EMPLOYMENT AGREEMENT

             THIS AGREEMENT is made effective as of January 17, 1998 (the
        "Commencement Date") by and between Aquila Biopharmaceuticals,
        Inc., a Delaware Corporation, having a principal place of
        business at 365 Plantation Street, Worcester, Massachusetts
        ("Aquila") and James L. Warren, of 48 Groton Road, North
        Chelmsford, Massachusetts ("Executive").

             WHEREAS, Aquila desires to employ Executive upon the terms
        and conditions provided in this Agreement; and

             WHEREAS, Executive desires to serve in the employ of Aquila
        on a full-time basis upon the terms and conditions hereinafter
        provided.

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

             1.   Employment.  Aquila hereby employs Executive, and
        Executive hereby accepts employment by Aquila upon the terms and
        conditions herein provided.

             2.   Position and Responsibilities; Principal Location.

             (a)  During the term of this Agreement, Executive will serve
        as Vice President, Chief Financial Officer and Treasurer, subject
        to election by the Board of Directors, reporting to the Chief
        Executive Officer ("CEO").  Executive shall devote his primary
        energies, attention and abilities to the business of Aquila and
        shall perform such duties as shall be assigned to him by the CEO.
        Executive may not serve as a director of other companies without
        the prior approval of the CEO.

             (b)  The principal location at which Executive will perform
        his duties will be at Aquila's principal offices in Worcester,
        Massachusetts or in a location not more than fifty (50) miles
        distant from Boston, Massachusetts.

             3.   Compensation and Benefits.  For all services rendered
        by Executive during his employment hereunder, Aquila shall
        compensate Executive as follows:

             (a)  Salary.  Aquila shall pay Executive a base salary of
        $165,000 per year, subject to increase from time to time in
        accordance with the usual practice of Aquila with respect to
        review of compensation of its senior executives.  Executive's
        salary shall be payable in periodic installments in accordance
        with Aquila's usual practice for its senior executives.

             (b)  Regular Benefits.  Executive shall be entitled to
        participate in any and all employee benefit plans, medical
        insurance plans, life insurance plans, disability income plans,




        retirement plans, bonus incentive plans and other benefit plans
        from time to time in effect for senior executives of Aquila.
        Such participation shall be subject to:  (i) the terms of the
        applicable plan documents; (ii) generally applicable policies of
        Aquila; and (iii) the discretion of the Board or any
        administrative or other committee provided for in or contemplated
        by such plan.

             (c)  Business Expenses.  Aquila shall reimburse Executive
        for all reasonable travel and other business expenses incurred by
        him in the performance of his duties and responsibilities,
        subject to such reasonable requirements with respect to
        substantiation and documentation as may be specified by Aquila.

             (d)  Vacation.  Executive shall be entitled to paid vacation
        in accordance with the policies of Aquila (but in no event less
        than four weeks per year), to be taken at such times and
        intervals as shall be determined by Executive with the approval
        of Aquila, which approval shall not be unreasonably withheld.

             (e)  Bonus.  Executive shall be eligible to receive an
        annual bonus based upon achievement of corporate and individual
        objectives; the award of any bonus shall lie solely in the
        discretion of the Board of Directors.

             4.   Termination and Termination Benefits.  Executive's
        employment hereunder shall terminate under the following
        circumstances:

             (a)  Death.  In the event of Executive's death during his
        employment hereunder, Aquila shall continue to pay an amount
        equal to Executive's base salary to Executive's beneficiary
        designated in writing to Aquila prior to his death (or to his
        estate if he fails to make such designation) for a period of six
        (6) months after the date of Executive's death, at the salary
        rate in effect on the date of his death, said payments to be made
        on the same periodic dates as base salary payments would have
        been made to Executive had he not died.

             (b)  Termination by Aquila for Cause.  Executive's
        employment hereunder may be terminated by Aquila for cause,
        without further liability on the part of Aquila, effective
        immediately by notice to Executive stating the nature of such
        cause.  The following shall constitute "cause" for such
        termination:

                  (i)    Deliberate dishonesty of Executive with respect to
             Aquila or any subsidiary or affiliate thereof; or

                  (ii)   Conviction of Executive of a crime involving moral
             turpitude; or

                  (iii)  The material failure by Executive to perform
             Executive's duties hereunder (other than any such failure

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             resulting from the incapacity of Executive due to physical or
             mental illness) which failure continues for thirty (30) days
             after notice to Executive setting forth in reasonable detail
             the manner in which Executive has not performed Executive's
             duties; or

                  (iv)   Unlawful conduct pertaining to Aquila or any of
             its affiliates or shareholders or involving a criminal act;
             material and conscious falsification or unauthorized
             disclosure of important records or reports; embezzlement or
             unauthorized conversion of property; violation of conflict of
             interest or vendor relations policies; or willful disclosure
             of significant trade secrets or other information likely to be
             used to the detriment of Aquila.

             (c)  Termination by Executive for Cause.  Executive may
        terminate his employment hereunder without liability effective
        after thirty (30) days notice by Executive to Aquila in the event
        of the material breach by Aquila of this Agreement if such breach
        shall continue for more than thirty (30) days after notice to
        Aquila setting forth in reasonable detail the nature of such
        breach.

             (d)  Termination by Aquila Without Cause.  Executive's
        employment may be terminated without cause by Aquila by thirty (30)
        days written notice to Executive.

             (e)  Certain Termination Benefits.  In the event of
        termination pursuant to Paragraphs 4(c) or 4(d), Executive shall be
        entitled to the following:

                  (i)    Base Salary.  For one hundred eighty (180) days
             after the date of termination, Aquila shall continue to pay
             Executive his base salary at the rate in effect on the date of
             termination.

                  (ii)   Regular Benefits.

                         (A)  For one hundred eighty (180) days subsequent
             to the date of termination, Executive shall continue to
             receive at Aquila's expense all benefits described in
             Paragraph 3(b) existing on the date of termination (except for
             any cash bonus plans which shall be pro-rated through the date
             of termination), provided that Aquila's obligation to continue
             such benefits shall cease on a benefit by benefit basis on
             that date, if any, on which Executive is employed and
             Executive receives in connection with such employment benefits
             which are substantially equivalent to Aquila's benefits.

                         (B)  For purpose of application of Aquila's
             benefits, Executive shall be treated, to the extent that
             applicable law pertaining to the particular Aquila benefit
             plan permits Aquila to do so, as if he had remained in the
             employ of Aquila, with a total annual salary at the rate in

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             effect on the date of termination and service or similar
             credits, if any, will continue to accrue during such period as
             if Executive had remained in the employ of Aquila.

                         (C)  If in spite of the provisions of this clause
             (ii), benefits or service credits under any benefit plan shall
             not be payable or provided under any such plan to Executive,
             or to Executive's dependents, beneficiaries or estate, because
             Executive is no longer deemed to be an employee of Aquila,
             Aquila itself shall pay or provide payment of such benefits
             and service credits for such benefits to Executive or to
             Executive's dependents, beneficiaries or estate.

                         (D)  To the extent that applicable law does not
             permit any Aquila benefit referred to above to be provided,
             paid, or funded through the applicable Aquila benefit plan,
             then Aquila shall not be required to provide such benefit
             through such plan and shall only be required to provide in the
             case of a benefit the tax treatment of which is enhanced by
             such plan an amount equal to what would have been Aquila's
             initial contribution to such plan and not the equivalent
             benefit.

                  (iii)  Set-off.  Aquila shall be entitled to set off
             against any cash compensation to be provided to Executive
             under this Paragraph 4(e) fifty percent (50%) of the amount of
             any cash compensation received by Executive from other
             employment during the period in which Executive received cash
             compensation under Paragraph 4(e).  Executive shall inform
             Aquila of any such amounts of cash compensation and shall
             refund to Aquila any amount which Aquila has paid which
             exceeds the amounts due from Aquila after application of the
             set-off provided for in this paragraph.  Notwithstanding the
             foregoing and any other provision of this Agreement, Executive
             shall be under no obligation to seek or accept any employment
             after termination of employment with Aquila for any reason.

             5.   Disability.

             (a)  If, due to physical or mental illness, Executive shall
        be disabled so as to be unable to perform substantially all of
        his duties and responsibilities hereunder, Aquila may designate
        another executive to act in his place during the period of such
        disability.  Notwithstanding any such designation, Executive
        shall continue to receive his full salary and benefits under
        Paragraph 3 of this Agreement, unless his employment is
        terminated as provided in this Paragraph 5.

             (b)  If Executive shall become totally and permanently
        disabled, then Aquila may terminate Executive's employment
        hereunder and shall continue to pay to Executive his full salary
        and provide him with the benefits he was receiving immediately
        prior to such termination for six months, provided that such
        salary shall be reduced by the amount of any disability insurance

                                      - 4 -




        proceeds actually paid to Executive or for his benefit with
        respect to such period of time under any disability policy
        provided by Aquila for Executive.

             (c)  The determination that by virtue of total and permanent
        disability Executive is unable to perform his duties hereunder
        shall be made by a physician chosen by Aquila and reasonably
        satisfactory to Executive (or Executive's legal representative)
        and such determination shall be conclusive.  The cost of such
        examination shall be borne by Aquila.  Executive shall be
        conclusively presumed to be totally and permanently disabled if
        for reasons involving physical or mental illness or injury
        Executive fails to perform his duties hereunder for a period of
        one hundred twenty (120) consecutive calendar days or for any
        periods aggregating one hundred twenty (120) days or more in any
        six (6) consecutive month period.  The date of termination of
        Executive's employment hereunder in the event of total and
        permanent disability shall be the earlier of such physicians's
        examination pursuant to which such determination is made or the
        first business day after which either such 120-day period or such
        six-month period has expired.

             6.   Non-competition, Confidential Information, and
                  Non-Solicitation.

             (a)  Non-competition.  Executive agrees that he will not at
        any time during the term of this Agreement and for a period of
        two (2) years following the termination of this Agreement for any
        reason, directly or indirectly, as a partner, officer, director,
        consultant, employee, stockholder or otherwise, engage in any
        employment, pursuit or association in which he shall have
        substantial responsibility with respect to products and/or
        services which are in direct competition with products and/or
        services of Aquila, provided however, in any event the holding by
        Executive of any investment in any security shall not be deemed
        to be a violation of this Paragraph 6 if such investment does not
        constitute more than 5% of the outstanding issue of such
        security.

             (b)  Confidential Information.  Executive will not disclose
        to any other person (except as required by applicable law or in
        connection with the performance of his duties and
        responsibilities hereunder), or use for his own benefit or gain,
        any confidential information of Aquila obtained by his incident
        to his employment with Aquila.  The term "confidential
        information" includes, without limitation, financial information,
        business plans, prospects and opportunities (such as lending
        relationships, financial product developments, possible
        acquisitions or dispositions of businesses of facilities),
        products, plans, intellectual property, analyses, projects,
        processes, marketing, research of development activities, and all
        technical or scientific information or know-how of Aquila which
        have been discussed or considered by Aquila but does not include
        any information which has become part of the public domain by

                                      - 5 -




        means other than Executive's non-observance of his obligations
        hereunder.

             (c)  Non-solicitation.  Executive agrees that he will not at
        any time during the term of this Agreement and for a period of
        three (3) years following the termination of this Agreement for
        any reason, directly or indirectly, solicit or recruit any
        employee of Aquila to serve as an employee of, consultant to, or
        partner of Executive or any entity.

             (d)  Relief; Interpretation.  Executive agrees that Aquila
        shall be entitled to injunctive relief for any breach by him of
        the covenants contained in Paragraphs 6(a), (b), or (c).  In the
        event that any provision of this Paragraph 6 shall be determined
        by any court of competent jurisdiction to be unenforceable by
        reason of its being extended over too great a period of time, too
        large a geographic area, or too great a range of activities, it
        shall be interpreted to extend only over the maximum period of
        time, geographic areas, or range of activities as to which it may
        be enforceable.  For purposes of this Paragraph 6, the term
        "Aquila" shall mean Aquila and any of its subsidiaries.

             (e)  Survival.  Executive's obligations under this
        Paragraph 6 shall survive termination of this Agreement.

             7.   Conflicting Agreements.  Executive hereby represents
        and warrants that the execution of this Agreement and the
        performance of his obligations hereunder will not breach or be in
        conflict with any other agreement to which he is a party or is
        bound, and that he is not now subject to any covenants against
        competition or similar covenants which would affect the
        performance of his obligations hereunder.

             8.   Withholding.  All payments made by Aquila under this
        Agreement shall be net of any tax or other amounts required to be
        withheld by Aquila under applicable law.

             9.   Arbitration of Disputes.  Any controversy or claim
        arising out of or relating to this Agreement or the breach
        thereof shall be settled by arbitration in accordance with the
        laws of the Commonwealth of Massachusetts by three arbitrators.
        The party initiating arbitration shall nominate one arbitrator in
        the request for arbitration and the other party shall nominate a
        second in the answer thereto within thirty (30) days of receipt
        of the request.  The two arbitrators so named will then jointly
        appoint the third arbitrator.  If the answering party fails to
        nominate its arbitrator within the thirty (30) day period, or if
        the arbitrators named by the parties fail to agree on the third
        arbitrator within sixty (60) days, then such arbitrator shall be
        appointed by the American Arbitration Association in the City of
        Boston.  Such arbitration shall be conducted in the City of
        Worcester, Massachusetts in accordance with the rules of the
        American Arbitration Association, except with respect to the
        selection of arbitrators which shall be provided in this

                                      - 6 -




        Paragraph 9.  Judgment upon the award entered by the arbitrators
        may be entered in any court having jurisdiction thereof.

             10.  Assignment; Successors and Assigns, etc.  Neither the
        employer nor Executive may make any assignment of this Agreement
        or any interest herein, by operation of law or otherwise, without
        the prior written consent of the other party; provided, however,
        that Aquila may assign its rights under this Agreement without
        the consent of Executive in the event Aquila shall hereafter
        consolidate with or merge into any other person, or transfer all
        or substantially all of its properties or assets to any other
        person.  In the event of the Executive's death prior to the
        completion by Aquila of all payments due him under this
        Agreement, Aquila shall continue such payments to the Executive's
        beneficiary designated in writing to Aquila prior to his death
        (or to his estate, if he fails to make such designation).  This
        Agreement shall inure to the benefit of and be binding upon
        Aquila and the Executive, their respective successors, executors,
        administrators, heirs and permitted assigns.

             11.  Enforceability.  If any portion or provision of this
        Agreement shall to any extent be declared illegal or
        unenforceable by a court of competent jurisdiction, then the
        remainder of this Agreement, or the application of such portion
        or provision in circumstances other than those as to which it is
        so declared illegal or unenforceable, shall not be affected
        thereby, and each portion and provision of this Agreement shall
        be valid and enforceable to the fullest extent permitted by law.

             12.  Waiver.  No waiver of any provision hereof shall be
        effective unless made in writing and signed by the waiving party.
        The failure of any party to require the performance of any term
        or obligation of this Agreement, or the waiver by any party of
        any breach of this Agreement, shall not prevent any subsequent
        enforcement of such term or obligation or be deemed a waiver of
        any subsequent breach.

             13.  Notices.  All notices and other communications required
        or permitted hereunder shall be in writing and shall be
        delivered, mailed by first-class mail, postage prepaid, or sent
        by telex or facsimile with a mailed confirmation copy, addressed:

             (a)  If to Aquila:

                                 Aquila Biopharmaceuticals, Inc.
                                 365 Plantation Street
                                 Worcester, MA 01605
                                 Attention:  Chief Executive Officer
                                 Facsimile No: 508-797-4014






                                      - 7 -




             (b)  If to Executive:

                                 James L. Warren
                                 48 Groton Road
                                 North Chelmsford, MA 01863

        or such other addresses or facsimile numbers as shall be
        furnished in writing by either party and any such notice or
        communication shall be deemed to have been given in the case of
        notices or communications which have been delivered or sent by
        facsimile or telex an the date of delivery or sending provided
        such day is a business day and in the case of notices or
        communications which have been mailed on the second business day
        after the date mailed.

             14.  Amendment.  This Agreement may be amended or modified
        only by a written instrument signed by Executive and by a duly
        authorized representative of Aquila.

             15.  Governing Law.  This is a Massachusetts contract and
        shall be construed under and be governed in all respects by the
        laws of the Commonwealth of Massachusetts without reference to
        its conflict of laws provisions.

             16.  Entire Agreement.  Except for the Invention and Non-
        Disclosure Agreement and the Employee Retention Agreement, both
        executed as of even date herewith, this Agreement constitutes the
        entire understanding between the parties with respect to the
        subject matter hereunder and supersedes and replaces all prior
        agreements, understandings, writings, and discussions between the
        parties.

             IN WITNESS WHEREOF, this Agreement has been executed as a
        sealed instrument by Aquila, by its duly authorized officers, and
        by the Executive, as of the date first above written.


        AQUILA BIOPHARMACEUTICALS, INC.


            /s/ Alison Taunton-Rigby
        By:______________________________
           Alison Taunton-Rigby
           President and CEO


            /s/ James L. Warren
           _____________________________
           James L. Warren






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