<PAGE>   1



[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                                                 EXHIBIT 10.95



                        COMBINATORIAL CHEMISTRY AGREEMENT

        THIS COMBINATORIAL CHEMISTRY AGREEMENT (the "Agreement") is made and
entered into effective as of December 22, 1998 (the "Effective Date"), by and
between AXYS PHARMACEUTICALS, INC., a Delaware corporation having a place of
business at 180 Kimball Way, South San Francisco, CA 94080 ("Axys"), and
RHONE-POULENC RORER PHARMACEUTICALS INC., a Delaware corporation having a place
of business at 500 Arcola Road, Collegeville, Pennsylvania 19426 ("RPR"). Axys
and RPR may be referred to herein individually as a "Party" or, collectively, as
the "Parties."

                                    RECITALS

        A. Axys has developed and owns certain technology and intellectual
property rights relating to combinatorial chemistry and the synthesis of diverse
chemistry libraries using combinatorial techniques.

        B. RPR desires to obtain from Axys a non-exclusive library of
approximately [*] compounds to be synthesized pursuant to protocols developed by
Axys and a license to use certain Axys combinatorial chemistry technology and
intellectual property rights for RPR's drug discovery and development programs.

        C. Axys is willing to grant such rights to RPR and to synthesize and
deliver to RPR such compound library pursuant to the following terms and
conditions.

        NOW, THEREFORE, the Parties agree as follows:

1.      DEFINITIONS

        1.1 "AFFILIATE" means, with respect to a Party, any individual or entity
that controls, is controlled by, or is under common control with, such Party.
For this definition, the term "control" shall refer to (a) the ownership,
directly or indirectly, of at least fifty percent (50%) of the voting securities
or other ownership interest of an entity (or, if less, the maximum percentage
permitted by law), or (b) the possession, directly or indirectly, of the power
to direct the management or policies of an entity, whether through the ownership
of voting securities, by contract or otherwise.

        1.2 "AXYS IMPROVEMENT" means any invention, idea, concept, formula,
design, techniques, enhancement or improvement (whether or not patentable or
copyrightable or subject to any other form of intellectual property protection)
which (i) is developed, conceived or 


<PAGE>   2

reduced to practice as a result of activities pursuant to this Agreement, (ii)
relates to the Library, the Library Compounds, the Library Protocols, the Axys
Know-How, or the Axys Patents, and (iii) is made by employees or agents of Axys
or its Affiliates, either solely or together with one or more employees or
agents of RPR and its Affiliates.

        1.3 "AXYS KNOW-HOW" means Information Controlled by Axys during the Term
that comprises or is contained in the Selected Protocols or relates directly to
use of the Selected Protocols. The term "Axys Know-How" shall not include the
general combinatorial chemistry techniques proprietary to Axys relating
generally to synthesis of compounds or to accelerated medicinal chemistry based
on the Library Compounds, or any computational methods and instrumentation
know-how and compound management databases, or any Information relating to
Library Protocols other than the Selected Protocols, except as the same may be
contained in the Selected Protocols.

        1.4 "AXYS PATENTS" means all Patent Rights that are Controlled by Axys
and claim aspects of the Axys Know-How.

        1.5 "CONFIDENTIAL INFORMATION" means the Information of a Party that it
considers proprietary and/or confidential, and that, if disclosed under this
Agreement in written, graphic or electronic form, is marked or otherwise
designated as "confidential" or "proprietary" or the equivalent and, if
disclosed orally, is characterized as "confidential" or "proprietary" by the
disclosing Party at the time of such disclosure.

        1.6 "CONTROLLED" means, with respect to a material or an item of
Information, Patent Right or other intellectual property right, that the
applicable Party owns or has a license or right to such material, Information,
Patent Right or other intellectual property right and has the ability to grant
to the other Party access and a right and license as provided for herein under
such material, Information, Patent Right or other intellectual property right
without violating the terms of any agreement or other arrangements with, or the
rights of, any Third Party.

        1.7 "DEVELOPMENT COMPOUND" means any Library Compound that RPR or its
Affiliates undertakes to develop and commercialize pursuant to Section 2.8.

        1.8 "DERIVATIVE" means a compound (other than a Library Compound) made
by RPR or any of its Affiliates using a Selected Protocol or any RPR Protocol.

        1.9 "EVALUATION PERIOD" means the period commencing on the Effective
Date and terminating on [*].

        1.10 "GENERAL SCREENING" means use of the Library or any Library
Compounds in assays (or other testing) to screen for activity against targets in
the pursuit of the identification of lead compounds or structures in research
and development programs, where the party conducting such screening is permitted
and authorized to use the Library or any Library Compound to screen against [*]
and/or [*]. For clarity, "General Screening" shall not include Limited
Screening.


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



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<PAGE>   3

        1.11 "INFORMATION" means any data results, information, know-how, trade
secrets, techniques, methods, development, material, or compositions of matter
of any type or kind.

        1.12 "LIBRARY" means the collection of approximately [*] to be
synthesized by Axys and provided to RPR under the terms of Article 2 of this
Agreement.

        1.13 "LIBRARY COMPOUND" means any individual chemical compound within
the Library and includes a Development Compound unless the context otherwise
requires.

        1.14 "LIBRARY PROTOCOL" means a Protocol used for synthesizing a set of
related Library Compounds using combinatorial chemistry techniques.

        1.15 "LIMITED SCREENING" means use of the Library or any Library
Compounds in assays (or other testing) to screen for activity against targets in
the pursuit of the identification of lead compounds or structures in research
and development programs, where the party conducting such screening is permitted
to use the Library or any Library Compound to screen against [*] and in [*].

        1.16 "PATENT RIGHTS" means (i) an issued and existing letters patent,
including any extensions, supplemental protection certificates, registration,
confirmation, reissue, reexamination or renewal thereof, (ii) pending
applications, including any continuation, divisional, continuation-in-part
application thereof, for any of the foregoing, and (iii) all counterparts to any
of the foregoing issued by or filed in any country or other jurisdiction.

        1.17 "PROTOCOL" means a detailed set of combinatorial chemistry
synthetic methods and standard operating procedures designed to be used for
synthesizing a set of related compounds using combinatorial chemistry
techniques.

        1.18 "RPR IMPROVEMENT" means any invention, idea, concept, formula,
design, technique, enhancement or improvement (whether or not patentable or
copyrightable or subject to any other form of intellectual property protection)
which (i) is developed, conceived or reduced to practice as a result of
activities pursuant to this Agreement, (ii) relates to the Derivatives, the RPR
Protocols, or the RPR Know-How, and (iii) is made by employees or agents of RPR
or its Affiliates, either solely or together with one or more employees or
agents of Axys or its Affiliates.

        1.19 "RPR KNOW-HOW" means all Information Controlled by RPR during the
Term that relates to the Derivatives or the RPR Protocols.

        1.20 "RPR PROTOCOL" means any Protocol which was developed by RPR or its
Affiliates using any Information contained in a Selected Protocol.

        1.21 "SCAFFOLD" means the chemical substructure common to a set of
Library Compounds related by the use of a particular Library Protocol to
synthesize such Library Compounds.


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



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        1.22 "SELECTED PROTOCOL" means a Library Protocol that has been selected
by RPR pursuant to Section 2.2 and, if applicable, [*], which Library Protocol 
shall contain at a minimum the enabling information outlined in Exhibit A 
attached hereto.

        1.23 "TECHNOLOGY COMMITTEE" means the committee formed by the Parties
under Section 2.4 of the Agreement.

        1.24 "TERM" means the term of this Agreement as set forth in Section
8.1.

        1.25 "THIRD PARTY" means any natural person, corporation, firm, business
trust, joint venture, association, organization, company, partnership or other
business entity, or any government or agency or political subdivision thereof,
other than Axys, RPR or an Affiliate of either of them.

2.      DEVELOPMENT AND TRANSFER OF LIBRARY

        2.1 LIBRARY SYNTHESIS. Commencing promptly after the Effective Date,
Axys will use [*] to synthesize Library Compounds to be provided to RPR as part
of the Library. Such Library Compounds shall be synthesized using [*] Library
Protocols of Axys. Axys will ensure that the Library will be comprised of [*]
Library Compounds per Library Protocol used in making the Library.

        2.2 SELECTED PROTOCOLS. During the Evaluation Period, RPR shall endeavor
to evaluate the Library Compounds provided by Axys and the Scaffolds that are
generated by Axys during such period. Prior to the end of the Evaluation Period,
RPR shall choose, by written notice provided to Axys, as Selected Protocols [*]
the Library Protocols. In addition, RPR [*]. RPR shall choose such [*] by
written notice provided to Axys, [*]. Selection of Selected Protocols by RPR
under this Section 2.2 shall be made based upon review by RPR of the Scaffolds
that have been provided to RPR [*] and/or based upon screening or other data
generated by RPR and its Affiliates from their use of the Library Compounds as
permitted by this Agreement. Axys shall use [*] to complete delivery of the
Selected Protocols and the Axys Know-How relating thereto within [*] of
selection by RPR hereunder or as soon as reasonably available. Such delivery
shall be in written form, CD-ROM, microfilm or other appropriate medium and
format (including without limitation electronic transfer or delivery) as
reasonably selected by the mutual agreement of the parties. RPR and its
Affiliates may use the Selected Protocols and grant sublicenses to use the
Selected Protocols only as permitted in Section 3.1.

        2.3 DELIVERY OF LIBRARY COMPOUNDS. Axys shall use [*] to deliver the
Library Compounds in the Library to RPR according to the following schedule: 
[*]. If Axys is able to produce and deliver the Library Compounds [*]. For
Library Compounds other than Initial Library Compounds, Axys shall calculate a
projected delivery date for the Library Compounds to be produced from each such
Scaffold within a reasonable period of time following RPR's acceptance of, or
failure to timely reject, Scaffolds pursuant to Section 2.9, and Axys shall


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



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<PAGE>   5
inform RPR of each such projected delivery date. [*] thereafter Axys shall
update RPR on the then-projected delivery date(s) for such Library Compounds.
The Library Compounds will conform to the specifications set forth in the
applicable Library Protocol. Axys shall use due care in conducting the testing
specified in Exhibit B for each Library Compound, and shall perform all such
testing in accordance with generally prevailing industry standards. The Initial
Library Compounds shall be delivered in [*] Library Compound present in the
shipment. All Library Compounds delivered after the Initial Library Compounds
shall be delivered in [*] Library Compound present in the shipment. For the
Initial Library Compounds [*] of each Library Compound shall be [*] well
plates. For all Library Compounds delivered after the Initial Library Compounds
[*] well plates. Each shipment shall be accompanied by a confidential
description of the identity and structure of each Library Compound in such
shipment, as well as a diagram indicating the location of each Library Compound
in each plate included in the shipment. Accompanying each shipment will be the
results of the analysis of the Library Compounds, performed by Axys according to
the method of analysis set forth in Exhibit B attached hereto. Axys shall make 
[*] to provide Library Compounds to RPR [*] and in any event [*]. Taking all
deliveries of Library Compounds as a whole, Axys shall not [*].

        2.4 TECHNOLOGY COMMITTEE. Within thirty (30) days of the Effective Date,
Axys and RPR shall form a committee consisting of two (2) representatives of
each Party (the "Technology Committee"). The Technology Committee shall meet as
needed at times as agreed upon by the members of the Technology Committee (but
no more than once per quarter) to establish a mechanism for RPR to review the
Scaffolds prior to the selection of Library Protocols under Section 2.2 or the
rejection of such Scaffolds under Section 2.9, to memorialize the dates on which
deliveries of Library Compounds were made by Axys to RPR, to review Axys [*]
and to discuss and resolve any non-business aspects of the relationship of the
Parties under this Agreement. The Technology Committee will also look at
analytical methods and results, as well as alternative approaches to quality
control relating to the Library Compounds. The Technology Committee shall act by
unanimous consent, and may meet by telephone, videoconference or in face-to-face
meetings, as agreed upon by the members of the committee. A Chairperson shall be
appointed for each meeting of the Technology Committee by the members of the
Technology Committee. Each Party may change its representatives on the
Technology Committee as it deems appropriate, and may send non-voting
representatives to attend committee meetings as observers.

        2.5 RIGHT TO USE LIBRARY COMPOUNDS - RPR. All Axys Know-How and Axys
Patents existing as of the Effective Date and relating to the Library and the
Library Compounds including any Information of Axys relating thereto, shall be
and remain the property of Axys (but subject to the licenses and other rights
granted to RPR and its Affiliates hereunder). Subject to the terms of this
Agreement, RPR and its Affiliates shall have the right to use the Library and
the Library Compounds solely (a) [*] and (b) [*]. Except as permitted in the
foregoing or as permitted in Section 6.3, RPR covenants that it and its
Affiliates shall not transfer or disclose the Library or Library Compounds, or
the structures thereof, to any Third Party for any purpose. RPR shall cause its
Affiliates to observe the limitations contained in this Section 2.5 and
elsewhere in this Agreement which are applicable to RPR and its Affiliates. RPR
and its Affiliates may use all Information generated by the use of the Library
and the Library 


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



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<PAGE>   6

Compounds as permitted above for any purpose subject to and in
compliance with the limitations in this Agreement. It is understood and agreed
that the provisions of this Section 2.5 shall only apply to Library Compounds
that are not Development Compounds and that the provisions of Section 2.8 shall
apply to Development Compounds.

        2.6 RIGHT TO USE LIBRARY COMPOUNDS - AXYS. Axys retains the rights to
provide the Library, Library Compounds and all the Library Protocols (including
without limitation the Selected Protocols) to Third Parties for use in General
Screening; provided, however, that, (i) during the [*] period after each date
of delivery of a set of Library Compounds by Axys, Axys covenants that it shall
not provide the Library Protocols applicable to such Library Compounds or any of
such Library Compounds (excluding a de minimis amount thereof) to more than [*]
for use in General Screening (each of such Third Parties being referred to
herein as a "General Screening Party"), and (ii) for an [*] thereafter, Axys
covenants that it [*] for use in General Screening. Without limiting any of
the foregoing, Axys and its Affiliates shall retain the right to use the Library
and the Library Compounds for all internal purposes, including without
limitation, General Screening, combinatorial chemistry and medicinal chemistry,
and research (including, without limitation, drug discovery), development and
commercialization activities of Axys and its Affiliates. Axys also retains the
right to use all the Library Protocols (including without limitation the
Selected Protocols) for any internal purpose and retains the right to use the
Library and the Library Compounds in programs focused on specific targets and/or
therapeutic areas pursuant to collaborative research, development or
commercialization agreements with Third Parties (each such Third Party being
referred to herein as a "Third Party Corporate Partner"), and to provide the
Library or Library Compounds to Third Party Corporate Partners of Axys or its
Affiliates for use by such partner in programs focused on specific targets
pursuant to research, development or commercialization agreements between such
Third Party Corporate Partner and Axys (or its Affiliate, as applicable),
provided that, each such Third Party Corporate Partner (and its Affiliates) is
contractually prohibited from using the Library or Library Compounds for General
Screening (unless such partner is also one of the General Screening Parties) and
is subject to a confidentiality agreement at least as restrictive as the
provisions of Article 6.

        2.7 RPR'S RIGHT TO DERIVATIVES. RPR and its Affiliates shall have the
right to synthesize and use Derivatives for any and all research, development,
commercialization and other purposes, including but not limited to research,
development and commercialization programs conducted in collaboration with Third
Parties.

        2.8 RPR'S RIGHT TO DEVELOPMENT COMPOUNDS. If RPR or its Affiliates [*],
in which case such Library Compound shall be deemed to be a Development
Compound. With respect to Development Compounds, Axys shall inform other
customers permitted to use such Library Compounds that they are no longer
available for, and are no longer licensed for, selection by such customers for
commercialization. RPR may designate up to [*] Library Compounds as
Development Compounds at any time; provided, however, that RPR may not select,
and will no longer be licensed to commercialize, any Library Compound as a
Development Compound (i) if Axys has previously received written notice from any
other customer that such customer has selected such Library Compound for
commercialization, or (ii) 


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



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if Axys itself [*] has selected such Library Compound for commercialization.
As soon as reasonably practicable following receipt of any such written notice,
Axys shall inform RPR that such Library Compound is no longer available for
selection as a Development Compound. For each Development Compound, RPR shall
use [*]. If RPR fails to satisfy the diligence obligations set forth herein
with respect to any Development Compound, such Development Compound shall again
be deemed to be a Library Compound rather than a Development Compound.

        2.9 RPR SCAFFOLD REVIEW. During the period when Axys is delivering the
Library Compounds to RPR under Section 2.3, RPR and its Affiliates shall have
the right, as provided below, to review the Scaffolds that Axys proposes to use
in creating the Library Compounds, in advance of Axys delivering the Library
Compounds based on such Scaffolds (but excluding the Scaffolds used for the
Initial Library Compounds). Axys shall provide the proposed Scaffolds to RPR in
confidence prior to preparing the Library Compounds based on such Scaffolds, and
will use [*] to provide such Scaffolds as soon as Axys can reasonably do so in
light of Axys' delivery schedule hereunder and in no event [*] in advance of
starting the preparation of the related Library Compounds. RPR shall have the
right to review such Scaffolds and shall have the right, subject to the
following, to reject certain of such Scaffolds for any reason, including without
limitation if RPR determines that any Library Compounds based on or including
such Scaffolds will overlap with or are substantially identical to compounds
that RPR or its Affiliates has manufactured or plans to manufacture. If RPR
desires to reject a particular Scaffold, it shall notify Axys as soon as
reasonably practicable and in no event [*] of receipt of the proposed
Scaffold. If RPR accepts a particular Scaffold, it shall notify Axys as soon as
reasonably practicable. Failure to notify Axys of its desire to reject a
particular Scaffold within such [*] shall be deemed to be acceptance of such
Scaffold by RPR. RPR shall have the right to reject up to [*].

        2.10 OPTIONAL CHEMISTRY SERVICES AND ENABLING COMBINATORIAL CHEMISTRY
TECHNOLOGY. Axys agrees to provide RPR with [*]. If RPR is interested in
pursuing such a project at Axys, RPR shall give Axys written notice of the
desired project and details thereof, and the Parties shall meet to negotiate in
good faith the financial terms and other terms and conditions relating to such
project. Axys agrees that the [*].

        2.11   DELIVERY; TITLE.

        (a) Axys shall ship, [*], the Library Compounds to RPR in
Collegeville, Pennsylvania or such other location within the continental United
States as RPR designates in a written notice to Axys.

        (b) Title to the actual physical samples of each set of Library
Compounds contained within the ninety-six (96) well plates provided by Axys
under this Agreement shall pass to RPR (free and clear of any liens, security
interests or other similar encumbrances) upon delivery of such Library Compounds
to RPR; provided that the passing of such title shall neither limit or eliminate
the restrictions upon use of the Library or the Library Compounds imposed by
this Agreement; and provided further that the passing of title to such actual
physical samples shall 


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



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not be deemed create any additional rights or licenses in such Library Compounds
or the intellectual property embodied therein or used to synthesize such Library
Compounds, and RPR's right to use such Library Compounds shall be solely as
expressly granted by Axys to RPR herein. Risk of loss to the actual physical
samples of each set of Library Compounds contained within the ninety-six (96)
well plates provided by Axys under this Agreement shall pass to RPR [ * ]. Axys
acknowledges that title to the actual physical samples of Derivatives produced
by RPR under and in accordance with this Agreement remains with RPR or its
Affiliates absent a further written agreement of the parties.

3.      TECHNOLOGY LICENSE RIGHTS

        3.1 TECHNOLOGY AND LIBRARY LICENSE RIGHTS.

                (a) LICENSES. Subject to the terms and conditions of this
Agreement, Axys hereby grants RPR and its Affiliates the non-exclusive,
worldwide, fully paid-up, perpetual (subject to termination under Section 8.4)
right and license to use and practice the Axys Know-How and the Axys Patents
solely (i) for RPR's and its Affiliates' permitted use of the Library and the
Library Compounds under Section 2.5, (ii) for RPR's and its Affiliates'
permitted synthesis and use of the Derivatives under Section 2.7 and permitted
use of the Development Compounds under Section 2.8, and (iii) to synthesize
additional quantities of Library Compounds for use as permitted in Section 2.5,
provided such right and license shall not entitle RPR to any of the Library
Protocols other than the Selected Protocols.

                (b) SUBLICENSING RIGHTS. RPR and its Affiliates shall have the
right to grant sublicenses to Third Parties under the licenses granted pursuant
to [*] above; provided that such sublicenses prohibit further sublicensing and
limit the sublicensee to synthesizing and using Derivatives for the
sublicensor's and/or for the sublicensee's internal research, development and
commercialization purposes and no other purposes. RPR and its Affiliates shall
also have the right to grant sublicenses to Third Parties under the licenses
granted pursuant to [*] above; provided that such sublicenses may only be
granted in conjunction with and in compliance with RPR's and its Affiliates'
permitted use of the Library and Library Compounds under Section 2.5 and only to
the extent needed to accomplish such permitted purposes. RPR and its Affiliates
covenant that they will not transfer or disclose any Axys Know-How or Axys
Patents disclosed hereunder to any Third Party except in connection with any
sublicense permitted under this Subsection 3.1(b) or in connection with the
exercise of its rights hereunder, and subject to limitations consistent with the
above restrictions. RPR shall provide Axys with written notification of an
intended sublicense pursuant to the second sentence of this Subsection 3.1(b)
prior to the execution of a sublicense agreement and shall provide Axys with a
copy of such sublicense agreement following execution (redacted of any
confidential Information of RPR or its sublicensee).

        3.2 LICENSE LIMITATIONS. RPR understands and agrees that its rights
granted in Section 3.1 under the Axys Know-How and the Axys Patents are
non-exclusive, and that Axys retains all its rights to use the Axys Know-How and
Axys Patents for its own purposes and to license or disclose the Axys Know-How
and Axys Patents to Third Parties without restriction,


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



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subject only to the restrictions set forth in, and to the licenses and other
rights granted RPR under, this Agreement. RPR covenants that RPR and its
Affiliates shall not use or practice the Axys Know-How and/or Axys Patents (or
grant sublicenses with respect thereto) for any use or purpose except as
expressly permitted in Section 3.1, [*]. RPR covenants that RPR and its
Affiliates will not sell or otherwise commercialize any Library Compound, but
excluding from the foregoing limitation any Development Compound or any compound
that is discovered or synthesized by RPR or its Affiliates completely
independent of any activity permitted under this Agreement and without reliance
on any Axys Know-How, Axys Patents or other Confidential Information of Axys
disclosed to RPR.

        3.3 [*] ON RESTRICTIVE PROVISIONS AND DELIVERY TIMES. Axys covenants
that it will contractually bind any General Screening Party, any Third Party
Corporate Partner, and any other Third Party to which Axys or its Affiliates
provides the right to use any of the Library Compounds or Library Protocols to
provisions [*] hereof and that it [*]. In the event that Axys desires to provide
the Library Compounds or the Library Protocols to any Third Party on [*] hereof
or [*], then [*], as the case may be.

4.      PAYMENTS

        4.1 LICENSE FEE. RPR shall pay Axys [*] within thirty (30) days of
the Effective Date as a [*] license fee.

        4.2 COMPOUND LICENSES AND PAYMENTS. The license fee and purchase price
of Library Compounds delivered hereunder shall be calculated in accordance with
the following:

                (a) for the Initial Library Compounds, the aggregate license fee
and purchase price per Library Compound shall be equal to [*] for such Initial
Library Compounds.

                (b) for Library Compounds delivered [*] the aggregate license
fee and purchase price per Library Compound shall be equal to [*] for such
Library Compounds.

        4.3 PAYMENT PROCEDURES. Upon each delivery by Axys of particular Library
Compounds pursuant to Section 2.3, RPR agrees to pay Axys the amounts set forth
in Section 4.2 for such delivered Library Compounds, such payment to be made
within [*] of receipt of an invoice from Axys regarding such delivered Library
Compounds, which invoice shall be submitted promptly upon delivery of such
Library Compounds by Axys under the terms of Section 2.3. RPR shall be
responsible for additional payments of any sales, transfer, excise, export or
other tax and of any customs tax or duties assessed on the sale or transfer of
Library Compounds, Library Protocols, Axys Know-How or Axys Patents. Such
additional payments shall exclude all taxes based upon the net income to Axys.

        4.4 SELECTED PROTOCOL FEES. There is no charge beyond the payments set
forth in Section 4.1 for the [*] Library Protocols chosen by RPR [*]. For each
Library Protocol chosen by RPR following the Evaluation Period and during the
Term as a Selected Protocol, RPR shall pay Axys 


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



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[*]. Such payments shall accompany the written notice whereby RPR informs Axys
of its selection of the Selected Protocol.

5.      INTELLECTUAL PROPERTY MATTERS

        5.1 OWNERSHIP.

                (a) AXYS IMPROVEMENTS. Axys Improvements made solely by
employees or agents of Axys and/or its Affiliates shall be owned solely by Axys.
Axys Improvements made jointly by employees or agents of Axys and/or its
Affiliates and one or more employees or agents of RPR and/or its Affiliates
shall be owned jointly by the Parties.

                (b) RPR IMPROVEMENTS. RPR Improvements made solely by employees
or agents of RPR and/or its Affiliates shall be owned solely by RPR. RPR
Improvements made jointly by employees or agents of RPR and/or its Affiliates
and one or more employees or agents of Axys and/or its Affiliates shall be owned
jointly by the Parties.

                (c) NON-LIBRARY COMPOUNDS. Axys [*]. Axys will [*]. At RPR's
request and expense, Axys will execute any documents or instruments as may be
necessary [*]. In the event [*].

                (d) LIBRARY COMPOUNDS. RPR [*]; provided nothing herein shall
limit or otherwise affect the provisions of Section 2.11(b) or the licenses or
other rights granted to RPR hereunder.

        5.2 LIMITATION ON PATENT APPLICATIONS.

                (a) SPECIFIC CLAIMS. A Party shall not file or allow any of its
Affiliates to file, and Axys shall not allow any General Screening Party or
Third Party Corporate Partner to file, any patent applications that [*],
provided that a Party shall have the right to [*], and Axys shall have the
right to allow any General Screening Party or Third Party Corporate Partner to 
[*] and Axys shall have the right to [*]. RPR shall have the right to [*].
For clarity, this Section 5.2(a) prohibits RPR from filing a patent application
that [*] and permits RPR to file a patent application that [*].

               (B) GENERIC CLAIMS. A Party shall have the right to [*], and
Axys shall have the right to allow any General Screening Party or Third Party
Corporate Partner [*]. For clarity, this Section 5.2(b)(i) permits RPR to file
a patent application that (A) [*] or (B) [*].

        5.3    ADDITIONAL LICENSES.

               (a) TO RPR. Subject to the limitations set forth herein, Axys
hereby grants to RPR and its Affiliates a non-exclusive, world-wide, perpetual
(subject to termination by Axys under Section 8.4), fully paid-up right and
license, with the right to sublicense, under any issued or published Patent
Rights Controlled by Axys or its Affiliates that [*] solely for RPR and its
Affiliates and permitted sublicensees to make and use such Library Compounds to
the extent 


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



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permitted in Section 2.5 and to make and use Library Compounds in connection
with the use of Derivatives and Development Compounds to the extent permitted in
Sections 2.7 and 2.8, respectively.

                (b) TO AXYS.

                        (i) RPR hereby grants to Axys a non-exclusive,
world-wide, perpetual, fully paid-up license, with right to sublicense, under
issued or published patents owned by RPR or its Affiliate that [*] solely for
Axys and its Affiliates and sublicensees to make, have made, import, use and
derivatize, such Library Compound as permitted in Section 2.6 and for Axys and
its Affiliates to offer for sale and sell such Library Compound (but not any
derivatives thereof) as permitted in Section 2.6, but excluding from the
foregoing license [*].

                        (ii) Subject to the limitations set forth herein, RPR
hereby grants to Axys a non-exclusive, world-wide, perpetual, fully paid-up
right and license, with the right to sublicense, under issued or published
Patent Rights Controlled by RPR or its Affiliates that [*], but excluding from
the foregoing right and license any [*].

        (c) COVENANT TO SECURE. With respect to [*].

        5.4 HANDLING OF PATENTS.

        (a) AXYS OR RPR PATENTS RIGHTS. At its sole cost and expense, each Party
shall have the right to file, prosecute, maintain and enforce the Patent Rights,
which it Controls, subject to the provisions of this Section 5. Each Party
agrees to provide the other with reasonable assistance in filing, prosecuting,
maintaining and enforcing the other's Patent Rights, at the other's request and
expense, including providing access to relevant documents and other evidence and
making its employees available. Any amounts recovered by a Party, whether by
settlement or judgment, shall be retained by such Party.

        (b) JOINT PATENTS RIGHTS. Responsibility for the filing, prosecution,
maintenance and enforcement of Patent Rights the Parties jointly own (the "Joint
Patent Rights") will be agreed upon by the Parties on a case-by-case basis and
handled by mutually acceptable counsel. The Parties shall [*]. Any amounts
recovered in the enforcement of Joint Patent Rights, whether by settlement or
judgement, shall [*].

        5.5 THIRD PARTY PATENT RIGHTS. If any warning letter or other notice of
infringement is received by a Party, or action, suit or proceeding is brought
against a Party alleging infringement of a Patent Right of any Third Party in
the manufacture, use or sale of a Library Compound or use of the Axys Know-How
or Axys Patents as permitted herein, the Parties shall promptly discuss and
decide the best way to respond.



6.      CONFIDENTIALITY


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



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        6.1 CONFIDENTIALITY OBLIGATIONS. Each Party agrees that, for the Term
and for ten (10) years thereafter, such Party shall keep, and shall ensure that
its officers, directors, employees and agents keep, completely confidential and
shall not publish or otherwise disclose and shall not use for any purpose except
as expressly permitted hereunder any Confidential Information furnished to it by
the other Party pursuant to this Agreement; except that the foregoing
obligations shall not apply to any Information to the extent that it can be
established by such receiving Party that such Information:

                (a) was already known to the receiving Party or any of its
Affiliates, other than pursuant to an obligation of confidentiality owed to the
disclosing Party, at the time of disclosure;

                (b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving Party;

                (c) became generally available to the public or otherwise part
of the public domain after its disclosure and other than through any act or
omission of the receiving Party in breach of this Agreement;

                (d) was subsequently lawfully disclosed to the receiving Party
or its Affiliates by a Third Party other than in contravention of a
confidentiality obligation of such Third Party to the disclosing Party; or

                (e) was developed or discovered by employees of the receiving
Party or its Affiliates who had no access to the Confidential Information of the
disclosing Party.

        Notwithstanding the foregoing, each Party may disclose the other Party's
Confidential Information only to the extent such disclosure is reasonably
necessary in filing or prosecuting Patent Rights, prosecuting or defending
litigation, complying with applicable governmental laws or regulations, making a
permitted sublicense of its rights hereunder or conducting clinical trials or
otherwise in performing its obligations or exercising its rights hereunder,
provided that if a Party is required to make any such disclosure of the other
Party's Confidential Information, it will, whenever reasonably possible, give
advance notice to the latter Party of such disclosure requirement, will
cooperate with the other Party in its efforts to secure confidential treatment
of such Information prior to its disclosure (whether through protective orders
or confidentiality agreements or otherwise), and will use reasonable efforts to
limit the extent of such disclosure and, if requested by the other Party because
of an inability of such other Party to seek confidential treatment, to secure
confidential treatment of such Information prior to its disclosure (whether
through protective orders or confidentiality agreements or otherwise).

        6.2 PRESS RELEASES. Except to the extent required by law or as otherwise
permitted in accordance with this Section 6.2 or Section 6.3, neither Party
shall make any public announcements concerning this Agreement or the subject
matter hereof without the prior written consent of the other Party, which
consent shall not be unreasonably withheld or delayed. Notwithstanding the
foregoing, the Parties agree that each Party may desire or be required to issue
press releases relating to this Agreement or the activities hereunder, and the
Parties agree to 


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



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consult with each other reasonably and in good faith with respect to the text of
such press releases prior to the issuance thereof, provided that a Party may not
unreasonably withhold consent to such releases, and that either Party may issue
such press releases as it determines, based on advice of counsel, are reasonably
necessary to comply with laws or regulations or for appropriate market
disclosure. The principles to be observed by Axys and RPR in public disclosures
with respect to this Agreement shall be: accuracy, the requirements of
confidentiality under this Article 6, and the normal business practices in the
pharmaceutical and biotechnology industries for disclosures by companies
comparable to Axys and RPR. Except as set forth in Section 6.3 hereof, in the
event of a required or desired public announcement, such Party shall provide the
other Party with a reasonable opportunity and the right to approve the content
of such announcement prior to its being made, which approval shall not be
unreasonably withheld or delayed. Furthermore, each Party shall give the other
Party a reasonable opportunity to review all filings with the United States
Securities and Exchange Commission describing the terms of this Agreement prior
to submission of such filings, and shall give due consideration to any
reasonable comments by the non-filing Party relating to such filing, including
without limitation the provisions of this Agreement for which confidential
treatment should be sought.

        6.3 PUBLICATIONS. Notwithstanding the terms of Section 6.2, either Party
may publish Information that such Party discovered or developed in its research,
development or commercialization activities derived from use of the Library or
any Library Compound without the consent of or notice to the other Party,
provided, however, that no such publication may contain any Confidential
Information of the other Party, or may disclose the structure of a Library
Compound or Information that reasonably may be interpreted to disclose the
structure of a Library Compound unless:

                (a) such structure is in the public domain at the time of such
publication; or

                (b) such structure was independently discovered by employees of
the publishing Party who had no access to the Library, the Library Compounds or
any Confidential Information of the other Party; or

                (c) the disclosure of such structure is required to support a
patent filing pursuant to Section 5.2; or

                (d) the other Party has consented in writing to such disclosure.

7.      INDEMNIFICATION

        7.1 INDEMNIFICATION BY RPR. RPR shall indemnify, defend and hold Axys
and its Affiliates and their respective agents, employees, officers and
directors (collectively the "Axys Indemnitees") harmless from and against any
and all liability, damage, loss, cost or expense (including reasonable
attorneys' fees) arising out of Third Party claims or suits related to (a) RPR's
or any of its Affiliate's negligence, willful misconduct or breach of this
Agreement; (b) the manufacture or use of Library Compound(s), Derivatives, or
Development Compounds or the manufacture, use or sale of compounds or products
containing compounds that are based upon or derived from a Library Compound,
Derivative or Development Compound, by RPR and 


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



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its Affiliates, sublicensees, distributors and agents, or (c) RPR's obligation
pursuant to Section 4.3 to pay taxes; provided, however, that the foregoing
shall not apply to the extent such claims or suits result from the negligence or
willful misconduct of or breach of this Agreement by any of the Axys
Indemnitees. Notwithstanding the foregoing, RPR shall have no obligation to
indemnify the Axys Indemnitees with respect to claims arising out of breach by
Axys of its representations and warranties set forth in Section 9.4 hereof.

        7.2 INDEMNIFICATION BY AXYS. Axys shall indemnify, defend and hold RPR
and its Affiliates and their respective agents, employees, officers and
directors (collectively the "RPR Indemnitees") harmless from and against any and
all liability, damage, loss, cost or expense (including reasonable attorney's
fees) arising out of Third Party claims or suits related to (a) Axys' or its
Affiliates' negligence, willful misconduct or breach of this Agreement, except
to the extent that such claims or suits result from (i) the manufacture, use, or
sale by RPR and its Affiliates, sublicensees, distributors and agents of
compounds, or products containing compounds, that are based upon or derived from
a Library Compound, or (ii) the negligence or willful misconduct of or breach of
this Agreement by any of the RPR Indemnitees; or (b) the manufacture, use or
sale to Third Parties by Axys, its Affiliates, Third Party licensees,
distributors or agents of Library Compound(s) or the manufacture, use or sale of
compounds, or products containing compounds, that are based or derived from
Library Compounds. Notwithstanding the foregoing, Axys shall have no obligation
to indemnify the RPR Indemnitees with respect to claims arising out of breach by
RPR of its representations and warranties set forth in Section 9.4 hereof.

        7.3 NOTIFICATION OF CLAIMS; CONDITIONS TO INDEMNIFICATION OBLIGATIONS.
As a condition to a Party's right to receive indemnification under this Article
7, it shall (i) promptly notify the other Party as soon as it becomes aware of a
claim or action for which indemnification may be sought pursuant hereto, (ii)
cooperate with the indemnifying Party in the defense of such claim or suit, and
(iii) permit the indemnifying Party to control the defense of such claim or
suit, including without limitation the right to select defense counsel. In no
event, however, may the indemnifying Party compromise or settle any claim or
suit in a manner which admits fault or negligence on the part of the indemnified
Party without the prior written consent of the indemnified Party. The
indemnifying Party shall have no liability under this Article 7 with respect to
claims or suits settled or compromised without its prior written consent.

8.      TERMINATION AND EXPIRATION

        8.1 TERM AND TERMINATION. This Agreement shall commence upon the
Effective Date and, unless earlier terminated as provided herein, shall expire
on the second anniversary of the Effective Date or, if later, upon the
completion of delivery of the Library to RPR. The license and other rights
granted under Sections 2.5, 2.7, 2.8, 3.1, 3.2, 5.1, 5.2 and 5.3 shall survive
such expiration, subject to compliance by RPR and its Affiliates with all
limitations on the practice of such license rights set forth in such Sections.

        8.2 TERMINATION BY RPR FOR FAILURE TO DELIVER. RPR shall have the right
to terminate this Agreement [*] written notice if Axys has materially failed
to comply with the 


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



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<PAGE>   15

delivery schedule for delivering Library Compounds under Section 2.3, provided
that such termination shall not be effective if Axys cures such failure prior to
the end of such [*]. The license and other rights under Sections 2.5, 2.7,
2.8, 3.1, 3.2, 5.1, 5.2 and 5.3 shall survive such termination with respect to
the Library Compounds and Selected Protocols already delivered and paid for by
RPR, subject to compliance by RPR and its Affiliates with all limitations on the
practice of such license rights set forth in such Sections.

        8.3 TERMINATION UPON MATERIAL BREACH.

                (a) Failure by a Party to comply with any of its material
obligations contained herein shall entitle the Party not in default to give to
the Party in default notice specifying the nature of the default, requiring it
to make good or otherwise cure such default, and stating its intention to
terminate if such default is not cured. If such default is not cured within [*]
after the date of such notice (or, if such default cannot be cured within
such [*] period, if the Party in default does not commence and diligently
continue actions to cure such default), the Party not in default shall be
entitled, without prejudice to any of its other rights conferred on it by this
Agreement, and in addition to any other remedies available to it by law or in
equity, to terminate this Agreement; provided, however, that such right to
terminate shall be stayed in the event that, during such [*], the Party
alleged to have been in default shall have initiated dispute resolution
proceedings in accordance with Section 9.11 with respect to the alleged default,
which stay shall last so long as the initiating Party diligently and in good
faith pursues the prompt resolution of such proceedings.

                (b) The right of a Party to terminate this Agreement, as
provided above, shall not be affected in any way by its waiver or failure to
take action with respect to any prior default. A Party may waive its right to
terminate this Agreement with respect to a particular default, provided that any
such waiver shall not constitute a waiver of, and such Party shall retain all
rights to pursue, any and all other remedies it may have at law or in equity of
such default by the other Party.

        8.4 CONSEQUENCES OF TERMINATION.

                (a) Upon termination of this Agreement by RPR pursuant to
Section 8.3, then: (i) the license and other rights granted under Sections 2.5,
2.7, 2.8, 3.1, 5.1, 5.2 and 5.3 shall survive termination for Library Compounds
and Selected Protocols delivered and paid for by RPR, subject to compliance with
all limitations in such Sections and in Section 3.2; (ii) Axys shall promptly
return all Confidential Information of RPR in its possession; (iii) all
obligations and rights of Axys to provide additional Library Compounds shall
terminate; and (iv) RPR shall retain the right to use the Library Compounds and
Selected Protocols already delivered and paid for as permitted under this
Agreement.

                (b) Upon termination of this Agreement by Axys pursuant to
Section 8.3, then: (i) all licenses and other rights granted by Axys to RPR
under this Agreement, or, if applicable, under this Agreement as to the
particular Library Compounds so terminated, shall terminate; (ii) RPR shall
return all existing samples of the Library Compounds that are subject to the
termination and all rights to use such Library Compounds shall terminate and
revert to Axys; 


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



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(iii) if the entire Agreement is terminated, all obligations of Axys to provide
additional Library Compounds shall terminate; and (iv) the license rights
granted to Axys by RPR in Section 5.3 shall survive any such termination.

                (c) In the event this Agreement is terminated pursuant to
Section 8.3 prior to October 31, 1999, RPR shall be entitled, in addition to its
other rights and remedies, to damages equal to the product of [*], and (y) the
number of months remaining between the date of termination and October 31, 1999.

        8.5 ACCRUED RIGHTS; SURVIVING OBLIGATIONS.

                (a) Termination or expiration of this Agreement for any reason
shall be without prejudice to any rights which shall have accrued to the benefit
of a Party prior to such termination or expiration. Such termination or
expiration shall not relieve a Party from obligations which are expressly
indicated to survive termination or expiration of this Agreement.

                (b) Without limiting the second sentence of Section 8.5(a),
Sections 2.5, 2.7, 2.8, 2.11(b), 5.1, 5.2, 5.3, 5.4, 9.10, 9.11 and 9.13 and
Articles 1, 3, 6, 7 and 8 of this Agreement shall survive the expiration or
termination of this Agreement for any reason except to the extent otherwise
provided in Section 8.4.

        8.6 RIGHTS IN BANKRUPTCY. All rights and licenses granted under or
pursuant to this Agreement by RPR or Axys are, and shall otherwise be deemed to
be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of
right to "intellectual property" as defined under Section 101 of the U.S.
Bankruptcy Code. The Parties agree that the Parties, as licensees of such rights
under this Agreement, shall retain and may fully exercise all of their rights
and elections under the U.S. Bankruptcy Code. The Parties further agree that, in
the event of the commencement of a bankruptcy proceeding by or against either
Party under the U.S. Bankruptcy Code, the Party hereto which is not a party to
such proceeding shall be entitled to a complete duplicate of (or complete access
to, as appropriate) any such intellectual property and all embodiments of such
intellectual property, and same, if not already in their possession, shall be
promptly delivered to them (i) upon any such commencement of a bankruptcy
proceeding upon their written request therefor, unless the Party subject to such
proceeding elects to continue to perform all of its obligations under this
Agreement or (ii) if not delivered under (i) above, following the rejection of
this Agreement by or on behalf of the Party subject to such proceeding upon
written request therefor by the non-subject Party.

9.      MISCELLANEOUS PROVISIONS

        9.1 RELATIONSHIP OF THE PARTIES. Nothing in this Agreement is intended
or shall be deemed to constitute a partnership, agency or employer-employee
relationship between the Parties. Neither Party shall incur any debts or make
any commitments for the other.

        9.2 ASSIGNMENTS. Except as expressly provided herein, neither this
Agreement nor any interest hereunder shall be assignable, nor any other
obligation delegable, by a Party without the prior written consent of the other
Party, which consent shall not be unreasonably withheld or 


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



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delayed; provided, however, that a Party may assign this Agreement to any
Affiliate or to any successor in interest by way of merger, acquisition or sale
of all or substantially all of its assets in a manner such that the assignee
shall be liable and responsible for the performance and observance of all such
Party's duties and obligations hereunder, but provided that if such assignee is
an Affiliate of the assigning Party, such Party shall guarantee the performance
by such Affiliate of all its obligations under the Agreement. This Agreement
shall be binding upon the successors and permitted assigns of the Parties;
provided, however, that in the event that Axys is acquired, the Axys Know-How
and the Axys Patents shall not include any information or intellectual property
rights owned by the acquiring company as of the date of such acquisition, unless
previously licensed to Axys. Any assignment not in accordance with this Section
9.2 shall be null and void. On December 1, 1998, Rhone-Poulenc S.A. and Hoechst
AG announced their common intention to merge their respective life sciences
businesses into a new company, Aventis S.A. (the "Merger"). In the event the
Merger is consummated, RPR shall be entitled to assign this Agreement to Aventis
or an Affiliate of Aventis without the prior written consent of Axys; provided
such entity agrees in writing to undertake and perform all liabilities, duties
and obligations of RPR hereunder.

        9.3 DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN SECTION
9.4, THE PARTIES EXPRESSLY DISCLAIM ALL WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, OR NON-INFRINGEMENT OF THIRD PARTY RIGHTS, UNLESS OTHERWISE
EXPRESSLY PROVIDED IN THIS AGREEMENT.

        9.4 REPRESENTATIONS AND WARRANTIES.

                (a) Each Party represents and warrants to the other Party that,
as of the date of this Agreement:

                        (i) such Party is duly organized and validly existing
under the laws of the state of its incorporation and has full corporate power
and authority to enter into this Agreement and to carry out the provisions
hereof;

                (ii) such Party has taken all corporate action necessary to
authorize the execution and delivery of this Agreement and the performance of
its obligations under this Agreement; and

                        (iii) this Agreement is a legal and valid obligation of
such Party, binding upon such Party and enforceable against such Party in
accordance with the terms of this Agreement, except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws affecting creditors' rights, and subject to
general equity principles and to limitations on availability of equitable
relief, including specific performance. All consents, approvals and
authorizations from all governmental authorities or other Third Parties required
to be obtained by such Party in connection with this Agreement have been
obtained.


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



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                        (iv) such Party has obtained written confidentiality
agreements from each of its employees and consultants who have access to the
Confidential Information of the other Party hereunder, whether in the form of
general confidentiality agreements from the employees obtained at the time of
commencement of such employees' employment by such Party or otherwise, which
agreements obligate such persons to maintain as confidential all confidential
information obtained by such Party in confidence from a Third Party.

                (b) Axys represents and warrants to RPR that as of the date of
this Agreement:

                        (i) [*], in whole or in part;

                        (ii) it has the full right, power and authority to enter
into this Agreement and to grant the licenses granted under Articles 3 and 5
hereof;

                        (iii) [*];

                        (iv) the execution, delivery and performance of this
Agreement by Axys does not and will not constitute a material breach under, and
is not and will not be precluded by the terms of, any agreement to which Axys is
a party or by which Axys or its assets is bound;

                        (v) [*]; and

                        (vi) [*].

                (c) RPR represents and warrants to Axys that as of the date of
this Agreement:

                        (i) it has the full right, power and authority to enter
into this Agreement and to grant the licenses granted under Section 5.3 hereof;

                        (ii) the execution, delivery and performance of this
Agreement by RPR does not and will not constitute a material breach under, and
is not and will not be precluded by the terms of, any agreement to which RPR is
a party or by which RPR or its assets is bound.

        9.5 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments and to do all such other acts as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.

        9.6 FORCE MAJEURE. Neither Party shall be liable to the other for
failure or delay in the performance of any of its obligations under this
Agreement for the time and to the extent such failure or delay is caused by
earthquake, riot, civil commotion, war, strike, flood, governmental acts or
restrictions or any other reason which is beyond the control of the respective
Party. The Party affected by force majeure shall provide the other Party with
full particulars thereof as soon as it becomes aware of the same (including its
best estimate of the 


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



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likely extent and duration of the interference with its activities), and will
use commercially reasonable efforts to overcome the difficulties created thereby
and to resume performance of its obligations as soon as practicable. If the
performance of any obligation under this Agreement is delayed owing to a force
majeure for any continuous period of more than [*], the Parties hereto shall
consult with respect to an equitable solution, including the possibility of the
mutual termination of this Agreement.

        9.7 NO TRADEMARK RIGHTS. No right, express or implied, is granted by
this Agreement to a Party to use in any manner the name or any other trade name
or trademark of a Party in connection with the performance of this Agreement.

        9.8 ENTIRE AGREEMENT OF THE PARTIES; AMENDMENTS. This Agreement,
together with the Exhibits hereto, constitutes and contains the entire
understanding and agreement of the Parties respecting the subject matter hereof
and cancels and supersedes any and all prior negotiations, correspondence,
understandings and agreements between the Parties, whether oral or written,
regarding such subject matter. No waiver, modification or amendment of any
provision of this Agreement shall be valid or effective unless made in writing
and signed by a duly authorized officer of each Party.

        9.9 CAPTIONS. The captions and headings to this Agreement are for
convenience only, and are to be of no force or effect in construing or
interpreting any of the provisions of this Agreement.

        9.10 APPLICABLE LAW. This Agreement shall be governed by and interpreted
in accordance with the laws of the [*], applicable to contracts entered into
and to be performed wholly within the [*], excluding conflict of laws
principles.

        9.11 DISPUTES. In the event of any controversy or claim arising out of,
relating to or in connection with any provision of this Agreement, or the rights
or obligations of the Parties hereunder, the Parties shall try to settle their
differences amicably between themselves by referring the disputed matter to the
Chief Executive Officer of Axys and the Senior Vice President, Research of RPR
for discussion and resolution. Either Party may initiate such informal dispute
resolution by sending written notice of the dispute to the other Party, and
within [*] after such notice such representatives of the Parties shall meet
for attempted resolution by good faith negotiations. If such personnel are
unable to resolve such dispute within [*] of their first meeting of such
negotiations, either Party may seek to have such dispute resolved in any federal
or state court in the United States having jurisdiction over the dispute and the
Parties.

        9.12 NOTICES AND DELIVERIES. Any notice, request, delivery, approval or
consent required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been sufficiently given if delivered in
person, transmitted by telecopier (receipt verified) or by express courier
service (signature required) or five (5) days after it was sent by registered
letter, return receipt requested (or its equivalent), to the Party to which it
is directed at its address or facsimile shown below or such other address or
facsimile number as such party shall have last given by notice to the other
Parties.


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



                                       19
<PAGE>   20

        If to RPR, addressed to:

               Rhone-Poulenc Rorer Pharmaceuticals Inc.
               500 Arcola Road
               Collegeville, PA 19426
               Telecopier:  (610) 454-3807
               Attn.:  General Counsel

        If to Axys, addressed to:

               Axys Pharmaceuticals, Inc.
               180 Kimball Way
               South San Francisco, CA  USA   94080
               Telecopier:  (650) 829-1067
               Attn:  Chief Executive Officer

               with a copy to:

               Axys Pharmaceuticals, Inc.
               180 Kimball Way
               South San Francisco, CA  USA   94080
               Telecopier:  (650) 829-1067
               Attn:  General Counsel

        9.13 NO CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL EITHER PARTY OR ANY OF
ITS RESPECTIVE AFFILIATES BE LIABLE TO THE OTHER PARTY OR ANY OF ITS AFFILIATES
FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT,
WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, including, but not
limited to, loss of profits or revenue, or claims of customers of any of them or
other Third Parties for such or other damages, but excluding from the foregoing
liabilities arising from breach of the limitations in Sections 2.5, 2.6, 2.7 or
3.3 or Article 6.

        9.14 WAIVER. A waiver by either Party of any of the terms and conditions
of this Agreement in any instance shall not be deemed or construed to be a
waiver of such term or condition for the future, or of any subsequent breach
hereof. All rights, remedies, undertakings, obligations and agreements contained
in this Agreement shall be cumulative and none of them shall be in limitation of
any other remedy, right, undertaking, obligation or agreement of either party.

        9.15 COMPLIANCE WITH LAW. Nothing in this Agreement shall be deemed to
permit a Party to export, reexport or otherwise transfer any Library Compound or
any Axys Know-How provided under this Agreement without compliance with all
applicable laws.

        9.16 SEVERABILITY. When possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision 


[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



                                       20
<PAGE>   21

of this Agreement is held to be prohibited by or invalid under applicable law,
such provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement. The Parties
shall make a good faith effort to replace the invalid or unenforceable provision
with a valid one, which in its economic effect is most consistent with the
invalid or unenforceable provision.

        9.17 COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, any one of which need not contain the signature of more
than one Party but all such counterparts taken together shall constitute one and
the same agreement.



[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



                                       21
<PAGE>   22

        IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their respective duly authorized officers as of the Effective Date,
each copy of which shall for all purposes be deemed to be an original.



                                            RHONE-POULENC RORER PHARMACEUTICALS
                                            INC.

                                            By: /s/ Kenneth R. Pina
                                               ---------------------------------

                                            Title:  VP
                                               ---------------------------------


                                            AXYS PHARMACEUTICALS, INC.

                                            By: /s/ Frederick Ruegsegger
                                               ---------------------------------

                                            Title: Senior VP & CFO
                                               ---------------------------------



[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



                                       22
<PAGE>   23

                                    EXHIBIT A

                            LIBRARY PROTOCOL CRITERIA

                                      [*]




[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



                                       23
<PAGE>   24

                                    EXHIBIT B

                               METHODS OF ANALYSIS


                                       [*]



[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.



                                       24