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                                                                  10.5 (REFILED)

* PLEASE NOTE THAT CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED ON A
REQUEST FOR CONFIDENTIAL TREATMENT FILED WITH THE COMMISSION ALONG WITH THE
INFORMATION REQUESTED TO BE OMITTED.

                           OPTION & LICENSE AGREEMENT

1.  INTRODUCTION

    THIS AGREEMENT is between the UNIVERSITY OF SOUTHERN CALIFORNIA,
(hereinafter USC) a California nonprofit corporation with its principal place of
business at University Park, Los Angeles, California 90089, and BioKeys, Inc., a
Delaware corporation, with its principal place of business at 11466 Winding
Ridge Drive, San Diego, California 92141 (hereinafter Licensee).

    WHEREAS USC warrants that it is the owner and that it has the right to
exclusively license those rights it has in the inventions which are the subject
matter of the patent applications listed in Appendix A and of which the inventor
is Charles McKenna of USC (hereinafter Inventor);

    WHEREAS Licensee desires to obtain an exclusive license in the defined FIELD
OF USE to manufacture and market products utilizing the inventions as
hereinafter defined;

    WHEREAS, USC is willing to grant a worldwide, exclusive license in the
defined FIELD OF USE to Licensee subject to the terms, conditions, limitations,
and restrictions set forth below;

    NOW, THEREFORE, in consideration of the covenants herein contained, the
parties agree as follows:

2.  DEFINITIONS

    For all purposes of this Agreement the following terms shall have the
meanings specified below:

    a.  The term "PATENT" or "PATENTS" shall mean any and all patent
        applications listed in Appendix A (Appendix A may be added to from time
        to time by USC and USC shall notify Licensee of any such additions), any
        and all patents issued thereon or any continuation, division, extensions
        or reissue thereof, and any and all foreign patents issuing from any
        application filed which corresponds to claims contained in any of the
        foregoing patents or applications.

    b.  "PRODUCT" or "PRODUCTS" shall mean any article, composition, apparatus,
        substance, chemical, material, method or service which is made, used,
        distributed or sold by Licensee which:

        i.  is covered in whole or in part by one or more pending or unexpired
            claims contained in a PATENT in the country in which the PRODUCT(S)
            is made, used, distributed or sold;

        ii. is manufactured using a method or process which is covered in whole
            or in part by one or


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            more pending or unexpired claims contained in a PATENT in the
            country in which (a) the PRODUCT(S) is made, used, distributed or
            sold, or (b) the method or process is used or sold; or

       iii. the use of which is covered in whole or in part by one or more
            pending or unexpired claims contained in a PATENT in the country in
            which (a) the PRODUCT(S) is made, used, distributed or sold, or (b)
            the method or process is used or sold;

        iv. incorporates technology transferred to Licensee pursuant to the
            confidential disclosure agreement dated May 22, 2000 between USC and
            Licensee.

    A PRODUCT is covered by a pending or unexpired claim of a PATENT if in the
course of manufacture, use, distribution or sale, it would, in the absence of
this Agreement, infringe one or more claims of the PATENT which has not been
held invalid by a court from which no appeal can be taken.

    c.  "FIELD OF USE" shall mean use of thiophosphonoformic acid (TPFA) and
        derivatives thereof for treatment of infection by Human Immunodeficiency
        Virus (HIV), Human Papillomavirus (HPV) and other viral infections.

    d.  "NET SALES PRICE" shall mean the gross billing price of any PRODUCT
        received by Licensee or its SUBLICENSEE for the sale or distribution of
        any PRODUCT, less the following amounts actually paid by Licensee or
        SUBLICENSEE:

        i.  discounts allowed;

        ii. returns;

       iii. transportation charges or allowances;

        iv. packing and transportation packing material costs (not including
            product containers or product packing containers as manufactured by
            the Company);

        v.  customs and duties charges; and

        vi. sales, transfer and other excise taxes or other governmental charges
            levied on or measured by the sales but no franchise or income tax of
            any kind whatsoever.

    Every commercial use or disposition of any PRODUCT, in addition to a bona
fide sale to a customer, shall be considered a sale of such PRODUCT. The NET
SALES PRICE, in the case of a use or disposition other than a bona fide sale,
shall be equivalent to the then payable NET SALES PRICE of such PRODUCT in an
arm's length transaction.

    e.  "SUBLICENSEE" shall mean any third party licensed by Licensee to make,
        or sell any PRODUCT in accordance with the terms of this Agreement.


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    f.  "EFFECTIVE DATE" of this Agreement shall be the date when the last party
        has signed this Agreement.

3.  OPTION PHASE

    a.  USC hereby grants Licensee the exclusive right to conduct various
        technical, pre-clinical, marketing, patent, and other studies on
        PRODUCTS in the FIELD OF USE during a three (3) month period commencing
        on the EFFECTIVE DATE of this Agreement. The option period may be
        extended by mutual written agreement of the parties.

    b.  The consideration for the grant of this option phase shall be One
        Hundred Fifty Thousand Dollars ($150,000). Such payment shall be due on
        the earlier to occur of: (i) within three (3) months of the EFFECTIVE
        DATE of this Agreement or (ii) thirty (30) days from the date Licensee
        raises its next round of private funding.

4.  LICENSE PHASE

    a.  In consideration of the license fee and royalties, and subject to the
        terms and conditions, as set forth in this Agreement and effective upon
        written notification to USC during the option phase that Licensee
        desires to license the PATENT(S), USC hereby grants to Licensee:

        i.  the exclusive worldwide license to use the PATENT to manufacture and
            sell the PRODUCT(S) for application in the FIELD OF USE; and

        ii. the right to grant sublicenses to any PATENT licensed exclusively
            hereunder, provided that any SUBLICENSEE agrees to be bound by the
            terms and conditions of this Agreement applicable to SUBLICENSEES.

    b.  In addition to the consideration referred to in Paragraph 3.b., Licensee
        and USC shall during the option phase negotiate in good faith the terms
        of a mutually agreeable research agreement for the purpose of testing
        and developing the PRODUCT(S) for commercial purposes throughout the
        world.

    c.  If USC is not notified of Licensee's desire to enter the license phase
        by the end of the option phase or any extensions thereto and Licensee
        and USC are not able to agree to the terms of a research agreement
        pursuant to Paragraph 4.b., this Agreement and the license granted
        herein shall immediately terminate. Payments referred to in Section 3
        shall not be refunded upon such termination.

    d.  All licenses pursuant to Paragraphs 4.a. and 4.c. to inventions
        conceived or first actually reduced to practice during the course of
        research funded by a U.S. federal agency are subject to the rights,
        conditions and limitations imposed by U.S. law, including but not
        limited to the following:

        i.  The words "exclusive license" as used herein shall mean exclusive
            except for the


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            royalty free non-exclusive license granted to the U.S. government by
            USC pursuant to 35 USC Section 202(c)(4) for any PATENT claiming an
            invention subject to 35 USC Section 201 and except for the rights of
            USC and Inventor as set forth in Paragraph 6.

        ii. Licensee agrees that PRODUCTS used or sold in the United States
            shall be manufactured substantially in the United States, unless a
            written waiver is obtained in advance from the relevant U.S. federal
            agency.

5.  ROYALTY

    a.  On all sales of PRODUCTS anywhere in the world by Licensee, Licensee
        shall pay USC a royalty of (SPACE) the NET SALES PRICE.

    b.  If any PRODUCT is manufactured and sold under sublicense from the
        Licensee, the Licensee shall pay USC a royalty equal to (SPACE) of all
        of the Licensee's revenue received from the sublicense, including but
        not limited to earned royalty, prepaid royalty and license fees.

    c.  The Licensee will pay an annual minimum royalty. The minimum royalty on
        each PRODUCT will be Twenty-Five Thousand Dollars ($25,000.00)
        commencing on the first anniversary date of this Agreement, Seventy-Five
        Thousand Dollars ($75,000) on the second anniversary date and on the
        third anniversary date and thereafter One Hundred Twenty-Five Thousand
        Dollars ($125,000.00) for each succeeding year up to the date of
        expiration of the last PATENT. Minimum royalties are to be paid
        biannually to USC, one half due and payable on January 1 of each year
        and the second half due and payable on July 1 of each year. Should
        Licensee fail to make earned royalty payments sufficient to meet said
        minimum royalty requirements, it may pay the difference between the
        earned royalty and the minimum royalty requirement to keep this
        Agreement in force.

    d.  Licensee shall pay such royalties to USC on a calendar quarter basis.
        With each quarterly payment, Licensee shall deliver to USC a full and
        accurate accounting to include at least the following information:

        i.  Quantity of each PRODUCT sold (by country) by Licensee and its
            SUBLICENSEES;

        ii. Total receipts for each PRODUCT (by country);

       iii. Quantities of each PRODUCT used by Licensee and its SUBLICENSEES;

        iv. Names and addresses of SUBLICENSEES of Licensee;

        v.  Total number of PRODUCTS manufactured (by country); and

        vi. Total royalties payable to USC.

    e.  In each year the amount of royalty due shall be calculated quarterly as
        of March 31, June 30,


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        September 30 and December 31 and shall be paid quarterly within the next
        thirty (30) days following such date. Every such payment shall be
        supported by the accounting prescribed in Paragraph 5.d. and shall be
        made in United States currency. Whenever for the purpose of calculating
        royalties conversion from foreign currency shall be required, such
        conversion shall be at the rate of exchange thereafter published in the
        Wall Street Journal for the business day closest to the applicable end
        of calendar quarter.

    f.  The royalty payments due under this Agreement shall, if overdue, bear
        interest until payment at a per annum rate equal to (SPACE) above the
        prime rate in effect at Bank of America on the due date, not to exceed
        the maximum permitted by law. The payments of such interest shall not
        preclude USC from exercising any other rights it may have as a
        consequence of the lateness of any royalty payment.

6.  RIGHTS RETAINED BY UNIVERSITY

    Notwithstanding the exclusive license granted in Paragraph 4.a., USC and
Inventor will have the absolute, nontransferable right to use the technology
covered by the PATENTS and all improvements thereof, for conducting research and
educational purposes.

7.  PATENT PROSECUTION

    a.  USC shall file, prosecute and maintain, during the course of this
        Agreement, the patent applications and patents listed in Appendix A.
        Should Licensee require the filing of foreign patents, USC shall take
        responsibility for filing, prosecuting and maintaining said foreign
        patents.

    b.  Licensee shall reimburse all reasonable legal expenses incurred and paid
        by USC in filing, prosecuting and maintaining the U.S. and foreign
        applications listed (or to be listed pursuant to Paragraph 2.a.) in
        Appendix A, whether such expenses were incurred before or after the date
        of this Agreement. These legal expenses shall include the attorneys' and
        agents' fees, foreign filing fees and out-of-pocket costs associated
        with responding to office actions and any other fees and costs directly
        related to obtaining and/or maintaining patent protection in the
        countries listed in Appendix A. Licensee shall advance payments of
        maintenance fees and annuities as part of such legal expenses to be
        reimbursed by Licensee within thirty (30) days of request by USC, unless
        Licensee is advised otherwise by timely notice from USC.

    c.  Licensee agrees to pay to USC an initial deposit of Twenty-Five Thousand
        Dollars ($25,000.00) within fifteen (15) days of the EFFECTIVE DATE of
        this Agreement. Such deposit will be held in a trust account. Licensee
        authorizes USC to use that account to pay all legal expenses incurred
        pursuant to Paragraph 7.b. When the trust account drops below
        Twenty-Five Thousand Dollars ($25,000.00), Licensee agrees to pay within
        thirty (30) days of USC's written demand, the amount to maintain the
        balance of the trust account at a minimum of Twenty-Five Thousand
        Dollars ($25,000.00). Upon termination of this Agreement, any unused
        deposit shall be refunded.

    d.  If the Licensee elects (i) not to pursue a PATENT or (ii) to terminate
        the prosecution or


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        maintenance of a PATENT in any country, the Licensee surrenders its
        right to make, use or sell PRODUCTS covered by the non-elected PATENT in
        that particular country and shall grant to USC the exclusive rights
        previously granted to Licensee, without limitation, for that country.
        Licensee agrees to execute all necessary documents to carry out this
        grant of rights to USC. Payments referred to in Paragraphs 7.a. and 7.b.
        shall not be refunded upon such non-election or termination.

    e.  If the Licensee decides to terminate this agreement pursuant to
        Paragraph 16, Licensee shall reimburse all reasonable legal expenses
        incurred up to six (6) months from the date written notification of
        termination is sent to Licensee; provided, however, such legal expenses
        shall not exceed (SPACE).

8.  PATENT INFRINGEMENT

    a.  Defensive Controversy.

    Licensee shall promptly notify USC of all claims, allegations and
notifications of infringement of third party patents. Except for the placing in
escrow of a portion of royalties as referred to hereinafter, USC shall have no
obligation or liability in the event that legal action is brought against
Licensee for patent infringement. Such obligation and liability shall be borne
by Licensee. Licensee may choose legal counsel and defend the patent
infringement lawsuit. During such lawsuit, Licensee may place all of the
royalties derived from sales of the PRODUCT in the country where such lawsuit is
pending in an interest-bearing escrow account. The escrow account shall be
established in a bank mutually acceptable to both parties under escrow
instructions insulating the funds from claims of any creditor. Upon termination
of the action, one-half (1/2) of any judgment amount, reasonable attorneys' fees
and costs, may be paid from this escrow account. Should the settlement of any
such patent infringement lawsuit involve payment of royalties by Licensee to a
third party for the continued right to manufacture, use, and sell the PRODUCT,
then funds in the escrow account and royalties payable to USC may be applied
against up to one-half (1/2) of such royalties to a third party. Any funds
thereafter remaining in the escrow shall be paid to USC. The above shall
constitute USC's sole liability and responsibility in the event of such action.
Royalties paid to third parties as provided for above shall be included when
determining whether the minimum royalty provided for in this Agreement has been
paid in a given year. During the patent infringement litigation both parties
shall keep each other informed in writing of significant developments in the
lawsuit.

    b.  Offensive Controversy.

    Licensee shall promptly notify USC of any potential infringement of a
PATENT. In the event that a third party infringes on a PATENT, Licensee shall
have the right but not an obligation to bring legal action to enforce any such
patent. If Licensee exercises such right, Licensee shall select legal counsel
and pay all legal fees and costs of prosecution of such action. In the event
that Licensee shall choose not to take such action, USC shall have the right, at
its option and at its own expense, to prosecute any action to enjoin such
infringement or to prosecute any claim for damages. The party prosecuting any
such action shall be entitled to retain any funds received as a result of
settlement


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or judgment of such action. The parties may also agree to jointly pursue
infringers. After deduction and payment to the parties of their respective costs
and fees (including without limitation reasonable attorneys' fees) incurred in
prosecuting any such actions, the net funds obtained as a result of settlement
or of judgment of any such jointly prosecuted action shall be divided in the
following manner: 25% of all net funds shall be divided equally by the parties
and 75% of all the net funds shall be divided between the parties in the
proportion to the amount of legal fees and costs incurred by the parties in the
prosecution of such actions. If funds are insufficient to pay all costs and fees
then all of the funds shall be paid to the parties in said proportion.

    c.  During any litigation hereunder both parties shall keep each other
        timely informed of any signifi cant development in the litigation and
        provide all reasonably requested technical assistance. During any said
        controversy, full royalty payment shall continue, except as otherwise
        provided herein.

9.  RECORDS

    Licensee and SUBLICENSEES shall keep complete, true and accurate books of
account and records for the purpose of showing the derivation of all amounts
payable to USC under this Option and License Agreement. Said books and records
shall be kept at Licensee's principal place of business for at least four (4)
years following the end of the calendar year to which they pertain and shall be
open at all reasonable times for inspection by a representative of USC for the
purpose of verifying Licensee's royalties statement or Licensee's compliance in
other respects with this Option and License Agreement. All information obtained
as a result of such audit shall be maintained in confidence, except that the
representative may disclose to USC the aggregate amount of royalties due to USC
during each year, as determined in such audit. Should an audit by USC show an
underpayment of royalties by more than 10%, Licensee shall immediately pay such
underpayment and all interest, as well as for USC's reasonable audit expenses.

10. SERVICES OF INVENTOR

    USC shall make reasonable efforts to make Inventor available during regular
business hours to answer questions concerning technical aspects of the
technology necessary to understand the PATENT(S). Should Licensee desire to use
the services of Inventor for further technical information and/or market studies
of the technology, a separate research and development and/or consulting
agreement should be negotiated with Inventor and the USC Office of Contracts and
Grants.

11. SUBLICENSE PERMISSION

    Licensee may sublicense the PATENT(S) only with prior written permission
from USC, which permission will not be unreasonably withheld. Notwithstanding
the foregoing, no permission will be granted for a sublicense unless the
SUBLICENSEE agrees in writing to be bound by the terms of this Agreement.

12. PATENT MARKING


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    Licensee shall use reasonable efforts to place all appropriate patent and
other intellectual property notices, markings and indicia on product and
marketing literature for the PRODUCTS as needed to protect the patent and other
intellectual property rights of USC and right for damages for infringement
thereof.

13. PUBLICATIONS

    Nothing in this Agreement shall limit or prevent USC or Inventor from
publishing any information about the PATENT. Thirty (30) days prior to
submission for publication, USC and Inventor will use their reasonable efforts
to submit the proposed publication, for review only, to Licensee.

14. PUBLICITY

    Neither party shall use the name, trade name, trademark or other designation
of the other party in connection with any products, promotion or advertising
without the prior written permission of the other party.

15. ASSIGNMENTS/TRANSFERS

    Licensee may not assign or transfer this Agreement in whole or part to any
third party without the prior written permission of USC, which permission shall
be granted in the sole discretion of USC. The Licensee may only assign the
entire Agreement to successors of the entire business of the PRODUCTS if the
successor agrees to be bound by this Agreement and prior written notice is
provided to USC.

16. TERMINATION

    a.  Upon the breach of or default under this Option and License Agreement by
        either party, the non-breaching party may terminate this Option and
        License Agreement by forty-five (45) days written notice to the
        breaching party. Said notice shall be effective at the end of such
        period unless during said period breaching party shall remedy such
        defect or default. Licensee may also terminate this Agreement at any
        time, for any reason, by providing USC a thirty (30) day written notice
        and paying to USC the legal expenses incurred up to six (6) months from
        the date written termination is sent to Licensee. No option fees,
        license fees, or royalties shall be returnable. This Agreement may also
        be terminated immediately by USC upon notice to Licensee upon the
        occurrence of any of the following: (i) Licensee attempts to use,
        sublicense, transfer or assign its rights or obligations under this
        Agreement in any manner contrary to the terms of this Agreement or in
        derogation of USC's proprietary rights; (ii) Licensee fails to obtain
        and maintain the insurance coverages required by Paragraph 24 hereof; or
        (iii) Licensee is determined to be insolvent or makes an assignment for
        the benefit of creditors, or has a bankruptcy petition filed by or
        against it, or a receiver or trustee in bankruptcy or similar officer is
        appointed to take charge of all or part of Licensee's property. Upon
        termination of the Agreement all rights granted to or provided by each
        party to the other shall automatically and irrevocably revert to the
        granting party.


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    b.  Surviving any termination are:

        i.  Licensee's obligation to pay the amount for consideration for the
            grant of the option phase and royalties accrued or accruable.

        ii. Licensee's obligation of Paragraph 9 to keep and allow a final
            audit.

       iii. Any cause of action or claim of Licensee or USC, accrue or to
            accrue, because of any breach or default by the other party.

        iv. The provisions of Paragraphs 22, 23 and 24.

    c.  Upon termination of this Agreement, Licensee agrees to immediately
        discontinue the manufacture and sale of the PRODUCTS and the use of the
        PATENTS. Within twenty (20) days after such termination, Licensee shall
        provide USC with a written inventory of all PRODUCTS currently in its
        stock as of the date of termination (the "INVENTORY"). USC shall have
        the option to grant to Licensee the privilege of disposing of such
        INVENTORY at its normal prices within three (3) months after said
        termination. Licensee shall dispose of this INVENTORY only to customers
        who had previously purchased PRODUCTS from Licensee during the term of
        this Agreement, and in no event shall Licensee sell such INVENTORY to
        wholesalers, diverters, jobbers or any other entity which does not sell
        at retail exclusively or to anyone else who intends to sell such
        INVENTORY at close-out. The disposition of all such INVENTORY, however,
        shall be subject to all of the terms and conditions of this Agreement.
        After the three (3) month sell-off period, Licensee shall destroy or
        return to USC all remaining unsold PRODUCTS, all equipment used in the
        manufacture of the PRODUCTS and all packaging and marketing materials,
        and shall certify their destruction or return to USC specifying the
        number of each destroyed or returned. All royalty obligations, including
        any unpaid portions of the minimum royalty, shall be accelerated and
        shall become immediately due and payable. In addition, Licensee shall
        immediately deliver to USC (i) all materials relating to the PATENTS,
        together with all copies thereof, and (ii) all market studies or other
        tests or studies conducted by Licensee with respect to the PRODUCTS, all
        at no cost whatsoever to USC.

    d.  LICENSEE acknowledges and agrees that any violation of this Agreement by
        Licensee would result in irreparable harm to USC. Accordingly, Licensee
        consents and agrees that, if Licensee violates any of the provisions of
        this Agreement, USC shall be entitled, in addition to other remedies
        available to it, to an injunction to be issued by any court of competent
        jurisdiction restraining Licensee from committing or continuing any
        violation of this Agreement, without the need for posting any bond or
        any other undertaking.

17. NOTICES, REPORTS AND PAYMENTS

    Any notice, report or payment permitted or required under this Agreement
shall be in writing, and shall be sent or delivered to the receiving party at
the address set forth below or at such address as either party may from time to
time designate in writing.


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USC:          Office of Technology Licensing
              University of Southern California
              3716 South Hope Street, Suite 313
              Los Angeles, California 90007-4344 (U.S.A.)

Attn:         Director

LICENSEE:     BioKeys, Inc.
              11466 Winding Ridge Drive
              San Diego, California 92141

Attn:         Nicholas Jon Virca
              President & Chief Executive Officer

18. PARAGRAPH HEADINGS

    Paragraph headings are for the convenience of this Agreement only and shall
not add to or detract from any of the terms or provisions.

19. SEVERABILITY

    If any provision of this Agreement is held invalid under any law applicable
to the parties, SUBLICENSEES and/or assignees, that provision shall be
considered severable and its invalidity shall not affect the remainder of this
Agreement, which shall continue in full force and effect.

20. CONTROLLING LAW, JURISDICTION AND VENUE

    This Agreement shall be deemed to be executed and to be performed in the
State of California, and shall be construed in accordance with the laws of the
State of California as to all matters, including but not limited to matters of
validity, construction, effect and performance. In the event of any controversy,
claim or dispute between the parties hereto arising out of or relating to this
agreement, such controversy, claim or dispute may be tried exclusively in the
courts of the State of California or in the United States Federal District Court
for the Central District of California, as either party may elect. Each of the
parties hereby waives any defense of lack of in personam jurisdiction, improper
venue and forum non conveniens, and agrees that service of process of such court
may be made upon each of them by personal delivery or by mailing certified or
registered mail, return receipt requested, to the other party at the address
provided for in Paragraph 17 hereof. Both parties hereby submit to the
jurisdiction of the court so selected, to the exclusion of any other courts
which may have had jurisdiction apart from this Paragraph 20.


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21. TERM OF THE AGREEMENT

    Except as otherwise terminated pursuant to the other provisions of this
OPTION AND LICENSE AGREEMENT, this Agreement shall terminate upon expiration of
the last to expire of the patents or fifteen (15) years from the Effective Date
of this Agreement, whichever is longer.

22. NEGATION OF WARRANTIES

    a.  Nothing in this Agreement shall be construed as:

        i.  a warranty or representation by USC as to the validity or scope of
            the PATENT and/or PATENT Application; or

        ii. a warranty or representation that any PRODUCTS made, used, sold or
            otherwise disposed of under any license granted in this Agreement is
            or will be free from infringement of patents of third parties; or

        iii. an obligation to bring or prosecute actions or suits against third
            parties for infringement; or

        iv. conferring the rights to use in advertising, publicity or otherwise
            any trademark, trade name, or names or any contraction,
            abbreviation, simulation or adoption thereof, of USC or Licensee; or

        v.  any obligation to furnish any know-how not provided.

    b.  USC MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
        FOR A PARTICULAR PURPOSE, nor does USC represent that the rights granted
        hereunder will result in PRODUCTS that are commercially successful.

    c.  Licensee further agrees that it will not rely upon technical information
        provided by USC and Inventor in developing and manufacturing any
        PRODUCTS hereunder, but will independently test, analyze and evaluate
        all PRODUCTS prior to manufacture and distribution of such PRODUCTS.

    d.  UNDER NO CIRCUMSTANCES SHALL USC BE LIABLE TO LICENSEE OR ANY OF ITS
        SUBLICENSEES FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR
        PUNITIVE DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE AGREEMENT.
        NOTWITHSTANDING THE FOREGOING, UNDER NO CIRCUMSTANCE SHALL USC HAVE ANY
        CUMULATIVE LIABILITY FOR ANY CLAIM ARISING FROM THIS AGREEMENT IN EXCESS
        OF THE TOTAL AMOUNTS PAID BY LICENSEE TO USE UNDER THIS AGREEMENT.

23. INDEMNITY

    a.  Licensee shall defend, indemnify and hold harmless USC and its trustees,
        officers, medical and


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        professional staff, employees and agents and their respective
        successors, heirs and assigns (the "Indemnitees"), against all
        liabilities, demands, losses, costs, and expenses (including without
        limitation attorneys' fees) incurred by or imposed upon the Indemnitees
        or any one of them in connection with any claims, suits, actions,
        demands or judgments arising out of any theory of liability (including
        but not limited to, actions in the form of tort, warrantee, or strict
        liability) for death, personal injury, illness, or property damage
        arising from Licensee's use, sale, or other disposition of the
        PRODUCT(S).

    b.  Licensee agrees, at its own expense, to provide attorneys reasonably
        acceptable to USC to defend against any actions brought or filed against
        any party indemnified hereunder with respect to the subject of indemnity
        contained herein, whether or not such actions are rightfully brought. To
        the extent that any proposed settlement directly affects USC, the
        Licensee shall obtain the approval of USC before finally agreeing to
        such settlement proposal, which consent shall not be unreasonably
        withheld.

24. INSURANCE

    a.  Not less than thirty (30) days prior to the exercise of the license
        phase of this Agreement, Licensee shall at its sole cost and expense,
        procure and maintain in effect a comprehensive general liability policy
        of insurance in single limit coverage of not less than One Million
        Dollars ($1,000,000) per incident and One Million Dollars ($1,000,000)
        annual aggregate for death, bodily injury or illness and Two Hundred
        Thousand Dollars ($200,000) annual aggregate in property damage. Such
        comprehensive general liability insurance shall provide (i) product
        liability coverage and (ii) broad form contractual liability coverage
        for Licensee's indemnification. If Licensee elects to self-insure all or
        part of the limits described above (including deductibles or retention
        which are in excess of annual aggregate) such self-insurance program
        must be acceptable to USC. Each such policy of insurance shall name USC
        as an additional insured and shall provide for not less than thirty (30)
        days prior written notice before any cancellation or material change in
        coverage shall be effective. A Certificate evidencing the comprehensive
        general liability policy herein defined shall be delivered to USC within
        ten (10) days of the EFFECTIVE DATE of this agreement. Licensee shall
        maintain such comprehensive general liability insurance until such time
        as the policy in Paragraph 24.b. or Paragraph 24.c is procured, or until
        fifteen (15) years after the term of this Agreement.

    b.  During such time and in each country where PRODUCT, or any modification
        thereof, is utilized in human clinical trials by Licensee or any
        SUBLICENSEE, Licensee shall at its sole cost and expense, procure and
        maintain in effect a comprehensive general liability policy of insurance
        in single limit coverage of not less than Five Million Dollars
        ($5,000,000) per incident and Five Million Dollars ($5,000,000) annual
        aggregate for death, bodily injury, illness or property damage. Such
        comprehensive general liability insurance shall provide (i) product
        liability coverage and (ii) broad form contractual liability coverage
        for Licensee's indemnification. If Licensee elects to self-insure all or
        part of the limits described above (including deductibles or retention
        which are in excess of $125,000 annual aggregate) such self-insurance
        program must be acceptable to USC. Each such policy of insurance shall
        name USC as an additional insured and shall provide for not less than
        thirty (30) days prior written notice before any cancellation or
        material change in coverage shall be effective. A Certificate evidencing
        the comprehensive general liability policy herein defined shall be
        delivered to USC prior to any manufacture, sale, distribution or
        administration to humans. Licensee shall maintain such comprehensive


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<Page>

        general liability insurance until such time as the policy in Paragraph
        24.c is procured, or until fifteen (15) years after the term of this
        Agreement.

    c.  During such time and in each country where PRODUCT, or any modification
        thereof, is administered to humans, manufactured or distributed for any
        purpose other than for human clinical trials as specified in Paragraph
        23.b (including for the purpose of obtaining regulatory approvals) by
        Licensee or any SUBLICENSEE, Licensee shall at its sole cost and
        expense, procure and maintain in effect a comprehensive general
        liability policy of insurance in single limit coverage of not less than
        Ten Million Dollars ($10,000,000) per incident and Ten Million Dollars
        ($10,000,000) annual aggregate for death, bodily injury, illness or
        property damage. Such comprehensive general liability insurance shall
        provide (i) product liability coverage and (ii) broad form contractual
        liability coverage for Licensee's indemnification. If Licensee elects to
        self-insure all or part of the limits described above (including
        deductibles or retention which are in excess of $250,000 annual
        aggregate) such self-insurance program must be acceptable to USC. Each
        such policy of insurance shall name USC as an additional insured and
        shall provide for not less than thirty (30) days prior written notice
        before any cancellation or material change in coverage shall be
        effective. A Certificate evidencing the comprehensive general liability
        policy herein defined shall be delivered to USC prior to any
        manufacture, sale, distribution or administration to humans. Licensee
        shall maintain such comprehensive general liability insurance during the
        period that the PRODUCT or any modification thereof is being
        manufactured, sold, distributed or administered to humans by the
        Licensee or its SUBLICENSEES and a reasonable period thereafter which in
        no event shall be less than fifteen (15) years.

    d.  In the event that Licensee does not maintain such insurance, but is
        self-insured, or carries a substantial self-retention, USC may grant
        permission for such self-insurance only if, in the sole discretion of
        USC, the net worth, assets and earnings of the Licensee are deemed
        sufficient to protect USC's economic interests in the event of claims,
        liability, demands, damages, expenses and losses from death, personal
        injury, illness, or property damage.

    e.  The minimum amounts of insurance coverage required under this Paragraph
        (subparts 24.a., 24.b., and 24.c.) shall not be construed to create a
        limit of Licensee's liability with respect to its indemnification in
        Paragraph 23 or any other provision of this Agreement.

    f.  By SUBLICENSEES

    As a condition precedent to a grant of permission by USC for Licensee to
sublicense the PATENT rights herein, the prospective SUBLICENSEE shall agree to
indemnify Licensee and USC to the same extent and degree as Licensee has agreed
to indemnify USC herein. Such SUBLICENSEE shall also provide insurance identical
in coverage and amount to that required of Licensee in subparagraph b, above,
naming both Licensee and USC as additional insured. A Certificate evidencing the
comprehensive general liability policy shall be delivered to USC prior to USC's
giving permission for such sublicensing agreement and a Certificate evidencing
the product liability coverage shall be delivered prior to first manufacture of
any PRODUCTS by the SUBLICENSEE. In the event a prospective SUBLICENSEE does not
maintain such insurance, but is self-insured, or carries a substantial
self-retention, USC may grant permission for such sublicense only if, in the
sole discretion of USC, the net worth, assets and earnings of such prospective
SUBLICENSEE are deemed sufficient to


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<Page>

protect USC's economic interests in the event of claims, liability, demands,
damages, expenses and losses from death, personal injury, illness, or property
damage.

25. ATTORNEYS' FEES

    In any action on or concerning this Agreement, the prevailing party shall be
awarded its reasonable attorneys' fees, costs and necessary disbursements, to be
paid by the nonprevailing party.

26. PRODUCT DEVELOPMENT

    If Licensee exercises its option, Licensee shall use diligent efforts to
test and develop the PRODUCT for commercial purposes throughout the world. On or
before January 1 of each year during the term of this Agreement, commencing on
the EFFECTIVE DATE of this Agreement, Licensee shall submit to USC a report
detailing its research, regulatory approval, marketing and product development
objectives the coming year as well as the research, regulatory approval,
marketing and development activities which Licensee undertook during the
preceding year. The reports shall identify specific future milestones
(regulatory approval and product development) and information demonstrating that
the Licensee is providing sufficient financial and manpower resources to
evidence its use of reasonable efforts. If USC desires to know the status of the
development of PRODUCTS before January 1, USC shall make a request in writing
for the status and Licensee shall provide, within fifteen (15) days, a written
summary of the status of such development of PRODUCT(S). Within six (6) months
after the signing of this Agreement and each two (2) years thereafter, a
representative from the USC Technology Licensing Office, at Licensee's expense
(including transportation, and, if appropriate, lodging and meals), shall visit
the manufacturing and marketing facilities of Licensee and be presented with an
in-depth updating of the manufacturing capability and marketing network of
Licensee.

27. EXPORT CONTROLS

    It is understood that USC is subject to United States laws and regulations
controlling the export of technical data, computer software, laboratory
prototypes and other commodities (such laws include the Arms Export Control Act,
as amended and the Export Administration Act), and that its obligations
hereunder are contingent on compliance with applicable United States export laws
and regulations. The transfer of certain technical data and commodities by the
Licensee may require a license from the cognizant agency of the United States
Government and/or written assurances by Licensee that Licensee shall not export
data or commodities to certain foreign countries without prior approval of such
agency. USC neither represents that a license shall not be required nor that, if
required, it shall be issued. Licensee shall not engage in any activity in
connection with this Agreement that is in violation of any applicable U.S. law.

28. INDEPENDENT CONTRACTOR


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<Page>

    In rendering performances under this Agreement, Licensee will function
solely as an independent contractor and not as agent, partner, employee or joint
venturer with USC. Nothing in this Agreement shall be deemed or construed to
create the relationship of principal and agent, or of partnership or joint
venture, and neither party shall hold itself out as an agent, legal
representative, partner, subsidiary, joint venturer, servant or employee of the
other. Neither party nor any officer, employee, agent or representative thereof
shall, in any event, have any right, collectively or individually, to bind the
other party, to make any representations or warranties, to accept service of
process, to receive notice or to perform any act or thing on behalf of the other
party, except as expressly authorized under this Agreement or in writing by such
other party in its sole discretion.

29. WAIVER

    No waiver by either party of any default or breach shall be deemed as a
waiver of prior or subsequent default or breach of the same or other provisions
of this Agreement.

30. ENTIRE AGREEMENT

    This Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof. No amendment, modification, extension or
cancellation of this Agreement shall be binding on the parties unless mutually
agreed to and executed in writing by each of the parties.


UNIVERSITY OF SOUTHERN CALIFORNIA   BIOKEYS, INC.


/s/ DENNIS F. DOUGHERTY                 /s/ NICHOLAS JON VIRCA
---------------------------------       ----------------------------------------
Dennis F. Dougherty                     Nicholas Jon Virca
Senior Vice President,                  President & Chief Executive Officer
Administration

             8/17/00                                 8/17/00
---------------------------------       ----------------------------------------
(Date)                                  (Date)


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<Page>

                                   APPENDIX A

<Table>
<Caption>
USC#           TITLE                                      SERIAL #     DATE      PATENT #     COUNTRY
-----------------------------------------------------------------------------------------------------------
<S>            <C>                                        <C>          <C>       <C>          <C>
2227           Preparation and Use of Thiophosphonates    369,468      6/21/89   5,072,032    United States
               and Thio-Analogues Of Phosphonoformic
               Acid
2227A          Preparation and Use of                     768,155      9/30/91   5,183,812    United States
               Thiophosphonates and Thio-Analogues
               Of Phosphonoformic Acid
2633           Improved Preparations of Thiophosphites    09/304,252   5/3/99                 United States
               and Thiophosphonates
2633           Improved Preparations of Thiophosphites                 5/3/00                 PCT
               and Thiophosphonates
2788A          Preparation and Use of Alpha-Keto          09/352,236   7/13/99                United States
               Bisphosphonates
2789           Preparation and Use of Sulfur-Containing   60/092,560   7/13/98                United States
               Phosphonoformate Analogues
2871           Synthesis and Use Of Lipophilic            60/125,805   3/23/99                United States
               Phosphonocarboxylate Derivatives
</Table>


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