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                                                                    EXHIBIT 10.1

                                LICENSE AGREEMENT

     This Agreement, made and entered into this 14th day of December, 1987, (the
Effective Date) by and between MASSACHUSETTS INSTITUTE OF TECHNOLOGY, a
corporation duly organized and existing under the laws of the Commonwealth of
Massachusetts and having its principal office at 77 Massachusetts Avenue,
Cambridge, Massachusetts 02139 U.S.A. (hereinafter referred to as M.I.T.), and
MATRITECH, INC., a corporation duly organized under the laws of Delaware and
having its principal office at 21 Fairfield Street, Boston, MA 02116
(hereinafter referred to as LICENSEE).

                                   WITNESSETH

     WHEREAS, M.I.T. is the owner of certain "Patent Rights" (as later defined
herein) relating to M.I.T. Case No. 4061, "Method For Determining Tissue Of
Origin And Degree Of Malignancy Of Tumor Cells", by Sheldon Penman and Edward G.
Fey, and has the right to grant licenses under said Patent Rights, subject only
to a royalty-free, nonexclusive license heretofore granted to the United States
Government;

     WHEREAS, M.I.T. desires to have the Patent Rights utilized in the public
interest and therefore is willing to grant a license thereunder;

     WHEREAS, LICENSEE has represented to M.I.T., to induce M.I.T to enter into
this Agreement, that the LICENSEE is experienced in the development, production,
manufacture, marketing and sale of products similar to "Licensed Product(s)" (as
later defined herein) and/or the use of "Licensed Process(es)" (as later defined
herein) and that it shall commit itself to using its reasonable best efforts to
exploit the Patent Rights so that public utilization shall result therefrom; and

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     WHEREAS, LICENSEE desires to obtain a license under the Patent Rights upon
the terms and conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto agree as follows:

                             ARTICLE I - DEFINITIONS

     For the purposes of this Agreement, the following words and phrases shall
have the following meanings:

     1.1 "LICENSEE" shall mean Matritech, Inc. and any subsidiary of Matritech,
Inc.

     1.2 "Subsidiary" shall mean any corporation, company or other entity more
than fifty percent (50%) of whose voting stock is owned or controlled directly
or indirectly by Matritech, Inc.

     1.3 "Patent Rights" shall mean the United States and correspondent foreign
patent applications set forth in Appendix A attached hereto and made a part
hereof (hereinafter referred to as the "Patent Rights Patent Application(s)"),
and the United States patents and foreign patents issuing from said pending
United States and foreign patent applications or later-filed foreign
applications based upon any of these United States patents and applications
(hereinafter referred to as the "Patent Rights Patent(s)") and any
continuations, continuations-in-part, divisions, reissues or extensions of any
of the foregoing.

     1.4 "Tangible Property" shall mean any or all of the hybridoma cell lines
from the M.I.T. laboratory of Professor Sheldon Penman with the designation(s)
MCF-7 B1 through B9.

     1.5 A "Licensed Product" shall mean any product or part thereof which:

     (a)  is covered in whole or in part by (i) a pending claim contained in a
          Patent Rights Patent Application in the country in which any Licensed
          Product is made, used or

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          sold; or (ii) a valid and unexpired claim contained in a Patent Rights
          Patent in the country in which any Licensed Product is made, used or
          sold; or

     (b)  is manufactured by using a process which is covered in whole or in
          part by (i) a pending claim contained in a Patent Rights Patent
          Application in the country in which any Licensed Process is used or
          (ii) a valid or unexpired claim contained in a Patent Rights Patent in
          the country in which any Licensed Process is used; or

     (c)  is developed or manufactured using the Tangible Property.

     1.6 A "Licensed Process" shall mean any process for making Licensed
Products which is covered in whole or in part by:

     (a)  a pending claim contained in a Patent Rights Patent Application; or

     (b)  a valid and unexpired claim contained in a Patent Rights Patent; or
          which

     (c)  uses the Tangible Property.

     1.7 "Net Sales Price" shall mean LICENSEE's billings for Licensed Products
produced hereunder less the sum of the following:

     (a)  Discounts allowed in amounts customary in the trade;

     (b)  Sales, tariff duties and/or use taxes directly imposed and with
          reference to particular sales;

     (c)  Outbound transportation prepaid or allowed; and

     (d)  Amounts allowed or credited on returns, and bad debts.

No deductions shall be made for commissions paid to individuals whether they be
with independent sales agencies or regularly employed by LICENSEE and on its
payroll, or for cost of collections. Licensed Products shall be considered
"sold" when billed out or invoiced.

                               ARTICLE II - GRANT

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     2.1 M.I.T. hereby grants to LICENSEE the worldwide right and license to
make, have made, use, lease and sell the Licensed Products, and to practice the
Licensed Processes until the last to expire of any valid Patent Rights in any
country, unless this Agreement is sooner terminated as hereinafter provided.

     2.2 In order to establish a period of exclusivity for LICENSEE, M.I.T.
hereby agrees that it shall not grant any other license to make, have made, use,
lease and sell Licensed Products or to utilize Licensed Processes in the
Research or In Vitro Diagnostics fields of use during the period of time
commencing with the Effective Date of this Agreement and terminating with the
first to occur of:

     (a)  The expiration of five years after the first commercial sale of a
          Licensed Product or first commercial use of a Licensed Process in the
          In Vitro Diagnostics field of use; or in each country in which a
          Patent Rights Patent or Application exists;

     (b)  The expiration of ten years after the Effective Date of this
          Agreement.

     2.3 M.I.T. also agrees that it shall not grant any other license to make,
have made, use, lease and sell Licensed Products or to utilize Licensed
Processes in the In Vivo Diagnostics field of use during the time period
commencing with the Effective Date of this Agreement and terminating with the
first to occur of:

     (a)  The expiration of five years after the first commercial sale of a
          Licensed Product or the first commercial use of a Licensed Process in
          each country in which a Patent Rights Patent Application or Patent
          exists in the In Vivo Diagnostics field of use; or

     (b)  The expiration of twelve years after the Effective Date of this
          Agreement.

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     2.4 M.I.T. also agrees that it shall not grant any other license to make,
have made, use, lease and sell Licensed Products or to utilize Licensed
Processes in the Therapeutics field of use during the time period commencing
with the Effective Date of this Agreement and terminating with the first to
occur of:

     (a)  The expiration of five years after the first commercial sale of a
          Licensed Product or the first commercial use of a Licensed Process in
          each country in which a Patent Rights Patent Application or Patent
          exists in the Therapeutics field of use; or

     (b)  The expiration of twelve years after the Effective Date of this
          Agreement.

     2.5 M.I.T. also agrees that times spent before regulatory agencies to
obtain approval to sell products shall, at LICENSEE's request, be added to
Paragraphs 2.2(b), 2.3(b) and 2.4(b) separately for each country, and separately
for In Vitro Diagnostics, In Vivo Diagnostics and Therapeutics, in order to
extend the periods of exclusivity.

     2.6 Six months prior to the end of each exclusive period (as defined in
Paragraphs 2.2, 2.3, 2.4 and 2.5) LICENSEE may request that M.I.T. extend the
period of exclusivity. M.I.T. shall consider such request and, at its sole
option, may extend said period of exclusivity based on the circumstances then
pertaining.

     2.7 At the end of the exclusive period, the license granted hereunder shall
become nonexclusive and shall extend to the end of the term or terms for which
any Patent Rights are valid in force, unless this Agreement is sooner terminated
as hereinafter provided. If M.I.T. subsequently grants a license to Patent
Rights to any third party which include terms more favorable than those granted
to LICENSEE, LICENSEE's terms shall be reduced to match such terms granted to
the third party.

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     2.8 In recognition of the fact that no commercial use or value has been
established for the Tangible Property as of the Effective Date of this
Agreement, and that LICENSEE intends to develop commercial applications of the
Tangible Property at its own expense, M.I.T. further agrees that its grant to
LICENSEE to use of the Tangible Property for commercial purposes shall be
exclusive in perpetuity unless this Agreement is terminated prior to the last to
expire of the Patent Rights.

     2.9 M.I.T. reserves the right to use the Tangible Property for its own
noncommercial research purposes.

     2.10 LICENSEE shall have the right to sublicense any of the rights,
privileges and license granted hereunder only during the exclusive period of
this Agreement and any such sublicenses shall remain in effect throughout the
duration of this Agreement, but shall become nonexclusive in each country when
LICENSEE's exclusivity expires in that country.

     2.11 LICENSEE hereby agrees that every sublicensing agreement to which it
shall be a party and which shall relate to the rights, privileges and license
granted hereunder shall contain a statement setting forth the date upon which
LICENSEE's exclusive rights, privileges and license hereunder shall terminate.

     2.12 LICENSEE agrees that any sublicenses granted by it shall provide that
the obligations to M.I.T. of the following sections of this Agreement shall be
binding upon the sublicensee as if the sublicensee were a party to this
Agreement: Paragraphs 5.1 and 7.6; 15.1, 15.3, 15.4 and 15.5. LICENSEE further
agrees to attach copies of these sections to all sublicense agreements.

     2.13 LICENSEE agrees to forward to M.I.T. a copy of any and all fully
executed sublicense agreements, and further agrees to forward to M.I.T. annually
a copy of such reports

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                                      -7-

received by LICENSEE from its sublicensees during the preceding twelve (12)
month period under the sublicenses as shall be pertinent to a royalty accounting
under said sublicense agreements.

     2.14 If LICENSEE receives from sublicensees anything of value in lieu of
cash payments based upon payment obligations of any sublicense under this
Agreement, LICENSEE shall notify M.I.T. at the time such considerations are
received, and the parties shall meet to determine the value of the non-cash
considerations received by LICENSEE. LICENSEE shall compensate M.I.T. at the
same rate as if the non-cash considerations had been cash.

     2.15 M.I.T. hereby also grants to LICENSEE a six-month first option to
negotiate for an exclusive license to any invention(s) arising from research in
the laboratories of Professor Sheldon Penman and\or Dr. Edward Fey which fall
within the claims of the Patent Rights. Such option shall, however, be subject
to the terms of any Research Agreement which sponsored the research leading to
such invention(s), and the grant of this Paragraph 2.15 shall not restrict the
terms of any such Research Agreement, past or future. LICENSEE's option to such
inventions shall terminate six months from the date at which M.I.T. notifies
LICENSEE that a patent application has been filed on the invention. If M.I.T.
decides that it is not in M.I.T.'s best interest to file a patent application on
an invention consisting of tangible property (such as a hybridoma cell line),
LICENSEE's option to said tangible property shall terminate six months from the
date at which M.I.T. notifies LICENSEE of the existence and description of the
tangible property.

     2.16 The license granted hereunder shall not be construed to confer any
rights upon LICENSEE by implication, estoppel or otherwise as to any other
patents, tangible property,

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software or copyrights not specifically set forth in Appendix A hereof or in
Paragraph 1.4 above or in Paragraph 2.15 above.

                           ARTICLE III - DUE DILIGENCE

     3.1 LICENSEE shall use its reasonable best efforts to bring one or more
Licensed Products or Licensed Processes to market through a thorough, vigorous
and diligent program for exploitation of the Patent Rights.

     3.2 In addition, LICENSEE shall adhere to the following milestones:

     (a)  LICENSEE shall deliver to M.I.T. on or before six (6) months from the
          Effective Date of this Agreement a business plan showing the amount of
          money, number and kind of personnel and time budgeted and planned for
          each phase of development of the Licensed Products and Licensed
          Processes and shall provide similar reports to M.I.T. on an annual
          basis on or before January 31 of each year until the first to occur
          of: (i) first commercial sale of a Licensed Product; or (ii) the
          successful completion of a public offering of stock by the company.

     (b)  LICENSEE shall make a first commercial sale of a Licensed Product
          within [REDACTED] months of the Effective Date of this Agreement.

     (c)  LICENSEE shall file for regulatory approval of a human diagnostics
          Licensed Product within [REDACTED] months of the Effective Date of
          this Agreement.

     3.3 LICENSEE's failure to perform in accordance with Paragraphs 3.1 and 3.2
above shall be grounds for M.I.T. to terminate this Agreement pursuant to
Paragraph 7.3 hereof.

                             ARTICLE IV - ROYALTIES

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     4.1 For the rights, privileges and license granted hereunder, LICENSEE
shall pay to M.I.T. in the manner hereinafter provided to the end of the term of
the Patent Rights or until this Agreement shall be terminated as hereinafter
provided:

     (a)  A license issue royalty fee of Twenty-Five Thousand Dollars ($25,000),
          which said license issue fee shall be deemed earned and due
          immediately upon the execution of this Agreement.

     (b)  During the exclusive period of this Agreement, a royalty in an amount
          equal to:

          (i)  [REDACTED] of Net Sales of Licensed Products sold as research
               reagents by LICENSES.

          (ii) [REDACTED] of Net Sales of Licensed Products sold for use as In
               Vitro Diagnostics by LICENSEE.

         (iii) [REDACTED] of Net Sales of Licensed Products sold for use as In
               Vivo Diagnostics or as Therapeutics by LICENSEE; provided,
               however, that these royalty rates shall be increased under the
               provisions of Paragraph 4.1(d) below.

     (c)  During the nonexclusive period of this Agreement in each country and
          for each class of products, royalties on Net Sales in that country of
          that class of products by LICENSEE shall be [REDACTED] of those
          specified in Paragraph 4.1(c) above, provided, however, that these
          royalty rates shall be increased according to the provisions of
          Paragraph 4.1(d) below.

     (d)  Until the cumulative royalties paid under Paragraphs 4.1(b) and 4.1(c)
          above are equal to [REDACTED], royalties paid on Net Sales of Licensed
          Products shall be

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          increased by [REDACTED] above the rates specified in Paragraphs 4.2
          (b) and 4.1(c).

     (e)  [REDACTED] of all sublicensing revenues of any form received by
          LICENSEE for sublicensing any of the rights granted herein; provided,
          however, that in no case shall the portion of sublicensing revenues
          paid to M.I.T. be less than [REDACTED] of the Net Sales of Licensed
          Products sold by sublicensee(s) during the exclusive period of this
          Agreement, nor less than [REDACTED] of Net Sales by sublicensee(s)
          during the nonexclusive period of this Agreement except as provided
          for under Paragraph 9.4.

     (f)  In the event that LICENSEE's royalty payment to M.I.T. hereunder for
          licensed operations during the calendar year 1989 and each year
          thereafter during the exclusive period shall fall below [REDACTED],
          LICENSEE shall, with its last report for said years, pay to M.I.T. the
          difference between said sum and the total royalties due M.I.T. for
          said year under 4.1(b), (c), (d) and (e) above.

     (g)  LICENSEE shall also sell to M.I.T. at par value one share of common
          stock of Matritech, Inc. for each [REDACTED] shares now outstanding.
          LICENSEE shall also sell to M.I.T. at par value one share of stock
          from every additional [REDACTED] shares of stock hereafter issued
          (thereby keeping M.I.T.'s share of equity ownership at [REDACTED]%)
          until the total investment of any form in Matritech, Inc. (including
          equity investment and payments for research and development) shall
          total [REDACTED]. Thereafter, M.I.T. shall have no further right to
          purchase shares.

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     4.2 In the event that a Licensed Product(s) under this Agreement is sold in
a combination package or kit containing other diagnostic products for other than
matrix proteins or other active biological agents (such as antibodies, peptides
and other proteins but not including enzymes used only for detection purposes or
simple salts, buffers or color reagents) not covered by the Patent Rights, then
the Net Sales Price for purposes of determining royalty payments in the
combination package shall be calculated using one of the following methods:

     (a)  By multiplying the Net Sales Price of that combination package by the
          quantity (A/B), where A is the gross selling price during the royalty
          paying period in question of the diagnostic or therapeutic products or
          active biological agents which fall under the Patent Rights sold
          separately, and B is the gross selling price of the combination
          package during the royalty paying period in question; or

     (b)  In the event that no such separate sales are made of any of the
          diagnostic or therapeutic products or active biological products in
          the combination package, then the Net Price of the combination package
          shall be multiplied by the quantity (X/Y), where X is the number of
          diagnostic and therapeutic products and active biological agents
          falling under the Patent Rights and Y is the total number of such
          products and active biological agents.

     4.3 In the event that no claims to the Patent Rights Patent Applications
are allowed by the U.S. Patent Office by the sixth anniversary of the Effective
Date of this Agreement, no royalties shall be due after that sixth anniversary
under Paragraphs 4.1(a), (b), (c), (d), (e) or (f), but the license granted
herein remains in full force and effect. Thereafter, if claims are allowed,
royalties shall resume for Net Sales of Licensed Products sold after such
allowance.

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     4.4 At the expiration of the last to expire of the Patent Rights, if this
License Agreement is still in effect, LICENSEE shall retain the exclusive right
in perpetuity to use the Tangible Property for commercial purposes, and no
royalties shall be due on Net Sales of Licensed Products sold after the last to
expire of the Patent Rights.

     4.5 No multiple royalties shall be payable because any Licensed Product,
its manufacture, lease or sale are or shall be covered by more than one patent
application or patent licensed under this Agreement.

     4.6 Royalty payments shall be paid in United States dollars in Cambridge,
Massachusetts, or at such other place as M.I.T. may reasonably designate
consistent with the laws and regulations controlling in any foreign country. If
any currency conversion shall be required in connection with the payment of
royalties hereunder, such conversion shall be made by using the exchange rate
prevailing at the Chase Manhattan Bank (N.A.) on the last business day of the
calendar quarterly reporting period to which such royalty payments relate.

                         ARTICLE V - REPORTS AND RECORDS

     5.1 LICENSEE shall keep full, true and accurate books of account containing
all particulars that may be necessary for the purpose of showing the amounts
payable to M.I.T. hereunder. Said books of account shall be kept at LICENSEE's
principal place of business or the principal place of business of the
appropriate Division of LICENSEE to which this Agreement relates. Said books and
the supporting data shall be open at all reasonable times for five (5) years
following the end of the calendar year to which they pertain, to the inspection
of M.I.T. or its agents for the purpose of verifying LICENSEE's royalty
statement or compliance in other respects with this Agreement.

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     5.2 LICENSEE, within sixty (60) days after March 31, June 30, September 30
and December 31, of each year, shall deliver to M.I.T. true and accurate
reports, giving such particulars of the business conducted by LICENSEE and its
sublicensees during the preceding three-month period under this Agreement as
shall be pertinent to a royalty accounting hereunder. These shall include at
least the following:

     (a)  All Licensed Products manufactured and sold.

     (b)  Total billings for Licensed Products sold.

     (c)  Accounting for all Licensed Processes used or sold.

     (d)  Deductions applicable as provided in Paragraph 1.6.

     (e)  Total royalties due.

     (f)  Names and addresses of all sublicensees to these Patent Rights of
          LICENSEE.

     (g)  Licensed Products manufactured and sold to the United States
          Government. (No royalty obligations shall arise due to use by, for or
          on behalf of the United States Government in view of the royalty-free,
          nonexclusive license heretofore granted to the United States
          Government).

     5.3 With each such report submitted, LICENSEE shall pay to M.I.T. the
royalties due and payable under this Agreement. If no royalties shall be due,
LICENSEE shall so report.

     5.4 On or before ninety (90) days following the close of fiscal year, or
following an initial public offering of LICENSEE's stock, at the same time that
such information is given to other investors, LICENSEE shall provide to M.I.T.
LICENSEE's certified financial statements for the preceding fiscal year
including, at a minimum, a Balance Sheet and an Operating Statement.

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     5.5 M.I.T. shall treat as confidential all information, reports and records
delivered by LICENSEE with at least the same degree of care to maintain
confidentiality as it exercises with respect to its own confidential
information.

     5.6 The royalty payments set forth in this Agreement shall, if overdue,
bear interest until payment at a per annum rate four percent (4%) above the
prime rate in effect on the due date of the Chase Manhattan Bank (N.A.). The
payment of such interest shall not foreclose M.I.T. from exercising any other
rights it may have as a consequence of the lateness of any payment.

                         ARTICLE VI - PATENT PROSECUTION

     6.1 M.I.T. shall apply for, seek prompt issuance of, and maintain during
the term of this Agreement the Patent Rights set forth in Appendix A. The
prosecution and maintenance of all Patent Rights Patents and Applications shall
be the primary responsibility of M.I.T.; provided, however, LICENSEE shall have
reasonable opportunities to advise M.I.T. and shall cooperate with M.I.T. in
such prosecution and maintenance. M.I.T. shall keep LICENSEE promptly informed
of all correspondence with U.S. and foreign patent offices concerning
prosecution and maintenance of the Patent Rights.

     6.2 Payment of all fees and costs relating to the filing, prosecution, and
maintenance of the Patent Rights in the United States shall be the
responsibility of M.I.T. LICENSEE shall pay fifty percent (50%) of the fees and
costs relating to the filing, prosecution, and maintenance of the Patent Rights
in each country other than the United States incurred during LICENSEE's period
of exclusivity in that country.

     6.3 If LICENSEE requests that M.I.T. continue patent prosecution in any
country, but M.I.T. elects not to continue said prosecution, LICENSEE may, at
its own expense, assume

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responsibility for such prosecution. Thereafter, LICENSEE shall not be required
to pay royalties on Net Sales of Licensed Products in said country.

                            ARTICLE VII - TERMINATION

     7.1 If LICENSEE shall cease to carry on its business, this Agreement shall
terminate upon notice by M.I.T. except as provided for in Article XI.

     7.2 Should LICENSEE fail to pay M.I.T. royalties due and payable hereunder,
M.I.T. shall have the right to terminate this Agreement on thirty (30) days
notice, unless LICENSEE shall pay M.I.T., within the thirty (30) day period, all
such royalties and interest due and payable. Upon the expiration of the thirty
(30) day period, if LICENSEE shall not have paid all such royalties and interest
due and payable, M.I.T. shall have the right to terminate this Agreement
immediately.

     7.3 Upon any breach or default of any material provision of this Agreement
by LICENSEE, other than those occurrences set out in Paragraphs 7.1 and 7.2
hereinabove, which shall always take precedence in that order over any breach or
default referred to in this Paragraph 7.3, M.I.T. shall have the right to
terminate this Agreement and the rights, privileges and license granted
hereunder by ninety (90) days' notice to LICENSEE. M.I.T. shall have the right
to make such termination effective upon expiration of the ninety (90) day
period. Termination shall become effective unless LICENSEE shall have cured any
such breach or default or if, in the sole opinion of M.I.T., LICENSEE is working
diligently and effectively to cure such breach or default.

     7.4 LICENSEE shall have the right to terminate this Agreement at any time
on six (6) months' notice to M.I.T., and upon payment of all amounts due M.I.T.
under Paragraph 4.1 above.

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     7.5 Upon termination of this Agreement for any reason, nothing herein shall
be construed to release either party from any obligation that matured prior to
the effective date of such termination. LICENSEE and any sublicensee thereof
may, however, after the effective date of such termination, sell all Licensed
Products, and complete Licensed Products in the process of manufacture at the
time of such termination and sell the same, provided that LICENSEE shall pay to
M.I.T. the royalties thereon as required by Article IV of this Agreement and
shall submit the reports required by Article V hereof on the sales of Licensed
Products.

     7.6 Upon termination of this Agreement for any reason during the exclusive
period, any sublicensee not then in default shall have the right to seek a
license from M.I.T.

                           ARTICLE VIII - ARBITRATION

     8.1 Except as to issues relating to the validity, construction or effect of
any patent licensed hereunder, any and all claims, disputes or controversies
arising under, out of, or in connection with this Agreement, which have not been
resolved by good faith negotiations between the parties, shall be resolved by
final and binding arbitration in Boston, Massachusetts under the rules of the
American Arbitration Association then obtaining. The arbitrators shall have no
power to add to, subtract from or modify any of the terms or conditions of this
Agreement. Any award rendered in such arbitration may be enforced by either
party in either the courts of the Commonwealth of Massachusetts or in the United
States District Court for the Eastern District of Massachusetts, to whose
jurisdiction for such purposes M.I.T. and LICENSEE each hereby irrevocably
consents and submits.

     8.2 Claims, disputes or controversies concerning the validity, construction
or effect of any patent licensed hereunder shall be resolved in any court having
jurisdiction thereof.

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     8.3 In the event that, in any arbitration proceeding, any issue shall arise
concerning the validity, construction or effect of any patent licensed
hereunder, the arbitrators shall assume the validity of all claims as set forth
in such patent, unless there has been an adjudication to the contrary; in any
event the arbitrators shall not delay the arbitration proceeding for the purpose
of obtaining or permitting either party to obtain judicial resolution of such
issue, unless an order staying such arbitration proceeding shall be entered by a
court of competent jurisdiction. Neither party shall raise any issue concerning
the validity, construction or effect of any patent licensed hereunder in any
proceeding to enforce any arbitration award hereunder or in any proceeding
otherwise arising out of any such arbitration award.

     8.4 Notwithstanding the foregoing, nothing in this Article shall be
construed to waive any rights or timely performance of any obligations existing
under this Agreement.

                            ARTICLE IX - INFRINGEMENT

     9.1 LICENSEE shall inform M.I.T. promptly in writing of any alleged
infringement of which it shall have knowledge by a third party of any patents
within the Patent Rights and provide any available evidence of infringement.

     9.2 During the term of this Agreement, M.I.T. shall have the right, but
shall not be obligated, to prosecute at its own expense any such infringements
of the Patent Rights and, in furtherance of such right, LICENSEE hereby agrees
that M.I.T. may join LICENSEE as a party plaintiff in any such suit, without
expense to LICENSEE. The total cost of any such infringement action commenced or
defended solely by M.I.T. shall be borne by M.I.T. M.I.T. shall indemnify
LICENSEE against any order for payment that may be made against LICENSEE in such
proceedings. No settlement, consent judgement or other voluntary final
disposition of the suit may be entered into without the consent of LICENSEE,
which consent shall not

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                                      -18-

unreasonably be withheld. Any recovery or damages for past infringement derived
from such action shall first be used to reimburse M.I.T. for all legal expenses
connected with such action. M.I.T. shall then keep any recovery or damages
relating to royalties not received by M.I.T. Any recovery or damages then
remaining shall be divided equally between M.I.T. and LICENSEE up to the limit
of the recovery or damages related to lost sales by LICENSEE during the
exclusive period(s) of this Agreement. Any recovery or damages still remaining
after the above-mentioned allocations shall be divided as follows: 50% to M.I.T.
and the remaining 50% divided prorata among all licensees in proportion to the
licensed sales of Licensed Products at the time of infringement.

     9.3 If within six (6) months after having been notified of any alleged
infringement, M.I.T. shall have been unsuccessful in causing the alleged
infringer to desist and shall not have brought and shall not be diligently
prosecuting an infringement action, or if M.I.T. shall notify LICENSEE at any
time prior thereto of its intention not to bring suit against any alleged
infringer, then, and in those events only, LICENSEE shall have the right, but
shall not be obligated, to prosecute at its own expense any infringement of the
Patent Rights, and LICENSEE may, for such purposes, use the name of M.I.T. as
party plaintiff. No settlement, consent judgement or other voluntary final
disposition of the suit may be entered into without the consent of M.I.T., which
consent shall not unreasonably be withheld. LICENSEE shall indemnify M.I.T.
against any order for payment that may be made against M.I.T. in such
proceedings.

     9.4 In the event that LICENSEE shall undertake the enforcement and/or
defense of the Patent Rights by litigation, LICENSEE may withhold up to fifty
percent (50%) of the royalties otherwise due M.I.T. hereunder after notification
of infringement and apply the same toward reimbursement of its expenses,
including reasonable attorneys' fees, in connection

<PAGE>

                                      -19-

therewith. In order for such royalties to be continued to be withheld, LICENSEE
must continuously and diligently pursue such enforcement and/or defense. Any
recovery of damages by LICENSEE for any such suit shall be applied first in
satisfaction of any unreimbursed expenses and legal fees of LICENSEE relating to
the suit, and next toward reimbursement of M.I.T. for any royalties past due or
withheld and applied pursuant to this Article IX. The balance remaining from any
such recovery shall be retained by LICENSEE except for those damages relating to
M.I.T.'s loss of royalties.

     9.5 In the event that a declaratory judgement action alleging invalidity or
non-infringement of any of the Patent Rights shall be brought against LICENSEE,
M.I.T., at its option, shall have the right, within thirty (30) days after
commencement of such action, to intervene and take over the sole defense of the
action at its own expense.

     9.6 In any infringement suit as either party may institute to enforce the
Patent Rights pursuant to this Agreement, the other party hereto shall, at the
request and expense of the party initiating such suit, cooperate in all
reasonable respects and, to the extent possible, have its employees testify when
requested and make available relevant records, papers, information, samples,
specimens, and the like.

     9.7 LICENSEE, during the exclusive period of this Agreement, shall have the
sole right in accordance with the terms and conditions herein to sublicense any
alleged infringer under the Patent Rights.

                ARTICLE X - PRODUCT LIABILITY AND REPRESENTATIONS

     10.1 LICENSEE shall at all times during the term of this Agreement and
thereafter, indemnify, defend and hold M.I.T., its trustees, officers, employees
and affiliates, harmless against all claims and expenses, including legal
expenses and reasonable attorneys' fees, arising

<PAGE>

                                      -20-

out of the death of or injury to any person or persons or out of any damage to
property and against any other claim, proceeding, demand, expense and liability
of any kind whatsoever resulting from the production, manufacture, sales, lease,
use, consumption or advertisement of Licensed Products and Licensed Processes or
arising from any obligation of LICENSEE hereunder.

     10.2 LICENSEE shall maintain or cause to be maintained prior to the first
planned use in humans or for human testing, liability insurance which shall
protect LICENSEE and M.I.T. in regard to events covered by Paragraph 10.1 above.

     10.3 M.I.T. hereby represents that it owns title to the Patent Rights and
Tangible Property and that it has the right to grant licenses to such Patent
Rights and Tangible Property subject only to a royalty-free nonexclusive license
to the Patent Rights heretofore granted to the United States Government.

     10.4 M.I.T. also hereby represents that, to the best of its knowledge as of
the Effective Date of this Agreement, the claims to the Patent Rights as listed
in Appendix B are valid and have a reasonable probability of being allowed by
the U.S. Patent office.

     10.5 M.I.T. also hereby represents that, to the best of its knowledge, the
existing technology in the Patent Rights Patent Applications of Appendix A does
not infringe any other M.I.T. patent or patent application existing at the
Effective Date of this Agreement. This representation notwithstanding, if at any
time during the term of this Agreement, it is found that the technology existing
in the Patent Rights Patent Applications at the Effective Date of this Agreement
infringes any other M.I.T. patent or patent application existing at the
Effective Date of this Agreement, then M.I.T. shall grant to LICENSEE at no
additional royalties a nonexclusive license to the M.I.T. patent or patents
which are infringed, but only to the extent

<PAGE>

                                      -21-

that the grant of such nonexclusive license is permitted by any prior agreements
with third parties existing at the time that the infringement is identified.

     10.6 M.I.T.'s liability for the representations of Paragraphs 10.3, 10.4
and 10.5 shall be limited to a refund of any royalties paid under Paragraph 4.1.

                             ARTICLE XI - ASSIGNMENT

     This Agreement may not be assigned without the written permission of M.I.T.
except in the case where LICENSEE merges or all of its assets are acquired.

                         ARTICLE XII - NON-USE OF NAMES

     LICENSEE shall not use the names of the Massachusetts Institute of
Technology nor of any of its employees, nor any adaptation thereof, in any
advertising, promotional or sales literature without prior written consent
obtained from M.I.T. in each case, except that LICENSEE may state that it is
licensed by M.I.T. under one or more of the patents and/or applications
comprising the Patent Rights.

                         ARTICLE XIII - EXPORT CONTROLS

     It is understood that M.I.T. is subject to United States laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes and other commodities (including the Arms Export Control
Act, as amended, and the Export Administration Act of 1979), 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 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. M.I.T. neither represents that a license shall not be required nor that,
if required, it shall be issued.

<PAGE>

                                      -22-

                          ARTICLE XIV PAYMENTS, NOTICES
                            AND OTHER COMMUNICATIONS

     Any payment, notice or other communication pursuant to this Agreement shall
be sufficiently made or given on the date of mailing if sent to such party by
certified first class mail, postage prepaid, addressed to it at its address
below or as it shall designate by written notice given to the other party:

     In the case of M.I.T.:

                  Director
                  Technology Licensing Office
                  Massachusetts Institute of Technology
                  77 Massachusetts Avenue, Room E32-300
                  Cambridge, Massachusetts 02139

     In the case of LICENSEE:

                  President
                  Matritech Inc.
                  21 Fairfield Street
                  Boston, Massachusetts 02116

                      ARTICLE XV - MISCELLANEOUS PROVISIONS

     15.1 This Agreement shall be construed, governed, interpreted and applied
in accordance with the laws of the Commonwealth of Massachusetts, U.S.A., except
that questions affecting the construction and effect of any patent shall be
determined by the law of the country in which the patent was granted.

     15.2 The parties hereto acknowledge that this Agreement sets forth the
entire Agreement and understanding of the parties hereto as to the subject
matter hereof, and shall not

<PAGE>

                                      -23-

be subject to any change or modification except by the execution of a written
instrument subscribed to by the parties hereto.

     15.3 The provisions of this Agreement are severable, and in the event that
any provision of this Agreement shall be determined to be invalid or
unenforceable under any controlling body of law, such invalidity or
unenforceability shall not in any way affect the validity or enforceability of
the remaining provisions hereof.

     15.4 LICENSEE agrees to mark the Licensed Products sold in the United
States with all applicable United States patent numbers. All Licensed Products
shipped to or sold in other countries shall be marked in such a manner as to
conform with the patent laws and practice of the country of manufacture or sale.

     15.5 The failure of either party to assert a right hereunder or to insist
upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party.

     IN WITNESS WHEREOF, the parties have hereunto set their hands and seals and
duly executed this Agreement the day and year set forth below.

Attest:                             MASSACHUSETTS INSTITUTE OF TECHNOLOGY

/s/ Lita Nelsen                     By /s/ George H. Dummer
--------------------------------       -----------------------------------------
                                    Name  George H. Dummer
                                          --------------------------------------

Title  Tech Licensing Officer       Title Director Office of Sponsored Programs
     ---------------------------          --------------------------------------

                                    Date  December 22, 1987
                                          --------------------------------------

Attest:                             MATRITECH, INC.

                                    By /s/ Stephen D. Chubb
--------------------------------       -----------------------------------------
                                    Name  Stephen D. Chubb
                                          --------------------------------------

Title:                              Title President
      --------------------------          --------------------------------------

                                    Date  December 14, 1987
                                          --------------------------------------

<PAGE>

                                   APPENDIX A

M.I.T. Case No. 4061
"Method For Determining Tissue Of Origin
And Degree Of Malignancy Of Tumor Cells"
By Sheldon Penman and Edward G. Fey

U.S. Serial No. 812,955
Filed: December 24, 1985

C.I.P.: U.S. Serial No. 946,770
Filed: December 23, 1986

Foreign filings:  PCT
                  EPO
                  Japan
                  Canada

<PAGE>

                                   APPENDIX B

     Pending claims of the Patent Rights as of the Effective Date of this
Agreement.

                                     CLAIMS

     1. A method for determining the tissue of origin of a cell and degree of
malignancy comprising:

     (a) isolating the nuclear matrix proteins from at least one type of cell of
known origin;

     (b) separating and identifying the isolated nuclear matrix proteins by
two-dimensional gel electrophoresis;

     (c) isolating nuclear matrix proteins from cells of unknown origin;

     (d) separating and identifying the nuclear matrix proteins from cells of
unknown origin by two-dimensional gel electrophoresis; and

     (e) comparing the identified, separated nuclear matrix proteins from cells
of unknown origin with the separated, identified nuclear matrix proteins of
known origin.

     2. The method of claim 1 wherein the nuclear matrix proteins are isolated
by:

     (a) separating the soluble proteins from the nucleus and cytoskeleton by
extracting eucaryotic cells with a non-ionic detergent solution at physiological
pH and ionic strength;

     (b) separating the nucleus from the cytoskeleton proteins by solubilizing
the cytoskeleton proteins in the insoluble material from step a;

     (c) separating the chromatin from the nuclear matrix by digesting the
insoluble material from step b with DNAse and RNAase and eluting the chromatin
with a buffered ammonium sulfate solution;

<PAGE>

                                      -2-

     (d) separating the interior and exterior proteins of the nuclear matrix by
dissolving the insoluble material from step c in urea and dialyzing the
dissolved proteins back into a physiological buffer.

     3. The method of claim 2 wherein the cytoskeleton proteins are solubilized
in 0.25 M ammonium sulfate at pH 6.8.

     4. The method of claim 2 wherein the cytoskeleton proteins are solubilized
in a solution comprising a non-ionic detergent and sodium deoxycholate.

     5. The method of claim 2 wherein the cytoskeleton proteins and chromatin
are removed together by digesting the insoluble material from step a with DNAase
and RNAase and then eluting with 0.25 M ammonium sulfate at pH 6.8.

     6. The method of claim 1 wherein the separated nuclear matrix proteins are
identified by staining the gel to form a pattern of the separated proteins.

     7. The method of claim 1 further comprising making antibodies to the
isolated, separated nuclear matrix proteins.

     8. The method of claim 7 further comprising labeling the anti-nuclear
matrix protein antibodies, wherein the isolated, separated nuclear matrix
proteins are identified by reacting said proteins with labeled antibodies to
nuclear matrix proteins of known origin.

     9. The method of claim 1 further comprising compiling a data base
consisting of two-dimensional gel electrophoresis patterns of isolated,
separated and identified nuclear matrix proteins from cells of different states
of malignancy and tissue of origin.

     10. The method of claim 1 further comprising separating, identifying and
comparing both the interior and exterior nuclear matrix proteins.

<PAGE>

                                      -3-

     11. A method for detecting tumor antigens in a body fluid comprising
reacting labeled monoclonal antibodies to nuclear matrix proteins of known
origin and degree of malignancy with the body fluid to be analyzed.

     12. The method of claim 11 further comprising:

     isolating and analyzing nuclear matrix associated DNA from at least one
cell of known origin;

     isolating and analyzing nuclear matrix associated DNA from cells of unknown
origin; and

     comparing the isolated, analyzed nuclear matrix associated DNA from the
cells of known and unknown origin.

     13. The method of claim 12 further comprising digesting the nuclear matrix
associated DNA with restriction enzymes.

     14. The method of claim 12 wherein the nuclear matrix associated DNA is
isolated by:

     (a) separating the soluble proteins from the nucleus and cytoskeleton by
extracting eucaryotic cells with a non-ionic detergent solution at physiological
pH and ionic strength;

     (b) digesting the insoluble material from step a with DNAase and then
eluting with a buffered ammonium sulfate solution; and

     (c) removing any remaining protein from the insoluble material in step b.

     15. The method of claim 13 wherein the nuclear matrix associated DNA is
isolated by:

     (a) separating the soluble proteins from the nucleus and cytoskeleton by
extracting eucaryotic cells with a non-ionic detergent solution at physiological
pH and ionic strength;

<PAGE>

                                      -4-

     (b) digesting the insoluble material from step a with one or more
restriction enzymes in the appropriate buffer and then eluting with a buffered
ammonium sulfate solution; and

     (c) removing any remaining protein from the insoluble material from step b.

     16. A method for isolating nuclear matrix proteins from eucaryotic cells
comprising:

     (a) separating the soluble proteins from the nucleus and cytoskeleton by
extracting eucaryotic cells with a non-ionic detergent-salt solution at
physiological pH and ionic strength;

     (b) separating the nucleus from the cytoskeleton by solubilizing the
cytoskeleton proteins in the insoluble material from step a;

     (c) separating the chromatin from the nuclear matrix by digesting the
insoluble material from step b with DNAse and RNAase and eluting with a buffered
ammonium sulfate solution; and

     (d) separating the interior and exterior proteins of the nuclear matrix by
dissolving the insoluble material from step c in urea and dialyzing the
dissolved proteins back into a physiological buffer.

     17. The method of claim 16 wherein the cytoskeleton proteins are
solubilized in 0.25 M ammonium sulfate at pH 6.8.

     18. The method of claim 16 wherein the cytoskeleton proteins are
solubilized in a solution comprising a non-ionic detergent and sodium
deoxycholate.

     19. The method of claim 16 wherein the insoluble material dissolved in a
buffered solution comprising 8 M urea.

     20. Antibodies to nuclear matrix proteins isolated according to the method
of claim 16.

     21. A method for isolating nuclear matrix associated DNA comprising:

<PAGE>

                                      -5-

     (a) separating the soluble proteins from the nucleus and cytoskeleton by
extracting eucaryotic cells with a non-ionic detergent solution at physiological
pH and ionic strength;

     (b) digesting the insoluble material from step a with DNAase and then
eluting with a buffered ammonium sulfate solution; and

     (c) removing any remaining protein from the insoluble material from step b.

     22. The method of claim 21 wherein the remaining protein is removed by
phenol extraction.

     23. The method of claim 21 wherein the remaining protein is removed by
centrifugation in cesium chloride.

     24. The method of claim 21 wherein the digested material is step b is
eluted with 0.25 M ammonium sulfate pH 6.8.

     25. A method for isolating restriction fragments of nuclear matrix
associated DNA comprising:

     a) separating the soluble proteins from the nucleus and cytoskeleton by
extracting eucaryotic cells with a non-ionic detergent solution at physiological
pH and ionic strength;

     b) digesting the insoluble material from step a with one or more
restriction enzymes in the appropriate buffer and then eluting with a buffered
ammonium sulfate solution; and

     c) removing any remaining protein from the insoluble material in step b.

     26. The method of claim 25 wherein the cytoskeleton proteins are
solubilized in 0.25 M ammonium sulfate at pH 6.8.

     27. The method of claim 25 wherein the cytoskeleton proteins are
solubilized in a solution comprising a non-ionic detergent and sodium
deoxycholate.

<PAGE>

                                      -6-

     28. The method of claim 25 wherein the insoluble material is dissolved in a
buffered solution comprising 8 M urea.

     29. The method of claim 1 further comprising selecting the cells of known
origin of step a from cells containing nucleotide sequences of viral origin.

     30. The method of claim 1 wherein the cells of known origin of step a are
selected from the group of cells having chromosomal defects or deficiencies for
the production of specific proteins.

<PAGE>

                                 FIRST AMENDMENT

     This Amendment, with the Effective Date of March 15, 1988 is to the License
Agreement between M.I.T. and Matritech, Inc. with the Effective Date of December
14, 1987.

     The parties agree that, in order to correct a typographical error in the
Licensing Agreements, subparagraph 4.1(c) of that License Amendment shall be
replaced with the following:

     (o)  During the nonexclusive period of this Agreement in each country and
          for each class of products, royalties on Net sales in that country
          shall be half of those specified in Paragraph 4.1(b) above, provided,
          however, that these royalty rates shall be increased according to the
          provisions of Paragraph 4.1(d) below.

Agreed to for:                                   Agreed to for:

MASSACHUSETTS INSTITUTE                          MATRITECH, INC.
         OF TECHNOLOGY

By:    /s/ John T. Preston                       By:    /s/ Stephen D. Chubb
       ------------------------------------          --------------------------
Title: Director/Technology Licensing Office      Title: President
       ------------------------------------            ------------------------
Date:  March 16, 1988                            Date:  March 21, 1988
       ---------------------------                     ------------------------

<PAGE>

                                SECOND AMENDMENT

     This Amendment, with the Effective Date of December 20, 1989 is to the
License Agreement between M.I.T. and Matritech, Inc. with the Effective Date of
December 14, 1987.

     The parties thereto hereby agree that Paragraphs 2.2, 2.3 and 2.4 will be
deleted in their entirety and replaced with the following:

     2.2: "In order to establish a period of exclusivity for LICENSEE, M.I.T.
          hereby agrees that it will not grant any other license to make, have
          made, use, lease and sell Licensed Products or to utilize Licensed
          Processes during the period of time commencing with December 14, 1987
          and ending on December 31, 1999."

Agreed to for:

MASSACHUSETTS INSTITUTE                       MATRITECH, INC.
OF TECHNOLOGY

By: /s/ John T. Preston                       By:  /s/ Stephen D. Chubb
   -----------------------------------------      -----------------------------
Title: Director/Technology Licensing Office   Title:   President
     ---------------------------------------       -----------------------------
Date:  December 21, 1989                      Date:    December 27, 1989
     ---------------------------------------       -----------------------------

<PAGE>

                                 THIRD AMENDMENT

     This Amendment with Effective Date of March 4, 1992 is to the License
Agreement between M.I.T. and Matritech, Inc. with the Effective Date of
December 14, 1989.

     The parties thereto hereby agree that the time specified for completion of
the milestone identified in paragraph 3.2(c) be extended by twenty-four (24)
months.

Agreed to for:

MATRITECH, INC.                      MASSACHUSETTS INSTITUTE
                                     OF TECHNOLOGY

By: /s/ Stephen D. Chubb             By: /s/ John T. Preston
    -----------------------------        ---------------------------------------
Title: President                     Title: Director/Technology Licensing Office
       --------------------------           ------------------------------------
Date:  March 4, 1992                 Date:  March 4, 1992
       --------------------------           ------------------------------------<PAGE>

                                  EXHIBIT 10.2

                                 1988 Stock Plan

<PAGE>

                                 MATRITECH, INC.

                                 1988 STOCK PLAN

         1.       PURPOSE. This 1988 Stock Plan (the "Plan") is intended to
provide incentives (a) to the officers and other employees of Matritech, Inc.
(the "Company"), its parent (if any) and any present or future subsidiaries of
the Company (collectively, "Related Corporations") by providing them with
opportunities to purchase stock in the Company pursuant to options which qualify
as "incentive stock options" under Section 422A(b) of the Internal Revenue Code
of 1986 (the "Code"), granted hereunder ("ISO" or "ISOs"); (b) to directors,
officers, employees, consultants and advisory board members of the Company and
Related Corporations by providing them with opportunities to purchase stock in
the Company pursuant to options granted hereunder which do not qualify as ISOs
("Non-Qualified Option" or "Non-Qualified Options"); (c) to directors, officers,
employees and consultants of the Company and Related Corporations by providing
them with awards of stock in the Company ("Awards"); and (d) to directors,
officers, employees and consultants of the Company and Related Corporations by
providing them with opportunities to make direct purchases of stock in the
Company ("Purchases"). Both ISOs and Non-Qualified Options are referred to
hereafter individually as an "Option" and collectively as "Options." As used
herein, the terms "parent" and "subsidiary" mean "parent corporation" and
"subsidiary corporation," respectively, as those terms are defined in Section
425 of the Code.

      2.          ADMINISTRATION OF THE PLAN.

              (a) The Plan shall be administered by the Board of Directors of
the Company (the "Board"). The Board may appoint a Stock Plan Committee (the
"Committee") of two or more of its members to administer this Plan. No member of
the Committee, while a member, shall be eligible to participate in this Plan.
Subject to ratification of the grant of each Option or Award and of the
authorization of each Purchase by the Board (if so required by applicable state
law), and subject to the terms of the Plan, the Board, or the Committee if so
appointed, shall have the authority to (i) determine the employees of the
Company and Related Corporations (from among the class of employees eligible
under paragraph 3 to receive ISOs) to whom ISOs may be granted, and to determine
(from among the class of individuals and entities eligible under paragraph 3 to
receive Non-Qualified Options and Awards and to make Purchases) to whom
Non-Qualified Options, Awards and authorizations to make Purchases may be
granted; (ii) determine the time or times at which Options or Awards may be
granted or Purchases made; (iii) determine the option price of shares subject to
each Option, which price with respect to ISOs shall not be less than the minimum
price specified in paragraph 6, and the purchase price of shares subject to each
Purchase; (iv) determine whether each Option granted shall be an ISO or a
Non-Qualified Option; (v) determine (subject to paragraph 7) the time or times
when each Option shall become exercisable and the duration of the exercise
period; (vi) determine whether

<PAGE>

restrictions such as repurchase options are to be imposed on shares subject to
Options, Awards and Purchases and the nature of such restrictions, if any, and
(vii) interpret the Plan and prescribe and rescind rules and regulations
relating to it. If the Board determines to issue a Non-Qualified Option, it
shall take whatever actions it deems necessary, under Section 422A of the Code
and the regulations promulgated thereunder, to ensure that such Option is not
treated as an ISO. The interpretation and construction by the Board of any
provisions of the Plan or of any Option, Award or authorization for any Purchase
granted under it shall be final unless otherwise determined by the Board. The
Board may from time to time adopt such rules and regulations for carrying out
the Plan as it may deem best. No member of the Board or the shall be liable for
any action or determination made in good faith with respect to the Plan or any
Option, Award or authorization for Purchase granted under it.

              (b) The Committee, if appointed, may select one of its members as
its chairman, and shall hold meetings at such time and places as it may
determine. Acts by a majority of the Committee, or acts reduced to or approved
in writing by a majority of the members of the Committee, shall be the valid
acts of the Committee. All references in this Plan to the Committee shall mean
the Board if no Committee has been appointed. From time to time the Board may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies however caused, or remove all members of the Committee
and thereafter directly administer the Plan.

              (c) Notwithstanding the provisions of paragraph 2(a), Options,
Awards and authorizations to make Purchases may be granted to members of the
Board, but no Option, Award or authorization to make a Purchase shall be granted
to any person who is, at the time of the proposed grant, a member of the Board,
unless such grant has been approved by a majority vote of the other members of
the Board. All grants of Options, Awards and authorizations to make Purchases to
members of the Board shall in all other respects be made in accordance with the
provisions of this Plan applicable to other eligible persons. Members of the
Board who are either (i) eligible for Options, Awards or authorizations to make
Purchases pursuant to the Plan or (ii) have been granted Options, Awards or
authorizations to make Purchases may vote on any matters affecting the
administration of the Plan or the grant of any Options, Awards or authorizations
to make Purchases pursuant to the Plan, except that no such member shall act
upon the granting to himself of Options, Awards or authorizations to make
Purchases, but any such member may be counted in determining the existence of a
quorum at any meeting of the Board during which action is taken with respect to
the granting to him of Options, Awards or authorizations to make Purchases.

              (d) Notwithstanding any other provision of this paragraph 2, in
the event the Company registers any class of any equity security pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), any grants to directors of Options made at any time from the effective
date of such registration until six months after the termination of such
registration shall be made only by the Board; provided, however, that if a
majority of the Board is eligible to participate in the Plan or in any other
stock option or other stock plan of the Company or any of its affiliates, or has
been so eligible at any time within the preceding year, any grant to directors
of Options must be made by, or only in accordance with

<PAGE>

the recommendation of, a Committee consisting of three or more persons, who may
but need not be directors or employees of the Company, appointed by the Board
but having full authority to act in the matter, none of whom is eligible to
participate in this Plan or any other stock option or other stock plan of the
Company or any of its affiliates, or has been eligible at any time within the
preceding year. The requirements imposed by the preceding sentence shall also
apply with respect to grants to officers who are not also directors. Once
appointed, the Committee shall continue to serve until otherwise directed by the
Board.

         3.       ELIGIBLE EMPLOYEES AND OTHERS. ISOs may be granted to any
officer or other employee of the Company or any Related Corporation. Those
officers and directors of the Company who are not employees may not be granted
ISOs under the Plan. Non-Qualified Options, Awards and authorizations to make
Purchases may be granted to any director (whether or not an employee), officer,
employee or consultant of the Company or any Related Corporation. The Board may
take into consideration a recipient's individual circumstances in determining
whether to grant an ISO, a Non-Qualified Option or an authorization to make a
Purchase. Granting of any Option, Award or authorization to make a Purchase to
any individual or entity shall neither entitle that individual or entity to, nor
disqualify him from, participation in any other grant of Options, Awards or
authorizations to make Purchases.

         4.       STOCK. The stock subject to Options, Awards and Purchases
shall be authorized but unissued shares of Common Stock of the Company, par
value $.01 per share (the "Common Stock"), or shares of Common Stock reacquired
by the Company in any manner. The aggregate number of shares which may be issued
pursuant to the Plan is 26,250, subject to adjustment as provided in paragraph
13. Any such shares may be issued as ISOs, Non-Qualified Options or Awards, or
to persons or entities making Purchases, so long as the number of shares so
issued does not exceed such number, as adjusted. If any Option granted under the
Plan shall expire or terminate for any reason without having been exercised in
full or shall cease for any reason to be exercisable in whole or in part, or if
the Company shall reacquire any unvested shares issued pursuant to Awards or
Purchases, the unpurchased shares subject to such Options and any unvested
shares so reacquired by the Company shall again be available for grants of
Options, Awards and authorizations to make Purchases under the Plan.

         5.       GRANTING OF OPTIONS, AWARDS AND AUTHORIZATIONS TO MAKE
PURCHASES. Options, Awards and authorizations to make Purchases may be granted
under the Plan at any time after April 20, 1988 and prior to April 20, 1998. The
date of grant of an Option, Award or authorization to make a Purchase under the
Plan will be the date specified by the Board at the time it grants the Option,
Award or authorization to make a Purchase; provided, however, that such date
shall not be prior to the date on which the Board acts to approve the grant. The
Board shall have the right, with the consent of the optionee, to convert an ISO
granted under the Plan to a Non-Qualified Option pursuant to paragraph 16.

         6.       MINIMUM OPTION PRICE; ISO LIMITATIONS.

                  A. The price per share specified in the agreement relating to
         each Non-Qualified Option granted under the Plan shall in no event be
         less than the lesser of (i) the book value per share of Common Stock as
         of the end of the fiscal year of the Company immediately

<PAGE>
         preceding the date of such grant, or (ii) 50 percent of the fair market
         value per share of Common Stock on the date of such grant.

                  B. The price per share specified in the agreement relating to
         each ISO granted under the Plan shall not be less than the fair market
         value per share of Common Stock on the date of such grant. In the case
         of an ISO to be granted to an employee owning stock possessing more
         than ten percent of the total combined voting power of all classes of
         stock of the Company or any Related Corporation, the price per share
         specified in the agreement relating to such ISO shall not be less than
         110 percent of the fair market value of Common Stock on the date of
         grant.

                  C. In no event shall the aggregate fair market value
         (determined at the time the option is granted) of Common Stock for
         which ISOs granted to any employee are exercisable for the first time
         by such employee during any calendar year (under all stock option plans
         of the Company and any Related Corporation) exceed $100,000.

                  D. If, at the time an Option is granted under the Plan, the
         Company's Common Stock is publicly traded, "fair market value" shall be
         determined as of the last business day for which the prices or quotes
         discussed in this sentence are available prior to the date such Option
         is granted and shall mean (i) the average (on that date) of the high
         and low prices of the Common Stock on the principal national securities
         exchange on which the Common stock is traded, if such Stock is then
         traded on a national securities exchange; or (ii) the last reported
         sale price (on that date) of the Common Stock on the NASDAQ National
         Market List, if the Common Stock is not then traded on a national
         securities exchange; or (iii) the closing bid price (or average of bid
         prices) last quoted (on that date) by an established quotation service
         for over-the-counter securities, if the Common Stock is not reported on
         the NASDAQ National Market List. However, if the Common Stock is not
         publicly traded at the time an Option is granted under the Plan, "fair
         market value" shall be deemed to be the fair value of the Common Stock
         as determined by the Board after taking into consideration all factors
         which it deems appropriate, including, without limitation, recent sale
         and offer prices of the Common Stock in private transactions negotiated
         at arm's length.

         7.       OPTION DURATION. Subject to earlier termination as provided in
paragraphs 9 and 10, each Option shall expire on the date specified by the
Board, but not more than (i) ten years and one day from the date of grant in the
case of Non-Qualified Options, (ii) ten years from the date of grant in the case
of ISOs generally, and (iii) five years from the date of grant in the case of
ISOs granted to an employee owning stock possessing more than ten percent of the
total combined voting power of all classes of stock of the Company or any
Related Corporation. Subject to earlier termination as provided in paragraphs 9
and 10, the term of each ISO shall be the term set forth in the original
instrument granting such ISO, except with respect to any part of such ISO that
is converted into a Non-Qualified Option pursuant to paragraph 16.

         8.       EXERCISE OF OPTION. Subject to the provisions of paragraphs 9
through 12, each Option granted under the Plan shall be exercisable as follows:
<PAGE>

                  A. The Option shall either be fully exercisable on the date of
         grant or shall become exercisable thereafter in such installments as
         the Board may specify.

                  B. Once an installment becomes exercisable it shall remain
         exercisable until expiration or termination of the Option, unless
         otherwise specified by the Board.

                  C. Each Option or installment may be exercised at any time or
         from time to time, in whole or in part, for up to the total number of
         shares with respect to which it is then exercisable.

                  D. The Board shall have the right to accelerate the date of
         exercise of any installment of any Option; provided that the Board
         shall not accelerate the exercise date of any installment of any Option
         granted to any employee as an ISO (and not previously converted into a
         Non-Qualified Option pursuant to paragraph 16) if such acceleration
         would violate the annual vesting limitation contained in Section
         422A(b)(7) of the Code.

         9.       TERMINATION OF EMPLOYMENT. If an ISO optionee ceases to be
employed by the Company and all Related Corporations other than by reason of
death or disability as defined in paragraph 10, no further installments of his
ISOs shall become exercisable, and his ISOs shall terminate after the passage of
60 days from the date of termination of his employment, but in no event later
than on their specified expiration dates, except to the extent that such ISOs
(or unexercised installments thereof) have been converted into Non-Qualified
Options pursuant to paragraph 16. Leave of absence with the written approval of
the Board shall not be considered an interruption of employment under the Plan,
provided that such written approval contractually obligates the Company or any
Related Corporation to continue the employment of the employee after the
approved period of absence. Employment shall also be considered as continuing
uninterrupted during any other bona fide leave of absence (such as those
attributable to illness, military obligations or governmental service) provided
that the period of such leave does not exceed 90 days or, if longer, any period
during which such optionee's right to reemployment is guaranteed by statute.
ISOs granted under the Plan shall not be affected by any change of employment
within or among the Company and Related Corporations, so long as the optionee
continues to be an employee of the Company or any Related Corporation. Nothing
in the Plan shall be deemed to give any grantee of any Option, Award or
authorization to make a Purchase the right to be retained in employment or other
service by the Company or any Related Corporation for any period of time. In
granting any Non-Qualified Option, the Board may specify that such Non-Qualified
Option shall be subject to the restrictions set forth herein with respect to
ISOs, or to such other termination or cancellation provisions as the Board may
determine.

         10.      DEATH; DISABILITY; DISSOLUTION. If an ISO optionee ceases to
be employed by the Company and all Related Corporations by reason of his death,
any ISO of his may be exercised, to the extent of the number of shares with
respect to which he could have exercised it on the date of his death, by his
estate, personal representative or beneficiary who has acquired the ISO by will
or by the laws of descent and distribution, at any time prior to the earlier of
the ISO's specified expiration date or 180 days from the date of the optionee's
death.
<PAGE>
         If an ISO optionee ceases to be employed by the Company and all Related
Corporations by reason of his disability, he shall have the right to exercise
any ISO held by him on the date of termination of employment, to the extent of
the number of shares with respect to which he could have exercised it on that
date, at any time prior to the earlier of the ISO's specified expiration date or
180 days from the date of the termination of the optionee's employment. For the
purposes of the Plan, the term "disability" shall mean "permanent and total
disability" as defined in Section 22(e)(3) of the Code or successor statute.

              In granting any Non-Qualified Option, the Board may specify that
such Non-Qualified Option shall be subject to the restrictions set forth herein
with respect to ISOs, or to such other termination and cancellation provisions
as the Board may determine.

         11.      ASSIGNABILITY. No Option shall be assignable or transferable
by the optionee except by will or by the laws of descent and distribution, and
during the lifetime of the optionee each Option shall be exercisable only by
him.

         12.      TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Board may from
time to time approve. Such instruments shall conform to the terms and conditions
set forth in paragraphs 6 through 11 hereof and may contain such other
provisions as the Board deems advisable which are not inconsistent with the
Plan, including restrictions applicable to shares of Common Stock issuable upon
exercise of Options. The Board may from time to time confer authority and
responsibility on one or more of its own members and/or one or more officers of
the Company to execute and deliver such instruments. The proper officers of the
Company are authorized and directed to take any and all action necessary or
advisable from time to time to carry out the terms of such instruments.

         13.      ADJUSTMENTS. Upon the happening of any of the following
described events, an optionee's rights with respect to Options granted to him
hereunder, and the recipient's rights with respect to Common Stock acquired
pursuant to a Purchase or Award hereunder, shall be adjusted as hereinafter
provided, unless otherwise specifically provided in the written agreement
between the recipient and the Company relating to such Option, Purchase or
Award.

                  A. In the event shares of Common Stock shall be subdivided or
         combined into a greater or smaller number of shares or if, upon a
         merger, consolidation, reorganization, split-up, liquidation,
         combination, recapitalization or the like of the Company, the shares of
         Common Stock shall be exchanged for other securities of the Company or
         of another corporation, each optionee shall be entitled, subject to the
         conditions herein stated, to purchase such number of shares of Common
         Stock or amount of other securities of the Company or such other
         corporation as were exchangeable for the number of shares of Common
         Stock which such optionee would have been entitled to purchase except
         for such action, and appropriate adjustments shall be made in the
         purchase price per share to reflect such subdivision, combination, or
         exchange; and

                  B. In the event the Company shall issue any of its shares as a
         stock dividend upon or with respect to the shares of stock of the class
         which shall at the time be subject to option

<PAGE>
         hereunder, each optionee upon exercising an Option shall be entitled to
         receive (for the purchase price paid upon such exercise) the shares as
         to which he is exercising his Option and, in addition thereto (at no
         additional cost), such number of shares of the class or classes in
         which such stock dividend or dividends were declared or paid, and such
         amount of cash in lieu of fractional shares, as he would have received
         if he had been the holder of the shares as to which he is exercising
         his Option at all times between the date of grant of such Option and
         the date of its exercise.

                  C. If any person or entity owning restricted Common Stock
         obtained by exercise of an Option or by a Purchase or Award made
         hereunder receives new or additional or different shares or securities
         ("New Securities") in connection with a corporate transaction described
         in subparagraph A above or a stock dividend described in subparagraph B
         above as a result of owning such restricted Common Stock, such New
         Securities shall be subject to all of the conditions and restrictions
         applicable to the restricted Common Stock with respect to which such
         New Securities were issued.

                  D. Notwithstanding the foregoing, any adjustments made
         pursuant to subparagraphs A or B with respect to ISOs shall be made
         only after the Board, after consulting with counsel for the Company,
         determines whether such adjustments would constitute a "modification"
         of such ISOs as that term is defined in Section 425 of the Code, or
         would cause any adverse tax consequences for the holders of such ISOs.
         If the Board determines that such adjustments made with respect to ISOs
         would constitute a modification of such ISOs, it may refrain from
         making such adjustments.

                  E. No adjustments shall be made for dividends paid in cash or
         in property other than securities of the Company.

                  F. No fractional shares shall actually be issued under the
         Plan. Any fractional shares which, but for this subparagraph F, would
         have been issued to an optionee pursuant to an Option, shall be deemed
         to have been issued and immediately sold to the Company for their fair
         market value, and the optionee shall receive from the Company cash in
         lieu of such fractional shares.

                  G. Upon the happening of any of the foregoing events described
         in subparagraphs A or B above, the class and aggregate number of shares
         set forth in paragraph 4 hereof that are subject to Options, Awards or
         authorizations to make Purchases which previously have been or
         subsequently may be granted under the Plan shall also be appropriately
         adjusted to reflect the events described in such subparagraphs. The
         Board shall determine the specific adjustments to be made under this
         paragraph 13 and, subject to paragraph 2, its determination shall be
         conclusive.

         14.      MEANS OF EXERCISING OPTIONS. An Option (or any part or
installment thereof) shall be exercised by giving written notice to the Company
at its principal office address. Such notice shall identify the Option being
exercised and specify the number of shares as to which such Option is being
exercised, accompanied by full payment of the purchase price therefor either (a)
in United States dollars in cash or by check, or (b) at the discretion of the
Board, through

<PAGE>
delivery of shares of Common Stock having fair market value equal as of the date
of the exercise to the cash exercise price of the Option, or (c) at the
discretion of the Board, by delivery of the optionee's personal recourse note
bearing interest payable not less than annually at no less than 100% of the
lowest applicable Federal rate, as defined in Section 1274(d) of the Code, or
(d) at the discretion of the Board, by any combination of (a), (b) and (c)
above. If the Board exercises its discretion to permit payment of the exercise
price of an ISO by means of the methods set forth in clauses (b), (c), or (d) of
the preceding sentence, such discretion shall be exercised in writing at the
time of the grant of the ISO in question. The holder of an Option shall not have
the rights of a shareholder with respect to the shares covered by his Option
until the date of issuance of a stock certificate to him for such shares. Except
as expressly provided above in paragraph 13 with respect to changes in
capitalization and stock dividends, no adjustment shall be made for dividends or
similar rights for which the record date is before the date such stock
certificate is issued.

         15.      TERM AND AMENDMENT OF PLAN. This Plan was adopted by the Board
on April 20, 1988, subject to approval of the Plan by the holders of a majority
of the outstanding shares of Common Stock of the Company by written consent at
the next Meeting of Stockholders. The Plan shall expire on April 20, 1998
(except as to Options outstanding on that date). Subject to the provisions of
paragraph 5 above, Options, Awards and authorizations to make Purchases may be
granted under the Plan prior to the date of stockholder approval of the Plan. If
the approval of Stockholders is not obtained by April 20, 1989, any grants of
ISOs under the Plan made prior to that date will be rescinded. The Board may
terminate or amend the Plan in any respect at any time, except that, without the
approval of such Stockholders obtained within 12 months before or after the
Board adopts a resolution authorizing any of the following actions: (a) the
total number of shares that may be issued under the Plan may not be increased
(except by adjustment pursuant to paragraph 13); (b) the provisions of paragraph
3 regarding eligibility for grants of ISOs may not be modified; (c) the
provisions of paragraph 6(B) regarding the exercise price at which shares may be
offered pursuant to ISOs may not be modified (except by adjustment pursuant to
paragraph 13); and (d) the expiration date of the Plan may not be extended.
Except as provided in the fourth sentence of this paragraph 15, in no event may
action of the Board or Stockholders alter or impair the rights of an optionee,
purchaser or Award recipient, without his consent, under any Option, Award or
authorization to make a Purchase previously granted to him.

         16.      CONVERSION OF ISOS INTO NON-QUALIFIED OPTIONS; TERMINATION OF
ISOS. The Committee, at the written request of any optionee, may in its
discretion take such actions as may be necessary to convert such optionee's ISOs
(or any installments or portions of installments thereof) that have not been
exercised on the date of conversion into Non-Qualified Options at any time prior
to the expiration of such ISOs, regardless of whether the optionee is an
employee of the Company or a Related Corporation at the time of such conversion.
Such actions may include, but not be limited to, extending the exercise period
or reducing the exercise price of the appropriate installments of such Options.
At the time of such conversion, the Board (with the consent of the Optionee) may
impose such conditions on the exercise of the resulting Non-Qualified Options as
the Board in its discretion may determine, provided that such conditions shall
not be inconsistent with this Plan. Nothing in the Plan shall be deemed to give
any optionee the right to have such optionee's ISOs converted into Non-Qualified
Options, and no such conversion shall occur until and unless the Board takes
appropriate action. The Board, with the

<PAGE>

consent of the optionee, may also terminate any portion of any ISO that has not
been exercised at the time of such termination.

         17.      APPLICATION OF FUNDS. The proceeds received by the Company
from the sale of shares pursuant to Options granted and Purchases authorized
under the Plan shall be used for general corporate purposes.

         18.      GOVERNMENTAL REGULATION. The Company's obligation to sell and
deliver shares of the Common Stock under this Plan is subject to the approval of
any governmental authority required in connection with the authorization,
issuance or sale of such shares.

         19.      WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of a
Non-Qualified Option, the grant of an Award, the making of a Purchase of Common
Stock for less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 20) or the vesting of restricted Common
Stock acquired on the exercise of an Option or by Award or Purchase hereunder,
the Company, in accordance with Section 3204(a) of the Code, may require the
optionee, Award recipient or purchaser to pay additional withholding taxes in
respect of the amount that is considered compensation includible in such
person's gross income. The Board in its discretion may condition (i) the
exercise of an Option, (ii) the grant of an Award, (iii) the making of a
Purchase of Common Stock for less than its fair market value, or (iv) the
vesting of restricted Common Stock acquired by exercising an Option, making a
Purchase or receiving an Award, on the purchaser's or recipient's payment of
such additional withholding taxes.

         20.      NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. Each employee
who receives ISOs shall agree to notify the Company in writing immediately after
the employee makes a disqualifying disposition of any Common Stock received
pursuant to the exercise of an ISO (a "Disqualifying Disposition").
Disqualifying Disposition means any disposition (including any sale) of such
stock before the later of (a) two years after the employee was granted the ISO
under which he acquired such stock, or (b) one year after the employee acquired
such stock by exercising such ISO. If the employee has died before such stock is
sold, these holding period requirements do not apply and no Disqualifying
Disposition can occur thereafter.

         21.      GOVERNING LAW; CONSTRUCTION. The validity and construction of
the Plan and the instruments evidencing Options, Awards and Purchases shall be
governed by the laws of the State of Massachusetts. In construing this Plan, the
singular shall include the plural and the masculine gender shall include the
feminine and neuter, unless the context otherwise requires.

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