Document:

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                                                                    Exhibit 10.2

                          INVESTMENT BANKING AGREEMENT

         AGREEMENT, made this 22nd day of October, 2001 by and between,
Microislet, Inc., a Delaware corporation, and ASA Investment Company, having its
principal place of business at 7612 E. Calle Los Arboles, Tucson, Arizona 85750,
hereinafter the ("Consultant").

         WHEREAS, the Company desires to retain the Consultant for consulting
services in connection with the Company's business affairs on a non-exclusive
basis, and the Consultants is willing to undertake to provide such services as
hereinafter fully set forth:

         NOW, THEREFORE, the parties agree as follows:

         1. CONDITIONS: This agreement is conditioned on the performance of the
Consultant. Two stages of financing are contemplated by this Agreement. The
first stage is One Million ($1,000,000) Dollars financing. The second stage is
at least an additional Three Million ($3,000,000) Dollars financing, but not
more than an additional Nine Million ($9,000,000) Dollars financing.

                  (a) The Consultant agrees to produce an investor, which will
deposit the stage one financing into a stock purchase escrow account on, or
before November 2, 2001. The form of escrow agreement is attached as EXHIBIT
"A". When the Consultant produces an investor that purchases Company capital
stock for One Million Dollars, the Ten percent fee, as outlined in paragraph
4(a) will be earned. Upon completion of the first stage equity financing, the
Consultant will have the exclusive right to perform the second stage financing
for a period of forty (40) calendar days. This financing exclusivity will
commence on the date the funds are received by the Company and terminate 40 days
thereafter. The warrant compensation outlined in paragraph 4(d) will be earned
pro rata to the total of first and second stage financing of Four Million
($4,000,000) Dollars. A copy of the form of Stock Purchase Agreement is attached
as EXHIBIT "B".

                  (b) When the Consultant produces investors who agree to
purchase Company capital stock for at least Four Million Dollars, the Company's
parent corporation, Microislet, Inc., a Delaware corporation, will agree to
enter into a business combination agreement whereby it will be acquired by an
NASD OTC Electronic Bulletin Board company. This business combination is
intended to take Microislet public by utilizing a "reverse acquisition" method.
It is the intention of the parties that the Four Million Dollar funding and
reverse acquisition business combination will occur simultaneously. The terms
and conditions of this business combination agreement are set forth in the Share
Exchange Agreement attached as Exhibit "D".

                  (c) RIGHT OF FIRST REFUSAL. When these two stages of financing
are completed, the Company grants the Consultant the first-right-of-refusal for
all subsequent equity financing for a period of eighteen (18) months from the
date of this agreement. In the event that the Company receives a bona fide
written offer (the "Offer") to purchase Company equity securities that the
Company desires to accept, the Company will notify the Consultant within five
(5) days thereafter in writing and include a copy of the Offer by the Offeror.
The Consultant will thereafter have a period of fourteen (14) calendar days from

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receipt of the notice to elect whether or not it wishes to arrange for the sale
of the equity securities on the same terms and conditions as contained in the
Offer. If the Consultant does elect to arrange for the financing on the same
terms and conditions as contained in the Offer, then Consultant will have the
absolute right to do so upon giving written notice thereof to Company within the
fourteen (14) day period. If the Consultant does not elect to arrange for the
equity financing, then Company will have the absolute right to complete the sale
to the Offeror in accordance with the Offer, free and clear of any and all
claims arid rights of Consultant contained in this Agreement and, upon the
closing of the equity financing, that particular equity financing first-right-of
refusal will be terminated and no party hereto will thereafter have any rights,
liabilities or obligations whatsoever under this Agreement as to that particular
equity financing. Since the Consultant will be arranging for financing its
commitment to arrange for the particular financing must be accompanied by a
Letter of Commitment from the investor stating that it has the financial ability
and is willing to make the equity investment according to the terms and
conditions of the Offer.

         2. NATURE OF SERVICES: The Company hereby engages Consultant to render
the services hereinafter described during the term hereof on a non-exclusive
basis (it being understood and agreed that Consultant is free to render the same
or similar services to any other entity selected by it).

                  (a) arrange for equity financing for Microislet, Inc. or its
successors, if it goes public, from investors in a dollar range from $4,000,000
to $10,000,000 with a price of $6.00 per share;

                  (b) assist the Company with its parent corporation,
Microislet, Inc., a Delaware corporation, "going public" process utilizing a
reverse acquisition transaction with a U.S. domestic corporation quoted on the
National Association of Securities Dealers, Inc. (NASD) Over-the-Counter
Electronic Bulletin Board;(1)

                  (c) consult with the Company concerning on-going strategic
corporate planning and long term, investment policies;

                  (d) render advice with respect to all Company corporate
financing arrangements.

         3. RESPONSIBILITIES OF THE COMPANY: The Company will provide the
Consultant with all financial and business information about the Company as
requested by the Consultant in a timely manner. In addition, executive officers
of the Company will make themselves available for personal consultations with
the Consultant and/or third party designees, subject to reasonable prior notice,
pursuant to the request of the Consultant.

         4. COMPENSATION: For corporate financial advisory services, due
diligence and other services which will be provided to the Company from time to
time over the course of our engagement, we mutually agree that the Consultant
will be entitled to compensation and other consideration mutually understood,
but understood, but not limited to the following:

-------------------
(1) It is understood that this type of transaction will not occur unless the
Consultant produces investors, which purchase at least $4,000,000 of Microislet
capital stock.

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                  (a) For completed financing from any of the entities,
affiliations or persons of the Consultants, its employees or former employees,
agents, representatives, advisors or the Consultant introduces any of these to
the Company. not previously introduced to the Company, the Company will pay
Consultant or its nominee(s) a finders fee in cash (U.S. Dollars) equal to Ten
(l0%) percent of the financing. The Company will also pay the Consultant or its
nominee(s), as an additional fee, irrespective of any finders fee described
herein, the first $200,000 of any completed financing in excess of $6,000,000
under the terms of this Agreement.

                  (b) Upon the completion of the reverse acquisition "going
public" transaction, the Company agrees to pay Consultant or its nominee(s)
$US400,000 as follows: (1) $200,000 payable in cash, and (2) $200,000 payable in
33,334 of the publicly held acquisition corporation's common shares. The common
shares will have "piggy-back registration rights."

                  (c) The fees, at the option of Consultant or its nominee(s),
may be deducted from the financing proceeds payable to the Company. Any fees not
deducted from any financing transaction will be carried forward as a debt
evidenced by a demand promissory note bearing interest at the rate of Eight (8%)
percent per annum.

                  (d) The Company agrees to issue to Consultant or its
nominee(s) common stock purchase warrants for the purchase of One Million
(1,000,000) Microislet common shares at $6.00 per share and Five Hundred
Thousand (500,000) common shares at $12.00 per share. The warrants will have a
five (5) year exercise term and the underlying common stock will have piggyback
registration rights. A definitive warrant agreement will be executed immediately
following the closing of the first stage $1,000,000 funding.

                  (e) When the Consultant has produced investors who purchase
Company capital stock for an aggregate amount in excess of Six Million Two
Hundred Thousand Dollars ($6,200,000), the Company agrees to pay Consultant or
its nominee(s) $70,000, payable in the form of Two Hundred Thirty Three Thousand
Three Hundred Thirty Three (233,333) common shares of the publicly held
acquisition corporation's common shames (`Shares"). The Company agrees to pay
Consultant or its nominee(s) an additional $35,000, in the form of One Hundred
Sixteen Thousand Six Hundred Sixty Six (116,666) Shares for each additional One
Million Dollars ($1,000,000) of investment raised up to a maximum of Four
Hundred Sixty Six Thousand Six Hundred Sixty Six (466,666) Shares. The Shares
will have "piggy-back registration rights."

                  (f) The Company hereby irrevocably agrees not to circumvent,
avoid, bypass or obviate directly or indirectly, the intent of this Agreement,
to avoid payment of fees, in any transaction with any corporation, partnership
or individual, introduced by the Consultant to the Company in connection with
any project, any loans or collateral or funding, or any other financing
transaction of any nature whatsoever.

         5. EXPENSES: The Company will also reimburse the Consultant for actual
out-of-pocket expenses including, but not limited to, facsimile, postage,
printing, photocopying, and entertainment, incurred by the Consultant without
the prior consent of the Company and in connection with the performance by the
Consultant of its duties hereunder, the Company will also reimburse the

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Consultant for the costs of all travel and related expenses incurred by the
Consultant in connection with the performance of its services hereunder,
provided that all such costs and expenses have been authorized, in advance, by
the Company. Expenses will be due and payable when billed and after they have
been incurred. The Consultant will not expend more than $100 dollars on any
expense item without the prior written approval of the Company.

         6. INDEMNIFICATION: The Parties agree to indemnify and hold harmless
each other and their affiliates, and their respective officers, directors,
employees, agents and controlling persons. The Parties and each such other
persons and entities being an "Indemnified Party" for purposes of this section
from and against any and all losses, claims, damages, and liabilities, jointly
or severally, to which such Indemnified Party may become subject under any
applicable law, or otherwise related to or arising out of any transaction
contemplated by this Agreement and the performance by the parties of the
Consultant of the services contemplated by this Agreement, and will reimburse
each indemnified party for all reasonable expenses (including reasonable counsel
fees and expenses) as they am incurred in connection with the investigation of,
preparation for or defense of any pending or threatened claim or any action or
proceeding arising therefrom, whether or not such Indemnified Party is a party
thereto provided that the other party will not be liable for any of the
foregoing to the extent they arise from the gross negligence or willful
misconduct of the Indemnified Party and further provide that such Indemnified
Party agrees to refund such reimbursed expenses if and to the extent it is
finally judicially determined that such Indemnified Party is not entitled to
indemnification. In the event that the foregoing indemnity is unavailable or
insufficient to hold any Indemnified Party harmless, then the other party will
contribute to amounts paid or payable by such Indemnified Party in respect of
such losses, claims, damages and liabilities in such proportions as
approximately reflects the relative benefits received by, in fault of, the other
party and such Indemnified Party in connection with the matters as to which such
losses, claims, damages and liabilities relate and other equitable
considerations, provided however that nothing in this sentence will be construed
as altering or limiting in any way the effect of the provisions contained in the
immediately preceding sentence.

         7. CAPITALIZATION: The Consultant has made tentative arrangements for
the Microislet, Inc., the Delaware corporation, to "go public" utilizing the
reverse acquisition method with a U.S. corporation which is presently listed on
the NASD Electronic Bulletin Board named ALD Services, Inc. To the extent, that
this transaction were to proceed, the proposed capitalization of the Company
would be as follows:

                  (a) 18,530,000 shares to Microislet, Inc. shareholders;

                  (b) 1,900,000 shares to Consultants, Finders, others(2);

                  (c) 206,000 shares publicly held;

                  (d) 1,166,666 shares privately placed assuming $7,000,000
funding at $6.00/share;

----------------------
(2) These shares will be subject to individual "Lock-up Agreements" in the form
of agreement attached as Exhibit E.

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                  (e) All beneficial owners of the shares outlined in (b) and
(c) above are set forth in EXHIBIT F.

         8. COMPLETE AGREEMENT: This Agreement contains the entire Agreement
between the parties with respect to the contents hereof and supersedes all prior
agreements and understandings between the parties with respect to such matters,
whether written or oral. Neither this agreement, nor any term or provision
hereof may be changed, waived, discharged or amended in any manner other than by
any instrument in writing, signed by the party against which the enforcement of
the change, waiver, discharge or amendment is sought.

         9. COUNTERPARTS: This Agreement may be executed in two or more
counterparts, each of which will be an original but all of which will constitute
but one Agreement.

         10. SURVIVAL: Any termination of this Agreement will not, however,
affect the on-going provisions of this Agreement that will survive such
termination in accordance with their terms.

         11. DISCLOSURE: Any financial advice rendered by the Consultant
pursuant to this Agreement may not be disclosed publicly in any manner without
the prior written approval of the Consultant. All non-public information given
to the Consultant by the Company will be treated by the Consultant as
confidential information, and the Consultant agrees not to make use of such
information other than in connection with its performance of this Agreement,
provided, however, that any such information may be disclosed if required by any
court or governmental or regulatory authority, board or agency. "Non-public
information" will not include any information which (i) is or becomes generally
available to the public other than as a result of a disclosure by the
Consultant; (ii) was available to the Consultant prior to its disclosure to the
Consultant by the Company, provided that such information is not known by the
Consultant to be subject to another confidentiality agreement with another
party; or (iii) becomes available to the Consultant on a non-confidential basis
from a source other than the Company, provided that such source is not bound by
a confidentiality agreement with the Company.

         12. NOTICE: Any or all notices, designations, consents, offers,
acceptance or other communication provided for herein will be given in writing
and delivered in person or by registered or certified mail, return receipt
requested, directed to the address shown above in the introductory paragraph.

         13. SEVERABILITY: Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law. If any provision of this agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule, such invalidity,
illegality or unenforceability will not affect any other provision or any other
jurisdiction, but this Agreement will be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.

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         14. MISCELLANEOUS:

                  (a) Neither the Consultant nor its affiliates, or their
respective officers, directors, employees, agents or controlling persons will be
liable, responsible or accountable in damages or otherwise to the Company or its
affiliates, or their respective officers, directors, employees, agents or
controlling persons for any act or omission performed or omitted by the
Consultant with the respect to the services provided by it pursuant or otherwise
relating to or arising out of this Agreement.

                  (b) All final decisions with respect to consultation, advice
and services rendered by the Consultant to the Company will rest exclusively
with the Company, and Consultant will not have any right or authority to bind
the Company to any obligation or commitment.

                  (c) This Agreement and the legal relations among the parties
hereto will be governed by and construed in accordance with the laws of the
California without regard to the conflicts of laws principles thereof or the
actual domiciles of the parties. In the event an arbitration, suit or action is
brought by any party under this Agreement to enforce any of its terms, or in any
appeal therefrom, it is agreed that the prevailing party will be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.

                  (d) If the Consultant will incur any expense (whether paid or
not) in performing any acts which the Company is required to perform, or in
instituting any action or proceeding based upon a default by the Company, or in
defending, or in asserting a counterclaim, in any action or proceeding brought
by the Company, any and all expenses to the Consultant, including attorney's
fees, costs and disbursements, will be paid by the Company to the Consultant, on
demand; furthermore, the expenses incurred in connection with any action or
proceeding instituted by the Consultant to enforce the provisions hereof will
also be recoverable by the Consultant.

         Agreed and Accepted on October 15, 2001 by and between:

ASA INVESTMENT COMPANY                             MICROISLET, INC.

/S/ DANNY E. FORD                                  /S/ JOHN STEEL, IV
--------------------------                         -----------------------------
By: Danny E. Ford                                  By: John Steel, IV
Title: President                                   Title: President

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                               FIRST AMENDMENT TO
                          INVESTMENT BANKING AGREEMENT

         THIS FIRST AMENDMENT to that certain INVESTMENT BANKING AGREEMENT (the
"Agreement"), dated the 22nd day of October, 2001 by and between, Microislet,
Inc., a Delaware corporation, and ASA Investment Company, having its principal
place of business at 110 South Church, Suite 6320, Tucson, Arizona 85701,
hereinafter the ("Consultant").

         WHEREAS, the parties have reconsidered and mutually agreed to adjust
the amount of compensation to paid to Consultant under the Agreement; and

         WHEREAS, paragraphs 4.(d) and 4.(e) of the Agreement currently provide:

                  "(d) The Company agrees to issue to Consultant or its
         nominee(s) common stock purchase warrants for the purchase of One
         Million (1,000,000) Microislet common shares at $6.00 per share and
         Five Hundred Thousand (500,000) common shares at $12.00 per share. The
         warrants will have a five (5) year exercise term and the underlying
         common stock will have piggyback registration rights. A definitive
         warrant agreement will be executed immediately following the closing of
         the first stage $1,000,000 funding."

                  "(e) When the Consultant has produced investors who purchase
         Company capital stock for an aggregate amount in excess of Six Million
         Two Hundred Thousand Dollars ($6,200,000), the Company agrees to pay
         Consultant or its nominee(s) $70,000, payable in the form of Two
         Hundred Thirty Three Thousand Three Hundred Thirty Three (233,333)
         common shares of the publicly held acquisition corporation's common
         shares ("Shares"). The Company agrees to pay Consultant or its
         nominee(s) an additional $35,000, in the form of One Hundred Sixteen
         Thousand Six Hundred Sixty Six (116,666) Shares for each additional One
         Million Dollars ($1,000,000) of investment raised up to a maximum of
         Four Hundred Sixty Six Thousand Six Hundred Sixty Six (466,666) Shares.
         The Shares will have `piggy-back registration rights.'"

         NOW, THEREFORE, the parties agree as follows:

         Paragraphs 4.(d) and 4.(e) of the Agreement shall be, and are hereby
deleted from the Agreement in their entirety, and the terms of said paragraphs
shall no longer be effective bind the parties to the Agreement. All other
provisions of the Agreement not inconsistent with this Amendment shall remain in
full force and effect.

ASA INVESTMENT COMPANY                           MICROISLET, INC.

/S/ DANNY E. FORD                                /S/ JOHN STEEL, IV
-----------------                                -----------------------
By:  Danny E. Ford                               By:      John Steel, IV
Title:  President                                Title:   President

                                       7<PAGE>

                                                                    Exhibit 10.3

                    LICENSE AND SPONSORED RESEARCH AGREEMENT

         THIS Agreement made and entered into this fifteenth day of September,
1998 by and between DUKE UNIVERSITY, a North Carolina not-for-profit
corporation, (hereinafter called the "LICENSOR"), having its principal office at
Durham, North Carolina 27708, and MicroIslet, Inc. a corporation organized under
the laws of California (hereinafter called the "LICENSEE"), having its principal
office at 1250 Prospect Street, Suite 202, La Jolla, CA 92037.

         WHEREAS, LICENSOR has certain SUBJECT TECHNOLOGY and PATENT RIGHTS
(hereinafter defined) relating to therapies for diabetes invented by Dr.
Emmanuel C. Opara, an employee of LICENSOR, which it is willing to make
available to LICENSEE subject to the terms of this Agreement in order that the
SUBJECT TECHNOLOGY and PATENT RIGHTS may be utilized in the public interest; and

         WHEREAS, LICENSOR has the right to grant licenses to use SUBJECT
TECHNOLOGY and PATENT RIGHTS; and

         WHEREAS, LICENSEE will obtain resources, proprietary technology, and
expertise to develop SUBJECT TECHNOLOGY and PATENT RIGHTS into useful products;
and

         WHEREAS, LICENSEE wishes to commercialize products based on SUBJECT
TECHNOLOGY and PATENT RIGHTS;

         NOW THEREFORE, in consideration of the premises and the faithful
performance of the covenants herein contained, IT IS AGREED:

                            ARTICLE 1 - DEFINITIONS

         1.01 For the purposes of this Agreement, and solely for that purpose,
the terms and phrases set forth hereinafter in capital letters shall be defined
as follows:

                  a.       "AFFILIATE" shall mean any party which directly or
                           indirectly controls, is controlled by, or is under
                           common control with any party to this Agreement. A
                           party shall be regarded as in control of another
                           party if it owns, or directly or indirectly, controls
                           at least fifty percent (50%) of the voting stock or
                           other ownership interest of the party, or if it
                           directly or indirectly possesses the power to direct
                           or to cause the direction of the management and
                           policies of the other party by any means whatsoever.

                  b.       "APPROVAL" shall mean the registration of a LICENSED
                           PRODUCT with a REGULATORY AGENCY following approval
                           for marketing by the REGULATORY AGENCY.

                  c.       "EFFECTIVE DATE" shall mean September 15, 1998.

                  d.       "LICENSED PRODUCT" shall mean any product in any
                           field of use that infringes upon a valid claim of
                           PATENT RIGHTS or utilizes the SUBJECT TECHNOLOGY.

                  e.       "NET SALES" shall mean the gross proceeds from sales
                           of LICENSED PRODUCTS by LICENSEE, its AFFILIATES, and
                           any sublicensees to unaffiliated third parties,
                           expressed in United States dollars less, first,
                           allowances for returns, chargebacks, and product
                           discounts actually given to customers; and, second,
                           import, export value added tax, excise and sales tax,
                           custom duties or other similar taxes or government
                           assessment collected on such sales; and, third,
                           rebates under the medical prescription drug rebate
                           and improved access to medicines requirements of the
                           Omnibus Budget Reconciliation Act of 1990.

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                           In the event that a LICENSED PRODUCT under this
                           Agreement is sold in a combination product containing
                           one or more active agreements or components, then NET
                           SALES on the combination product shall be calculated
                           using one of the following methods:

                                    (i). By multiplying the price of the
                           combination product by the fraction A/A+B, where A is
                           the gross selling price, during the royalty-paying
                           period being considered, of the LICENSED PRODUCT sold
                           separately, and B is the gross selling price, during
                           the royalty period in question, of the active
                           ingredients or components sold separately; or

                                    (ii). In the event that no such separate
                           sales are made of the LICENSED PRODUCT, NET SALES on
                           the combination product for royalty determination
                           shall be as reasonably allocated between such
                           LICENSED PRODUCT and other active ingredients or
                           components, based on their relative importance and
                           proprietary protection, as agreed by the parties. If
                           the parties fail to reach agreement, such allocation
                           shall be submitted to binding arbitration.

                  f.       "OPTION PERIOD" shall mean a time period during which
                           LICENSEE shall have an option to acquire an
                           exclusive, worldwide, royalty-bearing license of
                           LICENSOR'S sole or joint rights to an INVENTION, said
                           time period beginning when LICENSOR notifies LICENSEE
                           that a new INVENTION has been made during the
                           RESEARCH PROGRAM and extending continuously for
                           ninety (90) days after said disclosure.

                  g.       "PATENT RIGHTS" shall mean the PROVISIONAL
                           APPLICATION and all non-provisional patent
                           applications, continuations, continuations in part,
                           divisions, reissues, re-examinations, extensions or
                           other government actions which extend the subject
                           matter of the PROVISIONAL APPLICATION, and any
                           foreign patent applications, and any patent, patents
                           of addition, or other equivalent foreign patents
                           issuing, granted, or registered based on or resulting
                           from the PROVISIONAL APPLICATION and continuations in
                           part applications, and resulting patents that are
                           directed to subject matter described in the
                           PROVISIONAL APPLICATION. PATENT RIGHTS shall only
                           include applications that (i) cover the SUBJECT
                           TECHNOLOGY (ii) name Dr. Emmanuel C. Opara as an
                           inventor and (iii) are assigned to the LICENSOR.

                  h.       "PROVISIONAL APPLICATION" shall mean a provisional
                           patent application to be filed by LICENSOR at the
                           United States Patent and Trademark Office within
                           forty-five [45] days after the EFFECTIVE DATE to
                           protect the SUBJECT TECHNOLOGY.

                  i.       "PROCEEDS" shall mean all consideration, with the
                           sole exception of amounts received for research and
                           development, marketing and manufacturing expenses,
                           and bona fide equity investments not in excess of the
                           fair market value and any debt financing received by
                           LICENSEE from third parties pursuant to all business
                           activities relating to LICENSED PRODUCTS, including,
                           without limitation, the development, manufacture,
                           testing, marketing, sales, distribution, and
                           promotion of LICENSED PRODUCTS. PROCEEDS shall
                           include, without limitation, NET SALES of LICENSED
                           PRODUCTS by LICENSEE, its AFFILIATES, and its
                           sublicensees; all amounts received as payments in
                           consideration of establishing sublicense or other
                           alliances involving LICENSED PRODUCTS; all amounts
                           received as milestone payments for product
                           development; and all amounts received as sales
                           bonuses. In the event that PROCEEDS include non-cash
                           consideration, the parties will negotiate in good
                           faith to establish the cash value of such
                           consideration, and LICENSEE shall make a cash payment
                           to LICENSOR equal to [***] of the cash value so
                           determined.

[***] represents certain information on this page that has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

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                  j.       "REGULATORY AGENCY" shall mean United States Food and
                           Drug Administration or a comparable agency legally
                           empowered to approve and regulate manufacture, sales,
                           or distribution of medical services and products in a
                           country outside the United States.

                  k.       "RESEARCH PROGRAM" shall mean the research program
                           that is specified in detail in Exhibit B attached
                           hereto and made a part hereof.

                  l.       "SUBJECT TECHNOLOGY" shall mean the technology
                           licensed hereunder described in detail in Exhibit A
                           attached hereto and made a part hereof, and
                           alterations thereto which have heretofore been
                           conceived and/or reduced to practice by LICENSOR, its
                           employees, faculty members or students, as evidenced
                           by written records. Exhibit A is hereby acknowledged
                           to consist of Duke University Office of Science and
                           Technology File #1538 describing technology invented
                           by Dr. Emmanuel C. Opara.

                              ARTICLE 2 - LICENSE

         2.01 The LICENSOR hereby grants to the LICENSEE and LICENSEE hereby
accepts from LICENSOR, upon the terms and conditions herein specified, an
exclusive, world-wide license to make, have made, use, offer to sell and sell
LICENSED PRODUCTS, with the right to sublicense under the conditions specified
in Article 5 herein.

                          ARTICLE 3 - RESEARCH PROGRAM

         3.01 As partial consideration for the rights granted in Article 2
herein, LICENSEE shall provide to LICENSOR support for the RESEARCH PROGRAM in
the FIELD.

         3.02 WORK. LICENSOR agrees to use its best effort to perform the
RESEARCH PROGRAM described in the "Statement of Work" ("STATEMENT"), a copy of
which is attached to this Agreement as Exhibit B.

         3.03 PRINCIPAL INVESTIGATOR. The research will be supervised by Dr.
Emmanuel C. Opara ("INVESTIGATOR"). If for any reason INVESTIGATOR is unable to
continue to serve as Principal Investigator and a successor acceptable to both
LICENSOR and LICENSEE is not available, the Agreement may be terminated in
accordance with Article 13 below.

         3.04 BUDGET. In consideration of the foregoing, and as more
specifically provided in the budget included as Exhibit B, LICENSEE will pay
LICENSOR for all direct and indirect costs incurred in the performance of the
research as set forth in the STATEMENT, a total not to exceed [***]. Payment
will be made to LICENSOR by LICENSEE, in advance, in the form of twelve (12)
payments on the schedule set forth in Exhibit B.

         3.05 TERM. The RESEARCH PROGRAM will be conducted during a one year
period commencing October 1, 1998 and concluding on or before September 30,
1999. This RESEARCH PROGRAM will be renewable for additional periods upon the
mutual consent of the parties by a new agreement or by amendment hereto
expressed in writing and signed by both parties.

         3.06 TERMINATION COSTS. In the event that this Agreement is terminated
under the provisions of Article 13, other than 13.5 or due to breach by
LICENSOR, LICENSOR will proceed in an orderly fashion to terminate any
outstanding commitments and to stop the work as soon as it is practicable to do
so. All reasonable costs to LICENSOR associated with termination will be
considered reimbursable costs, including costs incurred prior to the notice of
termination but which have not yet been reimbursed, and commitments existing at
the time the notice of termination is received which cannot be canceled. This
shall include all noncancelable contracts and fellowships or postdoctoral
associate appointments incurred prior to the effective date of termination.
After termination, any obligation of LICENSEE for fellowships or postdoctoral
associates shall end no later than the end of LICENSEE's academic year following
termination. In no case will reimbursement under this Agreement exceed the total
estimated project costs specified in Exhibit B.

[***] represents certain information on this page that has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                                       3
<PAGE>

         3.07 REPORTS. LICENSOR will provide LICENSEE with quarterly progress
reports on the RESEARCH PROGRAM. In addition, LICENSOR will provide LICENSEE
with a final report on THE RESEARCH PROGRAM within sixty (60) days of
termination of the research supported under the RESEARCH PROGRAM. All reports
provided under this Article 3.07 will be treated as confidential INFORMATION as
defined in Article 8 herein.

         3.08 PUBLICATION. LICENSOR shall be free to use the results of the
subject research for its own teaching, research, educational, clinical and
publication purposes without the payment of royalties or other fees. LICENSOR
agrees to submit to LICENSEE for its review, a copy of any proposed publication
resulting from the subject research at least sixty (60) days prior to the
estimated date of publication, and if no response is received within thirty (30)
days of the date submitted to LICENSEE, it will be conclusively presumed that
the publication may proceed without delay. If LICENSEE determines that the
proposed publication contains patentable subject matters which require
protection, LICENSEE may require the delay of the publication for a period of
time not to exceed sixty (60) days for the purpose of allowing the pursuit of
such protection. LICENSEE shall treat all materials submitted for review under
this Article 3.08 as confidential INFORMATION as defined in Article 8 herein.

         3.09 OPTION TO INVENTIONS.

                  a.       Any new invention, development, or discovery
                           resulting from the subject research ("INVENTION")
                           shall be promptly disclosed in writing to LICENSEE.
                           LICENSEE is hereby granted, without option fee other
                           than the consideration of the research sponsored
                           herein and the reimbursement of DUKE for patent
                           expenses as discussed in the following paragraph, an
                           option to acquire an exclusive, worldwide,
                           royalty-bearing license of DUKE'S rights to any
                           INVENTION, which option shall extend for ninety (90)
                           days after LICENSEE'S receipt of an INVENTION
                           disclosure [the OPTION PERIOD]. If LICENSEE notifies
                           DUKE in writing of its exercise of the option within
                           the OPTION PERIOD, then the parties will proceed in
                           good faith to negotiate a license agreement within
                           ninety days on terms mutually agreed upon.

                  b.       During the OPTION PERIOD, LICENSOR shall have
                           responsibility for filing, prosecuting and
                           maintaining appropriate patent protection for any new
                           INVENTIONS. All of the expenses of pursuing such
                           patent protection shall be paid by LICENSOR. LICENSOR
                           shall invoice LICENSEE for reimbursement of such
                           patent expenses during the OPTION PERIOD, and
                           LICENSEE shall reimburse LICENSOR within thirty [30]
                           days of receipt of such invoices. Failure by LICENSEE
                           to reimburse LICENSOR within said thirty [30] day
                           period will cancel the option granted to LICENSEE
                           under Section 3.09.a, and LICENSOR shall be free to
                           dispose of the INVENTION in any way LICENSEE shall
                           see fit.

         3.10 COMPLIANCE WITH LAWS. The RESEARCH PROGRAM will be conducted in
accordance with, and the INVESTIGATOR and LICENSOR will comply with all federal,
state, and local laws and regulations applicable to the RESEARCH PROJECT.

                           ARTICLE 4 - CONSIDERATION

         4.01 LICENSOR shall receive from LICENSEE consideration for the rights
granted to LICENSEE herein as follows:

                  a.       LICENSEE shall sponsor the RESEARCH PROGRAM specified
                           in Article 2 herein.

                  b.       LICENSEE shall pay to LICENSOR a running royalty of
                           [***] of all PROCEEDS, such royalty to be paid as
                           specified in Article 6 herein. In the event that
                           LICENSEE must pay to a third party additional
                           royalties on NET SALES in order to commercialize a
                           LICENSED PRODUCT, royalty stacking will be capped so
                           that the total royalty due to LICENSOR and any other
                           third parties will not exceed [***] of NET SALES,
                           provided, first, that the royalty due to all parties
                           receiving royalties is diluted to the same degree,
                           and second, that the royalty due to LICENSOR shall
                           not be less than [***] on NET SALES.

[***] represents certain information on this page that has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                                       4
<PAGE>

                  c.       Upon execution of this Agreement, LICENSEE shall
                           transfer to LICENSOR [***] shares of the original
                           pool of founders' common stock in MicroIslet, Inc.
                           issued prior to financing, an amount equal to [***]
                           of such stock.

                  d.       Upon issuance of the first patent application
                           protecting commercially significant claims involving
                           the SUBJECT TECHNOLOGY or matter disclosed in the
                           PROVISIONAL APPLICATION, LICENSEE shall transfer to
                           LICENSOR an additional amount of common stock in
                           MicroIslet, Inc., such stock being equivalent to an
                           additional [***] of the pre-financing founders'
                           shares.

                  e.       Upon APPROVAL of a LICENSED PRODUCT, LICENSEE shall
                           transfer to LICENSOR an additional amount of common
                           stock in MicroIslet, Inc., such stock being
                           equivalent to an additional [***] of the
                           pre-financing founders' shares.

         4.02 All stock transferred by LICENSEE to LICENSOR as consideration
shall be diluted during subsequent financing to the same degree as the stock
held by other founders.

                            ARTICLE 5 - SUBLICENSES

         5.01 LICENSEE shall have the right to grant sublicenses without
LICENSOR approval. Any such sublicenses shall be subject to terms of this
Agreement. LICENSEE agrees to be responsible for the performance hereunder by
its sublicensees. If, for any reason, this license agreement is terminated,
LICENSEE agrees to assign all sublicenses directly to LICENSOR.

                        ARTICLE 6 - REPORTING & RECORDS

         6.01 LICENSEE shall render to LICENSOR prior to February 28th and
August 31st of each year a written account of all PROCEEDS received by the
LICENSEE during the prior six month periods ending December 31st and June 30th,
respectively, and shall simultaneously pay to LICENSOR the royalties due on such
PROCEEDS in United States Dollars. The royalty on NET SALES made in currencies
other than US Dollars shall be calculated using the appropriate foreign exchange
rate for such currency quoted by the Bank of America (San Francisco) foreign
exchange desk on the close of the last banking day of each calendar quarter. All
non-US taxes related to royalty payments shall be paid by LICENSEE and are not
deductible from the payments due to LICENSOR.

         6.02 LICENSEE shall keep full, true and accurate books of accounts and
other records containing all particulars which may be necessary to properly
ascertain and verify the royalties payable by them hereunder. Upon LICENSOR's
request, LICENSEE shall permit an independent Certified Public Accountant
selected by LICENSOR (except one to whom LICENSEE has some reasonable objection)
to examine during ordinary business hours to such of LICENSEE's records as may
be necessary to determine, in respect of any quarter ending not more than two
(2) years prior to the date of such request, the correctness of any report
and/or payment made under this Agreement.

         6.03 During the term of this Agreement, LICENSEE will submit annual
progress reports to LICENSOR by February 28 of each year which discuss the
progress and results, as well as ongoing plans, with respect to the plan for the
development of LICENSED PRODUCTS negotiated under Article 7. LICENSOR shall have
the right to request one meeting per year to discuss such information. Should it
be necessary for LICENSOR's personnel to meet with LICENSEE outside of Durham,
North Carolina, LICENSEE will reimburse reasonable travel and living expenses
incident thereto.

         6.04 All reports made under this Article 7 shall be treated as
confidential INFORMATION as defined in Article 8 herein.

[***] represents certain information on this page that has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                                       5
<PAGE>

                     ARTICLE 7 - DUE DILIGENCE REQUIREMENTS

         7.01 LICENSEE shall use its best efforts to bring LICENSED PRODUCTS to
market through a thorough, vigorous and diligent program for exploitation of the
PATENT RIGHTS, to develop manufacturing capabilities itself or through third
parties, and to continue active, diligent marketing efforts for LICENSED
PRODUCTS, including a vigorous sublicensing program to effect commercialization
of LICENSED PRODUCTS in any field that the LICENSEE decides not to exploit on
its own, throughout the life of this Agreement.

         7.02 LICENSEE and LICENSOR agree to negotiate in good faith a mutually
acceptable and commercially reasonable schedule for developing LICENSED
PRODUCTS. Such negotiations shall begin no later than three [3] months following
the termination of the RESEARCH PROGRAM. This schedule will be used to determine
if LICENSOR is showing due diligence in developing LICENSED PRODUCTS.

         7.03 LICENSOR may or convert this Agreement to a non-exclusive
Agreement in a particular field of interest if LICENSEE fails materially to meet
any of the mutually agreed commercialization milestones with respect to such
field of interest established through the negotiations specified in Articles
7.02 herein.

                      ARTICLE 8 - CONFIDENTIAL INFORMATION

         8.01 "Confidential Information" ("INFORMATION") shall mean all
information provided by one party to the other and clearly identified as
confidential by the transmitting party at the time of disclosure. Specifically
excepted from this definition is all information: (a) known by the receiving
party at the time of disclosure; (b) publicly disclosed except by breach of this
Agreement; (c) rightfully received by the receiving party from a third party
without an express obligation of confidence; (d) independently developed by the
employees or agents of either party without any knowledge of the confidential
information provided by the other party; or (e) is disclosed pursuant to any
judicial or government request, requirement or order, provided that the
disclosing party takes reasonable steps to provide the other party with
sufficient prior notice in order to allow the other party to contest such
request, requirement or order. The party receiving the INFORMATION agrees to
hold that INFORMATION in trust and confidence for the transmitting party, using
the same care and discretion that the receiving party uses with similar
INFORMATION which it considers confidential. The receiving party will not use
INFORMATION other than for the benefit of the two parties and relating to the
Agreement and except as may be provided for in Article 3.08 regarding
publication herein, neither party will disclose such information without
authorization from the other party. This provision shall remain in effect during
the term of this Agreement and for three (3) years thereafter.

                              ARTICLE 9 - PATENTS

         9.01 LICENSOR shall have responsibility for the filing, prosecuting and
maintaining the appropriate United States patent protection for PATENT RIGHTS
and for any new INVENTIONS. All of the expenses of such protection shall be paid
by LICENSOR, and LICENSEE shall reimburse LICENSOR for all such expenses within
thirty [30] days of receiving invoices for such expenses from LICENSOR. LICENSOR
shall keep LICENSEE advised as to prosecution of such applications by forwarding
to LICENSEE copies of all official correspondence relating thereto and shall
take into account LICENSEE's reasonable comments thereto. The parties agree to
cooperate in the prosecution of all patent applications to insure that the
applications reflect, to the best of each party's knowledge, all items of
commercial and technical interest and importance. LICENSOR agrees to provide
LICENSEE with copies of all correspondence and information related to PATENT
RIGHTS, to consult with LICENSEE on all decisions related to PATENT RIGHTS, and
to consider all recommendations made by LICENSEE with regard to PATENT RIGHTS.

         9.02 Article 9.01 not withstanding, the parties agree that LICENSEE
shall reimburse LICENSOR no more than [***] for expenses incurred by LICENSOR in
connection with the initial filing of the PROVISIONAL APPLICATION.

         9.03 LICENSEE shall designate the foreign countries, if any, in which
LICENSEE desires patent protection, and LICENSOR shall proceed to obtain such
protection. LICENSOR shall diligently pursue patent protection in the countries
so designated by LICENSEE. LICENSEE shall reimburse LICENSOR for all expenses
incurred by LICENSOR with regard to such foreign patent protection. LICENSOR may

[***] represents certain information on this page that has been omitted and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.

                                       6
<PAGE>

elect to seek patent protection in countries not so designated by LICENSEE, in
which case LICENSOR shall be responsible for all expenses attendant thereto;
however, in such instances LICENSEE shall forfeit its rights under this license
agreement as to those countries unless LICENSEE shall agree to pursue such
protection within thirty (30) days after receiving written notice.

         9.04 Each party shall give the other party prompt notice of each claim
or allegation received by it that the manufacture, use or sale of LICENSED
PRODUCTS constitutes a significant infringement of a third party patent or
patents. LICENSEE shall have the primary right and responsibility at its own
expense to defend and control the defense of any such claim against LICENSEE, by
counsel of its choosing. The settlement of any such actions must be approved by
LICENSOR, which approval may not be unreasonably withheld. LICENSOR agrees to
cooperate with LICENSEE in any reasonable manner deemed by LICENSEE to be
necessary in defending or prosecuting such action. LICENSEE shall reimburse
LICENSOR for all expenses incurred in providing such assistance. In the event
LICENSEE recovers any proceeds in excess of its costs incurred through such
actions, all remaining proceeds shall be considered PROCEEDS to be retained by
LICENSEE except for the royalty due to LICENSOR under section 4.01.b of this
Agreement. Notwithstanding the foregoing, LICENSOR shall, in its sole
discretion, be entitled to participate through counsel of its own choosing in
any such action.

                   ARTICLE 10 - INFRINGEMENT BY THIRD PARTIES

         10.01 Upon learning of the infringement of PATENT RIGHTS by a third
party, the party learning of such infringement shall promptly inform the other
party in writing of that fact along with any evidence available pertaining to
the infringement. LICENSEE may at its own expense take whatever steps are
necessary to stop the infringement and recover damages. In such case, LICENSEE
will keep LICENSOR informed of the steps taken and the progress of any legal
actions taken. LICENSEE agrees to pay LICENSOR one half of any such damages
recovered. If LICENSEE does not undertake, within sixty (60) days of notice, to
enforce the PATENT RIGHTS against the infringing party, the LICENSOR shall have
the right, at its own expense to take whatever steps are necessary to stop the
infringement and recover damages, and shall be entitled to retain damages so
recovered.

                       ARTICLE 11 - GOVERNMENT CLEARANCE,
                         PUBLICATION, OTHER USE, EXPORT

         11.01 LICENSEE agrees to use its best efforts to have the SUBJECT
TECHNOLOGY cleared for marketing in those countries in which LICENSEE intends to
sell LICENSED PRODUCTS by the responsible government agencies requiring such
clearance. To accomplish said clearances at the earliest possible date, LICENSEE
agrees to file, according to the usual practice of LICENSEE, any necessary data
with said government agencies. Should LICENSEE cancel this Agreement, LICENSEE
agrees to assign its full interest and title in such market clearance
application to LICENSOR at no cost to LICENSOR and to negotiate in good faith a
non-exclusive license to all data relating thereto.

         11.02 This license agreement is subject to all of the United States
laws and regulations controlling the export of technical data, computer
software, laboratory prototypes and other commodities and technology.

                           ARTICLE 12 -- RELATIONSHIP

         12.01 LICENSOR's relationship to LICENSEE under this agreement will be
that of an independent contractor and not an agent, joint venturer or partner of
LICENSEE.

                     ARTICLE 13 - DURATION AND TERMINATION

         13.01 This Agreement shall become effective upon the EFFECTIVE DATE,
and unless sooner terminated in accordance with any of the provisions herein,
shall remain in full force and effect in each country for the life of the
last-to-expire of the patents in such country included in the PATENT RIGHTS, or,
until such PATENT RIGHTS may be extended in such country by in terms of
Regulatory Market Exclusivity, e.g. Waxman Hatch ruling, European Community
regulatory exclusivity or if later, until the Market Exclusivity Position of the
LICENSED PRODUCT(S) ends through a generic entrant either into the US, Japan, or
a European country.

                                       7
<PAGE>

         13.02 LICENSEE may terminate the license granted herein and Articles 2,
4, 5, 6.01, 6.03, 6.04, 7, and 11 of this Agreement by giving LICENSOR written
notice at least three (3) months prior to such termination, and thereupon
terminate the manufacture, use or sale of LICENSED PRODUCTS.

         13.03 LICENSEE shall transfer to LICENSOR at LICENSEE'S cost all
product licenses, product regulatory approvals, and sublicenses based on SUBJECT
TECHNOLOGY and PATENT RIGHTS licensed under this Agreement if the license
granted herein is terminated under Article 13.02.

         13.04 LICENSEE's obligation to support the RESEARCH PROGRAM under the
terms and conditions specified in all subsections of Article 3 and Exhibit B and
also Articles 1, 6.02, 8, 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22,
shall survive termination of the license and related terms of this Agreement
under Article 13.02. In the event that LICENSEE elects to terminate the license
under Article 13.02, all obligations, terms, and conditions listed in the
previous sentence shall remain in force until the termination of the RESEARCH
PROGRAM. Upon termination of the license as specified herein, LICENSEE may, upon
written notice to LICENSOR, terminate the RESEARCH PROGRAM prior to the date
specified in Article 3.05, said early termination to be subject to the
conditions specified in Article 3.06. When all obligations under the RESEARCH
PROGRAM have been met, this Agreement shall terminate in its entirety, except as
specified in Articles 13.06 and 13.08.

         13.05 Either party may immediately terminate this Agreement for fraud,
willful misconduct, or illegal conduct of the other party upon written notice of
same to that other party. Except as provided above, if either party fails to
fulfill any of its obligations under this Agreement, the non-breaching party may
terminate this Agreement, upon written notice to the breaching party, as
provided below. Such notice must contain a full description of the event or
occurrence constituting a breach of the Agreement. The party receiving notice of
the breach will have the opportunity to cure that breach within thirty (30) days
of receipt of notice. If the breach is not cured within that time, the
termination will be effective as of the thirtieth (30th) day after receipt of
notice. A party's ability to cure a breach will apply only to the first two
breaches properly noticed under the terms of this Agreement, regardless of the
nature of those breaches. Any subsequent breach by that party will entitle the
other party to terminate this Agreement upon proper notice.

         13.06 Upon the termination of this Agreement, LICENSEE may notify
LICENSOR of the amount of LICENSED PRODUCT LICENSEE then has on hand, and
LICENSEE shall then have a license to sell that amount of LICENSED PRODUCT, but
no more, provided LICENSEE shall pay the royalty thereon at the rate and at the
time provided for.

         13.07 If during the term of this Agreement, LICENSEE shall become
bankrupt or insolvent or if the business of LICENSEE shall be placed in the
hands of a receiver or trustee, whether by the voluntary act of LICENSEE or
otherwise, LICENSEE will be allowed one year to reorganize itself out of
bankruptcy. If LICENSEE shall cease to exist as an active business or fails to
reorganize itself from bankruptcy within this one year period, this Agreement
shall immediately terminate.

         13.08 Articles 6.02, 8 and 17 shall survive termination of this
Agreement.

                           ARTICLE 14 - LAW TO GOVERN

         14.01 This Agreement shall be construed and enforced in accordance with
the laws of the State of North Carolina.

                              ARTICLE 15 - NOTICES

         15.01 Notice hereunder shall be deemed sufficient if given by
registered mail, postage prepaid, and addressed to the party to receive such
notice at the address given below, or such other address as may hereafter be
designated by notice in writing.

                                       8
<PAGE>

LICENSOR                                      LICENSEE

Office of Science and Technology              Mr. John Steel
Duke University                               President
Room 230, North Building                      MicroIslet Pharmaceuticals, Inc.
Box 90083                                     1250 Prospect Street, Suite 202,
Durham, NC 27708                              La Jolla, CA 92037

cc:      Office of the University Counsel
         Duke University/DUMC Box 3024.
         2400 Pratt Street, Suite 4000
         Durham, NC 27710

                            ARTICLE 16 - ASSIGNMENT

         16.01 This Agreement shall be binding upon and inure to the benefit of
the respective successors and assigns of the parties hereto. However, LICENSEE
may not assign its rights in this Agreement without approval by LICENSOR, such
approval not to be unreasonably withheld, provided that LICENSEE may assign this
Agreement or any portion hereof to an AFFILIATE or to a successor of all or
substantially all of its business relating to the PATENT RIGHTS without the
approval of LICENSOR and shall provide LICENSOR with written notice within
thirty [30] days of such assignment.

                 ARTICLE 17 - INDEMNITY, INSURANCE, AND STATUS

         17.01 LICENSEE agrees to indemnify, hold harmless and defend LICENSOR,
its officers, employees, and agents, against any and all claims, suits, losses,
damages, costs, fees, and expenses asserted by third parties, both government
and non-government, resulting from or arising out of (a) product liability with
respect to a LICENSED PRODUCT or (b) any obligation or activity of the LICENSEE
under this Agreement provided that LICENSEE shall have the right to control the
defense and settlement of any such claims or suit except that LICENSEE shall not
enter into any settlement which makes any admission of wrongdoing on the part of
LICENSOR without prior written consent of LICENSOR. The LICENSEE shall not be
responsible for the negligence or intentional wrongdoing of the LICENSOR.

         17.02 LICENSEE shall maintain in force at its sole cost and expense,
with reputable insurance companies, general liability insurance and products
liability insurance coverage in an amount reasonably sufficient to protect
against liability under paragraph 17.01 above upon initiation of clinical
studies wherein a LICENSED PRODUCT is administered to or used with human
subjects. LICENSOR shall have the right to ascertain from time to time that such
coverage exists, such right to be exercised in a reasonable manner.

         17.03 NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO BE A REPRESENTATION
OR WARRANTY BY LICENSOR OF THE VALIDITY OF ANY OF THE PATENTS OR THE ACCURACY,
SAFETY, EFFICACY, OR USEFULNESS, FOR ANY PURPOSE, OF ANY SUBJECT TECHNOLOGY.
LICENSOR SHALL HAVE NO OBLIGATION, EXPRESS OR IMPLIED, TO SUPERVISE, MONITOR,
REVIEW OR OTHERWISE ASSUME RESPONSIBILITY FOR THE PRODUCTION, MANUFACTURE,
TESTING, MARKETING OR SALE OF ANY LICENSED PRODUCT, AND LICENSOR SHALL HAVE NO
LIABILITY WHATSOEVER TO LICENSEE OR ANY THIRD PARTIES FOR OR ON ACCOUNT OF ANY
INJURY, LOSS, OR DAMAGE, OF ANY KIND OR NATURE, SUSTAINED BY, OR ANY DAMAGE
ASSESSED OR ASSERTED AGAINST, OR ANY OTHER LIABILITY INCURRED BY OR IMPOSED UPON
LICENSEE OR ANY OTHER PERSON OR ENTITY, ARISING OUT OF OR IN CONNECTION WITH OR
RESULTING FROM:

                  a.       the production, use, or sale of any LICENSED PRODUCT;

                  b.       the use of any SUBJECT TECHNOLOGY; or

                  c.       any advertising or other promotional activities with
                           respect to any of the foregoing.

                                       9
<PAGE>

                          ARTICLE 18 - REPRESENTATIONS

         18.01 LICENSOR represents to LICENSEE that,

                  a.       LICENSOR has the full power and authority to enter
                           into this Agreement and to carry out the transactions
                           contemplated hereby;

                  b.       to the best of LICENSOR'S knowledge, LICENSOR is not
                           aware that LICENSOR has any existing patents or other
                           intellectual property rights necessary to practice
                           PATENT RIGHTS.

         18.02 LICENSEE represents to LICENSEE that, to the best of LICENSEE'S
knowledge, LICENSEE has the full power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby.

                       ARTICLE 19 - USE OF A PARTY'S NAME

         19.01 Neither party will, without the prior written consent of the
other party:

                  a.       use in advertising, publicity or otherwise, any
                           trade-name, personal name, trademark, trade device,
                           service mark, symbol, or any abbreviation,
                           contraction or simulation thereof owned by the other
                           party; or

                  b.       represent, either directly or indirectly, that any
                           product or service of the other party is a product or
                           service of the representing party or that it is made
                           in accordance with or utilizes the information or
                           documents of the other party.

                 ARTICLE 20 - SEVERANCE, WAIVER AND ALTERATION

         20.01 Each clause of this Agreement is a distinct and severable clause
and if any clause is deemed illegal, void or unenforceable, the validity,
legality or enforceability of any other clause or portion of this Agreement will
not be affected thereby.

         20.02 The failure of a party in any instance to insist upon the strict
performance of the terms of this Agreement will not be construed to be a waiver
or relinquishment of any of the terms of this Agreement, either at the time of
the party's failure to insist upon strict performance or at any time in the
future, and such terms will continue in full force and effect.

         20.03 Any alteration, modification, or amendment to this Agreement must
be in writing and signed by both parties.

                            ARTICLE 21 - ARBITRATION

         21.01 Disputes relating to the terms and conditions of this Agreement
shall be settled by final and binding arbitration in the City of Durham in the
State of North Carolina pursuant to commercial arbitration rules of the American
Arbitration Association, in accordance with the following procedures:

                  a.       The arbitration tribunal shall consist of three
                           arbitrators. Each party shall nominate in the request
                           for arbitration and the answer thereto one arbitrator
                           and the two arbitrators so named will then jointly
                           appoint a third arbitrator as chairman of the
                           arbitration tribunal.

                  b.       The decision of the arbitration tribunal shall be
                           final and binding upon the parties hereto.

                                       10
<PAGE>

                              ARTICLE 22 - TITLES

         22.01 All titles and article headings contained in this Agreement are
inserted only as a matter of convenience and reference. They do not define,
limit, extend or describe the scope of this Agreement or the intent of any of
its provisions.

                       ARTICLE 23 - ENTIRE UNDERSTANDING

         23.01 This Agreement represents the entire understanding between the
parties, and supersedes all other agreements, express or implied, between the
parties concerning the SUBJECT TECHNOLOGY.

         IN WITNESS WHEREOF, the parties have caused these presents to be
executed in duplicate as of the date and year first above written.

SEAL                        LICENSOR

By:      /S/ RALPH SNYDERMAN
         -------------------
         Ralph Snyderman, MD
         Chancellor, Duke University Medical Center

Date:    9/9/98

         /S/ ROBERT TABER
         ----------------
         Robert Taber, Ph.D., Director,
         Office of Science & Technology

Date:   9/1/98

[LICENSEE]

By:      /S/ JOHN F. STEEL IV
         --------------------
         Name:  John F. Steel IV
         Title:  President

Date:    9/18/98

SEAL

                                       11

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