MGH/wmh:6/5/97
PerImmune.wp6
MGH/wmh:6/5/97
PerImmune.wp6
         DISTRIBUTION AGREEMENT BETWEEN PERIMMUNE, INC.,
                        AND MENTOR CORP.

     This Exclusive Distribution Agreement (hereinafter the
"Agreement") is made in Rockville, Maryland, by and between
PerImmune, Inc. (hereinafter "PERIMMUNE"), a corporation existing
under the laws of Delaware, and MENTOR Corp. (hereinafter
"MENTOR"), a corporation existing under the laws of Minnesota.

     WHEREAS, PERIMMUNE desires to sell and/or market its AuraTek-
FDP Bladder Cancer Diagnostic product and MENTOR desires to
purchase PERIMMUNE's product for resale to customers bearing a
trademark or trade name and logo owned by MENTOR; and

     WHEREAS, the parties desire to enter into an agreement
setting forth the terms of their relationship,

     NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties do hereby agree as
follows:

1.   Product. The product of PERIMMUNE covered by this Agreement
     is set forth on Exhibit A attached hereto (hereinafter the
     "Product") and any future modifications or improvements
     thereto. PERIMMUNE reserves the right to modify the Product
     from time to time, and shall give MENTOR at least six (6)
     months prior written notice before making changes to its
     manufacturing process that would have an impact on any of
     PERIMMUNE's product verifications or validations, or changes
     in raw materials that would alter the operating principle of
     the Product or other changes that could impact product
     labeling or promotional literature; provided, however, that
     PERIMMUNE shall be required to provide MENTOR with only
     reasonable advance notice where such modification is
     required to comply with any applicable legal or regulatory
     requirement or the unanticipated modification or
     unavailability of raw material.

2.   Appointment and Acceptance. PERIMMUNE hereby grants MENTOR
     the exclusive right to distribute the Products in the United
     States, and outside the United States (the "Territory").

3.   Term and Renewal. The term of this Agreement shall be for a
     period of five (5) years, commencing on the Effective Date
     (the "Initial Term"). "Effective Date" means the date on
     which this Agreement is executed. This Agreement shall
     automatically renew for additional and successive terms of
     one (1) year unless either party provides written notice on
     non-renewal at least six (6) months prior to the close of
     the initial Term or any anniversary date thereafter.

4.   Terms of Sale.

     (a)  MENTOR shall fix the price of the individual Product
          sold hereunder. On a monthly basis, MENTOR shall pay to
          Perimmune, in United States Dollars, fifty percent
          (50%) of the Net Sales, as defined below, received by
          MENTOR from the sale of the Product, less the Advances,
          as hereinafter defined, paid by MENTOR to PerImmune
          during such month. For purposes herein, "Advances" shaD
          mean an amount equal to 25% of the list price, per kit,
          paid by MENTOR to PerImmune within 30 days of MENTOR's
          receipt of kits ordered by it. Unless MENTOR and
          PerImmune otherwise agree in a writing signed by both
          of them, the payment and other provisions set forth in
          this Agreement shall supersede those of any subsequent
          purchase order, sales confirmation form or other
          document hereinafter sent by either party hereto to the
          other. For purposes hereof, Net Sales shall mean the
          gross invoiced price for the sales of the Products to
          Purchasers by MENTOR, its agents or affiliates ("Gross
          Sales") less (a) any credits and allowances granted by
          MENTOR to purchasers with respect to the Product,
          including, without limitation, credits and allowances
          on account of price adjustments, returns, discounts,
          and chargebacks, (b) any sales, excise, value added,
          turnover or similar taxes, and (c) transportation,
          insurance and handling expenses if separately invoiced
          and directly chargeable to such sales.
     
     (b)  Within thirty (30) days after the end of each month
          MENTOR shall submit a report to PERIMMUNE setting forth
          the (i) cumulative number of kits purchased from
          PERIMMUNE through the end of the preceding month (ii)
          50% of net sales price for each such kit sold through
          the end of the preceding month, (iii) the advances
          previously paid for such kits.  Each such report shall
          be accompanied by payment of the difference between
          (ii) and (iii).
     
     (c)  Title and risk of loss shall pass to MENTOR upon
          release of Product for shipment by PERIMMUNE to the
          designated carrier.  All freight and applicable
          insurance charges shall be the responsibility of MENTOR
          PERIMMUNE will be responsible for contracting freight
          services, in accordance with Section 8(a) of this
          Agreement, for which MENTOR will be billed on a
          shipment by shipment basis. Product is subject to
          inspection and acceptance by MENTOR upon receipt.
          MENTOR shall be deemed to have accepted all shipments
          of Product unless rejected for non-conformity with the
          Quality Specifications, as hereinafter defined, in
          accordance with Article 9 of this Agreement, within
          twenty (20) working days after receipt of shipments
          from PERIMMUNE.
     
     (d)  Unless approved by MENTOR in writing, PERIMMUNE will
          not sell any Product to MENTOR as of the effective date
          hereof that has less than eighteen (18) months shelf-
          life from date of shipment by PERIMMUNE.
     
5.   Termination.  Should any of the following events occur, the
     affected party may terminate this Agreement by giving
     notice, in writing to be effective on the date specified in
     the notice, namely,

          (a)  failure of either party to observe any of the
          terms hereof to a material extent and to remedy the
          same (where it is capable to being remedied) after
          having received reasonable notice from the aggrieved
          party and a reasonable opportunity to cure;

     (b)  either party becoming insolvent or having a receiver
          appointed of its assets, or execution or distress
          levied upon its assets;
     
     (c)  an order being made or a resolution being passed for
          the winding up or liquidation of either party;
     
     (d)  if PERIMMUNE discontinues manufacturing the product for
          va]id business reasons that cannot be remedied during
          the term of this Agreement then (i) at the request of
          MENTOR, PERIMMUNE shall assist MENTOR in establishing
          an alternative source of supply and shall transfer any
          necessary technology or knowledge to MENTOR or its
          alterative supplier provided that MENTOR reimburses
          PERIMMUNE the out-of-pocket costs of doing so
          (including salary and benefits for time expended by
          PERIMMUNE employees, (ii) or if the discontinuation
          occurs during the first three years MENTOR can receive
          the return of its investment at its election. Nothing
          herein is intended to permit PERIMMUNE to breach its
          obligation under the agreement.
     
6. Procedures on Termination. Upon termination or non-renewal of
this Agreement:

     (a)  MENTOR shall return to PERIMMUNE all literature which
          PERIMMUNE shall have supplied to MENTOR and which is in
          its possession.
     
     (b)  the rights and duties of each party under this
          Agreement in respect of performance prior to
          termination or non-renewal shall survive and be
          enforceable in accordance with the terms of this
          Agreement.
     
     (c)  within thirty (30) days of receipt of PERIMMUNE's
          invoice therefor, MENTOR will pay PERIMMUNE for all
          remaining inventory of Product for which MENTOR has
          issued purchase orders to PERIMMUNE. Upon payment,
          PERIMMUNE will ship such inventory to MENTOR at
          MENTOR's expense.
     
7.   MENTOR's Duties. MENTOR shall:

     (a) use best commercial efforts to advertise and promote the
     sale of the Product in a manner calculated by MENTOR to
     yield benefit to the parties hereto in light of the
     prevailing circumstances and to the extent to which any
     products are at the relevant time competitive with other
     products. MENTOR agrees that during the term of this
     Agreement, it will not market any product using the same
     technology which detects the same analyte and thereby
     directly competes with a Product.
     
     (b)  submit its purchase orders to PERIMMUNE in writing or
          via facsimile, signed by an authorized representative
          of MENTOR.
     
     (c)  pay an PERIMMUNE invoices in United States currency by
          company check.
     
     (d)  submit to PERIMMUNE a twelve (12) month forecast of
          purchases delivery dates from PERIMMUNE for the Product
          in a format to be mutually determined by the parties.
          Said forecast shaD be submitted by MENTOR to PERIMMUNE
          within thirty (30) days of commencement of the term of
          this Agreement, and quarterly thereafter.
     
     (e)  obtain advance written authorization and a Returned
          Material Authorization ("RMA") prior to resuming any of
          the Product.
     
     (f)  maintain a properly framed sales force of adequate size
          to represent and promote the sale of the Product and
          provide instructions to customers in the use of the
          Product. MENTOR shall be responsible for developing its
          own marketing plan and system for dispensing the
          Product.
     
     (g)  carry in stock an inventory of Product sufficient to
          promptly fill the orders of MENTOR's customers in the
          Territory.
     
     (h)  apply for and obtain an necessary licenses, permits and
          other authorizations required by local law or
          regulation in relation to the promotion, marketing,
          distribution and supply of the Product in any
          jurisdiction or country in which MENTOR sells the
          Product.
     
     (i)  pay any import duty or like charge on the entry of the
          Product into the Territory and any local or other
          applicable taxes.
     
     (j)  maintain separate and detailed accurate and complete
          records of all transactions in respect of the Product,
          including, but not limited to, such records as identify
          all customer purchases by Product and serial and/or lot
          number, and possess the capability to notify all
          purchasers in the event of a Product recall or
          corrective action.
     
     (k)  defray all expenses of and incidental to the
          distribution and sale of Product hereunder incurred by
          MENTOR
     
     (l)  make no contracts or commitments on behalf of PERIMMUNE
          or make any promises or representations or give any
          warranties or guarantees with respect to the Product
          except as herein expressly permitted or otherwise incur
          any liability on behalf of PERIMMUNE without
          PERIMMUNE's prior written consent, nor represent itself
          as agent or partner of PERIMMUNE.
     
     (m)  comply with all laws and regulations and requirements
          applicable to a seller of invitro diagnostics products,
          and with all laws and regulations and requirements of
          governmental agencies having jurisdiction with the
          Territory.
     
     (n)  except as authorized in writing by PERIMMUNE, refrain
          absolutely from using the trademark or trade name and
          logo of PERIMMUNE in connection with the marketing,
          distribution and sale of any Product.
     
8.   PERIMMUNE's Duties. PERIMMUNE shall:

     (a)  make reasonable best efforts, in good faith, to ship
          MENTOR's orders for Product within thirty (30) days
          from date of order receipt. MENTOR shall specify the
          method of shipment and insurance and PERIMMUNE shall
          make reasonable best efforts, in good faith, to comply
          with such specifications. If no such specification is
          made, or if the specification cannot be reasonably
          complied with after notice to MENTOR and an opportunity
          to resolve the issues surrounding PERIMMUNE's alleged
          inability to comply, PERIMMUNE may select a reasonable
          manner of shipment and insurance.
     
     (b)  at the time of shipment, the product will have a
          remaining shelflife of not less than 16 months.
     
     (c)  will provide up to 12,000 units per year of product at
          PERIMMUNE's cost plus shipping charges to be used by
          MENTOR for promotional purposes at no reimbursement to
          MENTOR.
     (d)  comply with all laws and regulations and requirements
          applicable to PERIMMUNE as a manufacturer of in-vitro
          diagnostic products.
     
     (e)  except as authorized in writing by MENTOR, refrain
          absolutely from using the trademark or trade name and
          logo of MENTOR in connection with the marketing,
          distribution and sale of any Product.
     
     (f)  provide reasonable technical assistance to MENTOR's
          personnel necessary for the marketing of the Product.
     
     (g)  at PERIMMUNE's expense, provide MENTOR with written
          product inserts relating to the Product's use, and with
          such amendments thereto as subsequently become
          available.
     
     (h)  provide necessary documentation to assist MENTOR in
          meeting requirements to register Products in the
          Territory, and where possible, allow MENTOR to utilize
          prior registrations by PERIMMUNE.
     
     (i)  provide MENTOR with copies of the 510(k) premarket
          notifications submitted for the Product, copies of
          current package insert for the Product, copies of
          documents describing specifications for the Product,
          and copies of all current and future correspondence
          with the FDA pertaining to the Product. PERIMMUNE will
          comply with the FDA's current GMP regulations in the
          manufacture of the Product, if those regulations are
          modified to include components of finished devices. If
          needed to comply with any change in the law or FDA's
          GMP regulations or policies, MENTOR shall be given the
          right to inspect PERIMMUNE's manufacturing facilities
          and GMP records pertaining to the manufacture of the
          Product. If any action should be taken by the FDA to
          restrict or prevent the distribution of any of the
          Product for more than thirty (30) days, and such
          restriction is not due to the negligence of MENTOR,
          then upon notice to PERIMMUNE, MENTOR shall have the
          right to terminate this Agreement as to such Product.
          PERIMMUNE shall replace any affected inventory of
          Product under this section or refund to MENTOR the
          purchase price it paid to PERIMMUNE for such inventory
          if PERIMMUNE is unable to replace the Product with
          comparable inventory. PERIMMUNE shall replace or
          repurchase any affected inventory of Product which
          MENTOR replaces or repurchases from MENTOR's customers,
          at the price MENTOR paid PERIMMUNE for such inventory.
          IN NO CASE SHALL PERIMMUNE BE LIABLE FOR CONSEQUENTIAL
          OR INCIDENTAL DAMAGES.
     
     (i)  comply with the Federal Food, Drug, and cosmetic Act.
          The Product comprising each shipment or other delivery
          hereafter made by PERIMMUNE to, or on the order of,
          MENTOR, as of the date of such shipment or delivery,
          shall be, on such date, not adulterated or misbranded
          within the meaning of the Federal Food, Drug, and
          Cosmetic Act.
     
9.   Performance Standards.

     (a)  Quality Specifications and Characteristics. PERIMMUNE
          shall deliver to MENTOR Product having the quality
          specifications agreed upon by the parties as set forth
          in Exhibit B (the "Quality Specifications").
     
     (b)  Certificate of Analysis. Concurrent with shipment,
          PERIMMUNE shall fax to MENTOR a Certificate of
          Analysis, in the form set forth in Exhibit B, for each
          lot of Product sold to MENTOR, confirming that the
          Product meets the Quality Specifications.
     
          (c)  Product Acceptance. Within twenty (20) working
          days of receipt of Product, MENTOR shall take and
          conduct analysis of samples of Product delivered by
          PERIMMUNE. Should the result of an analysis of such
          sample deviate from the Quality Specifications, MENTOR
          shall notify PERIMMUNE in accordance with Article 4(c)
          hereof and immediately thereafter provide PERIMMUNE
          with samples of the Product tested. If following a
          review of the test results and after conducting its own
          tests of the sample, PERIMMUNE agrees that such sample
          does not conform to the Quality Specifications,
          PERIMMUNE shall provide MENTOR, free of any additional
          charge, with new deliveries of the same quantity of the
          Product as the one from which the sample was taken, or,
          in PERIMMUNE's discretion and at its cost, PERIMMUNE
          may promptly reprocess the nonconforming Product to
          meet the Quality Specifications. In either event,
          MENTOR shall return, at PERIMMUNE's expense, the
          particular lot or shipment of the Product which does
          not comply with the Quality Specifications if requested
          to do so by PERIMMUNE.

10.  Product Recall.

     (a)  PERIMMUNE shall maintain an appropriate record of all
          claims made or to be made regarding the Products
          performance.
     
     (b)  Each party shall keep the other informed of any formal
          action relating to any specific lot of Product sold to
          MENTOR hereunder by an regulatory agency of any state,
          national government, or government agency having
          jurisdiction.
     
     (c)  Should any governmental or corporate action require the
          recall or field corrections or withholding from market
          of Product sold by PERIMMUNE to MENTOR, MENTOR shall
          bear the reasonable, direct costs and expenses of
          recall or field correction if such recall or field
          correction is the result of any fault or omission
          attributable to MENTOR and PER~E shall bear the cost of
          products and the actual costs of replacing the Product
          if such recall or field correction is the result of any
          fault or omission attributable to PERIMMUNE. Should
          such recall or field correction result from the fault
          of both parties, the parties shall share the costs of
          Products and the actual cost of replacing the Products
          in proportion to their respective degree of fault.
     
11. Product Complaints.

     (a)  Should either party experience any quality problem
          involving field correction or recall of any specific
          lot(s) of Product supplied to MENTOR by PERIMMUNE, such
          party will notify the other in writing by facsimile
          within twenty-four (24) hours of the initiation of the
          field correction or recall. Both parties will test
          retained samples of lots in question and report its
          findings to the other within ten (10) working days.
          Each party retains the right to correct field problems
          arising out of its fault or omission as it deems
          appropriate, with or without the concurrence of the
          other. All information about Product complaints shall
          be considered "Confidential Information" under the
          terms of the Agreement.
     
     (b)  Either party shall immediately notify the other party
          in writing should it become aware of any defect or
          condition that renders any lot(s) of Product supplied
          by PERIMMUNE to MENTOR in violation of the United
          States Food, Drug and Cosmetic Act, or of a similar law
          of any jurisdiction or country where the Product is
          sold. The parties shall share with each other all data
          on confirmed lot specific Product complaints including,
          but not limited to, complaints or information regarding
          performance and/or allegations or reports of any
          negative effect from the use or misuse of such affected
          lot of Product as soon as such data is available. Each
          party will provide reasonable assistance to the other
          in resolving customer complaints to the extent the
          complaint arises out of any fault or omission of the
          party whose assistance is requested. However, MENTOR
          shall have sole responsibility and authority to
          interact directly with MENTOR's customers in the
          resolution of such complaints and PERIMMUNE agrees that
          it will only interact with MENTOR in such matters.
     
     (c)  PERIMMUNE shall evaluate and investigate all customer
          complaints in connection with the Product which may be
          brought to its attention, in writing, by MENTOR;
          provided such complaints have been confirmed by MENTOR
          QA/QC or technical service personnel using the same
          standards for confirmation which MENTOR's uses for
          products other than the PER~ Product and which are
          believe in good faith by MENTOR to arise out of a fault
          or omission attributable to PERIMMUNE. Within twenty
          (20) calendar days following receipt from MENTOR of the
          original notification of each such complaint, PER~E
          agrees to provide MENTOR with a written interim or
          final complaint investigation report, using the same
          standards for evaluation and investigation that P~ uses
          for products other than the Product. All such Product
          complaints reported to PERIMMUNE by MENTOR shall be
          reviewed monthly by PERIMMUNE until closure, and a
          summary report thereof will be provided by PERIMMUNE to
          MENTOR.
     
     (d)  PERIMMUNE will report to MENTOR all data and/or
          information pertaining to adverse reports on any lot of
          Product supplied by PER~ for distribution by MENTOR
          which would have a materially adverse impact on
          performance of the Product.
     
          (e)  Recalls or field notifications with respect to the
          Product, or any of them, shall be the responsibility of
          the party whose fault or omission necessitated such
          action, as described in Article 10(c).

     (f)  Should there be a difference of opinion between
          PERIMMUNE and MENTOR regarding a field notification or
          recall, MENTOR will exercise the right to notify its
          customers without delay.
     
12. Warranties.

     (a)  PERIMMUNE warrants that the Product which is or will be
          the subject of FDA cleared 510(k) premarket
          notifications have not been changed or modified in
          design, components, method of manufacture or intended
          use from the Product as described in those 510(k)
          premarket notifications, and will notify MENTOR in
          advance of any changes in accordance with Article 1.
     
     (b)  PerImmune warrants that the Product manufactured and
          supplied under this Agreement shall at the time of
          shipment meet the Quality Control Specifications of
          PERIMMUNE which are attached to this Agreement as
          Exhibit B. No claim under this warranty may be made
          with respect to a unit of the Product if shipped or
          used after the expiration of the shelf-life of the
          Product as determined by PERIMMUNE. PERIMMUNE further
          warrants that prior to shipment to MENTOR, all of its
          standard tests and quality control procedures have been
          carried out in relation to each lot of the Product with
          satisfactory results. The limited warranty to MENTOR
          set forth in this Agreement shall control over any
          warranty provisions which may be set forth in MENTOR's
          Product literature and MENTOR shall hold PERIMMUNE
          harmless from any and all damages and expenses which
          PERIMMUNE may incur as a result of unauthorized MENTOR
          warranties or representations. PERIMMUNE MAKES NO
          WARRANTIES EXPRESSED OR IMPLIED WITH RESPECT TO THE
          PRODUCTS BEYOND THAT WHICH IS SET FORTH IN THIS
          AGREEMENT INCLUDING THE WARRANTIES OF MERCHANTABILITY
          AND FITNESS FOR ANY PARTICULAR PURPOSE. Any warranty
          made by MENTOR to its customers with respect to the
          Product shall not obligate PERIMMUNE in any way.
     
     (c)  Upon its verification of any claim of defect or
          nonconformity of any unit of the Product arising out of
          a fault or omission attributable to PERIMMUNE, during
          the term of this Agreement, PERIMMUNE will provide
          MENTOR with a replacement unit to the extent necessary
          to honor PERIMMUNE's warranties contained in Section
          12(a) hereof, or make good any shortages or non-
          completed deliveries and shall pay all associated
          freight and insurance associated therewith.
     
     (d)  PERIMMUNE's liability under any legal or equitable
          theory to any person with respect to the Product and/or
          the relationship described in this Agreement shall be
          limited to the replacement of the unit, or if
          impractical, return of the purchase price paid by
          MENTOR for such unit. PERIMMUNE shall in no event be
          liable to MENTOR or any other person for any incidental
          or consequential damages, lost profits, cost of
          procurement of substitute goods or any indirect,
          special, or consequential damages even if PER~E has
          been informed of the possibility thereof.
     
     (e)  As of the date hereof, PERIMMUNE warrants that it has
          no knowledge that the manufacture, use or sale of all
          or any of the Product under this Agreement, nor any
          method of using such Product infringes on any patent or
          other industrial property right of a third party, and
          PERIMMUNE has not received any notification from any
          third party alleging that the manufacture, use or sale
          of any such Product does or would infringe any patent
          or other industrial property. PERIMMUNE shall further
          disclose all information relating to the art of the
          Product of which it is, or becomes, aware relating to
          intellectual property, when PERIMMUNE recognizes
          necessary to do so.
     
13.  Packaging and Intellectual Property. MENTOR shall be
     responsible for packaging and labeling the Product. MENTOR
     will distribute the Product only with all appropriate
     labeling, packaging, and Product literature and only under
     MENTOR's applicable trademarks and trade names. MENTOR
     recognizes PERIMMUNE's right, title and interest in its
     patents, trademarks, trade names and copyrights, trade
     secrets and proprietary information in connection with the
     Product, and MENTOR shall not claim any ownership right
     thereto inconsistent with this Agreement, or dispute the
     validity thereof. In the event any third party shall contest
     PERIMMUNE's rights to its patents, trademarks, trade names
     or copyrights, trade secrets or propriety rights, MENTOR
     shaD, at PERIMMUNE's sole expense, render reasonable
     assistance to PER~ in defending such claims.

14.  Compliance with other Agreements. Each party represents and
     warrants that the execution and delivery by it of this
     Agreement and the performance by it of its obligations
     hereunder will not, with or without the giving of notice or
     the passage of time, violate any judgement, writ, injunction
     or order of any court, arbitration or governmental agency or
     conflict with, result in the breach of any provisions of, or
     the termination of, or constitute a default under, any
     agreement to which PERIMMUNE or MENTOR is a party or by
     which it is or may be bound.

15.  Indemnity.

     (a)  Except as limited by the remainder of this paragraph,
          PERIMMUNE hereby agrees to indemnify MENTOR against
          claims of third parties for injuries to their persons
          arising from the use of Product supplied by PERIMMUNE
          to MENTOR hereunder. This indemnity shall not apply to,
          and PERIMMUNE shall not be liable for, claims for
          injuries caused by or arising from:
     
          1)   any act or failure to act on the part of MENTOR
               its employees, representatives, agents, or
               subsidiaries in packaging, handling, storing or
               otherwise distributing such Product; or
          
          2)   any representation or warranty concerning the
               Product made by or on behalf of MENTOR and not
               specifically authorized by PERIMMUNE; or
          
          3)   claims where the use of the Product by any
               customer was not in accordance with the use
               prescribed by PERIMMUNE; or
          
          4)   MENTOR's failure to disseminate to purchasers or
               end-users any Product Information which PERIMMUNE
               has made available to MENTOR; or
          
          5)   claims where PERIMMUNE has not been notified in
               writing within forty five (45) days of MENTOR's
               first notice of the claim; or
          
          6)   claims where MENTOR fails to furnish evidence in
               its possession or fails to fully cooperate with
               PERIMMUNE in preparing the defense; or
          
          7)   claims where PERIMMUNE is not given the option to
               assume the sole defense of the claim at
               PERIMMUNE's expense; or
          
     (b)  PERIMMUNE shall indemnify MENTOR from any claims of
          patent infringement relating to a Product subject to
          this Agreement provided MENTOR gives PERIMMUNE notice
          within forty-five (45) days of MENTOR's first notice of
          the claim, and permits PERIMMUNE to assume the sole
          defense of the claim at PERIMMUNE's expense; provided,
          however, that the claim is not based on (i) the sale or
          use of any Product in combination with any other
          product which is not specifically authorized by
          PERIMMUNE in writing; (ii) the application of any
          Product in any manner not specifically authorized by
          PERIMMUNE in writing.
     
     (c)  MENTOR shall indemnify and hold PERIMMUNE harmless from
          and against any third party action brought against
          PERIMMUNE and any loss therefrom arising or related to
          this Agreement, except as may be caused by the
          negligent or willful act of PERIMMUNE.
     
     (d)  Not withstanding anything above to the contrary, in the
          event of a third party claim arising out of this
          Agreement, in which neither PERIMMUNE or MENTOR is in
          breach of this Agreement or is negligent, each party
          shall pay its respective legal expenses and damages
          caused by such claims
     
16.       Fees.     MENTOR acknowledges that it will pay $500,000
          (USD) to PERIMMUNE in connection with this Agreement,
          unless MENTOR elects to take an equity position in
          PERIMMUNE.

17.  Force Majeure. Neither party shall be responsible for any
     failure to perform due to causes beyond its control. These
     causes shall include, but not be limited to, fire, storm,
     flood, earthquake, explosion, wars, riots, civil disorder,
     sabotage, quarantine restrictions, labor disputes, labor
     shortages, transportation embargoes, or failure or delays or
     disruption in manufacturing process, curtailment of or
     failure in obtaining fuel or electrical power, or the acts
     of any governmental authority, or instrumentalities, orders
     of any court or tribunal whether foreign or domestic,
     exchange restrictions, acts of God, acts of the Federal
     Government or any agency thereof, acts of any state or local
     government or agency thereof, or shortage of materials or
     any similar or dissimilar occurrence beyond the reasonable
     control of the party which is prevented, interrupted or
     delayed in the performance of its obligations hereunder. In
     no event shall PER~E be under any obligations to purchase
     Products or similar products from any third party in order
     to supply same to MENTOR hereunder. Any force majeure event
     shall not excuse performance by the party but shall delay
     performance, unless such force majeure continues for a
     period in excess of ninety (90) days. In such event, the
     party seeking performance, as its sole and exclusive remedy,
     may cancel its obligations under this Agreement.

18.  Insurance. Each party shall keep in force during the term of
     this Agreement product liability insurance in such amounts
     as may be customary for like sized businesses undertaking
     like responsibilities to those contemplated by this
     Agreement. Each party shall submit a certificate of
     insurance to the other evidencing such coverage upon written
     request therefor.

19.  Confidentiality.

     (a)  Confidentiality Defined. For the purposes of this
          Agreement, the term "Confidential Information" shall be
          any information embodying concepts, ideas, techniques,
          proprietary information, know-how, formulations, market
          data, customer lists, product specifications and
          accounting data which:
     
          1)   is disclosed by one party hereto to the other;
          
          2)   is claimed by the disclosing party to be secret,
               confidential and proprietary to the disclosing
               party; and
          
          3)   if disclosed in writing, is marked by the
               disclosing party to indicate its confidential
               nature or if disclosed orally as confidential, is
               confirmed in writing by the disclosing party to be
               confidential within ten ( 10) days following
               disclosure.
          
     (b)  Non-Disclosure. During the period that this Agreement
          remains in effect and for a period of three (3) years
          following termination thereof, each party (except as is
          explicitly otherwise required hereby) shall keep
          confidential, shall not use for itself or for the
          benefit of others and shall not copy or allow to be
          copied in whole or in part any Confidential ~formation
          disclosed to such party by the other. The obligation of
          confidentiality imposed upon the parties by the
          foregoing paragraph shall not apply with respect to any
          alleged Confidential information which:
     
               (1)  is known to the recipient thereof, as
                    evidenced by said recipient's written
                    records, prior to receipt thereof from the
                    other party hereto;
               
               (2)  is disclosed to said recipient after the date
                    hereof by the third party who has the right
                    to make such disclosures and who does not
                    violate any confidentiality agreement with
                    the affected party hereto;
               
               (3)  is or becomes a part of the public domain
                    through no fault of the said recipient; or
               
               (4)  is required by law or judicial or
                    administrative process to be disclosed.
               
     (c)  PERIMMUNE and MENTOR shall agree to keep confidential
          and not disclose to third parties, the supply and
          working relationship under this Agreement.
     
     (d)  Each party agrees to limit access to Confidential
          ~formation to employees and agents having a need to
          know and to protect Confidential ~formation to the same
          extent as it protects its own trade secrets.
     
20.  Appointment of Sub-Distributors. MENTOR may assign,
     sublicense, delegate, or otherwise transfer the performance
     of the rights and obligations hereunder to qualified and
     reputable sub-distributors, provided, however, that: (i)
     MENTOR shall be liable to PERIMMUNE for the errors,
     negligent acts and omissions of its sub-distributor's as if
     such errors, negligent acts and omissions were its own,
     including any breach of any provision of this Agreement by
     the sub-distributors; (ii) MENTOR shall have and retain full
     control of any sub-distributors utilized, and shall be
     responsible for the performance by any sub-distributor; and
     (iii) MENTOR shall not be relieved of the responsibility for
     the proper performance and completion of the sub-distributed
     portions of its obligations hereunder.

21.  Successors. This agreement shall be binding upon the
     successors of PERIMMUNE and MENTOR, including successors who
     acquire the business assets of PERIMMUNE and MENTOR In the
     event the Principal(s) of PERIMMUNE shall sell all or a
     majority of the outstanding stock of PERIMMUNE, or in the
     event PERIMMUNE sells the business relating to the
     manufacture and sale for the Product, then the term of this
     Agreement may be extended unilaterally by MENTOR for three
     (3) successive terms of one (1) year each from the date of
     the transfer of the control of PERIMMUNE, or sale of the
     Product business, or the date for termination under the
     Agreement, whichever is the later, upon the terms of this
     Agreement. MENTOR shall give PERIMMUNE written notice of its
     intent to extend the term of this Agreement within thirty
     (30) days after PERIMMUNE advises MENTOR of the sale of
     PERIMMUNE's Product business and at least ninety (90) days
     before the end of each one (1) year term.

22.  Resolution of Disputes. In the event of any controversy or
     claim arising under or in  relation to this Agreement,
     including any issue about payment of amounts due, the
     parties  shall, in good faith, attempt to resolve the
     controversy or claim by negotiation. If the  controversy or
     claim cannot be resolved within sixty (60) days, then either
     party shall be  entitled to initiate litigation to resolve
     the dispute unless the parties have mutually agreed to
     arbitrate the dispute.

 23.      Notices. Any notice or other communication required or
     that shall be given pursuant to  this Agreement shall be
     deemed sufficient if delivered personally, sent by
     facsimile, telegraph, or sent by certified, registered or
     express mail, postage prepaid to the address or facsimile
     number set forth below:

     To PERIMMUNE:

          PERIMMUNE, INC.
          1330 Piccard Drive
          Rockville, MD 20850-4396
          Facsimile No: 301/840-2161
          ATTN: President and CEO

          MENTOR CORPORATION
          5425 Hollister Avenue
          Santa Barbara, CA 93111
          Facsimile No: 805/967-3362
          ATTN: Chairman of the Board, CEO

Either party may change the address to which notice to it is to
be given, as provided herein.

24.  Entire Agreement. This Agreement and the exhibits referred
     to herein constitute the entire  Agreement between the
     parties and supersede all prior proposals, communications,
     representations and agreements, whether written or oral,
     with respect to the subject matter  hereof. No change to the
     written terms of this Agreement shall be made except by
     written  instrumentation executed by the parties hereto.

25.  No Waiver. The failure of either party to enforce at any
     time any of the provisions of this  Agreement shall not be
     construed to be a waiver of those provisions or of the right
     of that party thereafter to enforce those provisions.

26.  Severability. If any provision of this Agreement is or
     becomes or is deemed invalid, illegal  or unenforceable in
     any jurisdiction in which the Agreement is sought to be
     enforced, (a) such provision shall be deemed and amended to
     conform to applicable laws of such jurisdiction so as to be
     valid and enforceable or, if it cannot be so amended without
     materially altering the intention of the parties, it shall
     be stricken; (b) the validity, legality and enforceability
     of such provision will not in any way be affected or
     impaired thereby in any other jurisdiction; and (c) the
     remainder of this Agreement shall remain in full force and
     effect.

27.  Headings. The headings of this Agreement are included only
     for ease of reference and shall not affect the
     interpretation of this Agreement in any manner.

28.  THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION
     ENFORCEABLE BY EITHER PARTY.

IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duty authorized officers or authorized
representatives.

PERIMMUNE, INC.
By:  /s/MICHAEL G. HANNA
Title:  President
Date:  June 13, 1997

MENTOR CORPORATION
By:  /s/CHRISTOPHER CONWAY
Title:  Chairman, CEO
Date:  June 13, 1997