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                                                                    EXHIBIT 10.2

                            TERMINATION OF AGREEMENT

     This Termination of Agreement, dated as of June 30, 2000, is between
ArQule, Inc. ("ArQule"), a Delaware corporation, and Pharmacia Corporation,
formerly known as Monsanto Company ("Pharmacia"), a Delaware corporation.

                                    RECITALS

     WHEREAS, ArQule and Pharmacia have previously entered into an Array
Delivery and Testing Agreement dated December 23, 1996, as subsequently amended
and restated on January 11, 2000 (the "Prior Agreement"), with respect to which
ArQule provides certain compound arrays for testing by Pharmacia and its
Affiliates and performs certain other compound development activities in
exchange for payment by Pharmacia of research funds, milestone payments and
royalties; and

     WHEREAS, Pharmacia has decided, and ArQule is willing to, terminate the
Prior Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants set forth in this
Agreement, the parties hereby agree as follows:

     1. TERMINATION.  The Prior Agreement previously executed and delivered by
and between ArQule and Pharmacia entitled "Amended and Restated Array Delivery
and Testing Agreement" dated January 2000 (including its predecessor agreement
entitled "Array Delivery and Testing Agreement" dated December 23, 1996, and any
other understandings and agreements relating to the subject matter thereof), and
the obligations and rights of the parties with respect thereto, except as set
forth below, are hereby terminated in their entirety.

     2. TERMINATION PAYMENT.  In consideration of the termination of the Prior
Agreement, and the satisfaction and discharge of any and all of Pharmacia's
obligations to make research and development and array delivery payments
thereunder, including without limitation all payments pursuant to Subsections
3.2.5 and 3.3.2, Pharmacia shall pay to ArQule, within sixty (60) days following
the date hereof, the sum of [*]. ArQule represents that, upon payment of the
foregoing amount, there are no amounts outstanding or due from Pharmacia as of
the date hereof under the Prior Agreement of which ArQule is aware or should
have been aware.

     3. SURVIVAL OF PROVISIONS.  Notwithstanding the foregoing or anything to
the contrary in Section 11.4 of the Prior Agreement, the following provisions of
the Prior Agreement shall survive termination: Articles 8, 10, and 12 (except
for Section 12.15 which shall not survive).

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*Confidential treatment has been requested for the marked portion.

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     IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement as a sealed instrument effective as of the date first above written.


G.D. SEARLE & CO.                             ARQULE, INC.



By: [ILLEGIBLE]                               By: /s/ Stephen A. Hill
    ---------------------------                   -----------------------------
Name:                                         Name: Stephen A. Hill
Title:                                        Title: CEO



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