Document:

ex10-4

EXHIBIT 10.4

EMPLOYMENT AGREEMENT

                  This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into by and between
Washington Gas Light Company (the “Company”) or the “Utility”) and Elizabeth M.
Arnold (the “Executive”), as of the 1st day of November, 2000.

RECITALS

                  The Board of Directors of the Company (the “Board”) has determined that it
is in the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication of the Executive, notwithstanding
the possibility, threat or occurrence of a Change of Control (as defined below)
of the Company or its parent company, WGL Holdings, Inc. The Board believes it
is imperative to diminish the inevitable distraction of the Executive by virtue
of the personal uncertainties and risks created by a pending or threatened
Change of Control of the Company or WGL Holdings, Inc., to encourage the
Executive’s full attention and dedication to the interests of the Company
currently and in the event of any threatened or pending Change of Control of
the Company or WGL Holdings, Inc. and to provide the Executive with
compensation and benefits arrangements upon such a Change of Control which
ensure that the compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.

AGREEMENT

                  
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

                  1. Certain Definitions. (a) The “Effective Date” shall mean the first
date during the Change of Control Period (as defined in Section l(b)) on which
a Change of Control (as defined in Section 2) occurs. Anything in this
Agreement to the contrary notwithstanding, if a Change of Control occurs and if
the Executive’s employment with the Company is terminated within twelve months
prior to the date on which the Change of Control occurs, and if it is
reasonably demonstrated by the Executive that such termination of employment
(i) was at the request of a third party who has taken steps reasonably
calculated to effect a Change of Control or (ii) otherwise arose in connection
with or anticipation of a Change of Control, then for all purposes of

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this Agreement the “Effective Date” shall mean the date immediately prior to
the date of such termination of employment.

                  (b) The “Change of Control Period” shall mean the period commencing on the
date hereof and ending on the second anniversary of the Effective Date.

		
	 	      2. Change of Control. For the purpose of this Agreement, a “Change
of Control” shall mean:
	 
	 	      (a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)) (a “Person”), of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 30% or more of either (i) the then-outstanding shares
of common stock of WGL Holdings, Inc. or (ii) the combined voting power
of the then-outstanding voting securities of WGL Holdings, Inc. entitled
to vote generally in the election of directors; provided, however, that
for purposes of this subsection (a), the following acquisitions shall
not constitute a Change of Control: (i) any acquisition directly from
WGL Holdings, Inc., (ii) any acquisition by WGL Holdings, Inc. or any
corporation controlled by or otherwise affiliated with WGL Holdings,
Inc., (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by WGL Holdings, Inc. or any corporation
controlled by or otherwise affiliated with WGL Holdings, Inc.; or (iv)
any transaction described in clauses (i), (ii), and (iii) of subsection
(d) of this Section 2; or
	 
	 	      (b) Individuals who, as of the close of business on November 1,
2000, constituted the Board of Directors of WGL Holdings, Inc. (the
“Incumbent WGL Holdings, Inc. Board”) cease for any reason to constitute
at least a majority of the Board of Directors of WGL Holdings, Inc.;
provided, however, that any individual becoming a director subsequent to
November 1, 2000 whose election, or nomination for election by WGL
Holdings, Inc.’s shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent WGL Holdings,
Inc. Board shall be considered as though such individual were a member
of the Incumbent WGL Holdings, Inc. Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs
as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Incumbent WGL Holdings, Inc. Board; or

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	 	      (c) The acquisition by any Person of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or
more of either (i) the then-outstanding shares of common stock of the
Utility or (ii) the combined voting power of the then-outstanding voting
securities of the Utility entitled to vote generally in the election of
directors, provided, however, that for purposes of this subsection (a),
the following acquisitions shall not constitute a Change of Control: (i)
any acquisition directly from the Utility, (ii) any acquisition by the
Utility or any corporation controlled by or otherwise affiliated with
the Utility, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Utility or any corporation
controlled by or otherwise affiliated with the Utility; or (iv) any
transaction described in clauses (i) and (ii) of subsection (e) of this
Section 2; or
	 
	 	      (d) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of
the WGL Holdings, Inc. (a “Business Combination”), in each case unless,
following such Business Combination, (i) all or substantially all of the
individuals and entities who were the beneficial owners, respectively,
of the outstanding WGL Holdings, Inc. common stock and outstanding WGL
Holdings, Inc. voting securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then-outstanding shares of common stock and the
combined voting power of the then-outstanding voting securities entitled
to vote generally in the election of directors, as the case may be, of
the corporation resulting from such Business Combination in
substantially the same proportions as their ownership, immediately prior
to such Business Combination, of the outstanding WGL Holdings, Inc.
common stock and outstanding WGL Holdings, Inc. voting securities, as
the case may be, (ii) no Person (excluding any corporation resulting
from such Business Combination or any employee benefit plan (or related
trust) of WGL Holdings, Inc. or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 30% or
more of, respectively, the then-outstanding shares of common stock of
the corporation resulting from such Business Combination, or the
combined voting power of the then-outstanding voting securities of such
corporation, except to the extent that such ownership existed prior to
the Business Combination and (iii) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent WGL Holdings, Inc. Board at
the time of the execution of the initial agreement, or of such Incumbent
WGL Holdings, Inc. Board, providing for such Business Combination; or

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	 	      (e) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of
the Utility (a “Utility Business Combination”), in each case unless,
following such Utility Business Combination, (i) all or substantially
all of the individuals and entities who were the beneficial owners,
directly or indirectly, respectively, of the outstanding Utility common
stock and the outstanding Utility voting securities immediately prior to
such Utility Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then-outstanding shares
of common stock and the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such
Utility Business Combination in substantially the same proportions as
their ownership, immediately prior to such Utility Business Combination,
of the outstanding Utility common stock and outstanding Utility voting
securities, as the case may be, and (ii) no Person (excluding any
corporation resulting from such Utility Business Combination or any
employee benefit plan (or related trust) of the Utility or such
corporation resulting from such Utility Business Combination)
beneficially owns, directly or indirectly, 30% or more of, respectively,
the then-outstanding shares of common stock of the corporation resulting
from such Utility Business Combination, or the combined voting power of
the then-outstanding voting securities of such corporation, except to
the extent that such ownership existed prior to the Utility Business
Combination; or
	 

		
	 	      (f) Approval by the shareholders of WGL Holdings, Inc. of a complete
liquidation or dissolution of WGL Holdings, Inc.

                  3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the
employ of the Company subject to the terms and conditions of this Agreement,
for the period commencing on the Effective Date and ending on the second
anniversary of such date (the “Employment Period”).

                  4. Terms of Employment. (a) Position and Duties. (i) During the
Employment Period, (A) the Executive’s position, duties and responsibilities
shall be at least commensurate in all material respects with the most
significant of those held, exercised and assigned at any time during the
120-day period immediately preceding the Effective Date (it being understood
that changes in reporting relationships or offices shall not necessarily
constitute a material change in position, duties or responsibilities) and (B)
the Executive’s services shall be performed at the location where the Executive
was employed immediately preceding the Effective Date or any office or location
less than 35 miles from such location; and

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                  (ii) During the Employment Period, and excluding any periods of vacation
and sick leave to which the Executive is entitled, the Executive agrees to
devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive hereunder, to use the
Executive’s reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions, and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of the
activities similar in nature and scope thereto) subsequent to the Effective
Date shall not thereafter be deemed to interfere with the performance of the
Executive’s responsibilities to the Company.

                  (b) Compensation. (i) Base Salary. During the Employment Period, the
Executive shall receive an annual base salary (“Annual Base Salary”), which
shall be paid at a monthly rate, at least equal to twelve times the highest
monthly base salary paid or payable, including any base salary which has been
earned but deferred, to the Executive by the Company and its affiliated
companies in respect of the 12-month period immediately preceding the month in
which the Effective Date occurs. As used herein, “Annual Base Salary” will
include all wages or salary paid to the Executive and will be calculated before
any salary reduction or deferrals, including but not limited to reductions made
pursuant to Sections 125 and 401(k) of the Internal Revenue Code of 1986, as
amended. During the Employment Period, the Annual Base Salary shall be
reviewed no more than 12 months after the last salary increase awarded to the
Executive prior to the Effective Date and thereafter at least annually. Any
increase in Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. Annual Base Salary shall not
be reduced after any such increase and the term Annual Base Salary as utilized
in this Agreement shall refer to Annual Base Salary as so increased. As used
in this Agreement, the term “affiliated companies” shall include any company
controlled by, controlling or under common control with the Company.

                  (ii) Annual Incentive. In addition to Annual Base Salary, the Executive
shall earn annual incentive compensation (the “Annual Incentive”) for each
fiscal year ending during the Employment Period, at least equal to that
available to other peer executives of the Company and its affiliated companies.

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Each such Annual Incentive shall be paid no later than the end of the
third month of the fiscal year next following the fiscal year for which the
Annual Incentive is awarded, unless the Executive shall elect to defer the
receipt of such Annual Incentive. In the event the Executive is terminated
during the Employment Period, the Executive’s Annual Incentive for the most
recent year shall be prorated for the portion of that year that the Executive
worked in the manner set forth in Section 6(a)(i)(A)(2).

                  (iii) Incentive, Savings and Retirement Plans. During the Employment
Period, the Executive shall be entitled to participate in all incentive,
savings and retirement plans, practices, policies and programs applicable
generally to other peer executives of the Company and its affiliated companies,
but in no event shall such plans, practices, policies and programs provide the
Executive with incentive opportunities (measured with respect to both regular
and special incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement benefit
opportunities, less favorable, in the aggregate, than the most favorable of
those provided by the Company and its affiliated companies for the Executive
under such plans, practices, policies and programs as in effect at any time
during the 120-day period immediately preceding the Effective Date or if more
favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies.

                  (iv) Welfare Benefit Plans. During the Employment Period, the Executive
and/or the Executive’s beneficiaries, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental,
disability, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other peer
executives of the Company and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide the Executive with
benefits which are less favorable, in the aggregate, than the most favorable of
such plans, practices, policies and programs in effect for the Executive at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, those provided generally at any time after the
Effective Date to other peer executives of the Company and its affiliated
companies.

                  (v) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the most favorable policies, practices and
procedures of the Company and its affiliated companies in effect for the
Executive at any time during the 120-day period immediately preceding

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the Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies.

                  (vi) Fringe Benefits. During the Employment Period, the Executive shall
be entitled to fringe benefits, including, without limitation, payment of club
dues, and, if applicable, use of an automobile and payment of related expenses,
in accordance with the most favorable plans, practices, programs and policies
of the Company and its affiliated companies in effect for the Executive at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and its affiliated
companies.

                  (vii) Office. During the Employment Period, the Executive shall be
entitled to an office at least equal to that of other peer executives of the
Company and its affiliated companies.

                  (viii) Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and its affiliated companies as
in effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives
of the Company and its affiliated companies.

                  5. Termination of Employment. (a) Death or Disability. The Executive’s
employment shall terminate automatically upon the Executive’s death during the
Employment Period. If the Company determines in good faith that the Disability
of the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive written
notice in accordance with Section 12(b) of this Agreement of its intention to
terminate the Executive’s employment. In such event, the Executive’s
employment with the Company shall terminate effective on the 30th day after
receipt of such notice by the Executive (the “Disability Effective Date”),
provided that, within the 30 days after such receipt, the Executive shall not
have returned to full-time performance of the Executive’s duties. For purposes
of this Agreement, “Disability” shall mean the absence of the Executive from
the Executive’s duties with the Company on a full-time basis for 180
consecutive business days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician selected
by the Company or its insurers and acceptable to the Executive or the
Executive’s legal representative.

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                  (b) Cause. The Company may terminate the Executive’s employment during
the Employment Period for Cause. For purposes of this Agreement, “Cause” shall
mean:

		
	 	      (i) the willful and continued failure of the Executive to perform
substantially the Executive’s duties with the Company or one of its
affiliates (other than any such failure from incapacity due to physical
or mental illness), after a written demand for substantial performance is
delivered to the Executive by the Board which specifically identifies the
manner in which the Board believes that the Executive has not
substantially performed the Executive’s duties, or
	 
	 	      (ii) the willful engaging by the Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the
Company.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive’s action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or based upon the advice of counsel for the Company
shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company. The
cessation of employment of the Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than three quarters
of the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before
the Board), finding that, in the good faith opinion of the Board, the Executive
is guilty of the conduct described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.

                  (c) Good Reason. The Executive’s employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, “Good Reason” shall
mean:

		
	 	      (i) the assignment to the Executive of any duties inconsistent in
any material respect with the Executive’s position as contemplated by
Section 4(a) of this Agreement, excluding for this purpose an isolated,
insubstantial and inadvertent action which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;

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	 	      (ii)any failure by the Company to comply with any of the
provisions of Section 4(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;
	 
	 	      (iii) failure by the Company to reimburse the Executive for
expenses related to a required relocation;
	 
	 	      (iv) any required relocation of the Executive more than thirty five
miles from Washington, D.C., other than on a temporary basis (less than
two months);
	 
	 	      (v) any purported termination by the Company of the Executive’s
employment otherwise than as expressly permitted by this Agreement; or
	 
	 	      (vi) any failure by the Company to comply with and satisfy Section
11 (c) of this Agreement.

                  (d) Notice of Termination. Any termination by the Company for Cause, or
by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b) of
this Agreement. For purposes of this Agreement, a “Notice of Termination”
means a written notice which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date (which date shall be not
more than 30 days after the giving of such notice). The failure by the
Executive or the Company to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of the Executive or the Company, respectively, hereunder or
preclude the Executive or the Company, respectively, from asserting such fact
or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

                  (e) Date of Termination. “Date of Termination” means (i) if the
Executive’s employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive’s
employment is terminated by the Company other than for Cause or Disability,
the Date of Termination shall be the date on which the Company notifies the
Executive of such termination and (iii) if the Executive’s employment is
terminated by reason of death or Disability, the Date of Termination shall be

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the date of death of the Executive or the Disability Effective Date, as
the case may be.

                  6. Obligations of the Company upon Termination During Employment Period.
(a) Good Reason, Other Than for Cause, Death or Disability. If, during the
Employment Period, the Company shall terminate the Executive’s employment other
than for Cause or Disability or the Executive shall terminate employment for
Good Reason:

		
	 	      (i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the
following amounts:

		
	 	      A. the sum of (1) the Executive’s Annual Base Salary through
the Date of Termination to the extent not theretofore paid, (2) the
product of (x) the Target Annual Incentive (as defined in the
Executive Compensation Plan of the Company) in the fiscal year of
the Executive’s Termination and (y) a fraction, the numerator of
which is the number of days in the current fiscal year through the
Date of Termination, and the denominator of which is 365 and (3)
any compensation previously deferred by the Executive (together
with any accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not therefore paid (the
sum of the amounts described in clauses (1), (2), and (3) shall be
hereinafter referred to as the “Accrued Obligations”); and
	 
	 	      B. Subject to the provisions of Section 9, the amount equal
to three times the Executive’s Highest Pay. For purposes of this
Agreement, Highest Pay shall mean the sum of (1) the Executive’s
Annual Base Salary, plus (2) the highest of the Executive’s Annual
Incentive actually earned for the last three full fiscal years.

		
	 	      (ii) for three years after the Executive’s Date of Termination, or
such longer period as may be provided by the terms of the appropriate
plan, program, practice or policy, the Company shall continue benefits to
the Executive and/or the Executive’s beneficiaries at least equal to
those which would have been provided to them in accordance with the
plans, programs, practices and policies described in Section 4(b)(iv) of
this Agreement if the Executive’s employment had not been terminated or,
if more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies and their families, provided, however, that if the
Executive becomes reemployed with another employer and is eligible to
receive medical or other welfare benefits under another employer-

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provided plan, the medical and other welfare benefits described
herein shall be secondary to those provided under such other plan during
such applicable period of eligibility. After this three-year term, the
Executive shall immediately be eligible for COBRA benefits. For purposes
of determining eligibility (but not the time of commencement of benefits)
of the Executive for retiree benefits pursuant to such plans, practices,
programs and policies, the Executive shall be considered to have remained
employed until three years after the Date of Termination and to have
retired on the last day of such period;

		
	 	      (iii) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive any other amounts or
benefits required to be paid or provided or which the Executive is
eligible to receive under any plan, program, policy or practice or
contract or agreement of the Company and its affiliated companies (such
other amounts and benefits shall be hereinafter referred to as the “Other
Benefits”);
	 
	 	      (iv) the Company shall credit the Executive with up to an additional
three years of benefit service under the Company’s Supplemental Executive
Retirement Plan (the “SERP”), but in no event shall such additional years
of benefit service result in total years of benefit service exceeding the
maximum under the SERP;
	 
	 	      (v) the Company shall, at its sole expense as incurred, provide the
Executive with reasonable outplacement services the scope and provider of
which shall be selected by the Executive in the Executive’s sole
discretion; and
	 
	 	      (vi) immediately prior to termination of the Executive’s
employment, all restricted stock grants made to the Executive which are
outstanding at the time of such event shall be accelerated and vest.

                  (b) Death. If the Executive’s employment is terminated by reason of the
Executive’s death during the Employment Period, this Agreement shall terminate
without further obligations to the Executive’s legal representatives under this
Agreement, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits. Accrued Obligations shall be paid to the
Executive’s estate or beneficiary, as applicable, in a lump sum in cash within
30 days of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 6(b) shall
include, without limitation, and the Executive’s estate and/or beneficiaries
shall be entitled to receive, benefits at least equal to the most favorable
benefits provided by the Company and affiliated companies to the estates and

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beneficiaries of peer executives of the Company and such affiliated
companies under such plans, programs, practices and policies relating to death
benefits, if any, as in effect with respect to other peers and their
beneficiaries at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive’s estate and/or the
Executive’s beneficiaries, as in effect on the date of the Executive’s death
with respect to other peer executives of the Company and its affiliated
companies and their beneficiaries.

                  (c) Disability. If the Executive’s employment is terminated by reason of
the Executive’s Disability during the Employment Period, this Agreement shall
terminate without further obligations to the Executive, other than for payment
of Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Executive in a lump sum in cash within
30 days of the Date of Termination. With respect to the provision of Other
Benefits, the term “Other Benefits” as utilized in this Section 6(c) shall
include, and the Executive shall be entitled after the Disability Effective
Date to receive, disability and other benefits at least equal to the most
favorable of those generally provided by the Company and its affiliated
companies to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect generally with respect to other peer executives and their families at
any time during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Executive and/or the Executive’s beneficiaries, as in
effect at any time thereafter generally with respect to other peer executives
of the Company and its affiliated companies and their families.

                  (d) Cause: Other than for Good Reason. If the Executive’s employment
shall be terminated for Cause during the Employment Period, this Agreement
shall terminate without further obligations to the Executive other than the
obligation to pay to the Executive (x) the Executive’s Annual Base Salary
through the Date of Termination, (y) the amount of any compensation previously
deferred by the Executive, and (z) Other Benefits, in each case to the extent
theretofore unpaid. If the Executive voluntarily terminates employment during
the Employment Period, excluding a termination for Good Reason, this Agreement
shall terminate without further obligations to the Executive, other than for
Accrued Obligations and the timely payment or provision of Other Benefits. In
such case, all Accrued Obligations shall be paid to the Executive in a lump sum
in cash within 30 days of the Date of Termination.

                  7. Nonexclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Executive’s continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor, subject to Section 12(f), shall
anything herein limit or otherwise affect such rights as the

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Executive may have under any contract or agreement with the Company or any
of its affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy, practice or
program of or any contract or agreement with the Company or any of its
affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract
or agreement except as explicitly modified by this Agreement.

                  8. Full Settlement. The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and such
amounts shall not be reduced whether or not the Executive obtains other
employment.

                  9. Certain Additional Payments by the Company. (a) Anything in this
Agreement to the contrary notwithstanding and except as set forth below, in the
event it shall be determined that any payment or distribution by the Company to
or for the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this
Section 9) (a “Payment”) would be subject to the excise tax imposed by Section
4999 of the Code or any interest or penalties are incurred by the Executive
with respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the “Excise
Tax”), then the Executive shall be entitled to receive an additional payment (a
“Gross-Up Payment”) in an amount such that after payment by the Executive of
all taxes (including any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and any interest and
penalties imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Payments.

                  (b) Subject to the provisions of Section 9(c), all determinations required
to be made under this Section 9, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by such certified
public accounting firm as may be designated by the Executive (the “Accounting
Firm”) which shall provide detailed supporting calculations both to the Company
and the Executive within 15 business days of the receipt of notice from the
Executive that there has been a Payment, or such earlier

13

time as is requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or group
effecting the Change of Control, the Executive shall appoint another nationally
recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder).
All fees and expenses of the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant to this Section 9, shall
be paid by the Company to the Executive within five days of the receipt of the
Accounting Firm’s determination. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made (“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.

                  (c) In the event the Internal Revenue Service (“IRS”) subsequently
challenges the Excise Tax computation herein described, then the Executive
shall notify the Company in writing of any claim by the IRS that, if
successful, would require the payment by the Executive of additional Excise
Taxes. Such notification shall be given no later than ten days after the
Executive receives written notice of such claim. The Executive shall not pay
such claim prior to the expiration of the 30-day period following the date on
which the Executive gives notice to the Company (or such shorter period ending
on the date that any payment of taxes with respect to such claim is due). If
the Company notifies the Executive in writing prior to the expiration of such
period that it desires to contest such claim and that it will bear the costs
and provide the indemnification as required by this sentence, the Executive
shall cooperate with the Company in good faith in order effectively to contest
such claim and permit the Company to participate in any proceedings relating to
such claim. In the event a final determination is made with respect to the IRS
claim, or in the event the Company chooses not to further challenge such claim,
then the Company shall reimburse the Executive for the additional Excise Tax
owed to the IRS in excess of the Excise Tax calculated by the Accounting Firm.
The Company shall also reimburse the Executive for all interest and penalties
related to the underpayment of such Excise Tax. The Company will also
reimburse the Executive for all federal and state income tax and employment
taxes thereon.

14

                  10. Confidential Information. The Executive shall hold in a fiduciary
capacity for the benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated companies,
and their respective businesses, which shall have been obtained by the
Executive during the Executive’s employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other
than by acts by the Executive or representatives of the Executive in violation
of this Agreement). After termination of the Executive’s employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the
Company and those designated by it. In no event shall an asserted violation of
the provisions of this Section 10 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this
Agreement.

                  11. Successors & Assigns. (a) This Agreement is personal to the
Executive and without the prior written consent of the Company shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive’s legal representatives.

                  (b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.

                  (c) The Company will require any successor or any party that acquires
control of the Company (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company or any party that acquires control of the Company to
assume expressly and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, “Company” shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.

                  12. Miscellaneous. (a) Governing Law; Headings; Amendment. This
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia, without reference to principles of conflict of laws.
The captions of this Agreement are not part of the provisions hereof and shall
have no force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.

15

                  (b) Notices. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

	 	If to the Executive:

at the address for Executive that is on file with the Company

	 	If to the Company:

Washington Gas Light Company

1100 H Street, N.W.

Washington, D.C. 20080

ATTN: General Counsel

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

                  (c) Severability. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.

                  (d) Withholding. The Company may withhold from any amounts payable under
this Agreement such federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.

                  (e) Waiver. The Executive’s or the Company’s failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right under this
Agreement.

                  (f) At Will Employment. The Executive and the Company acknowledge that,
except as may otherwise be provided under any other written agreement between
the Executive and the Company, the employment of the Executive by the Company
is “at will” and, subject to Section l(a) hereof, prior to the Effective Date,
the Executive’s employment and/or this Agreement may be terminated by either
the Executive or the Company at any time prior to the Effective Date, in which
case the Executive shall have no further rights under this Agreement. From and
after the Effective Date this Agreement shall supersede any other agreement
between the parties with respect to the subject matter hereof.

16

                  (g) Arbitration. In the event of any dispute between the parties
regarding this Agreement, the parties shall submit to binding arbitration,
conducted in Washington, DC or in Virginia within 25 miles of Washington, DC.
The arbitration shall be conducted pursuant to the rules of the American
Arbitration Association. Each of the parties shall select one arbitrator, who
shall not be related to, affiliated with or employed by that party. The two
arbitrators shall, in turn, select a third arbitrator. The decision of any two
of the arbitrators shall be binding upon the parties, and may, if necessary, be
reduced to judgment in any court of competent jurisdiction. Notwithstanding
the foregoing, the parties expressly agree that nothing herein in any way
precludes Company from seeking injunctive relief or declaratory judgment
through a court of competent jurisdiction with respect to a breach (or an
alleged breach) of any covenant not to compete or of any confidentiality
covenant contained in this Agreement. In the event the Executive pursues
arbitration pursuant to this Section herein, the Executive shall be compensated
up to $150,000 in legal costs.

                  (h) Pooling of Interests Accounting. In the event any provision of this
Agreement would prevent the use of pooling of interests accounting in a
corporate transaction involving the Company and such transaction is contingent
upon pooling of interests accounting, then that provision shall be deemed
amended or revoked to the extent required to preserve such pooling of
interests. The Executive will, upon advice from the Company, take (or refrain
from taking, as appropriate) all actions necessary or desirable to ensure that
pooling of interests accounting is available.

                  (i) Effect of Prior Agreements. This Agreement contains the entire
understanding between the parties hereto and supersedes the Employment
Agreement dated July 19, 1999 between the Company and the Executive.

                  IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

	 	_______________________________________

Name: Elizabeth M. Arnold

	 	WASHINGTON GAS LIGHT COMPANY

	 	_______________________________________

By: James H. DeGraffenreidt, Jr.

Title: Chairman, President and Chief

Executive Officer

17<PAGE>   1

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                                                   EXHIBIT 10.2

                                 TROPIX, INC.

                              RESELLER AGREEMENT

         THIS AGREEMENT is made as of the 22nd day of July, 1996, by TROPIX,
INC., a Delaware corporation ("Tropix"), with its principal place of business
at 47 Wiggins Avenue, Bedford, Massachusetts 01730, U.S.A., and Digene
Corporation, a Delaware corporation ("Digene"), with its principal place of
business at 2301-B Broadbirch Drive, Silver Spring, Maryland 20904, U.S.A..

                                   RECITALS

         The parties desire that the product of Tropix listed on Schedule A
hereto ("Product") shall be purchased by Digene and that Digene shall resell
the Product, all upon the terms and conditions set forth herein. The
definitions of capitalized terms used but not otherwise defined herein are set
forth in Schedule C hereto.

         The parties, in consideration of the mutual obligations hereinafter
set forth and intending to be legally bound, hereby agree as follows:

1.       APPOINTMENT AS RESELLER

         1.1 Tropix hereby appoints Digene as its nonexclusive reseller for
the sale, distribution and promotion of the Product, and Digene accepts such
appointment, subject to the restrictions set forth in this Section 1.

         1.2 Digene may only resell the Product (i) under Digene's label or a
joint Digene/Digene distributor label and (ii) only as a component of products
manufactured by Digene (and only Digene) which incorporate both the Product
and Digene's proprietary Hybrid Capture system for use in human in vitro
diagnostics or for pharmaceutical therapeutics research and development. In
the event that during the term of this Agreement, Digene develops one or more
products for the non-human diagnostic markets such as food and environmental
testing, and can demonstrate to Tropix reasonable satisfaction that
commencement of commercial sales is imminent, at Digene's request the parties
will negotiate in good faith a Reseller Agreement for the Product for use in
such Digene products for the non-human diagnostic markets. Tropix obligation
in such event shall be limited to negotiating such a Reseller Agreement in
good faith and nothing contained herein shall impose any obligation on Tropix
with respect thereto other than to so negotiate in good faith.

         1.3 Nothing contained in Section 1.2 shall be deemed to prohibit
International Murex Technologies Corporation ("Murex") from marketing and
selling products, manufactured b Digene, for the detection of infectious
diseases, which utilize Digene's proprietary Hybrid Capture system for use in
human in vitro diagnostics or for pharmaceutical therapeutics research and
development and which incorporate Product.

                                      1

<PAGE>   2

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Murex shall have no other rights to the Product (including, without
limitation, the right to incorporate any Product into any Murex product) and
in all other respects the restrictions set forth in Section 1.2 and 1.5 shall
apply.

         1.4 In the event Digene proposes to resell Product under the label of
a third party but otherwise in accordance with Section 1.2 and 1.5, at
Digene's request Tropix will negotiate in good faith a Reseller Agreement with
such third party for the products to be sold under such third party's label.
Tropix obligation in such event shall be limited to negotiating such a
Reseller Agreement in good faith and nothing contained herein shall impose any
obligation on Tropix with respect thereto other than to so negotiate in good
faith.

         1.5 In no event shall Digene (a) dilute or alter the Product, (b)
resell the Product in the research or pharmaceutical screening markets or (c)
resell the Product for use in membrane-based assays.

         1.6 To the extent Tropix grants to any unrelated third party the
right to resell an improved formulation of the Product at any time during the
term of this Agreement, Tropix shall notify Digene of such improved
formulation of the Product. Upon notification, Digene shall have the option of
purchasing such improved formulation of the Product at a purchase price to be
agreed upon by the parties. Digene recognizes and agrees that any new,
improved or substitute dioxetane products and any new, improved or substitute
enhancer products manufactured, marketed and/or sold by Tropix will not
constitute an improved formulation of the Product and that this Agreement does
not provide Digene with any right to any new, improved or substitute
dioxetanes or enhancers.

2.       DIGENE'S OBLIGATIONS AND REPRESENTATIONS.  In addition to Digene's
obligations set forth elsewhere in this Agreement, Digene shall from and after
the date of this Agreement:

         2.1 Use reasonable commercial efforts to promote, develop a market
for and sell DNA probe assays, utilizing the Product, for human in vitro
diagnostics;

         2.2 Promptly respond to all customer complaints about the Product,
promptly notify Tropix of any recall or complaints; and

         2.3 Obtain, at its own expense, any import or export license, foreign
exchange license, foreign exchange permit, or other permit or approval it may
need for the resale of Product hereunder and otherwise comply with all laws,
regulations, rules and requirements governing the sale of the Product;
provided, however, that, at the request and expense of Digene, Tropix will aid
Digene in gaining regulatory approvals where help and information relating to
the Product is required.

         2.4 Digene represents to Tropix to the best of its knowledge that:

                                      2

<PAGE>   3

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                  (a) Digene is duly organized and validly existing in good
         standing under the laws of the State of Delaware, and has full
         corporate power and authority to enter into this Agreement and to
         carry out the provisions hereof;

                  (b) Digene has validly taken all requisite corporate action
         to properly authorize the execution of this Agreement and to fulfill
         its obligations hereunder;

                  (c) Digene has all the necessary corporate right, power and
         authority to enter into this Agreement; and

                  (d) Digene has carried on directly all negotiations with
         Tropix relative to this Agreement and is under no obligation or
         commitment to any person under which any brokerage commission or
         other compensation is payable with respect to the execution of this
         Agreement.

3.       PRICES AND TERMS OF SALE

         3.1 The prices for the Product are set forth in Schedule B. Such
prices are F.O.B. Tropix U.S. shipping facility, currently in Bedford,
Massachusetts. Tropix may adjust the price list once per year beginning
[****************] as provided in Schedule B. Tropix will notify Digene not
later than thirty (30) days prior to the effective date of any such price
increase.

         No later than December 1 of each year, Digene shall deliver to Tropix
a non-binding forecast of the quantity of Product it estimates it will
purchase under this Agreement during the forthcoming calendar year, and the
prices for the Product for such year shall be based upon the assumption that
Digene in fact will purchase the forecasted quantity during such year. If
Digene in fact purchases less than the quantity of Product it forecasted it
would purchase during such year, within thirty (30) days after the conclusion
of such year, Digene shall pay to Tropix the difference, if any, between the
aggregate purchase price paid by Digene for Product purchased during such year
and the aggregate purchase price Digene should have paid for the Product
purchased during such year based upon the quantities actually purchased, and
if Digene in fact purchases more than the quantity of Product it forecasted it
would purchase during such year, within thirty (30) days after the conclusion
of such year, Tropix shall pay to Digene the difference between the aggregate
purchase price paid by Digene for Product purchased during such year and the
aggregate purchase price Digene should have paid for the Product purchased
during such year based upon the quantities actually purchased.

         If this Agreement shall expire or terminate other than at a calendar
year end, for purposes of determining any amounts payable pursuant to the
preceding paragraph, the quantities of Product purchased during such year
prior to the date of expiration or termination shall be annualized, and within
thirty (30) days after the date of such expiration or termination, Digene
shall make

                                      3

<PAGE>   4

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

the payment to Tropix or Tropix shall make the payment to Digene, as the case
may be, contemplated by the preceding paragraph based upon such annualization.

         3.2 All shipments will be invoiced at the time of shipment, including
partial shipments. Digene assumes and agrees to pay and hold Tropix harmless
from all export or import duties, fees or other charges, all sales, use,
excise, value added or other taxes or assessments applicable to any sale under
this Agreement (but excluding taxes, together with any interest or penalties
imposed in connection therewith, on Tropix's gross revenues or profits), and
all costs and charges for transportation, brokerage, handling and insurance of
the Product from the point of shipment.

         3.3 Except for the technology access fee pursuant to Section 3.4 and
the royalties pursuant to Section 3.5, all payments required hereunder are due
within thirty (30) days of invoicing. All payments shall be in U.S. Dollars at
Tropix's principal place of business, without deduction or offset (except as
expressly authorized herein or in writing in advance by Tropix). If Tropix at
any time has reasonable concern about security or timeliness of payments, it
may decline to make shipments until receipt of payment or establishment of a
letter of credit or other arrangement securing payment. Tropix may impose
interest on overdue payments at the lesser of (i) 1-1/2% per month or (ii) the
maximum legal rate of interest.

         3.4 In addition to the price listed on Schedule B, Digene shall pay
Tropix a technology access fee in the amount of $[*******], payable as of the
date of this Agreement, such technology access fee will be credited against
the first $[*******] of royalties due to Tropix as set forth in Section 3.5.

         3.5 In addition to the price listed on Schedule B, Digene shall,
subject to Section 3.4, pay Tropix royalties as set forth in Schedule B,
payable with each report submitted pursuant to Section 3.7.

         3.6 Digene shall keep complete and accurate books of account
containing all particulars that may be necessary for the purpose of showing
the amounts payable to Tropix hereunder. Said books of account shall be kept
at Digene's principal place of business or the principal place of business of
the appropriate division of Digene to which this Agreement relates. Said books
and the supporting data shall be open for five (5) years following the end of
the calendar year to which they pertain, to the inspection of Tropix or its
agents for the purpose of verifying Digene's royalty statements or compliance
in other respects with this Agreement during Digene's ordinary business hours,
not more than once in any 12-month period. Should such inspection lead to the
discovery of more than a 10% discrepancy, Digene shall pay the full cost of
such inspection.

         3.7 Within forty-five (45) days after each March 31, June 30,
September 30 and December 31, Digene shall deliver to Tropix reports stating
(a) the number of Tests sold (or otherwise disposed of in a transaction which
generated Net Sales) by Digene; (b)

                                      4

<PAGE>   5

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

Net Sales of Tests; (c) applicable deductions; (d) total royalties due and
payable, and (e) such other information regarding Digene's business under this
Agreement as Tropix shall reasonably request. If no royalties shall be due,
Digene shall so report. "Tests" and "Net Sales" shall have the meanings set
forth on Schedule C.

         3.8 Minimum Purchases are set forth in Schedule A. If Digene fails to
make Minimum Purchases for any applicable period set forth in Schedule A,
Tropix may terminate this Agreement as set forth in Section 5.2 without
incurring any obligation of any kind to Digene, provided, however, that Tropix
shall first notify Digene of its intent to terminate the agreement and Digene
shall then have 45 days to acquire the minimum purchase amount.

4.       ORDERS AND SHIP

         4.1 Digene shall submit orders at least forty-five (45) days prior to
the requested delivery dates on a purchase order referencing this Agreement.
Digene shall purchase at least the Minimum Purchase amounts not later than the
times set forth in Schedule A hereto.

         4.2 Tropix may specify a different ship date by written notice within
seven (7) days after receipt of an order but otherwise will use commercially
reasonable efforts to ship orders by the requested date. Shipments shall be in
accordance with Digene's instructions, but unless other written instructions
are provided by Digene, Tropix will select the common carrier and shall prepay
freight, insurance, and other reasonable and customary or necessary charges
and invoice them to Digene. All Product will be properly packed.

         4.3 The terms and provisions herein and no others shall govern all
orders and purchases notwithstanding any inconsistent or additional terms on
purchase orders or forms, which inconsistent or additional terms shall have no
force or effect whatsoever as between the parties even if Tropix might be
deemed to have accepted same by reason of its execution or acknowledgment
thereof.

         4.4 In the event Tropix is unable to supply Product to Digene and
such failure to supply continues for a period of six consecutive (6) months,
thereafter Tropix will grant Digene a non-exclusive license under Tropix
appropriate patents and know-how to enable Digene to manufacture such Product
solely to the extent necessary to enable Digene to substitute itself for
Tropix as a source of supply for the Product Tropix is unable to supply to
Digene. The terms and conditions of any license agreement granted pursuant to
this Section shall be the subject of good faith negotiations between Tropix
and Digene and shall include the payment of royalties to Tropix. In any event,
any rights granted to Digene under this Section (i) shall continue until the
earlier to occur of the expiration of this Agreement or such date as Tropix
advises Digene that it is able to supply such Product to Digene and (ii) are
limited to Digene only, and in no

                                      5

<PAGE>   6

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

event may Digene assign, delegate or otherwise transfer any of its rights
under this Section to any other party, including without limitation, its
subsidiaries or distributors.

5.       TERM AND TERMINATION

         5.1 This Agreement shall commence on the date first set forth above
and shall extend for a period of ten (10) years, subject to earlier
termination as provided herein. The parties may renew this Agreement after the
initial term upon express mutual agreement in writing at least ninety (90)
days prior to the expiration of the initial term, but if they do not, this
Agreement shall automatically expire at the end of the initial term, provided,
however, that Tropix shall have notified Digene at least six months in advance
of the expiration date of its intent not to renew the Agreement.

         5.2 This Agreement shall not, however, be terminated as to any Digene
products (and only such Digene products) which incorporate both the Product
and Digene's proprietary Hybrid Capture system for use in human in vitro
diagnostics as to which Digene has commenced FDA approval trials so long as
(i) Digene diligently prosecutes its application for FDA approval of such
product and (ii) if FDA approval is obtained, Digene is using commercially
reasonable efforts to market the approved products.

         5.3 Notwithstanding anything herein contained to the contrary, and in
addition and without prejudice to any other rights or remedies, the parties
shall have the right to terminate this Agreement as follows:

                  (a) either party may terminate this Agreement effective
         immediately upon written notice if (i) the other party fails to make
         any payment due hereunder within ten (10) days after the date such
         payment was due and the payment has not been made within 20 days
         after such notice or (ii) the other party is in material breach of
         the terms hereof, provided, however, that if the material breach is
         capable of remedy, termination shall be effective thirty (30) days
         after notice specifying the breach and such remedy if the breach
         shall not have been remedied within such period;

                  (b) either party may terminate this Agreement effective
         immediately upon written notice if (i) all or a substantial portion
         of the assets of the other party are transferred to an assignee for
         the benefit of creditors, a receiver, or a trustee in bankruptcy,
         (ii) a proceeding is commenced by or against the other party for
         relief under bankruptcy or similar laws and such proceeding is not
         dismissed within thirty (30) days, (iii) the other party is adjudged
         insolvent or bankrupt; or (iv) if the other party shall cease to
         carry on business;

                  (c) Tropix may terminate this Agreement effective
         immediately upon written notice if Digene is in breach of Section
         1.2, 7, 8 or 9 of this Agreement, provided, however, that Tropix
         shall first notify Digene of its intent to terminate

                                      6

<PAGE>   7

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

         the Agreement and Digene shall then have forty-five (45) days to
         remedy such breach;

                  (d) Tropix may terminate this Agreement effective
         immediately upon written notice if Digene shall fail to make the
         Minimum Purchases set forth on Schedule A for any applicable period
         set forth in said Schedule; provided however that Tropix shall first
         notify Digene of its intent to terminate the Agreement and Digene
         shall then have forty-five (45) days to acquire the Minimum Purchase
         amount;

                  (e) Tropix may terminate this Agreement effective upon
         thirty (30) days prior written notice if, during the first three
         years of the term hereof, Digene shall not have filed and be
         diligently prosecuting, applications with the United States Food and
         Drug Administration ("FDA") for commercial sales of at least four
         Digene Hybrid Capture Infectious Disease tests each of which
         incorporates Product for use in human in vitro diagnostics, provided,
         however, that this Agreement shall not be terminated as to any Digene
         products (and only such Digene products) which incorporate both the
         Product and Digene's proprietary Hybrid Capture system for use in
         human in vitro diagnostics as to which Digene has commenced FDA
         approval trials so long as (i) Digene diligently prosecutes its
         application for FDA approval of such product and (ii) if FDA approval
         is obtained, Digene is using commercially reasonable efforts to
         market the approved products;

                  (f) Tropix may terminate this Agreement upon ninety (90)
         days prior written notice in the event that for any [********] period
         Digene shall neither have developed nor, through the application of
         substantial resources, be actively and continuously engaged in the
         development of additional products incorporating the Product;
         provided, however, that this Agreement shall not be terminated as to
         any Digene products (and only such Digene products) which incorporate
         both the Product and Digene's proprietary Hybrid Capture system for
         use in human in vitro diagnostics as to which Digene has commenced
         FDA approval trials so long as (i) Digene diligently prosecutes its
         application for FDA approval of such product and (ii) if FDA approval
         is obtained, Digene is using commercially reasonable efforts to
         market the approved products; and

                  (g) Tropix may terminate this Agreement upon ninety (90)
         days prior written notice in the event Digene's Net Sales fall below
         [*************] dollars per calendar year for any year beginning with
         the [*********], provided however that Tropix shall first notify
         Digene of its intent to terminate the Agreement and Digene shall then
         have forty-five (45) days to pay to Tropix the royalties which would
         have been due under Section 3.5 based upon Net Sales of
         [*************] dollars; and further provided, that this Agreement
         shall not be terminated as to any Digene products (and only such
         Digene products) which incorporate both the

                                      7

<PAGE>   8

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

         Product and Digene's proprietary Hybrid Capture system for use in
         human in vitro diagnostics as to which Digene has commenced FDA
         approval trials so long, as (i) Digene diligently prosecutes its
         application for FDA approval of such product and (ii) if FDA approval
         is obtained, Digene is using commercially reasonable efforts to
         market the approved products.

         5.4 Digene acknowledges that this Agreement shall, unless the parties
mutually agree otherwise, continue only until the expiration of the term. With
such knowledge in mind, Digene has agreed to the pricing structure provided
for in this Agreement as full, fair and sufficient compensation for all
efforts and services to be performed by Digene. Accordingly, in the event of
termination or expiration in accordance with this Agreement neither party
shall be entitled to any indemnity, compensation, damages, loss of profits or
prospective profits, or payment in respect of investments made or goodwill or
clientele established during the continuance of this Agreement. Digene hereby
waives all rights to compensation and damages in connection therewith to which
it may otherwise be entitled under the law of any jurisdiction.

         5.5 The obligations of Digene under Sections 1.2, 1.5, 3.4, 3.5, 3.6,
3.7.6.6, 7, 8, 9 or 11 shall not be affected by termination or expiration. The
obligations of Tropix under Sections 6, 9 or 11 shall not be affected by
termination or expiration.

6.       LIMITED REPRESENTATIONS AND PRODUCT WARRANTIES

         6.1 Tropix sole warranties are that each Product supplied to Digene
will, for the period specified in the Product Specifications, conform to the
Product Specifications. Tropix will provide a Certificate of Analysis with
each shipment. Tropix makes the foregoing warranties to and for the benefit of
Digene only, and they may not be assigned to any other party.

         6.2 If any Product does not conform with the foregoing warranties,
Tropix sole obligation with respect thereto shall be to replace such Product
without charge or expense to Digene or, at Tropix option, to credit Digene for
the amount paid by Digene to Tropix for such Product.

         6.3 The above warranties are contingent upon the proper use, storage
and shipment of the Product and shall be void with respect to defects or
failures due to disaster, accident, neglect, misuse, or improper storage or
shipment (in each case not attributable to Tropix).

         6.4 Tropix represents to Digene to the best of its knowledge that:

                  (a) Tropix is duly organized and validly existing in good
         standing under the laws of the State of Delaware, and has full
         corporate power and authority to enter into this Agreement and to
         carry out the provisions hereof;

                                      8

<PAGE>   9

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                  (b) Tropix has validly taken all requisite corporate action
         to properly authorize the execution of this Agreement and to fulfill
         its obligations hereunder;

                  (c) Tropix has all the necessary corporate right, power and
         authority to enter into this Agreement and to grant to Digene the
         rights hereunder; and

                  (d) Tropix has carried on directly all negotiations with
         Digene relative to this Agreement and is under no obligation or
         commitment to any person under which any brokerage commission or
         other compensation is payable with respect to the execution of this
         Agreement.

         6.5 EXCEPT AS EXPRESSLY SET FORTH IN SECTION 6.1, THERE ARE NO
WARRANTIES, EXPRESS OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE, WITH RESPECT
TO THE PRODUCTS, AND TROPIX EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES AND
WARRANTIES ARISING BY OPERATION OF LAW INCLUDING BUT NOT LIMITED TO ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. NO
REPRESENTATION OR OTHER AFFIRMATION OF FACT, INCLUDING BUT NOT LIMITED TO
STATEMENTS REGARDING CAPACITY, SUITABILITY FOR USE OR PERFORMANCE OF PRODUCTS,
WHETHER MADE BY TROPIX EMPLOYEES OR OTHERWISE, WHICH IS NOT CONTAINED IN THIS
AGREEMENT SHALL BE DEEMED TO BE A WARRANTY BY TROPIX FOR ANY PURPOSE OR GIVE
RISE TO ANY LIABILITY OF TROPIX WHATSOEVER. WITHOUT LIMITATION OF THE
FOREGOING, TROPIX IS NOT EXTENDING ANY REPRESENTATION OR WARRANTY THAT THE
PRODUCTS, ALONE OR IN COMBINATION WITH OTHER PRODUCTS, WILL NOT INFRINGE THE
PATENTS OR OTHER RIGHTS OF THIRD PARTIES. IN NO EVENT SHALL TROPIX BE LIABLE
FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES, INCLUDING WITHOUT
LIMITATION LOST BUSINESS PROFITS, REGARDLESS WHETHER THE ACTION IS IN
CONTRACT, TORT (INCLUDING NEGLIGENCE), BREACH OF WARRANTY OR OTHERWISE, EVEN
IF TROPIX HAS BEEN ADVISED AS TO THE POSSIBILITY THEREOF.

         6.6 If Digene makes any warranty or representation inconsistent with
or in addition to the foregoing warranties, Digene shall defend and hold
Tropix harmless from any claim to the extent based thereon.

         6.7 Tropix shall maintain policies of comprehensive general liability
insurance, including product liability insurance, with limits of at least
[*******************************************].

7.       TRADEMARKS AND TRADE NAMES

         7.1 Subject to Section 7.2, Tropix grants to Digene a non-exclusive
right to use the trademarks, marks, trade names and logos that Tropix may
adopt from time to time with respect to the Product ("Tropix Marks") in
connection with Digene's sale and

                                      9

<PAGE>   10

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

distribution of Product. Digene will indicate clearly in any and all materials
in which Tests utilizing the Product are advertised, marketed, sold or
otherwise distributed that such Tests utilize Product obtained by Digene from
Tropix. Except as set forth in this Section 7, nothing contained in this
Agreement will grant to Digene any right, title or interest in Tropix Marks.
Digene recognizes the validity of Tropix Marks and acknowledges the same are
the property of Tropix. At no time during or after the term of this Agreement
will Digene challenge or assist others to challenge Tropix Marks or the
registration thereof or attempt or assist others to attempt to register any
trademarks, marks, trade names or logos confusingly similar to those of
Tropix.

         7.2 All representations of Tropix Marks that Digene intends to use
will first be submitted to Tropix for approval (which will not be unreasonably
withheld) of design, color, and other details or will be exact copies of those
used by Tropix. In addition, Digene shall follow the instructions issued by
Tropix from time to time for the purpose of protecting the standards of
quality established for the goods and services sold under Tropix Marks.

8.       PATENT MARKING

         Digene shall properly affix the statutory patent notice to all
Product or, where that is impractical, to labels or boxes for such Product.

9.       CONFIDENTIAL INFORMATION.

         Each party shall treat accordingly all verbal and written
communications from the other party which are designated, or which should
reasonably be regarded, in the normal commercial view, as constituting
business secrets or proprietary information ("Proprietary Information"). Each
party shall refrain from using, disclosing or making available to any third
party any of the other party's Proprietary Information without the other
party's written consent and shall impose upon its employees and agents the
same obligations with respect to the other party's Proprietary Information as
it employs with respect to its own confidential information but in no event
shall such obligations be less than what is appropriate in accordance with
good commercial practice. No such obligations of confidence shall extend to
information which (a) is publicly available; (b) is already in the receiving
party's possession; (c) is rightfully received from a third party; or (d) is
required by law to be disclosed, but solely to the extent of such requirement,
and in such event, the party required to disclose shall identify information
so disclosed as the confidential information of the other party, shall give
written notice of such requirement to the other party as long as possible
prior to such disclosure, and shall use all reasonable efforts to cause, or to
assist the other party to cause, such government, agency or organization to
protect such information as confidential.

10.      NOTICES.

                                      10

<PAGE>   11

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

         Any notice under this Agreement shall be effective when delivered to
the address of such party set out above (or to such other address as either
party may specify by notice given to the other party), addressed in the case
of Tropix to:

         Irena Bronstein
         President & CEO
         Tropix, Inc.
         47 Wiggins Avenue
         Bedford, MA 01730

         with a copy to its General Counsel, and in the case of Digene to:

<TABLE>
<S>                                             <C>
                                                 General Counsel
         Evan Jones                              Morris Cheston, Jr.
         President & CEO                         Ballard Spahr Andrews & Ingersoll, LLP
         Digene Corporation                      1735 Market Street
         9000 Virginia Manor Rd. Suite 206       51st Floor
         Beltsville, MD 20705                    Philadelphia, PA  19103-7599
</TABLE>

11.      DISPUTE RESOLUTION.

         Any dispute relating to the interpretation, performance, or damages
resulting from improper termination, of this Agreement shall be resolved, at
either party's written request, through final, binding arbitration; provided,
however, that nothing contained herein shall be construed to prevent either
party from terminating this Agreement or from bringing an action in any court
of competent jurisdiction to compel the other party to comply with orders or
awards of the arbitrator(s) in the nature of injunctive or provisional relief
during the pendency of the arbitration proceedings. Such arbitration shall be
conducted in Boston, Massachusetts, in accordance with the Commercial
Arbitration Rules and (if applicable) Supplementary Procedures for
International Commercial Arbitration, both as modified from time to time, of
the American Arbitration Association ("AAA"). The arbitrator (or at least one
of the arbitrators if there are three) shall be an experienced business
attorney skilled in the subject matter of the dispute. The arbitrator(s) shall
assess the fees and expenses of the AAA and the arbitrator(s) between the
parties in such proportions as the arbitrator(s) deem equitable. Punitive
damages (including multiple damages) may not be awarded in any arbitration
hereunder. If judicial enforcement or review of the arbitrator(s)' award is
sought by either party, judgment may be entered upon such award in any court
of competent jurisdiction.

12.      MISCELLANEOUS

                                      11

<PAGE>   12

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

         12.1 All obligations of Tropix under this Agreement shall be subject
to the U.S. export laws, and Tropix shall not be liable for any failure to
perform hereunder if such performance is at that time prohibited by the U.S.
export laws.

         12.2 If Digene learns of any infringement of Tropix's patents, Tropix
Marks or other intellectual property rights, Digene shall promptly inform
Tropix in writing of all known information relating thereto and shall
cooperate fully with Tropix, at Tropix' expense, in any reasonable efforts
undertaken by Tropix to challenge or prosecute such infringement.

         12.3 This Agreement may not be assigned or transferred by Digene or
Tropix without the prior written consent of the other party; provided,
however, that the foregoing shall not be deemed to prohibit any assignment of
this Agreement by Tropix in connection with a sale or other transfer of all or
a substantial portion of its business relating to any Product or to a
corporation or other entity into which Tropix is merged or consolidated.

         12.4 No modification or waiver of any terms or conditions hereof
shall be of any force or effect unless in writing and signed by each party's
authorized officer. Either party's failure to enforce any provision shall not
be deemed to be a waiver of such provision or such party's right thereafter to
enforce such provision.

         12.5 Digene shall act as an independent contractor and shall not be
deemed to be an employee, agent, or legal representative of Tropix for any
purpose hereunder. Digene shall not be entitled to enter into any contracts in
the name of or on behalf of Tropix, nor to pledge the credit of Tropix in any
way or hold itself out as having authority to do so.

         12.6 This Agreement, along with the attachments referenced herein,
embodies the final, complete and exclusive understanding between the parties,
and supersedes all previous agreements, understandings and arrangements
between the parties with respect to the subject matter contained herein.

         12.7 If any provision of this Agreement is held illegal, invalid or
unenforceable, all other provisions hereof shall remain in full force and
effect as if such provision were not a part hereof.

         12.8 Except as otherwise specifically provided herein, this Agreement
shall be governed by and construed according to the laws of Massachusetts,
U.S.A., excluding both its choice of law provisions and the United Nations
Convention on Contracts for the International Sale of Goods.

         12.9 Except as otherwise provided herein, if the performance of this
Agreement or any obligation hereunder (other than the making of payments
hereunder) is prevented, restricted or interfered with by reason of any event,
act or condition beyond

                                      12

<PAGE>   13

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

the reasonable control of the affected party, the party so affected, upon
written notice to the other party, shall be excused from such performance to
the extent of such prevention, restriction or interference

         12.10 The headings and captions in this Agreement are for convenience
only and are not part of this Agreement.

         12.11 The following attachments are incorporated in and made a part
of this Agreement:

                  (i)      Schedule A: Product and Minimum Purchases

                  (ii)     Schedule B: Price List

                  (iii)    Schedule C: Definitions

                  (iv)     Schedule D: Product Specification

                                      13

<PAGE>   14

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

IN WITNESS WHEREOF, the undersigned have executed and delivered this Agreement
by their duly authorized representatives as of the date first shown above.

<TABLE>
<CAPTION>
   TROPIX, INC.                              DIGENE CORPORATION
   <S>                                      <C>
   By: /s/Nancy E. Watters                   By: /s/Evan Jones
      -------------------------------           -----------------------------
   Name: Nancy E. Watters                    Name: Evan Jones
        -----------------------------             ---------------------------
   Title: General Counsel                    Title: President & CEO
         ----------------------------              --------------------------
   Date: July 22, 1996                       Date: August 1, 1996
        -----------------------------             ---------------------------
</TABLE>

                                      14

<PAGE>   15

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                  SCHEDULE-A

                        PRODUCT AND MINIMUM PURCHASES

<TABLE>
<S>                  <C>
Product:              [*****] CDP-Star(R) with [************] of
                      Emerald-II(TM) Enhancer in [*************].

Minimum               [***] Liters of Product in [****].
Purchases:
                      [***] Liters of Product in [****].

                      [***] Liters of Product in [****].

                      [***] Liters of Product in [****].
</TABLE>

<PAGE>   16

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                  SCHEDULE B

                             PRICES AND ROYALTIES

Price per liter of Product based upon aggregate purchases per calendar year*:

                [**] liters                    $  [***]/liter
                [******] liters                $  [***]/liter
                [*****] liters                 $  [***]/liter

*In [**************], price per liter of Product will be $ [***]/liter.

Beginning [*****************], each of the foregoing prices may be changed by
multiplying such price by a fraction, the numerator of which shall be the
Index as of the most recent date available prior to the date of such change
and the denominator of which shall be the Index as of the most recent date
available prior to the date of the Agreement to which this Schedule B is
attached. As used herein, "Index" shall mean the Producer Price Index
published by the U.S. Department of Labor.

Royalty Rate:

The first $[*********] of Net                [***]% of Net Sales of Tests,
Sales, the greater of:                       or $[****] per Test.

                                             [***]% of Net Sales of Tests,
Thereafter, the greater of:                  or $[****] per Test.

<PAGE>   17

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                  SCHEDULE C

                                  DEFINITION

1        "Net Sales" shall mean the aggregate gross invoiced sales price of
all Tests (as hereinafter defined) sold by Digene, less:

         (a)      any promotional samples, rebates or discounts offered as
                  sales incentives (in amounts not to exceed amounts that are
                  normal and customary in substantially similar
                  circumstances);

         (b)      any taxes or other governmental charges levied directly on
                  sales that are borne by the seller;

         (c)      any transportation or delivery costs that are borne by the
                  seller and separately stated on the invoice; and

         (d)      refunds or credits for defective or returned Tests.

No deductions shall be made for cash discounts, commissions, cost of
collections, or uncollectible accounts. Tests shall be considered "sold" when
billed out or invoiced. Where Tests are not sold but are otherwise disposed
of, Net Sales with respect to such Tests otherwise disposed of shall be the
selling price at which Tests sold in similar quantities are then being offered
for sale by Digene. Sales of Tests by Digene to an entity controlling,
controlled by or under common control with Digene shall be excluded from Net
Sales provided that such entity is purchasing for resale and any such resales,
when made, are included in determining Net Sales.

2.       "Test" shall mean a single DNA probe assay utilizing Product,
regardless of use for duplicates, standards or controls, manufactured and/or
sold by Digene.

<PAGE>   18

THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS MARKED WITH "*" AND BRACKETS AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                  SCHEDULE D

                            PRODUCT SPECIFICATIONS

<TABLE>
<S>                                  <C>
    Product:                          [******] CDP-Star(R) with [************] of
                                      Emerald-II(TM) enhancer in [****************].

    [**************]:                 [*********************************************
                                      **********************************************
                                      *******************************]

                                      [*********************************************
                                      **********************************************
                                      **********************************************
                                      *******************************].

                                      [*********************************************
                                      ********************]

    Storage Conditions:               4 degrees C

    Stability/Shelf Life:             one (1) year at 4 degrees C

    Packaging:                        High density polyethylene (HDPE) amber Nalgene bottles.

    Shipping Conditions:              Room temperature.
</TABLE>

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