<PAGE>

Confidential treatment requested for portions of this document.

                                                                    Exhibit 10.4


                               LICENSE AGREEMENT


                                    between



                        INEX PHARMACEUTICALS CORPORATION


                                      and


                          ESPERION THERAPEUTICS, INC.

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.
<PAGE>

                               LICENSE AGREEMENT
                               -----------------

     LICENSE AGREEMENT dated as of the ___ 16th ___ day of March, 1999 between
INEX PHARMACEUTICALS CORPORATION, a British Columbia corporation, having its
principal place of business at 100 - 8900 Glenlyon Parkway, Burnaby, B.C.
Canada V5J 5J8 (hereinafter referred to as "INEX"), and ESPERION THERAPEUTICS,
INC., a Delaware corporation having its principal place of business at 3621 S.
State Street, 695 KMS Place, Ann Arbor, MI, 48108, USA (hereinafter referred to
as "ESPERION").

                                  INTRODUCTION

1.  INEX has research and development facilities and experienced scientists,
technical associates and assistants and other personnel which enable it to
conduct research and development activities in the area of biotechnology and the
application thereof to the development, production and manufacture of
pharmaceutical products using that technology.

2.  ESPERION is in the business of the research and development of
pharmaceutical products.

3.  INEX is the assignee of European Patent serial number EP 0461559 Bl entitled
"Wirkstofffreie Liposomen zur Behandlung von Atherosklerose," granted and
registered in various states of the European Union (herein sometimes called
"Braun").

4.  The University of British Columbia, Vancouver, B.C.  Canada ("UBC") is the
assignee of US Patent Application S.N.  08/507,170 entitled "Liposome
Compositions and Methods for the Treatment of Atherosclerosis" (herein sometimes
called "Hope/Rodrigueza").

5.  INEX has by license agreement with UBC the right to sublicense
Hope/Rodrigueza, on terms and conditions set out therein, and subject to the
prior written consent of UBC.

6.  ESPERION desires to license from INEX the exclusive right to develop, make,
have made, use, import and sell products subject to Hope/Rodrigueza, Braun and
certain improvements to these patents.

7.  INEX is willing, for the consideration and on the terms set forth herein, to
license ESPERION for such purposes.


In consideration of the mutual covenants and promises contained in this
Agreement and other good and valuable consideration, INEX and ESPERION agree as
follows:

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       2
<PAGE>

                                  ARTICLE I.
                                  DEFINITIONS

As used in this Agreement, the following terms, whether used in the singular or
plural, shall have the following meanings:

        1.1 "Affiliate" means any corporation, company, partnership, joint
             ---------
venture or other person or entity which controls, is controlled by or is under
common control with a Party. For purposes of this Section 1. 1, "control" shall
mean (a) in the case of corporate entities, direct or indirect ownership of at
least 50% of the stock or shares entitled to vote for the election of directors;
and (b) in the case of non-corporate entities, direct or indirect ownership of
at least 50% of the equity interest or the power to direct the management and
policies of such noncorporate entities.

        1.2 "Combination Product(s)" means a product that includes a Licensed
             ---------------------
Product sold in combination with another component(s) whose manufacture, use or
sale by an unlicensed party would not constitute an infringement of the Licensed
Patents or Know-How.

        1.3 "Confidential Information" means (a) all proprietary information and
             ------------------------
materials, patentable or otherwise, of a Party which is disclosed in writing by
or on behalf of such Party to the other Party, including DNA sequences, vectors,
cells, substances, formulations, techniques, methodology, equipment, data,
reports, know-how, preclinical and clinical trials and the results thereof,
sources of supply, patent positioning and business plans, including any negative
developments, and (b) any other information, oral or written, designated in
writing by the disclosing Party to the other Party as confidential or
proprietary within ten (IO) days of such disclosure, whether or not related to
the making, use, importing or selling of Licensed Products.

        1.4 "Distributor" means a third party which is not an Affiliate or
             -----------
Sublicensee of ESPERION and which is a distributor, wholesaler or other entity
purchasing Licensed Products from ESPERION or an Affiliate or Sublicensee for
resale.

        1.5 "Enhancements" means any information, patentable or otherwise,
             ------------
developed or acquired by ESPERION (other than information licensed from INEX
pursuant to the terms of Section 2.1 of this Agreement) during the term of this
Agreement which is required to develop, use or manufacture Licensed Products and
which is related solely to compositions and uses of Large Unilammelar Vesicles
(LUVS) and is otherwise not associated with any therapeutic agent other than an
apoprotein or other cholesterol lowering drug.

        1.6    "Field" means
                -----

       For the Hope/Rodrigueza and Braun patents, human and veterinary
therapeutics (the "Basic Field");

                                       3
<PAGE>

       For Improvements, human and veterinary therapeutics, but limited to
products that use or include Large Unilammelar Vesicles (LUVS) as a therapeutic
agent which are not associated with any other therapeutic agent other than an
apoprotein (the "Improvements Field");

       For Know-How, human and veterinary therapeutics, but limited to products
that use or include Large Unilammelar Vesicles (LUVS) as a therapeutic agent
which are not associated with any other therapeutic agent other than an
apoprotein (the "Know-How Field");

       Together, the Basic Field, Improvements Field and Know-How Field comprise
the Field.

        1.7 "Future INEX Technology" means future inventions conceived, acquired
             ----------------------
or reduced to practice by INEX outside the scope of a development and supply
agreement between the parties as contemplated in Article VII after the date of
this Agreement.

        1.8 "Improvements" means any inventions or improvements conceived,
             ------------
reduced to practice, developed, acquired or controlled by INEX or any of its
Affiliates at any time after the date hereof under a development and commercial
supply agreement between the Parties as contemplated in Article VII. For greater
clarity, "Improvements" does not include Future INEX Technology.

        1.9 "IND" means an Investigational New Drug application or its
equivalent or any corresponding foreign application or registration.

        1.10 "Know-How" means all trade secret and/or confidential and
proprietary information, without regard to form, including but not limited to,
technical or non-technical data, formulas, patterns, compilations, programs,
devices, methods, techniques, drawings, discoveries and/or inventions which have
been developed, acquired, or are controlled by INEX or any of its Affiliates as
of the date of this Agreement, for use in connection with the development or
uses of methods or compositions which are disclosed by INEX to ESPERION. Such
"Know-How" must not be generally known by, or readily ascertainable by proper
means by others and must have been the subject of reasonable efforts to maintain
its secrecy. Information shall no longer be considered to be Know-How, should
the information become publicly known through no fault of ESPERION or should it
be disclosed to ESPERION by a person under no obligation of confidentiality.

        1.11  "Licensed Patents" means


        Hope/Rodrigueza - United States patent application serial number
        ---------------
08/507,170 entitled "Liposome Compositions and Methods for the Treatment of
Atherosclerosis", and any patent claims issued therefrom and patent claims
issued from any corresponding continuations, continuations-in-part, divisions,
re-exams, or foreign applications claiming priority from such application;

                                       4
<PAGE>

        Braun - European Patent serial number EP 04615 59 B 1 entitled
        -----
"Wirkstofffreie Liposomen zur Behandlung von Atherosklerose," registered in
Switzerland, Sweden, Spain, Austria, Netherlands, Luxembourg, Italy, United
Kingdom, Greece, France, Denmark, Belgium, Germany and any patent claims issued
from any corresponding continuations, continuations-in-part, divisions, reissues
and foreign applications claiming priority from such patent;

        Improvements shall be included as invented pursuant to a development and
commercial supply agreement as contemplated in Article VII; and

        Future INEX Technology in the Improvements Field may be included upon
written agreement signed by the Parties pursuant to Section 2.2 hereof

        For greater clarity, Licensed Patents excludes other currently existing
intellectual property of INEX, except those required to practice the inventions
defined by the Hope/Rodrigueza and Braun patents.  "Required to practice" as
used in this definition means necessary, not just useful or useable.  INEX
represents and warrants that it has no knowledge of any such other currently
existing intellectual property of INEX which is required to practice the
inventions defined by the Hope/Rodrigueza and Braun patents.

        1.12 "Licensed Products" means human and veterinary therapeutic
              -----------------
compositions and methods which, but for an immunity from suit under the Licensed
Patents or Know-How, would infringe one or more of the Licensed Patents or Know-
How.

        1.13 "NDA" means a New Drug Application or its equivalent or any
              ---
corresponding foreign application or registration.

        1.14 "Net Annual Sales" means the aggregate United States dollar
              ----------------
equivalent of gross revenues derived by or payable to ESPERION or its Affiliates
from or on account of the sale of Licensed Products to third parties, in any
given calendar year, less (a) reasonable credits or allowances, if any, actually
granted on account of price adjustments, recalls, rejection or return of items
previously sold, (b) excise taxes, sales taxes, value added taxes, consumption
taxes, customs and other duties or other taxes imposed upon and paid with
respect to such sales (excluding income or franchise taxes of any kind), (c)
separately itemized insurance and transportation costs incurred in shipping
Licensed Products to such third parties and (d) fees paid to Distributors,
dealers and other persons or entities which are not Affiliates of ESPERION but
which purchase Licensed Products from Esperion or its Affiliates for resale
(collectively, the "Permitted Deductions"). No deduction shall be made for any
item of cost incurred by ESPERION, its Affiliates, or Distributors in preparing,
manufacturing, shipping or selling Licensed Products except as permitted
pursuant to clauses (a), (b), (c) and (d) of the foregoing sentence. Net Annual
Sales shall not include any transfer between any of ESPERION and any of its
Affiliates for resale. Fair market value shall be assigned to any and all non-
cash consideration such as but not limited to any credit, barter, benefit,
advantage or concession received by

                                       5
<PAGE>

ESPERION or its Affiliates in payment for Licensed Products. As used in this
definition, a "sale" shall have occurred when Licensed Products are billed out
or invoiced. Notwithstanding anything herein to the contrary, the following
shall not be considered a sale of a Licensed Product under this Agreement: (i)
the transfer of a Licensed Product to a third party without consideration to
ESPERION in connection with the development or testing of a Licensed Product; or
(ii) the transfer of a Licensed Product to a third party without consideration
in connection with the marketing or promotion of the Licensed Product (e.g.,
                                                                       ---
pharmaceutical samples).

        1.15 "Party" means INEX or ESPERION; "Parties" means INEX and ESPERION.
               -----

        1.16 "Sublicensee" means a third party which is not an Affiliate of
              -----------
ESPERION and to whom ESPERION has granted a sublicense to make, have made, use,
import or sell Licensed Products. Without limiting the generality of the
foregoing, a Sublicensee shall be deemed to include any third party who is
granted a sublicense hereunder by ESPERION pursuant to the terms of the outcome
or settlement of any infringement or threatened infringement action.

        1.17 "Sublicensing Royalties" means all royalties, revenues, receipts,
              ----------------------
monies and the fair market value of all non-cash consideration such as but not
limited to any credit, barter, benefit, advantage or concession payable to
ESPERION by a Sublicensee which is, or may be reasonably construed as being
calculated on or based on the making, using or selling of Licensed Products by
the Sublicensee. For the avoidance of doubt, Sublicensing Royalties shall not
include payments which are reasonably construed as initial or periodic sub-
licensing fees, funds for research and development, milestone payments or equity
investments.

        1.18 "Territory" means worldwide.
               ---------
        1.19 "UBC License Agreement" means the License Agreement dated July 1,
              ---------------------
1998 by and between INEX and UBC.

        1.20 "Valid Claim" means a claim of an unexpired issued patent which
              -----------
shall not have been withdrawn, canceled or disclaimed, nor held invalid by a
court of competent jurisdiction in an unappealed or unappealable decision.



                                  ARTICLE II.

                          PATENT AND KNOW-HOW LICENSES

        2.1 Licenses. Subject to the payment of the Milestone Payments provided
            --------
for in Article III of this Agreement, the royalties provided for in Article IV
or this Agreement

                                       6
<PAGE>

and the fulfillment of the other terms and conditions of this Agreement, and
subject to the reservation set forth in Section 2.3 hereof, INEX hereby grants
to ESPERION:

                (a) an exclusive license for the Field in the Territory under
the Licensed Patents; and

                (b) an exclusive license for the Field to use the Know-How in
the Territory; for the sole and exclusive purpose of developing, making, having
made, importing, using and selling Licensed Products in the Territory, including
the right to grant sublicenses under these rights as set out in Section 2.4
hereof. The licenses granted pursuant to Section 2. 1 (a) shall continue in
effect until the expiration of the last patent licensed to ESPERION hereunder,
or until otherwise terminated according to this Agreement. The licenses granted
pursuant to Section 2.1 (b) shall continue in effect as provided in Section 4. 1
(b) of this Agreement.


        2.1.1.  Exclusivity.  In order to establish exclusivity for ESPERION,
                -----------
INEX hereby agrees that it shall not, without ESPERION's prior written consent,
grant to any other person or entity a license or other right, under the Licensed
Patents or Know-How, to develop, make, have made, import, use, lease and/or sell
Licensed Products in the Field during the period of time in which this Agreement
is in effect.

        2.2.  Further Right.  ESPERION shall have the first right to
              -------------
negotiate an exclusive license in the Improvements Field to any Future INEX
Technology. If the Parties are unable to agree on the terms of such exclusive
license, INEX will not license such Future INEX Technology to a third party on
more favourable financial terms than those first offered to ESPERION. This fight
shall be exhausted as to any specific item of Future INEX Technology upon
ESPERION's failure to initiate negotiations within thirty (30) days of receiving
terms for such exclusive license for such specific item of Future INEX
Technology, or having initiated negotiations, upon the Parties' failure to
execute such exclusive license within a reasonable period but in any event not
less than ninety (90) days.

        2.3.  Reservation of Rights.  INEX retains the non-exclusive right
              ---------------------
under the Licensed Patents and the Know-How to practice the inventions solely
for internal research purposes in the Field, which right shall not be assigned,
sublicensed or delegated without ESPERION's consent. ESPERION and INEX
acknowledge and agree that UBC may use Hope/Rodrigueza without charge in any
manner whatsoever for research, scholarly publication, educational or other non-
commercial use. INEX may not use Hope/Rodrigueza for any commercial purpose in
the Field.

        2.4.  Sublicenses.  ESPERION shall have the right to sublicense
              -----------
rights granted in Section 2. 1, subject to MX's right to review and comment on
the proposed sublicense as provided below. ESPERION shall provide a brief
summary of the nature of the proposed sublicense and the name of such proposed
sublicensee, except to the extent prohibited by the terms of any confidentiality
agreement between ESPERION and such proposed sublicensee, and sufficient
portions of the proposed sublicensing agreement to

                                       7
<PAGE>

permit RNEX to evaluate whether the agreement contains covenants by the
Sublicensee to observe and perform similar terms and conditions to those in the
UBC License Agreement and in this Agreement. If INEX does not provide ESPERION
with its comments within ten (IO) calendar days after such request is given by
ESPERION, INEX shall be deemed to have waived its right to review and comment.
Within ten (IO) calendar days after execution of a sublicensing agreement,
ESPERION shall provide INEX with a copy thereof. Within thirty (30) calendar
days after receiving such copy, INEX shall notify ESPERION, in express terms, of
any deficiency or failure of the sublicensing agreement to satisfy the terms and
conditions of the UBC License Agreement and this Agreement. The consent of UBC
shall not be required. All sublicenses granted by ESPERION shall be personal to
the sublicensee and shall not be assignable without the prior written consent of
INEX, except as provided by this Section 2.4. Such sublicenses shall terminate
upon the termination of ESPERION's rights granted herein unless events of
default are cured by ESPERION or Sublicensee within sixty (60) days of
notification by INEX of default and/or as provided by the terms of this
Agreement. Each sublicense shall contain covenants by the Sublicensee to observe
and perform similar terms and conditions to those in the UBC License Agreement
and in this Agreement. INEX agrees that if ESPERION has provided to INEX notice
that ESPERION has granted a sublicense to a Sublicensee under this Agreement,
then in the event INEX terminates this Agreement for any reason provided
hereafter, INEX shall provide to such Sublicensee written notice of such
termination no less than sixty (60) days prior to the effective date of such
termination. The Sublicensee may during such sixty (60) day period provide to
INEX notice wherein the Sublicensee: (a) reaffirms the terms and conditions of
this Agreement as it relates to the rights the Sublicensee has been granted
under the sublicense; (b) agrees to abide by all of the terms and conditions of
this Agreement applicable to Sublicensees and to discharge directly all
pertinent obligations of ESPERION which ESPERION is obligated hereunder to
discharge with respect to such sublicense; and (c) acknowledges that INEX shall
have no obligations to the Sublicensee other than its obligations set forth in
this Agreement with regard to ESPERION. INEX agrees that upon such Sublicensee's
notice and provided such Sublicensee is not in material breach of its
sublicense, INEX shall grant to such Sublicensee license rights and terms
equivalent to the sublicense rights and terms which ESPERION shall have granted
to such Sublicensee.

        2.5.  Delivery of Know-How. Upon execution and delivery by the parties
              --------------------
of this Agreement, INEX shall make available to ESPERION originals or copies of
all of its records, data and documentation relating to the Licensed Patents and
Know-How, including, without limitation, scientific data and regulatory
submissions and documentation, manufacturing process, reagents, formulations and
other information relevant to the development, manufacture, purification,
formulation, use, importation or sale of any Licensed Products.

                                       8
<PAGE>

                                 ARTICLE III.

                     MILESTONE PAYMENTS AND SUBLICENSE FEES

        3.1 Milestone Payments. In consideration of the licenses granted by INEX
            ------------------
to ESPERION under this Agreement, ESPERION shall make the following milestone
payments to INEX:


                 Milestone                                Amount
                 ---------                                ------

1. Execution of this Agreement                          US$250,000

2. Upon the enrollment of the first                     US[**    ]
   patient in a Phase II Clinic Trial

3. Upon the enrollment of the first                     US[**    ]
   patient in a Phase III Clinic Trial

4. Upon submission of first NDA in                      US[**    ]
   U.S. or Europe

5. Upon approval of first NDA in                        US[**    ]
   U.S. or Europe


                                        Total           US$8.75 Million
                                                        ===============

        ESPERION shall make the milestone payments to INEX whether the milestone
is achieved by ESPERION itself, or by an Affiliate or a Sublicensee.  For the
purposes of this Section 3.  1, "Phase II Clinical Trial" shall mean a clinical
trial for which an efficacy endpoint is defined in the clinical protocol and for
which data are collected and "Phase III Clinical Trial" shall mean a clinical
trial which is sized to enable measurement of statistically significant efficacy
for the purposes of filing for approval with regulatory authorities.

        3.2. Independent Consideration. Subject to the credits described in
             -------------------------
Section 4.2 of this Agreement, the amounts payable to INEX pursuant to Section
3.1 hereof shall be in addition to, and not in lieu of, the royalties payable to
INEX pursuant to Article IV of this Agreement.

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission.  The omitted
portions have been filed separately with the Commission.

                                       9
<PAGE>

                                  ARTICLE IV.

                         PATENT AND KNOW-HOW ROYALTIES

        4.1 Royalties.
            ---------
                (a) ESPERION shall pay to INEX during the term of the licenses
granted in Section 2.1 of this Agreement earned royalties at the rate set forth
on Schedule A hereto on all Net Annual Sales in the Territory of Licensed
Products by ESPERION, its Affiliates, and Distributors. If a Licensed Product is
made, used or sold by a Sublicensee in any part of the Territory, ESPERION shall
pay to INEX the earned royalties on all Sublicensing Royalties as set out in
Schedule A hereto. One royalty on either Licensed Patents or Know-How shall be
due with respect to each sale of a Licensed Product; and under no circumstance
shall ESPERION be obligated to pay both royalties.

                (b)  Royalties based upon Licensed Products solely involving
Know-How and not involving Licensed Patents shall be payable for a period of ten
(10) years after the first sale in each such country in the Territory of
Licensed Products. Upon the expiration of the royalty obligations set forth in
subsection (a) above with respect to any Know-How in any country in the
Territory, the licenses granted under Section 2. 1 (b) of this Agreement with
respect to such Know-How in such country in the Territory shall become fully
paid licenses. ESPERION may, upon such expiration, elect to continue in effect
the exclusive nature of the license of any Know-How in any country in the
Territory by continuing to pay to INEX fifty percent (50%) of the earned royalty
specified on Schedule A hereto. Such exclusive license shall remain in effect so
long as ESPERION pays such royalty; if and when such royalty payments are
terminated, the license shall become a fully paid, non-exclusive license with
respect to such Know-How in such country in the Territory. All royalty
obligations under this paragraph 4. 1 (b) shall cease should information cease
to be Know-How under the circumstances provided in Section 1.10.

                (c) For purposes of calculating royalties, in the event that a
Licensed Product which is approved for commercial sale by an applicable
regulatory authority includes both component(s) covered by a Valid Claim of a
Licensed Patent (a "Patented Component") and a component which is diagnostically
useable or therapeutically active alone or in a combination which does not
require the Patented Component, and such component is not covered by a Valid
Claim of a Licensed Patent (an "Unpatented Component"), then Net Annual Sales of
the Combination Product shall be calculated using one of the following methods:


                        (i)  By multiplying the Net Annual Sales of the
                             Combination Product during the applicable royalty
                             accounting period ("accounting period") by a
                             fraction, the numerator of which is the aggregate
                             gross selling price of the Patented Component(s)
                             contained in the Combination Product if sold

                                       10
<PAGE>

                             separately, and the denominator of which is the sum
                             of the gross selling price of both the Patented
                             Component(s) and the Unpatented Component(s)
                             contained in the Combination Product if sold
                             separately; or

                        (ii) In the event that no such separate sales are made
                             of the Patented Component(s) or the Unpatented
                             Component(s) during the applicable accounting
                             period, or in the event that either the Patented
                             Component(s) or the Unpatented Component(s) have
                             not been sold separately for at least one (1) year,
                             Net Annual Sales for purposes of determining
                             royalties payable hereunder shall be calculated by
                             multiplying the Net Sales of the Combination
                             Product by a fraction, the numerator of which is
                             the fully allocated production cost of the Patented
                             Component(s) and the denominator of which is the
                             sum of the fully allocated production costs of the
                             Patented Component(s) and the Unpatented
                             Component(s) contained in the Combination Product;
                             provided, however, that Net Annual Sales for
                             purposes of determining such royalties shall not be
                             less than fifty percent (50%) of the Net Annual
                             Sales of the Combination Product for the accounting
                             period, The fully allocated production costs shall
                             be determined by using ESPERION's accounting
                             procedures, which procedures must conform to
                             generally accepted accounting procedures (GAAP).

        4.2 Creditability of Milestone Payments. [**] of each of the fourth and
            -----------------------------------
fifth milestone payments will be creditable towards royalties owed to INEX,
except that in a given year, INEX's royalties will not be reduced below fifty
per cent (50%) of royalties owed in that year. Remaining credits will be carried
forward until exhausted.

        4.3 Third Party Royalties. For any Licensed Product which is not a
            ---------------------
Combination Product or for any Patented Component of a Combination Product, if
ESPERION, its Affiliates or Distributors, in order to operate under or exploit
the licenses granted under Article II of this Agreement in any country in the
Territory, must pay royalties to one or more third parties to obtain a license
or similar right in the absence of which the Licensed Products could not legally
be made, used, imported or sold in any country in the Territory, and such
royalties are, in fact, paid ESPERION, may deduct from royalties thereafter
payable to INEX on Net Annual Sales in such country in the Territory an amount
equal to up to fifty percent (50%) of such third party royalty payments,
provided that the total royalties otherwise due to INEX on Net Annual Sales in
such country in the Territory in any calendar year shall not be reduced by more
than fifty percent (50%) as a result of such deduction.

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       11
<PAGE>

        4.3.1 In this Section 4.3.1., "Unlicensed Competitive Product" means any
product which is commercially competitive with a Licensed Product, and which is
reasonably construed as infringing a Licensed Patent. In the event that an
Unlicensed Competitive Product is reducing the market share of any Licensed
Product, INEX and ESPERION agree to enter good faith negotiations for a
reduction in royalties payable on Net Annual Sales, such reduction in royalties
to be not more that 50% of the royalties otherwise payable, if such reduction is
required for ESPERION to make a Licensed Product competitive in the marketplace,
provided that any such reduction shall be effective no earlier than twelve (12)
months after the first commercial sale of the Unlicensed Competitive Product.

        4.4 Reports and Payment. ESPERION shall deliver to INEX within thirty
            -------------------
(30) days after the end of each calendar quarter a written report showing its
computation of royalties due under this Agreement upon Net Annual Sales by
ESPERION and its Affiliates and upon Sublicensing Royalties received from
Sublicensees, during such calendar quarter. All Net Annual Sales and
Sublicensing Royalties shall be segmented in each such report according to sales
by ESPERION, each Affiliate and each Sublicensee, as well as on a country-by-
country basis, including the rates of exchange used to convert such royalties to
United States dollars from the currency in which such sales were made. For the
purposes hereof, the rates of exchange to be used for converting royalties
hereunder to United States dollars shall be those in effect for the purchase of
dollars at CitiBank, New York, New York, on the last business day of the quarter
with respect to which the payment is due. ESPERION, simultaneously with the
delivery of each such report, shall tender payment in United States dollars of
all royalties shown to be due thereon.

        4.5 Foreign Royalties. Where royalties are due INEX hereunder for sales
            -----------------
of Licensed Products in a country in the Territory where, by reason of currency
regulations or taxes of any kind, it is impossible or illegal for ESPERION, any
Affiliate or Sublicensee to transfer royalty payments to INEX for Net Annual
Sales in that country in the Territory, such royalties shall be deposited in
whatever currency is allowable by the person or entity not able to make the
transfer for the benefit or credit of INEX in an accredited bank in that country
in the Territory that is reasonably acceptable to INEX.

        4.6 Records. ESPERION shall keep, and shall require all Affiliates and
            -------
Sublicensees to keep, full, true and accurate books of accounts and other
records containing all information and data which may be necessary to ascertain
and verify the royalties payable hereunder for a period of five (5) years after
the date such royalties became payable. After the first commercial sale of
Licensed Products and for a period of one (1) year following termination of this
Agreement, INEX shall have the right from time to time (not to exceed twice
during each calendar year) to have an independent firm of accountants inspect
such books, records and supporting data. Such independent firm of accountants
shall perform these audits at INEX's expense upon reasonable prior notice and
during ESPERION's regular business hours, and shall agree as a condition to such
audit to maintain the confidentiality of all information of ESPERION disclosed
or observed in connection with such audit and to disclose to INEX only whether

                                       12
<PAGE>

ESPERION has complied with its obligations under this Agreement.  If the result
of such audit demonstrates an underpayment to INEX of 5% or more, ESPERION shall
pay for the reasonable costs of such audit.


                                  ARTICLE V.

                        DUE DILIGENCE AND ANNUAL REPORTS

        5.1 Due Diligence.  ESPERION shall use commercially reasonable
            -------------
efforts in such portions of the Territory as is commercially reasonable but at a
minimum in the United States, and three countries of the European Community to:

                (a)  conduct all necessary and appropriate preclinical and
clinical trials and control the manner and extent of such trials in order to
file IND's and NDA's which it believes will be sufficient to obtain approval to
sell Licensed Products;

                (b)  prepare, file and diligently prosecute all governmental
applications necessary to obtain approvals to sell Licensed Products; and

                (c)  diligently market Licensed Products.

        5.2 Annual Reports.  ESPERION shall make annual reports, due on each
            --------------
anniversary of this Agreement, to INEX setting forth in general terms,
sufficient for evaluation by INEX of the diligence obligations contained herein,
the efforts it made to develop Licensed Products during the previous year,
including pre-clinical and clinical efforts and all submissions to regulatory
bodies, and the efforts it intends to make in the upcoming year on these
matters.


                                  ARTICLE VI.

                         REPRESENTATIONS AND WARRANTIES

        6.1 By ESPERION.  ESPERION hereby represents and warrants to INEX
            -----------
that (a) ESPERION has full legal right, power and authority to execute, deliver
and perform its obligations under this Agreement, (b) the execution, delivery
and performance by ESPERION of this Agreement do not contravene or constitute a
default under any provision of applicable law or its articles or by-laws (or
equivalent documents) or of any agreement, judgment, injunction, order, decree
or other instrument binding upon ESPERION, (c) all licenses, consents,
authorizations and approvals, if any, required for the execution and delivery by
ESPERION of this Agreement have been obtained and are in full force and effect
and all conditions thereof have been complied with, and no other action by or
with respect to, or filing with, any governmental authority or any other person
or entity is required in connection with the execution, delivery and performance
by ESPERION of this Agreement, and (d) this Agreement constitutes a valid and
binding agreement of ESPERION, enforceable against ESPERION in accordance with
its terms,

                                       13
<PAGE>

except as such enforceability may be limited by bankruptcy, insolvency,
moratorium or creditors' rights generally.

        6.2 By INEX.  INEX hereby represents and warrants to ESPERION that
            -------
(a) INEX has full legal right, power and authority to execute, deliver and
perform its obligations under this Agreement, (b) the execution, delivery and
performance by INEX of this Agreement do not contravene or constitute a default
under any provision of applicable law or of any agreement, judgment, injunction,
order, decree or other instrument binding upon INEX or otherwise relating to the
Licensed Patents or the Know-How, (c) all licenses, consents, authorizations and
approvals, if any, required for the execution, delivery and performance by INEX
of this Agreement have been obtained and are in full force and effect and all
conditions thereof have been complied with, and no other action by or with
respect to, or filing with, any governmental authority or any other person or
entity is required in connection with the execution, delivery and performance by
FNEX of this Agreement as of the date of this Agreement, (d) INEX is the
exclusive owner of all legal and beneficial right, title and interest in and to
the Braun Patent; (e) INEX is the sole and exclusive owner of the Know-How, free
and clear of any lien, claim or encumbrance or rights of any other person or
entity, except with respect to such Know-How of which FNEX is the sole and
exclusive licensee pursuant to the UBC License Agreement, (f) INEX is the sole
and exclusive licensee of Hope/Rodrigueza other than in favor of UBC pursuant to
the UBC License Agreement, (g) the UBC License Agreement and Research Agreement
effective February 1, 1993 are the only agreements between INEX and UBC or
otherwise relating to Hope/Rodrigueza, (h) the UBC License Agreement is in full
force and effect and has not been breached by INEX or, to the best knowledge of
INEX, UBC, and the representations and warranties made by FNEX and, to the best
of INEX's knowledge, UBC in the UBC License Agreement are sufficient to permit
the granting by FNEX of the license in Article II hereof on the date hereof, (i)
to the best knowledge of INEX, the practice of the Licensed Patents and/or the
Know-How, as embodied in the methods and compositions of the Hope/Rodrigueza and
Braun patents, and the development, manufacture, use, importation, offer for
sale, sale or commercialization of any method or composition described therein
can be enjoyed without infringing or violating any patent right of any person or
entity except that INEX provides no opinion, legal or otherwise, with respect to
certain patents set forth on Schedule B and 0) this Agreement constitutes a
valid and binding agreement of INEX, enforceable against it in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium or creditors' rights generally.

        6.3 Survival of Representations and Warranties. The representations and
            ------------------------------------------
warranties contained herein shall survive the execution, delivery and
performance of this Agreement by the parties, notwithstanding any investigation
at any time made by or on behalf of any Party or Parties, subject to any
necessary changes which do not affect the employment by the Parties of the
rights granted in this Agreement.

                                       14
<PAGE>

                                 ARTICLE VII.

                FUTURE AGREEMENTS: INTELLECTUAL PROPERTY RIGHTS

        7.1 Future Agreements.  While not being bound to reach any further
            -----------------
agreement, the Parties acknowledge that development and commercial supply
agreements may arise between the Parties in the future. It is the non-binding
proposal of the Parties that ESPERION and INEX will negotiate contracts for the
supply of materials, as well as services, which would support pre-clinical
development, clinical development, and regulatory submissions. The contracts
will be negotiated in good faith, but costs of such materials and services will
not exceed INEX's reasonable fully burdened costs plus twenty percent (20%)
profit. INEX will have the right of first offer for commercial supply of bulk
drug product, with terms to be negotiated in good faith; however such terms will
not exceed INEX's reasonable fully burdened costs plus twenty percent (20%)
profit.

        7.2 Prosecution and Maintenance of Licensed Patents.
            -----------------------------------------------
                (a)  ESPERION shall be responsible for and pay all future costs
of prosecuting and maintaining the Hope/Rodrigueza and Braun patents. ESPERION
shall advise INEX in writing of all significant actions which it undertakes
concerning the prosecution and maintenance of Hope/Rodrigueza and Braun, and
shall, except to the extent protected by attorney-client privilege between
ESPERION and its attorneys, provide copies of the substantive correspondence and
documents which it sends or receives in connection therewith to INEX and, in the
case of Hope/Rodrigueza, also to UBC. ESPERION shall diligently prosecute and
maintain the Hope/Rodrigueza and Braun patents, and ESPERION shall not
irrevocably alter the scope of patent coverage of such patents without prior
review by INEX and consideration of the opinion of INEX's patent advisor(s).
Should ESPERION seek to discontinue or not pursue Hope/Rodrigueza and/or Braun
in any specific jurisdiction, then ESPERION shall provide INEX, and in the case
of Hope/Rodrigueza, also UBC, with notice of its decision to discontinue or not
to pursue such patent in sufficient time, not to be less than forty-five (45)
days, whereupon INEX shall become entitled to continue or pursue such patent in
such jurisdiction at its own expense.


Failure of ESPERION to maintain a granted or issued patent in a jurisdiction
does not relieve ESPERION of the increased earned royalty obligation for that
jurisdiction set out in Schedule A.
                        ----------
                (b)  INEX and ESPERION shall each make available to the other
Party or such other Party's authorized attorneys, agents or representatives,
such of its employees whom the other Party in its reasonable judgment deems
necessary in order to assist it in obtaining patent protection of the
Hope/Rodrigueza and/or Braun patents. INEX and ESPERION shall each execute all
legal documents reasonably necessary to support the filing, maintenance and
prosecution of said patent applications. ESPERION shall, at the request of INEX
and, in the case of Hope/Rodrigueza, UBC, enter into such

                                       15
<PAGE>

further agreements and execute any and all documents as may reasonably be
required to ensure that ownership of the Licensed Patents remains with the legal
owner.

        7.3 Improvements and Future INEX Technology. INEX shall have the
right and responsibility to decide whether or not to seek or continue to seek or
maintain patent protection on any Improvement or Future INEX Technology in any
country, and shall have the right to file for, procure and maintain patents on
any Improvement or Future INEX Technology in any country. Obligations of
ESPERION regarding patent prosecution or costs for Improvements or Future INEX
Technology, if any, shall be determined by written agreement of the Parties.

        7.4 Infringement. This Section 7.4 is subject to the rights of UBC in
Section 11.1(a).

                (a) Each Party shall promptly report in writing to the other
Party during the term of this Agreement any (i) known infringement or suspected
infringement of any of the Licensed Patents in the Territory, or (ii)
unauthorized use or misappropriation of Know-How or Confidential Information by
a third party in the Territory of which it becomes aware, and shall provide the
other Party with all available evidence supporting said infringement, suspected
infringement or unauthorized use or misappropriation.

                (b)  Except as provided in subsection (c) below, ESPERION shall
have, upon receiving the prior written consent of INEX, not to be unreasonably
withheld, the right anywhere in the Territory to defend an allegation of
invalidity of one or more Licensed Patents, and to initiate an infringement or
other appropriate suit against any third party who at any time has infringed, or
is suspected of infringing, or is anticipated to infringe any of the Licensed
Patents or of using without proper authorization all or any portion of the
Confidential Information and/or Know-How. Provided that it has first granted its
prior written consent, not to be unreasonably withheld, INEX agrees to co-
operate to the extent of executing all necessary documents and to vest in
ESPERION the right to institute any such suits, in the name of ESPERION or INEX
or both, so long as all the direct or indirect costs and expenses of bringing
and conducting any such litigation or settlement shall be borne by ESPERION and
in such event all recoveries shall inure to ESPERION. For purposes of this
Agreement, if ESPERION requests in writing INEX's prior written consent to any
matter, as required hereby, and INEX does not either grant or deny such consent
within ten (10) days of receiving such request from ESPERION, INEX shall be
deemed to have granted the requested consent. In the event of any litigation:

       (b.i)   Each Party shall keep the other fully informed of the actions
and positions taken or proposed to be taken by such Party and actions and
positions taken by all other parties to such litigation;

       (b.ii)   No decision or action concerning or governing any final
disposition of the litigation shall be taken without five (5) days prior
notification thereof to INEX;

                                       16
<PAGE>

       (b.iii)   INEX may elect to participate formally in the litigation to
the extent that the court may permit, but any additional expenses generated by
such formal participation shall be paid by INEX (subject to the possibility of
recovery of some or all of such additional expenses from such other parties to
the litigation);

       (b.iv)   If a Party to a litigation is willing to make or accept an
offer of settlement and the other is not, then the unwilling party shall conduct
all further proceedings at its own expense, and shall be responsible to account
to the willing party for any deficiency in litigated or settled result from that
which it would have been entitled to in the offer, but shall be entitled to
retain unto itself the benefit of any litigated or settled result entailing a
greater payment of costs, damages, accounting of profits and settlement costs
than that provided in such offer;

                (c)  In the event that ESPERION elects not to initiate an
infringement or other appropriate suit pursuant to subsection (b) above,
ESPERION shall promptly advise INEX of its intent not to initiate such suit, and
INEX shall have the right, in INEX's sole discretion, and at the expense of
INEX, of initiating an infringement suit, a defense of patent validity, or other
appropriate suit against any third party who at any time has infringed, or is
suspected of infringing, or is anticipated to infringe any of the Licensed
Patents or of using without proper authorization all or any portion of the
Confidential Information and Know-How. At INEX's request, ESPERION shall offer
reasonable assistance to INEX in connection with such litigation at no charge to
INEX except for reimbursement of reasonable out-of-pocket expenses, including
salaries of ESPERION personnel, incurred in rendering such assistance.

        7.5 Claimed Infringement.  In the event that a third party at any
            --------------------
time provides written notice of a claim to, or brings an action, suit or
proceeding against, either Party or any of their respective Affiliates or
Sublicensees, claiming infringement of such third party's patent rights or
unauthorized use or misappropriation of its know-how, based upon an assertion or
claim arising out of the development, use, manufacture, distribution,
importation or sale of Licensed Products, such Party shall promptly notify the
other Party, and if Hope/Rodrigueza is involved, UBC, of the claim or the
commencement of such action, suit or proceeding, enclosing a copy of the claim
and/or all papers served. INEX agrees to make available to ESPERION its advice
and counsel regarding the technical merits of any such claim at no cost to
ESPERION. THE ENTIRE RESPONSIBILITY OF INEX IN THE CASE OF ANY CLAIMED
INFRINGEMENT OR VIOLATION OF ANY THIRD PARTY'S RIGHTS OR UNAUTHORIZED USE OR
MISAPPROPRIATION OF ANY THIRD PARTY'S KNOW-HOW IS SET OUT IN THIS AGREEMENT.

        7.6 Williams Claim.
            --------------

            In this Agreement, "Williams Claim" means any and all legal claims
against INEX, INEX' Affiliates and/or INEX Indemnitees (as defined in Section
10.1) based on the allegation that INEX misappropriated confidential information
and inventions which form the basis of Hope/Rodrigueza including, without
limitation, the [**] a copy of which has been provide to ESPERION. Except to the
extent provided in the immediately preceding sentence, the "Williams Claim"
shall not include the claim of Mr. Williams that he is a co-inventor of
Hope/Rodrigueza, of which ESPERION acknowledges it was informed by INEX prior to
the date of said letter.

        7.6.1.  INEX shall provide an adequate defense, at its own cost and
expense, to any claim related to the Williams Claim. INEX shall give five (5)
days' prior written notice to ESPERION prior to taking any material action with
respect to such defense. INEX further agrees that it shall not settle or
compromise any claim or action related in any way to the Williams Claim unless
it receives the prior written consent of ESPERION, provided, however, that INEX
shall not be required to receive such prior written consent if, and only if, (i)
the settlement or compromise of the claim or action does not reduce, diminish or
otherwise limit the license or other rights granted to ESPERION herein; and (ii)
a general release to the Williams Claim is obtained by the INEX Indemnitees and
the ESPERION Indemnitees (each as defined in Article X below).

        7.6.1.1  In the event any claim or action related in any way to the
Williams Claim is asserted against ESPERION and/or any ESPERION Indemnitees,
INEX shall be responsible for the defense thereof and shall pay all damages
awarded, all amounts paid in settlement or compromise thereof, and all legal
costs and other losses, as provided in Section 10.2 of this Agreement. The
obligations of INEX under this Section 7.6.1.1 shall not be subject to the
limitation on INEX's liability set forth in Section 10.6 of this Agreement.

        7.6.2  If INEX settles or compromises any claim or action related in any
way to the Williams Claim (which settlement or compromise shall be subject to
the prior written consent of ESPERION, except as provided in Section 7.6.1), and
the effect of such settlement or compromise is to reduce, diminish or otherwise
limit the license or other rights granted to ESPERION herein, this Agreement
shall be deemed amended at the time of such settlement or compromise to provide
that (i) a further [**] of all subsequent milestone payment obligations of
ESPERION pursuant to Article III hereof shall also become creditable as provided
in Section 4.2, and where payments under Article III hereof shall also become
creditable as provided in Section 4.2, and where payments under Article III have
been previously made, [**] of such payments shall also become creditable as
provided in Section 4.2; and (ii) in each country where a competing product
licensed under Hope/Rodrigueza or Braun is introduced, all royalty obligations
of ESPERION to INEX hereunder resulting from sales of Licensed Products such
countries shall be reduced by [**].

        7.6.3  INEX shall provide ESPERION with reasonable assistance in the
event that ESPERION seeks to rely on the facts relating to the Williams Claim in
a claim or action against Mr. Williams, his heirs and assigns, or any
organization or corporation representing the rights of Mr. Williams or any
Affiliate of Mr. Williams (collectively, the "Williams Parties"). If under
applicable law INEX is a necessary party to any claim or action brought by or
against ESPERION involving any of the Williams Parties, at ESPERION's request
INEX shall become a nominal party to such claim or action at ESPERION's expense.
ESPERION shall indemnity INEX for Losses incurred by INEX in connection with
such claim or action, to the extent set forth in Section 10.1 below. Where INEX
is not a necessary party to such claim or action, INEX' consent to joining such
action may be withheld by INEX in its sole discretion.

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       17
<PAGE>

                                 ARTICLE VIII.

                            CONFIDENTIAL INFORMATION

        8.1    Treatment of Confidential Information.  Each Party hereto shall
               -------------------------------------
maintain the Confidential Information of the other Party in confidence, and
shall not disclose, divulge or otherwise communicate such Confidential
Information to others, or use it for any purpose, except pursuant to, and in
order to carry out, the terms and objectives of this Agreement, and hereby
agrees to exercise every reasonable precaution to prevent and restrain the
unauthorized disclosure of such Confidential Information by any of its
directors, officers, employees, consultants, subcontractors, sublicensees or
agents.

        8.2 Release from Restrictions.  The provisions of Section 8.1 shall
            -------------------------
not apply to any Confidential Information disclosed hereunder which:

                (a) was known or used by the receiving Party or its Affiliates
prior to its date of disclosure to the receiving Party, as evidenced by the
prior written records of the receiving Party or its Affiliates; or


                (b) either before or after the date of the disclosure to the
receiving Party is lawfully disclosed to the receiving Party or its Affiliates
by an independent, unaffiliated third party rightfully in possession of the
Confidential Information; or

                (c) either before or after the date of the disclosure to the
receiving Party becomes published or generally known to the public through no
fault or omission on the part of the receiving Party or its Affiliates; or

                (d) the Party can verify by written documentation results from
research and development by the receiving Party or any of its Affiliates
independent and in advance of disclosure by the other Party thereof, or

                (e) is disclosed by the receiving party to its attorneys,
accountants or other advisors, actual or potential lenders, investors or
purchasers, each of whom shall be subject to a confidentiality restriction; or

                (f) is required to be disclosed by the receiving Party to comply
with applicable laws, to defend or prosecute litigation or to comply with
governmental regulations, provided that the receiving Party provides prior
written notice of such

**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       18
<PAGE>

disclosure to the other Party and takes reasonable and lawful actions to avoid
and/or minimize the degree of such disclosure.

        8.3 Publications.  The following restrictions shall apply with
            ------------
respect to the disclosure in scientific journals or publications by any Party or
any employee or consultant of any Party relating to the inventions contained in
the Licensed Patents and the Know-How:

                (a) a Party (the "publishing Party") shall provide the other
Party with an advance copy of any proposed publication which may be in draft
form) and such other Party shall have a reasonable opportunity to recommend any
changes it reasonably believes are necessary to preserve patent rights or know
how belonging in whole or in part to INEX or E8PERION, and the incorporation of
such recommended changes shall not be unreasonably refused; and

                (b) if such other Party informs the publishing Party, within
thirty (30) days of receipt of an advance copy of a proposed publication, that
such publication in its reasonable judgment could be expected to have a material
adverse effect on any patent rights or know how belonging in whole or in part to
INEX or ESPERION, the publishing Party shall, to the extent permitted by its
agreements with its employees and consultants, delay or prevent such publication
as proposed. In the case of inventions, the delay shall be sufficiently long to
permit the timely preparation and filing of a patent application(s) or
application(s) for a certificate of invention on the information involved but
not less than sixty (60) days.


                                  ARTICLE IX.

                                  TERMINATION

        9.1 Term.  This Agreement shall remain in effect for ten (IO) years
            ----
from the first commercial sale of a Licensed Product or until the last to expire
of the Licensed Patents, or until the last to expire of the licenses granted
pursuant to Article II, above, whichever is longer, on a country-by-country
basis.

        9.2 Voluntary Termination.  ESPERION may terminate the licenses
            ---------------------
under this Agreement at any time by providing ninety (90) days prior written
notice to INEX.

        9.3 Termination for Breach.  Each Party shall be entitled to
            ----------------------
terminate this Agreement and the licenses granted hereunder to the other Party
by written notice to the other Party in the event that the other Party shall be
in default of any of its obligations hereunder, and shall fail to remedy any
such default within sixty (60) days after notice thereof by the non-breaching
Party. Any such notice shall specifically state that the non-breaching Party
intends to terminate this Agreement in the event that the breaching Party shall
fail to remedy the default. Any such notice shall set out expressly the actions

                                       19
<PAGE>

required of the breaching Party to remedy the default. Where the alleged default
identified is of an obligation to maintain insurance (as in Sections 10.4 or
11.1(b)) or an obligation of indemnity in Article X, the termination date shall
be the effective date of the written notice provided (which effective date shall
take into account the sixty (60) day cure period described above). If the
alleged default relates to an obligation other than in Section 10.4, Section
11.1(b) or Article X, and if the existence of said breach is in dispute, the
license and all rights granted to ESPERION pursuant to this Agreement and all
obligations and commitments of ESPERION to INEX and/or to UBC shall continue
until finallydeterminedbyarbitrationorotherjudicialprocessasprovidedherein. In
the event a breach is finally determined, the remedy for such breach may take
effect from the date of first occurrence of such breach.

        9.4 Termination upon Bankruptcy.  This Agreement shall automatically
            ---------------------------
and immediately terminate without notice to ESPERION upon (a) the bankruptcy,
insolvency, liquidation or dissolution of ESPERION; (b) the filing of any
voluntary petition for bankruptcy, dissolution, liquidation or winding-up of the
affairs of ESPERION; or (c) the filing of any involuntary petition for
bankruptcy, dissolution, liquidation or winding-up of the affairs of ESPERION
which is not dismissed within one hundred twenty (I 20) days of the date on
which it is filed or commenced.

        9.5 Continuing Obligations.  Upon any termination of this Agreement
            ----------------------
to this Article IX, neither Party shall be relieved of any obligations incurred
prior to such termination.


        9.6 Disposition of Licensed Products.  Upon any termination of this
            --------------------------------
Agreement pursuant to Sections 9.2, 9.3 or 9.4 hereof, ESPERION shall within
thirty (30) days of the effective date of such termination notify INEX in
writing of the amount of Licensed Products which ESPERION, its Affiliates and
Sublicensees then have completed on hand, the sale of which would, but for the
termination, be subject to royalty, and ESPERION, its Affiliates and
Sublicensees shall thereupon be permitted during the one (1) year following such
termination to sell that amount of Licensed Products, provided that ESPERION
shall pay the aggregate royalty thereon at the conclusion of the earlier of the
last such sale or such one (1) year period. Except as provided in this
Agreement, all sublicenses granted by ESPERION shall forthwith terminate upon
the termination of this Agreement.

        9.7 Survival of Obligations; Return of Confidential Information.
            -----------------------------------------------------------
                (a)  Notwithstanding any termination of this Agreement, the
obligations of the Parties under Section 7.5 and Article VIII and Article X
hereof, as well as under any other provisions which by their nature are intended
to survive any such termination, shall survive and continue to be enforceable.
Upon any termination of this Agreement pursuant to Section 9.2, 9.3 or 9.4
hereof, each Party shall promptly return to the other Party all written
Confidential Information, and all copies thereof (except for one archival copy
to be retained by a person designated by such Party (who shall not make

                                       20
<PAGE>

such Confidential Information generally available to employees or other
representatives of such Party) for the purpose of confirming which information
to hold in confidence hereunder), of the other Party which is not covered by a
license surviving such termination;

                (b) Upon termination, ESPERION shall promptly deliver to INEX,
     at no cost to INEX, all animal and human data and such other information,
     materials (including biological materials) and documents in ESPERION's
     possession that INEX may require in order to obtain approval of applicable
     government regulatory agencies to market Licensed Products. Upon
     termination, ESPERION shall also promptly deliver to INEX, at no cost to
     INEX, all Licensed Patents, patent prosecution records and, Know-How in its
     possession or control, and shall destroy any copies of such materials
     (except for one archival copy to be retained by a person designated by such
     Party (who shall not make such Confidential Information generally available
     to employees or other representatives of such Party) for the purpose of
     confirming which information to hold in confidence hereunder); and

                (c) Termination shall give effect to a non-exclusive, royalty-
     free license from ESPERION to INEX, to make, have made, use or sell, any
     and all Enhancements to Licensed Products in the Territory.

        9.8 Arbitration. In the event of any unresolvable dispute, difference,
            -----------
or question arising between the Parties in connection with this Agreement or any
clause or the construction thereof, or the rights, duties or liabilities of
either Party, or the scope or validity of any patent licensed hereunder, the
matter shall be submitted for arbitration in accordance with the rules of the
American Arbitration Association. Arbitration shall take place in continental
North America or as otherwise agreed by the Parties. A single arbitrator shall
be appointed by agreement of the Parties to resolve all such disputes,
differences or questions. The arbitrator shall be guided by the contents of this
Agreement in arriving at a decision to resolve the dispute, but may rely on
extrinsic evidence where appropriate and/or necessary. The Parties shall share
the cost of the arbitration unless, in the arbitrator's opinion, the position
advanced by one of the Parties, or the nature or manner of presenting it, is
such that it would be unfair to so apportion such expenses, in which case the
arbitrator may apportion such expenses differently. In cases where validity or
scope of a patent is in issue, either party shall have the right to elect to
have the arbitration conducted by three arbitrators, each party selecting one
and those arbitrators selecting the third.

                                  ARTICLE X.

                   INDEMNIFICATION AND LIABILITY LIMITATIONS

        10.1 Indemnification by ESPERION. ESPERION hereby agrees that it shall
             ---------------------------
be responsible for, indemnify, hold harmless and defend INEX and its Affiliates,
and their respective Board of Governors, directors, officers, employees,
faculty, students, invitees, managing members, shareholders, partners,
attorneys, accountants, consultants and

                                       21
<PAGE>

agents, and their respective heirs, successors and assigns (collectively, the
"INEX Indemnities"), and UBC and its Affiliates and their respective directors,
officers, Board of Governors, employees, faculty, students, invitees, managing
members, shareholders, partners, attorneys, accountants, consultants and agents
and their respective heirs, successors and assigns (collectively, the "UBC
Indemnities") from and against any and all claims, demands, losses, liabilities,
damages, costs and expenses (including the cost of settlement, reasonable legal
and accounting fees and any other expenses for investigating or defending any
actions or threatened actions) (collectively, "Losses") suffered or incurred by
any INEX Indefinite or UBC Indemnity arising out of, relating to, resulting from
or in connection with (a) any third party claims arising out of or relating to
the breach of any representation or warranty made by ESPERION herein, (b) any
third party claims arising out of or relating to the default by ESPERION in the
performance or observance of any of its obligations to be performed or observed
hereunder, (c) any third party claims arising out of or relating to any injury
or death to any person or damage to any property caused by any Licensed Product,
whether claimed by reason of breach of warranty, negligence, product defect or
otherwise, and regardless of the form in which any such claim is made except to
the extent that such injury, death or damage is caused by the negligence or
willful misconduct of any INEX Indemnity or UBC Indemnity, and (d) any claim or
action which INEX is made a party at the request of ESPERION pursuant to Section
7.6.3 above. The foregoing shall not apply to the extent that such Losses are
due to the negligence or willful misconduct of any of the INEX Indemnities or
the gross negligence or willful misconduct of any of the UBC Indemnities or are
on account of or arising out of the Williams Claim.

        10.2 Indemnification by INEX. INEX hereby agrees that it shall be
             -----------------------
responsible for, indemnify, hold harmless and defend ESPERION and ESPERION's
Affiliates, and their respective Board of Governors, directors, officers,
employees, faculty, students, invitees, managing members, shareholders,
partners, attorneys, accountants, consultants and agents and their respective
heirs, successors and assigns (collectively, the "ESPERION Indemnities"), from
and against any and all Losses suffered or incurred by any ESPERION Indemnity
arising out of, relating to, resulting from or in connection with (a) any third
party claims arising out of or relating to the breach of any representation or
warranty made by INEX herein, and (b) any third party claims arising out of or
relating to the default by INEX in the performance or observance of any of its
obligations to be performed or observed hereunder, and (c) losses relating to
the Williams Claim that are (i) damages, costs, and expenses awarded against any
ESPERION Indemnity relating to the Williams Claim, (ii) any amounts payable in
connection with the settlement or compromise of any claims relating to the
Williams Claim, and (iii) any legal expenses, such as but not limited to,
reasonable legal fees, and any other expenses for investigating or defending any
actions or threatened actions. Reasonable legal fees, in this section, means
legal fees paid to attorneys appointed by FNEX to defend ESPERION against the
Williams Claim, or should ESPERION select its own attorneys to make such
defense, reasonable legal fees that explicitly distinguish legal expenses
relating to the Williams Claim from all other business between ESPERION and its
own attorneys. The foregoing shall not apply to the extent that such Losses are
due to the negligence or willful misconduct of any of ESPERION Indemnities.

                                       22
<PAGE>

        10.3 Notice of Claims. In the event that a claim is made pursuant to
             ----------------
Section IO. I or 10.2 above against any person or entity which seeks
indemnification hereunder (the "Indemnity"), the Ingenuity agrees to promptly
notify the indemnifying Party (the "Indemnity") of such claim or action and, in
the case of any claim by a third Person against the Indemnity, the Indemnity
may, at its option, elect to assume control of the defense of such claim or
action; provided, however, that (a) the Indemnity shall be entitled to
participate therein (through counsel of its own choosing) at the Indemnity's
sole cost and expense, and (b) the Indemnitor shall not settle or compromise any
such claim or action without the prior written consent of the Indemnity, unless
such settlement or compromise includes a general release of the Indemnity and
all of the other INEX Indemnities or ESPERION Indemnities, as the case may be,
from any and all liability with respect thereto.

        10.4  Liability.  No Party shall be liable for special, incidental or
              ---------
consequential damages or for loss of profit or lost revenue, even if such Party
has been advised of the possibility of such damage.

        10.5 Insurance. If available on commercially reasonable terms (as
             ---------
determined in good faith by the Board of Directors of ESPERION), ESPERION shall
obtain product liability insurance in an amount not less than US Five Million
Dollars (US$5,000,000) per occurrence, and US Five Million Dollars
(US$5,000,000) annual aggregate, naming INEX and UBC as a named-insured. This
provision shall take effect at the time a Licensed Product is being commercially
sold (other than for the purpose of obtaining regulatory approval) by ESPERION,
an Affiliate, Sublicensee or Distributor.

        10.6  Limitation on Liability.  INEX's liability for damages under this
              -----------------------
Agreement (regardless of form of action, whether in contract, tort or warranty)
shall not exceed the aggregate milestone payments and royalties paid to INEX.

        10.7 Actions Between the Parties. For the avoidance of doubt, in
             ---------------------------
connection with actions brought by one party hereto against the other (whether
for breach of any provisions hereof, any representation or warranty made herein
or otherwise), each party expressly reserves all of its rights and remedies
under applicable law, including, without limitation, the right to sue for breach
of contract.

                                       23
<PAGE>

                                  ARTICLE XI.

                                UBC PROVISIONS

        11.1  Limitations to License.  ESPERION and INEX agree to the following
              ----------------------
additional limitations, terms and conditions to the licenses granted herein, in
relation to Hope/Rodrigueza, expressly for the benefit of UBC:

                (a) In the event a suit under Section 7.4 involves
     Hope/Rodrigueza, the rights of INEX shall be transferred to UBC.

                (b) One month prior to the first sale of a Licensed Product,
     ESPERION will give notice to UBC of the terms and amount of the public
     liability, product liability and errors and omissions insurance which it
     has placed in respect of the same, which in no case shall be less than the
     insurance which a reasonable and prudent businessman carrying on a similar
     line of business would acquire. This insurance shall be placed with a
     reputable and financially secure insurance carrier, and where available on
     commercially reasonable terms, shall include UBC, its Board of Governors,
     faculty, officers, employees, students and agents as additional insureds,
     and shall provide primary coverage with respect to the activities
     contemplated by this Agreement. Such policy shall include severability of
     interest and cross-liability clauses and shall provide that the policy
     shall not be canceled or materially altered except upon at least thirty
     (30) days written notice to UBC. UBC shall have the right to propose
     reasonable amendments to the terms or the amount of coverage contained in
     the policy. Failing the parties agreeing on the appropriate terms or the
     amount of coverage, then the matter shall be determined by arbitration as
     provided for herein. ESPERION shall provide UBC with certificates of
     insurance evidencing such coverage seven (7) days before commencement of
     sales of any Licensed Product and ESPERION covenants not to sell any
     Licensed Product before such certificate is provided and approved by UBC.
     ESPERION shall require that each Sublicensee under this Agreement shall
     procure and maintain, during the term of the sublicense, public liability,
     product liability and efforts and omissions insurance consistent with the
     terms of this section. ESPERION shall use commercially reasonable efforts
     to ensure that any and all such policies of insurance required pursuant to
     this clause shall contain a waiver of subrogation against UBC, its Board of
     Governors, faculty, officers, employees, students and agents.

                (c) UBC shall not be restricted from presenting at symposia,
     national or regional professional meetings, or from publishing in journals
     or other publications accounts of its research relating to Hope/Rodrigueza,
     provided, however, that ESPERION shall have the same right to review such
     publication as it has with respect to publications made by INEX pursuant to
     Section 8.3 above. For practical application of this provision, INEX agrees
     to provide to ESPERION any and all publication(s) INEX receives from UBC
     relating to the inventions contained in the Licensed Patents and the Know-
     How to ESPERION within ten (IO) business days of such receipt.

                                       24
<PAGE>

                (d) ESPERION shall not use any of the UBC's registered trade-
     marks or make reference to UBC or its name in any advertising or publicity
     whatsoever, without the prior written consent of UBC, except as required by
     law. Nothing herein shall prevent ESPERION from making or issuing factual
     statements to the public regarding its business or use of Hope/Rodrigueza.
     If ESPERION is required by law to act in contravention of this provisions,
     ESPERION shall provide UBC with sufficient advance notice in writing to
     permit UBC to bring an application or other proceeding to contest the
     requirement.

                (e) UBC's total liability, whether under the express or implied
     terms of this Agreement, in tort (including negligence), or at common law,
     for any loss or damage suffered by ESPERION, whether direct, indirect,
     special, or any other similar or like damage that may arise or does arise
     from any action by UBC, its Board of Governors, officers, employees,
     faulty, students, or agents shall be limited to the sum of Cdn$l0,000. In
     no event shall UBC be liable for consequential or incidental damages
     arising from actions related to this Agreement.

        11.2 The Parties acknowledge and confirm that in relation to
Hope/Rodrigueza:

                (a) UBC makes no representations, conditions, or warranties,
     either express or implied, with respect to Licensed Products. Without
     limiting the generality of the foregoing, UBC specifically disclaims any
     implied warranty, condition or representation that the Licensed Products


                        (i)  shall correspond with a particular description;

                        (ii)  are of merchantable quality;

                        (iii)  are fit for a particular purpose; or

                        (iv) are durable for a reasonable period of time.

UBC shall not be liable for any loss, whether direct, consequential, incidental,
or special which ESPERION suffers arising from any defect, error, fault or
failure to perform with respect to the Licensed Products, even if UBC has been
advised of the possibility of such defect, error, fault, or failure.  ESPERION
acknowledges that it has been advised by UBC to undertake its own due diligence
with respect to the Licensed Products.

                (b)  Nothing in this Agreement shall be construed as:

                                       25
<PAGE>

                        (i) a warranty or representation by UBC as to title to
     Hope/Rodrigueza or that anything made, used, sold or otherwise disposed of
     under the license granted in this Agreement is or will be free from
     infringement of patents, copyrights, trademarks, industrial design or other
     intellectual property rights,

                        (ii) an obligation by UBC to bring or prosecute or
     defend actions or suits against third parties for infringement of patents,
     copyrights, trade-marks, industrial designs or other intellectual property
     or contractual rights, or

                        (iii) the conferring by UBC of the right to use in
advertising or publicity the name of UBC or UBC Trade-marks.


                                 ARTICLE XII.

                                 MISCELLANEOUS

        12.1 Publicity. Neither Party, nor any of its Affiliates, shall
             ---------
originate any publicity, news release or other public announcement, written or
oral, relating to this Agreement or the existence of an arrangement between the
Parties, without the prior written approval of the other Party, which approval
shall not be unreasonably withheld, except as otherwise required by law.

        12.2 Non-Use of Names. Neither Party shall use the name of the other
             ----------------
Party, nor any adaptation thereof, in any advertising, promotional or sales
literature without prior written consent obtained from such other Party in each
case (which consent shall not be unreasonably withheld or delayed).

        12.3 Assignment. Except as otherwise provided in this Agreement, neither
             ----------
this Agreement nor any of the rights or obligations hereunder may be assigned by
either Party without the prior written consent of the other Party, except either
to an Affiliate or to a third-party who acquires all or substantially all of the
business of the assigning Party by merger, sale of assets or otherwise.

        12.4 Governing Law. This Agreement shall be governed by and interpreted
             -------------
in accordance with the laws of the State of Michigan, without regard to
conflicts of law principles.


        12.5 Force Majeure. In the event that either Party is prevented from
             -------------
performing or is unable to perform any of its obligations under this Agreement
due to any act of God; fire; casualty; flood; war; strike; lockout; failure of
public utilities; injunction or any act,

                                       26
<PAGE>

exercise, assertion or requirement of governmental authority; epidemic;
destruction of production facilities; riots; insurrection; inability to procure
or use materials, labor, equipment, transportation or energy; or any other cause
beyond the reasonable control of the Party invoking this Section 12.5 if such
Party shall have used its reasonable efforts to avoid such occurrence, such
Party shall give notice to the other Party in writing promptly, and thereupon
the affected Party's performance shall be excused and the time for performance
shall be extended for the period of delay or inability to perform due to such
occurrence.

        12.6 Waiver. The waiver by either Party of a breach or a default of any
             ------
provision of this Agreement by the other Party shall not be construed as a
waiver of any succeeding breach of the same or any other provision, nor shall
any delay or omission on the part of either Party to exercise or avail itself of
any right, power or privilege that it has or may have hereunder operate as a
waiver of any right, power or privilege by such Party.

        12.7 Notices. Any notice or other communication in connection with this
             -------
Agreement must be in writing and if by mail, by registered mail, return receipt
requested, and shall be effective when delivered to the addressee at the address
listed below or such other address as the addressee shall have specified in a
notice actually received by the addressor.


       If to INEX:

               Inex Pharmaceuticals Corporation
               100-8900 Glenlyon Parkway
               Burnaby, B.C.
               Canada V5J 5J8

               Telecopier No.: (604) 419-3 202
               Attention: Vice-President, Corporate Development

       If to ESPERION:

               Esperion Therapeutics, Inc.
               3621 S. State Street
               695 KMS Place
               Ann Arbor, MI 48108 USA

               Telecopier No.:
               Attention: President

       With a copy to:

               Sills Cummis Radin Tischman Epstein & Gross
               One Riverfront Plaza

                                       27
<PAGE>

               Newark, New Jersey 07102 USA
               Telecopier No.: (973) 643-6500
               Attention: Ira A.  Rosenberg, Esq.

       If to UBC:

               The Director
               University - Industry Liaison Office University of British
               Columbia
               IRC 331 - 2194 Health Sciences Mail Vancouver, B.C.
               Canada V6T I Z3
               Telephone: (604) 822-8580
               Facsimile: (604) 822-8589

        12.8 No Agency. Nothing herein shall be deemed to constitute either
             ---------
Party as the agent or representative of the other Party, or both Parties as
joint ventures or partners for any purpose. INEX shall be an independent
contractor, not an employee or partner of ESPERION, and the manner in which INEX
renders its services under this Agreement shall be within INEX's sole
discretion. Neither Party shall be responsible for the acts or omissions of the
other Party, and neither Party will have authority to speak for, represent or
obligate the other Party in any way without prior written authority from the
other Party.


        12.9 Entire Agreement. This Agreement and the Schedule hereto (which
             ----------------
Schedule is deemed to be a part of this Agreement for all purposes) contain the
full understanding of the Parties with respect to the subject matter hereof and
supersede all prior understandings and writings relating thereto. No waiver,
alteration or modification of any of the provisions hereof shall be binding
unless made in writing and signed by the Parties by their respective officers
thereunto duly authorized.

        12.10 Headings. The headings contained in this Agreement are for
              --------
convenience of reference only and shall not be considered in construing this
Agreement.

        12.11 Severability. In the event that any provision of this Agreement is
              ------------
held by a court of competent jurisdiction to be unenforceable because it is
invalid or in conflict with any law of any relevant jurisdiction, the validity
of the remaining provisions shall not be affected, and the rights and
obligations of the Parties shall be construed and enforced as if the Agreement
did not contain the particular provisions held to be unenforceable.

        12.12 Successors and Assigns. This Agreement shall be binding upon and
              ----------------------
inure to the benefit of the Parties hereto and their successors and permitted
assigns.

                                       28
<PAGE>

        12.13 Third Parties. None of the provisions of this Agreement shall be
              -------------
for the benefit of or enforceable by any third party.

        12.14 Counterparts. This Agreement may be executed in any number of
              ------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

        12.15 Further Assurances. Each party hereto agrees to execute,
              ------------------
acknowledge and deliver such further instruments and do all such further acts as
may be necessary or appropriate to carry out the purposes and intent of this
Agreement.



        IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed as a sealed instrument in their names by their properly and duly
authorized officers or representatives as of the date first above written.


INEX PHARMACEUTICALS CORPORATION



/s/ David J. Main
-----------------------------
David J. Main
Executive Vice President



ESPERION THERAPEUTICS, INC.



/s/ Roger  Newton
-----------------------------
Roger  Newton
President & C.E.O.

                                       29
<PAGE>

                                   SCHEDULE A

                                EARNED ROYALTIES
                                ----------------


1.  Earned Royalties Payable for each Licensed Product
    --------------------------------------------------


    (a) For Sales by ESPERION and Affiliates

          (a.1) In each jurisdiction in the Territory where a Valid Claim under
                a Licensed Patent covers a Licensed Product:

                  [**] on Net Annual Sales from [**]

                  [**] on Net Annual Sales above [**]


          (a.2) In remainder of Territory

                  [**] on Net Annual Sales from [**]

                  [**] on Net Annual Sales above [**]

          Where Licensed Products are sold both in jurisdictions (a.1) and
          (a.2), the [**] of Net Annual Sales shall be allocated to the [**]
          royalty under (a.1) and to the [**] royalty under (a.2) according to
          the relative proportions of total Net Annual Sales made in each
          portion of the territory. The amount of Net Annual Sales over [**]
          shall be allocated to the [**] royalty under (a.1) and the [**]
          royalty under (a.2) according to where such Net Annual Sales occurred.

    (b) For Sales by  Sublicensees

          [**] on Sublicensing Royalties received by ESPERION


                                        SCHEDULE  A
                                        Acknowledgment and Acceptance

                                        INEX          DJM      March 16, 1999
                                              -------------------------------
                                                    Initials   Date

                                        ESPERION      RSN      March 18, 1999
                                                 ----------------------------
                                                    Initials   Date


**Certain portions of this Exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                       30
<PAGE>

                                   SCHEDULE B
                                   ----------


                       INEX PROVIDES NO OPINION REGARDING
                       ----------------------------------
                             THE FOLLOWFNG PATENTS
                             ---------------------


US 5746223
WO 9713501
AU 9675956
US 5736157

                                       31