<PAGE>
 
                                                                   EXHIBIT 10.27



================================================================================



                               LICENSE AGREEMENT

                                    between

                             U.S. BIOSCIENCE, INC.

                                      and

                                SCHERICO, LTD.


                         DATED AS OF NOVEMBER 6, 1997



================================================================================
<PAGE>
 
<TABLE>
<CAPTION>
                         TABLE OF CONTENTS             PAGE
              ---------------------------------------  ----
<S>           <C>                                      <C>
 
              Recitals...............................    1
 
ARTICLE 1     Definitions............................    2
 
ARTICLE 2     Rights Granted.........................    7
 
ARTICLE 3     Obligations of the Parties.............   13
 
ARTICLE 4     Up-Front Payment/Royalty/Consulting Fee   19
 
ARTICLE 5     Promotion and Marketing................   21
 
ARTICLE 6     Confidentiality........................   22
 
ARTICLE 7     Additional Documents...................   24
 
ARTICLE 8     Indemnity/Insurance....................   24
 
ARTICLE 9     Breach/Remedies........................   26
 
ARTICLE 10    Recalls/Adverse Reactions..............   26
 
ARTICLE 11    Licensor's Representations.............   31
 
ARTICLE 12    Term/Termination.......................   31
 
ARTICLE 13    Post-Termination Obligations...........   34
 
ARTICLE 14    Independence of Parties................   36
 
ARTICLE 15    Non-Waiver.............................   37
 
ARTICLE 16    Assignment.............................   37
 
ARTICLE 17    Severability...........................   38
 
ARTICLE 18    Governing Law-Arbitration..............   38
 
ARTICLE 19    Notices................................   39
 
ARTICLE 20    Amendment..............................   40
 
ARTICLE 21    Government Approvals...................   40
 
ARTICLE 22    Consents and Approvals.................   41
 
ARTICLE 23    Press Releases/Announcements...........   41
</TABLE>
<PAGE>
 
                               INDEX OF ANNEXES
                               ----------------



ANNEX I        Patent Rights

ANNEX II       Territory
<PAGE>
 
                               INDEX OF EXHIBITS
                               -----------------



Exhibit 1.12   Product Specification

Exhibit 2.3    Fully Absorbed Cost
<PAGE>
 
                               LICENSE AGREEMENT
                               -----------------


     Agreement made as of the 6th day of November, 1997 (the "Effective Date")
between U.S. BIOSCIENCE, INC., a company organized and existing under the laws
of the State of Delaware, with offices at One Tower Bridge, 100 Front Street,
4th Floor, West Conshohocken, Pennsylvania 19428 (hereafter "LICENSOR"), and
SCHERICO, LTD., a company organized and existing under the laws of Switzerland,
with offices at 2000 Galloping Hill Road, Kenilworth, New Jersey 07033 acting on
its own behalf and on behalf of its Affiliates (as hereafter defined)
(collectively "LICENSEE").

                                  WITNESSETH
                                  ----------

     WHEREAS, LICENSOR has rights relating to a pharmaceutical product known as
Ethyol(R) (amifostine) which is being developed by Licensor for use in reducing
toxicities of chemotherapeutic cancer treatments and as a radioprotective agent;
and

     WHEREAS, LICENSOR has rights relating to a pharmaceutical product known as
NeuTrexin(R) (trimetrexate glucuronate for injection) which is being developed
by Licensor for use in treating Pneumocystis carinii pneumonia ("PCP") and as an
anti-cancer agent; and

     WHEREAS, LICENSOR and LICENSEE on February 14, 1992 entered into a License
Agreement that grants LICENSEE the right to market Ethyol in certain countries
in South America and Asia; and
<PAGE>
 
     WHEREAS, LICENSOR wishes to have LICENSEE develop and market Ethyol and
NeuTrexin in certain additional territories, upon the terms and conditions
specified herein.

     NOW, THEREFORE, in consideration of the mutual covenants and undertakings
hereafter set forth, the parties hereto agree as follows:

                                   ARTICLE 1
                                  DEFINITIONS
                                  -----------
     As used in this Agreement, the following terms shall have the following
meanings:

     1.1  "Affiliate/s" of the relevant party hereto means any corporation or
other business entity (currently existing or later established during the term
of this Agreement) controlling, controlled by or under common control with such
party.  For purposes hereof, the term "control" (including the terms
"controlling", "controlled by" and "under common control with") means the
possession, direct or indirect, of the power to direct or cause the direction of
the management policies of a person or entity (whether incorporated, not
incorporated or a partnership) through the ownership of voting securities or
voting rights by contract or otherwise.

     1.2  "Cost-of-Goods" means the cost to LICENSEE or its designees of a
Product supplied by LICENSOR pursuant to Article 2.3 hereof.

     1.3  "Force Majeure" means acts or actions beyond the reasonable control of
the parties, including but not limited to 

                                       2
<PAGE>
 
strikes or other labor disputes, riots, lockouts, civil commotions, war, actions
or inactions of government, fire, acts of God, flood, embargo, or any other
cause or unforeseeable supervening event of whatsoever nature (including
shortages of labor and materials).

     1.4  "Fully Absorbed Cost" has the meaning set forth on EXHIBIT 2.3 hereto.

     1.5  "Gross Margin" means the amount remaining after deducting from Net
Sales the Cost-of-Goods and the royalty and consulting fee payable to LICENSOR
under Article 4.1.C hereof.

     1.6  "Health Registration Dossier" means a regulatory dossier prepared for
a Product for filing with the Committee for Proprietary Medicinal Products, the
United States Food and Drug Administration, the Canadian Health Protection
Board, or any other country mutually acceptable to LICENSOR and LICENSEE.

     1.7  "Improvement/s" shall mean with respect to a Product, any improvement
in (i) existing pharmaceutical and any new pharmaceutical formulations and
presentations; (ii) mode of delivery or new delivery system(s); (iii) additional
indications; (iv) new dosage; (v) changes in manufacturing procedure/production
monograph; or (vi) shelf-life extension. Over-the-counter versions of a Product
and related improvements as defined in items (i) through (vi) shall also be
deemed to be "Improvements" for purposes of this Agreement.

     1.8  "Know-How" with respect to a Product and/or Improvements shall include
but shall not be limited to all

                                       3
<PAGE>
 
confidential and proprietary processes, specifications, formulae, techniques,
practices and technical data relating to formulation and packaging; existing
analytical and clinical data, studies and procedures; existing directions and
specifications for the proper transformation, compressing, packaging, storing,
handling and transporting and the methods and procedures of testing production
batches.

     1.9  "Net Sales" means the gross invoiced value charged by LICENSEE or its
designees (e.g., Affiliates, sub-licensees, distributors) for Products in the
Territory to independent third parties less sales and similar taxes; returns;
allowances; duties; freight and shipping insurance charges; ordinary trade,
quantity and cash discounts; and government mandated rebates. Any sale of a
Product between or among LICENSEE and its Affiliates, sub-licensees or
distributors for resale, shall be excluded from the computation of Net Sales,
but Net Sales shall include any subsequent sale to an independent third party by
LICENSEE, or by any of LICENSEE's Affiliates, sublicensees or distributors.  Net
Sales shall include commercial use by LICENSEE or its designees (i.e.,
Affiliate, sub-licensees, distributors) and shall be calculated at the fair
value of the commercial use by LICENSEE or such designee.  For purposes of
determining whether LICENSEE has the right to manufacture a Product pursuant to
Section 2.1 hereof, duties; freight; and shipping insurance shall not be
deducted in calculating Net Sales.

                                       4
<PAGE>
 
     1.10 "Patent Rights" means rights under the patents and patent applications
listed in ANNEX I hereto and to any foreign counterparts thereof in the
Territory in which LICENSOR or any of its Affiliates has any right, title,
interest, or control, or hereafter obtains such, to the extent of LICENSOR's
interest therein (and to the extent acquired from third parties, which LICENSOR
shall have the right to license for purposes of this Agreement), including,
without limitation, any and all reissues, extensions (or other governmental
actions in respect of such patents or patent applications which provide
exclusive rights to the patent holder in the patented subject matter beyond the
original patent expiration date), substitutions, confirmations, registrations,
revalidations, additions, continuations, continuations-in-part or divisions of
or to any of the foregoing which are hereafter granted in the Territory.  Patent
Rights shall include all Patent Rights to Improvements in the Territory and any
and all patent applications, issued patents, foreign counterparts, and the like
(including, without limitation, any and all reissues, extensions (or other
governmental actions in respect of such patents or patent applications which
provide exclusive rights to the patent holder in the patented subject matter
beyond the original patent expiration date), substitutions, confirmations,
registrations, revalidations, additions, continuations, continuations-in-part or
divisions of or to any of the foregoing which are hereafter granted in the

                                       5
<PAGE>
 
Territory and which claim Improvements to a Product.  From time to time
hereunder, LICENSOR shall update ANNEX I.

     1.11 "Product" means any product containing as its sole active ingredient
Ethyol(R) (amifostine) or NeuTrexin(R) (trimetrexate glucuronate for injection)
and any Improvements thereto, as further described in the Product
Specifications.  The term "Product" also shall include any pharmaceutical
product containing Ethyol(R) (amifostine) or NeuTrexin(R) (trimetrexate
glucuronate for injection) in combination with another active ingredient,
including combination packages containing separate active ingredients, in each
case, subject to the agreement of the parties in writing as to the method for
allocating to Net Sales the Product portion of the combination and any other
terms and conditions applicable to such combination product under this
Agreement.  The terms "Product Ethyol" and "Product NeuTrexin" are used in this
Agreement to identify a Product with specificity.

     1.12  "Product Specifications" means the general specifications for a
Product set forth as EXHIBIT 1.12 hereto, as such may be modified to reflect an
Improvement.  The Product Specifications also shall be reasonably supplemented
and/or modified from time to time to the extent required by any regulatory
authority in the Territory with respect to obtaining or maintaining a Regulatory
Approval, and may otherwise be modified only by the written agreement of
LICENSEE and LICENSOR. The Product Specifications and any supplements or
modifications

                                       6
<PAGE>
 
thereto shall be documented in such reasonable level of detail as is customary
in the pharmaceutical industry.

     1.14 "Territory" means the countries listed on ANNEX II attached hereto and
made a part hereof, as such may be expanded in accordance with Article 2.9
hereof or reduced pursuant to Article 12.4 hereof.

     1.15 "Trademark" means the trademark Ethyol(R) or the trademark
NeuTrexin(R) and "Trademarks" means the trademarks Ethyol(R) and NeuTrexin(R),
or, if for any reason either such name is not available or otherwise appropriate
in a particular country, any substitute or additional trademarks selected by
LICENSEE, after consultation with LICENSOR, to promote, market and sell a
Product in a country in the Territory.

                                   ARTICLE 2
                                RIGHTS GRANTED
                                --------------

     2.1    LICENSOR hereby grants to LICENSEE the exclusive right to utilize
such rights as are held by LICENSOR to develop, use, promote, market and sell
(directly or indirectly) each Product in the Territory pursuant to the Know-How,
Patents and Improvements. LICENSEE shall have the right to manufacture a Product
in bulk or finished form if LICENSEE's Gross Margin on such Product is less than
71% during any consecutive twelve (12) month period; in such event, LICENSEE
shall have the right, but not the obligation, for the balance of the term of
this Agreement, to manufacture (or have manufactured) such Product in accordance
with this Agreement, directly or indirectly through LICENSEE's Affiliates

                                       7
<PAGE>
 
anywhere in the world for sale in the Territory, or through third parties to be
previously approved by LICENSOR in writing, which approval shall not be
unreasonably withheld.  Insofar as permitted as of the Effective Date under any
existing license agreements held by LICENSOR or its Affiliates, LICENSEE shall
have the right to sub-license its rights under this Agreement to any third
party/ies in the Territory, subject to LICENSOR's written approval, which
approval shall not be unreasonably withheld.  During the period that LICENSOR is
manufacturing a Product for LICENSEE hereunder, if LICENSEE's Gross Margin on
such Product is less than 71% during any consecutive three (3) month period,
LICENSEE shall so advise LICENSOR and shall provide to LICENSOR reasonable
documentation supporting its position that its Gross Margin on such Product is
less than 71%.

     2.2    LICENSOR agrees and shall cause its Affiliates to agree not to grant
any rights to a Product in the Territory to any third party other than LICENSEE,
except that LICENSOR may manufacture or cause a third party to manufacture
either or both Products inside the Territory.

     2.3    Except as provided in Article 2.1 and until such time, if ever, that
LICENSEE manufactures a Product as provided in Article 2.1,  LICENSOR shall
supply (either directly or through a third party manufacturer) LICENSEE's
requirements of such Product in accordance with a Supply Agreement to be entered
into by the parties on reasonable terms, which are normal and customary in the
pharmaceutical industry.  Under any such supply agreement

                                       8
<PAGE>
 
LICENSOR shall warrant that the Product that is the subject of such agreement
when sold by LICENSOR to LICENSEE for the Territory will meet the Product
Specifications for such Product. The price of a Product to LICENSEE shall be
LICENSOR's or its Affiliates' Fully Absorbed Cost plus twelve percent (12%) or
"invoiced cost". The term "invoiced cost" shall mean that price at which
LICENSOR or its Affiliate(s) purchase a Product in finished form from
independent third parties; provided however that "invoiced cost" shall not
exceed LICENSOR's then current Fully Absorbed Cost. In the event that the price
at which LICENSOR purchases a Product in finished form from an independent third
party is more than LICENSOR's then current Fully Absorbed Cost, LICENSOR shall
have the right to discontinue supply of such Product for LICENSEE, subject to
LICENSOR's obligation to continue supply of such Product for LICENSEE for a
reasonable period of time to allow LICENSEE to qualify a manufacturing facility
to manufacture such Product.

     If LICENSOR's ability to supply LICENSEE's requirements of a Product should
be impaired for any reason, including Force Majeure, LICENSOR shall promptly
provide written notice to LICENSEE of this fact and the parties shall meet in
good faith to discuss an appropriate solution.

     2.4    As soon as it is reasonably feasible, but no later than the date of
health registration filing under a New Drug Application or its foreign
equivalent, of a Product utilizing any Improvements in the United States, Japan,
or in any country which

                                       9
<PAGE>
 
is now or later becomes a member of the European Community, LICENSOR agrees to
disclose to LICENSEE, to the extent it shall have the right to do so during the
term of this Agreement or any extensions thereof, all Improvements to such
Product for the Territory. Such Improvements will be made available on an
exclusive and royalty-free basis, and at no charge whatsoever to LICENSEE other
than the royalty and consulting fee set forth in Article 4.1 C. payable on
account of the sale of the Product incorporating such Improvement(s).

     2.5    Subject to the provisions of Section 3.13 of this Agreement, as soon
as it is reasonably feasible, but no later than the date of health registration
filing of a Product by LICENSEE in the Territory utilizing any Improvements
(other than Improvements provided by LICENSOR), LICENSEE agrees to disclose to
LICENSOR, to the extent it shall have the right to do so during the term of this
Agreement or any extensions thereof, all Improvements to such Product.

     2.6    LICENSOR agrees that it, through its Chief Executive Officer and/or
other executives and/or other qualified professionals of LICENSOR reasonably
acceptable to LICENSEE, shall act as consultant to LICENSEE (such persons being
collectively referred to as "Consultants").  As requested by LICENSEE,
Consultants will provide support to LICENSEE and its Affiliates as is reasonable
and appropriate, which support may include but shall not be limited to (i)
assisting in the development of clinical development plans, (ii) meeting with

                                       10
<PAGE>
 
investigators and other thought leaders and (iii) meeting with regulatory
officials in the Territory.  All salaries of Consultants shall be paid by
LICENSOR and any and all reasonable travel and out-of-pocket expenses incurred
by Consultants shall be shared equally by LICENSOR and LICENSEE.

     2.7    LICENSEE shall promote, market and sell each Product in the
Territory under the corresponding Trademark(s).  Unless prohibited by local law,
all finished dosage form containers and labelling material for a Product shall
provide that such Product is manufactured by and is being sold under license
from  "U.S. Bioscience, Inc."  If a Product is not being manufactured by
LICENSOR, all finished dosage form containers and labelling material for such
Product shall provide that such Product is under license from "U.S. Bioscience,
Inc."  LICENSEE shall appropriately identify, in compliance with local laws,
each Product being commercialized in the Territory with any Patent numbers or
appropriate patent legend applicable to such Product. LICENSOR shall apply for
and diligently prosecute a trademark registration for the Trademarks in South
Africa, Australia and New Zealand.  LICENSOR shall renew and maintain the
Trademark(s) filed in its name at its cost and expense, and shall defend such
Trademark(s) in accordance with Section 3.11 hereof.  In the event that LICENSEE
makes a determination that a trademark registration should be filed for a
Trademark in any other country in the Territory, LICENSEE shall so advise
LICENSOR in writing. Within fifteen (15) business days of such notification,
LICENSOR

                                       11
<PAGE>
 
shall advise LICENSEE in writing as to whether LICENSOR will make such filing in
its own name and at its own expense. In the event LICENSOR determines that
LICENSOR will not make such filing, LICENSEE agrees to file or cause to be filed
an application in such country in the Territory for the Trademark and to
diligently prosecute such application. Any such filings shall be in LICENSEE's
name and at LICENSEE's cost and expense. LICENSEE shall renew and maintain the
Trademark(s) filed in its name at its own cost and expense, and shall defend
such Trademark(s) in accordance with Section 3.11 hereof. LICENSOR hereby grants
to LICENSEE the right to become a Registered User or recorded licensee of the
Trademarks, if required by the laws of the Territory. In those countries in the
Territory wherein LICENSOR is the registered Trademark owner, LICENSOR hereby
grants LICENSEE an exclusive, royalty-free license to use the Trademarks in any
country in the Territory in connection with the exercise of the rights granted
herein. Any Trademarks filed in LICENSEE's name hereunder shall be transferred
to LICENSOR upon expiration or termination of this Agreement, in accordance with
Article 13.2 hereof. Other than the rights expressly granted under this
Agreement, LICENSEE shall have no other rights to use the Trademarks.

                                       12
<PAGE>
 
                                   ARTICLE 3
                          OBLIGATIONS OF THE PARTIES
                          --------------------------

     3.1    LICENSEE agrees that if it undertakes to manufacture a Product under
Article 2.1 hereof, it shall do so in compliance with Good Manufacturing
Practices and pursuant to specifications contained in the Know-How as long as
such specifications are acceptable to local authorities in the Territory.  In
discharging its obligations hereunder, LICENSEE agrees to observe all applicable
laws and regulations, and shall obtain all necessary licenses, permits and
authorizations to market each Product in the Territory.

     3.2    LICENSEE shall use the Know-How and Patents only in connection with
the development, manufacture, use, packaging, promotion, marketing and sale of
the Products in the Territory and only to the extent permitted under this
Agreement.

     3.3  LICENSEE agrees to use its diligent efforts to file or cause to be
filed in each country in the Territory, in its own name or in the name of any of
its Affiliates, an application for the health registration of each Product and
any applications for pricing and reimbursement approvals required to market each
Product, and to use its commercially reasonable diligent efforts to achieve the
broadest indication for each Product approval based on the Health Registration
Dossier for such Product supplied by LICENSOR hereunder, substantially
consistent with the final recommendation of the European Union's Committee for
Proprietary Medicinal Products and/or the United States Food and 

                                       13
<PAGE>
 
Drug Administration, all at LICENSEE's cost and expense. LICENSEE shall
diligently seek to obtain all such approvals and authorizations.

     3.4  For the purposes set forth under Article 3.3 and subject to the
provisions of Article 6 hereof, LICENSOR agrees to make available or cause to
make available to LICENSEE all LICENSOR health registration data (including,
without limitation certificates of free sale or their equivalent) and all
applicable scientific data available to LICENSOR in any country in the world;
provided however that data which is the property of a third party will only be
----------------                                                              
provided to LICENSEE if LICENSOR has the right to do so or to the extent that
such third party has consented to providing such data to LICENSEE, and/or to
grant rights of reference to all of such data so as to enable LICENSEE (or its
Affiliates) to secure regulatory approval and manufacture, use, promote, market
and sell the Products in the Territory and only to the extent permitted under
this Agreement. To the extent that it is contractually permitted, LICENSOR shall
also share or cause to be shared with LICENSEE all data available in any country
in the world to LICENSOR or its Affiliates from any third party which data the
parties mutually agree shall be useful to secure health registration approval
for a Product in the Territory.

     3.5    LICENSOR and LICENSEE agree to consult each other to enable LICENSEE
to file an application for the health 

                                       14
<PAGE>
 
registration of each Product containing a dossier meeting all regulatory
requirements in each country of the Territory.

     3.6    LICENSEE shall conduct or cause to be conducted such local clinical
trials as LICENSEE reasonably deems necessary and shall bear the costs for same,
including all costs associated with any pricing/marketing approvals.  All data
generated by LICENSEE related to a Product shall be made available to LICENSOR
free of charge for use outside the Territory only in connection with the
Product.  Subject to the provisions of Article 6 hereof, LICENSOR shall have the
right to disclose said data to LICENSOR's sub-licensees and/or consultants for
use outside the Territory as long as LICENSOR secures from such sub-licensees
and/or consultants in writing the obligation to disclose to LICENSEE all data
related to such Product generated by them for LICENSEE's use in the Territory.

     3.7    Should LICENSEE decide, consistent with the provisions of Article
3.3, not to file or cause to be filed an application for health registration or
not to market after receipt of health registration approval of a Product in any
country or countries in the Territory, LICENSEE shall promptly communicate so in
writing to LICENSOR, and LICENSEE shall thereafter have no further obligation to
commercialize such Product in such country or countries.  LICENSOR shall then
have the right to license such Product in the country(ies) in question to a
third party licensee.  Such right shall be in addition to any rights LICENSOR
may have under Article 12.4 hereof.

                                       15
<PAGE>
 
     3.8    LICENSEE agrees to submit to LICENSOR:
            (1) An accounting of all sales of each Product by units and sales
     (in U.S. Dollars), on a calendar quarter basis, within sixty (60) days
     after the close of each calendar quarter. Such accounting shall show gross
     sales and Net Sales on a country-by-country and Product-by-Product basis;

            (2) From time to time, and to the extent LICENSEE is able, any other
     reports which LICENSOR may reasonably require.

     3.9    LICENSEE shall use each of the Trademark(s) solely in the packaging,
promotion, marketing and sale of the respective Product in the Territory.

     3.10   If LICENSEE undertakes the manufacture of a Product pursuant to
Article 2.1 hereof, LICENSEE agrees that upon prior written notice of at least
five (5) business days, LICENSOR or its designee shall have the right, at all
reasonable times, to inspect the Product manufactured by or for LICENSEE at the
manufacturing sites as well as the methods of manufacturing and packaging.
LICENSOR shall also have the right, upon giving the above referred written
notice, to perform audits from time to time at all reasonable times in order to
verify LICENSEE's compliance with Good Manufacturing Practices.

     3.11   LICENSEE agrees not to acquire and not to claim any right, title or
interest in the Know-How and/or Patent Rights as a result of or pursuant to this
Agreement, except for those 

                                       16
<PAGE>
 
Improvements developed by LICENSEE. The parties agree to immediately notify each
other in writing of any infringement of the Patent Rights or the Trademarks or
claims that the Patent Rights or the Trademarks may infringe, which may come to
their attention, and agree to join each other, if requested by the owner of the
Patent Rights or the Trademarks in question and at the owner's expense, in
taking action against the infringement or otherwise for the protection or the
defense of such Patent Rights or Trademark(s). In the event LICENSOR does not
wish to take the necessary action to defend or to protect the Patent Rights or
the Trademarks or to prosecute any infringement of the Patent Rights or the
Trademark(s), LICENSEE shall have the right, but not the obligation, to do so at
LICENSEE's expense and in such case, any proceeds resulting from such action
shall be the exclusive property of LICENSEE. Under this Agreement, the LICENSOR
shall have no obligation to maintain the Patent Rights in the Territory. In the
event that LICENSOR elects not to maintain any of the Patent Rights, LICENSOR
shall so advise LICENSEE in a timely manner to enable LICENSEE to take
appropriate action, at its expense, to maintain the particular patent involved
or to continue prosecution of the particular patent application. The LICENSOR
shall remain the owner of all of the Patent Rights even if LICENSEE elects to
maintain any Patent Rights under this provision.

     3.12   If LICENSEE undertakes the manufacture of a Product pursuant to
Article 2.1 hereof, LICENSEE agrees to conduct such 

                                       17
<PAGE>
 
quality control tests and to implement such quality control procedures as the
parties shall mutually agree. In such event, LICENSOR agrees to provide to
LICENSEE, its Affiliates and/or designees, at LICENSOR's cost and expense, all
reasonable technical assistance which LICENSEE may require in connection with
the application of the Know-How to the manufacture of such Product.

     3.13   To the extent LICENSEE shall have the right to do so, any
Improvements developed by LICENSEE or its designees (e.g., Affiliates, sub-
licensees or distributors) during the life of this Agreement shall be licensed
to LICENSOR on a perpetual, exclusive and royalty-free basis: (i) for use in
connection with the Products outside the Territory; (ii) for use in connection
with the Products in the Territory upon termination or expiration of this
Agreement; and (iii) for use in connection with the Products in any country in
the Territory upon termination of this Agreement with respect to such country.
LICENSOR shall have the right to grant royalty-free sublicenses of the foregoing
licenses in the event LICENSOR has obtained from its sub-licensees in writing an
exclusive and royalty-free grant-back license of sub-licensees' Improvements for
use in the Territory exclusively by LICENSEE or its designees or with the
written consent of LICENSEE which consent shall not be unreasonably withheld.

     3.14     LICENSEE shall not actively promote or advertise either of the
Products outside the Territory and shall not establish a branch or distribution
depot for the sale of either 

                                       18
<PAGE>
 
of the Products outside the Territory, except as otherwise authorized in writing
by LICENSOR.

     LICENSEE shall use its diligent efforts subject to all laws and regulations
applicable to LICENSEE to cause its sub-licensees and/or distributors to
undertake to comply with LICENSEE's obligations under this Article 3.14 and
shall take the necessary action to enforce said undertakings, and if necessary
upon mutual written agreement of LICENSOR and LICENSEE, to discontinue supply of
any Product to the sub-licensees and/or distributors who have breached this
undertaking.

                                   ARTICLE 4
                    UP-FRONT PAYMENT/ROYALTY/CONSULTING FEE
                    ---------------------------------------

     4.1    In consideration of the rights granted under this Agreement,
LICENSEE shall pay or cause to be paid to LICENSOR the amount of $100,000 (the
"Up-front Payment") pursuant to a side letter between the parties dated as of
the date hereof.  In addition, LICENSEE shall pay or cause to be paid to
LICENSOR the following royalty and consulting fee during each calendar year
during the term of this Agreement:

               (i)   a royalty of 6% of the Net Sales; and
               (ii)  a fee for the consulting services rendered pursuant to
     Article 2.6 hereof, equal to 6% of the Net Sales.

It is agreed that no portion of the Up-front Payment shall be credited against
payments due from LICENSEE pursuant to clause (i) or (ii) above.

                                       19
<PAGE>
 
     4.2    Except as otherwise provided in this Article 4, all payments due to
LICENSOR pursuant to Article 4.1 above, shall be in United States Dollars (or in
local currency as notified in writing from time to time by LICENSOR) paid within
sixty (60) days of the end of each calendar quarter.  Such payments shall be by
wire transfer in immediately available funds to such bank and account as
LICENSOR shall notify LICENSEE, in writing, from time to time hereunder.
LICENSEE shall use diligent efforts in taking any and all action which may be
required under the laws, rules, regulations and the like in the Territory,
including but not limited to timely application to the appropriate authorities,
to ensure that payment shall be made within the time stipulated herein.
LICENSEE shall bear all expenses in connection with obtaining such
authorizations.

     4.3    The royalty and consulting fee in Article 4.1 shall be calculated on
a quarterly basis.  Where applicable, the exchange rate shall be the spot rate
of exchange for the sale of United States Dollars at close of business
prevailing at Citibank, New York on the last business day of each quarter.

     4.4    LICENSEE agrees to maintain at its principal offices or at those of
its Affiliates accurate and complete books and records of its gross sales and
Net Sales of each Product, and related expenses, consistent with sound business
and accounting practices and in such form and in such detail as to enable the
amount payable hereunder by LICENSEE to LICENSOR to be determined.  LICENSEE
shall permit LICENSOR or its designee or 

                                       20
<PAGE>
 
any independent certified accountant appointed by LICENSOR and reasonably
acceptable to LICENSEE, at LICENSOR's expense, to examine such books and records
at all reasonable times for the purpose of (i) verifying LICENSEE's reports and
accounting submitted to LICENSOR hereunder and (ii) determining the correctness
of the payments made by LICENSEE hereunder; provided however, that such
                                            ----------------
examinations shall take place not more often than once per calendar year.

                                   ARTICLE 5
                            PROMOTION AND MARKETING
                            -----------------------

     5.1    LICENSEE shall use its diligent efforts to promote, market and sell
(or to cause to be promoted, marketed and sold) each Product throughout the
Territory at its own expense.  Such efforts will be commensurate with those
efforts LICENSEE utilizes on behalf of its own products of similar commercial
potential.

     5.2    As may reasonably be required by LICENSEE, LICENSOR shall supply
LICENSEE or its designee free of charge, if LICENSOR's contractual rights allow
for it, LICENSOR's or LICENSOR's sub-licensees' released specimens of such
samples, displays, sales promotion material and literature available to LICENSOR
or LICENSOR's sub-licensees outside the Territory.

     5.3  LICENSOR agrees to provide LICENSEE, at LICENSOR's Fully Absorbed
Cost, such reasonable quantities of each Product as may be required for clinical
trials in the Territory.

     5.4  Prior to LICENSEE's launching of each Product, the parties shall agree
on the uses for which LICENSEE shall promote 

                                       21
<PAGE>
 
(or cause to promote) such Product. Any other additional uses or
deletions/changes to the agreed upon uses, shall be mutually agreed by the
parties in writing.

     5.5   In their activities contemplated by this Agreement, LICENSEE and its
Affiliates shall comply with all applicable laws and regulations, including
without limitation, laws and regulations of the countries in the Territory.
LICENSEE shall cause its designees (e.g. Affiliates, sub-licensees and
distributors) to comply with all applicable laws and regulations, including
without limitation, laws and regulations of the countries in the Territory.

                                   ARTICLE 6
                                CONFIDENTIALITY
                                ---------------

     6.1    Subject to the provisions of Article 6.3 and except as otherwise
provided under this Agreement, any and all confidential information given by
either party to the other under this Agreement shall not be disclosed to any
third party and shall not be used for purposes other than the fulfillment of
obligations under this Agreement.

     6.2    The following information is excluded from the provisions of Article
6.1:
           a)  information which, at the time of disclosure, is in the public
     domain;
           b)  information which, after disclosure, becomes part of the public
     domain by publication or otherwise, except by breach of this Agreement;

                                       22
<PAGE>
 
           c)  information which a party can establish by competent proof was in
     its possession at the time of disclosure and was not acquired, directly or
     indirectly, from the other party or acquired from any third party subject
     to any obligation of confidentiality to the disclosing party;

           d)  information which is required by law, administrative or judicial
     order to be disclosed, provided that such disclosure is subject to all
     applicable governmental or judicial protection available for like material
     and the party relying on this exception notifies the other party in writing
     in advance of such intended disclosure, promptly after the notifying party
     becomes aware of the disclosure requirement; or

          e) information which is independently developed by the receiving party
     without the aid, application or use of information disclosed by the other
     party.

     6.3    The parties agree to disclose or make available any confidential
information received under this Agreement only to those of their employees,
agents, sublicensees and consultants to whom it shall be reasonably necessary in
order to facilitate their performance hereunder and only after they have
undertaken to comply with all of the confidentiality obligations hereunder.

     6.4  The provisions of this Article 6 shall survive the expiration or
termination of this Agreement for a period of five (5) years.

                                       23
<PAGE>
 
                                   ARTICLE 7
                             ADDITIONAL DOCUMENTS
                             --------------------

     7.1    Where required by law, LICENSEE and LICENSOR agree to execute or
cause to be executed, at LICENSEE's cost and expense, all documents, including
but not limited to documents related to the Trademark(s), local license
agreements and local technical service agreements in order to allow the parties
to perform all of their obligations and exercise their respective rights under
this Agreement.

                                   ARTICLE 8
                              INDEMNITY/INSURANCE
                              -------------------

     8.1      LICENSOR hereby agrees to indemnify, save, defend and hold
LICENSEE and its directors, officers and employees (a "LICENSEE Indemnified
Party") harmless from and against any and all suits, claims, actions, demands,
liabilities, expenses (including legal fees) and/or losses resulting from (i)
the breach by LICENSOR of any covenant, representation or warranty contained in
this Agreement, (ii) any negligent act or omission of LICENSOR (or any Affiliate
thereof) in the manufacture of a Product or any other activity conducted by
LICENSOR under this Agreement, (iii) the failure of a Product manufactured by
LICENSOR for the Territory to meet the Product Specifications for such Product,
or (iv) the successful enforcement by a LICENSEE Indemnified Party of any of the
foregoing.

     8.2    LICENSEE hereby agrees to indemnify, save, defend and hold LICENSOR
and its directors, officers and employees (a 

                                       24
<PAGE>
 
"LICENSOR Indemnified Party") harmless from and against any and all suits,
claims, actions, demands, liabilities, expenses (including legal fees) and/or
losses resulting from (i) the breach by LICENSEE of any covenant, representation
or warranty contained in this Agreement, (ii) the negligent promotion, handling,
storage, disposal, marketing and/or sale of a Product or any other activity
conducted by LICENSEE under this Agreement, or (iii) the successful enforcement
by a LICENSOR Indemnified Party of any of the foregoing.

     8.3  Each party shall, during the term of this Agreement, maintain
commercially reasonable amounts of insurance (but not less than $5,000,000) from
a reputable insurance carrier (or, in the case of LICENSEE, maintain a self-
insurance program) for liability insurance, including products liability and
contractual liability insurance adequately covering such party's obligations
under this Agreement.  If during the term of this Agreement LICENSOR
demonstrates that it has sufficient financial resources to adopt a self-
insurance program for such insurance requirements, LICENSEE shall not
unreasonably withhold its consent to the adoption by LICENSOR of such a program.
Each party shall provide the other party with evidence of such insurance or
self-insurance program, upon request.

     8.4    The respective indemnification obligations of the parties hereto in
this Article 8 shall survive the termination or expiration of this Agreement for
ten years.

                                       25
<PAGE>
 
                                   ARTICLE 9
                                BREACH/REMEDIES
                                ---------------

     9.1    In addition to the termination rights granted under Article 12.2,
any material breach by a party hereto of its obligations or representations
hereunder shall grant the other party the right to seek all remedies available
under applicable law including but not limited to compensation for all losses
and damages suffered by the non-breaching party, costs and expenses (including
attorneys' fees).  With respect to any claim by one party against the other
arising out of the performance or failure of performance of the other party
under this Agreement, the parties expressly agree that the liability of such
party to the other party for such breach shall be limited under this Agreement
or otherwise at law or equity to direct damages only and in no event shall a
party be liable for, indirect, incidental or consequential damages, including
without limitation, lost profits.

                                  ARTICLE 10
                           RECALLS/ADVERSE REACTIONS
                           -------------------------

     10.1   In the event that any governmental agency or authority issues a
recall or takes similar action in connection with any quantity of either Product
in the Territory, LICENSEE shall advise LICENSOR immediately in writing, and
LICENSOR and LICENSEE shall agree on an appropriate course of action.  LICENSOR
shall bear all expenses of any recall unilaterally requested by it and not
concurred in by LICENSEE acting reasonably, or of any recalls 

                                       26
<PAGE>
 
caused by LICENSOR's gross negligence or misconduct. LICENSEE shall bear all
expenses of any recall unilaterally requested by it and not concurred in by
LICENSOR acting reasonably, or of any recall caused by LICENSEE's gross
negligence or misconduct. The expenses of all other recalls shall be equally
shared between LICENSOR and LICENSEE. For the purposes of this Agreement,
expenses of recall to be borne by the parties hereunder include, without
limitation, the expenses of notification and destruction or return of the
recalled Product but not the expenses or service fees associated with personnel
time, which shall be borne by the party incurring the same.

     10.2  The parties hereby agree that the following terms will govern
disclosures of each party to the other with respect to adverse event reporting
relating to each Product:
     A.  An Adverse event ("AE") is defined as:

          1.  any experience which is adverse, including what are commonly
described as adverse or undesirable experiences, adverse events, adverse
reactions, side effects, or death due to any cause associated with, or observed
in conjunction with the use of a drug, biological product, or device in humans,
whether or not considered related to the use of the Product:

               (i)  occurring in the course of the use of the Product,
               (ii) associated with, or observed in conjunction with Product
               overdose, whether accidental or intentional,

                                       27
<PAGE>
 
               (iii) associated with, or observed in conjunction with Product
               abuse, and/or
               (iv)  associated with, or observed in conjunction with Product
               withdrawal.

          2.  any significant failure of expected pharmacological or biological
therapeutic action (with the exception of in clinical trials).

     B.  Serious or Non-Serious is defined as:

          1. A serious AE is one that is life threatening or fatal, permanently
disabling, requires in-patient hospitalization or prolonged hospitalization, or
is a congenital anomaly, cancer or overdose.  In addition, end organ toxicity,
including hematological, renal, hepatic, and central nervous system AEs, may be
considered serious.  In laboratory tests in animals, a serious AE includes any
experience suggesting significant risk for human subjects.

          2.  A non-serious AE is any AE which does not meet the criteria for a
serious AE.

     C.  Life-threatening is defined as:  the patient is at immediate risk of
death from the AE as it occurs.

     D.  End-Organ Toxicity is defined as:  A medically significant event or lab
value change in which a patient may not necessarily be hospitalized or disabled,
but is clinically significant enough to warrant monitoring (e.g. seizures, blood
dyscrasias).

     E.  Expected or unexpected is defined as:

                                       28
<PAGE>
 
          1.  Expected AE - An AE which is listed in the Investigator's Brochure
for clinical trials, included in local labelling (e.g., Summary of Product
Characteristics) for Marketed Drugs, or in countries with no local labelling, in
the Corporate Standard Prescribing Document.

          2.  Unexpected AE - An AE that does not meet the criteria for an
expected AE or an AE which is listed but differs from that event in terms of
severity or specificity.

     F.  Associated with or related to the use of the drug is defined as:  A
reasonable possibility exists that the AE was caused by the Product.

     G.  Un-associated or unrelated to the use of the Product is defined as one
that does not meet the criteria for associated or related to the use of the
Product.

     10.3  All initial reports and follow-ups (oral or written) for any and all
serious and unexpected AEs (other than with respect to animal studies) which
become known to a party (other than from disclosure by or on behalf of the other
party) must be communicated by telephone or telefax to the other party within
twenty four (24) hours upon receipt of the information by the disclosing party
with written confirmation to follow as soon as it becomes available, but in no
event later than three days after initial communication of the AE.

     10.4  For AEs from animal studies which suggest a potential significant
risk for humans, a written report must be forwarded 

                                       29
<PAGE>
 
to the other party as soon as the results are received by the party making the
report.

     10.5  Within thirty (30) days of receipt of a request from the other party,
but not more often than as required by any regulatory agency, each party will
give the other party a print out or computer disk of all AEs reported to it and
its Affiliates relating to either Product within the last year.

     10.6  If either party wishes access to AE reports of the other party
relating to a Product, upon request of that party the other party shall make
available its records (including computer disks) for viewing and copying by the
other party.

     10.7  Disclosure of information hereunder by a party to the other party
shall continue as so long as either party and/or its Affiliates or designees
continue to clinically test or market a Product.  LICENSEE's obligations
regarding AE reporting relate to territories in the world that are the subject
of a license or other commercial relationship for Product between LICENSOR and
LICENSEE.

     10.8  LICENSEE shall make timely submissions of safety reports to
regulatory authorities in the countries in the Territory as required by local
law.  LICENSEE shall notify investigators of safety reports as required by local
law. LICENSEE shall notify LICENSOR of any such reports.

                                       30
<PAGE>
 
                                  ARTICLE 11
                          LICENSOR'S REPRESENTATIONS
                          --------------------------

     11.1   By entering into this Agreement, LICENSOR represents that, subject
to obtaining the W-L Consent (as defined in Section 22.1), neither this
Agreement nor the transactions contemplated hereunder conflict with or violate
or will conflict with or violate the terms of any existing oral or written
commitment, obligation, arrangement, understanding or contract to which LICENSOR
or any of its principals is a party or by which any of them or the Products are
bound, or would require LICENSEE to make to any third party any payment of
royalty, or any compensation whatsoever as a result hereof.

                                  ARTICLE 12
                               TERM/TERMINATION.
                               -----------------

     12.1  Subject to the other provisions of this Agreement and of this Article
12, this Agreement shall be effective, for each country of the Territory, as of
the Effective Date and year first above written and shall be in full force and
effect with respect to the Products for a period of fifteen (15) years from the
date of first commercial sale of the first Product in such country, provided,
however, that the term of this Agreement shall be extended for one additional
year, on a country by country basis, for each country in which (i) the first
commercial sale of the second Product in such country shall have been made more
than one year after the first commercial sale of the first Product in such

                                       31
<PAGE>
 
country and (ii) LICENSOR shall have met all of its obligations under Section
12.4 with respect to both Products.

     12.2   Either party shall have the right to terminate this Agreement by
giving to the other not less than ninety (90) days' prior written notice in the
event that the other shall, at any time, commit a material breach of any of its
obligations hereunder (other than a material breach which would give rise to a
right of LICENSOR to terminate this Agreement in whole or in part under Section
12.4 hereof) and fail to cure such material breach during the period of said
notice.

     12.3   This Agreement may be terminated without further notice by either
party if the other should become insolvent or should make or seek to make an
arrangement with or an assignment for the benefit of creditors; or if
proceedings in voluntary or involuntary liquidation or pursuant to any other
insolvency law shall be instituted by, on behalf of or against the other party
or if a receiver or trustee of the other party' s property shall be appointed.

     12.4  This Agreement may be terminated upon written notice by LICENSOR to
LICENSEE as to a particular country or countries with respect to a particular
Product or Products if LICENSEE has failed to file an application for marketing
approval of such Product in such country within one year from the receipt by
LICENSEE of a Health Registration Dossier; if however, the applicable regulatory
authority in a country requires, as to a Product, proof of regulatory approval
or of a free sale 

                                       32
<PAGE>
 
certificate (or its equivalent) from some other jurisdiction or requires that
LICENSEE conduct additional clinical trials or imposes any additional regulatory
requirement, LICENSOR's rights to terminate as to such Product provided in this
sentence shall not arise until one year from LICENSEE's receipt of proof of such
regulatory approval or of such free sale certificate (or its equivalent),
completion of such additional clinical trials or fulfillment of such additional
requirement. LICENSEE shall use diligent efforts to achieve approvals for each
Product in each country in the Territory. If LICENSEE is required to conduct
additional clinical trials in a country in the Territory prior to filing for
marketing approval of a Product, LICENSEE shall use diligent efforts to conduct
such trial(s), provided the conduct of such trials is commercially reasonable.
If the conduct of such trials is not commercially reasonable and LICENSEE has
not achieved Net Sales with respect to a Product in such country as required
hereunder, LICENSOR shall have the right to terminate LICENSEE's rights with
respect to such Product in such country. Subject to suspension of performance
hereunder for any period during which Force Majeure requires suspension of
performance, this Agreement shall expire as to any country with respect to a
Product if Net Sales of such Product are not made in such country by the earlier
of: three (3) years from the date on which LICENSEE received a Health
Registration Dossier from LICENSOR for such Product or six months from the date
on which such Product may first be sold legally and pricing and/or reimbursement

                                       33
<PAGE>
 
approvals have been received by LICENSEE in such country in the Territory.

     12.5  This Agreement may be terminated by LICENSEE with respect to a
Product in one or more countries in the Territory upon 90 days written notice to
LICENSOR.

                                  ARTICLE 13
                         POST-TERMINATION OBLIGATIONS
                         ----------------------------

     13.1   Upon a partial or full termination of this Agreement for any reason
whatsoever or upon expiration of the same, LICENSOR shall, at its option, either
(i) grant LICENSEE the right to fully exhaust or cause to be exhausted all
stocks of each Product on hand on the date of termination or expiration in each
country of the Territory as to which the termination or expiration applies, as
well as the right to use any stocks of packaging materials, excipients and
labels (hereafter "Materials") on hand in the manufacture of such Products or
(ii) re-purchase such stocks of each such Product and Materials at a price to be
mutually agreed by the parties.

     13.2   Subject to the provisions of this Article 13.2 and the rights which
may be granted to LICENSEE pursuant to Article 13.1 (i), upon the expiration or
full or partial termination of this Agreement, LICENSEE and its Affiliates (i)
shall not themselves, or in association with any other person or entity, use the
Trademarks relating to any terminated Product in any country of the Territory as
to which the termination or expiration applies, and (ii) shall not register in
any terminated country in the 

                                       34
<PAGE>
 
Territory any trademark which is confusingly similar to the Trademarks relating
to any such terminated Product, and (iii) shall transfer and assign to LICENSOR,
without charge, all of their rights, title and interest in such Trademarks in
each such country in the Territory and shall execute all such instruments and
agreements as shall be necessary or appropriate to effectuate the transfer of
ownership to LICENSOR in and to such Trademarks and to cancel any applicable
recorded licenses or Registered User Agreements for such Trademarks; it is
agreed that this covenant shall survive the termination or expiration of this
Agreement, for so long as LICENSOR has valid enforceable rights to the
Trademarks in the Territory.

     13.3  Upon the expiration or a partial or full termination of this
Agreement, LICENSEE and its Affiliates (i) shall transfer and assign to
LICENSOR, all registrations and permits or similar documentation necessary for
the sale of each Product in each country of the Territory as to which the
expiration or termination applies, including without limitation, health
registrations (applications and approvals), pricing and/or reimbursement
approvals and permits; (reasonable out-of-pocket costs of such transfer and
assignments shall be borne by LICENSOR); (ii) in the event LICENSEE is
manufacturing a Product hereunder as to which the expiration or termination
applies, LICENSEE shall cooperate with LICENSOR to achieve an orderly transition
of the manufacturing process and ensure supply of such Product in the Territory;
(iii) shall provide LICENSOR with 

                                       35
<PAGE>
 
samples of promotional materials used for each Product in each country in the
Territory as to which the expiration or termination applies; (iv) shall provide
LICENSOR with customer lists developed for marketing each Product in each
country in the Territory as to which the expiration or termination applies; and
(v) shall perform such other actions and shall execute, acknowledge and deliver
all such assignments, transfers, consents and other documents as may be
reasonably necessary to effectuate an orderly transfer to LICENSOR of all rights
necessary to commercialize the Products in each country in the Territory as to
which the expiration or termination applies (reasonable out-of-pocket costs of
such assistance shall be borne by LICENSOR).

     13.4   Upon any termination or expiration of this Agreement, LICENSEE shall
submit payment to LICENSOR for any earned but unpaid royalties or milestones.

                                  ARTICLE 14
                            INDEPENDENCE OF PARTIES
                            -----------------------

     14.1   It is agreed that the parties hereto are independent contractors and
engage in the operation of their own respective businesses.  Neither of the
parties hereto shall be considered the agent of the other nor shall it have
authority to enter into any contract or assume any obligation for the other
party or make any warranties or representations on behalf of the other party.
Moreover, nothing in this Agreement shall be construed to establish a
relationship of co-partners or joint venturers between the parties.

                                       36
<PAGE>
 
                                  ARTICLE 15
                                  NON-WAIVER
                                  ----------

     15.1   Either party's failure, at any time, to exercise or enforce any
right conferred upon it hereunder, shall not be deemed to be a waiver of any
such right or operate to bar the exercise or performance thereof at any time or
times thereafter, nor shall its waiver of any right hereunder at any given time,
including rights to any payment, be deemed a waiver thereof for any other time.

                                  ARTICLE 16
                                  ASSIGNMENT
                                  ----------

     16.1  Subject to the provisions of this Article 16, neither this Agreement
nor any of the rights or obligations hereunder shall be assigned by either party
by judicial process or otherwise, to any person, firm, company or corporation
without the prior written consent of the other party, except that LICENSOR shall
have the right to assign this Agreement in the event (i) LICENSOR is absorbed by
merger into a third party other than into any of its Affiliates, or (ii)
LICENSOR sells, transfers and assigns all of its assets including all its
rights, title and interest to the Product to any third party other than any of
LICENSOR's Affiliates, or (iii) there is a change in the stock ownership of
LICENSOR so that such ownership falls under the "control" of a third party other
than any of LICENSOR's Affiliates.  For the purposes hereof, the term "control"
shall have the same meaning as that set forth in Article 1.1.

                                       37
<PAGE>
 
     16.2  LICENSEE and LICENSOR shall have the right to assign this Agreement
to any of their respective Affiliates.

                                  ARTICLE 17
                                 SEVERABILITY
                                 ------------

     17.1  If any provision of this Agreement shall be deemed ineffective or
invalid, the remaining provisions hereof shall not be affected thereby and shall
continue to be in full force and effect.

                                  ARTICLE 18
                          GOVERNING LAW/ARBITRATION.
                          --------------------------

     18.1  In the event that any controversy or claim shall arise under, out of,
or in connection with, or relating to this Agreement or the breach thereof, the
party initiating such controversy or making such claim shall provide to the
other party a written notice containing a brief and concise statement of the
initiating party's claims, together with relevant facts supporting them.  During
a period of thirty (30) days, or such longer period as may be mutually agreed
upon in writing by the parties, following the date of said notice, the parties
shall make good faith efforts to settle the dispute.  Such efforts will include,
but shall not be limited to, full presentation of both parties' claims and
responses, with or without the assistance of counsel, before the President of
Schering-Plough International, Inc. and the President of LICENSOR.  If the
parties are unable to reach accord using the procedures set forth in this
Section, 

                                       38
<PAGE>
 
either party may initiate arbitration proceedings in accordance with Section
18.2 hereof by so serving notice on the other party.

     18.2  This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.  Any disputes between the parties arising in
connection with this Agreement shall be settled through arbitration to be held
in New York under the rules of the American Arbitration Association.  Any
arbitration award shall be final and binding on the parties.  The documented
costs and expenses arising from arbitration shall be borne by the losing party.

                                  ARTICLE 19
                                    NOTICES
                                    -------
     19.1   Any notices required or permitted to be given hereunder, shall be in
writing and shall be sent by telefax and reconfirmed within forty-eight (48)
hours by prepaid registered air mail (return receipt requested) or recognized
courier service to the following addresses or to such other addresses as the
parties may communicate to each other as per the provisions herein.  All notices
shall be deemed served five (5) days after telefax transmission.

To LICENSOR:        U.S. BIOSCIENCE, INC.
                    One Tower Bridge
                    100 Front Street, 4th Floor
                    West Conshohocken, Pennsylvania  19428

                    Attn.:   President
                    Telefax: (215) 832-4500

Copy to:            U.S. BIOSCIENCE, INC.
                    One Tower Bridge
                    100 Front Street, 4th Floor

                                       39
<PAGE>
 
                    West Conshohocken, Pennsylvania  19428

                    Attn.:    General Counsel
                    Telefax: (215) 832-4535

To LICENSEE:        SCHERICO, LTD.
                    2000 Galloping Hill Road
                    Kenilworth, New Jersey  07033

                    Attn.:   President,
                             Schering-Plough International, Inc.
                    Telefax: (908) 298-5379

Copy to:            SCHERING-PLOUGH CORPORATION, INC.
                    Law Department
                    2000 Galloping Hill Road
                    Kenilworth, New Jersey  07033

                    Attn.:   Senior Legal Director, Licensing
                    Telefax: (908) 298-4766


                                  ARTICLE 20
                                   AMENDMENT
                                   ---------

     20.1  No amendment, change, modification or alteration of the terms and
conditions of this Agreement shall be binding upon LICENSOR or LICENSEE unless
in writing and signed by a duly authorized officer of the party to be charged.

                                  ARTICLE 21
                             GOVERNMENT APPROVALS
                             --------------------

     21.1  This Agreement and all obligations herein shall be subject to and
conditioned upon the receipt of any and all required approvals from the
applicable governmental authorities of the Territory or any agency,
instrumentality or subdivision thereof.  All registration fees and/or stamp
duties in connection 

                                       40
<PAGE>
 
with the registration of this Agreement shall be paid by LICENSEE.

                                  ARTICLE 22
                            CONSENTS AND APPROVALS
                            ----------------------

     22.1  The parties hereto represent that they have obtained all required
consents and approvals, including but not limited to their own corporate and
third parties' required approval (if any) to enter into this Agreement,
provided, however, that the consent of Warner-Lambert Company (the "W-L
Consent") is required in connection with the rights granted to LICENSEE with
respect to the Product NeuTrexin under this Agreement and is being sought by the
parties contemporaneously with the negotiation of this Agreement.

                                  ARTICLE 23
                         PRESS RELEASES/ANNOUNCEMENTS
                         ----------------------------

     23.1  All press releases, or other written or verbal public announcements
relating to this Agreement and the transactions hereunder, and the method of
release for publication thereof will be subject to the written approval of the
parties hereto, which approval shall not be unreasonably withheld.  Nothing in
the foregoing shall prohibit a party from making such disclosures to the extent
deemed necessary under applicable federal or state securities laws; in such
event, however, the disclosing party shall use good faith efforts to consult
with the other party prior to such disclosure.

                                       41
<PAGE>
 
     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.

U.S. BIOSCIENCE, INC.               SCHERICO, LTD.

By: /s/ C. Boyd Clarke              By:  /s/ Hans-Jorg Kummer     
  -----------------------------        ---------------------------  
As its: President & COO             As its:    President
        -----------------------            -----------------------

                                       42
<PAGE>
 
                                    ANNEX I
                                    -------

                                 Patent Rights


CRYSTALLINE AMIFOSTINE COMPOSITIONS AND METHODS FOR THE PREPARATION AND USE OF
SAME

                                    App. #         App. Date
                                    ------         ---------

Republic of Korea                   700370/95      July 30, 1993

Taiwan                              8210635        July 28, 1993

                                       43
<PAGE>
 
                                   ANNEX II
                                   --------
                                   Territory
                                   ---------

Korea
Taiwan
Peru
Paraguay

                                       44
<PAGE>
 
                                 EXHIBIT 1.12

                    RELEASE SPECIFICATIONS FOR THE PRODUCTS

                                       45
<PAGE>
 
                                  EXHIBIT 2.3


Fully Absorbed Cost shall be calculated in accordance with applicable Generally
Accepted Accounting Principles ("GAAP"), is defined as:

Included:
---------

1.   Direct raw materials, actives (including intermediates), excipients and
     labelling and packaging materials (vials etc.).

2.   Direct labor costs.

3.   Costs for quality control and stability testing.

4.   Indirect labor costs, production supplies and chemicals, and general
     factory overhead.  These costs should be allocated to Product based upon
     methodology in current practice within the manufacturing site which will
     generally be in accordance with GAAP.  Such allocation may be based upon
     direct labor hours, machine hours or such other methodology as the
     companies may agree in advance in writing.


Excluded
--------

1.   Idle and excess capacity.

2.   Manufacturing start-up costs.

3.   Costs of research batches which are part of Product development (unless
     such batches are used by Licensee for product development or research
     activities within the Territory).

                                       46