<PAGE>   1

                                                                   EXHIBIT 10.12

                                  AGREEMENT
                                   REDACTED


THIS AGREEMENT is made the 11th day of October, 1996

B E T W E E N:

1.       MSU (UK) Limited, a United Kingdom Company having its registered
         office at Elder House, 525 to 528 Elder Gate, Central Milton Keynes,
         MK9 1LR, England ("MSU") and

2.       Mitac Inc., a Republic of China Corporation, having its principal
         place of business at 8F, No 77, Sec 3, Ming Sheng Road, Taipei,
         Taiwan, Republic of China ("Mitac").

RECITALS

(a)      MSU is the owner of the Intellectual Property Rights in the ISP Chip
         Set and the Product.

(b)      MSU desires to purchase in a fully manufactured form the Product from
         Mitac.

(c)      Mitac desires to license and MSU agrees to grant a license on a
         non-exclusive basis to;

         (i)     manufacture the Product whether by itself or authorised agents
                 or on behalf of MSU and to

         (ii)    distribute the Product on a non-exclusive basis whether by
                 itself or authorised agents or OEM customers.

(d)      The Parties agree to share net revenue from sales of the Product
         whether by MSU or its OEM customers or by Mitac or its authorised
         agents or OEM customers upon the basis set out in this Agreement.

(e)      To facilitate early production of the product by Mitac both parties
         agree to complete the further actions contemplated by this Agreement
         without delay.

(f)      The Parties have agreed to enter into the commitments of this
         Agreement and regulate their rights in the manner appearing below.

IT IS AGREED as follows:

1.       Interpretation

         1.1     "Base Cost" shall mean the cost of manufacture of the Product
                 according to the bill of materials and direct labours and the
                 overhead direct related to the Product mutually agreed by both
                 Parties hereto as may be varied from time to time by the Sub
                 Group.  Save for the Royalty set out below neither party shall
                 attribute any share of its own over head costs to the Base
                 Cost.

         1.2     "Intellectual Property Rights" (IPR's) shall mean industrial
                 and other rights in the Product and ISP Chip Set including but
                 not limited to copyright, confidential




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                 information, patents and the right to apply for patents,
                 protected designs (whether registered or not) semi conductor
                 and topography rights and technical know-how.

         1.3     "ISP Chip Set" shall mean the MSU proprietary Internet
                 Services Processor as described in the ISP Chip Set reference
                 manual.

         1.4     "Know-how" shall mean:

                 1.4.1    Pre-production drawings for the Product;

                 1.4.2    Layout and other documents for manufacturing
                          assembling and testing the product

                 1.4.3    Purchasing specifications for components of the
                          Product;

                 1.4.4    Test specifications for manufactured items;

                 1.4.5    Documents relating to installation, maintenance,
                          factory operations, data testing and training;

                 1.4.6    Drawing specifications and information for the
                          manufacture or procurement of all production tools,
                          gauges, inspection equipment and accessories required
                          for the manufacture of the Product;

                 1.4.7    Specifications of machine tools and accessories
                          required for the manufacture of the Product together
                          with written advice on their ordering selection and
                          procurement;

                 1.4.8    Technical assistance and training in the
                          implementation of all of the foregoing in accordance
                          with an agreed detailed program.

         1.5     "Product" shall mean the MSU proprietary Internet Access
                 Device incorporating the ISP Chip Set and Software.

         1.6     "Selling Price" shall mean the notional Selling Price of the
                 Product mutually agreed by both Parties, after review by the
                 Sub Group.

         1.7     "Software" shall mean MSU proprietary Internet Access Device
                 software including, Browser, E-Mail, printer driver and
                 enhancements.

         1.8     "The Sub Group" shall mean a Group which unless otherwise
                 agreed by the parties shall consist of three number
                 representatives of each Party.  The Parties agree that the Sub
                 Group shall meet at least four number times a year during the
                 term of this Agreement at a venue to be agreed between the
                 Parties.

                 1.8.1    The Sub Group's responsibilities shall be in relation
                          to:





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                                          *CONFIDENTIAL PORTION HAS BEEN OMITTED
                                        AND FILED SEPARATELY WITH THE COMMISSION

                          1.8.1.1 The review and determination on an Open Book
                                  manufacturing basis of the Base Cost from
                                  time to time to be determined in the light of
                                  then existing component costs and global
                                  market conditions;

                          1.8.1.2 The review and determination of the Selling
                                  Price from time to time to be determined in
                                  the light of then existing component costs
                                  and global market conditions.

                 18.2     The Sub Group shall have a right of access to all
                          information concerning sourcing and cost of
                          components used in the manufacture of the Product,
                          and alternative quotations or quotes regarding
                          alternative sourcing of components and this decision
                          shall be made in the light of the then existing
                          component costs and global market conditions.

         1.9     "Open Book Manufacturing" shall mean the manufacture of the
                 product by Mitac at the Base Cost giving full access to MSU
                 and/or the Sub Group to all component sourcing quotation and
                 pricing details.

                 *CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
                        SEPARATELY WITH THE COMMISSION.

         1.10    "The Royalty" shall mean the sum of US $ *  per unit to be
                 incorporated into the Base Cost.  The Royalty shall be in
                 relation to software and shall be paid to MSU at the end of
                 the month in which a unit of the Product is shipped.

         1.11    "Technical Information" shall mean technical knowledge and
                 data specifications of materials and the manufacturing
                 techniques and other information of a secret and confidential
                 nature in existence at the date of this Agreement which are
                 necessary to enable Mitac to manufacture the Product properly
                 and efficiently in reasonable quantities of a standard and
                 quality required by this Agreement.

2.       Commencement Date and Term

         2.1     This Agreement shall be effective upon execution by the
                 authorised representative of both Parties on the date first
                 above shown.

         2.2     The term of this Agreement shall be for an initial period of
                 eighteen months from the commencement date and shall renew for
                 further periods of one year unless three months prior notice
                 in writing of termination is given by either Party.

3.       Grant of License

         3.1     MSU hereby grants Mitac a non-exclusive license to make and
                 have made and/or distribute and sell the Product during the
                 continuance of this Agreement using for this purpose (but not
                 further or otherwise) the ISP Chip Set the Software the
                 Intellectual Property Rights and the Know-How.





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<PAGE>   4
         3.2     Engagement by Mitac of component suppliers, manufacturing
                 sub-contractors and agents who will have access to Technical
                 Information shall be subject to the prior approval of MSU.
                 Such approval shall not be unreasonably withheld provided the
                 provisions of Clause 3.3 herein are complied with.

         3.3     Mitac shall ensure that all component suppliers, manufacturing
                 sub-contractors and agents who will have access to Technical
                 Information shall enter into direct covenants of
                 confidentiality with MSU in the form of the Confidentiality
                 and Trust Agreement set out in Schedule A hereto.

4.       Improvements

         4.1     It is anticipated that MSU will continue to develop the
                 Product.  Improvements arising from the developments carried
                 on by MSU shall remain it's exclusive property.

         4.2     MSU shall forthwith disclose to Mitac in confidence and in
                 sufficient detail to allow evaluation, all improvements that
                 it might develop during the term of this agreement that may
                 materially enhance the commercial value or potential of the
                 Product.

         4.3     In the event of any MSU improvements being adopted by Mitac in
                 the manufacture of the Product where royalties or license fees
                 are payable to third parties, such additional payments shall
                 be reimbursed to MSU or added to the Base Cost as appropriate.

5.       Manufacture (General)

         5.1     It is the intention of the Parties that the Product will be
                 manufactured to the agreed specification by Mitac for the
                 supply to both Parties and their OEM customers.

         5.2     Mitac may sub-contract the whole or any part of the
                 manufacturing process but always subject to Clause 3.2 and
                 3.3.

         5.3     Suppliers and Subcontractors.

                 5.3.1    Mitac shall use all necessary efforts to ensure that
                          any component supplier, sub-contractor or
                          manufacturing agent with access to the Product, the
                          ISP Chip Set, the Software, IPR's or Technical
                          Information will not modify, reverse, engineer,
                          decompile, and or disassemble the Product.

                 5.3.2    Mitac shall not mask, modify or suppress any
                          copyright notices or any other proprietary right
                          notices.  Furthermore Mitac shall not unload, decode,
                          password any part of the Product or render any part
                          of the Product to any third party for unauthorised
                          use or reverse engineering.





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                                          *CONFIDENTIAL PORTION HAS BEEN OMITTED
                                        AND FILED SEPARATELY WITH THE COMMISSION

         5.4     Technical Support

                 5.4.1    MSU shall support Mitac.  MSU shall provide technical
                          support in relation to the Technical Information
                                 *      provided that Mitac shall treat such
                          information as trade secrets and shall not disclose
                          such information to any third party without prior
                          written consent of MSU or pursuant to the terms of
                          clause 3.3 above.

                 5.4.2    Mitac shall return to MSU all of the Technical
                          Information provided with all copies or duplicate
                          documentation on the expiry or termination date of
                          this Agreement.

                 *CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
                            SEPARATELY WITH THE COMMISSION.

                 5.4.3    MSU agrees to provide the ISP Chip Set to Mitac
                                 *            during the contract period.

6.       Manufacture for MSU / OEM customers

         6.1     Mitac shall undertake MSU and/or MSU customers reasonable
                 obligations in relation to quality control.

         6.2     Payment and Price.

                 6.2.1    Mitac shall supply the product to MSU and its OEM
                          customers finished and packaged FOB Taiwan as defined
                          by Incoterms 1990 Edition, issued by the
                          International Chamber of Commerce at the Selling
                          Price.

                 6.2.2    Payment.  MSU shall make payment for supply of
                          Product to MSU or its OEM customers by either:

                          (I)     irrevocable letter of credit in favour of
                                  Mitac.  Payment shall be made in an amount
                                  for each purchase order which shall be net of
                                  the Royalty and the share of profit referred
                                  to in clause 9.1.1, or;
                          (ii)    where ISP Chip Sets or other components used
                                  in the manufacture of the Product are
                                  supplied by MSU to Mitac, MSU may at it's
                                  option add the costs of the Royalty and MSU's
                                  share of profit referred to in clause 9.1.1
                                  to the invoice for such component supply.

                 6.2.3    MSU shall pay all taxes relating to Royalty.  Mitac
                          may deduct such taxes from the amount owed to MSU and
                          pay them to the appropriate tax authority, provided,
                          however, that Mitac shall promptly secure and deliver
                          to MSU an official receipt for such taxes withheld or
                          other documents necessary.





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<PAGE>   6
                                          *CONFIDENTIAL PORTION HAS BEEN OMITTED
                                        AND FILED SEPARATELY WITH THE COMMISSION
7.       Confidentiality

         7.1     Each Party will enter into a Trust and Confidence Agreement in
                 the form set out in Schedule A regulating to the fullest
                 extent allowed by the law the respective responsibilities and
                 duties of confidentiality governing the ISP Chip Set, the
                 Software, IPR's, Know-How and Technical Information, the
                 subject of this Agreement.

         7.2     Mitac undertakes to ensure that all employees, suppliers,
                 sub-contractors, sub-licensees and any other persons or
                 organizations who it is reasonable to contemplate having
                 access to the IPR's, Know-How or Technical Information will
                 covenant directly with MSU in the same terms as the Trust and
                 Confidence Agreement.

8.       Royalty

         8.1     MSU shall be paid by Mitac a Royalty of $  *    (US) for each
                 unit of the Product manufactured and shipped.

                 *CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
                        SEPARATELY WITH THE COMMISSION.

         8.2     For the avoidance of doubt:

                 8.2.1    The Royalty shall remain at $* (US) throughout the
                          term of this Agreement and any extension thereof and
                          shall be included as one of the costs to be taken
                          account of by the Sub Group in the calculation of the
                          Base Cost.

                 8.2.2    As the Royalty will be included in the Base Cost the
                          Royalty shall also be payable in relation to orders
                          of product from MSU and/or its OEM customers.

         8.3     Mitac agrees to keep true and accurate records and books of
                 account containing all the data necessary for the
                 determination of the Royalty payable under Clause 8.1 which
                 records and books of account shall upon reasonable notice of
                 MSU be open at all reasonable times during business hours for
                 inspection by MSU or an independent accountant selected by MSU
                 and acceptable to Mitac (which acceptance should not be
                 unreasonably withheld) for the purpose of verifying the
                 accuracy of Mitac's report hereunder.  MSU shall be solely
                 responsible for the costs of the accountant unless the
                 accountant certifies that any reports are inaccurate in any
                 material respect in which even Mitac shall reimburse MSU for
                 its costs.

         8.4     Mitac shall submit to MSU within fourteen days of the end of
                 each calendar month a statement setting forth with respect to
                 its operations hereunder during that period setting out in
                 particular:

                 8.4.1    The quantity of Product made;





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                  *CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
                             SEPARATELY WITH THE COMMISSION
                 8.4.2    The quantity of Product shipped;

                 8.4.3    The sequential serial numbers of all items made or
                          shipped.

         8.5     Mitac agrees to maintain confidential all financial
                 information received with respect to MSU's operations pursuant
                 to this Agreement and in particular the sub clauses of this
                 Clause 8.

9.       Division of Profit

         9.1     Profit shall be calculated after the deduction of the Base
                 Cost from the Selling Price.  The profit shall be divided as
                 to MSU      *   % (    *   per cent) Mitac   * % ( *   per
                 cent)

                 *CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
                        SEPARATELY WITH THE COMMISSION.
         9.2     Inter Parte accounts will be prepared upon a monthly basis by
                 an international firm of accountants to be nominated and
                 agreed between the Parties.  The calculations shall be
                 monitored by the Sub-Group.

         9.3     The accountants appointed pursuant to Clause 9.2 above shall
                 certify the payment due by one Party to the other.  Such
                 payments shall be made within fourteen days of the date of the
                 certificate of the accountants.

         9.4     Sales to third parties will be made at a minimum of the
                 Selling Price.  In the event that either party agrees to sales
                 being made at less than the Selling Price the whole of the
                 difference between the Selling Price and the lower sale price
                 then agreed shall be a charge against the share of profit of
                 the Party that has agreed sales at less than the Selling Price
                 and its share of profits shall be reduced accordingly unless
                 otherwise agreed by the other Party in writing.

         9.5     Each Party shall use its best endeavours to promote sales of
                 the Product and to make sure that its OEM customers will have
                 the Product manufactured in the manner contemplated by this
                 Agreement.

         9.6     MSU contemplate that Mitac may introduce the Product to other
                 third party companies who may wish to OEM manufacture subject
                 to license from MSU.  Where a license to manufacture is
                 granted by MSU to such third party company, MSU shall pay to
                 Mitac a commission calculated at the rate of  * % (  *   per
                 cent) of the selling amount for each ISP Chip Set supplied to
                 such third party.

                 *CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
                        SEPARATELY WITH THE COMMISSION.
10.      Marks

         10.1    It is anticipated that from time to time the Product will
                 carry a distinctive mark or logo together with an
                 acknowledgement of MSU design and ownership of rights.  Such
                 marks will be carried on the packaging of the Product.





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                                          *CONFIDENTIAL PORTION HAS BEEN OMITTED
                                        AND FILED SEPARATELY WITH THE COMMISSION
         10.2    Mitac shall leave in position and not cover or erase any
                 notices or other marks (including without limitation details
                 of patents or trademark or copyright relating to the Product
                 or its ownership by MSU which MSU may reasonably insist are
                 placed or fixed to the Product or their packaging supplied
                 pursuant to this Agreement).

11.      MSU Obligations

         11.1    MSU shall forthwith supply          *        :

                 11.1.1   One engineering prototype sample;
                 *CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
                        SEPARATELY WITH THE COMMISSION.
                 11.1.2          *          samples of its proprietary ISP Chip
                          Set       *    for the purposes of the development of
                          prototypes by Mitac pursuant to Clause 12.1.1 herein.

         11.2    MSU will supply at    *   , assistance in design and supplying
                 services of one engineer to assist in the setting up of the
                 manufacturing process.

12.      Obligations of Mitac

         12.1    Mitac shall:

                 12.1.1   Develop    *    prototypes of the product free of
                    charge as soon as commercially possible.

                 *CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
                        SEPARATELY WITH THE COMMISSION.
                 12.1.2   Make    *    of the prototypes available to MSU.

         12.2    In consideration of the premises of this Agreement Mitac will
                 set up at its own cost production of the Product including all
                 tooling production facilities, packaging and art work.

         12.3    Prior to setting up for volume production Mitac will entertain
                 a commitment to orders from MSU for the first production units
                 for delivery after two months of receipt of an irrevocable
                 letter of credit.

         12.4    Priority shall be given to the manufacture of MSU orders over
                 manufacture of Mitac or Mitac's OEM customer orders.

13.      Interest

         13.1    All sums due from either of the Parties to the other which are
                 not paid on the due date shall bear interest from day to day
                 at the annual rate of 1.5% (three per cent) over the current
                 National Westminster Bank Plc daily base rate with a minimum
                 of 8% (ten per cent) per annum.





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                                          *CONFIDENTIAL PORTION HAS BEEN OMITTED
                                        AND FILED SEPARATELY WITH THE COMMISSION
14.      Warranty

         14.1    Mitac warrants that the Product hardware will conform to the
                 agreed specification and will be free from all defects in
                 material and workmanship for a period of 14 months commencing
                 from the date of manufacture.

         14.2    Provided MSU notifies Mitac promptly in writing of any defect
                 or nonconformity.  Mitac shall, at Mitac's expense, promptly
                 repair or replace such defective Product in Mitac facilities.

         14.3    MSU warrants that the Product's software conform to the
                 specification contained in the Product's documentation.  If
                 the Product software fails to conform to the specification,
                 Mitac may report such deviations to MSU in writing, then MSU
                 shall correct such deviation within thirty (30) days and
                 update the software for customer at      *      .

                 *CONFIDENTIAL PORTION HAS BEEN OMITTED AND FILED
                        SEPARATELY WITH THE COMMISSION.

15.      Indemnities

         15.1    MSU shall indemnify and hold harmless Mitac against claims,
                 costs and expenses that Mitac or its OEM customers may incur
                 in connection with any claim of infringement of the third
                 party IPR's caused by or arising out of the manufacture,
                 importation, possession, sale or use of the Product.

         15.2    Mitac shall fully indemnify and hold harmless MSU against any
                 claims or actions brought by third parties against MSU due to
                 defects in the Product.  This indemnity shall include all
                 costs and expenses of refuting defending or setting any claims
                 as well as any damage or compensation ordered to any third
                 party by any Court.

         15.3    Mitac shall have no liability for any claim or suit where:

                 (i)      Infringement is primarily attributable to Mitac's
                          incorporation of MSU supplied designs into the
                          Product;
      
                 (ii)     such claim or suit would have been avoided but for
                          the combination, operation or use of the Product with
                          devices, parts or software not supplied by Mitac or
                          its subcontractors;

                 (iii)    such claim or suit would have been avoided but for
                          the modification or alteration of the Product by MSU
                          or a third party.

16.      Termination

         16.1    Notwithstanding the provisions of clause 2, either party may
                 by notice in writing to the other terminate this Agreement
                 immediately upon the happening of any one of the following
                 events:





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<PAGE>   10
                 If either party shall become bankrupt or be wound up or make
                 any arrangement or composition with its creditors.

         16.2    If Mitac attempts or purports to assign or transfer this
                 Agreement without MSU's prior written consent.

         16.3    If either Party's ability to carry out its obligations
                 hereunder is prevented or substantially interfered with for
                 any reason whatsoever (whether or not within the control of
                 that Party) including without limitation by reason of any
                 regulation, law, decree or any act of state or other action of
                 a government.

17.      Limitation of Liabilities

         17.1    Force Majeure.  Neither party shall be liable to the other for
                 any delay, loss, damage or injury caused by acts of God,
                 governmental order or regulation, restraining imposed by
                 governmental action, national strikes, commotion, riots, war,
                 war like situations, hostilities, governmental disposal,
                 mobilisation, blockage, embargo, custody, revolution, fire,
                 earthquake, tornado, explosion, storm, flood or for any other
                 cause beyond its reasonable control (hereinafter referred to
                 as Force Majeure).

                 17.1.1   Notification of such delay arising solely from
                          circumstances attributable to the Force Majeure shall
                          be given as soon as possible and followed in writing
                          to the other party within seven days of the
                          occurrence of such an event.

                 17.1.2   Should any failure of performance persist for more
                          than forty-five days MSU may by written notice to
                          Mitac forthwith cancel the particular order or part
                          thereof of effected and such cancellation shall be
                          without any liability on the part of MSU to pay for
                          any costs or cancellation charge arising from such
                          cancellation.

         17.2    If any section or sub section of this Agreement is found by
                 competent authority to be void, voidable, illegal or otherwise
                 unenforceable, the remaining provisions of this Agreement
                 shall remain in full force and effect.

         17.3    No agency or Partnership.  The Parties are not partners or
                 joint venturers nor is one Party entitled to act as the agent
                 of the other (unless specifically authorised in writing) nor
                 shall either Party be liable in respect of any representation,
                 act or omission of the other Party of whatever nature.

         17.4    Whole Agreement.  This Agreement contains the whole agreement
                 between the Parties and supersedes any prior written or oral
                 agreements between them in relation to its subject matter and
                 the Parties confirm that they have not entered into this
                 Agreement on the basis of any representations that are not
                 expressly incorporated into this Agreement.





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<PAGE>   11
         17.5    No Modification.  This Agreement may not be modified except by
                 an instrument in writing signed by both of the Parties or
                 their duly authorised representatives.

         17.6    Survival of Terms.  The warranties and indemnities and
                 obligations of confidentiality contained in this Agreement and
                 the provision for payment of and accounting in respect of
                 continuing fees and other sums due to either party under this
                 Agreement shall survive the termination or expiry of this
                 Agreement.

         17.7    Governing Law.  Where either Party has any complaint of the
                 other under this Agreement it may at it's option commence
                 proceedings in any Court of competent jurisdiction in either
                 London or Taipei.

SIGNED   /S/                            SIGNED    /S/                       
      ---------------------------              ---------------------------
AUTHORISED REPRESENTATIVE               AUTHORISED REPRESENTATIVE
OF MSU (UK) LIMITED                     OF MITAC INC





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<PAGE>   12
                                   SCHEDULE A

                         TRUST AND CONFIDENCE AGREEMENT

This Trust and Confidence Agreement is made the  Day of         199
   

BETWEEN


(1)      MSU (UK) Limited whose registered office is at Elder House, 526 to 528
         Elder Gate, Central Milton Keynes, United Kingdom ("MSU").

(2)                            a corporation organized under the laws of     
         whose principal place of business is at
         (the "Recipient").

RECITALS

(a)      MSU has developed a product for accessing the Internet incorporating
         its Proprietary Internet Services Processor, Chip Set, and software
         (the "Product") and is the owner of confidential information relating
         to the product and of intellectual property rights therein.

(b)      To enable the Recipient to evaluate the product with a view to taking
         a license to either:

         (i)     component supply, or;
         (ii)    manufacture, and/or;
         (iii)   sell the same

         MSU is willing to disclose information relating to the product to the
         Recipient under conditions of confidentiality.

OPERATIVE PROVISIONS

1.       INTERPRETATION

         1.1     For the purposes of this Agreement Proprietary Information
                 means any and all information which is now or at any time
                 hereafter in the possession of MSU and which relates to the
                 Product, including without limitation data, know-how, formula,
                 processes, designs, photographs, drawings, specifications,
                 software programs and samples and any other material bearing
                 or incorporating any information relating to the Product.

2.       UNDERTAKINGS OF THE RECIPIENT

         2.1     In consideration of MSU disclosing information relating to the
                 Product to the Recipient, the Recipient hereby undertakes





<PAGE>   13


                 2.1.1    to use all Proprietary Information so disclosed
                          exclusively for the purpose of evaluation or any
                          license granted in respect of the Product, and;

                 2.1.2    to maintain confidential or Proprietary Information
                          that it may require in any manner;

                 and it will accordingly not directly or indirectly use or
                 disclose any of the Proprietary Information in whole or in
                 part save for the purposes of and in accordance with this
                 Agreement.

3.       EXCEPTIONS

         3.1     The foregoing restrictions on the Recipient shall not apply to
                 any Proprietary Information which:

                 3.1.1    the Recipient can prove by documentary evidence
                          produced to MSU within 28 days of disclosure that
                          such Proprietary Information was already in the
                          possession of the Recipient and at its free disposal
                          before the disclosure to the Recipient;

                 3.1.2    is hereafter disclosed to the Recipient without any
                          obligations of confidence by a third party who has
                          not derived it directly or indirectly from MSU;

                 3.1.3    is or becomes generally available to the public in
                          printed publications in general circulation through
                          no act or default on the part of the Recipient or the
                          Recipient's agents or employees.

4.       INCLUSIONS

         4.1     Without prejudice to the generality of clause 3.1.3
                 information shall not be deemed to be generally available to
                 the public by reason only that it is known to only a few of
                 those people to whom it might be of commercial interest, and a
                 combination of two or more portions of the Proprietary
                 Information shall not be deemed to be generally available to
                 the public by reason only of each separation being so
                 available.

5.       CONFIDENTIALITY MEASURES

         5.1     To secure the confidentiality attaching to the Proprietary
                 Information the Recipient shall:

                 5.1.1    keep separate all Proprietary Information and all
                          information generated by the Recipient based thereon
                          from all documents and other records of the
                          Recipient;





<PAGE>   14


                 5.1.2    keep all documents and other materials bearing or
                          incorporating any of the Proprietary Information at
                          the usual place of business of the Recipient, namely

                 5.1.3    not use, reproduce, transform, or store any of the
                          Proprietary Information in any externally accessible
                          computer or electronic information retrieval system
                          or transmit it in any form or by any means whatsoever
                          outside of its usual place of business;

                 5.1.4    allow access to the proprietary exclusively to those
                          employees of the Recipient who have reasonable need
                          to see and use it for the purposes of its evaluation
                          by the Recipient and shall inform each of the said
                          employees of the confidential nature of the
                          Proprietary Information and of the obligations on the
                          Recipient in respect thereof;

                 5.1.5    wherever reasonably practicable obtain a written
                          statement from each of its employees having access to
                          the Proprietary Information undertaking to maintain
                          the same confidential and shall take such steps as
                          may be reasonably desirable to enforce such
                          obligations.

                 5.1.6    make copies of the Proprietary Information only to
                          the extent that the same is strictly required for the
                          purposes of any license granted to the Recipient;

                 5.1.7    on request of MSU made at any time shall deliver up
                          to MSU all documents and other material in the
                          possession custody or control of the Recipient that
                          bear or incorporate any part of the Proprietary
                          Information.

6.       GOVERNING LAW

         6.1     The construction validity and performance of this Agreement
                 shall be governed by English law.

SIGNED 
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SIGNED 
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                 MSU (UK) LIMITED