<PAGE>   1

                                                                    EXHIBIT 10.2

                            LICENSE AGREEMENT BETWEEN
           ALBERT EINSTEIN COLLEGE OF MEDICINE OF YESHIVA UNIVERSITY
                                       AND
                             PAIN THERAPEUTICS, INC.

                                TABLE OF CONTENTS


<TABLE>
<S>                                                                      <C>
ARTICLE I

DEFINITIONS ............................................................... 2

    1.1     "AFFILIATE" ................................................... 2
    1.2     "AGENCY" ...................................................... 2
    1.3     "CALENDAR QUARTER" ............................................ 2
    1.4     "CALENDAR YEAR" ............................................... 3
    1.5     "CONFIDENTIAL INFORMATION" .................................... 3
    1.6     "DEVELOPMENT SCHEDULE" ........................................ 3
    1.7     "FIRST COMMERCIAL SALE" ....................................... 3
    1.8     "IND" ......................................................... 3
    1.9     "KNOW-HOW" .................................................... 3
    1.10    "LICENSED PRODUCT" ............................................ 4
    1.11    "MAJOR COUNTRIES" ............................................. 4
    1.12    "NDA" ......................................................... 4
    1.13    "NET SALES" ................................................... 4
    1.14    "NET PROCEEDS" ................................................ 5
    1.15    "PATENT RIGHTS" ............................................... 5
    1.16    "SUBLICENSEE" ................................................. 6
    1.17    "TERRITORY" ................................................... 6
    1.18    "VALID PATENT CLAIM" .......................................... 6

ARTICLE II

PATENT RIGHTS AND KNOW-HOW .................................................6

ARTICLE III

PAYMENTS ...................................................................8

Table I ...................................................................10
</TABLE>


<PAGE>   2


<TABLE>
<S>                                                                      <C>
ARTICLE IV

ROYALTIES AND REPORTS .................................................... 11

ARTICLE V

DEVELOPMENT AND COMMERCIALIZATION ........................................ 17

ARTICLE VI

CONFIDENTIALITY AND PUBLICATION .......................................... 18

ARTICLE VII

PATENTS .................................................................. 21

ARTICLE VIII

TERM AND TERMINATION ..................................................... 24

ARTICLE IX

INDEMNIFICATION .......................................................... 26

ARTICLE X

MISCELLANEOUS ............................................................ 28
</TABLE>


<PAGE>   3


                                LICENSE AGREEMENT

        THIS AGREEMENT, effective as of the date of last signature by a party
hereto (the "Effective Date"), is entered into by and between Albert Einstein
College of Medicine of Yeshiva University, a division of Yeshiva University, a
corporation existing under the laws of the State of New York, having an office
and place of business at 1300 Morris Park Avenue, Bronx, New York 10461
("UNIVERSITY") and Pain Therapeutics, Inc., a corporation organized and existing
under the laws of Delaware and having its principal office at 1345 Douglas
Street, San Francisco, CA 94131 ("LICENSEE").

                                   WITNESSETH

        WHEREAS, in the course of research conducted under UNIVERSITY auspices
by Dr. Stanley M. Crain and Dr. Ke-Fei Shen in the Department of Neuroscience of
UNIVERSITY certain Know-How and Patent Rights have been developed;

        WHEREAS, pursuant to assignments by Dr. Crain and Dr. Shen to
UNIVERSITY, which assignments have been recorded in the U.S. Patent and
Trademark Office, UNIVERSITY is the owner of the Know-How and Patent Rights, and
has the right to grant licenses under the Know-How and Patent Rights;

        WHEREAS, UNIVERSITY desires to have the Patent Rights utilized in the
public interest and is willing to grant a license to its interest thereunder,

        WHEREAS, LICENSEE desires to obtain a license under the Patent Rights
and Know-How in accordance with the terms and conditions set forth herein, to
commercially develop and exploit the Patent Rights and Know-How;


<PAGE>   4

        NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties herein contained, the parties hereto, intending to be legally
bound, do hereby agree as follows.

                                    ARTICLE I
                                   DEFINITIONS

        The terms in this Agreement with initial letters capitalized, whether
used in the singular or plural, shall have the meaning designated below or, if
not designated below, the meaning as designated in places throughout this
Agreement.

1.1  "AFFILIATE" means any corporation or other entity which controls, is
     controlled by, or is under common control with a party to this Agreement. A
     corporation or other entity shall be regarded as in control of another
     corporation or entity if it owns or directly or indirectly controls more
     than fifty percent (50%) of the voting stock or other ownership interest of
     the other corporation or entity, or if it possesses, directly or
     indirectly, the power to direct or cause the direction of the management
     and policies of the corporation or other entity or the power to elect or
     appoint more than fifty percent (50%) of the members of the governing body
     of the corporation or other entity.

1.2  "AGENCY" means any governmental regulatory authority responsible for
     granting health or pricing approvals, registrations, import permits, and
     other approvals required before Licensed Product may be tested or marketed
     in any country.

1.3  "CALENDAR QUARTER" means the respective periods of three (3) consecutive
     calendar months ending on March 31, June 30, September 30 and December 31.


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1.4  "CALENDAR YEAR" means each successive period of twelve (12) months
     commencing on January 1 and ending on December 31.

1.5  "CONFIDENTIAL INFORMATION" means and includes, without limitation,
     information and data of one party supplied to the other, know-how, and all
     other scientific, clinical, regulatory, marketing, financial and commercial
     information or data, whether communicated in writing or orally or by other
     means, which is provided by one party to the other party in connection with
     this Agreement, and which is designated confidential by the disclosing
     party.

1.6  "DEVELOPMENT SCHEDULE"' shall have the meaning set forth in Section 5.2
     hereof.

1.7  "FIRST COMMERCIAL SALE" means, with respect to a Licensed Product, the
     first sale for use or consumption by the public of such Licensed Product in
     a country after all required approvals, including marketing and pricing
     approvals, have been granted by the governing health authority of such
     country.

1.8  "IND" means Investigational New Drug application, or the like, as defined
     in the applicable laws and regulations of the governmental drug regulatory
     agencies in each country.

1.9  "KNOW-HOW" means all information and materials, including but not limited
     to, technology, experience, discoveries, improvements, processes, formulae,
     data (including but not limited to all preclinical, clinical,
     toxicological, and pharmacological data) and inventions, trade secrets,
     patentable or otherwise, developed by UNIVERSITY through Drs. Crain and
     Shen, which on the Effective Date of this Agreement are in UNIVERSITY's
     possession and control, are not generally known and are necessary or useful
     for LICENSEE in the research,


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     development, manufacture, marketing, use or sale of compositions or methods
     for the attenuation of opioid tolerance and dependence and the enhancement
     of opioid analgesic potency. Know-How shall also include any Know-How and
     improvements or modifications to the Know-How which are developed by
     UNIVERSITY through Drs. Crain, Shen and their staff after the Effective
     Date of this Agreement as a result of any research funding provided by
     LICENSEE to UNIVERSITY pursuant to this Agreement.

1.10 "LICENSED PRODUCT" means any and all formulations for human pharmaceutical
     or animal health use, the manufacture, importation use or sale of which
     would (a) infringe a Valid Patent Claim but for the license provided under
     Article II hereof or (b) involve the use of Know-How.

1.11 "MAJOR COUNTRIES" means the following countries: United States, Canada,
     Japan and collectively the European Community.

1.12 "NDA" means a New Drug Application in the U.S. or the corresponding
     application for authorization for marketing of Licensed Product in any
     other country, as defined in the applicable laws and regulations and filed
     with the Agency of a given country.

1.13 "NET SALES" means the aggregate gross invoice price of Licensed Product
     sold by LICENSEE, its Affiliates and Sublicensees to an independent third
     party, including without limitation distributors, after deducting (to the
     extent not already deducted in the amount invoiced):

                (i)   trade and quantity discounts given;

                (ii)  returns and allowances;

                (iii) rebates, chargebacks and other amounts paid, credited or
                      accrued;

                (iv)  retroactive price reductions;


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                (v)   sales commissions paid to distributors and/or selling
                      agents;

                (vi)  a fixed amount equal to five percent (5%) for U.S. sales
                      and ten percent (10%) for sales outside the U.S., of the
                      amount invoiced to cover bad debt, custom duties,
                      surcharges, sales or excise taxes, cash discounts,
                      transportation and insurance charges; and

                (vii) as agreed by the parties, any other specifically
                      identifiable amounts included in gross sales that were or
                      ultimately will be credited and that are substantially
                      similar to those listed above.

1.14 "NET PROCEEDS" shall mean the total consideration. in any form (including,
     but not limited to, license signing and maintenance fees, minimum payments,
     research and development funds, and payments for equity of Licensee in
     excess of fair market value. etc.), received by LICENSEE from any third
     party or parties in connection with the grant to said third party or
     parties of a sublicense to make and sell (or otherwise dispose of) Licensed
     Products. Net Proceeds do not include royalties based on Net Sales of a
     sublicensee, nor payments made to Licensee that are specifically earmarked
     for and actually used to conduct clinical trials for Licensed Products.

1.15 "PATENT RIGHTS" means the patents and patent applications listed on
     Attachment A and any and all divisions, continuations,
     continuations-in-part, reissues, renewals, extensions or the like of any
     such patents and patent applications and all foreign equivalents thereof
     and any and all patents and patent applications owned by UNIVERSITY which
     contain one or more claims directed to compositions or methods for the
     attenuation of opioid tolerance and dependence and the enhancement of
     opioid analgesic potency and which result from the research funding
     provided by LICENSEE to UNIVERSITY pursuant to this Agreement, and any and
     all divisions, continuations, continuations-in-part,


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     reissues, renewals, extensions or the like of any such patents and patent
     applications and all foreign equivalents thereof.

1.16 "SUBLICENSEE" means a business entity which is sublicensed by LICENSEE
     under this Agreement.

1.17 "TERRITORY" means the entire world.

1.18 "VALID PATENT CLAIM"' means a claim of an issued and unexpired patent
     included within the Patent Rights which has not been revoked or held
     unenforceable or invalid by a decision of a court or other governmental
     agency of competent jurisdiction, unappealable or unappealed within the
     time allowed for appeal, or which has not been disclaimed, denied or
     admitted to be invalid or unenforceable through reissue or disclaimer or
     otherwise.

                                   ARTICLE 11

                           PATENT RIGHTS AND KNOW-HOW

2.1  Subject to paragraph 2.4, UNIVERSITY hereby grants to LICENSEE an exclusive
     license, with right to grant sublicenses, under the Patent Rights and
     Know-How to make, have made, use, sell, offer for sale and import Licensed
     Products in the Territory. LICENSEE shall require all of its sublicensees
     to expressly agree to indemnify UNIVERSITY in the same manner as LICENSEE
     is required to indemnify UNIVERSITY pursuant to this Agreement. For each
     sublicense agreement into which LICENSEE proposes to enter, LICENSEE shall
     notify UNIVERSITY of the name and address of the sublicensee and provide to
     UNIVERSITY a copy of the proposed agreement with such sublicensee. Within
     thirty days of receipt of the proposed agreement and name and address,


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     UNIVERSITY shall have the right to reject a proposed Sublicensee if such
     sublicensee:

     1. Has, within the past 2 years, engaged in illegal activities;

     2. Has an unusually high debt burden or liability (as compared with similar
        businesses in the same country); and

     3. Has, within the past 2 years, been censured by the U.S. Securities and
        Exchange Commission or, if not a U.S. company, by the securities
        regulators of its country.

     4. Has, within the past 2 years, engaged in a boycott or Israel.

     A true and complete copy of all sublicense agreements shall be promptly
     provided to UNIVERSITY.

2.2  Within thirty (30) days following the Effective Date of this License
     Agreement, UNIVERSITY shall provide to LICENSEE Know-How not already
     provided to LICENSEE. Throughout the term of this Agreement, UNIVERSITY
     will provide additional Know-How to LICENSEE promptly as it is developed.

2.3  LICENSEE's Right of Negotiation. It is recognized that during the term of
     this Agreement discoveries and inventions may be made as a result of the
     research funding provided by LICENSEE to UNIVERSITY pursuant to this
     Agreement that have utility in the pharmaceutical or animal fields which
     are outside the scope of the license granted under Section 2.1 hereof. Such
     discoveries and inventions may be made solely by UNIVERSITY or jointly by
     UNIVERSITY and LICENSEE (said discoveries and inventions referred to herein
     collectively as "Subject Inventions"). In consideration of this Agreement,
     UNIVERSITY hereby grants to LICENSEE the fight to require, at LICENSEE's
     election, that UNIVERSITY negotiate in good faith with LICENSEE with
     respect to the grant to LICENSEE of an exclusive world-wide license, with
     right to grant sublicenses, to make, have


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<PAGE>   10

     made, use, sell, offer for sale and import under UNIVERSITY's rights in any
     and all Subject Inventions and any patent or patent application claiming
     such Subject Inventions. The terms and Conditions of such license will be
     determined giving consideration to product sales, the license scope and
     rates conventionally granted for inventions with reasonably similar
     commercial potential and the relative contributions of the parties to the
     invention, the relative contribution of such invention to the product
     commercialized, and the cost of subsequent research and development needed
     to bring the product into the marketplace.

2.4  UNIVERSITY has and will perform research sponsored in part by the United
     States Government and related to Licensed Products. As a result of this
     government sponsorship of the aforementioned research, the United States
     Government retains certain rights in such research as set forth in 35
     U.S.C. Section 200 et. seq. and applicable regulations. The continuation
     of such government sponsored research by UNIVERSITY during the term of this
     Agreement will not constitute a breach of this Agreement. All rights
     reserved to the U.S. Government under 35 U.S.C. Section 200 et. seq. and
     applicable regulations shall remain so reserved and shall in no way be
     affected by this Agreement. UNIVERSITY is not obligated under this
     Agreement to take any action which would conflict in any respect with their
     past, current or future obligations to the U.S. Government as to work
     already performed and to be performed in the future.

                                   ARTICLE III

                                    PAYMENTS

3.1  LICENSE FEE. In consideration for the rights and licenses granted
     hereunder, LICENSEE shall pay to UNIVERSITY a one time license fee payment
     of one hundred thousand dollars ($100,000) which shall be due within thirty
     (30) days of

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     the Effective Date. This payment is non-returnable and not creditable
     against any other payment due under this Agreement.

3.2  RESEARCH FUNDING. In consideration of the license grant and with the
     understanding that the following payments will be used to fund research at
     UNIVERSITY in the laboratory of Drs. Crain and Shen, LICENSEE shall pay
     UNIVERSITY a total of six hundred thousand dollars ($600,000) as follows:

               (a) FIRST PAYMENT: one hundred thousand dollars ($100,000) paid
                   in the first year of this Agreement, which shall be due
                   within thirty (30) days of the Effective Date;

               (b) SECOND PAYMENT: one hundred thousand dollars ($100,000) paid
                   in the first year of this Agreement, which shall be due
                   within thirty (30) days of the sixth (6) month anniversary of
                   the Effective Date;

               (c) THIRD PAYMENT: two hundred thousand dollars ($200,000), paid
                   in the second year of this Agreement, which shall be due
                   within thirty (30) days of the one year anniversary of the
                   Effective Date; and

               (d) FOURTH PAYMENT: two hundred thousand dollars ($200,000), paid
                   in the third year of this Agreement, which shall be due
                   within thirty (30) days of the two year anniversary of the
                   Effective Date.


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<PAGE>   12

     The parties acknowledge and agree that in the event LICENSEE terminates
     this Agreement as provided under Article VIII hereinbelow, then LICENSEE
     shall not be obligated to make any payment under this Section 3.2 that,
     becomes due after such termination. Thus, e.g., if LICENSEE terminates this
     Agreement on the six month anniversary of the Effective Date, then LICENSEE
     shall not be obligated to make the payments of Sections 3.2(a) and (b).

3.3  MILESTONES: MILESTONE PAYMENTS. In further consideration of the rights and
     licenses granted to LICENSEE hereunder, LICENSEE shall make lump sum
     milestone payments to UNIVERSITY upon the first achievement of the
     Milestone Events, as set forth in Table I hereinbelow, with respect to
     Licensed Product.

                                     TABLE 1

<TABLE>
<CAPTION>
      MILESTONE EVENT              MILESTONE PAYMENT           MILESTONE DATE
-----------------------------      -----------------      -----------------------
<S>                                   <C>                 <C>
Initiation of first Phase III           $200,000          4 years from  Effective
studies in the U.S.                                       Date

First NDA filing in the U.S.            $300,000          8 years from Effective
                                                          Date

First NDA approval in the U.S.        $3,000,000          1O Years from Effective
                                                          Date

First approval to market in             $500,000
each Major Country, other than
the U.S.
</TABLE>


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<PAGE>   13

        LICENSEE shall notify UNIVERSITY in writing within thirty (30) days upon
the achievement of each Milestone Event and such Milestone Payment shall be paid
no later than thirty (30) days following achievement of the Milestone Event. All
Milestone Payments under this Agreement shall be made in United States dollars.

        Notwithstanding anything to the contrary, LICENSEE shall be deemed to
have met a Milestone obligation upon timely payment of the Milestone Payment,
regardless of whether the Milestone Event has actually been achieved. Moreover,
in the event LICENSEE meets a Milestone by timely payment of the Milestone
Payment, and then achieves the Milestone Event some time after the Milestone
Date, then the remaining Milestone Dates shall be adjusted into the future by
the same amount of time, up to one year, that it took to achieve the Milestone
Event. For example, if LICENSEE tendered the Milestone Payment associated with
the initiation of first Phase III Studies in the U.S. on the Milestone Date, and
achieved this Milestone Event 4.5 years from the Effective Date, then remaining
Milestone Dates would be adjusted forward as follows: First NDA filing in the
U.S., 8.5 years from Effective Date; First NDA approval in the U.S., 10.5
years. However, if LICENSEE tendered the Milestone Payment associated with the
initiation of first Phase III Studies in the U.S. on the Milestone Date, and
achieved this Milestone Event 5.5 years from the Effective Date, then remaining
Milestone Dates would be adjusted forward as follows: First NDA filing in the
U.S., 9 years from Effective Date; First NDA approval in the U.S., 11 years.

                                   ARTICLE IV

                              ROYALTIES AND REPORTS

4.1  In consideration of the license rights granted to LICENSEE by UNIVERSITY
     hereunder, LICENSEE shall pay to UNIVERSITY annual royalties for each
     Calendar Year on Net Sales of Licensed Product(s) by LICENSEE, its
     Affiliates and Sublicensees in the Territory. Such royalty shall be payable
     based upon the


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     worldwide annual aggregate Net Sales in a Calendar Year of Licensed
     Product(s) at the rates and in the amounts set forth below:

               (a) four percent (4%) of the total aggregate Net Sales of
                   Licensed Product(s) in all countries in the Territory in
                   which the sale of the Licensed Product is covered in whole or
                   in part by a Valid Patent Claim;

               or, in the event that the Licensed Product is not covered by a
               Valid Patent Claim,

               (b) a royalty of two percent (2%) as a Know-How royalty, for each
                   country in the Territory in which the sale of the Licensed
                   product is not covered in whole or in part by a Valid Patent
                   Claim but involves the use of Know-How.

For each country, royalties on Licensed Product(s) at the rate set forth above
shall be payable to UNIVERSITY effective as of the date of First Commercial Sale
in the country. The royalty payable under Section 4.1(a) shall be payable until
the date of expiration of the last applicable Patent Right containing a Valid
Patent Claim in each such country. The royalty payable under Section 4.1(b)
shall be payable for a period of ten (10) years from the date of First
Commercial Sale.

         The royalties payable hereunder shall be subject to the following
         conditions:

                (i)   that only one royalty shall be due with respect to the
                      same unit of Licensed Product;


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                (ii)  that  no royalties shall be due upon the sale or other
                      transfer between LICENSEE and its Affiliates;

                (iii) no royalties shall accrue on the disposition of Licensed
                      Product in reasonable quantities by LICENSEE, Affiliates
                      or its Sublicensees as bona fide samples or as donations
                      to nonprofit institutions or government agencies for
                      non-commercial purposes; and

                (iv)  notwithstanding the above royalty rates, upon LICENSEE's
                      request. the parties agree to discuss in good faith a
                      reduction of such royalty rate in any given country in the
                      event the level of development, patent protection or
                      general commercial environment affects the commercial
                      viability of the Licensed Product under such royalty rate.

4.2  If LICENSEE grants a sublicense under Patent Rights and/or Know-How prior
     to the completion of a Phase 11 clinical trial in support of approval to
     sell the first Licensed Product in the U.S.A., then LICENSEE shall pay to
     UNIVERSITY fifty percent (50%) of Net Proceeds in addition to payments due
     to UNIVERSITY pursuant to Paragraph 4.1 with respect to Net Sales of such
     Sublicensee. If LICENSEE grants a sublicense under Patent Rights and/or
     Know-How after the completion of a Phase II clinical trial in support of
     approval to sell the first Licensed Product in the U.S.A., then LICENSEE
     shall be obligated to make payments to UNIVERSITY pursuant to Paragraph 4.1
     with respect to Net Sales of such Sublicensee, but will not be obligated to
     make additional payments to UNIVERSITY based on Net Proceeds.

4.3  COMPULSORY LICENSES. If a compulsory license is granted with respect to
     Licensed Product in any country in the Territory with a royalty rate lower
     than the

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     royalty rate provided by Section 4.1., then the royalty rate to be paid by
     LICENSEE on Net Sales in that country under Section 4.1 shall be reduced to
     be equal to the rate paid by the compulsory licensee.

4.4  THIRD PARTY PATENTS. If LICENSEE, in its reasonable judgment, is required
     to obtain a license from any third party under any patent in order to
     import, manufacture, use or sell the Licensed Product, and to pay a royalty
     under such license, and the infringement of such patent cannot reasonably
     be avoided by LICENSEE, LICENSEE's obligation to pay royalties under
     Section 4.1 hereof shall be reduced by one-half of the amount of the
     royalty paid to such third party, provided, however, that the royalties
     payable under Section 4.1 hereof shall not be reduced in any such event
     below one-half (1/2) of the amounts set forth in Sections 4.1(a)-(b) above.
     In addition, if LICENSEE is required to pay up-front payments or milestone
     payments to such third party in consideration for such license, then the
     milestone payments under Section 3.3 shall be reduced by one-half of the
     amount of such up-front payments or milestone payments paid to such third
     party, provided, however, that the milestone payments payable under Section
     3.3 hereof shall not be reduced in any such event below one-half (1/2) of
     the amounts set forth in Section 3.3.

4.5  ROYALTY DURING INFRINGEMENT. If there is substantial infringement of the
     Patent Rights by a third party or parties and LICENSEE has commenced
     litigation to abate such infringement, LICENSEE may discontinue payment of
     up to one half of the royalty with respect to sales in the country where
     the infringement occurs, until the infringement ends, after which the
     royalty rate will return to its previous level. Upon successful completion
     of the litigation and receipt by LICENSEE of a monetary award therefor,
     LICENSEE shall reimburse UNIVERSITY those royalties withheld under this
     paragraph 4.5. For the purpose of this paragraph 4.5 "substantial
     infringement" means unit sales which equal at least 10% of


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     LICENSEE's unit sales in the country over any three (3) month period, as
     reported by IMS America Ltd. or another reputable, independent market
     research firm reasonably acceptable to both parties.

4.6  PAID-UP LICENSE. For each country, upon expiration of LICENSEE's obligation
     to pay royalties pursuant to Section 4.1, LICENSEE shall have a fully
     paid-up, non-exclusive license under any Know-How, to make, have made, use
     and sell Licensed Product in that country.

4.7  REPORTS: PAYMENT OF ROYALTY. During the term of the Agreement following the
     First Commercial Sale of a Licensed Product, LICENSEE shall furnish to
     UNIVERSITY a quarterly written report for the Calendar Quarter showing the
     sales of all Licensed Product(s) subject to royalty payments sold by
     LICENSEE, its Affiliates and its Sublicensees in the Territory during the
     reporting period and the royalties payable under this Agreement. Reports
     shall be due on the ninetieth (90) day following the close of each Calendar
     Quarter. Royalties shown to have accrued by each royalty report shall be
     due and payable on the date such royalty report is due. LICENSEE shall keep
     complete and accurate records in sufficient detail to enable the royalties
     payable hereunder to be determined.

4.8  AUDITS.

     (a)  Upon the written request of UNIVERSITY and not more than once in each
          Calendar Year, LICENSEE shall permit an independent certified public
          accounting firm of nationally recognized standing selected by
          UNIVERSITY and reasonably acceptable to LICENSEE, at UNIVERSITY's
          expense, to have access during normal business hours to such records
          of LICENSEE as may be reasonably necessary to verify the accuracy of
          the royalty reports hereunder for any Calendar Year ending not more
          than twenty-four (24) months prior to the date of such request.


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<PAGE>   18

          These rights with respect to any Calendar Year shall terminate two (2)
          years after the end of any such Calendar Year.

     (b)  If such accounting firm correctly concludes that additional royalties
          were owed during such period, LICENSEE shall pay the additional
          royalties within thirty (30) days of the date UNIVERSITY delivers to
          LICENSEE such accounting firm's written report so correctly
          concluding. The fees charged by such accounting firm shall be paid by
          UNIVERSITY unless the audit discloses that the payments payable by
          LICENSEE for the audited period are more than one hundred ten percent
          (110%) of the payments actually made for such period, in which case
          LICENSEE shall pay the reasonable fees and expenses charged by the
          accounting firm.

     (c)  LICENSEE shall include in each sublicense granted by it pursuant to
          this Agreement a provision requiring the Sublicensee to make reports
          to LICENSEE, to keep and maintain records of sales made pursuant to
          such sublicense and to grant access to such records by UNIVERSITY's
          independent accountant to the same extent required of LICENSEE under
          this Agreement.

     (d)  UNIVERSITY shall treat all financial information and other LICENSEE
          information subject to review under this Section 4.8 or under any
          sublicense agreement in accordance with the confidentiality provisions
          of this Agreement, and shall cause its accounting firm to enter into a
          confidentiality agreement with LICENSEE obligating it to retain all
          such financial information in confidence pursuant to such
          confidentiality agreement.


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<PAGE>   19

4.9  PAYMENT AND EXCHANGE RATE. All payments to be made by LICENSEE to
     UNIVERSITY under this Agreement shall be made in United States dollars and
     shall be paid by bank wire transfer in immediately available funds to such
     bank account in the United States designated in writing by UNIVERSITY from
     time to time. In the case of sales outside the United States by LICENSEE,
     the rate of exchange to be used in computing the amount of currency
     equivalent in United States dollars due UNIVERSITY shall be the month-end
     exchange rate applicable for the month in which the sales are recorded.
     Such month-end exchange rate is the exchange rate utilized by LICENSEE in
     its worldwide accounting system and reflects the average exchange rate for
     each month.

4.10 INTEREST ON LATE PAYMENTS. UNIVERSITY reserves the right to charge and
     LICENSEE hereby agrees to pay interest on any overdue amounts owing from
     LICENSEE which are overdue through the fault of LICENSEE, at the rate of
     one-half percent (0.5%) per month calculated from the date any payment was
     due and payable.

                                    ARTICLE V

                        DEVELOPMENT AND COMMERCIALIZATION

5.1  LICENSEE shall use its good faith efforts, to safely and appropriately
     manage at its own cost all scientific, medical and business activities that
     lead to regulatory approval, manufacturing, marketing and sale of Licensed
     Products worldwide.

5.2  Within ninety (90) days of the Effective Date of this Agreement, LICENSEE
     shall provide to UNIVERSITY a proposed schedule for the development of the
     Licensed Product (the "Development Schedule"). LICENSEE shall provide to
     UNIVERSITY an updated Development Schedule on an annual basis during the
     development of Licensed Product.


                                       17
<PAGE>   20

                                   ARTICLE VI

                         CONFIDENTIALITY AND PUBLICATION

6.1  The parties hereby agree to not disclose and to use all reasonable efforts
     to maintain the secrecy of any and all Confidential Information disclosed
     by one party to the other under the terms of this Agreement without the
     express, written consent of the disclosing party, with the exception of the
     following:

     (a)  information which, at the time of disclosure, is available to the
          public;

     (b)  information which, after disclosure, becomes available to the public
          by publication or otherwise, other than by breach of this Agreement by
          the receiving party;

     (c)  information that the receiving party can establish by prior record was
          already known to it or was in its possession or in the possession of
          an Affiliate (as such term is defined below) at the time of disclosure
          and was not acquired, directly or indirectly, from the disclosing
          party;

     (d)  information that the receiving party obtains from a third party;
          provided however, that such information was not obtained by said third
          party, directly or indirectly, from the disclosing party under an
          obligation of confidentiality toward the disclosing party;

     (e)  information that the receiving party can establish was independently
          developed by persons in its employ or otherwise who had no contact
          with and were not aware of the content of the Confidential
          Information; and

     (f)  information that the receiving party is compelled to disclose by a
          court or other tribunal of competent jurisdiction, provided however,
          that in such case the receiving party shall immediately give notice
          to the providing party so that the providing party may seek a
          protective order or other remedy from said court or tribunal. In any
          event, the receiving party shall


                                       18
<PAGE>   21

               disclose only that portion of the Confidential Information that,
               in the opinion of its legal counsel, is legally required to be
               disclosed and will exercise reasonable efforts to ensure that any
               such information so disclosed will be accorded confidential
               treatment by said court or tribunal.

6.2     The receiving party will not disclose any such Confidential Information
        to any person other than to Rs directors, officers or employees, or to,
        directors, officers or employees of an Affiliate and sublicensees, and
        only then if they have a clear need to know such Confidential
        Information in connection with the performance of their professional
        responsibilities.

6.3     The receiving party shall take all reasonable steps, including, but not
        limited to, those steps taken to protect its own information, data or
        other tangible or intangible property that it regards as proprietary or
        confidential, to insure that the Confidential Information is not
        disclosed or duplicated for the use of any third party, and shall take
        all reasonable steps to prevent its officers and employees, or any
        others having access to the Confidential Information, from disclosing or
        making unauthorized use of any Confidential Information, or from
        committing any acts or omissions that may result in a violation of this
        Agreement.

6.4     Title to, and all rights emanating from the ownership of, all
        Confidential Information disclosed under this Agreement shall remain
        vested in the disclosing party. Nothing herein shall be construed as
        granting any license or other right to use the Confidential Information
        other than as specifically agreed upon by the parties.

6.5     Upon written request of the disclosing party, the receiving party shall
        return promptly to the disclosing party all written materials and
        documents, as well as any computer software or other media, made
        available or supplied by the


                                       19
<PAGE>   22

        disclosing party to the receiving party that contains Confidential
        Information, together with any copies thereof, except that the receiving
        party may retain one copy of each such document or other media for
        archival purposes, subject to protection and non-disclosure in
        accordance with the terms of this Agreement

6.6     The receiving party agrees that the disclosure of Confidential
        Information without the express written consent of the disclosing party
        will cause irreparable harm to the disclosing party, and that any breach
        or threatened breach of this Agreement by the receiving party will
        entitle the disclosing party to injunctive relieve, in addition to any
        other legal remedies available to it, in any court of competent
        jurisdiction.

6.7     USE OF CONFIDENTIAL IN INFORMATION. Both parties agree that the
        Confidential Information shall only be used in connection with the
        parties' respective rights and obligations under this Agreement.

6.8     PUBLICATION. During the term of this Agreement, LICENSEE and UNIVERSITY
        each acknowledge the other party's interest in publishing its results to
        obtain recognition within the scientific community and to advance the
        state of scientific knowledge. Each party also recognizes the mutual
        interest in obtaining valid patent protection and in protecting business
        interests and trade secret information. Consequently, either party, its
        employees or consultants wishing to make a publication of the research
        funded by LICENSEE pursuant to this Agreement shall deliver to the other
        party a copy of the proposed written publication or an outline of an
        oral disclosure at least thirty (30) days prior to submission for
        publication or presentation. The reviewing party shall have the right
        (i) to propose modifications to the publication for patent reasons,
        trade secret reasons or business reasons or (ii) to request a reasonable
        delay in publication or presentation in order to protect patentable
        information. If the


                                       20
<PAGE>   23

        reviewing party requests a delay, the publishing party shall delay
        submission or presentation for a period of sixty (60) days to enable
        patent applications protecting each party's rights in such information
        to be filed. Upon expiration of such sixty (60) days, the publishing
        party shall be free to proceed with the publication or presentation. If
        the reviewing party requests modifications to the publication, the
        publishing party shall edit such publication to prevent disclosure or
        trade secret or proprietary business information prior to submission of
        the publication or presentation. In addition, the contributions of the
        parties to the research shall be expressly noted in such publications or
        other public disclosures by acknowledgment or co-authorship, whichever
        is appropriate.

                                   ARTICLE VII
                                     PATENTS


7.1     FILING, PROSECUTION AND MAINTENANCE OF PATENTS. The parties shall
        diligently take all commercially reasonable steps required to maintain
        the Patent Rights in full force and effect, UNIVERSITY shall be
        responsible for the day-to-day activities associated with filing,
        prosecuting and maintaining the Patent Rights. UNIVERSITY agrees to
        consult with and cooperate with LICENSEE to promptly file, prosecute and
        maintain the Patent Rights in the Territory. All filing, prosecution,
        and maintenance decisions with respect to the Patent Rights, including
        without limitation decisions about reexaminations and reissue
        proceedings, shall be made by LICENSEE with the approval of UNIVERSITY,
        such approval not to be unreasonably withheld. All such filing,
        prosecution, and maintenance of the Patent Rights shall be carried out
        by outside patent counsel selected by LICENSEE with the approval of
        UNIVERSITY, such approval not to be unreasonably withheld. Such outside
        patent counsel shall at all times during the term of this Agreement keep
        LICENSEE and UNIVERSITY advised of the status of patent filings and upon
        request of either party shall provide copies of


                                       21
<PAGE>   24

        any papers relating to the filing, prosecution or maintenance of such
        Patent Rights. During the term of this Agreement the parties shall
        cooperate in providing information to assist the outside counsel with
        the patent prosecution of the Patent Rights.

7.2     PATENT COSTS. In consideration of this Agreement, during the term of
        this Agreement LICENSEE shall reimburse UNIVERSITY for the documented
        filing, prosecution, and maintaining costs with respect to the Patent
        Rights which are invoiced by such outside patent counsel (the "Patent
        Costs"). Outside patent counsel shall provide LICENSEE with detailed
        invoices, reasonably satisfactory to LICENSEE, for the Patent Costs.
        LICENSEE shall pay outside patent counsel within thirty (30) days of
        receipt of such invoices. UNIVERSITY shall promptly give notice to
        LICENSEE of the grant, lapse, revocation, surrender, invalidation, or
        abandonment of any Patent Rights licensed to LICENSEE for which
        UNIVERSITY is responsible for the filing, prosecution and maintenance.
        In the event that UNIVERSITY desires to discontinue maintenance or
        prosecution of the Patent Rights, UNIVERSITY shall first agree to assign
        such Patent Rights to LICENSEE at no cost.

7.3     PATENT TERM RESTORATION. The parties hereto shall cooperate with each
        other in obtaining patent term restoration or supplemental protection
        certificates or their equivalents in any country in the Territory where
        applicable to Patent Rights. In the event that elections with respect to
        obtaining such patent term restoration, supplemental protection
        certificates or their equivalents are to be made, LICENSEE shall have
        the right to make the election and UNIVERSITY agrees to abide by such
        election.


                                       22
<PAGE>   25


7.4     INFRINGEMENT.

        (a)     UNIVERSITY and LICENSEE each shall immediately give notice to
                the other of any potential infringement or infringement by a
                third party of any Patent Rights of which they become aware or
                of any certification of which they become aware filed under the
                United States "Drug Price Competition and Patent Term
                Restoration Act of 1984" claiming that Patent Rights covering
                the Licensed Product are invalid or unenforceable or that
                infringement will not arise from the manufacture, use or sale of
                Licensed Product by a third party.

        (b)     LICENSEE as exclusive licensee will have the right to settle
                with the infringer or to bring suit or other proceeding at its
                expense against the infringer in its own name or in the name of
                UNIVERSITY where necessary, after consultation with UNIVERSITY.
                UNIVERSITY shall be kept advised at all times of such suit or
                proceedings brought by LICENSEE. UNIVERSITY may, in its
                discretion, join LICENSEE as party to the suit or other
                proceeding, provided that LICENSEE shall retain control of the
                prosecution of such suit or proceedings in such event.
                UNIVERSITY agrees to cooperate with LICENSEE in its efforts to
                protect Patent Rights, including joining as a party where
                necessary.

        (c)     If LICENSEE does not settle with the infringer or bring suit or
                other proceeding against the infringer, UNIVERSITY may in its
                discretion, bring suit or other proceeding at its expense
                against the infringer, provided however, that UNIVERSITY shall
                first consult with LICENSEE as to whether such act(s) by a third
                party reasonably constitute infringement and whether it is
                commercially advisable to bring such suit or proceeding, as
                reasonably determined by LICENSEE. LICENSEE shall be kept


                                       23
<PAGE>   26

                advised at all times of such suit or proceedings brought by
                UNIVERSITY. LICENSEE may, in its discretion, join LICENSEE as
                party to the suit or other proceeding, provided that UNIVERSITY
                shall retain control of the prosecution of such suit or
                proceedings in such event. LICENSEE agrees to cooperate with
                UNIVERSITY in its efforts to protect Patent Rights, including
                joining as a party where necessary.

        (d)     Each party will bear its own expenses with respect to any suit
                or other proceeding against an infringer. Any recovery in
                connection with such suit or proceeding will first be applied to
                reimburse UNIVERSITY and LICENSEE for their out-of-pocket
                expenses, including attorney's fees. The party controlling the
                suit will retain the balance of any recovery. However, if the
                damages awarded LICENSEE include an amount based on lost sales
                or profit, then LICENSEE shall pay to UNIVERSITY four percent
                (4%) of the award after first subtracting from the award those
                amounts not based on lost sales or profit (such as punitive
                damages including treble damages, e.g.). If the damages awarded
                LICENSEE include an amount based on a reasonable royalty then,
                LICENSEE shall pay to UNIVERSITY twenty percent (20%) of the
                award after first subtracting from the award those amounts not
                based on a reasonable royalty (such as punitive damages
                including treble damages, e.g.).


                                  ARTICLE VIII

                              TERM AND TERMINATION

8.1     TERM AND EXPIRATION. This Agreement shall be effective as of the
        Effective Date and unless terminated earlier pursuant to Section 8.2,
        8.3 or 8.4 below, the terms of this Agreement shall continue in effect
        on a country-by-country basis until expiration date of the last
        obligation of LICENSEE to pay royalty to


                                       24
<PAGE>   27

        UNIVERSITY for the sale of a Licensed Product in that country. Upon
        expiration of this Agreement as to any country due to the expiration of
        the obligation of LICENSEE to pay royalty to UNIVERSITY for the sale of
        a Licensed Product in that country, the licenses hereunder with respect
        to Licensed Product shall become fully paid-up, perpetual licenses.

8.2     TERMINATION FOR CAUSE. This Agreement may be terminated by notice by
        either party at any time during the term of this Agreement:

        (a)     if it is shown by credible evidence that the other party is in
                breach of its material obligations hereunder (including all
                obligations of Licensee to make payments to UNIVERSITY
                hereunder) by causes and reasons within its control and has not
                cured such breach within ninety (90) days after written notice
                requesting cure of the breach; or

        (b)     upon the filing or institution of bankruptcy, liquidation or
                receivership proceedings, or upon an assignment of a substantial
                portion of the assets for the benefit of creditors by the other
                party; provided, however, in the case of any involuntary
                bankruptcy proceeding such right to terminate shall only become
                effective if the party consents to the involuntary bankruptcy or
                such proceeding is not dismissed within ninety (90) days after
                the filing thereof.

8.3     TERMINATION WITHOUT CAUSE. This Agreement may be terminated by LICENSEE
        at any time on fifteen (15) days written notice. Upon such termination
        all right, title and interest in the Patent Rights, Know-How and all
        preclinical and clinical data shall revert to UNIVERSITY and LICENSEE
        shall have no further obligations under this Agreement.


                                       25
<PAGE>   28

8.4     TERMINATION by UNIVERSITY. If LICENSEE has not initiated a Phase III
        clinical trial in the U.S.A. for a Licensed Product before the fourth
        anniversary of the Effective Date, then UNIVERSITY may terminate and the
        licenses granted hereunder by giving notice to LICENSEE FIFTEEN (15)
        days prior to such termination. Upon such termination all right, title
        and interest in the Patent Rights, Know-how and all preclinical data
        shall revert to UNIVERSITY and LICENSEE shall have no further
        obligations under this Agreement.

8.5     EFFECT OF TERMINATION. Expiration or termination of the Agreement shall
        not relieve the parties of any obligation accruing prior to such
        expiration or termination. Any expiration or early termination of this
        Agreement shall be without prejudice to the rights of either party
        against the other accrued or accruing under this Agreement prior to
        termination, including the obligation to pay royalties for Licensed
        Product sold prior to such termination.


                                   ARTICLE IX

                                 INDEMNIFICATION

9.1     INDEMNIFICATION BY LICENSEE. LICENSEE shall at all times during the term
        of this Agreement and thereafter, indemnify, defend and hold harmless
        UNIVERSITY, its trustees, officers, employees and affiliates, from and
        against any and all claim, loss, damage, liability, injury, cost or
        expense, including without limitation expenses of litigation and
        reasonable attorneys' fees, in connection with any claims made or suits
        brought against LICENSEE relating to this Agreement: (i) arising from
        the negligence, willful misconduct, or material breach of this Agreement
        by LICENSEE, its Affiliates, subcontractors, sublicensees, or agents or
        (ii)


                                       26
<PAGE>   29

        arising out of the death of or injury to any person or persons or out of
        any damage to property and resulting from the production, manufacture,
        sale, use, lease, consumption or advertisement of Licensed Product;
        provided however that LICENSEE shall not be obligated to provide
        indemnification hereunder to the extent that any such claim, loss,
        damage, liability, injury, cost or expense results form the gross
        negligence, willful misconduct, or material breach of this Agreement by
        UNIVERSITY.

9.2     INSURANCE. LICENSEE represents and warrants that prior to any clinical
        trials of Licensed Product, LICENSEE shall have liability protection,
        the nature and extent of which is commensurate with usual and customary
        industry practices.

9.3     PROCEDURE. Should UNIVERSITY or any of its officers, agents, parent
        companies, affiliates, or employees (the "Indemnitee") intend to claim
        indemnification under this Article 9, such Indemnitee shall promptly
        notify LICENSEE (the "Indemnitor") in writing of any loss, claim,
        damage, liability or action in respect of which the Indemnitee intends
        to claim such indemnification, and the Indemnitor shall be entitled to
        assume the defense thereof with counsel selected by the Indemnitor and
        approved by the Indemnitee, such approval not to be unreasonably
        withheld; provided, however, that if representation of Indemnitee by
        such counsel first selected by the Indemnitor would be inappropriate due
        to a conflict of interest between such Indemnitee and any other party
        represented by such counsel, then Indemnitor shall select other counsel
        for the defense of Indemnitee, with the fees and expenses to be paid by
        the Indemnitor, such other counsel to be approved by Indemnitee and such
        approval not to be


                                       27
<PAGE>   30

        unreasonably withheld. The indemnity agreement in this Article 9 shall
        not apply to amounts paid in settlement of any loss, claim, damage,
        liability or action if such settlement is effected without the consent
        of the Indemnitor, which consent shall not be withheld unreasonably. The
        failure to deliver notice to the Indemnitor within a reasonable time
        after the commencement of any such action, prejudicial to its ability to
        defend such action, shall relieve such Indemnitor of any liability to
        the Indemnitee under this Article 9, but the omission so to deliver
        notice to the Indemnitor will not relieve it of any liability that it
        may have to any Indemnitee otherwise than under this Article 9. The
        Indemnities under this Article 9, its employees and agents, shall
        cooperate fully with the Indemnitor and its legal representatives in the
        investigation of any action, claim or liability covered by this
        indemnification.

9.4     Except as otherwise expressly set forth in this Agreement, UNIVERSITY
        MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER
        EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
        MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE NON-INFRINGEMENT OF
        THIRD PARTY RIGHTS, AND VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR
        PENDING.


                                    ARTICLE X

                                  MISCELLANEOUS


10.1    FORCE MAJEURE. Neither party shall be held liable or responsible to the
        other party nor be deemed to have defaulted under or breached the
        Agreement for failure or delay in fulfilling or performing any term of
        the


                                       28
<PAGE>   31

        Agreement when such failure or delay is caused by or results from causes
        beyond the reasonable control of the affected party including, but not
        limited to, fire, floods, embargoes, war, acts of war (whether war be
        declared or not), insurrections, riots, civil commotions, strikes,
        lockouts of other labor disturbances, acts of God or acts, omissions or
        delays in acting by any governmental authority or the other party.

10.2    ASSIGNMENT. This Agreement may not be assigned or otherwise transferred
        by either party without the consent of the other party; provided,
        however, that LICENSEE may, without such consent, assign this Agreement
        and its rights and obligations hereunder to its Affiliates or in
        connection with the transfer or sale of all or substantially all of its
        business, or in the event of its merger or consolidation or change in
        control or similar transaction. Any purported assignment in violation of
        the preceding sentences shall be void. Any permitted assignee shall
        assume all obligations of its assignor under this Agreement.

10.3    SEVERABILITY. In the event any one or more of the provisions contained
        in this Agreement should be held invalid, illegal or unenforceable in
        any respect, the validity, legality and enforceability of the remaining
        provisions contained herein shall not in any way be affected or impaired
        thereby, unless the absence of the invalidated provision(s) adversely
        affect the substantive rights of the parties. The parties shall in such
        an instance use their best efforts to replace the invalid, illegal or
        unenforceable provision(s) with valid, legal and enforceable
        provision(s) which, insofar as practical, implement the purposes of this
        Agreement.


                                       29
<PAGE>   32

10.4    NOTICES. Any payment, notice or other communication pursuant to this
        Agreement shall be sufficiently made or given on the date of mailing if
        sent to such party by facsimile on such date, with paper copy being sent
        by certified first class mail, postage prepaid, or by next day express
        delivery service, addressed to it at is address below (or such address
        as it shall designate by written notice given to the other party).

               In the case of LICENSEE:

               Pain Therapeutics, Inc.
               1345 Douglas Street
               San Francisco, CA 94131
               Attn: Mr. Remi Barbier

               In the case of UNIVERSITY:

               Office of Industrial Liaison
               Albert Einstein College of Medicine of Yeshiva University
               Jack and Pearl Resnick Campus
               1300 Morris Park Avenue
               Bronx, NY 10461
               Telephone No. (718) 430-3357
               Fax No. (718) 430-8822

               With copy to:

               Kenneth P. George, Esq.
               AMSTER, ROTHSTEIN & EBENSTEIN
               90 Park Avenue
               New York, NY 10016
               Telephone No. (212) 697-5995
               Fax No. (212) 286-0854

10.5    APPLICABLE LAW/JURISDICTION. This Agreement is acknowledged to have been
        made in and shall be construed, governed, interpreted and applied in
        accordance with the laws of the State of New York, without giving effect
        to


                                       30
<PAGE>   33

        its conflict of laws provisions. The parties shall attempt in good faith
        to amicably resolve any disputes under this Agreement. LICENSEE and
        UNIVERSITY agree to negotiate in good faith a resolution of any dispute
        between them regarding this Agreement. In this regard, the President and
        CEO of LICENSEE and the Director of the Office of Industrial Liaison of
        UNIVERSITY shall meet in person for at least two continuous hours to
        attempt in good faith to resolve the dispute. With respect to such
        disputes, any litigation instituted by LICENSEE shall be brought in a
        state or federal court located in New York, and any litigation
        instituted by UNIVERSITY shall be brought in a state or federal court
        located in New York. Each party hereby irrevocably consents to the
        personal and exclusive jurisdiction and venue of such courts.

10.6    ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
        understanding of the parties as to the subject matter hereof. This
        Agreement may be amended only by a written instrument duly executed by
        both parties hereto.

10.7    HEADINGS. The captions to the Articles and Sections hereof are not a
        part of the Agreement, but are merely guides or labels to assist in
        locating and reading the Articles and Sections hereof.

10.8    INDEPENDENT CONTRACTORS. It is expressly agreed that UNIVERSITY and
        LICENSEE shall be independent contractors with respect to this Agreement
        and that the relationship between the two parties created by this
        Agreement shall not constitute a partnership, joint venture or agency.
        Neither UNIVERSITY nor LICENSEE shall have the authority to make any


                                       31
<PAGE>   34

        statements, representations or commitments of any kind, or to take any
        action, which shall be binding on the other, without the prior consent
        of the party to do so.

10.9    WAIVER. The waiver by either party hereto of any right hereunder or the
        failure to perform or of a breach by the other party shall not be deemed
        a waiver of any other right hereunder or of any other breach or failure
        by said other party whether of a similar nature or otherwise.

10.10   COUNTERPARTS. The Agreement may be executed in two or more counterparts,
        each of which shall be deemed an original, but all of which together
        shall constitute one and the same instrument.

10.11   REPRESENTATIONS AND WARRANTIES. UNIVERSITY hereby represents and
        warrants that: (1) it has the right to enter into this Agreement and to
        grant the licenses contained herein and owns the Patent Rights and
        Know-How licensed hereunder by virtue of assignments from Drs. Crain and
        Shen and (2) no other person or organization presently has any effective
        option or license from UNIVERSITY to manufacture, use, sell or import
        Licensed Product or is presently authorized by UNIVERSITY to use the
        Know-How. Each party warrants and represents to the other that it has
        the full eight and authority to enter into this Agreement, and that it
        is not aware of any impediment, including any charge of infringement of
        patents, which would inhibit its ability to perform the terms and
        conditions imposed on it by such Agreement.


                                       32
<PAGE>   35

10.12   Nothing in this Agreement is or shall be construed as:

        (a)     A warranty or representation by UNIVERSITY that anything made or
                used by LICENSEE under any license granted in this Agreement is
                or will be free from infringement of patents, copyrights, and
                other rights of third parties; or

        (b)     Granting by implication, estoppel, or otherwise any license,
                right or interest other than as expressly set forth herein.

10.13   As of the Effective Date, to the best of UNIVERSITY's knowledge and
        belief, it has advised Licensee in writing of any conditions that may:

        (a)     materially affect pre-clinical/clinical development, regulatory
                approval or commercialization of Licensed Products, or

        (b)     raise reasonable doubts about the safety or utility of Licensed
                Products, including serious or unexpected side effects, toxicity
                or sensitivity reactions related to the clinical use or
                administration of the Licensed Products.

10.14   PUBLICITY. Each party agrees not to issue any press release or other
        public statement, whether oral or written, disclosing the existence of
        this Agreement or any information relating to this Agreement without the
        prior written consent of the other party, provided however, that neither
        party will be prevented from complying with any duty of disclosure it
        may have pursuant to law or government regulation.


                                       33
<PAGE>   36


10.15   USE OF NAMES. Neither party will, without prior written consent of the
        other party, use the name or any trademark or trade name owned by the
        other party, or, owned by an affiliate or parent corporation of the
        other party, in any publication, publicity, advertising, or otherwise.

10.16   NON-SOLICITATION. Except in the event of an initial public offering,
        LICENSEE will not directly or indirectly solicit the general public, or
        UNIVERSITY, its employees, directors, affiliates and all other parties
        related to UNIVERSITY, for any fund raising purposes whatsoever.


               IN WITNESS WHEREOF, the parties intending to be bound have caused
this Agreement to be executed by their duly authorized representatives,
Effective as of the Effective Date.

                                    ALBERT EINSTEIN COLLEGE OF MEDICINE
                                    OF YESHIVA UNIVERSITY



                                    BY: /s/ EMANUAL GENN
                                       -----------------------------------------
                                       EMANUEL GENN
                                       ASSOCIATE DEAN FOR BUSINESS AFFAIRS

                                    DATE:  5/5/98
                                         ---------------------------------------


                                       34
<PAGE>   37

                                     PAIN THERAPEUTICS, INC.



                                     BY: /s/ REMI BARBIER
                                        ----------------------------------------
                                     TITLE: President & CEO
                                           -------------------------------------
                                     DATE:
                                          --------------------------------------


                                       35
<PAGE>   38

                                   APPENDIX A


[*]

[*] Confidential Treatment Requested


                                       36