Exhibit 10.21

                                    AGREEMENT
                                      AMONG
                                INTERCARDIA, INC.
                                   CPEC, INC.
                                       AND
                                    KNOLL AG


         Intercardia, Inc. ("Intercardia") and CPEC, Inc. ("CPEC") (collectively
"Intercardia/CPEC") and Knoll AG ("Knoll") hereby enter into this agreement
("Agreement") intending to be formally bound under the terms and conditions set
forth below relating to the final development, manufacture and marketing of
bucindolol in certain designated territories.

1.       Scope.

         This Agreement reflects the material terms of a Bucindolol License
Agreement ("License Agreement") between the parties granting Knoll the exclusive
right to develop, manufacture and market bucindolol in the Territory for all
uses granted to Intercardia/CPEC under the Bristol Myers Squibb Company ("BMS")
agreement (the "Project"). Intercardia/CPEC shall use their best efforts to [
                   ].  In return, Knoll shall pay milestones and
royalties to CPEC.

2.       Territory.

         The License Agreement shall include worldwide rights for all countries
with the exception of the United States, Puerto Rico and Japan ("Territory").
Knoll shall have the right to sublicense bucindolol in the Territory, provided
however, all sublicensing arrangements shall be arms-length transactions
(arms-length transactions being defined as an agreement entered into by parties
having equal bargaining power with no compulsion either to buy or to sell where
the agreement contains terms reflective of the fair value of the contributions
of each party) and shall reflect the fair market value of bucindolol in the
respective country of the Territory. In case Knoll intends to grant a sublicense
which includes a provision contemplating a quid pro quo, the parties will meet
to determine equitable compensation in favor of CPEC. In addition, royalties,
down payments and other remuneration paid in connection with any sublicense
shall be taken into account in the calculation of CPEC royalties hereunder. Any
sublicense arrangement will terminate simultaneously with any early termination
of the License Agreement.

3.       Reversion.

         If Knoll elects not to, or fails to actively pursue the development or
marketing or sub-licensing of bucindolol in major markets of the Territory,
unless to avoid commercial damages, all

[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.


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rights to bucindolol in any such major market shall revert to Intercardia/CPEC.
The parties agree that major markets of the Territory are the European Community
("EC"), Canada, Australia, New Zealand, South Africa, Mexico, Columbia, Brazil
and Argentina.

4.       Milestones Payable by Knoll to CPEC.

o        $2.0 million upon signing this Agreement.
o        $1.0 million on January 2, 1997.
o        $10.0 million upon bucindolol approval, including pricing approval
         where required, in a major EC member state.
o        $10.0 million one-time payment upon attainment of Net Sales in the
         Territory of $200 million in any consecutive 12-month period.
o        No milestone payment shall be considered an expense of the
         Project, but shall be borne exclusively by Knoll.

5.       Product Improvements.

         Intercardia/CPEC grants Knoll, the exclusive right in the Territory to
bucindolol product improvements (e.g., sustained release formulation, improved
or new indications, formulations and strengths), contingent upon Knoll
reimbursing Intercardia/CPEC for 60% of costs relating to clinical trials and
other tests conducted primarily for benefit of the Territory and 1/3 of all
other development costs which have a worldwide benefit, including any previous
product improvement development costs incurred by Intercardia/CPEC. For example,
with respect to costs relating to clinical trials and other tests conducted and
incurred primarily for the benefit of the Territory, Knoll would reimburse
Intercardia/CPEC for 60% of such costs incurred by Intercardia/CPEC, and
Intercardia/CPEC would reimburse Knoll for 40% of costs incurred by Knoll. Where
the benefits of the trials and costs are worldwide, Knoll would pay 1/3 of such
trials and costs incurred by Intercardia/CPEC and Intercardia/CPEC would
reimburse Knoll for 2/3 of costs incurred by Knoll. However, Knoll would not
reimburse Intercardia/CPEC for any costs where the trials and costs were
conducted and incurred exclusively for the benefit of the United States. The
overall development of product improvements will be conducted and controlled by
Intercardia/CPEC. Knoll will reimburse CPEC for one third of previous sustained
release development costs (which presently total $418,000.00) upon signing this
Agreement, and Knoll will pay its share of future costs on a quarterly basis. In
case Knoll has no interest in an improvement, Intercardia/CPEC shall have no
right to market such improved product in the Territory during the term of this
Agreement unless hereinafter provided otherwise.



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     Intercardia/CPEC and Knoll agree that a sustained release formulation
is a product improvement which should be pursued. Intercardia/CPEC has 
contracted with Jago Pharma AG, a Swiss corporation ("Jago") for the 
development of a sustained release formulation utilizing Jago's 
proprietary Geomatrix technology. Intercardia/CPEC will grant Knoll the 
opportunity to present a proposal regarding the feasibility of utilizing
Knoll's melt extrusion technology for the development of a sustained release 
formulation. By the end of [      ], Intercardia/CPEC and Knoll shall determine
whether to pursue Jago's or Knoll's sustained release formulation technology. 
If Knoll's technology is selected, the parties shall agree upon a binding 
development plan for the Knoll technology which shall include an agreement as 
to reimbursement of certain development costs incurred by Knoll which are 
directly related to bucindolol. If the Knoll melt extrusion technology is 
selected, Knoll shall grant Intercardia/CPEC a license relating to such Knoll 
technology in order to permit Intercardia to use, sell, sublicense and otherwise
market bucindolol using the Knoll technology outside of Knoll's territory, 
provided, however, Knoll shall retain the right to manufacture bucindolol for 
Intercardia/CPEC and its licensees under a separate supply contract. All costs
and penalties related to [        ] of the [   ] contract and all costs 
not previously reimbursed by Knoll to Intercardia/CPEC, shall be allocated 
and paid by Knoll and by Intercardia/CPEC in accordance with the provisions 
of the prior paragraph.

     If Knoll decides not to particpate in further developement of the Jago
technology (beyond the preceding paragraph), and Intercardia/CPEC decide not
to participate in the development of bucindolol utilizing Knoll's melt 
extrusion technology ("Melt/Bucindolol"), Knoll shall have the right to pursue 
developement of Melt/Bucindolol at its own expense. Knoll shall accumulate the 
costs directly associated with the development of Melt/Bucindolol and such 
developement costs shall become a deductible item in calculating the royalties 
due to CPEC for sales resulting from Melt/Bucindolol. Such deductions shall 
be limited to [ ]% ([   ] percent) of the cumulative development costs of 
Melt/Bucindolol and shall not exceed [ ]% ([   ] percent) of the royalty due 
to CPEC for Melt/Bucindolol sales, prior to such deduction for any royalty 
period. For example, if the total development cost of Melt/Bucindolol is 
$[   ] million, Knoll will be entitled to recover $[ ] million ([ ]% 
of $[   ] million) of this cost from future royalties due on sales 
of Melt/Bucindolol. The maximum which shall be recoverable by Knoll in 
any period (e.g. a quarter) will be limited to [ ]% of the royalty 
which would have been payable to CPEC prior to this deduction. For example, 
if CPEC's royalty for the first period of Melt/Bucindolol sales is $[ ] 
million prior to this deduction, Knoll will recover $[  ] million of 
Melt/Bucindolol development costs ([ ]% of $[  ] million) and $[ ] million 
($[   ] million less $[ ] million) will be paid to CPEC, leaving $[ ] million 
of the $[ ] million due to Knoll. If CPEC's royalty for the second period of 
Melt/Bucindolol sales is $[   ] million prior to this deduction, Knoll will 
recover $[ ] million ($[ ] million less the $[ ] million already paid) and 
CPEC's royalty will be $[ ] million ($[   ] million less $[ ] million). No 
deduction for Melt/Bucindolol costs will be made from any royalty from any 
sales that are not derived from Melt/Bucindolol technology.

     If Knoll decides not to participate in furhter development of the 
Jago technology, and Intercardia/CPEC develops a sustatined release formulation
with Jago, Intercardia/CPEC shall be entitled to sell directly or through a
third party its sustained release formualation in Knoll's Territory at such 
time as the first generic sustained relase formulation is approved in an EC 
member state. At such time after Knoll has met its obligations under the second
paragraph of this Section 5, and after Knoll notifies Intercardia/CPEC in 
writing that it does not intend to sell directly or through a third party or
to develop a sustained release formulation, Knoll's right to sustained release
formulations shall terminate and Knoll's oblgiation to reimburse 
Intercardia/CPEC for additional sustatined release developoment costs shall 
terminate.

    

[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.

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         Intercardia/CPEC and Knoll shall mutually agree to any other line
extensions to be included under the License Agreement, if any.

6.       Advisory Committee.

         Intercardia/CPEC and Knoll shall create a committee consisting of equal
representation from Knoll and Intercardia/CPEC ("Advisory Committee") consisting
of not more than 4 members each. The role of the Advisory Committee will be to
discuss, review and advise the parties regarding the development and clinical
trials of bucindolol in the Territory. The Advisory Committee shall not have any
responsibility or authority to manage operations. The Advisory Committee shall
meet twice a year. Each party shall be responsible for its own time and travel
expenses incurred in conjunction with the Advisory Committee.

         The Advisory Committee shall be dissolved upon the later to occur of
the following: (i) one year after bucindolol is approved in an EC member state,
(ii) upon the approval of the last product improvement in process, or (iii) upon
discontinuance of all product improvement efforts. Each party to this Agreement
shall designate its advisory committee members and such members shall meet for
the first time not later than three months after the date of execution of this
Agreement.

7.       Worldwide Committee.

         Intercardia/CPEC will establish a worldwide development and scientific
marketing information exchange committee of which Intercardia/CPEC, its U.S.
partner (Astra Merck) and Knoll will be members ("Worldwide Committee").

[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.

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         The Worldwide Committee will exchange information regarding the
worldwide scientific coordination of bucindolol activities. The Worldwide
Committee shall not have any responsibility or authority to manage operations.
Each party shall be responsible for its own time and travel expenses incurred in
conjunction with the Worldwide Committee. The Worldwide Committee shall meet not
less than once a year.

8.       Phase III(b) and Phase IV Clinical Trials.

         The overall clinical program (Phase III(b) and Phase IV) in the
Territory will be conducted and controlled by Knoll. Within sixty days after the
first meeting of the Advisory Committee, Knoll will present a clinical trial
plan to Intercardia/CPEC which shall be updated and revised at least on an
annual basis. Knoll shall report to the Advisory Committee on the progress of
the clinical studies not less than twice annually.

         All clinical study protocols shall be forwarded by Knoll to
Intercardia/CPEC for information at least 30 days before the start of such
studies. It is agreed that Intercardia/CPEC shall within three weeks notify
Knoll if it has substantial concerns regarding the study protocols. In such case
the parties shall discuss the concerns. It is acknowledged that Intercardia/CPEC
and Knoll must agree on all studies performed in the Territory which have an
impact on worldwide positioning of bucindolol, the safe use of bucindolol and
the achievement or maintenance of optimal worldwide labeling of bucindolol.
Final decision authority over clinical trials and other studies which could
reasonably be determined to affect international registrations shall be made by
Intercardia/CPEC. Intercardia/CPEC shall not, however, be entitled to block
registration studies which may be required by a registration authority in the
Territory.

9.       Regulatory.

         Knoll shall compile the registration dossiers, submit all applications
for marketing authorizations and Knoll shall be the holder of the marketing
authorizations in the Territory. Intercardia/CPEC shall provide to Knoll all
data and documents to which they have access in order to support the compilation
of the dossier and the subsequent authorizations. Intercardia/CPEC shall have a
permanent and irrevocable right to promptly receive copies of all documents sent
to or received from regulatory authorities by Knoll or its agents. Knoll shall
have a permanent and irrevocable right to promptly receive copies of all
documents sent to or received from regulatory authorities by Intercardia/CPEC or
its agents.

10.      Trademark.

         Intercardia/CPEC shall own and maintain any trademarks for bucindolol.
Knoll shall bear 1/3 of trademark costs and related expenses for activities
which have world-wide benefit. For example, Knoll shall bear 1/3 of the costs of
generating and

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market testing trademark candidates incurred by Intercardia/CPEC prior or
subsequent to the execution of this Agreement. Knoll shall be responsible for
60% and Intercardia for 40% of trademark costs and related expenses which are
incurred solely for the benefit of the Territory. For example, trademark
registration and maintenance costs and related expenses shall be paid 60% by
Knoll and 40% by Intercardia/CPEC in the Territory and 100% by Intercardia
outside the Territory. Knoll shall reimburse Intercardia/CPEC within 30 days of
receipt of invoices documenting any such trademark costs or related expenses.

11.      Certain Costs.
   

         The parties have agreed to budgets relating to certain costs incurred
by the parties (i) prior to the first commercial sale of bucindolol in three
major EC member states (the "Launch") and (ii) for the period ending twelve full
calendar months subsequent to the Launch of bucindolol in three major EC member
states (the "Launch Year"). The parties agree that the budget for expenses
incurred through the end of the Launch Year in connection with Phase III(b) and
Phase IV clinical studies, which are anticipated to begin in 1997 and to
continue through [ ], is estimated to be up to $25,000,000. Knoll shall bear 
60% of such actual expenses and Intercardia/CPEC shall bear 40% of such 
actual expenses (but Intercardia/CPEC's share of expenses shall not exceed 
$10,000,000). In addition, the parties agree that the budget for sales 
and marketing expenses incurred prior to Launch, which are anticipated 
to be expended during [ ] and [ ], is estimated to be up to 
$10,000,000. Knoll shall bear 60% of such actual expenses and Intercardia/CPEC 
shall bear 40% of such actual expenses (but Intercardia/CPEC's share of 
expenses shall not exceed $4,000,000). Finally, the parties agree that the 
budget for sales and marketing expenses incurred during the Launch Year, 
anticipated to be the year [ ], is estimated to be up to 
$20,000,000. Knoll shall bear 60% of such actual expenses and Intercardia/CPEC 
shall bear 40% of such actual expenses (but Intercardia/CPEC's share 
of expenses shall not exceed $8,000,000). If actual expenses for any of the 
budgets exceeds the amount stated in this paragraph, Knoll shall bear 100% 
of such actual additional expenses.
    

         If additional minor clinical or preclinical trial expenses are required
in order to complete a registration in the Territory, such expenses shall be
born under the Phase III(b) and Phase IV clinical trial budget previously
referenced. For all periods subsequent to the Launch Year, all revenues and
expenses shall be accounted for under the terms and conditions set forth in
Section 13 Royalties.

         Costs for development and clinical trial studies incurred prior to the
end of the Launch Year shall include actual external/outside and internal costs,
directly related to the conduct of such clinical trials, but excluding general

[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.

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administrative, corporate and affiliate overhead or reserves, in accordance with
a jointly approved budget, which initial budget shall be prepared by Knoll and
presented to Intercardia/CPEC within 60 days after the first meeting of the
Advisory Committee.

         It is expected that both parties will incur expenses approved in the
budget. At the end of each calendar quarter, each party will total all such
expenses incurred by it during the quarter and submit a detailed report to the
other party itemizing such expenses. All amounts will be converted to U.S.
dollars using a mutually agreed upon exchange rate. The net amount owed will be
paid to the other party in U.S. dollars within 30 days after the end of the
quarter.

12.      Sales and Marketing.

         Knoll shall be responsible for all sales and marketing activities and
expenses in the Territory. All sales and marketing charges will be based on
actual costs incurred and shall not include general administrative, corporate or
affiliate overhead or reserves.

         Subsequent to the first commercial sale of bucindolol in an EC member
state ("Product Launch"), Knoll shall update Intercardia/CPEC on the progress
and status of bucindolol sales activities in the Territory, including an
analysis of sales and expenses, at meetings to be held not less than twice per
year. Knoll shall submit an annual budget including the planned sales force
allocation and costs, to Intercardia/CPEC for review and comment prior to the
beginning of each year.

13.      Royalty.

         Knoll shall pay to CPEC a royalty for the use of the license and
trademarks of bucindolol in the Territory. The royalty for all periods
subsequent to the end of the Launch Year shall be equal to 40% of the net result
of (1) Net Sales and other collaborative revenue (e.g., a payment by a
sublicensee or royalties received from agents or from third parties ("Other
Collaborative Revenue")) less (2) cost of goods sold, sales and marketing
expenses (including costs for samples not previously deducted as an expense,
mutually agreed upon sales force allocation, and other bucindolol related
promotional and educational expenditures), post-launch clinical trials, third
party royalties (including any royalty payable to BMS or Jago Pharma AG) and
distribution costs (including freight, insurance and packaging material for
shipment of bucindolol). If the royalty calculation, as set forth in the
preceding sentence, results in a negative amount for any period, then CPEC shall
pay to Knoll such amount within 30 days after the end of the quarter, and Knoll
shall not owe CPEC a royalty payment for such period.

         The royalty payable by Knoll to CPEC during the Launch Year shall be
equal to 40% of the net result of (1) Net Sales and Other Collaborative Revenue
less (2) cost of goods sold, third party royalties and distribution costs.

         Net Sales shall mean the total amount invoiced by Knoll or its
affiliates or sublicensees, for sales of licensed product

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less commission, discounts, returns and return allowances, sales, use or
value-added taxes, duties and other credits or allowances shown on the invoices;
provided, however, Net Sales shall with respect to unaffiliated third parties
include the sales amount to such unaffiliated third parties or agents (and not
the value of resales by such third parties or agents) and royalties payable to
third parties in connection with sales by unaffiliated third parties or agents
shall be a deductible expense. Expenses shall be based on actual costs incurred
and shall not include general administrative, corporate or affiliate overhead or
reserves. Each party shall be responsible for its own taxes on income. The
royalty payable to CPEC will be converted to U.S. dollars using a mutually
agreed upon exchange rate and shall be paid in U.S. dollars within 30 days after
the end of the quarter. Taxes and other duties which are mandatorily payable by
Intercardia/CPEC in the Federal Republic of Germany and which must be remitted
by Knoll for Intercardia/CPEC's account and for which Knoll is legally liable
shall be withheld and remitted by Knoll on behalf of Intercardia/CPEC. In such
cases, Knoll shall send Intercardia/CPEC the receipts for such payments. All
payments to Intercardia/CPEC shall be net of withholding taxes, if applicable.
As long as legally permitted, value added tax shall not be invoiced as a
separate item.

         Exhibit A illustrates the calculation of royalties payable to CPEC
under this Agreement.

14.      Reports.

   
         During the term of this Agreement, Knoll will maintain accounting
systems which will report Net Sales and Project expenses and which are capable
of accurately calculating the royalties due to CPEC pursuant to this Agreement
on a country-by- country basis. Knoll represents that is Executive Information
System ("EIS") currently collects all information necessary to accurately
calculate the royalty. Knoll shall keep the Chief Financial Officers of
Intercardia and CPEC informed of any significant changes to the EIS or other
accounting system used to track the royalty information.
    

         Within 15 working days after the end of each month, Knoll shall report
to Intercardia/CPEC monthly Net Sales amounts and units on a country-by-country
basis.

         Within 30 calendar days after the end of each quarter, Knoll shall send
Intercardia/CPEC a report detailing the results of such quarter. This report
shall detail the calculation of the royalty payment, with an analysis of Net
Sales and deductible expenses on a country-by-country basis. This quarterly
report shall be certified as true and correct by Knoll's Chief Financial
Officer.

   
    

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         Within 60 working days after the end of each calendar year, Knoll shall
issue a full report to Intercardia/CPEC detailing the calculation of the royalty
payments for the past year, including an analysis for the calculation on a
country-by-country basis.

         Any changes from the previously submitted quarterly reports shall be
explained in detail. This annual report shall be certified as true and correct
by Knoll's Chief Financial Officer.

         Upon reasonable advance notice, Intercardia/CPEC shall be entitled to
audit Knoll's accounting systems, Project expenses and components of Knoll's
royalty calculation on an aggregated Territory or on a country-by-country basis.
Knoll will cooperate and assist in such audits as appropriate. If the results of
such audit indicate that Knoll has underpaid its royalty obligation by 5% or
more for any 12 month period examined, Knoll shall bear the expenses of such
audit. Upon completion of the audit, if the audit reveals an underpayment or
overpayment of royalties, such underpayment or overpayment shall be paid to the
party owed such amount within 30 days of such audit. Any such underpayments or
overpayments shall accrue interest as of the date due, calculated at the prime
interest rate quoted in the Wall Street Journal for such period plus three
percent.

15.      Manufacturing.

         The Advisory Committee shall advise the parties as to the recommended
manufacturer of bucindolol for the Territory. Knoll shall have the right to
choose to manufacture the active ingredient and the final drug product for sale
in the Territory or to choose a third party outside manufacturer as long as the
price, capability and other terms are competitive with other third party
manufacturers. Additionally, Intercardia/CPEC and its U.S. partner intend to
out-source manufacturing and would consider Knoll as a possible additional
manufacturer for the U.S. market.

16.      Term.

         The term of the License Agreement will be 15 years after the first
commercial sale with respect to each country in the Territory, subject to two
additional 5 year renewals at Knoll's option. At the termination of the second
five year renewal period with respect to each country in the Territory, Knoll
shall retain the rights to registrations and know how owned by Knoll.
Intercardia/CPEC shall retain ownership of all trademarks. At the termination of
the second five year renewal term, Intercardia/CPEC shall license to Knoll the
Intercardia/CPEC trademarks which are the subject of this Agreement for a [ ]%
royalty on net sales.

[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.

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         If Knoll declines to license the Intercardia/CPEC trademarks which are
the subject of this Agreement, Knoll shall transfer to Intercardia/CPEC
ownership of all the exclusive rights to its registrations, trade secrets and
know how relating to bucindolol, and Intercardia/CPEC shall pay to Knoll a [ ]%
royalty on net sales. During the term of the License Agreement, including all
extensions, whether or not exercised, Knoll shall not sell bucindolol except
under the terms of the License Agreement.

17.      Early Termination.

         Knoll shall have the right to terminate the License Agreement at any
time prior to the termination of the BEST Study and within 60 days after the
BEST Study's primary end-point results are reported in writing to Knoll. Knoll
shall not receive any refund of milestone or development payments previously
made to Intercardia/CPEC. Knoll will cooperate in transferring all on-going
clinical trials, ownership of any materials and applications filed with any
regulatory authorities and other information to Intercardia/CPEC, and
Intercardia/CPEC will assume ownership of all such materials and information
relating to bucindolol.

18.      Expenses.

         Intercardia/CPEC and Knoll shall each bear their respective legal,
accounting, and other expenses associated with this Agreement.

19.      Announcement.

         Upon completion and signing of this Agreement by all parties thereto, a
public announcement shall be made which is acceptable to Knoll and
Intercardia/CPEC.

20.      Actions Upon Signing.

         Upon completion and signing of this Agreement by all parties thereto,
the Advisory Board shall be established and upon completion of its
recommendations, Knoll will diligently proceed to conduct clinical trials in the
Territory in accordance with this Agreement; Knoll will make initial payments to
CPEC as set forth in this Agreement; and Knoll and Intercardia/CPEC will
commence the accrual and payment sharing of costs as set forth in this
Agreement.


[ ] CONFIDENTIAL TREATMENT REQUESTED; CERTAIN INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SEC.

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         The parties shall, upon execution of this Agreement, proceed to prepare
a final License Agreement containing terms typically found in similar
pharmaceutical industry license agreements. The parties agree that the material
terms, conditions and provisions of such License Agreement are embodied in this
Agreement and such material terms shall be enforceable by any party hereto.


CPEC, INC.                                           INTERCARDIA, INC.


By:                                 By:
    Clayton I. Duncan                           Clayton I. Duncan
    President and                                        President and
    Chief Executive Officer                     Chief Executive Officer



KNOLL AG


By: 
    Dr. Wuppermann
    Dr. Biesalski, Counsel
    
              (Print or Type Name)

Title:

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