<PAGE>

Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment.  The  omitted portions, marked by an * and [  ], have
been separately filed with the Commission.

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






                          WORLDWIDE LICENSE AGREEMENT -


                                 ILOPERIDONE


                                BY AND BETWEEN


                          HOECHST MARION ROUSSEL, INC.


                                     AND


                          TITAN PHARMACEUTICALS, INC.



                          Effective December 31, 1996






===============================================================================
<PAGE>

                           TABLE OF CONTENTS

                  Worldwide License Agreement - Iloperidone
           Hoechst Marion Roussel, Inc. - Titan Pharmaceuticals, Inc.

                                                                          PAGE

1.   DEFINITIONS                                                            1
2.   GRANT                                                                  7
3.   PAYMENTS AND ROYALTIES                                                16
4.   COMPULSORY LICENSES AND THIRD PARTY LICENSES                          25
5.   DEVELOPMENT                                                           27
6.   EXCHANGE OF INFORMATION AND CONFIDENTIALITY                           30
7.   HMRI SUPPLY OF COMPOUND AND PRODUCT TO TITAN                          35
8.   PATENT PROSECUTION, MAINTENANCE AND EXTENSION;
     INFRINGEMENT                                                          38
9.   STATEMENTS AND REMITTANCES                                            43
10.  TERM AND TERMINATION                                                  45
11.  RIGHTS AND DUTIES UPON TERMINATION                                    48
12.  WARRANTIES, INDEMNIFICATIONS AND REPRESENTATIONS                      50
13.  FORCE MAJEURE                                                         54
14.  GOVERNING LAW AND ARBITRATION                                         55
15.  SEPARABILITY                                                          56
16.  ENTIRE AGREEMENT                                                      57
17.  NOTICES                                                               57
18.  ASSIGNMENT                                                            59
19.  FAILURE TO ENFORCE                                                    60
20.  NO AGENCY                                                             60
21.  FURTHER ASSURANCES                                                    60
22.  CAPTIONS                                                              60
23.  MISCELLANEOUS                                                         60


APPENDIX

   A Patents and Patent Applications (per Section 1.12)
   B Major Metabolites (per Section 1.5)
   C Documents to be Delivered by HMRI to TITAN (per Section 3.1(a))
   D SEC Registration Rights Granted by TITAN to HMRI (per Section 3.3)
   E HMRI Documents and Development Activities During Transition Period (per
     Section 6.1)
   F HMRI Development Activity to Extend Beyond Transition Period (per Section
     6.1)
   G Special Countries in TERRITORIES Regarding HMRI's PATENT Protection (per
     Section 8.2)

                                       -i-
<PAGE>

          THIS LICENSE AGREEMENT, effective as of the 31st day of December,
1996, between HOECHST MARION ROUSSEL, INC., a corporation organized under the
laws of the State of Delaware with offices at Route 202-206, P.O. Box 6800,
Bridgewater, NJ 08807-0800 (hereinafter "HMRI") and TITAN PHARMACEUTICALS, INC.,
a corporation organized under the laws of the State of Delaware and having its
principal office at 400 Oyster Point Blvd., Suite 505, South San Francisco, CA
94080 (hereinafter "TITAN"),

WITNESSETH THAT:

          WHEREAS, HMRI is the owner of all right, title and interest in certain
patents and patent applications, identified in Appendix A hereto, and know-how
relating to a compound known as Iloperidone; and

          WHEREAS, TITAN desires to obtain certain exclusive worldwide licenses
from HMRI under the aforesaid patents and patent applications and know-how, and
HMRI, is willing to grant to TITAN such licenses;           NOW, THEREFORE, in
consideration of the covenants and obligations expressed herein, and intending
to be legally bound, the parties agree as follows:

     1.   DEFINITIONS

          1.1   "HMRI" shall mean HOECHST MARION ROUSSEL, INC.

          1.2   "TITAN" shall mean TITAN PHARMACEUTICALS, INC.

<PAGE>

          1.3  "AFFILIATE" shall mean any corporation, firm, partnership or
other entity, hether DE JURE or DE FACTO, which directly or indirectly owns, is
owned by or is under common ownership with a party to this License Agreement to
the extent of more than fifty percent (50%) of the equity (or such lesser
percentage which is the maximum allowed to be owned by a foreign corporation in
a particular jurisdiction) having the power to direct the affairs of the entity
and any person, firm, partnership, corporation or other entity actually
controlled by, controlling or under common control with a party to this License
Agreement.

          1.4  "COMPETITIVE INDUSTRY STANDARD LEVEL" shall mean PRODUCT shall be
marketed by or on behalf of TITAN, its AFFILIATES or SUBLICENSEES in the
countries of the TERRITORY where PATENTS are issued and enforced with at least
the same diligence that TITAN would use in marketing its own products in such
countries, in a manner consistent with the effort devoted by the pharmaceutical
industry to products having the same or similar potential value of PRODUCT in
those countries when PRODUCT is launched.

          1.5  "COMPOUND" shall mean the chemical compound known as Iloperidone,
whose more specific chemical name is 1-[4-[3-[4-(6-fluoro-1,2-benzisoxazol-3-
yl)-1-piperidinyl]propoxy]-3-methoxyphenyl]ethanone, including any salts,
hydrates, solvates, and/or stereoisomers thereof, and only the metabolites
listed in Appendix B hereto, including any salts, hydrates, solvates and/or
stereoisomers of such metabolites.

          1.6  "EEA" shall mean the European Economic Area, which consists of
the EUROPEAN UNION and Iceland, Lichtenstein and Norway.

          1.7  "EUROPEAN UNION" shall mean the member states of the European
Union, as may exist from time to time, which as of the date hereof include
Austria, Belgium, Denmark,

                                       2
<PAGE>

Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the
Netherlands, Portugal, Spain, Sweden, and the United Kingdom.

          1.8  "EXCLUSIVE" shall have the meaning specified in Section 2.1(a)
hereof.

          1.9  "FDA" shall mean the United States Food and Drug Administration.

          1.10 "FD&C ACT" shall mean the Federal Food, Drug and Cosmetic Act (21
U.S.C. 301ff), as amended from time to time.

          1.11 "FIELD" shall mean the treatment in humans of psychiatric
disorders, psychotic disorders and analgesia.

          1.12 "IND" shall mean an Investigational New Drug Application.

          1.13 "KNOW-HOW" shall mean all technical information and know-how
presently developed and owned or controlled by HMRI and its AFFILIATES, or
developed and owned or controlled by HMRI and its AFFILIATES after the date
hereof and included within this definition of "KNOW-HOW" by operation of
Section 2.1(c) hereof, which relates to COMPOUND or PRODUCT in the FIELD and
which constitutes a proprietary "trade secret" or other valid intellectual
property right under U.S. or other applicable law which is substantial, secret
and identifiable, including, without limitation, all biological, chemical,
pharmacological, toxicological, clinical, regulatory, analytical, quality
control and manufacturing data and any other information (whether technical or
commercial) relating to COMPOUND or PRODUCT that may be useful for the
development, regulatory approval, manufacture and commercialization of COMPOUND
or PRODUCT.

          1.14 "NDA" shall mean any and all applications (New Drug Applications)
submitted to the FDA under Sections 505, 507 or 512 of the FD&C ACT and
applicable regulations

                                       3
<PAGE>

related to PRODUCT, including without limitation, full NDAs, "paper" NDAs and
abbreviated NDAs (ANDAs) and all amendments and supplements thereto or
equivalent applications in the EUROPEAN UNION or JAPAN.

          1.15 "NET SALES" shall mean the gross revenues from the first sales of
COMPOUND or PRODUCT in the TERRITORY by a party, its AFFILIATES and/or its
SUBLICENSEES to THIRD PARTIES, less deductions for:

               (a)  standard transportation charges, including insurance,
     consistent with custom in the industry;

               (b)  import, export, sales, use and excise taxes, tariffs and
     duties paid or allowed by a selling party and any other governmental
     charges imposed upon the production, importation, use or sale of COMPOUND
     OR PRODUCT;

               (c)  normal and customary quantity discounts (including volume or
     formulary or other positioning discounts paid or credited to any
     wholesaler, purchaser or THIRD PARTY payor or other contractee as a result
     of a contractual arrangement specific to PRODUCT), cash discounts
     (including discounts for prompt payment), and customary trade promotional
     allowances and credits, in the ordinary course of a party's, its
     AFFILIATES' or its SUBLICENSEES' business;

               (d)  discounts (including retroactive price reductions or a
     statutorily required reimbursement) mandated by or granted in response to
     state, provincial or federal law or regulation;

                                  4

<PAGE>

               (e)  allowances or credits to customers on account of recalls,
     rejection or return (including for spoiled, damaged and outdated goods) in
     the ordinary course of business,

               (f)  rebates paid or credited to any government or agency or any
     THIRD PARTY payor, administrator or contractee, and

               (g)  wholesaler charge-backs allowed and taken in amounts
     customary in the trade.

          The computation of NET SALES shall not include sales between or among
a party and its AFFILIATES or SUBLICENSEES, except where such AFFILIATES or
SUBLICENSEES are end users.  For purposes of this License Agreement, sales of
COMPOUND or PRODUCT to independent distributors, wholesalers or other parties
who purchase and take title to COMPOUND or PRODUCT are considered to be sales to
THIRD PARTIES.  If COMPOUND or PRODUCT is sold through intermediaries such as
agents or co-promoters who do not purchase and take title to COMPOUND or
PRODUCT, royalties shall be due on NET SALES to THIRD PARTIES who purchase
COMPOUND or PRODUCT through such intermediaries.

          1.16 "PATENTS" shall mean all patents and patent applications set
forth in Appendix A, including continuations, continuations-in-part, divisions,
patents of addition, reissues, re-examinations, renewals or extensions thereof,
along with supplementary protection certificates and other administrative
protection of any kind in the TERRITORY owned or controlled by HMRI or its
AFFILIATES which claim COMPOUND or PRODUCT, or use, formulations or manufacture
thereof, for use in the FIELD, but not any other compound or use outside of the
FIELD disclosed or claimed in those patents or patent applications.  Any patent
relating to COMPOUND or

                                       5
<PAGE>

PRODUCT for use in the FIELD which is issued during the term of this License
Agreement in any country of the TERRITORY shall automatically be deemed as of
the date of such issuance to be included in PATENT, as defined hereunder.

          1.17 "PRODUCT" shall mean any bulk or finished pharmaceutical
composition containing COMPOUND as a pharmaceutically active ingredient (either
alone or in combination with one or more other pharmaceutically active
ingredients), for use in the FIELD.

          1.18 "SEC" shall mean the United States Securities and Exchange
Commission.

          1.19 "SUBLICENSEE" shall mean a THIRD PARTY (as defined below) to whom
a party sublicenses rights to manufacture and sell (or have manufactured and
sold) COMPOUND under PATENTS, but shall not include any THIRD PARTIES to whom
rights to manufacture COMPOUND have not been granted.  Unless such party grants
to such THIRD PARTY the right to manufacture COMPOUND, the following THIRD
PARTIES shall not be considered SUBLICENSEES hereunder: agents, distributors,
wholesalers, subcontractors, co-marketers, co-promoters, partners or joint
venturers.  SUBLICENSEES shall not include compulsory licensees as described in
Section 4.1(a).

          1.20 "TERRITORY" shall mean all countries and territories of the world
provided that any country(ies) in which this License Agreement is terminated
shall be removed from the scope of this definition.

          1.21 "THIRD PARTY" shall mean any party other than a party to this
License Agreement or an AFFILIATE thereof.

                                       6
<PAGE>

     2.   GRANT

          2.1(a)    HMRI hereby grants to TITAN an EXCLUSIVE license in the
     FIELD under the PATENTS (to the extent, but only to the extent, that such
     patents or patent applications claim COMPOUND or PRODUCT or the
     manufacture, formulation, or use thereof) and KNOW-HOW to develop, have
     developed, make, have made, use, import, sell, offer for sale and have sold
     COMPOUND and PRODUCT in the TERRITORY, subject to the terms and conditions
     of this License Agreement.  The foregoing license shall include the right
     to sublicense, but only upon HMRI's prior written consent, which consent
     shall not be unreasonably withheld.  Any such sublicense(s) shall impose
     upon SUBLICENSEE(S) substantially the same terms and conditions as TITAN
     assumes in this License Agreement, except no such sublicense(s) shall be
     required to contain obligations on the part of the SUBLICENSEE regarding
     payment of an upfront license fee, milestone payments or the same or
     similar royalty rates.  As used in this License Agreement, the term
     "EXCLUSIVE" shall mean neither HMRI nor its AFFILIATES shall grant any
     other license to, nor themselves exploit, the PATENTS and KNOW-HOW with
     respect to COMPOUND and PRODUCT in the FIELD (unless otherwise specified
     herein) and be limited as follows:

                    (i)  With respect to all geographic areas in the TERRITORY
          outside of the EEA, such license shall be exclusive for the duration
          and validity of the intellectual property rights constituting the
          PATENTS and/or  KNOW-HOW.

                    (ii) With respect to all geographic areas in the TERRITORY
          within the EEA, such license shall be exclusive for the following time
          periods:


                                       7
<PAGE>
                         A.   For each of the countries within the EEA where
               only PATENTS (and not KNOW-HOW) exist and are licensed to TITAN
               hereunder, the period of exclusivity for each such country shall
               be limited to the duration of the relevant PATENTS in such
               country, PROVIDED that "PATENTS" for purposes of the
               interpretation of this paragraph shall be limited to patents
               existing, and patents issuing from patent applications existing,
               and patents issuing from patent applications covering inventions
               existing as of the date of this License Agreement;

                         B.   For each of the countries within the EEA where
               PATENTS AND KNOW-HOW exist and are licensed to TITAN hereunder,
               the period of exclusivity for each such country shall be limited
               to the duration of the relevant PATENTS in such country, PROVIDED
               that "PATENTS" for purposes of the interpretation of this
               paragraph shall be limited to patents existing, and patents
               issuing from patent applications existing, as of the date of this
               License Agreement and, PROVIDED, FURTHER, that if the duration of
               such PATENTS is less than ten (10) years from the date of first
               marketing of COMPOUND or PRODUCT in the EEA but the KNOW-HOW
               continues to be licensed hereunder, the duration of exclusivity
               shall be for ten (10) years from the date of first marketing of
               COMPOUND or PRODUCT in the EEA; and

                         C.   For each of the countries within the EEA where
               KNOW-HOW (and not PATENTS) exists and is licensed to TITAN

                                       8
<PAGE>

               hereunder, the period of exclusivity for each such country shall
               be limited toten (10) years from the date of first marketing of
               COMPOUND or PRODUCT in the EEA;

                    Thereafter, such license within the EEA shall be on a non-
          exclusive basis.

                    (iii)     Notwithstanding the provisions of clause
          2.1(a)(ii), above, in the event that the TERRITORY (for whatever
          reason) does not include all countries within the EEA, this License
          Agreement shall be deemed to be amended in a reciprocal fashion to
          comply with applicable competition law requirements, while preserving
          the EXCLUSIVE rights of the parties hereto to the extent possible.

                    (iv) For all purposes, such exclusivity shall be subject to
          Section 2.1(c) hereof.

                    (v)  HMRI and its AFFILIATES and licensed THIRD PARTIES
          shall be entitled to utilize the PATENTS and KNOW-HOW in the FIELD
          within the TERRITORY for the development and manufacture of COMPOUND
          and PRODUCT for marketing, distribution and sale outside of the
          TERRITORY (where TITAN's rights have been terminated).

     The duration of the license granted by this Section 2.1(a) shall be limited
     to the duration, on a country-by-country basis, of the intellectual
     property rights which comprise the PATENTS and KNOW-HOW with respect to a
     relevant country, PROVIDED that the termination of any portion of any
     license shall be without prejudice to the requirement of TITAN to pay
     royalties pursuant to the terms of this License Agreement.  Notwithstanding
     the foregoing

                                       9
<PAGE>

     but subject to Sections 3.5 and 3.6 hereof, HMRI acknowledges and agrees
     that TITAN shall as a matter of law have the right to continue to use on a
     royalty-free, non-exclusive basis the information which constitutes the
     PATENTS and KNOW-HOW on a country-by-country basis in the TERRITORY for the
     FIELD after the PATENTS expire or cease to be valid or enforceable and/or
     KNOW-HOW has entered into the public domain.

               (b)  Subject to TITAN's right of first negotiation under Section
     5.6 hereof with respect to uses or indications outside the FIELD, HMRI
     shall have the right for either HMRI, its AFFILIATES or SUBLICENSEES to
     develop, have developed, make, have made, use, import, sell, offer for sale
     and have sold COMPOUND and PRODUCT for uses outside the FIELD.

               (c)  HMRI also shall have the right to make and use COMPOUND or
     PRODUCT for the use in the FIELD limited solely to further study,
     investigation or experimentation purposes to further understand the
     category of compounds in the FIELD, how they work and their comparison to
     other compounds.  The reservations stated in this provision shall be
     understood by the parties to comprise independent work by HMRI, its
     AFFILIATES, SUBLICENSEES or collaborators (who are subject to obligations
     of non-use and nondisclosure with respect thereto), PROVIDED that in the
     event that the results of such work would be relevant to COMPOUND or
     PRODUCTS with respect to the FIELD and could appropriately be included
     within the PATENTS and KNOW-HOW licensed hereunder, and if HMRI has the
     legal right to do so, all as determined in the reasonable discretion of
     HMRI, then HMRI shall offer such results to TITAN, and TITAN shall have the
     option of accepting such results after reasonable review (not to exceed
     sixty (60) days), whereupon

                                       10
<PAGE>

     if accepted in writing by TITAN such results shall be included, as
     appropriate, within the PATENTS and KNOW-HOW licensed hereunder, and if
     declined by TITAN such results may be used, assigned or licensed by HMRI
     subject to provisions of the License Agreement.  It is mutually understood
     by the parties that independent experimental use of COMPOUND or PRODUCT or
     of results shall not be used in any way that could be damaging or otherwise
     detrimental to COMPOUND or PRODUCT or their development, manufacture or
     commercialization by TITAN or HMRI or their respective AFFILIATES or
     SUBLICENSEES hereunder.  Within twenty (20) days of HMRI's request, TITAN
     shall provide to HMRI free of charge reasonable quantities of COMPOUND or
     PRODUCT for such experimental use in laboratory or animal studies.  This
     does not prevent HMRI from making COMPOUND or PRODUCT for experimental
     use only in laboratory or animal studies.

               (d)  HMRI grants to TITAN a non-exclusive, worldwide license to
     make or use any analytical reference standards, intermediate or metabolite
     of COMPOUND or PRODUCT not listed in Appendix B hereto which may be claimed
     in PATENTS limited solely to making or using the COMPOUND or PRODUCT.  The
     foregoing license shall include the right to sublicense, but only upon
     HMRI's prior written consent, which consent shall not be unreasonably
     withheld.  Any such sublicense shall impose upon SUBLICENSEE(s)
     substantially the same terms and conditions as TITAN assumes in this
     License Agreement, except no such sublicense(s) shall be required to
     contain obligations on the part of the SUBLICENSEE regarding payment of an
     upfront license fee, milestone payments or the same or similar royalty
     rates.

                                       11
<PAGE>

The information below marked by * and [     ] has been omitted pursuant to a
request for confidential treatment.  The omitted portion has been separately
filed with the Commission.

     2.2  TITAN shall promote, market and sell PRODUCT under a registered TITAN
trademark(s) approved by HMRI, which approval shall not be unreasonably
withheld.   TITAN shall be responsible for the selection and registration of
such trademark(s) in all countries of the TERRITORY at its own cost.  In the
event the license granted hereunder is terminated in a particular country, and
HMRI or its designee(s) exercises the right to promote, market or sell PRODUCT
in such country then at HMRI's option (i) TITAN shall grant HMRI or its
designee(s) a trademark license at a royalty to be negotiated in good faith [ *
] at such time to use such trademark in connection with marketing PRODUCT in
such country, or (ii) HMRI or its designee(s) shall select and register at
HMRI's cost a trademark of its own in connection with the marketing of PRODUCT
in such country, provided such HMRI trademark is not in any way confusingly
similar to TITAN'S trademark.   HMRI shall use an HMRI trademark (rather than a
TITAN trademark) in promoting, marketing or selling PRODUCT in any country that
is a member of a free trade union or other economic grouping (e.g., the EUROPEAN
UNION, EEA, NAFTA, ASEAN and ANDEAN PACT countries) where TITAN is promoting,
marketing or selling PRODUCT under a TITAN trademark.

          2.3  If TITAN notifies HMRI in writing, that TITAN (and/or its
AFFILIATE(S)) is not willing or does not have the capability itself or cannot
enter into a sublicense or other agreement (providing the necessary expertise
and resources) in country(ies) outside those covered by NAFTA, EUROPEAN UNION
and Japan to: (i) develop COMPOUND or PRODUCT (as the case may warrant), and
(ii) manufacture and/or market COMPOUND or PRODUCT (as the case may warrant) at
a COMPETITIVE INDUSTRY STANDARD LEVEL by the date of PRODUCT

                                       12
<PAGE>

approval in such country(ies), then HMRI shall have the right to terminate the
license granted by this License Agreement but only with respect to such
country(ies), unless the parties agree in writing to extend such time frame.

          2.4  If PRODUCT is not launched in each of the United States, France
and Germany, respectively, at a COMPETITIVE INDUSTRY STANDARD LEVEL by TITAN,
its AFFILIATE's and/or SUBLICENSEE within six (6) months after the date of
receiving the approvals necessary to commercialize PRODUCT in each of the United
States, Germany and France, respectively, HMRI and TITAN shall review the
progress of launch efforts, it being understood the parties, at the request of
either party, may review the progress of launch efforts prior to the end of such
six (6) month period.  TITAN shall keep HMRI informed on a regular basis of the
status of its launch efforts after receiving the approvals necessary to
commercialize PRODUCT in each of the United States, Germany and France,
respectively, until such time that launch is achieved in the United States,
Germany or France.  If launch in each of the United States, France or Germany,
respectively, is not achieved within one (1) year after the date of receiving
the approvals necessary to commercialize PRODUCT in such country(ies)
(circumstances shall not include events of force majeure as defined in Section
13), or in any event within two (2) years after PRODUCT approval then the
license granted by this License Agreement shall terminate, but only with respect
to the particular country where launch was not achieved within such one (1) year
or two (2) year time frame, as the case may be, unless the parties agree in
writing to extend such time frame.

          2.5  If an NDA or equivalent ex-U.S. regulatory approval in the
EUROPEAN UNION (Marketing Authorization Application via the Centralized
Procedure) for PRODUCT is not obtained within three (3) years of TITAN's or its
AFFILIATE's or SUBLICENSEE's filing of an NDA or such other equivalent ex-US
filing, and such failure is solely due to circumstances within

                                       13
<PAGE>

TITAN's reasonable control, then the license granted by this License Agreement
shall terminate, but only with respect to the United States or the EUROPEAN
UNION where such approval was not obtained, unless the parties agree in writing
to extend such time frame.  If, however, the parties determine that such failure
is due to circumstances beyond the reasonable control of TITAN (including
without limitation delays on the part of the regulatory agencies), the three (3)
year period shall be extended to take into account such circumstances, the
duration of any such extension to be  mutually agreed.

          2.6  Subject to the provisions of Section 2.6(d), HMRI shall not be
obligated to refund any upfront license fees and milestone payments paid to HMRI
with respect to any country(ies) which cease to be included within the
TERRITORY, and in the event that (i) HMRI, its AFFILIATE(S) or SUBLICENSEE(S)
elects to commercialize PRODUCT or COMPOUND in such country(ies) AND (ii) TITAN,
its AFFILIATE(S) or SUBLICENSEE(S) has an NDA filing in the United States or an
equivalent filing in the EUROPEAN UNION, then in consideration for use of any
IND, NDA or other governmental approval or associated developmental work held or
owned by TITAN related to COMPOUND or PRODUCT:

               (a)  At HMRI's request, and subject to Sections 6.3 and 11.5
     hereof, TITAN shall license or otherwise make available under applicable
     law the benefit of such approvals or work to HMRI or an AFFILIATE or THIRD
     PARTY designated by HMRI who shall thereafter have the rights to develop,
     register, manufacture, market and sell COMPOUND and PRODUCT in such
     country(ies) utilizing such approvals or work, and HMRI shall pay to TITAN
     a royalty to be negotiated in good faith at the time HMRI

                                       14
<PAGE>

The information below marked by * and [     ] has been omitted pursuant to a
request for confidential treatment.  The omitted portion has been separately
filed with the Commission.


     exercises such option, on NET SALES in such country to equitably recognize
     the value added by TITAN to COMPOUND and/or PRODUCT through its development
     efforts. Such royalty shall not be less than [           *          ] and
     no greater than [          *           ] on NET SALES.  Upon expiration of
     PATENT in such country, only the royalty paid to TITAN for HMRI's use of
     the TITAN trademark shall be paid to TITAN for a time period to be
     negotiated at such time.  If a trademark license has not been granted to
     HMRI in such country, no royalty shall be paid to TITAN upon expiration of
     PATENT.

               (b)  HMRI shall share with TITAN, on a basis to be negotiated in
     good faith at that time, a portion of any upfront license fees, milestone
     payments or other payments such as prepaid royalties received from a THIRD
     PARTY in connection with the exercise of such option only. If TITAN has not
     paid to HMRI the upfront license fee and all of the milestone payments
     provided for in Sections 3.1(a) through (c), then TITAN's share of the
     amount shall be multiplied by a fraction, the numerator of which is equal
     to the total of the payments that have been made by TITAN to HMRI under
     Sections 3.1(a) through (c), and the denominator of which is equal to the
     total of the payments that TITAN otherwise would have been required to pay
     to HMRI under Sections 3.1(a) through (c) had the license not been
     terminated.

               (c)  Notwithstanding anything contained herein to the contrary,
     HMRI shall not be required to pay to TITAN a royalty on sales of COMPOUND
     or PRODUCT that exceeds in the aggregate [      *      ], including any
     royalty payments for a license under the TITAN trademark that HMRI may be
     required to pay to TITAN under Section 2.2.

                                       15
<PAGE>

               (d)  If the circumstances leading up to the termination of the
     License Agreement pursuant to Section 2.5 are due to any
     misrepresentations, omissions (of information owned or controlled by HMRI
     or its AFFILIATES as of the date hereof) or falsifications with respect to
     such KNOW-HOW, information or data or fraud by HMRI or its AFFILIATES, then
     HMRI shall repay in full to TITAN, within ninety (90) days of such
     termination, the upfront license fee and milestone payments HMRI had
     received from TITAN up to the date of such termination (including in the
     form of TITAN common stock).

          2.7  In the event TITAN or a SUBLICENSEE intends to seek a co-
promotion or co-marketing partner for PRODUCT in the United States or if TITAN
intends to provide exclusive rights to a THIRD PARTY to market PRODUCT in the
United States, TITAN shall notify HMRI thereof in writing and HMRI shall have a
right of first negotiation with TITAN or the SUBLICENSEE on such a
collaboration.  If HMRI exercises its right of first negotiation, then HMRI and
TITAN or the SUBLICENSEE shall negotiate in good faith for a period of ninety
(90) days from the date of notification by TITAN to HMRI.  If the negotiating
parties are unable to enter into a separate definitive written agreement
regarding such collaboration by the end of such ninety (90) day period, TITAN or
the SUBLICENSEE shall be free to enter into a collaboration with any THIRD PARTY
subject to all other terms of this License Agreement and shall have no further
obligation to negotiate with HMRI.

     3.   PAYMENTS AND ROYALTIES

          3.1  As consideration for the licenses granted to TITAN by HMRI under
this License Agreement, TITAN shall make the following payments to HMRI:


                                       16
<PAGE>

               (a)  An upfront license fee of Nine Million Five Hundred Thousand
     Dollars ($9,500,000) consisting of (i) Four Million Dollars ($4,000,000) in
     cash payable by TITAN to HMRI as follows:  (X) Two Million Dollars
     ($2,000,000) due on January 20, 1997 and (Y) Two Million Dollars
     ($2,000,000) due on July 18, 1997, and (ii) Five Million Five Hundred
     Thousand Dollars ($5,500,000) which shall be paid in TITAN common stock
     issuable to HMRI on January 20, 1997 in a private placement.  The number of
     shares to be received by HMRI in 3.1(a)(ii) shall be determined by dividing
     $5,500,000 by the closing price on the NASDAQ Small Cap Market as of a date
     to be determined by TITAN in its sole discretion but at a closing price
     during the period from the date of this License Agreement and ending
     January 20, 1997.  In connection with the issuance of such shares to HMRI,
     HMRI represents that it is acquiring such shares for itself and not with a
     view towards distribution and acknowledges that the shares have not been
     registered under the Securities Act of 1933, as amended, and therefore
     cannot be resold unless they are registered under such act or unless an
     exemption from registration is available.  At the sole discretion of HMRI,
     HMRI may sell this stock (at any time after two hundred seventy (270)
     calendar days of receipt of such stock) in a registered offering in
     accordance with Appendix D to this License Agreement, conducted through a
     broker designated by TITAN (provided that if TITAN has not designated a
     broker by the effective date of the registration statement covering such
     shares, HMRI may select a broker for such sales). TITAN shall not be
     obligated to register such shares until all of the documents listed in
     Appendix C to this License Agreement have been delivered to TITAN to its
     reasonable satisfaction.  For a

                                       17
<PAGE>

The information below marked by * and [     ] has been omitted pursuant to a
request for confidential treatment.  The omitted portion has been separately
filed with the Commission.


     period not to exceed the second anniversary after the date of issuance of
     TITAN common stock, TITAN, at the option of HMRI, shall pay to HMRI in cash
     the difference between (A) $5,500,000 and (B) the net proceeds
     (including net of any brokerage commissions), if any, received by HMRI upon
     sale of the TITAN common stock received by HMRI pursuant to this
     Section 3.1(a).  To exercise such option, HMRI shall send to TITAN a
     written statement of the amount due on account of the foregoing provisions
     upon completion of the sale of such TITAN common stock or 120 days from the
     date of the registration statement, whichever occurs earlier.  Such payment
     due shall be paid by TITAN within ten (10) days after written notice.  If
     all or a portion of such shares of TITAN common stock received by HMRI
     pursuant to this Section 3.1(a) have not been sold, regardless of whether a
     registration statement covering such shares has been declared effective,
     and in the event there is the payment of a difference by TITAN to HMRI,
     HMRI shall immediately surrender to TITAN, properly endorsed for transfer,
     certificates representing such unsold shares of TITAN common stock received
     by HMRI pursuant to this Section 3.1(a).

               (b)  A first development milestone payment of [                 *
                  ] shall be payable by TITAN to HMRI one time only upon the
     first NDA Filing (based on a full and complete regulatory package and for
     these purposes not to include an ANDA or "Paper" NDA) for PRODUCT in the
     FIELD in the United States (New Drug Application) or Europe (Marketing
     Authorization Application via the Central Procedure) by TITAN, its
     AFFILIATE or SUBLICENSEE.  As used in this Section, "NDA Filing" shall mean
     the notification in writing to TITAN from the FDA or an equivalent EUROPEAN

                                       18
<PAGE>

The information below marked by * and [     ] has been omitted pursuant to a
request for confidential treatment.  The omitted portion has been separately
filed with the Commission.

     UNION application via the Centralized Procedure that the NDA is
     sufficiently complete to permit a substantive review. HMRI shall notify
     TITAN of its intent to receive this milestone payment, in whole or in part,
     of cash and/or TITAN common stock.  If HMRI elects to receive a portion of
     this milestone payment in the form of TITAN common stock, such portion
     shall be mutually agreed to by HMRI and TITAN.  Any cash portion of this
     milestone payment shall be paid within seven (7) business days of the date
     of such first filing.  The portion of any milestone payment in the form of
     TITAN common stock shall be issued to HMRI in a private placement within
     thirty (30) days after the date of such first filing.  The number of shares
     to be received by HMRI shall be determined by dividing the dollar amount to
     be received by HMRI in the form of stock by the amount based on the closing
     price of the TITAN common stock on the NASDAQ Small Cap Market on a date to
     be determined by TITAN, in its sole discretion, but on a date within thirty
     (30) days of the issuance of the TITAN common stock.  The registration and
     sale of such stock shall be in accordance with Appendix D hereto.  At the
     sole discretion of HMRI, HMRI may sell the stock portion of the development
     milestone payment at any time at least ninety (90) days after such issuance
     date, in a registered offering pursuant to Appendix D to this License
     Agreement, conducted through a broker designated by TITAN (provided that if
     TITAN has not so designated a broker by the effective date of the
     registration statement, HMRI may select a broker for such sale).  For a
     period not to exceed the first anniversary after the date of issuance of
     TITAN common stock, TITAN, at the option of HMRI, shall pay to HMRI in cash
     the difference between (A) [      *      ] MINUS any cash received pursuant
     to this

                                       19
<PAGE>

The information below marked by * and [     ] has been omitted pursuant to a
request for confidential treatment.  The omitted portion has been separately
filed with the Commission.

     Section 3.1(b); and (B) the net proceeds (including net of any brokerage
     commissions), if any, received by HMRI upon the sale of the TITAN common
     stock received by HMRI pursuant to this Section 3.1(b).  To exercise such
     option, HMRI shall send to TITAN a written statement of the amount due on
     account of the foregoing provisions upon completion of the sale of such
     TITAN common stock or 120 days from the date of the registration statement,
     whichever occurs earlier.  Such payment due shall be paid by TITAN within
     ten (10) days after written notice.  If all or a portion of TITAN common
     stock received by HMRI pursuant to this Section 3.1(b) have not been sold,
     regardless of whether a registration statement covering such shares has
     been declared effective, and in the event there is the payment of a
     difference by TITAN to HMRI, HMRI shall immediately surrender to TITAN
     properly endorsed for transfer, certificates representing such unsold
     shares of TITAN common stock received by HMRI pursuant to this
     Section 3.1(b).

               (c)  A second development milestone payment of  [             *
            ] which shall be payable one time only by TITAN to HMRI as follows:
     (i) [         *

                          *                    ]  consisting in whole or in part
     of cash and/or TITAN common stock as determined by HMRI.  Any portion of
     this milestone payment consisting of cash shall be paid within seven (7)
     business days of receipt by TITAN, its AFFILIATE or SUBLICENSEE of the
     first notification from the FDA or the regulatory agency for the EUROPEAN
     UNION marketing authorization via the Centralized Procedure, that PRODUCT
     is approved for marketing and commercialization by TITAN, its AFFILIATE or
     SUBLICENSEE (or their designee) for a major indication having an approval
     comparable

                                       20
<PAGE>

The information below marked by * and [     ] has been omitted pursuant to a
request for confidential treatment.  The omitted portion has been separately
filed with the Commission.

     to the principal indication(s) of leading competing products in the FIELD;
     and  (ii)

     [             *             ] consisting in whole or in part of cash and/or
     TITAN common stock within six (6) months after receipt of such
     notification. HMRI shall notify TITAN in writing of its intent to receive
     this second milestone payment, in whole or in part, in the form of cash
     and/or TITAN common stock.  If HMRI elects to receive a portion of this
     milestone payment (in this Section 3.1(c)) in the form of TITAN common
     stock, such portion shall be mutually agreed to by HMRI and TITAN.   Any
     portion of the second milestone payment in the form of TITAN common stock
     shall be issued to HMRI in a private placement within thirty (30) days
     after the date of notification by HMRI.  The number of shares to be
     received by HMRI shall be determined by dividing the dollar amount to be
     received by HMRI in the form of stock at the closing price listed on the
     NASDAQ Small Cap Market on a date to be determined by TITAN at its sole
     discretion but on a date within thirty (30) days of the issuance of the
     TITAN common stock.  At the sole discretion of HMRI, HMRI may sell the
     stock portion of this second milestone payment at any time at least ninety
     (90) days after the issuance date of such stock, in a registered offering
     pursuant to Appendix D to this License Agreement conducted through a broker
     designated by TITAN (provided that if TITAN has not so designated a broker
     by the effective date of the registration statement, HMRI may select a
     broker for such sales).  For a period not to exceed one (1) year after the
     date of issuance of such TITAN common stock, TITAN shall, at the option of
     HMRI, pay to HMRI in cash the difference between (A) [     *      ] MINUS
     any cash received pursuant to this Section 3.1(c); and (B) the net proceeds
     (including net of any brokerage commissions), if

                                       21
<PAGE>



     any, received by HMRI upon the sale of the TITAN common stock received by
     HMRI pursuant to this Section 3.1(c).  To exercise such option, HMRI shall
     send to TITAN a written statement of the amount due on account of the
     foregoing provisions upon completion of the sale of such TITAN common stock
     or 120 days from the date of the registration statement, whichever occurs
     earlier.  Such payment due shall be paid by TITAN within ten (10) days
     after written notice.  If all or a portion of such shares of TITAN common
     stock received by HMRI pursuant to this Section 3.1(c) have not been sold,
     regardless of whether a registration statement covering such shares has
     been declared effective, and in the event there is the payment of a
     difference by TITAN to HMRI, HMRI shall immediately surrender to TITAN
     properly endorsed for transfer, certificates representing such unsold
     shares of TITAN common stock received by HMRI pursuant to this
     Section 3.1(c).

          3.2 (a)   Unless HMRI instructs TITAN in writing otherwise, all cash
     payments by TITAN to HMRI (including, without limitation, upfront payments,
     milestone payments, payments by TITAN to HMRI for shortfalls upon HMRI's
     sale of TITAN common stock, and royalties) shall be made by bank wire
     transfer as follows:

               Citibank - New York

               ABA #021000089

               Hoechst Marion Roussel, Inc.

               Account # - 40552555

     At least two (2) business days prior to the planned wire transfer to the
     above Citibank account, TITAN shall notify HMRI's treasurer by facsimile
     (816-966-3847, Attention: Cash Manager) of the amount and date the cash
     shall be transferred.  TITAN shall also notify HMRI in writing at least two
     (2) business days prior to issuance of TITAN common stock.

                                       22
<PAGE>

The information below marked by * and [     ] has been omitted pursuant to a
request for confidential treatment.  The omitted portion has been separately
filed with the Commission.

               (b)  In the event of a late payment hereunder by TITAN to HMRI,
     TITAN shall pay to HMRI interest (based on the prime rate as stated in The
     Wall Street Journal, New York edition, on the date such payment is due (or
     the immediately preceding business date if such payment date is not a
     business date) plus two percent (2%)) on the outstanding balance until such
     balance, including interest, is paid in full to HMRI.  The acceptance of
     such late payment shall act as a waiver of any rights HMRI may have
     hereunder due to a breach by TITAN relating solely to such payment being
     made late.

          3.3  The parties acknowledge that the TITAN common stock to be
acquired by HMRI shall be "restricted securities" under SEC Rule 144 or
otherwise would be subject to the volume, timing, and manner of sale
requirements of SEC Rule 144.  In order to facilitate the disposition of such
shares by HMRI, TITAN hereby grants to HMRI the demand and piggyback rights for
registration under the U.S. Securities Act of 1933, as amended, which demand and
piggyback rights are set forth in the Registration Rights Agreement attached
hereto and made a part here as Appendix D.  If there is a conflict between the
terms and conditions of Sections 3.1 through 3.3 of this License Agreement and
the Registration Rights Agreement, the terms and conditions of the Registration
Rights Agreement shall govern.

          3.4  As consideration for the license granted to TITAN in this License
Agreement, TITAN shall pay to HMRI (i) a [             *              ] royalty
for use of PATENTS and KNOW-HOW, and (ii) a [        *        ] royalty for the
KNOW-HOW to manufacture COMPOUND and PRODUCT, in each case on TITAN's, its
AFFILIATES' and SUBLICENSEES' annual NET SALES in the TERRITORY.  The [      *
    ] royalty for the KNOW-HOW to manufacture

                                       23
<PAGE>

The information below marked by * and [     ] has been omitted pursuant to a
request for confidential treatment.  The omitted portion has been separately
filed with the Commission.



COMPOUND and PRODUCT shall apply only in the event TITAN, its AFFILIATES or
SUBLICENSEES manufactures COMPOUND and PRODUCT itself or through a subcontract
manufacturer (other than HMRI or an HMRI AFFILIATE, in which event a separate
supply agreement between HMRI shall be negotiated).

          3.5  Upon expiration of all PATENTS claiming a priority date of
May 19, 1989 and December 29, 1989 in a particular country in the TERRITORY for
which a patent had been granted validly claiming Iloperidone or the manufacture,
formulation or use thereof for use in the FIELD, TITAN's obligation to pay a
royalty for use of PATENTS shall cease, and the royalty for KNOW-HOW not
relating to manufacturing (whether or not such KNOW-HOW continues as a valid
intellectual property right or is in the public domain) shall be [          *
      ] on TITAN's, its AFFILIATES' and any SUBLICENSEES' annual NET SALES in
such country for a period of ten (10) years after the expiration of the final
remaining PATENT.  After the end of such ten (10) year period, no further
royalties arising from sales of COMPOUND and PRODUCT in such country shall be
due to HMRI and TITAN shall be entitled to continue to use the KNOW-HOW on a
fully-paid, irrevocable basis in accordance with Section 10.3.

          3.6  As consideration for the license granted to TITAN under this
License Agreement in those countries in the TERRITORY for which (i) a PATENT
application for COMPOUND or PRODUCT is pending or (ii) no PATENT application has
been filed or (iii) PATENTS have been abandoned or been held invalid or
unenforceable by a decision of a court or tribunal of competent jurisdiction
from which no appeal is or can be taken (collectively, "Non-Patent Countries"),
TITAN shall pay to HMRI, on a country-by-country basis, a [           *
  ] royalty

                                       24
<PAGE>

The information below marked by * and [     ] has been omitted pursuant to a
request for confidential treatment.  The omitted portion has been separately
filed with the Commission.


on TITAN's, its AFFILIATES' and any SUBLICENSEES' annual NET SALES in the Non-
Patent Countries for a period of five (5) years from the date of the first
commercial sale of PRODUCT in each such country by TITAN, its AFFILIATES or
SUBLICENSEES.  After the end of such five (5) year period, no further royalties
arising from sales of COMPOUND or PRODUCT in such country shall be due.
However, with respect to Section 3.6(i) or (ii), if at any time during or after
such five (5) year period a PATENT for COMPOUND or PRODUCT is issued in such
country, subject to Section 3.5, TITAN shall pay to HMRI from the date the
PATENT was issued (i) a [           *                ] royalty for PATENT and
KNOW-HOW and (ii) a [          *          ] royalty for the KNOW-HOW to
manufacture.  Upon expiration of TITAN's obligation to pay a royalty under such
PATENT, a [                 *                 ] royalty on NET SALES shall be
paid to HMRI for a period of five (5) years after which TITAN shall be entitled
to continue to use the KNOW-HOW on a fully-paid, irrevocable basis in accordance
with Section 10.3.

     4.   COMPULSORY LICENSES AND THIRD PARTY LICENSES

          4.1 (a)   In the event that during the term of this License Agreement
     a governmental agency in the TERRITORY grants or compels HMRI to grant a
     license to any THIRD PARTIES for COMPOUND or PRODUCT in such country(ies),
     TITAN shall have the benefit of any lower royalty rates granted to such
     THIRD PARTIES, but only to the extent that such royalty rates to THIRD
     PARTIES are more favorable than those granted TITAN pursuant to this
     License Agreement, and only during the period such THIRD PARTIES sell
     COMPOUND or PRODUCT in those countries of the TERRITORY where compulsory
     license(s) exist and have achieved for a period of at least six (6)
     consecutive months a

                                       25
<PAGE>

     combined total sales volume of at least ten percent (10%) of TITAN's,
     its AFFILIATE'S and SUBLICENSEE'S sales of PRODUCTS in such country(ies).

               (b)  If a governmental authority in a country in the TERRITORY
     imposes a maximum royalty rate, such that lower royalty rates than would
     otherwise apply under this License Agreement are mandated in such country,
     then the royalty rates provided for herein shall be reduced to equal such
     lower rates for sales of COMPOUND or PRODUCT in such country for the period
     such lower royalty rate is required by any governmental authority and shall
     cease when TITAN's royalty payment obligations to HMRI cease under this
     License Agreement.

          4.2 (a)   If, during the term of this License Agreement, HMRI and
     TITAN agree that a patent(s) of a THIRD PARTY exists in the TERRITORY
     covering the manufacture, use or sale of COMPOUND or PRODUCT, and if it
     should prove, in the reasonable judgment of HMRI and TITAN, impractical or
     impossible for TITAN or its AFFILIATES or SUBLICENSEES to continue the
     activity or activities licensed hereunder in the FIELD without obtaining a
     royalty-bearing license from such THIRD PARTY under such patent(s) or if
     the parties otherwise agree it is desirable for HMRI to acquire any THIRD
     PARTY patent or license in connection with the development or manufacture
     of COMPOUND or PRODUCT covered by PATENTS in the TERRITORY, then in either
     case the provisions of Section 8.8(c) shall apply.

               (b)  If, after attempting in good faith to resolve the issue
     relating to licensing THIRD PARTY patents in Section 4.2(a) between
     themselves, the parties are unable to agree within ninety (90) days as to
     whether it is impracticable or impossible for TITAN, its AFFILIATES or
     SUBLICENSEES to continue the activity or activities licensed

                                       26
<PAGE>

     hereunder without obtaining a royalty-bearing license from a THIRD PARTY,
     the issue shall be submitted to a disinterested, competent and experienced
     patent attorney reasonably acceptable to both parties for resolution.  If
     the parties cannot agree on the selection of such patent attorney, then
     each party shall select a patent attorney and the selected patent attorneys
     shall select a mutually acceptable patent attorney who will determine
     whether such THIRD PARTY rights materially inhibit TITAN's ability to
     manufacture, distribute or sell COMPOUND or PRODUCT.  The costs of such
     patent attorney shall be borne equally, provided that in the event the
     patent attorney determines that such THIRD PARTY rights do not materially
     inhibit TITAN's ability to manufacture, distribute or sell COMPOUND or
     PRODUCT, then the costs of such patent attorney shall be borne by TITAN.

     5.   DEVELOPMENT

          5.1  Upon the signing of this License Agreement, TITAN shall have full
legal and financial responsibility for all costs that are incurred and all
activities that are undertaken after the signing of this License Agreement,
which are related to development, safety and required periodic reporting to the
FDA and equivalent ex-U.S. regulatory agency, marketing, regulatory approvals,
price registrations, and other activities required by TITAN or its
SUBLICENSEE(S) (or their respective agents or distributors) to obtain
appropriate government approvals for, and to commercialize, COMPOUND and PRODUCT
in the TERRITORY.  Other than as expressly provided for herein or in Article
II.A. of the Letter of Intent, dated November 19, 1996, between the parties,
TITAN shall not assume, nor shall TITAN be liable for, any costs or activities
(whether scientific, financial or otherwise) relating to the COMPOUND or PRODUCT
that were incurred or undertaken prior to the signing of this License Agreement
(including without limitation any costs, expenses, damages, losses, fines,
penalties or the like that may be awarded or assessed after the

                                       27
<PAGE>

signing of this License Agreement, but which arise out of events and
activities that occurred prior to the signing of this License Agreement).

          5.2  Provided that the AFFILIATES, SUBLICENSEES and other THIRD
PARTIES agree to substantially the same terms of confidentiality in Section 6.4
hereof, TITAN may appoint such AFFILIATES, SUBLICENSEE(S) and other THIRD
PARTIES to perform any and all development activities necessary to obtain
government approvals for PRODUCT in the TERRITORY.  The appointment of any
SUBLICENSEE shall require HMRI's prior written consent, which consent shall not
be unreasonably withheld.

          5.3  TITAN shall, in a manner consistent with the effort TITAN devotes
to its own products having the same or similar potential value as PRODUCT,
exercise its reasonable commercial efforts and diligence in developing and
commercializing PRODUCT, and in undertaking those investigations and actions
required to obtain appropriate governmental approvals to market PRODUCT in the
TERRITORY.  All such activity shall be undertaken at TITAN's expense.  HMRI
shall use reasonable efforts to assist or provide consultation at TITAN's
expense in support of the development of COMPOUND or PRODUCT, but in its
discretion may limit its resources and assistance.

          5.4  Upon the signing of this License Agreement, TITAN shall inform
HMRI in writing which of the contract research organizations ("CROs") and other
organizations currently working on development activities relating to COMPOUND
and/or PRODUCT which TITAN desires to retain, and those development activities
on which  TITAN desires to have such CROs and other organizations work. Provided
(a) the contracts can be modified as may be desired by TITAN and (b) such CROs
release HMRI from any liability thereunder, existing contracts between HMRI and
such CROs and other organizations which TITAN wants to assume shall be assigned
to TITAN

                                       28
<PAGE>

by HMRI after the signing of this License Agreement by HMRI and TITAN
entering into an assignment, release and assumption agreement with respect to
each such contract, which shall provide, INTER ALIA, that HMRI shall have no
legal, financial or administrative responsibilities related to such contracts as
of the date of such assignment.  TITAN shall endeavor in good faith to have a
CRO which has a pre-existing agreement with HMRI relating to work to be
performed on the COMPOUND or PRODUCT, to enter into an agreement with HMRI and
TITAN releasing HMRI and TITAN from all liability under such pre-existing
agreement.  If such CRO is unwilling to grant such release to HMRI, then HMRI in
its sole discretion may waive the requirement of a release as to a particular
issue(s) raised by such CRO which HMRI in good faith deems to be meritorious.
TITAN shall be solely responsible for negotiation of contracts with any other
CROs and other organizations it desires to work on development activities
relating to COMPOUND and/or PRODUCT and TITAN shall bear all legal and financial
responsibility under such new contracts.

          5.5  Any inventions or discoveries or improvements which arise from
TITAN'S, its AFFILIATE'S or SUBLICENSEE'S work relating to the development
and/or manufacture of the COMPOUND and/or PRODUCT shall be owned by TITAN, but
shall be licensed to HMRI, at HMRI's option on a world-wide, non-exclusive,
perpetual basis, at a license fee and/or royalty to be negotiated at such time.

          5.6  In the event uses or indications outside the FIELD are identified
by HMRI or TITAN, TITAN shall have a right of first negotiation for a separate
license from HMRI to develop and commercialize such other uses and indications
under terms to be negotiated in good faith at such time.  Such right of first
negotiation shall mean that HMRI shall offer to TITAN the right to develop and
commercialize such uses and indications under a separate license, the financial
terms of which may be no less favorable than the financial terms provided for in
this License

                                       29
<PAGE>

Agreement, except that TITAN shall not be required to pay to HMRI
any upfront license fees or milestone payments.  If TITAN exercises its right of
first negotiation, the parties shall negotiate in good faith for a period of
ninety (90) days and, if the parties are unable to enter into a separate
definitive written agreement regarding such license by the end of such ninety
(90) day period, HMRI or an AFFILIATE shall be free to develop and commercialize
such other use or indication itself or to enter into a license or other
agreement with a THIRD PARTY, and shall have no further obligations to negotiate
with TITAN or further license obligations with respect thereto.

          5.7  TITAN shall provide to HMRI regular written reports at least
every six (6) months setting forth significant developments and improvements
that affect COMPOUND or PRODUCT.  From the date of this License Agreement, TITAN
shall provide to HMRI on an annual basis, a written report on the status and
progress of the development and/or registration activities related to COMPOUND
or PRODUCT.

          5.8  TITAN, or its SUBLICENSEES, shall promptly advise HMRI in writing
upon the submission and filing for government regulatory approval to market
PRODUCT, and upon the receipt of government regulatory approval to market
PRODUCT, in each case in each country in the TERRITORY, and shall commence
marketing PRODUCT in such country in accordance with Section 5.3.

     6.   EXCHANGE OF INFORMATION AND CONFIDENTIALITY

          6.1  Upon the signing of this License Agreement, HMRI shall deliver to
TITAN, pursuant to Appendices C, E and F hereto, all available KNOW-HOW,
documents, information and data which is owned or controlled by it and its
AFFILIATES, which may be reasonably expected to assist TITAN in developing,
registering, manufacturing and marketing COMPOUND and PRODUCT in the TERRITORY.
After the execution of this License Agreement, there shall be a

                                       30
<PAGE>

transition until March 31, 1997 during which HMRI shall provide, at its own
cost, reasonable resources, expertise, KNOW-HOW and documents to effectively
transfer the development activity to TITAN as more fully set forth in
Appendix E hereto.  In addition, subsequent to March 31, 1997, HMRI shall
complete the activities set forth in Appendix F in a mutually agreed time
frame.  Upon HMRI's receipt of the upfront license fee referred to in Section
3.1(a) hereof, HMRI and TITAN each shall promptly provide written
notification to the FDA that HMRI assigns and that TITAN assumes sponsorship
of the U.S. IND No. 36,827 (as specified in 21 CFR 314.72).  Within ten (10)
days after the date of such written notification, HMRI shall transfer the
U.S. IND for COMPOUND or PRODUCT to TITAN.  Until such transfer is made,
TITAN shall have the right to make reference to such COMPOUND or PRODUCT
owned or controlled by HMRI or its AFFILIATE.  At the option of TITAN, TITAN
shall notify HMRI in writing by March 31, 1997 of TITAN's desire to have the
sponsorship of Canadian IND Control No. 27740 transferred from Hoechst Marion
Roussel Canada, Inc. ("HMRC") to TITAN, after which date, without such
notification, HMRC shall have the right to terminate such IND.  Upon TITAN
notifying HMRI of such desire to have such sponsorship, the Canadian IND
regulatory file shall be transferred to TITAN within a mutually agreed time
frame and manner.

          6.2  TITAN shall have EXCLUSIVE use, subject to the terms of this
License Agreement and in particular Section 2.1(c), of all KNOW-HOW, documents,
information, data and material for the development, registration, manufacture
and marketing of COMPOUND and PRODUCT for use in the FIELD.  HMRI and its
AFFILIATES shall keep confidential all KNOW-HOW, documents, information and data
in their possession or received from or generated by or on behalf of TITAN that
is not already in the public domain relating to COMPOUND and PRODUCT regarding
the use in the FIELD with the same level of care HMRI uses for its own
confidential

                                       31
<PAGE>

information.  Upon HMRI's request during the term of this License
Agreement, TITAN shall deliver to HMRI a copy of all such information and data
in a form to be mutually agreed upon, within thirty (30) days after HMRI's
request.

          6.3  Subject to the confidentiality obligations of this Article 6,
HMRI shall be able to freely use KNOW-HOW, documents, information and data
disclosed or generated by TITAN, its AFFILIATES and SUBLICENSEES and
applications for government approvals (United States or EUROPEAN UNION), reports
on the status and progress of the development of COMPOUND or PRODUCT and the
like in any country(ies) deleted from the TERRITORY and as to which this License
Agreement has been terminated pursuant to the terms hereof.

          6.4  During the period of time during which TITAN is obligated to pay
royalties hereunder and for seven (7) years thereafter, irrespective of any
termination with respect to a particular country or countries in the TERRITORY,
TITAN shall not reveal or disclose to THIRD PARTIES or use for any purpose other
than to perform its obligations herein any Confidential Information (as defined
below) without first obtaining the written consent of HMRI, except as may be
otherwise provided herein, or for securing essential or desirable
authorizations, privileges, licenses, registration or rights from governmental
agencies, or is required to be disclosed to a governmental agency or is
necessary to file or prosecute PATENT applications concerning COMPOUND or
PRODUCT or to carry out any litigation concerning COMPOUND or PRODUCT; provided,
however, that TITAN notifies HMRI in writing in a reasonably sufficient time
frame prior to making such disclosure that TITAN intends to make such
disclosures and the details thereof, and TITAN seeks confidential treatment
where available of such Confidential Information from such governmental
agencies.  This confidentiality obligation shall not apply to such information
which is or becomes a matter of public knowledge through no fault of TITAN's, or
is already in the

                                       32
<PAGE>

possession of TITAN as evidenced by written records, or is disclosed to TITAN
by a THIRD PARTY having the right to do so, or is subsequently and
independently developed by employees of TITAN or AFFILIATES who had no
knowledge of the Confidential Information.  TITAN shall take reasonable
measures to assure that no unauthorized use or disclosure is made by others
to whom access to such information is granted.  As used herein, "Confidential
Information" means, any confidential or proprietary information of HMRI,
including any present or future formulas, research project, work in process,
inventions, procedures, development, scientific, engineering, manufacturing,
marketing, business or financial plan or records, products, sales, suppliers,
customers, or investors, whether such confidential or proprietary information
is in oral, written, graphic or electronic form (including all copies in
whole or in part of any of the foregoing) and which derives value from being
known to the discloser or owner.

          6.5  Each party shall promptly inform the other party of any
information that it obtains or develops regarding the safety of COMPOUND or
PRODUCT and shall promptly report to the other party any confirmed information
of serious or unexpected reactions or side effects related to the utilization or
medical administration of  PRODUCT in accordance with the procedures that shall
be agreed upon in writing by the parties by no later than March 31, 1997.

          6.6  Nothing herein shall be construed as preventing TITAN from
disclosing any information received from HMRI to an AFFILIATE, SUBLICENSEE,
distributor, contractor, agent, consultant, legal counsel or other THIRD PARTY
involved in the development, manufacture, marketing, promotion or sale of
COMPOUND or PRODUCT, provided such AFFILIATE or SUBLICENSEE or other THIRD PARTY
has undertaken a similar obligation of confidentiality with respect to the
Confidential Information.

                                       33
<PAGE>

          6.7  In the event that a court or other legal or administrative
tribunal, directly or through an appointed master, trustee or receiver, assumes
partial or complete control over the assets of TITAN based on the insolvency or
bankruptcy of TITAN, TITAN shall promptly notify the court or other tribunal (i)
that Confidential Information received from HMRI remains the property of HMRI
and (ii) of the confidentiality obligations under this License Agreement.  In
addition, TITAN shall, to the extent permitted by law, take all steps reasonably
necessary or desirable to maintain the confidentiality of HMRI's Confidential
Information and to ensure that the court, other tribunal or appointee maintains
such information in confidence in accordance with the terms of this License
Agreement.

          6.8  No public announcement or other disclosure to THIRD PARTIES
concerning the existence of or terms of this License Agreement shall be made,
either directly or indirectly, by either party to this License Agreement, except
as may be legally required, without first obtaining the approval of the other
party, which approval shall not be unreasonably withheld, and shall be given
within a reasonable time.  The party desiring to make any such public
announcement or other disclosure shall provide the other party with a written
copy of the proposed announcement or disclosure in sufficient time prior to
proposed public release, to allow such other party to comment upon the nature,
text and timing of such announcement or disclosure, prior to proposed public
release.

          6.9  Neither party shall submit for written or oral publication any
manuscript, abstract or the like which includes KNOW-HOW, data or other
information generated and/or provided by HMRI or TITAN pursuant to this License
Agreement without first obtaining the prior written consent of the other party,
which consent shall not be unreasonably withheld.  The

                                       34
<PAGE>

contribution of each party shall be noted in all publications or
presentations by acknowledgment or coauthorship, whichever is appropriate.

     7.   HMRI SUPPLY OF COMPOUND AND PRODUCT TO TITAN

          7.1  HMRI shall supply COMPOUND and PRODUCT to TITAN under the
following conditions;

               (a)  Upon written notice by TITAN to HMRI, HMRI shall, at its own
     cost (including without limitation, duties, tariffs and the like), ship to
     TITAN or its designee, free of charge, the quantities of COMPOUND and
     PRODUCT to be determined by TITAN within thirty (30) days after the date of
     this agreement (which quantities include COMPOUND in bulk active ingredient
     form and PRODUCT both in bulk tablet and packaged tablet form); provided,
     however, HMRI shall not be obligated to produce bulk substance beyond its
     existing supply.

               (b)  Title to, and risk of loss with respect to, all COMPOUND and
     PRODUCT supplied by HMRI to TITAN under this Section 7.1 shall pass to
     TITAN upon the receipt of such COMPOUND and PRODUCT by TITAN or its
     designee at their point of delivery.  HMRI shall ship COMPOUND and PRODUCT
     to TITAN upon notification by TITAN that adequate secured storage space
     meeting any regulatory requirements has been designated and that the FDA
     has been notified by TITAN of its sponsorship of the U.S. IND No. 36,827.

               (c)  Any shipment of COMPOUND or PRODUCT shall include a
     certificate of analysis with respect thereto.  Unless TITAN notifies HMRI
     within sixty (60) days after receipt of any shipment that COMPOUND or
     PRODUCT does not conform with the specifications therefor, by using the
     methods of analysis provided by HMRI to TITAN

                                       35
<PAGE>

     under this Section 7.1(a), then such shipment shall be deemed to be
     accepted by TITAN (except in the case of defects, contamination or other
     problems that could not have been ascertained by testing COMPOUND or
     PRODUCT in accordance with the methods of analysis therefor).

               (d)  If TITAN notifies HMRI of any non-conformance of COMPOUND or
     PRODUCT with specifications therefor, the parties shall discuss in good
     faith such non-conformance and if it cannot be resolved within ten (10)
     days, the parties shall have an independent reputable laboratory,
     reasonably acceptable to both parties, test representative samples from
     such shipment, and the results of such laboratory shall be final and
     binding on the parties.  The party whose determination is not upheld by the
     laboratory's results shall bear the costs of such testing.

          7.2  HMRI shall provide information and assistance to TITAN with
respect to COMPOUND and PRODUCT as follows:

               (a)  Upon the signing of this License Agreement, HMRI shall
     deliver to TITAN any and all KNOW-HOW, documentation, data and other
     information owned or controlled by HMRI and its AFFILIATES, that TITAN may
     reasonably require for the manufacture of COMPOUND and PRODUCT.  Such
     information shall include without limitation the specifications for
     COMPOUND and PRODUCT and methods of analysis for testing COMPOUND and
     PRODUCT, as currently described within the IND regulatory documentation
     including Chemistry-Manufacturing/Controls (CMC) information amendments and
     the technology transfer file.

               (b)  HMRI shall provide to TITAN or its designated THIRD PARTY
     assistance for the transfer of manufacturing technology, through
     documentation, consultation

                                       36
<PAGE>

     and face-to-face meetings, to enable TITAN or THIRD PARTY to proceed with
     development of commercial-scale manufacturing.  If requested by TITAN
     or the THIRD PARTY, HMRI shall visit the designated commercial
     manufacturing facility, with the limitation of three (3) visits,
     not to exceed a total of ten (10) business days, for which TITAN shall bear
     all the costs of travel and other out-of-pocket expenses.

          7.3  HMRI represents and warrants that:

               (a)  all COMPOUND and PRODUCT supplied hereunder shall meet the
     specifications therefor at the time COMPOUND and PRODUCT are delivered to
     TITAN or its designee;

               (b)  the specifications for COMPOUND and PRODUCT are consistent
     with those set out in the INDs sponsored by HMRI;

               (c)  all COMPOUND and PRODUCT supplied hereunder shall be
     manufactured, stored and shipped in accordance with GMPs and other
     applicable laws and regulations;

               (d)  none of the COMPOUND or PRODUCT supplied hereunder shall be
     adulterated or misbranded as provided for under applicable laws and
     regulations; and

               (e)  as of the date of this License Agreement, the raw materials
     for the manufacture of COMPOUND are readily available in the marketplace.

          7.4  TITAN shall return to HMRI all unused COMPOUND or PRODUCT
supplied by HMRI to TITAN hereunder.

                                       37
<PAGE>

The information below marked by * and [     ] has been omitted pursuant to a
request for confidential treatment.  The omitted portion has been separately
filed with the Commission.

     8.   PATENT PROSECUTION, MAINTENANCE AND EXTENSION; INFRINGEMENT

          8.1  HMRI shall be responsible for the filing, prosecution (including
oppositions) and maintenance of the PATENTS at HMRI's expense. For so long as
the license grants set forth in Article 2 remain in effect, HMRI agrees to file
and prosecute and maintain the PATENTS in the TERRITORY, provided that the
foregoing is subject to HMRI's reasonable business judgment.  HMRI shall keep
TITAN informed of important issues relating to the preparation, filing,
prosecution and maintenance of such patent applications and patents.  TITAN
shall have the right to comment on HMRI's preparation, filing, prosecution and
maintenance of patent applications and PATENTS, and HMRI shall give due
consideration to TITAN's comments, but HMRI shall make all decisions regarding
same.

          8.2  If HMRI elects not to seek patent protection in countries listed
in Appendix G or to maintain patent protection on PATENTS listed in Appendix A
in any country in the TERRITORY to the extent that PATENTS claim COMPOUNDS or
PRODUCT (or formulations, use or manufacture thereof), TITAN shall have the
right, at its option and at HMRI's expense, which expense must be approved in
advance by HMRI (approval which shall not be unreasonably withheld), to file,
prosecute (including oppositions) and maintain any such patent applications and
patents in HMRI's name, and any patent issued therefrom shall be owned by HMRI.
HMRI shall advise TITAN of its decision not to seek or maintain patent
protection in a reasonably timely manner.  In the event that a PATENT is issued
covering COMPOUND or PRODUCT in any country in the TERRITORY under the
conditions of this Section 8.2, TITAN shall pay HMRI a [ * ] royalty
on NET SALES for five (5) years from the date of such patent issuance in
such country in

                                       38
<PAGE>

recognition of HMRI's KNOW-HOW and manufacturing rights and the right to
make and sell COMPOUND or PRODUCT in such country.  Legal fees and expenses,
as confirmed by HMRI, incurred by TITAN shall be deducted from the royalty
paid to HMRI.

          8.3  Each party shall make available to the other party its employees,
agents, subcontractors or consultants (including its authorized attorneys) to
the extent reasonably necessary or appropriate to enable the appropriate party
to file, prosecute and maintain patent applications and resulting patents
subject to this License Agreement to the extent that PATENTS claim COMPOUND or
PRODUCT (or formulations, use or manufacture thereof).  Where appropriate, each
party shall sign or cause to have signed all documents relating to said patent
applications or patents at no charge to the other party.

          8.4  HMRI shall promptly notify TITAN in writing of (i) the issuance
of each PATENT giving the date of issue and patent number for each patent, and
(ii) each notice pertaining to any PATENT which it receives as patent owner
pursuant to the Drug Price Competition and Patent Term Restoration Act of 1984,
or other similar laws now or hereafter in effect which extend the PATENT life,
or pursuant to comparable laws or regulations in other countries in the
TERRITORY.  At HMRI's expense, the parties shall cooperate with each other in
applying for patent term extensions (including Supplementary Protection
Certificate in EUROPEAN UNION member states) where applicable in any country of
the TERRITORY.  HMRI shall have full responsibility and authority in the
decisions regarding filing for the foregoing PATENT extensions at its own
expense although TITAN shall be consulted and its opinions given due
consideration in such decision-making process.  If HMRI elects not to pursue
extension of any PATENTS, TITAN shall have the right (but not the obligation) to
apply for such extension in HMRI's name and at TITAN's expense and HMRI shall
reasonably cooperate in the filing and procurement thereof.

                                       39
<PAGE>

          8.5  Except as otherwise expressly provided in this License Agreement,
under no circumstances shall a party hereto, as a result of this License
Agreement, obtain any ownership interest in or other right to any technology,
KNOW-HOW, patents, pending patent applications, products, or biological material
of the other party, including items owned, controlled, discovered, invented or
developed by the other party, or transferred by the other party to said party,
at any time pursuant to this License Agreement which is not a direct result of
the study, KNOW-HOW and experimentation of COMPOUND and PRODUCT.  It is
understood and agreed that this License Agreement does not grant TITAN any
license to other uses for COMPOUND or PRODUCT outside the FIELD.

          8.6  TITAN and HMRI shall each promptly, but in any event no later
than ten (10) business days after receipt of notice of such action, notify the
other in writing of any PATENT  nullity actions, any declaratory judgment
actions or an alleged or threatened infringement of PATENTS or PATENT
applications or misappropriation of intellectual property comprising PATENTS, or
if either party, or any of their respective AFFILIATES or SUBLICENSEES, shall be
individually named as a defendant in a legal proceeding by a THIRD PARTY
alleging infringement of a patent or other intellectual property right of such
THIRD PARTY as a result of the manufacture, production, use, development,
marketing, selling or distribution of COMPOUND or PRODUCT, or of any information
or notification regarding the PATENTS.

          8.7  HMRI shall have the first right to respond to, defend or
prosecute any actions, challenges, infringements, misappropriations or
proceedings by a THIRD PARTY alleging infringement described in Section 8.6.  In
the event HMRI elects to do so, TITAN will cooperate with HMRI and its legal
counsel, join in such suits as may be brought by HMRI, and be available at
HMRI's reasonable request to be an expert witness or otherwise to assist in such
proceedings and

                                       40
<PAGE>

The information below marked by * and [     ] has been omitted pursuant to a
request for confidential treatment.  The omitted portion has been separately
filed with the Commission.

at HMRI's expense.  HMRI will cooperate with TITAN and its legal counsel and
keep TITAN and its counsel reasonably informed at all times as to the status of
HMRI's response or defense.

          8.8  In the event that HMRI elects to respond to, defend or prosecute
any actions, challenges, infringements, misappropriations or proceedings by a
THIRD PARTY claiming infringement described in Section 8.6 hereof, then:

               (a)  legal fees and other costs and expenses of HMRI associated
     with such response or defense shall be paid by HMRI;

               (b)  legal fees and other costs and expenses associated with such
     response or defense incurred by TITAN at HMRI's request, shall be paid by
     HMRI;

               (c)  costs of acquiring THIRD PARTY patents or licenses and any
     settlement, court award, judgment or other damages shall be paid by HMRI to
     such THIRD PARTIES out of royalties projected to be received from TITAN;
     provided, however, HMRI shall not be obligated to pay for any patents or
     licenses for uses of COMPOUND or PRODUCTS not disclosed in PATENTS as of
     the date of the execution of this License Agreement; and

               (d)  any amounts recovered from THIRD PARTIES in connection with
     such response or defense shall be applied [        *        ] to TITAN and
     [          *             ] to HMRI, subject first to reimbursement of both
     parties for expenses.

          8.9  In the event that HMRI elects not to respond to, defend or
prosecute any actions challenges, infringements, misappropriations or
proceedings by a THIRD PARTY alleging infringement described in Section 8.6
hereof or HMRI abandons any such action, HMRI shall notify

                                       41
<PAGE>

The information below marked by * and [     ] has been omitted pursuant to a
request for confidential treatment.  The omitted portion has been included
herein.


TITAN in writing within thirty (30) days after becoming aware or notified of
such actions, challenges, infringements, misappropriations, proceeding or upon
HMRI's decision to abandon any such action.  In such event, TITAN shall have the
option to respond, defend or prosecute such action at TITAN's sole cost,
provided that HMRI shall cooperate with and provide assistance to TITAN at
HMRI's expense.  All amounts recovered from any THIRD PARTY shall be applied [
  *     ] to TITAN and [                 *               ] to HMRI, subject
first to reimbursement of both parties for expenses.

          8.10 In the event that the parties mutually agree that it is desirable
for HMRI to acquire any THIRD PARTY patent or license in connection with the
development or manufacture of COMPOUND or PRODUCT covered by PATENTS in the
TERRITORY, then the costs of acquiring such THIRD PARTY patent or license shall
be paid by HMRI to such THIRD PARTIES out of royalties received from TITAN.
HMRI shall not be obligated to pay for any patents or licenses for uses of
COMPOUND or PRODUCTS not disclosed in PATENTS as of the date of the execution of
this License Agreement.

          8.11 TITAN recognizes that HMRI has reserved certain rights in the
patents set forth in Appendix A and that there may be a legitimate dispute
between the parties whether a legal action should be brought against a THIRD
PARTY which could effect HMRI's reserved rights under those patents and TITAN's
license rights under this License Agreement.  In the event that there is a
dispute between the parties regarding whether there is an infringement of
PATENTS by a THIRD PARTY and therefore whether a legal action should be
initiated, the parties shall submit the issue to a disinterested, competent and
experienced patent attorney reasonably acceptable to the

                                       42
<PAGE>

parties to determine whether or not there is an infringement and legal
actions should be taken.  If the parties cannot agree on the selection of
such a  patent attorney, then each party shall select a patent attorney and
those selected patent attorneys shall select a mutually acceptable patent
attorney. That selected patent attorney shall determine whether or not there
is an infringement and legal action should be taken and then each party may
decide whether or not to initiate a legal action as described by this Article
8.  The compensation to, and expenses of, such patent attorney shall be borne
by the losing party.

     9.   STATEMENTS AND REMITTANCES

          9.1  TITAN shall keep, and require its AFFILIATES and SUBLICENSEES to
keep complete and accurate records of all NET SALES of PRODUCT under the
licenses granted herein.  HMRI shall have the right, at HMRI's expense, through
a certified public accountant or like independent person reasonably acceptable
to TITAN, and following reasonable notice, to examine such records under
conditions of confidentiality during regular business hours during the period of
time during which royalties are due and payable hereunder and for two (2) years
thereafter; provided, however, that such examination shall not take place more
often than once a year and shall not cover such records for more than the
preceding two (2) years; and provided further, that such accountant shall report
to HMRI only as to the accuracy of the NET SALES computation and royalty
statements and payments.  It is agreed that if this License Agreement is
terminated with respect to a particular country(ies), then HMRI's examination
rights shall continue with respect to sales of PRODUCT in such country(ies) only
for a period of two (2) years after the termination of license rights in that
country.  Copies of all such accountant's reports shall be supplied to TITAN.

          9.2  Within sixty (60) days after the close of each calendar quarter,
TITAN shall deliver to HMRI a true accounting of all PRODUCT sold by TITAN, its
AFFILIATES and

                                       43
<PAGE>

SUBLICENSEES during such quarter and shall at the same time pay all earned
royalties due.  Such accounting shall show NET SALES of PRODUCT on a
country-by-country and product-by-product basis and such other particulars as
are reasonably necessary for accounting of the royalties payable hereunder.

          9.3  Any tax paid or required to be withheld by TITAN on account of
royalties payable by TITAN to HMRI under this License Agreement shall be
indicated on the accounting described in Section 9.2 hereof and deducted from
the amount of royalties otherwise due.  TITAN shall secure and send to HMRI
proof of any such taxes withheld and paid by TITAN.  Any withholding or other
tax arising on or following permitted assignment of this License Agreement by
TITAN or a SUBLICENSEE shall be for the account of and paid by TITAN.

          9.4  Unless otherwise indicated herein, and subject to foreign
exchange regulations then prevailing, to the extent free conversion from local
currency to United States dollars is permitted, all payments and royalties
payable under this License Agreement shall be paid in cash in U.S. dollars by
wire transfer in accordance with Section 3.2 hereof.  If governmental
regulations prevent remittances from a foreign country with respect to sales
made in that country, the obligation of TITAN to pay royalties on sales in that
country shall be suspended until such remittances are possible but such
royalties shall accrue as an accounts payable by TITAN to HMRI.  HMRI shall have
the right, upon giving written notice to TITAN, to receive payment in that
country in local currency.

          9.5  Monetary conversions from the currency of a foreign country, in
which PRODUCT is sold, into United States currency shall be made by using the
exchange rates published in the Foreign Exchange column of The Wall Street
Journal, New York edition, or other qualified

                                       44
<PAGE>

source mutually acceptable to the parties on the last business day of the
calendar quarter for which the royalties are being paid.

     10.  TERM AND TERMINATION

          10.1 In the event the development of COMPOUND and PRODUCT is
terminated altogether by TITAN for reasons of toxicology, safety, efficacy,
product stability or the like deemed unacceptable by the FDA or its equivalent
ex-U.S. regulatory agency in the EUROPEAN UNION or Japan to commercialize
PRODUCT, then this License Agreement shall terminate in its entirety and the
license granted hereunder shall revert back to HMRI.  HMRI shall retain all
upfront license fees and milestone payments it had received up to the date of
termination if, and only if, termination was not due to any misrepresentations,
omissions (of information owned or controlled by HMRI or its AFFILIATES as of
the date hereof) or falsifications with respect to such KNOW-HOW, information or
data or fraud by HMRI or its AFFILIATES, which case HMRI shall repay in full to
TITAN within ninety (90) days of such termination, the upfront license fee and
milestone payments HMRI had received from TITAN up to the date of such
termination (including in the form of  TITAN common stock).

          10.2 In the event the development of COMPOUND and PRODUCT is
terminated altogether by TITAN within one (1) year of the date this License
Agreement for reasons other than toxicology, safety, efficacy, product stability
or like issues deemed unacceptable by the FDA or its equivalent ex-U.S.
regulatory agency in the EUROPEAN UNION or Japan to commercialize PRODUCT, then
this  License Agreement shall terminate in its entirety and the license granted
hereunder shall revert back to HMRI.  HMRI shall retain all upfront license fees
it had received up

                                       45
<PAGE>

The information below marked by * and [     ] has been omitted pursuant to a
request for confidential treatment.  The omitted portion has been separately
filed with the Commission.

to the date of termination and TITAN shall also pay [                       *
                     ] penalty payment to HMRI if, and only if, termination was
not due to any misrepresentations, omissions (of information owned or controlled
by HMRI or its AFFILIATES as of the date hereof) or falsifications with respect
to KNOW-HOW, information or data or fraud by HMRI or its AFFILIATES, in which
case HMRI shall repay in full to TITAN, within ninety (90) days of such
termination, the upfront license fee and milestone payments HMRI had received
from TITAN up to the date of such termination (including in the form of TITAN
common stock).

          10.3 Unless otherwise terminated, this License Agreement shall expire
on a country-by-country basis upon the expiration of TITAN'S obligation to pay
royalties under this License Agreement in each such country.  Expiration of this
License Agreement under this provision shall not preclude TITAN, its AFFILIATES
and SUBLICENSEES from continuing directly or indirectly to manufacture, market
and sell COMPOUND and PRODUCT and to use KNOW-HOW without further royalty
payments.

          10.4 In the event there is a change in the control of TITAN, TITAN
shall give HMRI thirty (30) days' written notice of such event and that the
development and commercialization of COMPOUND and PRODUCT will continue per the
terms of this License Agreement.

          10.5 (a)  If either party materially defaults in its performance of
     this License Agreement and if such default is not corrected or if the party
     in default is not exercising reasonably diligent efforts to cure such
     default within ninety (90) days after receiving written notice from the
     other party with respect to such default, or if such default is not
     correctable within ninety (90) days then such other party shall have the
     right to terminate this License

                                       46
<PAGE>

     Agreement at the end of such period in its entirety by giving written
     notice to the party in default.

               (b)  In the event TITAN materially defaults in its performance
     under this License Agreement with respect to a particular country, then,
     subject to Section 11.4 hereof, HMRI's right to terminate shall be limited
     to termination of the license granted hereunder in such country only.

          10.6 (a)  Subject to applicable bankruptcy laws, either party may
     terminate this License Agreement if, at any time, the other party shall
     file in any court pursuant to any statute of the United States or of any
     individual state or foreign country, a petition in bankruptcy or insolvency
     or for reorganization in bankruptcy or for an arrangement or for the
     appointment of a receiver or trustee of the party or of its assets, or if
     the other party shall be served with an involuntary petition against it,
     filed in any insolvency proceeding, and such petition shall not be
     dismissed within ninety (90) days after the filing thereof, or if the other
     party shall propose or be a party to any dissolution, or if the other party
     shall make an assignment for the benefit of creditors.

               (b)  Without limitation, TITAN's rights under this License
     Agreement shall include those rights afforded by 11 U.S.C. Section 365 (n)
     of the United States Bankruptcy Code and any successor thereto (the
     "Code").  If the bankruptcy trustee of HMRI as a debtor or debtor-in-
     possession rejects this License Agreement under 11 U.S.C. Section 365 (n)
     of the Code, TITAN may elect to retain its rights licensed from HMRI
     hereunder (and any other supplementary agreements hereto) for the duration
     of this License Agreement and avail itself of all rights and remedies to
     the full extent contemplated by this

                                       47
<PAGE>

     License Agreement and 11 U.S.C. Section 365 (n) of the Code, and any other
     relevant sections of the Code and other relevant non-bankruptcy law.

     11.  RIGHTS AND DUTIES UPON TERMINATION

          11.1 Upon termination of this License Agreement, HMRI shall have the
right to retain any sums already paid by TITAN hereunder, and TITAN shall pay
all sums accrued hereunder which are then due except as otherwise defined in
this License Agreement.

          11.2 Upon early termination of this License Agreement in its entirety
under Sections 10.2 or 11.6 or with respect to any country, or due to a breach
hereof by TITAN, TITAN shall notify HMRI of the amount of COMPOUND and PRODUCT
that TITAN, its AFFILIATES and SUBLICENSEES then have on hand for sale in each
country, the sale of which would, but for the termination, be subject to
royalty, and TITAN, its AFFILIATES and  SUBLICENSEES shall thereupon be
permitted to sell that amount of COMPOUND and PRODUCT, provided that TITAN shall
pay the royalty thereon to HMRI at the time herein provided for.

          11.3 Expiration or termination of this License Agreement or
termination on a country-by-country basis shall terminate all outstanding
obligations and liabilities between the parties arising from this License
Agreement except those described in Sections 6.2 (with sole respect to HMRI
confidentiality), 6.3, 6.4, 6.5, 6.6, 6.8, 9.1, 9.2, 10.3, 11.1, 11.2, 11.4,
11.5, 11.6, 12.5, 12.6, 12.7, 14.1 and 14.2, and the terms of Appendix D, which
sections and appendix shall survive such termination.  In addition, any other
provision required to interpret and enforce the parties' rights and obligations
under this License Agreement shall also survive, but only to the extent required
for the full observation and performance of the surviving obligations under this
License Agreement.

                                       48
<PAGE>

          11.4 Except as otherwise specifically provided for herein,
termination, in whole or in part, of the License Agreement in accordance with
the provisions hereof shall not limit remedies to the parties which may be
otherwise available in law or equity, including consequential, incidental or
indirect damages (such as loss of sales, profits, or goodwill) arising out of a
party's performance or non-performance under this License Agreement.

          11.5 Subject to Section 11.2 and other express provisions hereof, upon
early termination of this License Agreement in its entirety due to breach hereof
by TITAN and pursuant to Sections 10.1, 10.2 or 11.6, TITAN's rights in COMPOUND
and PRODUCT shall cease, TITAN, its AFFILIATES and SUBLICENSEES shall cease
manufacture, development, marketing and sale of COMPOUND and PRODUCT in the
TERRITORY, and all originals and copies of KNOW-HOW, data, results and other
information collected and/or generated by TITAN, its AFFILIATES and SUBLICENSEES
relating to COMPOUND or PRODUCT prior to termination shall be delivered to HMRI
within thirty (30) days thereafter, except for one copy thereof which may be
retained in TITAN's legal files solely for the purpose of establishing the
extent of its obligations hereunder.  Any IND or other regulatory filing
effected prior to termination shall be assigned by TITAN to HMRI (or its
designee(s)), at HMRI's request and expense, if not already assigned to HMRI.
TITAN shall provide to HMRI, within one (1) month of HMRI's request, copies of
all regulatory correspondence, including, but not limited to, IND Information
Amendments, IND Reports, IND Safety Reports, NDA submission, NDA Postmarketing
Reports, and reports of written/phone contacts to/from regulatory agencies, as
well as the safety database for PRODUCT.

          11.6 If (a) TITAN is precluded from selling COMPOUND or PRODUCT in a
particular country(ies) in the TERRITORY by virtue of infringement of THIRD
PARTY patent rights, or (b) there is a holding of invalidity or unenforceability
of any PATENT, from which no

                                       49
<PAGE>

further appeal can be taken, that materially affects TITAN's ability to
commercialize COMPOUND or PRODUCT in a particular country(ies) in the
TERRITORY, TITAN shall have the right (but not the obligation) to terminate
this License Agreement in such country(ies).  At TITAN's option, this License
Agreement may be terminated in its entirety if the events described in
subsection (a) or (b) of this Section 11.6 occur in the United States, the
EUROPEAN UNION and/or Japan.  Within ninety (90) days of any such
termination, HMRI shall repay to TITAN: (i) if the License Agreement has been
terminated in its entirety, all upfront license fees and milestone payments
(including in the form of TITAN common stock) it has received from TITAN up
to the date of termination and (ii) if the License Agreement has been
terminated only with respect to certain country(ies), the parties shall
negotiate in good faith what portion of the upfront license fees and
milestone payments HMRI has received from TITAN up to such date shall be
repaid to TITAN.  If the parties are unable to agree on such portion within
ninety (90) days, the issue shall be submitted for determination by
arbitration in accordance with Section 14.2.

     12.  WARRANTIES, INDEMNIFICATIONS AND REPRESENTATIONS

          12.1 (a)  HMRI represents and warrants that to the best of its
     knowledge at the date of this License Agreement, all currently issued or
     pending patents and patent applications owned or controlled by HMRI or its
     AFFILIATES claiming the COMPOUND or PRODUCT are listed in Appendix A.  If
     HMRI becomes aware of any patents or patent applications owned or
     controlled by HMRI or its AFFILIATES claiming COMPOUND or PRODUCT or
     manufacture, formulation or use thereof not listed in Appendix A and is
     within the rights granted to TITAN in this License Agreement, such patents
     and patent applications shall be added to Appendix A at no cost to TITAN.
     HMRI further represents and warrants that HMRI owns or controls the entire
     right, title and interest in PATENTS and

                                       50
<PAGE>

     KNOW-HOW, and HMRI has the legal power, right and authority to enter into
     this License Agreement.

               (b)  TITAN represents and warrants that (i) TITAN has the legal
     power, right and authority to issue its common stock to HMRI and when
     issued, such stock shall be validly issued, fully paid and nonassessable,
     and (ii) TITAN has the legal power, right and authority to enter into this
     License Agreement.

          12.2 Nothing in this License Agreement shall be construed as a
warranty that PATENTS are valid or enforceable or that their exercise does not
infringe any patent rights of THIRD PARTIES.  HMRI hereby represents and
warrants that it has no present knowledge that (i) PATENTS are invalid or
unenforceable, (ii) the exercise of PATENTS infringes any patent rights of THIRD
PARTIES, and (iii) THIRD PARTY licenses are necessary for the development,
manufacture or commercialization of COMPOUND or PRODUCT.  A holding of
invalidity or unenforceability of any PATENT, from which no further appeal is or
can be taken, shall not affect any obligation already accrued hereunder, but
shall only eliminate future royalties otherwise due under such PATENT from the
date such holding becomes final.

          12.3 Each party represents to the other that it is not currently
debarred, suspended or otherwise excluded by any U.S. Government agencies from
receiving federal contracts.

          12.4 TITAN agrees that during the term of this License Agreement TITAN
or an AFFILIATE or SUBLICENSEE shall not license, develop, have developed,
manufacture, have manufactured, sell or have sold any of the following compounds
or products classified as an atypical antipsychotic: (i.e. Olanzapine,
Sertindole, Seroquel, Ziprasadone, Risperidone); PROVIDED that such restriction
shall not apply within the EEA.  In the event that TITAN or an AFFILIATE or
SUBLICENSEE undertakes any of the foregoing actions within the EEA, then HMRI
may not

                                       51
<PAGE>

terminate this License Agreement or seek damages or equitable remedies
for such actions, but may at its option by notice to TITAN (i) terminate the
EXCLUSIVE nature of the licenses granted pursuant to Article 2 hereof in the
EEA, so that all use of PATENTS and KNOW-HOW in the EEA will thereafter be on a
non-exclusive basis at a reduced royalty rate to be negotiated at such time of
change in exclusivity, (ii) cease providing improvements to TITAN pursuant to
Section 2.1(c); and/or (iii) require TITAN to prove to HMRI's reasonable
satisfaction that the KNOW-HOW is not being used for such activities.

          12.5 TITAN shall indemnify, defend and hold HMRI and its AFFILIATES
harmless from and against any and all liabilities, claims, demands, damages,
costs, expenses, fines, penalties or money judgments including without
limitation court costs and reasonable attorney's fees (hereinafter referred to
as "Liabilities"), during the term of this License Agreement and after its
expiration or termination, incurred by or rendered against HMRI and its
AFFILIATES which arise out of the clinical testing, use or labeling, or the
manufacture, processing, packaging, sale or distribution of COMPOUND or PRODUCT
(as the case may be) by TITAN its AFFILIATES and SUBLICENSEES, or the breach of
this License Agreement by TITAN (including without limitation any breach of
TITAN's representations and warranties under this License Agreement) or any
negligence or misconduct of TITAN, except to the extent that such Liabilities
are directly attributable to the breach of this License Agreement by HMRI
(including without limitation any breach of HMRI's representations or warranties
under this License Agreement) or any negligence or misconduct by HMRI.  TITAN
shall also indemnify, defend and hold HMRI and its AFFILIATES harmless from and
against any and all Liabilities incurred by or rendered against HMRI and its
AFFILIATES which arise out of the COMPOUND or PRODUCT supplied by TITAN to HMRI
and for use pursuant to Section 2.1(c).

                                       52
<PAGE>

          12.6 HMRI shall indemnify, defend and hold TITAN, its AFFILIATES and
SUBLICENSEES harmless from and against any and all Liabilities (as defined in
Section 12.5 hereof), incurred by or rendered against TITAN, its AFFILIATES and
SUBLICENSEES, which arise out of the breach of this License Agreement by HMRI
(including without limitation any breach of HMRI's representations or warranties
under this License Agreement), or any negligence or misconduct by HMRI, except
to the extent that such Liabilities are directly attributable to the breach of
this License Agreement by TITAN (including without limitation any breach of
TITAN's representations and warranties under this License Agreement), or any
negligence or misconduct by TITAN.  HMRI shall also indemnify, defend and hold
TITAN, its AFFILIATES and SUBLICENSEES harmless from and against any and all
Liabilities incurred by or rendered against TITAN and its AFFILIATES and
SUBLICENSEES which arise out of the manufacture, use or sale of COMPOUND and
PRODUCT that has been manufactured or sold by or on behalf of HMRI and its
AFFILIATES or SUBLICENSEES in those countries where TITAN's license rights
hereunder have been terminated (including the clinical testing, use and labeling
of PRODUCT and the manufacture, processing, packaging, sale or distribution of
PRODUCT by HMRI and its AFFILIATES and SUBLICENSEES); the manufacture, use or
sale of COMPOUND and PRODUCT that has been manufactured or sold by or on behalf
of HMRI and its AFFILIATES or SUBLICENSEES for uses outside the FIELD; human,
clinical studies (Phase I/II) conducted by or on behalf of HMRI and its
AFFILIATES prior to this License Agreement; the COMPOUND or PRODUCT supplied by
HMRI to TITAN under Article 7 hereof; use of COMPOUND or PRODUCT pursuant to
Section 2.1(c) other than for in vitro and lab animal studies.

                                       53
<PAGE>

          12.7 Each party shall give the other prompt notice in writing of any
claim or demand referred to in Sections 12.5 or 12.6.  In addition, the
obligations of any indemnifying party shall be subject to the indemnified party
fulfilling the following obligations:

               (a)  With respect to third party claims, indemnified party shall
     fully cooperate with the indemnifying party in the defense of such claim or
     demand which defense shall be controlled by the indemnifying party; and

               (b)  With respect to third party claims, indemnified party shall
     not, except at its own cost, voluntarily make any payment or incur any
     expense with respect to any claim, demand or suit (including without
     limitation retaining its own counsel) without the prior written consent of
     the indemnifying party, which such party shall not be required to give.

     13.  FORCE MAJEURE

          13.1 If the performance of any part of this License Agreement by
either party, or if any obligation under this License Agreement, is prevented,
restricted, interfered with or delayed by reason of any cause beyond the
reasonable control of the party required to perform, , the party so affected,
upon giving written notice and written evidence of such force majeure to the
other party, shall be excused from such performance to the extent of such
prevention, restriction, interference or delay, provided that the affected party
shall use its reasonable commercial efforts to avoid or remove such causes of
non-performance and shall continue performance with the utmost dispatch whenever
the force majeure is removed.  In the event of a force majeure, the parties
shall also discuss whether modification of the terms of this License Agreement
are necessary to alleviate the hardship or loss caused by the force majeure.

     14.  GOVERNING LAW AND ARBITRATION

                                       54
<PAGE>

          14.1 This License Agreement shall be deemed to have been made in the
State of New York and its form, execution, validity, construction and effect
shall be determined in accordance with the laws of the State of New York
(without regard to New York's or any other jurisdiction's choice of law
principles).

          14.2 In the event of any controversy or claim arising out of or
relating to any provision of this License Agreement, the parties shall try to
settle their differences amicably between themselves.  Any unresolved disputes
arising between the parties relating to, arising out of or in any way connected
with this License Agreement or any term or condition hereof, or the performance
by either party of its obligations hereunder, whether before or after
termination of this License Agreement, shall be resolved by final and binding
arbitration.  Whenever a party shall decide to institute arbitration
proceedings, it shall give written notice to that effect to the other party.
Except in the case of a determination to be made where payments are to be made
to by one party to the other, the party giving such notice shall refrain from
instituting the arbitration proceedings for a period of sixty (60) days
following such notice to allow the parties time to further attempt to come to an
amicable resolution of the dispute.  Arbitration shall be held in New York City,
New York according to the commercial rules of the American Arbitration
Association ("AAA").  The arbitration will be conducted by a panel of three
arbitrators appointed in accordance with AAA rules; provided, however, that each
party shall within thirty (30) days after the institution of the arbitration
proceedings appoint a party arbitrator, and the party-arbitrators shall select a
neutral arbitrator, to be chairman of the arbitration panel, within thirty (30)
days thereafter.  If the party-arbitrators are unable to select a neutral within
such period, the neutral shall be appointed in accordance with AAA rules.  All
arbitrator(s) eligible to conduct the arbitration must agree to render their
opinion(s) within thirty (30) days of the final arbitration hearing.  No
arbitrator (nor the panel

                                       55
<PAGE>

of arbitrators) shall have the power to award punitive damages under this
License Agreement and such award is expressly prohibited. Decisions of the
arbitrator(s) shall be final and binding on all of the parties. Judgment on
the award so rendered may be entered in a court having jurisdiction thereof.
In any arbitration pursuant to this License Agreement, the arbitrators shall
interpret the express terms hereof and apply the laws of the State of New
York.  The losing party to the arbitration as determined by the arbitrators
shall pay the costs of arbitration.

     15.  SEPARABILITY

          15.1 In the event any portion of this License Agreement not material
to the remaining portions shall be held illegal, void or ineffective, the
remaining portions hereof shall remain in full force and effect.

          15.2 If any of the terms or provisions of this License Agreement are
in conflict with any applicable statute or rule of law, then such terms or
provisions shall be deemed inoperative to the extent that they may conflict
therewith and shall be deemed to be modified to conform with such statute or
rule of law.

          15.3 In the event that the terms and conditions of this License
Agreement are materially altered as a result of Sections 15.1 or 15.2, the
parties shall renegotiate the terms and conditions of this License Agreement so
as to accomplish as nearly as possible the original intentions of the parties.

     16.  ENTIRE AGREEMENT

          16.1 This License Agreement and the Appendices attached hereto,
entered into as of the date written above, constitutes the entire agreement
between the parties relating to the subject matter hereof and supersedes all
previous writings and understandings, including without limitation the Letter of
Intent between the parties, dated November 19, 1995 (except for Article II.A.
thereof,

                                       56
<PAGE>

which shall remain in effect), and the Confidential Disclosure Agreement
between the parties, dated June 26, 1996.  No terms or provisions of this
License Agreement shall be varied or modified by any prior or subsequent
statement, conduct or act of either of the parties, except that the parties
may amend this License Agreement by written instruments specifically
referring to and executed in the same manner as this License Agreement.

     17.  NOTICES

          17.1 Any notice required or permitted under this License Agreement
shall be in writing and in English and shall be sent by airmail, postage pre-
paid, or facsimile or courier to the following address of each party or to such
other address as may be designated in writing by the respective parties:

          If to HMRI:    Hoechst Marion Roussel, Inc.
                         Route 202-206
                         P.O. Box 6800
                         Bridgewater, NJ 08807-0800
                         Attention:  Andrew J. Gorman
                                     Director, Licensing and Alliances
                         Telephone:  (908) 231-3166
                         Facsimile:   (908) 231-3730

         With copies to: Hoechst Marion Roussel, Inc.
                         10236 Marion Park Drive
                         Kansas City, Missouri
                         Attention:  Vice President, General
                         Counsel, North America
                         Telephone:  (816) 966-4072
                         Facsimile:   (816) 966-2756

                         and

                         Hoechst Marion Roussel, Inc.
                         Bridgewater Center
                         Route 202-206
                         Bridgewater, New Jersey 08807-0800
                         Attention:  Vice President, General Counsel
                         Telephone:  (908) 231-3537
                         Facsimile:   (908) 231-2243

                                       57
<PAGE>

          If to TITAN:   Titan Pharmaceuticals. Inc.
                         400 Oyster Point Blvd., Suite 505
                         South San Francisco, CA 94080
                         Attention:  Dr. Louis R. Bucalo, M.D.
                                     President & CEO
                         Telephone:  (415) 244-4990
                         Facsimile:   (415) 244-4956

         With copies to: Titan Pharmaceuticals, Inc.
                         400 Oyster Point Blvd., Suite 505
                         South San Francisco, CA 94080
                         Attention:  Sunil R. Bhonsle
                                     Executive V.P. & COO
                         Telephone:  (415) 244-4990
                         Facsimile:   (415) 244-4956

                         and

                         Heller Ehrman White & McAuliffe
                         525 University Avenue
                         Palo Alto, CA 94301-1900
                         Attention:  Neil Flanzraich, Esq.
                         Telephone:  (415) 324-7118
                         Facsimile:   (415) 324-0638

          17.2 Any notice required or permitted to be given concerning this
License Agreement shall be effective upon receipt by the party to whom it is
addressed.

     18.  ASSIGNMENT

          18.1 This License Agreement or any portions thereof and the licenses
herein granted shall be binding upon and inure to the benefit of the successors
in interest and assignees of the respective parties.

          18.2 TITAN may assign this License Agreement to an AFFILIATE and in
such event TITAN will continue to guarantee the obligations of such AFFILIATE
hereunder, unless otherwise approved by HMRI, which approval shall not be
unreasonably withheld.  TITAN may also assign this License Agreement to a
special purpose accelerated research corporation (SPARC), or

                                       58
<PAGE>

similar entity in which TITAN retains rights to reacquire all or a majority
of the special purpose corporation or rights provided for under the License
Agreement or retains the primary responsibility for completing the
development and/or commercialization of COMPOUND and/or PRODUCT.

          18.3 In the event of a consolidation, merger or acquisition which
involves a change in the control of TITAN, the License Agreement shall remain in
full force and effect, and TITAN agrees to notify HMRI pursuant to Section 10.4.
Consolidation, mergers and/or acquisitions to which TITAN is a party which do
not involve a change in control of TITAN shall not require such notice.

          18.4 In order for any assignment by TITAN of this License Agreement
(which is permitted by this License Agreement) to be valid, the assignee of such
assignment shall assume and agree to be bound by the provisions hereof.

     19.  FAILURE TO ENFORCE

          19.1 The failure of either party to enforce at any time any provisions
hereof shall not be construed to be a waiver of such provision nor of the right
of such party thereafter to enforce each and every such provision.

     20.  NO AGENCY

          20.1 Except as expressly set forth in this License Agreement, nothing
in this License Agreement authorizes either party to act as agent for the other
or, as to any third party, to indicate or imply the existence of any such agency
relationship.  The relationship between the parties is that of independent
contractors.

     21.  FURTHER ASSURANCES

                                       59
<PAGE>

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

     22.  CAPTIONS

          22.1 Captions are inserted for convenience only and in no way are to
be construed to define, limit or affect the construction or interpretation
hereof.

     23.  MISCELLANEOUS

          23.1 Both parties agree to discuss matters arising during the term of
this License Agreement in the spirit of cooperation and good faith and endeavor
to resolve any differences by mutual agreement whenever possible.  If the
parties fail to reach agreement, either party may submit the matter for
resolution pursuant to Section 14.2.

          23.2 TITAN covenants to HMRI that during the term of this License
Agreement TITAN, its AFFILIATES and SUBLICENSEES shall not violate the Federal
Foreign Corrupt Practices Act in the performance of its negotiations hereunder.

          IN WITNESS WHEREOF, the parties, through their authorized officers,
have executed this License Agreement as of the date first written above.



HOECHST MARION ROUSSEL INC.        TITAN PHARMACEUTICALS, INC.


By:  /s/                                By:  /s/
     -----------------------------           ---------------------------
Name: Michael A. Yeomans, Ph.D.         Name: Louis R. Bucalo, M.D.
Title: Vice President, Licensing        Title: President & CEO
         and Alliances


                                       60
<PAGE>

                                    Appendix A
                  PATENTS AND PATENT APPLICATIONS (PER SECTION 1.12)
<TABLE>
<CAPTION>

                       PATENT     FILING                                PATENT      ISSUE       EXPIRATION
COUNTRY               APPL. NO.    DATE       TYPE          STATUS        NO.        DATE          DATE
----------------------------------------------------------------------------------------------------------
<S>                 <C>           <C>       <C>           <C>        <C>            <C>         <C>
US                  07/354,411    05/19/89                abandoned
----------------------------------------------------------------------------------------------------------
US                  07/456,790    12/29/89    CIP +       abandoned
----------------------------------------------------------------------------------------------------------
EP                  90/09208.0    05/16/90                granted    0 402 644 B1   08/16/95     05/16/2010
----------------------------------------------------------------------------------------------------------
Austria             55770/90      05/22/90                issued        640,653     09/02/93     05/22/2010
----------------------------------------------------------------------------------------------------------
Canada              2,017,193-6   05/18/90
----------------------------------------------------------------------------------------------------------
China               90103721.4    05/19/90
----------------------------------------------------------------------------------------------------------
Czech Republic      2425-90       05/17/90
----------------------------------------------------------------------------------------------------------
Finland             902449        05/17/90
----------------------------------------------------------------------------------------------------------
Hungary             3090/90       05/18/90
----------------------------------------------------------------------------------------------------------
Israel              94425         05/17/90
----------------------------------------------------------------------------------------------------------
Japan               127090/90     05/18/90                 issued        1931594    02/16/95     05/18/2010
----------------------------------------------------------------------------------------------------------
Korea               90/7102       05/18/90
----------------------------------------------------------------------------------------------------------
Mexico              20787         05/18/90
----------------------------------------------------------------------------------------------------------
Norway              P902214       05/18/90                                177301    08/23/95     05/18/2010
----------------------------------------------------------------------------------------------------------
Philippines         40530         05/17/90
----------------------------------------------------------------------------------------------------------
Poland              P-285247      05/18/90                                163965    12/09/93
----------------------------------------------------------------------------------------------------------
Russia              4743876/04    05/18/90
----------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------
US                  07/619,825    11/29/90  continuation   abandoned
----------------------------------------------------------------------------------------------------------
US                  07/944,705    09/05/91  continuation   abandoned
----------------------------------------------------------------------------------------------------------
US                  07/788,269    11/05/91    CIP          abandoned
----------------------------------------------------------------------------------------------------------
US                  07/969,383    10/30/92    CIP          issued       5,364,866   11/15/94     11/15/2011
----------------------------------------------------------------------------------------------------------
PCT                 92/09276      11/04/92                 WO/93/09102
----------------------------------------------------------------------------------------------------------
EP                  92/924151.1   11/04/92
----------------------------------------------------------------------------------------------------------
EP (PT)             92/118992.5   11/05/92
----------------------------------------------------------------------------------------------------------
Austria             30570/92      11/04/92
----------------------------------------------------------------------------------------------------------
Belarus             1715          11/04/92
----------------------------------------------------------------------------------------------------------
Canada              2,121,253     11/04/92
----------------------------------------------------------------------------------------------------------
Czech Republic      PV 1102-94    11/04/92
----------------------------------------------------------------------------------------------------------
Finland             942052        11/04/92
----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

                       PATENT     FILING                                PATENT      ISSUE       EXPIRATION
COUNTRY               APPL. NO.    DATE       TYPE          STATUS        NO.        DATE          DATE
----------------------------------------------------------------------------------------------------------
<S>                 <C>           <C>       <C>           <C>        <C>            <C>         <C>
Georgia             001977        11/04/92
----------------------------------------------------------------------------------------------------------
Hungary             P9401316      11/04/92
----------------------------------------------------------------------------------------------------------
Israel              103622        11/03/92
----------------------------------------------------------------------------------------------------------
Japan               5-508591      11/04/92
----------------------------------------------------------------------------------------------------------
Korea               94-701524     11/04/92
----------------------------------------------------------------------------------------------------------
Kazakhstan          941593.1      11/04/92
----------------------------------------------------------------------------------------------------------
Mexico              926370        11/05/92
----------------------------------------------------------------------------------------------------------
Norway              941647        11/04/92
----------------------------------------------------------------------------------------------------------
New Zealand         245006        11/03/92                               245006     05/17/96    11/03/2012
----------------------------------------------------------------------------------------------------------
Philippines         45259         11/12/92
----------------------------------------------------------------------------------------------------------
Poland              P-303452      11/04/92
----------------------------------------------------------------------------------------------------------
Romania             9400761       11/04/92
----------------------------------------------------------------------------------------------------------
Russia              94028105.04   11/04/92
----------------------------------------------------------------------------------------------------------
Slovak Republic     PV 0456-94    11/04/92
----------------------------------------------------------------------------------------------------------
Taiwan              81108831      11/05/92
----------------------------------------------------------------------------------------------------------
Uzbekistan          9500706.1     11/04/92
----------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------
US                  08/144,265    10/28/93     CIP         abandoned
----------------------------------------------------------------------------------------------------------
US                  08/309,395    09/20/94     CIP**       pending
----------------------------------------------------------------------------------------------------------
US                  08/329,000*   10/25/94     CIP**       allowed
----------------------------------------------------------------------------------------------------------
US                  08/468,611    06/06/95     DIV**       pending
----------------------------------------------------------------------------------------------------------
PCT                 94/12054      10/27/94                 WO95/11680
----------------------------------------------------------------------------------------------------------
Canada              94/12054      10/27/94
----------------------------------------------------------------------------------------------------------
China               94194302.X    10/27/94
----------------------------------------------------------------------------------------------------------
Czech Republic      PV 1238-96    10/27/94
----------------------------------------------------------------------------------------------------------
Hungary             P/P 00576     06/29/95                               211,853    11/05/95     06/29/2015
----------------------------------------------------------------------------------------------------------
Indonesia           951058        06/08/95
----------------------------------------------------------------------------------------------------------
Ireland             94/12054      10/27/94
----------------------------------------------------------------------------------------------------------
Israel              111,498       10/27/94
----------------------------------------------------------------------------------------------------------
Japan               512724/1995   10/27/94
----------------------------------------------------------------------------------------------------------
</TABLE>
                                       A-2
<PAGE>
<TABLE>
<CAPTION>

                       PATENT     FILING                                PATENT      ISSUE       EXPIRATION
COUNTRY               APPL. NO.    DATE       TYPE          STATUS        NO.        DATE          DATE
----------------------------------------------------------------------------------------------------------
<S>                 <C>           <C>       <C>           <C>        <C>            <C>         <C>
Korea               96-702162     10/27/94
----------------------------------------------------------------------------------------------------------
Mexico              94 8405       10/27/94
----------------------------------------------------------------------------------------------------------
Norway              p961686       10/27/94
----------------------------------------------------------------------------------------------------------
New Zealand         275941        10/27/94
----------------------------------------------------------------------------------------------------------
Poland              P314135       10/27/94
----------------------------------------------------------------------------------------------------------
Romania             96-00888      10/27/94
----------------------------------------------------------------------------------------------------------
Russia              96110214      10/27/94
----------------------------------------------------------------------------------------------------------
Taiwan              83110396      11/10/94
----------------------------------------------------------------------------------------------------------
South Africa        95/2653       10/28/94
----------------------------------------------------------------------------------------------------------
</TABLE>

           *subject to a 60 way restriction requirement; 329,000 survived as one
            to the 60 divisionals
          **pending as one of the 60 divisionals
          + CIP (Continuation-in-part)

                                       A-3
<PAGE>

                                  APPENDIX B

                      MAJOR METABOLITES (PER SECTION 1.5)
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
 COMPOUND NO.                  NAME                              R1      R2         R3
---------------------------------------------------------------------------------------
<S>              <C>                                             <C>  <C>         <C>

 P88 8991        4-[3-[4-(6-fluoro-1,2-benzisoxazol-3-yl)-1-     H    CH(OH)CH3    OCH3
                 piperidinyl]propoxy]-3-methoxy- A-methyl-
                 benzenemethanol
 P89 9124        1-[4-[3-[4-(6-fluoro-1,2-benzisoxazol-3-yl)-    H    C(O)CH3      OH
                 1-piperidinyl]propoxy]-3-hydroxyphenyl]-
                 ethanone
 P94 11840       1-[4-[3-[4-(6-fluoro-1,2-benzisoxazol-3-yl)-    H    C(O)CH2OH    OCH3
                 1-piperidinyl]propoxy]-3-methoxyphenyl]-2-
                 hydroxyethanone
 P89 9430        4-[3-[4-(6-fluoro-1,2-benzisoxazol-3-yl)-1-
                 piperidinyl]propoxy]-3-hydroxy-a-
                 methylbenzenemethanol                           H    CH(OH)CH3    OH
 P94 11677       4-[3-[4-(6-fluoro-1,2-benzisoxazol-3-yl)-1-    OH    CH(OH)CH3    OCH3
                 piperidinyl]propoxy]-2-hydroxy-5-methoxy-
                 a-methylbenzenemethanol
 P94 11679       1-[4-[3-[4-(6-fluoro-1,2-benzisoxazol-3-yl)-
                 1-piperidinyl]propoxy]-2-hydroxy-5-
                 methoxyphenyl]ethanone                         OH    C(O)CH3      OCH3
 P94 11702       1-[4-[3-[4-(6-fluoro-1,2-benzisoxazol-3-yl)-
                 1-piperidinyl]propoxy]-2,5-
                 dihydroxyphenyl]-ethanone                      OH    C(O)CH3      OH
</TABLE>
<PAGE>

The information below marked by * and [     ] has been omitted pursuant to a
request for confidential treatment.  The omitted portion has been separately
filed with the Commission.

                                APPENDIX C

    [                             *                             ]

<PAGE>

                                 APPENDIX D
               STOCK REGISTRATION RIGHTS GRANTED BY TITAN TO HMRI
                              (PER SECTION 3.1)


1.   DEFINITIONS.

As used in this Appendix D:

(a)  "SECURITIES ACT" means the Securities Act of 1933, as amended.

(b)  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

(c)  "HMRI" means Hoechst Marion Roussel, Inc.

(d)  "LICENSE AGREEMENT" means the Worldwide License Agreement between
Hoechst Marion Roussel, Inc., and Titan Pharmaceuticals, Inc., effective
December 31, 1996.

(e)  "REGISTRABLE SECURITIES" means the Common Stock of TITAN issuable or
issued to HMRI pursuant to the LICENSE AGREEMENT or in exchange for or in
replacement of any of such shares.

(f)  "SEC" means the United States Securities and Exchange Commission.

(g)  "TITAN" means Titan Pharmaceuticals, Inc.

2.   DEMAND REGISTRATION

If at any time at least eight (8) months after the date HMRI becomes
entitled to receive any REGISTRABLE SECURITIES pursuant to the License
Agreement, HMRI requests in writing that any shares of such REGISTRABLE
SECURITIES be registered under the SECURITIES ACT for resale to the public by
HMRI, TITAN shall take all necessary action to effect such registration in
accordance with the provisions of this Appendix; provided, however, that TITAN
shall not be required to cause any such registration to become effective as to
any specific REGISTRABLE SECURITIES sooner than nine (9) months after the date
HMRI becomes entitled to receive such REGISTRABLE SECURITIES.

TITAN's obligation to effect a registration pursuant to this Section 2
shall be limited to a total of three occasions, once for each payment by TITAN
of a license fee under the License Agreement, which is comprised, in part, of
REGISTRABLE SECURITIES.

<PAGE>

                             APPENDIX D (Cont.)

3.   TITAN REGISTRATION

If (but without any obligation to do so) TITAN proposes to register
(including for this purpose a registration effected by TITAN for stockholders
other than HMRI) any of its stock or other securities under the SECURITIES ACT
in connection with the public offering of such securities (other than a
registration relating solely to the sale of securities to participants in a
Company plan for employees, a registration relating solely to a Rule 145
transaction, a registration on any form which does not  include substantially
the same information as would be required to be included in a registration
statement for the sale of the REGISTRABLE SECURITIES or a registration in which
the only Common Stock being registered is Common Stock issuable upon conversion
of debt securities which are also being registered), TITAN shall, at such time,
promptly  give HMRI written notice of such registration. Upon HMRI's request
given within twenty (20) days after mailing of such notice by TITAN, TITAN
shall, subject to the provisions of Section 8, cause to be registered under the
SECURITIES ACT all of the REGISTRABLE SECURITIES that HMRI requests be included
in such registration.

4.   OBLIGATIONS OF TITAN

Whenever required under this Appendix to effect the registration of any
REGISTRABLE SECURITIES, TITAN shall, as expeditiously as reasonably possible:

(a)  Not more than 30 days after receiving a registration request under
Section 2 hereof, prepare and file with the SEC a registration statement on Form
S-3 (or another applicable Form if TITAN is ineligible to use Form S-3) to
register the offering and sale of such REGISTRABLE SECURITIES on a delayed or
continuous basis under SEC Rule 415 and to use its best efforts to cause such
registration statement to become effective as promptly as possible and to remain
effective until all shares registered thereby either have been sold or
surrendered to TITAN pursuant to Section 3.1 of the License Agreement, or have
become eligible for sale within a three-month period pursuant to the provisions
of SEC Rule 144.

Notwithstanding the foregoing, TITAN may defer for an additional thirty
(30) days the filing of any registration statement provided for under Section 2
hereof if the Board of Directors of TITAN, in its good faith judgment made after
receipt of HMRI's request for registration, determines that it would be
seriously detrimental to TITAN and its shareholders to effect the registration
at that time.  In any such case, TITAN shall furnish to HMRI a certificate
signed by the President of TITAN setting forth the Board's determination.  The
Company shall not utilize this deferral right more than once annually, and any
exercise of this right by TITAN shall not extend the time period during which
the proceeds of sales of REGISTRABLE SECURITIES are offset against TITAN's
obligations to make cash payments to HMRI under Section 3.1 of the LICENSE
AGREEMENT.

                                       D-2
<PAGE>

                             APPENDIX D (Cont.)

(b)  Prepare and file with the SEC such amendments and supplements to any
registration statement hereunder and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
SECURITIES ACT with respect to the disposition of all securities covered by such
registration statement.

(c)  Furnish to HMRI such numbers of copies of a prospectus, including a
preliminary prospectus, in conformity with the requirements of the SECURITIES
ACT, and such other documents as HMRI may reasonably request in order to
facilitate the disposition of the REGISTRABLE SECURITIES.

(d)  Use its best efforts to register and qualify the securities covered by
such registration statement under such other securities or blue sky laws of such
jurisdictions as shall be reasonably requested by HMRI; provided that TITAN
shall not be required in connection therewith or as a condition  thereto to
qualify to do business or to file a general consent to service a process in any
such states or jurisdictions, unless TITAN is already subject to service in such
jurisdiction and except as may be  required by the SECURITIES ACT.

(e)  In the event of any underwritten public offering under Section 3,
enter into and perform its  obligations under an underwriting agreement, in the
usual and customary form, with the managing underwriter of the offering.  HMRI
shall also enter into and perform its  obligations under such an agreement.

(f)  During any period when a prospectus relating thereto is required to be
delivered under the SECURITIES ACT, notify HMRI promptly of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect,  includes any untrue statement of a material fact
or omits to state a material fact required to be stated therein or any fact
necessary to make the statements therein not misleading in the light of the
circumstances then existing.  Upon receipt of such notification, HMRI shall
forthwith discontinue disposition of REGISTRABLE SECURITIES pursuant to the
registration statement covering the same until receipt of a supplemental or
amended prospectus from TITAN, and, if so directed by TITAN, deliver to TITAN at
TITAN's expense all copies in HMRI's possession of the prospectus covering
REGISTRABLE SECURITIES that was in effect prior to the amendment or
supplementation.

(g)  Cause all REGISTRABLE SECURITIES registered pursuant hereto to be
listed on each securities exchange (or listed for quotation on each automated
quotation system such as the NASDAQ Stock Market) on which similar securities
issued by TITAN are then listed.

(h)  Provide a stock transfer agent and registrar for all REGISTRABLE
SECURITIES registered hereunder and a CUSIP number for all such REGISTRABLE
SECURITIES, in each case not later than the effective date of such registration.

                                       D-3
<PAGE>

                             APPENDIX D (Cont.)

5.   FURNISH INFORMATION

It shall be a condition precedent to the obligations of TITAN to take any
action pursuant to this Appendix with respect to any REGISTRABLE SECURITIES that
HMRI shall furnish to TITAN in writing (and stated to be specifically for
inclusion in the related registration statement or prospectus) such information
regarding itself, the REGISTRABLE SECURITIES, and the intended method of
disposition of such securities as shall be required to effect the registration
of such REGISTRABLE SECURITIES and to permit TITAN to comply with all applicable
requirements of the SEC, any blue sky laws or other applicable legal
requirements.

6.   EXPENSES OF REQUESTED REGISTRATION

All expenses other than brokerage commissions incurred in connection with
registrations, filings or qualifications pursuant to Section 2 hereof, including
(without limitation) all registration, filing and qualification fees, printing
and accounting fees, and the fees and disbursements of counsel for TITAN, shall
be borne by TITAN; provided, however, that TITAN shall not be required to pay
for any expenses of any registration proceeding begun pursuant to Section 2 if
the registration request is subsequently withdrawn at the request of HMRI, in
which case HMRI shall bear such expenses unless such withdrawal is based upon
material adverse information relating to TITAN that is different from
information known or available (upon request from TITAN or otherwise) to HMRI at
the time of HMRI's request for registration.

7.   EXPENSES OF COMPANY REGISTRATION

The Company shall bear and pay all expenses incurred in connection with any
registration, filing or qualification of REGISTRABLE SECURITIES pursuant to
Section 3 hereof, including (without limitation) all registration, filing, and
qualification fees, printing and accounting fees relating or apportionable
thereto and the reasonable fees and disbursements of outside counsel for HMRI,
but excluding underwriting discounts and commissions relating to REGISTRABLE
SECURITIES.

8.   UNDERWRITING REQUIREMENTS

In connection with any offering under Section 3 hereof involving an
underwriting of shares of TITAN's capital stock, TITAN shall not be required to
include any of HMRI's REGISTRABLE SECURITIES in such underwriting unless HMRI
accepts the terms of the underwriting as agreed upon between TITAN and the
underwriters selected by it (or by other persons entitled to select the
underwriters), and then only in such quantity as the underwriters determine in
their sole discretion will not jeopardize the success of the offering by TITAN.
If the total amount of securities, including REGISTRABLE SECURITIES, requested
by stockholders to be included in such offering exceeds the amount of securities
sold other than by TITAN that the underwriters determine in their sole
discretion is compatible with the success of the offering, then TITAN shall be
required to include

                                       D-4
<PAGE>

                             APPENDIX D (Cont.)

in the offering only that number of such securities, including REGISTRABLE
SECURITIES, that the underwriters determine in their sole discretion will not
jeopardize the success of the offering (the securities so included to be
apportioned pro rata among the selling stockholders according to the total
amount of securities entitled to be included therein owned by each selling
stockholder or in such other proportions as shall mutually be agreed to by
such selling stockholders). For purposes of the preceding parenthetical
concerning apportionment, for any selling stockholder that is a partnership
or corporation, the  partners, retired partners and stockholders of such
holder, or the estates and family members of any such partners and retired
partners and any trusts for the benefit of any of the foregoing persons shall
be deemed a single "selling stockholder", and any pro-rata reduction with
respect to such "selling stockholder" shall be based upon the aggregate
amount of shares carrying registration rights owned by all entities and
individuals included in such "selling stockholder", as defined in this
sentence.

9.   DELAY OF REGISTRATION

HMRI shall not have any right to obtain or seek an injunction restraining
or otherwise delaying any registration under Section 3 hereof as the result of
any controversy that might arise with respect to the interpretation or
implementation of this Appendix.

10.  INDEMNIFICATION

In the event any REGISTRABLE SECURITIES are included in a registration
statement under this Appendix:

(a)  To the extent permitted by law, TITAN will indemnify and hold harmless
HMRI and each person, if any, who controls HMRI within the meaning of the
SECURITIES ACT or the EXCHANGE ACT, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the
SECURITIES ACT or the EXCHANGE ACT, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation"): (i) any untrue statement or alleged untrue statement of a material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein and any amendments and
supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or a fact necessary to make the
statements therein not misleading, or (iii) any violation or alleged violation
by TITAN of the SECURITIES ACT, the EXCHANGE ACT, or any rule or regulation
promulgated under the SECURITIES ACT or the EXCHANGE ACT, and TITAN will pay to
HMRI and any such controlling person, as incurred, any legal or other expenses
reasonably incurred by any of them in connection with investigating or defending
any such loss, claim, damage, liability, or action; provided, however, that the
indemnity agreement contained in this Section 10 shall not apply to amounts paid
in settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of TITAN (which consent shall

                                       D-5
<PAGE>

                             APPENDIX D (Cont.)

not be unreasonably withheld), nor shall TITAN be liable in any such case for
any such loss, claim damage, liability, or action to the extent that it
arises out of or is based upon a violation that occurs in reliance upon and
in conformity with written information furnished expressly for use in
connection with such registration by HMRI or any such controlling person.

(b)  To the extent permitted by law, HMRI will indemnify and hold harmless
TITAN, each of its directors, each of its officers who has signed the
registration statement, each person, if any, who controls TITAN within the
meaning of the SECURITIES ACT or the EXCHANGE ACT, any underwriter, any other
stockholder selling securities under such registration statement, and any
controlling person of any such underwriter or other stockholder, against any
losses, claims, damages, or liabilities (joint or several) to which any of the
foregoing persons may become subject under the SECURITIES ACT or the EXCHANGE
ACT insofar as such losses, claims, damages, or liability (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by HMRI expressly for use in
connection with such registration; and HMRI will pay, as incurred, any legal or
other expenses reasonably incurred by any person intended be indemnified
pursuant to this subsection 10(b) in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this subsection 10(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability, or action
if such settlement is effected without the consent of HMRI, which consent shall
not be unreasonably withheld; provided, that, in no event shall HMRI's liability
under this subsection 10(b) exceed the gross proceeds from the offering received
by HMRI.

(c)  Promptly after receipt by an indemnified party under this Section 10
of notice of the commencement of any action including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 10, deliver to the indemnifying party
a written notice of the commencement thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party (together with all other indemnified parties
who may be represented without conflict by one counsel) shall have the right to
retain one separate counsel, with the fees and expenses to be paid by the
indemnifying party, if representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interest between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, if prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 10, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 10.

                                       D-6
<PAGE>

                             APPENDIX D (Cont.)

(d)  If the indemnification provided for in this Section 10 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage, or expense referred to therein,
then the indemnifying party, in lieu of indemnifying such indemnified party
hereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions that resulted in such loss, liability, claim,
damage, or expense as well as any other relevant equitable considerations.  The
relative fault of the indemnifying party and of the indemnified party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the indemnifying party or by the indemnified
party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.

(e)  Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with any underwritten public offering are in conflict with
the foregoing provisions, the provisions in the underwriting agreement shall
control.

(f)  The obligations of TITAN and HMRI under this Section 10 shall survive
the completion of any offering of REGISTRABLE SECURITIES in a registration
statement under this Appendix, and otherwise.

11.  ASSIGNMENT OF REGISTRATION RIGHTS

The rights to cause TITAN to register REGISTRABLE SECURITIES pursuant to
this Appendix may be assigned (but only with all related obligations) by HMRI to
a transferee or assignee of such securities who, after such assignment or
transfer, holds at least 500,000 shares of REGISTRABLE SECURITIES (subject to
appropriate adjustment for stock splits, stock dividends, combinations and other
recapitalizations), provided: (a) TITAN is, within a reasonable time after such
transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; (b) such transferee or assignee agrees
in writing to be bound by and subject to the terms and conditions of this
Appendix, including without limitation the provisions of Section 12 below; and
(c) such assignment shall be effective only if immediately following such
transfer the further disposition of such securities by the transferee or
assignee is restricted under the SECURITIES ACT.

12.  MARKET STANDOFF AGREEMENT

HMRI hereby agrees that, during the period of duration specified by TITAN
and an underwriter of common stock or other securities of TITAN, following the
effective date of a registration

                                       D-7
<PAGE>

statement of TITAN filed under the SECURITIES ACT, HMRI shall not, to the
extent requested by TITAN and such underwriter, directly or indirectly sell,
offer to sell, contract to sell (including without limitation, any short
sale), grant any option to purchase, or otherwise transfer or dispose of
(other than to donees who agree to be similarly bound) any securities of
TITAN held by HMRI at any time during such period except common stock
included in such registration; provided, however:

(a)  that such market stand-off time period shall not exceed 90 days
following the effective date of TITAN's registration statement to which it
relates; and

(b)  all officers and directors of TITAN and all five percent (5%) or
greater stockholders of TITAN enter into substantially similar agreements.

In order to enforce the foregoing covenant, TITAN may impose stop-transfer
instructions with respect to the REGISTRABLE SECURITIES (and the shares or
securities of every other person subject to the foregoing restriction) until the
end of such period.

Notwithstanding the foregoing. the obligations described in this Section 12
shall not apply  to a registration relating solely to employee benefit plans on
Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or
a registration  relating solely to an SEC Rule 145 transaction on Form S-4 or
similar forms that may be promulgated in the future.

13.  TERMINATION OF REGISTRATION RIGHTS

The right of HMRI to request registration or inclusion in any registration
pursuant to this Appendix shall terminate when all payments required to be made
under Section 3.1 of the LICENSE AGREEMENT have been made by TITAN and all
shares of REGISTRABLE SECURITIES held by HMRI may be sold immediately under SEC
Rule 144 during any three-month period.

                                       D-8
<PAGE>

The information below marked by * and [     ] has been omitted pursuant to a
request for confidential treatment.  The omitted portion has been separately
filed with the Commission.

                                    APPENDIX E

         [                             *                             ]

<PAGE>

                                   APPENDIX F

               HMRI DEVELOPMENT ACTIVITY TO EXTEND BEYOND THE
                     TRANSITION PERIOD (PER SECTION 6.1)

     1.   HMRI Review of Final Toxicology Report(s) as Noted:

     Title / Description                               Estimated Target Date
     -------------------                               ---------------------
     Oral 24-month carcinogenicity study in mouse         4th Quarter 1997

     Oral 24-month carcinogenicity study in rat           3rd Quarter 1997

     2.   HMRI Assisting TITAN's Production and Manufacturing (pursuant to
          Article 7):

     A.   HMRI production and manufacturing staff shall be available to meet
          with TITAN and its THIRD PARTY contract manufacturer to discuss the
          efficient transfer of technology and KNOW-HOW necessary for the
          manufacture of COMPOUND and PRODUCT (pursuant to Section 7.1).

     B.   By a time frame to be determined by January 30, 1997 (and agreed to by
          TITAN), HMRI shall carry out, in accordance with FDA standards,
          activities to qualify the HMR-Frankfurt production site as a GMP
          production site to allow for commercial use of the currently available
          bulk substance.  HMRI and TITAN will meet to define together those
          technical activities necessary to qualify the bulk substance for
          commercial use and to develop a plan to complete those activities.

     C.   HMRI shall provide the necessary C/M/C, production and manufacturing
          documents to support the NDA or an equivalent foreign submission by
          TITAN or its SUBLICENSEE.

     3.   Transfer of Supplies of Drug Substance, Bulk Tablets and Packaged
          Tablets of Product (pursuant to Article 7).

          Supplies of drug substance, bulk tablets and packaged tablets of
     PRODUCT as specified by TITAN (Section 7.1(a)) shall be made available and
     transferred by HMRI to TITAN or to a THIRD PARTY, as specified by TITAN.
     The physical shipment of these supplies shall occur once TITAN has notified
     HMRI in writing that TITAN has contracted with a THIRD PARTY manufacturer,
     has secured adequate storage space for storing tablets and has notified the
     FDA that TITAN will be the sponsor of the IND.

<PAGE>

                             APPENDIX F (Continued)

     4.   Exchange of Information (pursuant to Section 6.1).

     HMRI shall promptly notify all HMRI (and/or AFFILIATES) employees to retain
     and make available to TITAN existing reports, files and information
     directly related and deemed necessary for the development of COMPOUND or
     PRODUCT.

     5.   HMRI shall archive all non-clinical drug screening documentation not
          transferred to TITAN.


                                       F-2
<PAGE>

                              APPENDIX G

                   SPECIAL COUNTRIES IN TERRITORY REGARDING
                   HMRI'S PATENT PROTECTION (PER SECTION 8.2)

          United States
PCT
          Australia           Brazil
          Canada              Bulgari
          China               Kazakhstan
          Czech Republic
          EPO
          Austria             Belgium        Iceland
          Denmark             Finland
          France              Germany
          Great Britain       Greece
          Ireland             Italy
          Latvia              Lithuania
          Luxembourg          Monaco
          Netherlands         Portugal
          Slovenia            Spain
          Sweden              Switzerland with Liechtenstein
          Estonia             Turkey
          Hungary             Romania
          Israel              Singapore
          Japan               Ukraine
          Mexico
          New Zealand
          Norway
          Poland
          Russian
          Slovakia
          South Korea

Non-PCT
          Argentina
          South Africa
          Taiwan
          Egypt
          Chile
          Venezuela
          Indonesia
          Saudi Arabia
          Philippines
<PAGE>

                             APPENDIX G (Continued)
          Thailand
          India
          Hong Kong
          Malaysia


                                       G-2