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                                                                    Exhibit 10.5

                           OPTION & LICENSE AGREEMENT

1.       INTRODUCTION

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

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

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

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

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

2.       DEFINITIONS

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

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

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

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

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

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

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

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

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

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

         i.       discounts allowed;

         ii.      returns;

         iii.     transportation charges or allowances;

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

         v.       customs and duties charges; and

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

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

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

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

3.       OPTION PHASE

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

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

4.       LICENSE PHASE

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

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

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

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

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

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

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

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

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

5.       ROYALTY

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

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

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

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

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

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

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

         iv.      Names and addresses of SUBLICENSEES of Licensee;

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

         vi.      Total royalties payable to USC.

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

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

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

6.       RIGHTS RETAINED BY UNIVERSITY

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

7.       PATENT PROSECUTION

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

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

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

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

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

8.       PATENT INFRINGEMENT

         a. Defensive Controversy.

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

         b. Offensive Controversy.

         Licensee shall promptly notify USC of any potential infringement of a
PATENT. In the event that a third party infringes on a PATENT, Licensee shall
have the right but not an obligation to bring legal action to enforce any such
patent. If Licensee exercises such right, Licensee shall select legal counsel
and pay all legal fees and costs of prosecution of such action. In the event
that Licensee shall choose not to take such action, USC shall have the right, at
its option and at its own expense, to prosecute any action to enjoin such
infringement or to prosecute any claim for damages. The party prosecuting any
such action shall be entitled to retain any funds received as a result of
settlement or judgment of such action. The parties may also agree to jointly
pursue infringers. After deduction and payment to the parties of their
respective costs and fees (including without limitation reasonable

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attorneys' fees) incurred in prosecuting any such actions, the net funds
obtained as a result of settlement or of judgment of any such jointly prosecuted
action shall be divided in the following manner: 25% of all net funds shall be
divided equally by the parties and 75% of all the net funds shall be divided
between the parties in the proportion to the amount of legal fees and costs
incurred by the parties in the prosecution of such actions. If funds are
insufficient to pay all costs and fees then all of the funds shall be paid to
the parties in said proportion.

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

9.       RECORDS

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

10.      SERVICES OF INVENTOR

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

11.      SUBLICENSE PERMISSION

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

12.      PATENT MARKING

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

13.      PUBLICATIONS

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

14.      PUBLICITY

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

15.      ASSIGNMENTS/TRANSFERS

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

16.      TERMINATION

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

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of Licensee's property. Upon termination of the Agreement all rights granted to
or provided by each party to the other shall automatically and irrevocably
revert to the granting party.

         b. Surviving any termination are:

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

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

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

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

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

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

17.      NOTICES, REPORTS AND PAYMENTS

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

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

Attn:         Director

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

Attn:         Nicholas Jon Virca
              President & Chief Executive Officer

18.      PARAGRAPH HEADINGS

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

19.      SEVERABILITY

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

20.      CONTROLLING LAW, JURISDICTION AND VENUE

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

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so selected, to the exclusion of any other courts which may have had
jurisdiction apart from this Paragraph 20.

21.      TERM OF THE AGREEMENT

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

22.      NEGATION OF WARRANTIES

         a. Nothing in this Agreement shall be construed as:

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

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

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

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

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

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

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

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

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23.      INDEMNITY

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

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

24.      INSURANCE

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

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

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policy herein defined shall be delivered to USC prior to any manufacture,
sale, distribution or administration to humans. Licensee shall maintain such
comprehensive general liability insurance until such time as the policy in
Paragraph 24.c is procured, or until fifteen (15) years after the term of
this Agreement.

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

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

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

         f. By SUBLICENSEES

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

                                       13
<Page>

substantial self-retention, USC may grant permission for such sublicense only
if, in the sole discretion of USC, the net worth, assets and earnings of such
prospective SUBLICENSEE are deemed sufficient to protect USC's economic
interests in the event of claims, liability, demands, damages, expenses and
losses from death, personal injury, illness, or property damage.

25.      ATTORNEYS' FEES

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

26.      PRODUCT DEVELOPMENT

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

27.      EXPORT CONTROLS

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

                                       14
<Page>

28.      INDEPENDENT CONTRACTOR

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

29.      WAIVER

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

30.      ENTIRE AGREEMENT

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

UNIVERSITY OF SOUTHERN CALIFORNIA            BIOKEYS, INC.

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

8/17/2000                                    8/17/2000
---------------------------------            -----------------------------------
(Date)                                       (Date)

                                       15
<Page>

                                   APPENDIX A

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

                                       16<Page>

                                                                    Exhibit 10.6

                         EXECUTIVE EMPLOYMENT AGREEMENT

         EMPLOYMENT AGREEMENT, made as of the 1st day of December, 1999, by and
between Warren C. Lau (the "Executive"), an individual residing 16702 Tennison
Court, Spring, Texas, 77379 and BioQuest, Inc. (the "Company") with a place of
business at 333 N. Sam Houston Parkway, Suite 1035, Houston Texas 77060

                              W I T N E S S E T H:

         WHEREAS, the Executive is currently employed by the Company as its
President and Chief Operating Officer, and the Company desires that the
Executive shall continue to be employed by it and render services to it, and the
Executive is willing to continue to be so employed and to render services, all
upon the terms and subject to the conditions set forth herein.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

         1.       EMPLOYMENT, DUTIES AND ACCEPTANCE.

                  1.1 The Company hereby employs Executive, and the Executive
hereby accepts employment, for the term ("Term) set forth in Section 2 hereof,
to render services to Company as its President and Chief Operating Officer. The
Executive represents and warrants to the Company that he has full power and
authority to enter into this Agreement and that he is not under any obligation
of a contractual or other nature to any person, firm or corporation which is
inconsistent or in conflict with this Agreement, or which would prevent, limit
or impair in any way the performance by Executive of his obligations hereunder.
<Page>

                  1.2 The Executive will serve as President and Chief Operating
Officer of the Company and as a member of its Board of Directors when elected as
such, will have general supervision over the operations of the Company and will
have such other duties and responsibilities, consistent with his position as
President and Chief Operating Officer, as may reasonably be assigned to him by
the Board of Directors of the Company. The Executive will report to the Board of
Directors of the Company.

                  1.3 The Executive shall devote his full business time to the
business and affairs of the Company, and shall use his best efforts, skills, and
abilities to promote the interests of the Company, except for reasonable
vacations and during periods of illness or incapacity, but nothing contained in
this Agreement shall prevent the Executive from engaging in charitable or
community activities provided they do not interfere with the regular performance
of the Executive's duties and responsibilities under this Agreement.

                  1.4 Unless the Executive and the Company shall otherwise
agree, the Executive's principal place of employment shall be in and around
Houston, Texas, but the duties of the Executive shall include such visits to the
Company's research sites, vendors,, customers, and investors and lenders at the
expense of the Company, as may be reasonably required in the performance of the
Executive's responsibilities.

         2. TERM. 2.1 The Term of this Agreement will commence as of December 1,
1999 and will terminate at the close of business on November 30, 2002, unless
sooner terminated in accordance with the provisions of this Agreement. The
employment of the Executive shall continue hereunder for successive one-year
periods (each such one-year period being hereinafter referred to as a "Renewal
Term") following the Term (the first such Renewal

                                       -2-
<Page>

Term to commence on December 1, 2002) unless the Company or Executive shall give
notice to the other at least sixty (60) days prior to the end of the Term or any
Renewal Term of the election of the Company or the Executive to terminate the
employment of the Executive at the end of the Term or the then current Renewal
Term, as the case may be. The twelve month period from December 1 in any year to
the following November 30 shall be an "Employment Year".

         3.       BASE SALARY.

                  3.1 For all services performed by the Executive under this
Agreement, the Executive shall be paid a base salary ("Base Salary") at the
following annual rates:

                     EMPLOYMENT YEAR              BASE SALARY
                     ----------------             -----------
                          2000                     $ 114,000
                          2001                       114,000
                          2002                       114,000

Notwithstanding the foregoing specified amounts of Base Salary, (i) if the
Consumer Price Index applicable to the Standard Metropolitan Statistical Area in
which the Company's executive offices are located shall increase in any year
during the Term, the Base Salary shall be increased at the end of each
Employment Year to reflect such percentage change in the Consumer Price Index,
and (ii) the Board of Directors may award increases in Base Salary greater than
those provided above after a review taking into account corporate and individual
performance, the Company's prospects and general business conditions.

                  3.2 Base Salary shall be paid in equal monthly or semi-monthly
installments in keeping with the Company's standard payroll policies applicable
to its senior executives.

                                       -3-
<Page>

4.       ANNUAL BONUS.

                  4.1 The Executive shall be entitled to an annual bonus (the
"Annual Bonus") determined from time to time by the Board of Directors of the
Company (without the active participation of the Executive). In determining the
amount of any Annual Bonus, the Board of Directors may take into consideration
such factors as they deem appropriate, including, but not limited to, the
success of the Company in achieving profitable operations, in attracting
investors, and in accomplishing other goals related to the business of the
Company. Bonuses in addition to the Annual Bonus may be awarded by the Board of
Directors (without the active participation of the Executive) from time to time
for reaching other goals established by the Board of Directors.

         5.       REIMBURSEMENT FOR EXPENSES.

                  5.1 Company shall reimburse Executive for all reasonable
out-of-pocket expenses paid or incurred by him in the course of his employment,
upon presentation by Executive of valid receipts or invoices therefor, utilizing
procedures and forms for that purpose as established by Company from time to
time.

         6.       VACATIONS.

                  6.1 Executive shall be entitled to reasonable vacations (which
shall aggregate no less than three (3) weeks vacation with pay) during each
consecutive 12 month period commencing on the date hereof. Executive may not
accumulate any vacation days which remain unused at the end of any year during
the term hereof without the prior consent of Company.

         7.       EMPLOYEE BENEFIT PROGRAMS, ETC.

                  7.1 Without limiting the generality of Section 5, above, the
Company shall reimburse the Executive by means of a cash allowance for expenses
incurred by the Executive in

                                       -4-
<Page>

the use if his automobile in the performance of Executive's duties, along with
the cost of garage, insurance, fuel, fluids and maintenance, upon such terms and
conditions as are approved by Company. The Company shall pay or reimburse the
Executive for the costs of a cellular telephone.

                  7.2 Subject to the approval of the Board of Directors of the
Company, the Executive shall be provided with disability insurance providing for
disability payments to the Executive following a termination of Executive's
employment hereunder as a result of Disability (as defined in Section 8.2
below). In the event such policy is not obtained, Executive shall be entitled to
participate in such disability plan(s) as are available to Company executives
generally.

                  7.3 Subject to the Executive's meeting the eligibility
requirements of each respective plan, Executive shall be offered the opportunity
participate in and be covered by each pension, life insurance, accident
insurance, health insurance, hospitalization and any other employee benefit plan
adopted by the Company, as the case may be, made available generally from and
after the date hereof to its respective executives, on the same basis as shall
be available to such other executives without restriction or limitation by
reason of this Agreement; PROVIDED, HOWEVER, that Executive shall not
participate in two or more plans providing duplicative benefits or coverage. The
Company shall use its reasonable efforts to waive any qualifying period for
participation in any such plan by the Executive.

                  7.4 Nothing herein contained shall prevent the Company from at
any time increasing the compensation herein provided to be paid to Executive,
either permanently or for a limited period, or from paying bonuses and other
additional compensation to Executive, whether or not based upon the earnings of
the business of Company, or from increasing or expanding any

                                       -5-
<Page>

employee benefit program applicable to the Executive, in the event the Company,
in its sole discretion, shall deem it advisable so to do in order to recognize
and compensate Executive fairly for the value of his services.

         8.       DEATH OR DISABILITY.

                  8.1 If Executive shall die during the term hereof, this
Agreement shall immediately terminate, except that Executive's legal
representatives or designated beneficiaries shall be entitled to receive (i) the
Base Salary due to Executive hereunder to the last day of the third month
following the month in which his death occurs, payable in accordance with the
Company's regular payroll practices, (ii) a portion of the Annual Bonus payable
under Section 4 (determined as provided under Section 8.4), based on the
Company's Adjusted Net Income through the month of the bonus year preceding the
month in which death occurs; and (iii) all other payments and entitlements
available upon death under any employee benefit program covering the Executive
as of the date of death. Except for the payments required pursuant to this
Section 8.1, no payments shall be made for any period after Executive's death.

                  8.2 In the event of the Disability (as hereinafter defined) of
the Executive, the Executive shall be entitled to continue to receive from the
Company and its several benefit plans an amount equal to his Base Salary
(prorated as may be necessary) in accordance with the terms of Section 3 hereof
through the last day of the third month following the month in which Executive's
employment hereunder is terminated as a result of such Disability. At any time
after the date of the Notice (as hereinafter defined) and during the continuance
of the Executive's Disability, the Company may at any time thereafter terminate
Executive's employment hereunder by written notice to the Executive. The term
"Disability" shall mean physical or mental illness or

                                       -6-
<Page>

injury which prevents the Executive from performing his customary duties for the
Company for a period of twenty-five (25) consecutive business days or an
aggregate period of ninety (90) days out of any consecutive twelve (12) months.
The date of commencement of Disability shall be the date set forth in the notice
of a determination of Disability (the "Notice") given by Company to the
Executive at any time following a determination of Disability, which date shall
not be earlier than the date the Notice is given by Company. A determination of
Disability by Company shall be solely for the purposes of this Section 8.2 and
shall in no way affect the Executive's status under any benefit plan applicable
to the Executive.

                  8.3 Upon the occurrence of a Disability, and unless the
Executive's employment shall have been terminated as provided in Section 8.2,
the Executive shall continue to perform such services for Company, consistent
with his duties under Section 1 hereof, as he is reasonably capable of
performing in light of the condition giving rise to a Disability. All payments
due under Section 8.2 shall be payable in accordance with Company's regular
payroll practices. Those payments, together with the aggregate amount of all
periodic payments which the Executive is entitled to receive under all workers
compensation plans, disability plans and accident, health or other insurance
plans or programs maintained for the Executive by Company (or by any company
controlling, controlled by or under common control with the Company), shall be
not less than Executive's Base Salary for the month or period in question.

                  8.4 If the Executive's employment is terminated due to
Disability, the Executive shall be entitled, in addition to the payments
described in Section 8.2, to a pro-rated portion of the Annual Bonus otherwise
payable for the fiscal year in which such Disability occurs, determined by
multiplying the Annual Bonus that would otherwise be payable by a

                                       -7-
<Page>

fraction, the numerator of which is the number of days the Executive was
employed during such fiscal year and the denominator of which is 360.

         9.       TERMINATION FOR CAUSE.

                  9.1 The employment of the Executive may be terminated by the
Company for Cause. For this purpose, "Cause" shall mean:

                           (i)      conviction of the commission of a felony;

                           (ii)     fraudulent or dishonest acts against the
                                    Company;

                           (iii)    illegal drug use on the premises of the
                                    Company at any time or elsewhere during the
                                    working day;

                           (iv)     willful gross misconduct which in the good
                                    faith opinion of a majority of the Board of
                                    Directors of the Company is likely to cause
                                    either significant financial loss to the
                                    Company or significant damage to its
                                    business reputation;

                           (v)      willful and repeated misconduct constituting
                                    bad faith in performing the Executive's
                                    obligations; or

                           (vi)     repeated gross neglect of the Executive's
                                    duties.

The Executive's employment shall not be terminated for Cause under clauses (ii),
(iv), (v) or (vi) unless (a) the Executive has received at least 15 days notice
of a meeting of the Board of Directors to consider the existence of Cause with
an opportunity to be heard before the Board, and the Board has determined, based
upon credible evidence, that grounds for Cause exist, AND (b) the misconduct or
breaches on which an assertion of Cause is based are not cured within 30 days
thereafter if such misconduct or breaches are capable of being cured.

                                       -8-
<Page>

                  9.2 In the event of a termination for Cause, the Executive
shall (a) be entitled to any unpaid Base Salary pro rated up to the date of
termination, and (b) have no further rights under this Agreement or under any
Incentive Option issued hereunder.

         10.      TERMINATION UPON CHANGE OF CONTROL OR BY COMPANY WITHOUT
                  CAUSE.

                  10.1 A "Change in Control" shall occur: (A) if any Person, or
combination of Persons, (as hereinafter defined), or any affiliate of any
Person, is or becomes the "beneficial owner" (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934) directly or indirectly,
of securities of the Company representing twenty- five percent (25%) or more of
the total number of outstanding shares of common stock of the Company; or (B) if
individuals who, at the date of this Agreement, constitute the Board (the
"Incumbent Directors") cease, for any reason, to constitute at least a majority
thereof, provided that any new director whose election was approved by the
favorable vote of at least 75% of the Incumbent Directors shall be treated as an
Incumbent Director. For purposes hereof, "Person" shall mean any individual,
partnership, joint venture, association, trust, or other entity, including a
"group" as referred to in section 13(d)(3) of the Securities Exchange Act of
1934.

                  10.2 If a Change in Control occurs, and if there subsequently
occurs a material adverse change, without the Executive's written consent, in
the Executive's working conditions or status, including but not limited to a
significant change in the nature or scope of the Executive's authority, powers,
duties or responsibilities, or a reduction in the level of support services or
staff, then, whether or not such change would otherwise constitute a breach of
this Agreement by the Company, this Agreement may be terminated by notice given
by the Executive, specifying the Change of Control and significant adverse
change or changes.

                                       -9-
<Page>

         10.3 Upon the termination of this Agreement in accordance with Section
10.2 above, the Executive will be entitled, without any duty to mitigate
damages, to:

                  (a) All unpaid Base Salary pro-rated up to the date of
         termination; and

                  (b) The greatest of (i) the full Annual Bonus for the entire
         year in which the termination referred to in Section 10.2 takes place,
         or (ii) the portion of the Annual Bonus earned from the first day of
         the fiscal year in which such termination occurred until the date of
         the Change of Control, or (iii) the portion of the Annual Bonus earned
         from the first day of the fiscal year in which such termination
         occurred until the effective date of such termination; and

                  (c) A severance payment equal to the sum of (i) the Base
         Salary in effect for the prior fiscal year and (ii) the Annual Bonus
         paid (or payable) on account of such prior fiscal year; and

                  (d) All benefits available under the Company's employee
         benefit programs, to the extent applicable to senior executives
         voluntarily and amicably retiring from employment with the Company.

                  10.4 In the event that the Company shall actually or
constructively terminate this Agreement without cause (and with or without a
Change of Control), the Executive shall be entitled to the same payments,
compensation and rights as provided in the case of a termination by the
Executive under Section 10.3.

                  10.5 The payments, and other compensation and benefits to
which the Executive is entitled under this Section 10 shall be made available to
the Executive no later than ten (10) days after the date of any termination
referred to in Section 10.2, 10.3 or 10.4.

                                      -10-
<Page>

                  10.6 In the event that Executive receives the payments, and
other compensation and benefits referred to in this Section 10, he will be bound
by the restrictive provisions of Section 12 for the period therein provided.

         11.      TERMINATION BY EXECUTIVE.

                  11.1 If the Executive shall terminate his employment under
this Agreement prior to the third anniversary of the date hereof without either
(i) a Change of Control or (ii) the express written consent of the Company,
then, for purposes of establishing the rights of the Executive upon such
termination, such termination shall be deemed the equivalent of a termination
for Cause under Section 9.1, and the Executive shall have only those rights with
regard to compensation as are set forth in Section 9.2, and the restrictive
provisions of Section 12 below shall fully apply.

                  11.2 If the Executive shall terminate his employment under
this Agreement after the third anniversary of the date hereof without either (i)
a Change of Control or (ii) the express written consent of the Company, then,
for purposes of establishing the rights of the Executive upon such termination,
the Executive shall be entitled to receive all unpaid Base Salary pro-rated up
to the date of termination.

                  11.3 In the case of a termination pursuant to Section 11.2,
the restrictions set forth in Section 12 shall apply to Executive for the period
therein stated, and the Executive shall receive the compensation set forth
therein.

                                      -11-
<Page>

         12.      RESTRICTIVE COVENANTS.

                  12.1 During such time as this Agreement shall be in effect
and, except as otherwise explicitly stated herein, for a period of twelve (12)
months following the termination of Executive's employment, and without the
Company's prior written consent (which may be withheld for any reason or for no
reason in Company's sole discretion), Executive shall not do anything in any way
inconsistent with his duties to or adverse to the interests of Company, and
shall not, directly or indirectly, himself or by or through a family member or
otherwise, alone or as a member of a partnership or joint venture, or as a
principal, officer, director, consultant, employee or stockholder of any other
entity, compete with Company or be engaged in or connected with any other
business competitive with that of Company, except that Executive may own as a
passive investment not more than five percent (5%) of the securities of any
publicly held corporation that may engage in a business competitive with that of
Company.

                  12.2 In view of the fact that Executive will be brought into
close contact with many confidential affairs of Company not readily available to
the public, Executive agrees during the Term of this Agreement and thereafter:

                  (a) to keep secret and retain in the strictest confidence all
         information about (i) research and development plans and operations,
         new technology, pending or proposed license agreements, products,
         financial condition and other financial affairs (such as costs,
         pricing, plans for future development, joint ventures, methods of
         operation and marketing goals) of the Company; (ii) its employment
         policies and plans; and (iii) any other proprietary information
         relating to the Company, its operations, businesses, financial
         condition and financial affairs (collectively, the "Confidential
         Information") and,

                                      -12-
<Page>

         for such time as Company is operating, not to disclose the Confidential
         Information to anyone not then an officer, director or authorized
         employee of Company, either during or after the term of this agreement,
         except in the course of performing his duties hereunder or with
         Company's express written consent or except to the extent that such
         confidential information can be shown to have been in the public domain
         through no fault of Executive; and

                  (b) to deliver to Company within ten days after termination of
         his services, or at any time Company may so request, all memoranda,
         notes, records, reports and other documents relating to Company,
         businesses, financial affairs or operations and all property associated
         therewith, which he may then possess or have under his control.

                  12.3 Executive shall not at any time during the twelve month
period following the termination of his employment for any reason whatsoever,
including termination resulting from the natural expiration of the term of this
Agreement, (i) employ any individual who was employed by Company at any time
during the such period or during the twelve calendar months immediately
preceding such termination, or (ii) in any way cause, influence or participate
in the employment of any such individual by anyone else in any business that is
competitive with any of the businesses engaged in by Company.

                  12.4 Executive shall not at any time during the twelve (12)
month period following the termination of his employment, for any reason
whatsoever, including termination resulting from the natural expiration of the
term of this Agreement, directly or indirectly (i) persuade or attempt to
persuade any customer or client or research and development venture partner of
Company to cease doing business with Company or any Affiliate or to reduce the

                                      -13-
<Page>

amount of business it does with Company or (ii) solicit for himself or any
person other than Company, the business of any individual or business which was
a customer or client of Company at any time during the twelve month period
immediately preceding such termination.

                  12.5 Executive acknowledges that the execution and delivery by
him of the covenants set forth in this Section 12 is an essential inducement to
Company to retain Executive and to enter into this agreement, and that Company
would not have retained Executive and entered into this Agreement but for such
covenants. Executive further acknowledges that his services are unique and that
any breach or threatened breach by Executive of any of the foregoing provisions
of this Section 12 cannot be remedied solely by damages. In the event of a
breach or a threatened breach by Executive of any of the provisions of this
Section 12, Company shall be entitled to injunctive relief restraining Executive
and any business, firm, partnership, individual, corporation or other entity
participating in such breach or attempted breach. Nothing herein, however, shall
be construed as prohibiting Company from pursuing any other remedies available
at law or in equity for such breach or threatened breach, including the recovery
of damages and the immediate termination of the employment of Executive
hereunder.

                  12.6 If any of the provisions of, or covenants contained in,
this Section 12 are hereafter construed to be invalid or unenforceable in any
jurisdiction, the same shall not affect the remainder of the provisions or the
enforceability thereof in any other jurisdiction, which shall be given full
effect, without regard to the invalid portions or the unenforceability in such
other jurisdiction. If any of the provisions of or covenants contained in this
Section 12 are held to be unenforceable in any jurisdiction because of the
duration or scope thereof, the parties hereto agree that the court making such
determination shall have the power to reduce the duration

                                      -14-
<Page>

and/or scope of such provision or covenant and, in its reduced form, said
provision or covenant shall be enforceable; PROVIDED, however, that the
determination of such court shall not affect the enforceability, duration or
scope of this Section 12 in any other jurisdiction.

         13.      RELATIONSHIP OF PARTIES.

                  Nothing herein contained shall be deemed to constitute a
partnership between or a joint venture by the parties, nor shall anything herein
contained be deemed to constitute either the Executive or the Company the agent
of the other except as is expressly provided herein. Neither Executive nor
Company shall be or become liable or bound by any representation, act or
omission whatsoever of the other party made contrary to the provisions of this
Agreement.

         14.      KEY MAN INSURANCE.

                  The Company, in its discretion, may apply for and procure in
its own name and benefit, life insurance on a the life of the Executive and
disability insurance in any amount or amounts considered advisable by the
Company, and the Executive shall submit to any medical or other examination and
execute and deliver any application or other instrument in writing, reasonably
necessary to effectuate such insurance.

         15.      NOTICES.

                  All notices and communications hereunder shall be in writing
and delivered by hand or sent by registered or certified mail, postage and
registration or certification fees prepaid, return receipt requested, or by
overnight delivery such as Federal Express, and shall be deemed given when hand
delivered or upon three (3) business days after the date when mailed, or upon
one (1) business day after delivery to an agent for overnight delivery, if sent
in such manner, as follows:

                                      -15-
<Page>

         If to Company:                     BioQuest, Inc.
                                            333 N. Sam Houston Parkway,
                                            Suite 1035,
                                            Houston Texas 77060
                                            Attn: Board of Directors

         With a copy to:                    Bresler Goodman & Unterman, LLP
                                            521 Fifth Avenue
                                            28th Floor
                                            New York, NY 10175
                                            Attn:  Seymour H. Bucholz

         If to Executive:                   Warren C. Lau
                                            16702 Tennison Court,
                                            Spring, Texas, 77379

The foregoing addresses may be changed by notice given in the manner set forth
in this Section 15.

         16.      DISPUTES.

                  Any dispute or controversy arising under or in connection with
this Agreement shall be resolved in the manner set forth in Schedule A.
Notwithstanding the foregoing, Company shall have the right to apply to any
court having jurisdiction over Executive to seek injunctive or other emergency
relief in the event Executive breaches, or threatens to breach, any of his
covenants set forth in Section 12.

         17.      MISCELLANEOUS.

                  17.1 This Agreement contains the entire understanding of the
parties hereto with respect to the employment of Executive by Company during the
term hereof, and the provisions hereof may not be altered, amended, waived,
terminated or discharged in any way whatsoever except by subsequent written
agreement executed by the party charged therewith. This Agreement supersedes all
prior employment agreements, understandings and arrangements between Executive
and Company pertaining to the terms of the employment of Executive. A waiver by
either of the parties of any of the terms or conditions of this Agreement, or of
any breach hereof, shall not be deemed a waiver of such terms or conditions for
the future or of any other term or condition hereof, or of any subsequent breach
hereof.

                                      -16-
<Page>

                  17.2 The provisions of this Agreement are severable, and if
any provision of this Agreement is invalid, void, inoperative or unenforceable,
the balance of the Agreement shall remain in effect, and if any provision is
inapplicable to any circumstance, it shall nevertheless remain applicable to all
other circumstances.

                  17.3 Company shall have the right to deduct and withhold from
Executive's compensation the amounts required to be deducted and withheld
pursuant to any present or future law concerning the withholding of income
taxes. In the event that Company makes any payments or incurs any charges for
Executive's account or Executive incurs any personal charges with Company,
Company shall have the right and Executive hereby authorizes Company to recoup
such payments or charges by deducting and withholding the aggregate amount
thereof from any compensation otherwise payable to Executive hereunder.

                  17.4 Executive represents that he is under no disability,
restriction or prohibition from entering this Agreement or performing the
services required hereunder; and also that he has been represented and advised
by independent legal counsel in connection with the negotiation, preparation and
execution of this Agreement.

                  17.5 This Agreement shall be construed and interpreted under
the laws of the State of Delaware applicable to contracts executed and to be
performed entirely therein.

                  17.6 The captions and section headings in this Agreement are
not part of the provisions hereof, are merely for the purpose of reference and
shall have no force or effect for any purpose whatsoever, including the
construction of the provisions of this Agreement.

                  17.7 To the extent any provision of this Agreement
contemplates action after termination hereof or creates a cause of action or
claim on which action may be brought by either party, such provision, cause of
action or claim shall survive termination of Executive's employment or
termination of this Agreement.

                  17.8 Executive may not assign his rights nor delegate his
duties under this Agreement; provided, however, that notwithstanding the
foregoing this Agreement shall inure to

                                      -17-
<Page>

the benefit of Executive's legal representatives, executors administrators or
successors and to the successors or assigns of Company.

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

                                      BIOQUEST, INC.

                                      By:
                                           ----------------------------------
                                           Chairman of the Board of Directors

                                           /S/ WARREN C. LAU
                                      ------------------------------------------
                                               Warren C. Lau

                                      -18-
<Page>

                                   SCHEDULE A

                     RESOLUTION OF DISPUTES OR CONTROVERSIES

(a)      If the parties are deadlocked on any issue arising under the terms of
         this Agreement, a tiebreaker shall be chosen by lot from among a panel
         of three persons designated by the Dean of the College of Business
         Administration at the University of Houston. Each party may present its
         proposal to the designated tiebreaker in written form and may, on a
         date established by the tiebreaker within ten calendar days of the day
         the tiebreaker is chosen, make an oral presentation not to exceed two
         hours in length, accompanied by exhibits and written arguments not to
         exceed 20 pages in length. The designated tiebreaker shall then select
         one of the submitted proposals, without any change or adjustment, and
         shall announce to the parties his or her selection within five calendar
         days of the day of submission.

(b)      The general administrative costs of designating the tiebreaker panel
         shall be paid by the Company. The cost of each specific tiebreaker
         decision shall be borne by the party whose proposal was NOT accepted by
         the tiebreaker. Included in the cost of a tiebreaker decision are costs
         for expert advisors, preparation of special data or other submissions
         to the tiebreaker, and legal fees if a proponent has sought the
         assistance of counsel in presenting a matter to the tiebreaker.

                                      -19-

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