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


                              PRINCETON UNIVERSITY

                                LICENSE AGREEMENT

     This Agreement is made and entered into this 29th day of June 1998 (the
Effective Date) by and between The Trustees of PRINCETON UNIVERSITY a
not-for-profit corporation duly organized and existing under the laws of the
STATE OF NEW JERSEY, U.S.A. (hereinafter referred to as PRINCETON), and
Intercardia, Inc., a corporation duly organized under the laws of Delaware, and
having its principal office at 3200 East Highway 54, Cape Fear Building, Suite
300, Research Triangle Park, NC 27709 (hereinafter referred to as LICENSEE).

                                   WITNESSETH

     WHEREAS, PRINCETON is the owner of certain "Patent Rights" (as later
defined herein) relating to Princeton University Case #98-1476-1, [ * ] and has
the right to grant licenses under said Patent Rights; and

     WHEREAS, PRINCETON desires to have the Patent Rights utilized in the public
interest and is willing to grant an exclusive license thereunder; and

     WHEREAS, PRINCETON and Interneuron Pharmaceuticals, Inc ("Interneuron")
entered into a Research Agreement on April 29, 1997 (the "Research Agreement")
granting Interneuron an exclusive option to acquire an exclusive worldwide
license, with the right to sublicense, to any inventions and confidential
information, including any Patent Rights arising under the Research Agreement;

     WHEREAS, Interneuron has assigned the Research Agreement to LICENSEE,

     WHEREAS, LICENSEE desires to obtain an exclusive license under the Patent
Rights upon the terms and conditions hereinafter set forth; and

     WHEREAS, LICENSEE has represented to PRINCETON, to induce PRINCETON to
enter into this Agreement, that LICENSEE intends to commit itself to a thorough,
vigorous and diligent program of exploiting the Patent Rights with the intention
that public utilization shall result therefrom;

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



<PAGE>


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


                             ARTICLE I - DEFINITIONS

     For the purposes of this Agreement, the following words and phrases shall
have the following meanings:

     1.1 "Affiliate" shall mean any corporation, company, or other business
entity controlled by, controlling or under common control with LICENSEE or
Princeton, as the case may be. For this purpose, control shall mean direct or
indirect beneficial ownership of more than fifty percent (50%) of the voting
stock of, or a fifty percent (50%) or greater interest in the income of such
corporation or other business entity or fifty percent (50%) or greater
management control over a joint venture, or such other relationship as, in fact,
constitutes actual control.

     1.2 "Assay" shall mean a method, process, assay, or screening procedure
that is covered either by a pending claim of a patent application or by a valid,
unexpired claim of an issued patent that is part of the Patent Rights.

     1.3 "Compound" shall mean any compound that [ * ] activity and which
activity is discovered by use of an Assay.

     1.4 "Licensed Products shall mean any commercial product that includes a
[*], which is covered by a valid, unexpired claim of an issued patent in the
Patent Rights in the country in which the Licensed Product(s) is sold.

     1.5 "Licensed Process(es)" shall mean any commercial process that includes
an Assay, which is covered by a valid, unexpired claim of an issued patent in
the Patent Rights in the country in which the Licensed Process(es) is used.

     1.6 "LICENSEE" shall mean Intercardia, Inc. ("ITRC"), and any Affiliate or
Subsidiary of ITRC.

     1.7 [ * ] shall mean a [ * ], which is covered either by a pending claim of
a patent application or by a valid, unexpired claim of an issued patent that is
part of the Patent Rights.

     1.8 "Net Revenues" shall mean all amounts actually received on account of
billings by LICENSEE or its Sublicensees for the sale of the Licensed
Product(s), Licensed Process(es) or Compound(s), less the sum of the following:

          (a) Discounts and free goods allowed in amounts customary in the
          trade;

          (b) Sales, tariff duties and/or use taxes directly imposed and with
          reference to particular sales;


                                       2
<PAGE>


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


          (c) Outbound transportation prepaid or allowed;

          (d) Amounts allowed or credited on returns, including, but not limited
          to allowances or credits to customers on account of rejection or
          return of Licensed Product; and

          (e) Actual losses incurred due to changes in foreign currency exchange
          rates and an allowance for bad debt expense.

     Net Revenues shall not include amounts received by LICENSEE as payment for
product development or other services rendered by LICENSEE.

     1.9 "Party(ies)" shall mean person(s) or entity(ies) who is (are) party to
the Agreement.

     1.10 "Patent Rights" shall mean:

          (a) United States Provisional Patent Application Serial No. [ * ]
          filed February 2, 1998 on behalf of the Trustees of Princeton
          University in the name of Suzanne Walker Kahne, Hongbin Men, Peter
          Park, and Min Ge, inventors, including any regular patent
          applications, continuations, continuations-in-part, divisionals,
          reissues, reexaminations, or extensions thereof, or any international
          or foreign counterparts thereof, (hereinafter referred to as "Patent
          Rights Patent Applications"), and

          (b) Any United States and/or foreign patents issuing from any of the
          foregoing in 1.11 (a) (hereinafter referred to as the "Patent Rights
          Patents").

     1.11 "Research Program" shall mean the research project described in, and
conducted during the term of, the Research Agreement, which is attached hereto
as Appendix A.

     1.12 "Sublicense" shall mean a sublicense granted by LICENSEE.

     1.13 "Sublicensee" shall mean any Third Party licensed by LICENSEE to make,
have made, import, export, use or sell any Licensed Product or to use or sell
any Licensed Process.

     1.14 "Subsidiary" shall mean any corporation, company, or other entity,
more than fifty percent (50%) of whose voting stock is owned or controlled
directly or indirectly by ITRC.

     1.15 "Third Party" shall mean person(s) or entity(ies) who or which is
(are) neither a Party nor an Affiliate of a Party.


                                       3
<PAGE>


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


                          ARTICLE II - GRANT OF LICENSE

     2.1 PRINCETON hereby grants to LICENSEE an exclusive (even as to Princeton)
worldwide license, with the right to sublicense, under the Patent Rights to
make, have made, use, lease and/or sell the [ * ] and Licensed Product(s), and
to use, lease, and/or sell the Assay or Licensed Process(es) to the full end of
the term for which the Patent Rights are granted unless sooner terminated as
hereinafter provided.

     2.2 LICENSEE agrees to use commercially reasonable efforts to provide that
LICENSED PRODUCTS leased or sold in the United States shall be manufactured
substantially in the United States.

     2.3 PRINCETON expressly reserves the right to use the Patent Rights,
Licensed Products, Licensed Processes, and associated information and technology
for Princeton's own educational, research and other non-commercial purposes
only, provided, however, that PRINCETON shall notify LICENSEE of any additional
intellectual property that may arise from such use and shall offer LICENSEE a
first option to license such technology on terms and conditions to be negotiated
in good faith between the Parties, such option to be exercised within six (6)
months of disclosure of the invention by PRINCETON to LICENSEE.

     2.4 LICENSEE shall have the right to sublicense the Patent Rights granted
pursuant to this Agreement to any Third Party; provided that LICENSEE shall not
grant any such Sublicense without Princeton's written consent, which consent
shall not be unreasonably withheld.

     2.5 LICENSEE agrees that any sublicenses granted by it shall have privity
of contract between PRINCETON and Sublicensee such that the obligations of this
Agreement shall be binding upon the Sublicensee as if it were in the place of
LICENSEE. LICENSEE further agrees to attach copies of Articles II, V, VII, IX,
X, XII, XIII, and XV of this Agreement to all sublicense agreements,

     2.6 LICENSEE agrees to forward to PRINCETON a copy of any and all fully
executed sublicense agreements, and further agrees to forward to PRINCETON
annually a copy of such reports received by LICENSEE from its Sublicensees
during the preceding twelve (12) month period under the sublicenses as shall be
pertinent to a royalty accounting under said sublicense agreements.


                                       4
<PAGE>


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

                           ARTICLE III - DUE DILIGENCE

     3.1 LICENSEE shall use its best efforts to commercialize the Licensed
Product(s) and/or Licensed Process(es) through a thorough, vigorous and diligent
program for exploitation of the Patent Rights. The progress and results of
LICENSEE's efforts shall be reported to PRINCETON through annual reports.

     3.2 A sublicense by LICENSEE of the Patent Rights in accordance with the
terms of this Agreement shall satisfy the obligations of LICENSEE set forth in
Section 3.1; provided, however, that if the sublicense is terminated with
respect to a Licensed Product, LICENSEE shall continue to have the obligations
set forth in Section 3.1. In such event, LICENSEE shall also submit a
development plan to PRINCETON on an annual basis relating to the budget and
estimated time for development of Licensed Products.

     3.3 LICENSEE's failure to perform in accordance with Paragraphs 3.1 and 3.2
above shall be grounds for PRINCETON to have the right to terminate this
Agreement pursuant to Paragraph 7.3 hereof.

                       ARTICLE IV - ROYALTIES AND PAYMENTS

     4.1 For the rights, privileges and license granted hereunder, LICENSEE
shall pay to PRINCETON in the manner hereinafter provided to the end of the term
of the Patent Rights or until this Agreement shall be terminated as hereinafter
provided:

          (a) A License Issue Fee of One Hundred Sixty Thousand Dollars
          ($160,000), which shall be deemed earned immediately upon the
          execution of this Agreement and payable upon such execution.

          (b) License Maintenance Fees of Fifty Thousand Dollars ($50,000) per
          year, payable on each anniversary of the Effective Date of this
          Agreement until the earlier of the year in which the first commercial
          sale of Licensed Product or Licensed Process occurs or the termination
          of the Agreement occurs.

          (c) Running royalties in an amount equal to one percent (1%) of Net
          Revenues, provided, however, that fifty percent (50%) of any other
          royalties or payments accrued or paid by LICENSEE to a Third Party in
          connection with the manufacture, use, or sale of [ * ], Licensed
          Product(s), Compound(s), Assay(s), or Licensed Process(es) may be
          deducted from the amounts due under this Paragraph.


                                       5
<PAGE>

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


          (d) Milestone payment of one million dollars ($1,000,000) payable
          within ten (10) days after filing a New Drug Application with the Food
          and Drug Administration for the marketing of a Compound.

          (e) A payment in an amount equal to Twenty-Five Percent (25 %) of any
          Sublicense Fees received by LICENSEE from a Sublicensee of Licensed
          Product or Licensed Process, payable within ten (10) days of signing
          of such Sublicense Agreement.

     4.2 No multiple royalties shall be payable to PRINCETON pursuant to the
License if the manufacture, use or sale of a [ * ] or Licensed Product or
practice of the Assay or Licensed Process is covered by more than one patent
application or patent contained in the Patent Rights, if such royalty or payment
may be covered under more than one of the above provisions, or if a royalty is
payable to PRINCETON in connection with the manufacture, use or sale of such
Licensed Product or Compound under any other License agreement between PRINCETON
and LICENSEE; provided, however, that if a royalty would be payable to PRINCETON
under such other license agreement, then for such Licensed Product or Compound,
PRINCETON shall be entitled to select, by notifying LICENSEE in writing prior to
the First Commercial Sale of such Licensed Product or Compound, whether to
receive the royalty rate set forth under this Agreement or the royalty rate set
forth under such other license agreement.

     4.3 Royalty payments shall be paid in United States dollars in Princeton,
New Jersey, or at such other place as PRINCETON may reasonably designate
consistent with the laws and regulations controlling in any foreign country. Any
withholding taxes which LICENSEE or any Sublicensee shall be required by law to
withhold on remittance of the royalty payments shall be deducted from royalties
paid to PRINCETON. LICENSEE shall furnish PRINCETON with copies of all official
receipts for such taxes. If any currency conversion shall be required in
connection with the payment of royalties hereunder, such conversion shall be
made by using the exchange rate prevailing at a first-class foreign exchange
bank on the last business day of the calendar quarterly reporting period to
which such royalty payments relate.

                         ARTICLE V - REPORTS AND RECORDS

     5.1 LICENSEE shall keep full, true and accurate books of account containing
all particulars that may be necessary for the purpose of showing the amount
payable to PRINCETON by way of royalty as aforesaid. Said books of account shall
be kept at LICENSEE's principal place of business or the principal place of
business of the appropriate division of LICENSEE to which this Agreement
relates. Said books and the supporting data shall be open at all reasonable
times, for three (3) years following the end of the calendar year to which they
pertain, to the 


                                       6
<PAGE>


inspection of the PRINCETON Internal Audit Division and/or an independent
certified public accountant retained by PRINCETON and/or a certified public
accountant employed by PRINCETON for the purpose of verifying LICENSEE's royalty
statement or compliance in other respects with this Agreement.

     5.2 LICENSEE, within forty-five (45) days after March 31, June 30,
September 30 and December 31, of each year, shall deliver to PRINCETON true and
accurate reports, giving such particulars of the business conducted by LICENSEE
during the preceding quarter under this Agreement as shall be pertinent to a
royalty accounting hereunder. These shall include at least the following:

          (a) All Licensed Products manufactured and sold.

          (b) Total amounts actually received by LICENSEE on account of its
          billings for Licensed Product sold.

          (c) Accounting for all the Licensed Process(es) used or sold.

          (d) Deductions applicable as provided in Paragraph 1.9.

          (e) Total royalties due.

          (f) (fl Names and addresses of all SubLicensees of LICENSEE.

          (g) Annually, within one hundred (100) days of LICENSEE's fiscal year
          end, LICENSEE's certified financial statements for the preceding
          twelve (12) months including, at a minimum, a Balance Sheet and an
          Operating Statement.

     5.3 With each such report submitted, LICENSEE shall pay to PRINCETON the
royalties due and payable under this Agreement, provided that no payment to
PRINCETON shall be payable in the event that the remittance of royalties from
foreign countries to the accounts of LICENSEE in the United States shall be
blocked by exchange controls in foreign countries, which exchange controls are
beyond the control of LICENSE, in which case, such royalties shall be held in
escrow and paid to PRINCETON at such time as such exchange controls are no
longer blocked. If no royalties shall be due, LICENSEE shall so report.

                         ARTICLE VI - PATENT PROSECUTION

     6.1 PRINCETON and LICENSEE agree to cooperate fully in applying for,
obtaining, prosecuting and maintaining patents.


                                       7
<PAGE>



     6.2 For inventions originating under the Research Program, PRINCETON shall
promptly disclose to LICENSEE, in writing, any PRINCETON-owned or Jointly-owned
Inventions disclosed to PRINCETON. PRINCETON shall file and prosecute U.S. and
foreign patent applications in its name at LICENSEE's request and expense, using
mutually agreed upon patent counsel, on such PRINCETON-owned or Jointly-owned
Inventions as may, in LICENSEE's judgement, become appropriate during the term
of this Agreement.

     6.3 For inventions originating under the Research Program, PRINCETON shall
have the opportunity to file patent applications in its name at its own expense
for those PRINCETON-owned or Jointly-owned Inventions made by its personnel and
for which LICENSEE does not agree, within thirty (30) days after notification by
PRINCETON of its intent to file a patent application, to pay for PRINCETON to
file said patent applications.

     6.4 LICENSEE's patent counsel may prepare, file and prosecute all U.S.
applications for any Jointly-owned Inventions, at LICENSEE's sole cost and
expense, provided, however, that PRINCETON shall have the right to review and
approve the application, and be consulted on all prosecution actions, and
foreign filing decisions. PRINCETON's right, title and interest in the
Jointly-owned Inventions disclosed or claimed in such patent applications or in
any such patents shall be subject to the terms of this Agreement.

                            ARTICLE VII - TERMINATION

     7.1 If LICENSEE shall become bankrupt or insolvent, or shall file a
petition in bankruptcy, or if the business of LICENSEE shall be placed in the
hands of a receiver, assignee or trustee for the benefit of creditors, whether
by the voluntary act of LICENSEE or otherwise, this Agreement shall
automatically terminate.

     7.2 Should LICENSEE fail in its payment to PRINCETON of royalties due in
accordance with the terms of this Agreement, PRINCETON shall have the right to
serve notice upon LICENSEE by certified mail at the address designated in
Article XIV hereof, of its intention to terminate this Agreement within thirty
(30) days after receipt of said notice of termination unless LICENSEE shall pay
to PRINCETON, within the thirty (30) day period, all such royalties due and
payable. Upon the expiration of the thirty (30) day period, if LICENSEE shall
not have paid all such royalties due and payable, the rights, privileges and
license granted hereunder shall thereupon immediately terminate.

     7.3 Upon any material breach or default of this Agreement by LICENSEE,
other than those occurrences set out in Paragraphs 7.1 and 7.2 hereinabove,
which shall always take precedence in that order over any material breach or
default referred to in this Paragraph 7.3, 


                                       8
<PAGE>



PRINCETON shall have the right to terminate this Agreement and the rights,
privileges and license granted hereunder by ninety (90) days' notice by
certified mail to LICENSEE Agreement. Such termination shall become effective
unless LICENSEE shall have cured any such breach or default prior to the
expiration of the ninety (90) day period from receipt of PRINCETON notice of
termination.

     7.4 LICENSEE shall have the right to terminate this Agreement at any time
on six (6) months' notice by certified mail to PRINCETON in whole or with
respect to designated countries or designated Patent Rights, Licensed Products
or Licensed Processes.

     7.5 Upon termination of this Agreement for any reason, nothing herein shall
be construed to release either party from any obligation that matured prior to
the effective date of such termination. LICENSEE and/or any Sublicensee thereof
may, however, after the effective date of such termination, sell all Licensed
Products, and complete Licensed Products in the process of manufacture at the
time of such termination and sell the same, provided that LICENSEE shall pay to
PRINCETON the royalties thereon as required by Article IV of this Agreement and
shall submit the reports required by Article V hereof on the sales of Licensed
Products.

                           ARTICLE VIII - ARBITRATION

     8.1 Except as to issues relating to the validity, construction or effect of
any patent licensed hereunder, any and all claims, disputes or controversies
arising under, out of, or in connection with this Agreement, which have not been
resolved by good faith negotiations between the parties, shall be resolved by
final and binding arbitration in Princeton, New Jersey under the rules of the
American Arbitration Association then obtaining. The arbitrators shall have no
power to add to, subtract from or modify any of the terms or conditions of this
Agreement. Any award rendered in such arbitration may be enforced by either
party in either the courts of the State of New Jersey or in the United States to
whose jurisdiction for such purposes PRINCETON and LICENSEE each hereby
irrevocably consents and submits.

     8.2 Claims, disputes or controversies concerning the validity, construction
or effect of any patent licensed hereunder shall be resolved in any court having
jurisdiction thereof.

     8.3 In the event that, in any arbitration proceeding, any issue shall arise
concerning the validity, construction or effect of any patent licensed
hereunder, the arbitrators shall assume the validity of all claims as set forth
in such patent; in any event the arbitrators shall not delay the arbitration
proceeding for the purpose of obtaining or permitting either party to obtain
judicial resolution of such issue, unless an order staying such arbitration
proceeding shall be entered by a court of competent jurisdiction. Neither party
shall raise any issue concerning the validity, 


                                       9
<PAGE>


 
construction or effect of any patent licensed hereunder in any proceeding to
enforce any arbitration award hereunder or in any proceeding otherwise arising
out of any such arbitration award.

                            ARTICLE IX - INFRINGEMENT

     9.1 LICENSEE and PRINCETON shall promptly inform the other in writing of
any alleged infringement of which it shall have notice by a third party of any
patents within the Patent Rights and provide such other with any available
evidence of infringement.

     9.2 During the term of this Agreement, LICENSEE shall have the right, but
shall not be obligated, to prosecute at its own expense any such infringements
of the Patent Rights and, in furtherance of such right, PRINCETON hereby agrees
that LICENSEE may join PRINCETON as a party plaintiff in any such suit, without
expense to PRINCETON. The total cost of any such infringement action commenced
or defended solely by LICENSEE shall be borne by LICENSEE, and LICENSEE shall
keep any recovery or damages for past infringement derived therefrom. No
settlement, consent judgment or other voluntary final disposition of the suit
may be entered into without the consent of PRINCETON, which consent shall not
unreasonably be withheld. LICENSEE shall indemnify PRINCETON against any order
for costs that may be made against PRINCETON in such proceedings.

     9.3 If within six (6) months after having been notified of any alleged
infringement, LICENSEE shall have been unsuccessful in persuading the alleged
infringer to desist and shall not have brought and shall not be diligently
prosecuting an infringement action, or if LICENSEE shall notify PRINCETON at any
time prior thereto of its intention not to bring suit against any alleged
infringer, then, and in those events only, PRINCETON shall have the right, but
shall not be obligated, to prosecute at its own expense any infringement of the
Patent Rights, and PRINCETON may, for such purposes, join LICENSEE as party
plaintiff.

     9.4 In the event that LICENSEE shall undertake the enforcement and/or
defense of the Patent Rights by litigation, LICENSEE may withhold up to fifty
percent (50%) of the royalties otherwise thereafter due PRINCETON hereunder and
apply the same toward reimbursement of its expenses, including reasonable
attorneys' fees, in connection therewith. Any recovery of damages by LICENSEE
for any such suit shall be applied first in satisfaction of any unreimbursed
expenses and legal fees of LICENSEE relating to the suit, and next toward
reimbursement of PRINCETON for any royalties past due or withheld and applied
pursuant to this Article IX. The balance remaining from any such recovery shall
be divided equally between LICENSEE and PRINCETON.


                                       10
<PAGE>



     9.5 In the event that a declaratory judgement action alleging invalidity or
non-infringement of any of the Patent Rights shall be brought against LICENSEE,
and LICENSEE is not diligently defending such action, PRINCETON, at its option,
shall have the right, within ninety (90) days after commencement of such action,
to intervene and take over the sole defense of the action at its own expense.

     9.6 In any infringement suit as either party may institute to enforce the
Patent Rights pursuant to this Agreement, the other party hereto shall, at the
request and expense of the party initiating such suit, cooperate in all respects
and, to the extent possible, have its employees testify when requested and make
available relevant records, papers, information, samples, specimens, and the
like.

     9.7 LICENSEE, during the exclusive period of this Agreement, shall have the
sole right in accordance with the terms and conditions herein to sublicense any
alleged infringer under the Patent Rights for future infringements.

                          ARTICLE X - PRODUCT LIABILITY

     10.1 PRINCETON by this Agreement makes no representation as to the
patentability and/or breadth of the inventions and/or discoveries involved in a
Licensed Patent. PRINCETON by this Agreement makes no representation as to
patents now held or which will be held by others in the field of the Licensed
Products for a particular purpose.

     10.2 LICENSEE agrees to defend, indemnify and hold PRINCETON, its Trustees,
Officers, Agents, Employees and Students harmless from and against all
liability, demands, damages, expense or losses for death, personal injury,
illness or property damage arising (a) out of use by LICENSEE or its transferees
of inventions licensed or information furnished under this Agreement, or (b) out
of any use, sale or other disposition by LICENSEE, its Affiliates, Subsidiaries,
Contractors and Subcontractors, or its transferees of products made by use of
such inventions or information.

     10.3 In discharge of the above, on or prior to the date on which a clinical
trial commences with respect to a Licensed Product ("the Insurance Commencement
Date"), LICENSEE will maintain general liability insurance in the amount of at
least One Million Dollars ($1,000,000) per occurrence with a deductible of not
more than $10,000 per occurrence with commercially reasonable insurers against
damage to or destruction of property and injury to or death of individuals and
against such other risks as PRINCETON may reasonably request arising out of or
in connection with any of the Licensed Products. PRINCETON, and its respective
officers, trustees, and employees will be named insureds under all such
insurance. Such insurance 


                                       11
<PAGE>



will also provide that PRINCETON will be given notice of any modification
thereof and at least ten (10) days' prior written notice of cancellation or
termination and the reason therefore. LICENSEE will furnish PRINCETON upon
request, and in any event on the Insurance Commencement Date and on each
anniversary of the Insurance Commencement Date, written confirmation issued by
the insurer or an independent insurance agent confirming that insurance is
maintained in accordance with the above requirements.

                             ARTICLE XI - ASSIGNMENT

     11.1 LICENSEE may assign or otherwise transfer this Agreement and the
license granted hereby and the rights acquired by it hereunder, so long as such
assignment or transfer shall be to an Affiliate, or shall be accompanied by a
sale or other transfer of LICENSEE's entire business or of that part of
LICENSEE's business to which the license granted hereby relates or as PRINCETON
may otherwise consent, which consent shall not be unreasonably withheld.
LICENSEE shall give PRINCETON thirty (30) days' prior notice of any such
assignment and transfer requiring PRINCETON's consent, and if PRINCETON raises
no reasonable objection to such assignment or transfer, in writing within thirty
(30) days after the giving of such notice and stating the reasons for such
objection, then PRINCETON shall be deemed to have approved such assignment or
transfer; provided, however, PRINCETON shall not be deemed to have approved such
assignment and transfer unless such assignee or transferee shall have agreed in
writing to be bound by the terms and conditions of this Agreement. Upon such
assignment or transfer and agreement by such assignee or transferee, the term
LICENSEE as used herein shall include such assignee or transferee. If LICENSEE
shall sell or otherwise transfer its entire business or that part of its
business to which the license granted hereby relates and the transferee shall
not have agreed in writing to be bound by the terms and conditions of this
Agreement, or new terms and conditions shall not have been agreed upon within
sixty (60) days of such sale or transfer, PRINCETON shall have the right to
terminate this Agreement.

                         ARTICLE XII - NON-USE OF NAMES

     12.1 LICENSEE shall not use the name of PRINCETON nor any adaptation
thereof in any advertising, promotional or sales literature without prior
written consent obtained from PRINCETON, in each case, except that LICENSEE may
state that it is licensed by PRINCETON under one or more of the patents and/or
applications comprising the Patent Rights.


                                       12
<PAGE>


                         ARTICLE XIII - EXPORT CONTROLS

     13.1 It is understood that PRINCETON is subject to United States laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes and other commodities (including the Arms Export Control
Act, as amended, and the Export Administration Act of 1979), and that its
obligations hereunder are contingent on compliance with applicable United States
export laws and regulations. The transfer of certain technical data and
commodities may require a license from the cognizant agency of the United States
Government and/or written assurances by LICENSEE that LICENSEE shall not export
data or commodities to certain foreign countries without prior approval of such
agency. PRINCETON neither represents that a license shall not be required nor
that, if required, it shall be issued.

                         ARTICLE XIV - PAYMENTS, NOTICES
                            AND OTHER COMMUNICATIONS

     14.1 Any payment, notice or other communication pursuant to this Agreement
shall be sufficiently made or given on the date of mailing if sent to such party
by certified first class mail, postage prepaid, addressed to it at its address
below or as it shall designate by written notice given to the other party:

In the case of PRINCETON UNIVERSITY
     Office of Technology and Trademark Licensing
     Princeton University
     5 New South Building, P.O. Box 36
     Princeton, New Jersey 08544
     Attention: Director, Patent Licensing

In the case of LICENSEE:
     Intercardia, Inc.
     P.O. Box 14287
     3200 East Highway 54
     Cape Fear Building, Suite 300
     Research Triangle Park, NC 27709
     Attention: Clayton Duncan, President & CEO


                                       13
<PAGE>




                      ARTICLE XV - MISCELLANEOUS PROVISIONS

     15.1 This Agreement shall be construed, governed, interpreted and applied
in accordance with the laws of the State of New Jersey, except that questions
affecting the construction and effect of any patent shall be determined by the
law of the country in which the patent was granted.

     15.2 The parties hereto acknowledge that this Agreement sets forth the
entire Agreement and understanding of the parties hereto as to the subject
matter hereof, and shall not be subject to any change of modification except by
the execution of a written instrument subscribed to by the parties hereto.

     15.3 The provisions of this Agreement are severable, and in the event that
any provision of this Agreement shall be determined to be invalid or
unenforceable under any controlling body of law, such invalidity or
unenforceability shall not in any way affect the validity or enforceability of
the remaining provisions hereof.

     15.4 LICENSEE agrees to mark the Licensed Products sold in the United
States with all applicable United States patent numbers. All Licensed Products
shipped to or sold in other countries shall be marked in such a manner as to
confirm with the patent laws and practice of the country of manufacture or sale.

     15.5 The failure of either party to assert a right hereunder or to insist
upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party.

     IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals and duly executed this License Agreement the day and year first set forth
below.

Attest:                                  The Trustees of Princeton University
                                        
                                        
                                         By:                                 
-----------------------------------         ------------------------------------
                                        
                                        
Title                                    Title                               
     ------------------------------           ----------------------------------
                                        
                                        
                                         Date                                
                                             -----------------------------------
                                        
                                        

                                       14
<PAGE>




Attest:                                  LICENSEE: Intercardia, Inc.
                                        
                                        
                                         By:                                 
-----------------------------------         ------------------------------------
                                        
                                        
Title                                    Title                               
     ------------------------------           ----------------------------------
                                        
                                        
                                         Date                                
                                             -----------------------------------
                                        
                                        

                                       15