royalties due to MAS, and
further agrees to permit said records to be examined from time to time, on
reasonable notice during normal business hours to the extent necessary to verify
the amount of royalties due MAS hereunder. MAS shall pay the costs of said
examination unless it is determined that IllumeSys underpaid royalties by more
than five percent (5 %) for the period being audited by MAS, in which case
IllumeSys shall reimburse MAS for the audit by MAS, in which case IllumeSys
shall reimburse MAS for the audit expenses.

5.       PROTECTION OF PROPERTY RIGHTS

         5.1 CONFIDENTIALITY. Except as provided below, each party receiving
information of the other party hereunder agrees to keep confidential all
information of the disclosing party which is in the possession or comes into the
possession of the receiving party during the term of this Agreement, together
with any and all documentation and other physical manifestations or embodiments
thereof, and not to use such information for any purpose other than as set forth

                                       7.

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in this Agreement. In carrying out its obligations hereunder each receiving
party shall use at least the degree of care, effort and procedures in protecting
such confidential information as such party utilizes in connection with
protecting its own information of similar character.

         5.2 EXEMPTIONS. The foregoing provisions of Section 5.1 shall not apply
to information which:

             (a) was in the public domain at the time of disclosure;

             (b) later became part of the public domain through no act or
omission of the receiving party, its employees, agents, successors or assigns;

             (c) was lawfully disclosed to the receiving party by a Third Party
having the right to disclose it;

             (d) was already known by the receiving party at the time of
disclosure, other than as a result of previous disclosure by the disclosing
party;

             (e) was independently developed by the receiving or

             (f) is required by court or governmental order, law or regulation
to be disclosed, provided, however, that the receiving party required to
disclose such information shall provide the other party with reasonable advance
notice of any such proposed disclosure to give such party a reasonable period of
time in which to object to such disclosure.

         5.3 DISCLOSURES. Notwithstanding the foregoing, the parties understand
and agree that IllumeSys may, to the extent it deems necessary or appropriate,
disclose the Licensed Technology and any improvement to potential sublicensees
or investors, but IllumeSys agrees to use its reasonable efforts to make such
disclosures subject to a confidentiality agreement containing terms
substantially similar to those contained in Sections 5.1 and 5.2.

         5.4 RIGHTS TO SUBSEQUENT TECHNOLOGIES. MAS shall have no rights in any
subsequent discoveries, inventions, and/or technologies resulting from the
development of the Licensed Technology by IllumeSys, any Affiliate of IllumeSys
or any Sublicensee.

         5.5 PATENT APPLICATIONS. It is understood by the parties that, pursuant
to the Baylor Technology Transfer Agreement, MAS has the initial responsibility
for filing, prosecution and maintenance of Patents and Patent Applications
covering the Baylor Technology. The parties agree that, as between MAS and
IllumeSys, MAS shall be responsible for deciding whether and how to file,
prosecute and maintain the Patents and Patent Applications, provided that:

             (a) all decisions of MAS (whether substantive or procedural)
         concerning whether and how to file, prosecute and/or maintain any
         Patents and Patent Applications shall be acceptable to IllumeSys, such
         acceptance not to be unreasonably withheld;

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             (b) with respect to any action permitted under Section 5.5 of
         the Baylor Technology Transfer Agreement or Section 5.5 of this
         Agreement, MAS will use legal counsel reasonably acceptable to
         IllumeSys and IllumeSys shall reimburse MAS for fifty percent (50%) of
         all out-of-pocket legal, filing, prosecution and maintenance expenses
         incurred by MAS in connection with the Patents and Patent Applications;

             (c) MAS will provide IllumeSys with (i) drafts of all filings
         relating to the Patents and Patent Applications and (ii) drafts of all
         correspondence to be sent by MAS to Baylor, the Patent and Trademark
         Office (the "PTO") or any third party relating to the Patents and
         Patent Applications. Final versions of all such filings and
         correspondence shall be acceptable to IllumeSys, such acceptance not to
         be unreasonably withheld;

             (d) MAS will promptly provide IllumeSys with copies of any
         notices and other correspondence received by IllumeSys from Baylor, the
         PTO or any other third party relating to the Patents and Patent
         Applications, including, but not limited to, any notices received by
         MAS pursuant to Section 5.5 of the Baylor Technology Transfer
         Agreement;

             (e) MAS will, if requested by IllumeSys, provide notice to
         Baylor under any of the circumstances permitting notice pursuant to
         Section 5.5 of the Baylor Technology Transfer Agreement;

             (f) MAS agrees to cooperate with IllumeSys to whatever extent
         is reasonably necessary to procure patent protection of any rights
         regarding the Licensed Technology and agrees to execute any and all
         documents to give IllumeSys the full benefit of the sublicenses and
         licenses granted herein;

             (g) MAS represents and warrants that, as of the Effective
         Date, it has not received any notices from Baylor pursuant to Section
         5.5(c) or Section 5.5(d) of the Baylor Technology Transfer Agreement.
         In the event MAS receives any notices from Baylor pursuant to Section
         5.5(c) or Section 5.5(d) of the Baylor Technology Transfer Agreement
         after the Effective Date, MAS will provide a copy of such notice to
         IllumeSys within five (5) business days of receipt of such notice by
         MAS. MAS will then take all actions requested by IllumeSys to allow
         IllumeSys to retain its rights granted under this Agreement, including,
         but not limited to, promptly notifying Baylor in the event IllumeSys
         wishes MAS to proceed with any actions in connection with the Patents
         or Patent Applications.

         5.6 COOPERATION WITH CTI. It is understood that the rights granted to
IllumeSys under Section 5.5 and Articles 6 and 7 may overlap with rights granted
by MAS to CTI pursuant to comparable provisions of the MAS/CTI Agreement. In the
event of such overlap MAS and IllumeSys agree to cooperate in good faith with
CTI with respect to any issues which may arise and decisions which may need to
be made, so as to maximize the economic benefit of the Licensed Technology to
all three parties.

                                       9.

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6.       INFRINGEMENT BY THIRD PARTIES

         6.1 ENFORCEMENT OF BAYLOR INTELLECTUAL PROPERTY AGAINST THIRD PARTIES.
It is understood by the parties that MAS has certain rights under Article 6 of
the Baylor Technology Transfer Agreement with respect to suspected infringement,
misuse, misappropriation, theft or breach of confidence of other proprietary
rights in the Patent Rights, the Baylor Technology and the Improvements (the
"Baylor Technology Infringement"). It is further understood by the parties that,
as a sublicensee under such intellectual property in the IllumeSys Field of Use,
IllumeSys has an interest in any actions against third parties which may be
taken or contemplated as a result of infringement of the Baylor Technology
within the scope of the IllumeSys Field of Use. Accordingly, the parties hereby
agree that with respect to any such infringement:

             (a) MAS promptly will provide IllumeSys with copies of any notices
received or sent by MAS pursuant to Article 6 of the Baylor Technology Transfer
Agreement.

             (b) MAS will, if requested by IllumeSys, provide notice to Baylor
under any of the circumstances permitting notice pursuant to Article 6 of the
Baylor Technology Transfer Agreement.

             (c) with respect to any legal action permitted under Article 6 of
the Baylor Technology Transfer Agreement, MAS will use legal counsel acceptable
to IllumeSys;

             (d) with respect to any legal action permitted under Article 6 of
the Baylor Technology Transfer Agreement, all decisions of MAS (whether
substantive or procedural) concerning whether to bring an action, how to proceed
with such action and whether and how to settle such action shall be acceptable
to IllumeSys; and

             (e) with respect to any legal action permitted under Article 6 of
the Baylor Technology Transfer Agreement, any recoveries which may be obtained
by MAS as a result of such action shall be allocated between MAS and IllumeSys
on the basis of their relative losses (or potential losses) of revenue as a
result of such infringement.

         6.2 ENFORCEMENT OF MAS TECHNOLOGY AGAINST THIRD PARTIES. IllumeSys
shall have the right, but not the obligation, to enforce at its expense any
patent contained in the MAS Technology against infringement by Third Parties
within the IllumeSys Field of Use and shall be entitled to retain recovery from
such enforcement. In the event that IllumeSys does not file suit against a
substantial infringer of such patents within six (6) months of knowledge
thereof, then MAS shall have the right, but not the obligation, to enforce at
its expense any patent contained in the MAS Technology against infringement by
Third Parties and shall be entitled to retain recovery from such enforcement.

         6.3 COOPERATION. In any suit or dispute involving an infringer, the
parties shall cooperate fully, and upon the request and at the expense of the
party bringing suit, the other party shall make available to the party bringing
suit at reasonable times and under appropriate conditions all relevant
personnel, records, papers, information, samples, specimens, and the like

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which are in it possession. In the event a party brings suit under Sections 6.1
or 6.2, the other party agrees to be joined as a party plaintiff with respect to
such suit, provided that the party bringing suit reimburses each other party for
all out-of-pocket costs incurred by such other party in its role as party
plaintiff.

7.       INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY

         In the event of any infringement or likely infringement by any of the
Licensed Technology of any Third Party's intellectual property, the parties
shall cooperate in good faith and on a mutual and reasonable basis, with each
party responsible for its respective expenses, to negotiate and settle any
dispute with any such Third Party concerning, the Licensed Technology, and
otherwise resolve any such infringement and secure MAS's and IllumeSys'
continued rights to practice the Licensed Technology.

8.       INDEPENDENT CONTRACTOR

         It is agreed that the relationship of IllumeSys to MAS in the
performance of this Agreement is as an independent licensee and that neither
IllumeSys nor MAS is an agent of the other party. Each party agrees to refrain
from representing itself as being the agent of the other party in performing or
acting pursuant to this Agreement. Neither party shall have the power or
authority to bind or otherwise commit the other party and shall not attempt to
do so.

9.       INDEMNIFICATION; DAMAGES

         9.1 INDEMNIFICATION. Each of IllumeSys and MAS agrees to indemnify and
hold harmless the other party and such other party's Affiliates and their
respective employees, agents, officers, directors and permitted assigns (such
party's "Indemnified Group") from and against any claims by a third party
resulting in the award or payment of any judgments, expenses (including
reasonable attorney's fees), damages and awards (collectively a Claim) arising
out of or resulting from (i) the, indemnifying party's negligence or misconduct.
(ii) a breach of any of the indemnifying party's representations, warranties or
obligations hereunder or (iii) the indemnifying party's research, development,
manufacture, use, promotion, marketing or sale of any Licensed Product, except
to the extent that such Claim arises out of or results from the negligence or
misconduct of the party seeking to be indemnified and held harmless or the
negligence or misconduct of a member of such party's Indemnified Group. A
condition of this obligation is that, whenever a member of the Indemnified Group
has information from which it may reasonably conclude an incident has occurred
which could give rise to a Claim, such indemnified party shall immediately give
notice to the indemnifying party of all pertinent data surrounding such incident
and, in the event a Claim is made, all members of the Indemnified Group shall
assist the indemnifying party and cooperate in the gathering of information with
respect to the time, place and circumstances and in obtaining the names and
addresses of any injured parties and available witnesses. No member of the
Indemnified Group shall voluntarily make any payment or incur any expense in
connection with any such Claim or suit without the prior written consent of the
indemnifying party. The obligations set forth in this Section 9.1 shall survive
the expiration or termination of this Agreement.

                                      11.

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         9.2 SPECIAL INDEMNIFICATION AGAINST INTELLECTUAL PROPERTY CLAIMS. MAS
shall, on the terms and conditions and limitations set forth herein, indemnify
IllumeSys against any loss, expenses, liability or other damages including
reasonable costs of investigation, interest, penalties and attorneys' and,
accountants' fees, whether or not involving any third party (collectively,
"Damages"), incurred in connection with or arising from or attributable to any
Third Party claims to the Licensed Technology.

         9.3 INSURANCE. Commencing with the Date of First Commercial Sale,
IllumeSys and/or each of its Affiliates and Sublicensees, as applicable, shall,
for so long as IllumeSys or its Affiliates or Sublicensees manufactures, sells,
tests, operates, leases or uses the Licensed Products, maintain in full force
and effect policies of (i) general liability insurance with limits of not less
than one million dollars ($1,000,000) per occurrence and three million dollars
($3,000,000) in the aggregate and (ii) product liability insurance with limits
of not less than one million dollars ($1,000,000) per occurrence and three
million dollars ($3,000,000) in the aggregate. Such coverage(s) shall name MAS
and its Affiliates as additional insureds. IllumeSys shall promptly provide
verification of such insurance coverages to MAS.

10.      TERM AND TERMINATION

         10.1 EXPIRATION; EFFECT OF EXPIRATION. This Agreement shall expire, on
a country-by-country basis, on the date of expiration of the last to expire
patent included within the Licensed Technology in that country or, if no patents
in the Licensed Technology issue in such country, seventeen (17) years from the
Effective Date. In the event this Agreement expires and has not been terminated
early pursuant to Section 10.2, the license grants set forth in Sections. 2.1
and 2.2 will survive such expiration, except that all such licenses will become
non-exclusive upon the expiration date. It is understood by the parties that the
Baylor Technology Transfer Agreement may expire on a date which is earlier than
the expiration date provided for in the first sentence of this Section 10.1 and
that the sublicense granted pursuant to Section 2.1 may therefore expire on such
earlier date.

         10.2 VOLUNTARY TERMINATION BY ILLUMESYS. IllumeSys may terminate this
Agreement for any reason upon prior written notice of one hundred eighty (180)
days to MAS.

         10.3 EARLY TERMINATION FOR BANKRUPTCY OR BREACH. This Agreement will
earlier terminate:

             (a) automatically if IllumeSys or its successors in interest shall
become bankrupt or insolvent and/or if the business of IllumeSys shall be placed
in the hand of a receiver or trustee, whether by voluntary act of IllumeSys or
otherwise; or

             (b) upon ninety (90) days written notice from one party if the
other party shall commit a material breach of any of such other party's
obligations under this Agreement; provided, however, such breaching party may
avoid such termination if, before the end of such ninety (90) day period, it
cures such material breach and provides the non-breaching party with a notice
stating that such cure has occurred and stating the manner of such cure.

                                      12.

<PAGE>

         10.4 EFFECT OF TERMINATION. Upon termination of all or part of this
Agreement for any; cause, nothing herein shall be construed to release either
party of any obligation matured prior to the effective date of such termination,
IllumeSys may, after the effective date of such termination, sell all Licensed
Products and parts thereof that it may have on hand at the date of termination.

         10.5 SURVIVAL. The following provisions will survive expiration or
termination of this Agreement: Article 4 and Sections 5.1, 5.2, 9.1, 9.2 and
10.1.

11.      ASSIGNMENT

         11.1 ASSIGNMENT BY MAS. MAS may not assign its rights or obligations
under this Agreement without the prior written consent of IllumeSys.

         11.2 ASSIGNMENT BY ILLUMESYS. IllumeSys may assign any of its rights
and obligations under this Agreement. Within thirty (30) days of such
assignment, IllumeSys shall notify MAS that such assignment has occurred.

12.      MISCELLANEOUS

         12.1 FURTHER ASSURANCES. Without further consideration, MAS hereby
agrees to execute and deliver, and to cause its respective officers, trustees,
directors, employees, and agents to execute and deliver, such other instruments,
and to take such other action as IllumeSys hereunder may reasonably request to
more effectively license and sublicense to IllumeSys the rights granted
hereunder, and to assist IllumeSys in the recordation of same as necessary, all
in such form and substance as IllumeSys may reasonably request and at its
expense

         12.2 ENTIRE AGREEMENT. This Agreement constitutes the entire and only
agreement between the parties with respect to the subject matter of this
Agreement, including the Licensed Technology, and all other prior negotiations,
representations, agreements and understandings are superseded hereby. No
agreements altering or supplementing the terms hereof may be made except by
means of a written document signed by the duly authorized representatives of the
parties.

         12.3 NOTICE. Any notice required by this Agreement shall be in writing
and shall be prepaid, first class, mail, return receipt requested, the case
given by first certified addressed in of IllumeSys to:

                           IllumeSys Pacific, Inc.
                           c/o Ciphergen Biosystems, Inc.
                           490 San Antonio Road
                           Palo Alto, CA 94306
                           Attention: President

                                      13.

<PAGE>

with a copy to:            Cooley Godward LLP
                           Five Palo Alto Square
                           3000 El Camino Real
                           Palo Alto, CA 94306
                           Attention: Robert J.  Brigham, Esq.

or in the case of MAS:

                           Molecular Analytical Systems, Inc.
                           c/o Wagner, Kirkman & Blaine
                           1792 Tribute Road, Suite 450
                           Sacramento, CA 95815
                           Attention: Belan Kirk Wagner, Esq.

or such other address as may be given from time to time under the terms of this
notice provision.

         12.4 COMPLIANCE WITH LAWS. Each party shall comply with all applicable
federal, state and local laws and regulations in connection with its activities
pursuant to this Agreement.

         12.5 GOVERNING LAW. This Agreement shall be construed and interpreted
in accordance with the laws of the State of California other than those
provisions governing conflicts of law. Any claim or controversy arising out of
or related to this Agreement or any breach hereof shall be submitted to a court
of applicable jurisdiction in the state of California, each party hereby
consents to the jurisdiction and venue of such court.

         12.6 NO WAIVER. Failure of a party to enforce a right under this
Agreement shall not act as a waiver of that right or the ability to later assert
that right relative to the particular situation involved.

         12.7 HEADINGS. Headings included herein are for convenience only and
shall not be used to construe this Agreement.

         12.8 SEVERABILITY. If any provision of this Agreement shall be found by
a court to be void, invalid or unenforceable, the same shall be reformed to
comply with applicable law or stricken if not so conformable, so as not to
affect the validity or enforceability of this Agreement.

         12.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

         12.10 SUCCESSORS. This Agreement shall inure to the benefit of, and be
binding upon, any successors and permitted assigns of each party and is not
intended to confer upon any person, other than the parties and their permitted
successors and assigns, any rights or remedies hereunder.

                                      14.

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
multiple originals by their duly authorized officers and representatives.

ILLUMSYS PACIFIC, INC.,                    MOLECULAR ANALYTICAL SYSTEMS, INC.

By:  /s/ T. William Hutchens          By:  /s/ T. William Hutchens
     ------------------------------        -----------------------------------

Printed Name: T. William Hutchens     Printed Name: T. William Hutchens
              ---------------------                 --------------------------

TITLE:  President                     Title:  President
        ---------------------------           --------------------------------

Schedule 3.1 - Schedule of Exceptions
Exhibit A - Baylor Technology Transfer Agreement

                                      15.

<PAGE>

SCHEDULE 3.1

                EXCLUSIONS TO REPRESENTATION AND WARRANTY BY MAS

1.       Matthew A. McLean has been criminally prosecuted for theft of MAS trade
         secrets.

2.       All or part of the Baylor and/or MAS Technology has been disclosed to
         Randall W. Nelson (Bioactive Proves). This information may have been
         used to prepare and file patent applications which may or may not
         contain Baylor and/or MAS Technology. See, e.g., PCT/US96/08994
         entitled "A Sample Presentation Apparatus for Mass Spectrometry" and
         PCT/US96/07522, entitled "Mass Spectrometry Immunoassy"

3.       All or part of the Baylor and/or MAS Technology has been disclosed to
         Marvin Vestal (Perceptive Biosystems). This information may have been
         used to prepare and file patent applications which may or may not
         contain Baylor and/or MAS Technology.

4.       All or part of the Baylor and/or MAS Technology was disclosed to Hubert
         Koster (Sequenome). This information may have been used to prepare and
         file patent applications which may or may not include any or all of the
         Baylor and/or MAS Technology. See e.g., PCT/US94/02938, entitled "DNA
         Sequencing by Mass Spectrometry Via Exonuclease Degradation";
         PCT/US96/05136, entitled "Solid Phase Sequencing of Biopolymers" and
         U.S. Patent No. 5,547,835, entitled "DNA Sequencing by Mass
         Spectrometry."

5.       All of part of the Baylor and/or MAS Technology has been disclosed to
         Klaus Biemann (MIT). This information may have been used to prepare and
         file patent applications which may or may not include any or all of the
         Baylor and/or MAS Technology. See, e.g. PCT/US96/05796, entitled
         "Matrix-Bearing Targets for MALDI Mass Spectrometry and Methods of
         Production Thereof."

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