Document:

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                                                                  EXHIBIT 10.6

[CONFIDENTIAL TREATMENT REQUESTED, CONFIDENTIAL PORTIONS OF THIS AGREEMENT
HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE COMMISSION.]

                                 NANOGEN/HITACHI
                             COLLABORATION AGREEMENT

1.     DEFINITIONS
2.     COLLABORATION
3.     DEVELOPMENT FUNDING
4.     EQUITY INVESTMENT
5.     MANUFACTURING
6.     DISTRIBUTION AND SERVICES
7.     INTELLECTUAL PROPERTY RIGHTS
8.     REPRESENTATIONS AND WARRANTIES
9.     INDEMNIFICATION
10.    LIMITATION OF LIABILITY
11.    CONFIDENTIALITY INFORMATION
12.    TERM AND TERMINATION
13.    MISCELLANEOUS
14.    EXHIBIT A - COLLABORATION PROJECTS
15.    EXHIBIT B - COLLABORATION PRODUCTS
16     EXHIBIT C - DEVELOPMENT FUNDING
17     EXHIBIT D - COMMON STOCK PURCHASE AGREEMENT

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                             COLLABORATION AGREEMENT

This Agreement is made and entered into this 26th day of July 2000 (the
"Effective Date") by and between Nanogen, Inc., a corporation organized and
existing under the laws of Delaware, and having its principal place of business
at 10398 Pacific Center Court, San Diego, California, USA 92121 ("NANOGEN"), and
Hitachi, Ltd., a corporation organized and existing under the laws of Japan,
through its Instrument Group and having its principal place of business at 5-1,
Marunouchi 1-chome, Chiyoda-ku, Tokyo, 100 Japan, Nissei Sangyo Co. Ltd., having
its principal place of business at 24-14, Nishi-shimbashi, 1-chome, Minato-ku,
Tokyo, 105-8717 Japan, and Hitachi Instruments Service Co., Ltd., having its
principal place of business at 28-8 Yotsuya 4-Chrome, Shinjuku-ku Tokyo 160-0004
(collectively, "HITACHI"). NANOGEN and HITACHI are sometimes referred to herein
individually as a "Party," or collectively as the "Parties."

                                 R E C I T A L S

A. WHEREAS, HITACHI has special expertise, proprietary technology and know-how
relating to the development and manufacture of certain instrumentation and
products, and NANOGEN has special expertise, proprietary technology and know-how
relating to the design and development of certain instrumentation and the
design, development and manufacture of certain consumable cartridges which can
be used with such instrumentation and products;

B. WHEREAS, the Parties desire to utilize their respective technologies and
expertise to develop jointly certain new products pursuant to the terms and
conditions of this Agreement.

NOW, THEREFORE in consideration of the promises and mutual covenants hereinafter
contained, the Parties hereto agree as follows.

                                    ARTICLE 1

                                   DEFINITIONS

As used herein, the following terms shall have the meanings indicated.

     1.1 "AGREEMENT TO COMMERCIALIZE" means a written agreement by the
Development and Commercialization Committee that a Collaboration Product meets
applicable standards and is ready to commercialize.

     1.2 "ASIA" means: Japan, China, Korea, Singapore, and Taiwan and any other
country in Asia as agreed to by the Parties from time to time.

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     1.3 **********************************************************************
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     1.4 **********************************************************************
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     1.5 "CARTRIDGES" means consumable biochip cartridges, including those
which may be subject to the ***, and includes Existing NANOGEN Products or
New NANOGEN Products.

     1.6 "COLLABORATION" means all of the activities of the Parties set forth in
Article 2 of this Agreement.

     1.7 "COLLABORATION COMMITTEE" means the committee comprised of members
appointed by each Party, respectively, as set forth in Section 2.6.

     1.8 "COLLABORATION MANAGER" means the individual appointed by each Party,
respectively, as set forth in Section 2.3 to serve on the Executive Committee.

     1.9 "COLLABORATION PRODUCT" means a product developed hereunder as a
Collaboration Project pursuant to a Development Plan or pursuant to the Prior
Agreement, which combines NANOGEN Intellectual Property Rights and/or HITACHI
Intellectual Property Rights and/or jointly-owned Intellectual Property rights.
HITACHI Products, NANOGEN Products and Other Products shall be considered
Collaboration Products.

     1.10 "COLLABORATION PROJECT" means a project to develop a product based on
a certain technology which the Parties will agree to develop and/or contribute
hereunder. A list of potential Collaboration Projects is attached as Exhibit A.

     1.11 "CONFIDENTIAL INFORMATION" means any information designated by the
disclosing Party as confidential in writing, or which reasonably should be
understood to be confidential in light of the nature of the information
contained therein, or which is not generally available to the public; provided,
however, that "Confidential Information" will not include information that the
receiving Party can establish by written evidence: (a) is or has become
generally known or available by publication, commercial use or otherwise through
no fault of the receiving Party; (b) is known and has been reduced to tangible
form by the receiving Party at the time of disclosure and is not subject to
restriction; (c) is independently developed by the receiving Party without use
of the disclosing Party's Confidential Information; (d) is lawfully obtained
from a third party who has the right to make such disclosure; or (e) is released
for publication by the disclosing Party in writing.

     1.12 "DEVELOPMENT AND COMMERCIALIZATION COMMITTEE" means the committee
comprised of members appointed by each Party, respectively, as set forth in
Section 2.8.

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     1.13 "DEVELOPMENT PLAN" means the development plan for a certain
Collaboration Product to be prepared by the Development and Commercialization
Committee pursuant to Section 2.10.

     1.14 "EXECUTIVE COMMITTEE" means the committee comprised of the
Collaboration Managers as described in Section 2.3.

     1.15 "EXISTING HITACHI PRODUCTS" means the reader and loader currently
manufactured by HITACHI under the Prior Agreement.

     1.16 "EXISTING NANOGEN PRODUCTS" means the products currently manufactured
by NANOGEN pursuant to the Prior Agreement.

     1.17 "FIELD" means all fields of use for Collaboration Products, except for
use specifically in connection with infectious disease DNA diagnostics.

     1.18 "GENERAL TECHNOLOGY DEVELOPMENT" means such development by NANOGEN as
NANOGEN desires to fund, provided that such development generally benefits the
Collaboration Projects.

     1.19 "HII" means Hitachi Instruments, Inc., a California corporation having
its principal place of business at 3100 North Street, San Jose, California
95134.

     1.20 "HITACHI" means Hitachi, Ltd., Instrument Group, Nissei Sangyo Co.,
Ltd., and Hitachi Instruments Service Co., Ltd.

     1.21 "HITACHI IMPROVEMENTS" means any proprietary information, know-how,
software, technology or other information which HITACHI conveys to NANOGEN
pursuant to this Agreement, either orally (which oral disclosure is promptly
reduced to writing), in documents or other materials and which constitutes an
enhancement of, or any other improvement to any HITACHI Product, NANOGEN
Product, NANOGEN Improvement or Other Product.

     1.22 "HITACHI INTELLECTUAL PROPERTY RIGHTS" means all Intellectual Property
rights of any kind which may be now or hereafter owned by HITACHI, or pursuant
to which HITACHI has a right to grant licenses or sublicenses.

     1.23 "HITACHI PRODUCTS" means Existing HITACHI Products, New HITACHI
Products, and HITACHI Improvements including without limitation: (a) all
hardware-related products, including firmware, instrument control and diagnostic
software; and (b) spare parts and hardware-related consumables and accessories
included with the Existing HITACHI Products.

     1.24 "INTELLECTUAL PROPERTY" means all intellectual property rights of any
kind, including without limitation patents, patent applications, patentable
inventions, copyrights, trade secrets, trade names, service marks and
trademarks.

     1.25 "NANOGEN" means NANOGEN, Inc.

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     1.26 "NANOGEN IMPROVEMENTS" means any proprietary information, know-how,
software, technology or other information which NANOGEN conveys to HITACHI
pursuant to this Agreement, either orally (which oral disclosure is promptly
reduced to writing), in documents or other materials, and which constitutes an
enhancement of or other improvement to any NANOGEN Product, HITACHI Product,
HITACHI Improvements, or Other Product.

     1.27 "NANOGEN INTELLECTUAL PROPERTY RIGHTS" means all Intellectual Property
rights of any kind which may be now or hereafter owned by NANOGEN, or pursuant
to which NANOGEN has a right to grant licenses or sublicenses.

     1.28 "NANOGEN PRODUCTS" means Existing NANOGEN Products, New NANOGEN
Products, and NANOGEN Improvements including without limitation Cartridges,
Cartridge applications and data handling-related software to be used in
conjunction with HITACHI Products.

     1.29 ********************************************************************
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     1.30 "NEW HITACHI PRODUCTS" means those products developed by HITACHI
during the term of this Agreement, and contributed, in HITACHI's sole
discretion, to the Collaboration.

     1.31 "NEW NANOGEN PRODUCTS" means those products developed by NANOGEN
during the term of this Agreement, and contributed, in NANOGEN's sole
discretion, to the Collaboration.

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     1.33 "OTHER PRODUCTS" means reagents, chemicals, consumables and spare
parts developed by a Party and all other products not considered to be HITACHI
Products or NANOGEN Products.

     1.34 "PRIOR AGREEMENT" means that certain Reader, Loader and Cassette Low
Cost Engineering and Manufacturing Agreement between HITACHI and NANOGEN dated
December 15, 1999, and executed by each of the Parties on January 12, 2000.

     1.35 "PRODUCT SPECIFICATIONS" means the specifications for the
Collaboration Products as developed by the Parties pursuant to Section 2.8.

     1.36 "SDA" means strand displacement amplification for genetic testing.

     1.37 "SUBSIDIARIES OF HITACHI" means HII and Naka Instruments, Co. Ltd.

                                   ARTICLE 2

                                  COLLABORATION

     2.1 OVERVIEW. The Parties shall each use commercially reasonable best
efforts to work jointly and independently to develop Collaboration Products
pursuant to the terms and conditions contained herein. The development phase for
each Collaboration Product shall commence as set forth in the Development Plan
for such Collaboration Product and shall continue until an Agreement to
Commercialize is reached for each such Collaboration Product, or until the
Parties mutually agree in writing to discontinue development of the
Collaboration Product. The commercialization phase for each Collaboration
Product shall commence upon the Parties' signing an Agreement to Commercialize
such Collaboration Product. The purpose of the commercialization phase of the
Collaboration is the facilitation of a cost effective manufacturing program for
the Collaboration Products and the development and implementation of a plan for
the marketing, sales, distribution and service of each Collaboration Product.

     2.2 COMMITTEE APPOINTMENT AND VOTING. Within *** **** days of the Effective
Date of this Agreement, each Party shall appoint, in its sole discretion, one
(1) Collaboration Manager to serve on the Executive Committee, three (3)
individuals to serve on the Collaboration Committee and three (3) individuals to
serve on the Development and Commercialization Committee, respectively. All
decisions by the Collaboration Committee and the Development and
Commercialization Committee shall be by majority vote, which may be submitted by
proxy.

     2.3 EXECUTIVE COMMITTEE. Each Party shall designate one of its executives
to act on its behalf as a member of the Executive Committee (each, a
"Collaboration Manager"). Each party shall have the right to replace its
Collaboration Manager, for any reason in its reasonable discretion, with an
individual reasonably acceptable to the other

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Party. Each Collaboration Manager shall have the corporate authority to bind the
Party it represents with respect to all matters associated with the
Collaboration. The primary duty of the Executive Committee is to oversee the
Collaboration and to resolve any deadlocks or disputes of either the
Collaboration Committee or the Development and Commercialization Committee.

     2.4 DEADLOCKS / DISPUTES. In the event that the Development and
Commercialization Committee is in deadlock or otherwise unable to resolve any
disputes, within ************************ of any such deadlock or dispute, the
Development and Commercialization Committee shall tender such deadlock or
dispute to the Collaboration Committee for resolution. In the event that the
Collaboration Committee is in deadlock or is otherwise unable to resolve any
disputes, within ************************* of any such deadlock or dispute, the
Collaboration Committee shall tender such deadlock or dispute to the Executive
Committee and the Collaboration Managers shall meet and confer in good faith to
resolve any such deadlocks or disputes. In the event that the Executive
Committee is unable to resolve any such deadlock or dispute within ***********
*********** after using commercially reasonable best efforts, either Party may
submit the matter to arbitration pursuant to Section 13.2.

     2.5 COMMITTEE EXPENSES. The Parties shall each bear all expenses of their
respective members related to their participation on any committee described in
this Agreement.

     2.6 COLLABORATION COMMITTEE. The Collaboration Committee shall have the
primary responsibility for all aspects of the Collaboration including, but not
limited to, the following: (a) selecting and prioritizing all Collaboration
Projects; (b) overseeing the Development and Commercialization Committee and
resolving any deadlocks or disputes regarding development and commercialization
of any such Collaboration Project; (c) arranging such meetings, visits and
consultations between the Parties as may be deemed necessary or desirable for
the successful accomplishment of the Collaboration; (d) filing any joint patent
applications, (e) discussing in good faith the General Technology Development to
be funded by NANOGEN; and (f) any other actions deemed appropriate by the
Parties.

     2.7 COLLABORATION COMMITTEE MEETINGS AND ATTENDANCE. Within *************
**** of the Effective Date of this Agreement, the Collaboration Committee shall
meet and confer to prioritize Collaboration Projects on a
technology-by-technology basis, drawn from the Collaboration Products listed in
Exhibit B. No later than ************** after the Effective Date of this
Agreement, the Collaboration Committee shall select one (1) or more
Collaboration Projects and direct the Development and Commercialization
Committee to prepare a Development Plan for each selected Collaboration Project.
Throughout the term of this Agreement, the Collaboration Committee shall
continue to meet and direct the collaboration as may be mutually agreed.

     2.8 DEVELOPMENT AND COMMERCIALIZATION COMMITTEE. The purpose of the
Development and Commercialization Committee shall be to: (a) prepare Development
Plans for each Collaboration Product, including detailed milestones for each
Party

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(initially, it is anticipated that responsibility for, e.g., development of
breadboards for Collaboration Products would be the primary responsibility of
NANOGEN working with HITACHI, which breadboards and related documentation would
be transferred to HITACHI for further product development); (b) direct the
development teams in the development of Product Specifications for each
Collaboration Product; (c) implement the Development Plan for each Collaboration
Product; (d) review and evaluate progress under the Development Plan for each
Collaboration Product on an annual basis; (e) initiate and implement changes to
development of the Collaboration Products, as needed, from time to time; (f)
oversee and direct the development of the Collaboration Products; (g) where
appropriate, reach an Agreement to Commercialize for each applicable
Collaboration Product; (h) upon reaching an Agreement to Commercialize each
Collaboration Product, make such recommendations to the Collaboration Managers
regarding all aspects of the commercialization of each Collaboration Product,
including manufacturing, supply agreements, Product Specifications, marketing,
sales, distribution and service of the Collaboration Products, pursuant to the
terms and conditions of this Agreement; (i) recommend and, upon approval,
implement changes to the commercialization phase of the Development Plans for
the Collaboration Products; (j) provide rolling forecasts, establish minimum
sales volumes, agree on the transfer price of NANOGEN Products, HITACHI
Products, and Other Products and aggregate minimum production quantities thereof
of such products prior to the development of same, pursuant to the terms and
conditions of this Agreement; (k) ensure that each of the Parties is adequately
informed of the status of each Collaboration Project, including, without
limitation, the availability of all books and records regarding the
Collaboration; and (l) address such other issues as the Parties may deem
appropriate from time to time.

     2.9 DEVELOPMENT AND COMMERCIALIZATION COMMITTEE MEETINGS AND ATTENDANCE.
The Development and Commercialization Committee shall initially meet as mutually
agreed to create the Development Plans and thereafter as often as is reasonably
necessary to accomplish its purpose, but at least quarterly, at a place and on a
date selected initially by HITACHI and then by each Party in turn thereafter.
Representatives of HITACHI or NANOGEN or both, in addition to members of the
Development and Commercialization Committee, may attend such meetings at the
invitation of either Party. Attendance may be in person, by telephone or
videoconference, or by any other means which is mutually acceptable to the
Parties.

     2.10 DEVELOPMENT PLAN. Once a Collaboration Project has been selected by
the Collaboration Committee, it shall notify the Development and
Commercialization Committee in writing. The Development and Commercialization
Committee shall then prepare a mutually acceptable written Development Plan for
the Collaboration Project within ************ of such notification. Each such
Development Plan shall, at a minimum, include the following: (a) each Party's
respective duties and obligations thereunder, including any actions which
require the joint efforts of the Parties, on an annual and life-of-project
basis; (b) annual and life-of-project milestones for each Party, including any
joint efforts of the Parties; (c) annual and life-of-project budgets; and (d)
any other information which the Development and Commercialization Committee
deems appropriate. The Parties shall use commercially reasonable best efforts to
develop each Collaboration Product in accordance with the applicable Development
Plan. The

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Development Plan may be revised from time to time by the Development and
Commercialization Committee.

     2.11 DEVELOPMENT TEAMS. Each Party shall assign personnel to its respective
development teams for Collaboration Projects with the appropriate skills and
experience to accomplish the development work established in the subject
Development Plan. It is expected that such teams shall work together to
accomplish the objectives of the Collaboration.

     2.12 *********************************************************************
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                                   ARTICLE 3

                               DEVELOPMENT FUNDING

     3.1 FUNDING. Upon the Effective Date of this Agreement and the Common Stock
Purchase Agreement pursuant to Article 4, NANOGEN shall provide HITACHI with an
invoice for the initial installment ************************** of the funding
contribution due during the ***** **** of this Agreement as set forth in Exhibit
C. HITACHI shall pay such ******************** within ********************** of
receipt of such invoice. HITACHI shall make payments to fund the Collaboration
Projects selected by the Collaboration Committee in the amounts and on the dates
listed in Exhibit C, provided that, as a condition precedent to HITACHI's
obligation to make each such payment: (a) NANOGEN contributes, on a year-by-year
basis, funding for its own General Technology Development from all sources
(except HITACHI) in an amount equal to or greater than HITACHI's actual payments
made pursuant to Exhibit C; (b) HITACHI receives from NANOGEN through the
Development and Commercialization Committee (i) an assessment of the progress
toward milestone completion for each Collaboration Project and (ii) a technical
report for each Collaboration Project and a list of intellectual property
developed in connection with any Collaboration Project in the previous period;
and (c) HITACHI receives an assessment that the Collaboration Projects then
underway are proceeding pursuant to the material milestones and budgets
reflected in the Development Plans, as modified from time to time, as needed.
Subject to the

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termination provisions during the first three years as set forth in Section
12.2, HITACHI shall not be obligated to make any development funding payments
until each of the three (3) conditions precedent set forth above in subsections
3.1(a) through (c) are met. The determination as to whether the condition in
subsection 3.1(c) has been met shall be made by the Development and
Commercialization Committee, or, if such committee cannot agree on such
determination, according to the dispute resolution procedures described in
Section 2.4; provided, however, that HITACHI shall not be obligated to make any
development funding payments: (y) until each of the three conditions precedent
set forth above have been met; or (z) any dispute as to the satisfaction of the
condition in subsection 3.1(c) has been resolved to the mutual satisfaction of
the Parties.

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*****************. Each such payment shall be accompanied with a statement
listing, at a minimum: (a) the number and type of each Cartridge sold or used;
(b) the gross sales of each Cartridge and the gross amount received therefrom,
the type and amount of each deduction made from such gross sales and receipts,
and the resulting Net Sales for each Cartridge sold, leased, rented or otherwise
provided to a third party for the period covered by such statement; (c) the
royalties due HITACHI hereunder; (d) the exchange rate used; and (e) such other
information as HITACHI may reasonably request from time to time. Such royalties
shall be paid in U.S. Dollars, with the conversion of sales proceeds to U.S.
Dollars determined based on the U.S. Dollar exchange rate in effect at the end
of the subject calendar quarter. In calculating the royalty base for such sales
of Cartridges, the value attributable to any genetic content embodied in or
contained in a Cartridge shall be included in the sales price.

     3.3 TERMINATION OF ROYALTY OBLIGATION. The royalty payments due on all of
NANOGEN's sales of Cartridges shall continue until such time as HITACHI has
recouped (through royalty payments made by NANOGEN) ******************** of the
aggregate amount of funding it has paid to NANOGEN pursuant to Section 3.1 as of
the expiration or earlier termination of this Agreement, whichever occurs first.
Any amount owed to HITACHI by NANOGEN pursuant to Section 3.2 upon expiration or
termination of this Agreement shall survive termination of this Agreement until
paid.

                                   ARTICLE 4

                                EQUITY INVESTMENT

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Concurrent with the Effective Date of this Agreement, the Parties agree to enter
into the Common Stock Purchase Agreement, in the form attached hereto as Exhibit
D. HITACHI's payment for such stock purchase shall be made within ****** *****
**** of the Effective Date of this Agreement.

                                   ARTICLE 5

                                  MANUFACTURING

     5.1 RESPECTIVE RIGHTS TO MANUFACTURE. Subject to the terms of this
Agreement: (a) HITACHI shall have the exclusive right to manufacture and have
manufactured all HITACHI Products; (b) NANOGEN shall have the exclusive right to
manufacture and have manufactured all NANOGEN Products; and (c) the Parties
shall mutually agree in writing as to which Party shall have the right to
manufacture Other Products on a case by case basis.

     5.2 MANUFACTURING ASSISTANCE. Each Party shall initially provide the other
Party with all current design and related documentation concerning its
respective products in its possession which may be useful to the other Party in
exercising its manufacturing rights hereunder. Each Party shall use commercially
reasonable best efforts to complete such transfer as soon as practical after the
Parties have reached an Agreement to Commercialize for each Collaboration
Product. Thereafter, each Party shall periodically provide the other with all
relevant information and materials regarding any updates, modifications,
improvements or corrections to any Collaboration Products which may be made by
such Party. The Parties shall discuss and mutually agree upon any NANOGEN or
HITACHI requirements that cause changes to be made to the Collaboration Products
and the impact such changes may have on schedules and any additional costs
related to such changes. Existing production and test equipment currently
located at NANOGEN facilities which can be utilized in the development and/or
manufacture of HITACHI Products, any Other Products (that HITACHI is to develop
and/or manufacture pursuant to any Development Plan), and any NANOGEN Products
(that HITACHI is to manufacture pursuant to Section 5.5) which HITACHI cannot
purchase from outside vendors, will be made available free of charge and
transferred at NANOGEN's expense to HITACHI's facility for HITACHI's use in
connection with HITACHI's performance of its obligations under this Agreement,
upon HITACHI'S request. In the event of expiration or earlier termination of
this Agreement, all such production and test equipment shall be returned to
NANOGEN's facility at HITACHI's expense upon the expiration of HITACHI's right
to manufacture hereunder as set forth in Section 12.8.

     5.3 MUTUAL ENGINEERING ASSISTANCE. Each Party will assist the other Party
in matters pertaining to engineering and manufacturing responsibilities
hereunder that are within the capabilities of a Party and as the Parties may
mutually agree.

     5.4 MARKET DATA. The Parties shall periodically share relevant market and
related information concerning the Field in order to seek to ensure that the
Collaboration

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Products conform to the technical specifications required by customers and
include appropriate innovations.

     5.5 *********************************************************************
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     5.8 **********************************************************************
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     5.10 TRANSFER PRICES. The transfer price for all HITACHI Products, NANOGEN
Products, and Other Products shall be determined on a product-by-product and
********************** basis as mutually agreed upon by the Parties as part of
the applicable supply agreement. If a change in the price of any such product
becomes necessary due to a major change of the competitive situation with
respect to price performance or any other reasonable cause, the Parties shall,
in good faith, negotiate, through the Development and Commercialization
Committee, to establish new prices.

     5.11 CURRENCY FLUCTUATION. **********************************************
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     5.12 WITHHOLDING TAXES. The Parties acknowledge and agree that the funding
made by HITACHI pursuant to Section 3.1 will be used for development activities
(as specified in the applicable Development Plan) in the United States.
Accordingly, such funding *****************************************. If a Party
has reasonable grounds to conclude that the ***************************** under
applicable law in its jurisdiction on any payment to be made to the other Party
hereunder, such Party may *****************************************************
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**********************. In such event, a Party shall notify the other Party of
such payment, and, as soon as possible following such payment, shall provide the
other Party with evidence of such tax payment and other documentation which
would be reasonably required for a taxpayer in the relevant jurisdiction to meet
the requirements for claiming a tax credit on its income tax return. Each Party
shall use commercially reasonable best efforts to credit any such tax withheld
by the other Party against its tax liability, and if such Party is able to so
credit all or any amount of such withheld tax, it shall promptly reimburse to
the other Party one-half of the amount of such credit. Each party shall, upon
the other Party's request from time to time, report as to whether any such tax
credit has been taken.

     5.13 AUDIT. The Parties shall keep and maintain accurate records. At any
time during the term of this Agreement, but in no event more often than once per
year, a Party, at its sole cost and expense, shall have the right to audit the
other Party's books and

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records to ensure compliance with this Agreement. Specifically, NANOGEN shall
only have the right to audit HITACHI's books and records regarding: (a) transfer
prices for products manufactured by HITACHI hereunder; (b) calculation of the
NRE Fee; and (c) HITACHI distribution of products in Asia, (for purposes of: (i)
calculating the average sales price to determine Net Sales as described in
Section 1.29; and (ii) determining whether HITACHI has met the minimum targets
as described in Section 6.1.). HITACH shall only have the right to audit
NANOGEN's books and records regarding: (x) transfer prices for products
manufactured by NANOGEN hereunder; (y) General Technology Development funding;
and (z) the Cartridge royalty paid to HITACHI pursuant to Section 3.2. If any
such audit reveals an underpayment of any amounts due hereunder, the Party which
owes any amount shall immediately pay such amounts due, plus interest accruing
at a rate of *************************************************** for the amount
underpaid. If any audit reveals an ********************************* or more of
the amount owed to the other Party hereunder, or other non-compliance with this
Agreement, the Party which owes the amounts due, or has been found to be in
non-compliance with this Agreement shall bear all costs and expenses associated
with such audit.

                                   ARTICLE 6

                             DISTRIBUTION & SERVICES

     6.1 *********************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************

     6.2 *********************************************************************
******************************************************************************
******************************************************************************

-----------------
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                                    15 of 33
<PAGE>

******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************

     6.3 *********************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************
******************************************************************************

     6.4 OTHER PRODUCTS. The Parties agree to discuss and agree on terms and
conditions for distribution of the Other Products.

     6.5 TECHNICAL SUPPORT AND OTHER SERVICES. HITACHI shall have the exclusive
right and obligation to perform all services relating to HITACHI Products
anywhere in the world. NANOGEN shall provide HITACHI with all such information,
training and assistance as is required or useful to HITACHI for any NANOGEN
Products and Collaboration Products relating to technical support in Asia and
any reasonable assistance in providing services relating to HITACHI Products. At
the time the Parties reach an Agreement to Commercialize a Collaboration Product
hereunder, the Parties shall meet and agree upon mutually acceptable performance
requirements for HITACHI's technical support and service obligations on a
country-by-country basis pursuant hereto. NANOGEN shall have the exclusive right
and obligation to perform all services relating to NANOGEN Products, including
triage and installation for HITACHI Products, anywhere in the world other than
Asia, and service for NANOGEN Products to HITACHI in Asia. NANOGEN, may at its
sole discretion and without obligation, at any time, request HITACHI to assist
in such installation of HITACHI Products outside of Asia under terms to be
agreed between the Parties. Within *************** of the Agreement to
Commercialize any Collaboration Product, the Parties shall agree on the terms
and conditions, and respective obligations of the Parties regarding service
activities for Collaboration Products, subject to the Parties' respective rights
hereunder.

                                   ARTICLE 7

                          INTELLECTUAL PROPERTY RIGHTS

-----------------
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                                    16 of 33
<PAGE>

     7.1 NANOGEN OWNERSHIP. As between the Parties, subject to the licenses
granted hereunder, NANOGEN is the owner (or licensee from a third party) of all
NANOGEN Intellectual Property Rights in and to the Existing HITACHI Products,
NANOGEN Products and the NANOGEN Improvements, even if such items are
incorporated into, combined with, or embodied into the Collaboration Products.

     7.2 NANOGEN LICENSE. *****************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************

     7.3 HITACHI OWNERSHIP. As between the Parties, subject to the licenses
granted hereunder, HITACHI is the owner (or licensee from a third party) of all
HITACHI Intellectual Property Rights in and to the New HITACHI Products and
HITACHI Improvements, even if such items are incorporated into, combined with,
or embodied into the Collaboration Products.

     7.4 HITACHI LICENSE. *****************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************

-----------------
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                                    17 of 33
<PAGE>

     7.5 SOLELY DEVELOPED INTELLECTUAL PROPERTY. Subject to Section 7.7 and
except as otherwise provided herein, any Intellectual Property rights of any
kind which may arise from the Parties' activities under or related to this
Agreement shall remain the sole property of the Party which performed the work
which gave rise to such rights, or the right to obtain such rights (including,
in the case of patent rights, the making of an invention or discovery of a
patentable invention under 35 U.S.C.). Each Party has an obligation to disclose
in writing, such solely developed Intellectual Property to the other Party. Any
such solely developed intellectual property necessary or desirable for use in
any Collaboration Product shall be licensed to the other Party ***************
****************************** to enable such Party to fulfill its obligations
throughout the term of this Agreement. In the event of termination or expiration
of this Agreement the Parties shall agree to discuss in good faith ***
****************************** such solely developed Intellectual Property on
reasonable commercial terms and conditions.

     7.6 JOINT OWNERSHIP OF JOINTLY DEVELOPED WORKS. Subject to Section 7.7 and
except as otherwise provided herein, the Parties shall be joint owners of
undivided interests in all Intellectual Property rights in those components of
the Collaboration Products which are jointly developed by the Parties. A work
shall be deemed to be jointly-developed if one or more employees or agents of
HITACHI and one or more employees or agents of NANOGEN have materially
contributed to such development. In the event of any uncertainty, the
Collaboration Committee shall determine whether any work is jointly developed.
Except as otherwise provided hereunder, each Party shall have the right to deal
freely with any such joint ownership interest, including by transferring such
interest or by licensing such interest, without any accounting or other
obligation to the other Party. If further action is required in order to obtain
or perfect any interest in any jointly-owned Intellectual Property in the
Collaboration Products in any jurisdiction, including, without limitation, the
filing of a patent application, a Party which desires to obtain or perfect such
right shall notify the other Party. If the other Party desires to be a joint
owner of such right, the Parties shall then cooperate in the procedure to obtain
or perfect such right, including by sharing all costs associated with such
procedure, with any resulting right to be jointly owned by both Parties and
subject to the terms hereof. If the other Party does not desire to participate
in such procedure, it shall notify the first Party in writing, and the first
Party may then proceed with such procedure alone, and shall be the sole owner of
any such right thereby obtained or perfected, provided that such Party owning
such right shall be deemed to have granted Party. ***************************
*****************************************************************************
under such right for any and all purposes, except as otherwise provided herein.
If either Party believes that a third party is infringing any jointly-owned
Intellectual Property in the Collaboration Products and desires to take any
action against such third party with respect to such infringement, such Party
shall first contact the other Party and the Parties shall use commercially
reasonable best efforts to coordinate any such action. If either Party receives
a claim of infringement from any third party which relates to any jointly-owned
Intellectual Property, such Party shall immediately notify the other Party and
the Parties shall then use commercially reasonable best efforts to coordinate
any defense of or other response to such claim.

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                                    18 of 33
<PAGE>

     7.7 LIMITATION. For the avoidance of doubt, any Intellectual Property
rights arising pursuant to Sections 7.5 and 7.6 are limited to such rights as
may be necessary for the Party receiving such license to exercise its rights
hereunder and do not include any licenses or rights to grant licenses or
sublicenses to the other Party's underlying Intellectual Property.

     7.8 COOPERATION. Each Party shall cooperate with the other in the
protection of any Intellectual Property rights relating to the HITACHI Products
or the NANOGEN Products, as the case may be, and shall inform the other Party
immediately of any infringement or other improper action with respect to any
such Intellectual Property rights that shall come to its attention.

     7.9 THIRD PARTY LICENSES. **********************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************

     7.10 *******************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************

-----------------
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                                    19 of 33
<PAGE>

*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************
*****************************************************************************

                                   ARTICLE 8

                         REPRESENTATIONS AND WARRANTIES

     8.1 GENERAL REPRESENTATIONS AND WARRANTIES. Each Party represents and
warrants that: (a) it is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is incorporated;
(b) it has the corporate power and authority and the legal right to enter into
the Agreement and to perform its obligations hereunder; (c) it has the corporate
power and authority and the legal right to own and operate its property and
assets, to lease the property and assets it operates under lease, and to carry
on its business as it is now being conducted; (d) it is in compliance with all
requirements of applicable law, except to the extent that any noncompliance
would not have a material adverse effect on the properties, business, financial
or other condition of such Party and would not materially adversely affect such
Party's ability to perform its obligations under the agreement; (e) it has taken
all necessary corporate action to authorize the execution and delivery of the
Agreement and the performance of its obligations hereunder; (f) the Agreement
has been duly executed and delivered on its behalf and constitutes a legal,
valid, and binding obligation, enforceable against such Party in accordance with
its terms; (g) all necessary consents, approvals and authorizations of all
governmental authorities and other persons required to be obtained by such Party
in connection with the Agreement have been obtained; (h) the execution and
delivery of the Agreement and the performance of such Party's obligations
hereunder (i) do not conflict with or violate any requirement of applicable laws
or regulations, and (ii) do not conflict with, or constitute a default under,
any contractual obligation of such Party); and (i) there is no outstanding
contract, commitment or agreement to which it is a party or legal impediment of
any kind which conflicts with this Agreement or might limit, restrict or impair
the rights granted to the other Party hereunder.

     8.2 INTELLECTUAL PROPERTY REPRESENTATIONS AND WARRANTIES. NANOGEN
represents and warrants that (a) it owns, or otherwise has all appropriate
licenses to existing NANOGEN Intellectual Property Rights to perform its duties
and obligations hereunder, (b) to the best of its knowledge, the Existing
HITACHI Products (made in accordance with NANOGEN specifications) and the
Existing NANOGEN Products do not infringe, or constitute a misappropriation of,
the valid Intellectual Property rights of any third party (HITACHI is aware that
NANOGEN is a party to a certain intellectual property lawsuit against Motorola
and Massachusetts Institute of Technology (MIT); (c) it shall use commercially
reasonable best efforts to ensure that, to the best of its knowledge, none of
the New NANOGEN Products or NANOGEN Improvements infringe, or constitute a
misappropriation of the valid Intellectual Property rights of any third party;
and (d) nothing contained herein conflicts with or constitutes a default under
either the ************************************************. HITACHI represents

-----------------
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                                    20 of 33
<PAGE>

and warrants that (x) it owns, or otherwise has all appropriate licenses to
existing HITACHI Intellectual Property Rights to perform its duties and
obligations hereunder, (y) it shall use commercially reasonable best efforts to
ensure that, to the best of its knowledge, none of the New HITACHI Products or
HITACHI Improvements infringe, or constitute a misappropriation of the valid
Intellectual Property rights of any third party; and (z) that nothing contained
herein conflicts with or constitutes a default under any license or other
agreement to which HITACHI is a party.

                                   ARTICLE 9

                                 INDEMNIFICATION

Each Party shall indemnify, defend and hold harmless the other Party, and any of
the other Party's affiliates, employees, representatives, agents and/or
customers (each an "Indemnified Party"), from and against any and all claims,
demands, suits, actions, liabilities, damages, costs and expenses, including,
without limitation, attorneys' fees and any and all amounts paid in settlement
of any such claim, demand, suit or action, which are asserted against, imposed
upon, or incurred or suffered directly or indirectly by any Indemnified Party as
a result of, arising from or relating to: (a) any breach or threatened breach of
the representations and warranties made in Section 8.1 or Section 8.2; or (b)
any claim by any third party that any product, component or work created by the
indemnifying Party infringes, or constitutes a misappropriation of, any
Intellectual Property rights of such third party, provided that: (x) the
indemnifying Party promptly notifies the Indemnified Party in writing of any
such claim or suit; (y) the Indemnifying Party is permitted to control fully the
defense and any settlement of such claim or suit; and (z) the Indemnified Party
cooperates fully in the defense of such claim or suit, and may appear, at its
own expense, through counsel reasonably acceptable to the Indemnifying Party.

                                   ARTICLE 10

                             LIMITATION OF LIABILITY

IN NO EVENT SHALL A PARTY BE LIABLE TO THE OTHER FOR COSTS OF PROCUREMENT OF
SUBSTITUTE GOODS AND SERVICES, LOSS OF USE OR PROFITS, OR ANY OTHER SPECIAL,
INCIDENTAL, INDIRECT, OR CONSEQUENTIAL DAMAGES, ARISING OUT OF OR RELATED TO
THIS AGREEMENT OR THE USE OR PERFORMANCE OF ANY PRODUCT, HOWEVER CAUSED, AND ON
ANY THEORY OF LIABILITY, WHETHER IN AN ACTION FOR CONTRACT OR TORT (INCLUDING
NEGLIGENCE) OR OTHERWISE, AND WHETHER OR NOT A PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. Each limitation on liability or limited or
exclusive remedy set forth in this Agreement is independent of any other
limitation or remedy and if any such limitation or remedy fails of its essential
purpose or is otherwise held to be unenforceable, that shall not affect the
validity of any other such limitation or remedy.

                                    21 of 33
<PAGE>

                                   ARTICLE 11

                            CONFIDENTIAL INFORMATION

     11.1 RESTRICTIONS ON USE OF CONFIDENTIAL INFORMATION. Each Party shall
protect the other's Confidential Information from unauthorized dissemination and
use the same degree of care that each such Party uses to protect its own like
information, provided that in no case shall a Party use less than reasonable
care with respect to the other Party's Confidential Information. Neither Party
will use the other's Confidential Information for purposes other than those
necessary to directly further the purposes of this Agreement. Neither Party will
disclose to third parties the other's Confidential Information without the prior
written consent of the disclosing Party.

     11.2 EXCEPTIONS. The foregoing restrictions shall not apply to information
that is required to be disclosed in compliance with applicable laws or
regulations, or by order of a court or other regulatory body having competent
jurisdiction; provided, however, that the Party required to make the disclosure
gives reasonable advance written notice to the other of the disclosure
requirement, and further provided that the Party required to make the disclosure
uses commercially reasonable best efforts to secure confidential treatment of
such Confidential Information required to be disclosed.

                                   ARTICLE 12

                              TERM AND TERMINATION

     12.1 TERM. This Agreement shall become effective on the Effective Date and
shall continue in full force and effect for ********************, unless sooner
terminated as provided herein. The Parties may extend such ************** term
upon mutual written agreement.

     12.2 TERMINATION DURING *****************. The intent of the Parties is
that this Agreement shall not be terminated by either Party during the first
***************** except in the exceptional case of material non-performance
of the other Party. Material non-performance shall include, but is not
limited to: (a) the failure of either Party to achieve any material milestone
or otherwise perform any of its material obligations as provided in each
Development Plan for a period of *********** after such time as the material
milestone or obligation is required to be completed by that Party; (b)
NANOGEN's failure to (i) eliminate any restrictions *********** on HITACHI's
right to develop, manufacture, sell and otherwise distribute, and service
Collaboration Products for infectious disease DNA diagnostics prior to the
execution of an Agreement to Commercialize the first Collaboration Product
hereunder; and (ii) maintain any necessary license enabling HITACHI to do so;
or (c) a willful or grossly negligent disclosure of the other Party's
material Confidential Information in violation of Article 11. Upon a material
non-performance, the aggrieved Party may terminate this Agreement effective
immediately, and seek any remedy from the other Party, otherwise

-----------------
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                                    22 of 33
<PAGE>

consistent with this Agreement under Article 10, available at law or in equity
for such material non-performance of the other Party.

     12.3 TERMINATION FOR CONVENIENCE. Either Party may terminate this Agreement
for convenience by providing the other Party with written notice of its
intention to terminate: (a) in connection with the **************** , any time
during the ***************** period after the ***************** of the Effective
Date and subject to Section 12.8 effective immediately (and subject further to,
in the case of HITACHI termination for convenience, the ************* wind down
period described in Section 12.4); and (b) in connection with the ******
***************************** days prior to the date of the ************ of the
Effective Date and subject to Section 12.8 effective on the **************** of
the Effective Date.

     12.4 TERMINATION BY HITACHI FOR CONVENIENCE ON THE ********************. In
the event that HITACHI terminates this Agreement on the ***** *********** of the
Effective Date of this Agreement: (a) the Agreement shall continue in full force
and effect into the *********** for a period of ************** after the *******
************ of the Effective Date of this Agreement; (b) HITACHI shall be
obligated to make a pro-rata funding payment pursuant to Section 3.1 in an
amount equal to ************************************************* to cover its
funding obligation for the *************** of such ************ ; (c) NANOGEN
shall make a funding payment for General Technology Development in an amount
*******************************************************************************
***************; (d) HITACHI shall not recover from NANOGEN any *********; and
(e) the Parties acknowledge and agree that they will be winding down the
Collaboration during the ****************** of the ************.

     12.5 TERMINATION BY HITACHI FOR CONVENIENCE ON THE ********************. In
the event that HITACHI terminates this Agreement on the ***************** of the
Effective Date: (a) the Agreement shall terminate on the ****************** of
the Effective Date; (b) neither Party shall be obligated to make any funding
payments after the ****************** of the Effective Date; and (c) HITACHI
shall not recover from NANOGEN any *******.

     12.6 TERMINATION BY NANOGEN FOR CONVENIENCE. In the event that NANOGEN
terminates this Agreement on either the *************************** of the
Effective Date of this Agreement: (a) the Agreement shall terminate on either
the ***************************** of the Effective Date, as the case may be; (b)
neither Party shall be obligated to make any funding payments after the
effective date of NANOGEN's notice of termination pursuant to this Section 12.6;
(c) NANOGEN shall pay HITACHI, within ************** days of invoice, any
applicable ******* pursuant to any Collaboration Product Supply Agreement
consistent with Section 5.8.

     12.7 TERMINATION FOR CAUSE. At any time after ******************** of the
Effective Date of this Agreement, either Party may terminate this Agreement if
the other Party is in material breach of any obligation hereunder, and the
breaching Party has failed to cure such material breach within *********** days
of receipt of notice detailing the nature of the material breach. A Party may
also terminate this Agreement immediately

-----------------
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                                    23 of 33
<PAGE>

upon notice to the other Party in the event of one or more of the following: (a)
appointment of a trustee or receiver for all or any part of the assets of the
other Party; (b) insolvency or bankruptcy of the other Party; (c) assignment by
the other Party for the benefit of creditors; (d) attachment of the assets of
the other Party; or (e) dissolution or liquidation of the other Party. If either
Party is involved in any of the events enumerated in subsections (a) through (e)
above, such Party shall immediately notify the other Party of the occurrence of
such event. In the event of any termination for cause pursuant to this Section
12.7, the aggrieved Party may seek any remedies available at law or in equity
for such other Party's breach.

     12.8 EFFECT OF TERMINATION. Upon expiration or any termination of this
Agreement: (a) all collaboration efforts and (except as otherwise provided
herein) associated or related funding obligations shall terminate effective
immediately; (b) the receiving Party shall return to the disclosing Party all
Confidential Information in its possession except for an archival copy of same
so that it may perform its post-termination obligations; and (c) except as
required to fulfill post-termination supply, manufacture, and service
obligations under subsection 12.8 (d) below, all licenses granted herein shall
terminate *********** from the date of such expiration or termination; and (d)
each Party shall continue its manufacturing and supply, sale and distribution
with respect to the Collaboration Products for a period of ************ from the
date of expiration or termination; and in the case of HITACHI, to supply service
and spare parts at reasonable costs directly to all existing customer installed
base of HITACHI Products, and consumables and NANOGEN Products to its existing
customer installed base of HITACHI Products for a period of ************* after
the last shipment of a HITACHI Product. NANOGEN shall be obligated to continue
to supply HITACHI with NANOGEN Products and Other Products manufactured by
NANOGEN, under "most favored nation" terms, so that HITACHI may continue
distribution of these to HITACHI's installed base for a minimum period of ****
*********** after the last shipment of a HITACHI Product to a HITACHI customer.

     12.9 SURVIVAL. The provisions of Articles 1, 7, 9, 10, 11 and 12, and
Sections 3.2, 3.3, 13.2 and 13.3 shall survive the termination of this
Agreement. All other rights and obligations arising hereunder which have not
accrued prior to such termination, including, without limitation, all licenses
granted hereunder, shall terminate upon such termination.

                                   ARTICLE 13

                                  MISCELLANEOUS

     13.1 FORCE MAJEURE. Neither Party shall be liable for any delay or
nonperformance of any provision of this Agreement (other than for the payment of
amounts due) due to fire, explosion, flood or other natural catastrophe;
governmental legislation, act, orders or regulations; strikes or labor
difficulties; computer, software, Y2K, telecommunications, or electrical failure
to the extent any such event is not

-----------------
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                                    24 of 33
<PAGE>

occasioned by the negligence of the delayed Party, and the time for performance
of such provision shall be deemed to be extended for a period equal to the
duration of the conditions preventing performance. The Party affected by an
event described in the preceding sentence shall use commercially reasonable best
efforts to minimize the delays caused by such events. Each Party shall notify
the other as promptly as practicable of the occurrence of a force majeure event
hereunder.

     13.2 ARBITRATION. All disputes arising in connection with this Agreement
(except for a violation of Section 11.1), not resolved pursuant to Section 2.4.
shall be finally settled under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce by one or more arbitrators appointed in
accordance with the said Rules. If such arbitration is demanded by NANOGEN, the
arbitration proceeding shall be held in Tokyo, Japan. If such Arbitration is
demanded by HITACHI, the arbitration proceeding shall be held in San Diego,
California. In the event of a dispute each Party will bear its own attorneys'
fees and related costs.

     13.3 GOVERNING LAW. This Agreement and the performance of all obligations
hereunder shall be governed by and construed in accordance with the laws of
California, without application of any choice of law rules or the provisions of
the 1980 United Nations Convention on Contracts for the International Sale of
Goods, and provided that the Federal Arbitration Act shall apply in place of and
instead of the California Arbitration Act and the California International
Arbitration Act.

     13.4 COMPLIANCE WITH LAW. At all times during the term of this Agreement,
both Parties shall comply with any and all applicable laws, rules and
regulations of all governmental authorities.

     13.5 EXPORT LICENSES. HITACHI shall obtain any and all export licenses
and/or government approvals that may be required with respect to exporting the
HITACHI Products or Collaboration Products from Japan. NANOGEN shall obtain any
and all export licenses and/or government approvals that may be required with
respect to exporting the NANOGEN Products or Collaboration Products from the
United States. A Party shall not sell the Collaboration Product to, or for the
use of, any ultimate purchaser with which the other Party could not deal under
laws or regulations applicable in any country having jurisdiction, including the
export laws and regulations of the United States and Japan which may prohibit
certain products from being diverted, transshipped, or re-exported to any
destination not described in the shipping documents without prior authorization
from the United States or Japanese Government. Each Party shall comply with all
laws and regulations applicable in all countries having jurisdiction with
respect to the HITACHI Products, NANOGEN Products and Collaboration Products,
their sale and this Agreement. Each Party recognizes that performance by the
other Party is subject to receipt of export license(s) from government(s) of the
country/countries of origin of the HITACHI Products, NANOGEN Products,
Collaboration Products and/or of the materials they contain and/or of the
technology on which they are based. Each Party shall be free from all liability
in case of non-receipt or late receipt of such export license(s).

                                    25 of 33
<PAGE>

     13.6 RELATIONSHIP OF THE PARTIES. The relationship of the Parties
established by this Agreement is that of independent contractors, and nothing
contained in this Agreement shall be construed to give either Party the power to
direct or control the day-to-day activities of the other, constitute the Parties
as partners, joint venturers, co-owners or otherwise as participants in a joint
or common undertaking, or allow either Party to create or assume any obligation
on behalf of the other Party for any purpose whatsoever.

     13.7 WAIVER. A waiver of a breach or default under this Agreement shall not
be a waiver of any other or subsequent breach or default. Failure or delay by
either Party to enforce compliance with any term or condition of this Agreement
shall not constitute a waiver of such term or condition.

     13.8 ASSIGNMENT. Neither Party may assign or delegate any of its rights or
obligations arising under this Agreement, whether voluntarily or by operation of
law, without the express written consent of the other Party, and any such
purported assignment or delegation shall be void and without effect, provided
that either Party (after providing written notice thereof to the other party)
may assign all or part of its rights and obligations hereunder to any of its
affiliates and may assign this Agreement in connection with any sale or transfer
of its business, whether by way of sale or transfer of all or substantially all
of its assets, sale of stock, merger or otherwise. This Agreement shall be
binding upon and inure to the benefit of the successors or assigns of the
Parties hereto and, to the extent any successor or assign is not bound by
operation of law, each Party shall cause such successor or assign to expressly
agree in writing to be bound by this Agreement.

     13.9 COMPLETE AGREEMENT. This Agreement and the Prior Agreement contains
the entire understanding of the Parties with respect to the matters contained
herein and supersedes all previous negotiations, agreements and commitments
related thereto. There are no promises, covenants or undertakings between the
Parties other than those expressly set forth herein and in the Prior Agreement.
In the event of any conflicts between this Agreement and the Prior Agreement,
this Agreement shall prevail. For the avoidance of any doubt, the non-recurring
engineering fee associated with the Prior Agreement is a separate and distinct
obligation from the NRE Fee contemplated herein. No modification or amendment to
this Agreement shall be valid unless made in writing and signed by duly
authorized representatives of both Parties.

     13.10 NOTICES. Any and all notices required or authorized hereunder shall
be in writing and shall be delivered by any reasonable means, including by
personal delivery, registered or certified mail, or facsimile to the following
address of the Party to which that notice is to be given:

To HITACHI:
                     Hitachi, Ltd.
                     Instrument Group
                     5-1, Marunouchi 1-chome, Chiyoda-ku
                     Tokyo, 100 Japan
                     Attn: General Manager, Environmental Systems Operations

                                    26 of 33
<PAGE>

                     Fax: 011-81-3-3212-1493
                     with copies to Nissei Sangyo Co., Ltd. and Hitachi
                     Instrument Service Co, Ltd. at the addresses listed in the
                     introductory paragraph

To NANOGEN:
                     Nanogen, Inc.
                     10398 Pacific Center Court
                     San Diego, CA 92121
                     Attn: Chief Executive Officer
                     Fax: 858-410-4949
                     with a copy to General Counsel

If such address changes for any Party, such Party shall immediately inform the
other Party of such change.

     13.11 PUBLICITY. Neither Party shall make any public announcements or press
releases about this Agreement without the other Party's prior written consent.

IN WITNESS WHEREOF, the Parties shall have caused this Agreement to be signed by
their respective duly authorized representatives as of the Effective Date.

              HITACHI, LTD.                             NANOGEN, INC.
            INSTRUMENT GROUP

By:      /s/ H. INOMATA                    By:       /s/ H.C. BIRNDORF
   ------------------------------------       ----------------------------------
   Name:  H. Inomata                          Name:    H. C. Birndorf
   Title: President and Chief Executive       Title:   Chairman, Chief Executive
          Officer                                      Officer, & President

         NISSEI SANGYO CO., LTD.                 HITACHI INSTRUMENTS SERVICE
                                                           CO., LTD.

By:      /s/ Y. Tsunoda                    By:  /s/ T. HONKAWA
   ------------------------------------       ----------------------------------
   Name:  Y. Tsunoda                          Name:    T. Honkawa
   Title: Executive Managing Director         Title:   President

                                    27 of 33
<PAGE>

                                    EXHIBIT A

                              Collaboration Project

Pursuant to Section 2.7, the Parties shall meet and confer and agree upon a
joint development strategy which prioritizes development projects on a
technology by technology basis, drawn from the following project areas:

*****************
*****************
*****************
*****************
*****************
*****************
*****************
*****************
*****************
*****************

-----------------
*** Confidential material redacted and separately filed with the Commission.

                                    28 of 33
<PAGE>

                                    EXHIBIT B

                              Collaboration Product

A list of possible Collaboration Products contemplated by the Parties as of the
Effective Date of this Agreement includes:

***********************************
***********************************
***********************************
***********************************
***********************************
***********************************

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*** Confidential material redacted and separately filed with the Commission.

                                    29 of 33
<PAGE>

                                    EXHIBIT C

                               Development Funding

Subject to receipt of the reports and satisfaction of the other conditions set
forth in Section 3.1, HITACHI shall provide NANOGEN the following development
funding (in United States Dollars and subject to currency fluctuations, as
provided in Section 5.11):

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*****************************************************************************
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*** Confidential material redacted and separately filed with the Commission.

                                    30 of 33
<PAGE>

*****************************************************************************
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*** Confidential material redacted and separately filed with the Commission.

                                    31 of 33
<PAGE>

                                    EXHIBIT D

                         Common Stock Purchase Agreement

                                [See Exhibit 10.8]

                                    32 of 33<PAGE>

[Confidential Treatment Requested. Confidential Portions of this Agreement have
been redacted and have been separately filed with the Commission.]

                                                                   EXHIBIT 10.7

                                 FIRST AMENDMENT
                                       TO
                           READER, LOADER AND CASSETTE
                LOW COST ENGINEERING AND MANUFACTURING AGREEMENT

This First Amendment (hereinafter, the "First Amendment") to that certain
Reader, Loader and Cassette Low Cost Engineering and Manufacturing Agreement
dated December 15, 1999, and executed by the Parties on January 12, 2000 (the
"Agreement") is made and entered into this 26th day of July, 2000 (the
"Effective Date") by and between Nanogen, Inc., a corporation organized and
existing under the laws of Delaware, and having its principal place of
business at 10398 Pacific Center Court, San Diego, California, USA 92121
("NANOGEN"), and Hitachi, Ltd., a corporation organized and existing under
the laws of Japan, through its Instrument Group and having its principal
place of business at 5-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo, 100 Japan
("HITACHI"). NANOGEN and HITACHI are sometimes referred to herein
individually as a "Party," or collectively as the "Parties." Unless otherwise
noted herein, all capitalized terms shall have the meaning ascribed to them
in the Agreement.

Pursuant to Section 21.6 of the Agreement, the Parties hereby agree to modify
the Agreement only as specifically provided below.

1. DEFINITION OF NET SALES. The Parties agree to add the following new section
1.21 to the Agreement.

         "1.21. "NET SALES" means*********************************************
         **********************************************************************
         **********************************************************************
         **********************************************************************
         **********************************************************************
         **********************************************************************
         **********************************************************************
         **********************************************************************
         **********************************************************************
         **********************************************************************
         **********************************************************************
         **********************************************************************
         **********************************************************************

2. COMMISSION ON SALES OF HITACHI PRODUCTS. The Parties agree to replace Section
7.6 of the Agreement with the following:

         "7.6 *****************************************************************
         **********************************************************************
         **********************************************************************

                                     1 of 3
<PAGE>

         **********************************************************************
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         **********************************************************************

3. AUDIT. The Parties agree to add the following new section 7.10 to the
Agreement.

         7.10 HITACHI shall keep and maintain accurate records. At any time
         during the term of this Agreement, but in no event more often than once
         per year, NANOGEN, at its sole cost and expense, shall have the right
         to audit HITACHI's books and records to ensure compliance with this
         Agreement. Specifically, NANOGEN shall only have the right to audit
         HITACHI's books and records regarding: (a) the commission payable on
         sales of HITACHI Products pursuant to Section 7.6; and (b) calculation
         of the average sales price and applicable deductions to determine Net
         Sales. If any such audit reveals an underpayment of any amounts due
         hereunder, HITACHI shall immediately pay such amounts due, plus
         interest accruing at a rate of ********************************** per
         month for the amount underpaid. If any audit reveals an underpayment of
         *************** or more of the amount owed to NANOGEN hereunder,
         HITACHI shall bear all costs and expenses associated with such audit.

IN WITNESS WHEREOF, the Parties shall have caused this Agreement to be signed by
their respective duly authorized representatives as of the Effective Date.

-------------------------
*** Confidential material redacted and separately filed with the Commission.

                                     2 of 3

<PAGE>

            HITACHI, LTD.                               NANOGEN, INC.
          INSTRUMENT GROUP

By: /s/ Y. MAEDA                             By: /s/ H. C. BIRNDORF
   ------------------------------               ------------------------------
Name:   Y. Maeda                             Name:  H. C. Birndorf
Title:  Vice President                       Title: Chairman, Chief Executive
                                                    Officer, & President

Date:   Aug. 1, 2000                         Date:  July 26, 2000
      ---------------------------                  -----------------------------

                                     3 of 3

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