<PAGE>   1
                                                                   Exhibit 10.27

              Confidential material omitted and filed separately
                 with the Securities and Exchange Commission.
                      Asterisks denote such omissions.






                             RESEARCH COLLABORATION

                                       and

                                LICENSE AGREEMENT

                                     between


                                    BAYER AG

                                       AND

                          CAMBRIDGE NEUROSCIENCE, INC.
<PAGE>   2
                                TABLE OF CONTENTS


1.   DEFINITIONS...............................................................1

     1.1   Meaning.............................................................1

     1.2   Affiliates..........................................................1

     1.3   CNSI Know How.......................................................1

     1.4   CNSI Patent Rights..................................................2

     1.5   CNSI Technology.....................................................2

     1.6   Competitive Product.................................................2

     1.7   Cost of Research....................................................2

     1.8   Data................................................................2

     1.9   Decision Point......................................................3

     1.10  Effective Date......................................................3

     1.11  Field...............................................................3

     1.12  Improvements........................................................3

     1.13  Launch..............................................................3

     1.14  Licensed Technology.................................................3

     1.15  Major Market........................................................3

     1.16  Market Approval.....................................................3

     1.17  Net Sales...........................................................3

     1.18  Phase I Study.......................................................3

     1.19  Phase III Study.....................................................3

     1.20  Primary Indication..................................................4

     1.21  Product.............................................................4

     1.22  Research Steering Committee.........................................4

     1.23  Research Protocol...................................................4

     1.24  Territory...........................................................4

2.   RESEARCH AND DEVELOPMENT..................................................4

     2.1   Research Steering Committee.........................................4



<PAGE>   3
           2.1.1    Formation..................................................4

           2.1.2    Membership.................................................4

           2.1.3    Voting Powers..............................................4

           2.1.4    Meetings...................................................5

           2.1.5    Functions and Authority....................................5

           2.1.6    Expenses...................................................6

           2.1.7    Dispute Resolution.........................................6

           2.1.8    Disbanding.................................................6

     2.2   CNSI Research.......................................................6

           2.2.1    Representation.............................................6

           2.2.2    Scope of Research..........................................6

           2.2.3    Payment....................................................6

           2.2.4    Records and Audits.........................................6

           2.2.5    Subcontracting.............................................7

           2.2.6    Subcontractee Improvements.................................7

           2.2.7    Independent Contractor.....................................7

           2.2.8    Technology Transfer........................................7

           2.2.9    Research Warranty..........................................8

           2.2.10   Records and Reports........................................8

           2.2.11   Rights in DATA.............................................8

     2.3   BAYER Research and Development......................................8

           2.3.1    Scope of Research..........................................8

           2.3.2    Development Studies........................................8

           2.3.3    Contracted Clinical Trials.................................8

           2.3.4    Regulatory Filings.........................................8

           2.3.5    Assistance.................................................9

           2.3.6    Costs......................................................9

           2.3.7    Reporting..................................................9

           2.3.8    Diligence..................................................9



<PAGE>   4



     2.4   Research Publications...............................................9

3.   LICENSE GRANT

     3.1   CNSI Grant of Patent Rights........................................10

     3.2   Term of Grant......................................................10

     3.3   Reservation of Rights CNSI.........................................10

     3.4   CNSI Grant of Rights in Know How...................................10

     3.5   CNSI Funded Research...............................................10

     3.6   Term of Grant......................................................11

     3.7   BAYER Grant of Rights..............................................11

     3.8   Bankruptcy or Insolvency...........................................11

4.   LICENSE FEE, MILESTONES AND ROYALTIES....................................11

     4.1   Consideration for License Granted..................................11

     4.2   Milestone Payments.................................................11

     4.3   Royalty Payments...................................................12

           4.3.1    Royalties for Patent Rights...............................12

           4.3.2    Royalties for Know How....................................13

           4.3.3    CNSI Royalties............................................14

           4.3.4    Default on Third Party Contract...........................14

           4.3.5    License to Third Party Patent Rights......................14

           4.3.6    Cap on Royalties..........................................14

     4.4   Accounting Records and Procedures..................................14

           4.4.1    Royalties Payments........................................14

           4.4.2    Currency..................................................15

           4.4.3    Records and Audits........................................15

           4.4.4    Confidentiality of Financial Reports......................15

           4.4.5    Payment of Taxes..........................................15

           4.4.6    Sublicensees..............................................15

           4.4.7    Non-Product Related Sublicenses...........................16

5.   SUPPLY OF MATERIAL
<PAGE>   5
     5.1   Research Material..................................................16

     5.2   Other Material.....................................................16

     5.3   BAYER Cost of Manufacture..........................................16

6.   PRODUCT COMMERCIALIZATION................................................16

     6.1   Right to Commercialize.............................................16

     6.2   Co-Promotion.......................................................16

     6.3   Cost of Commercialization..........................................16

     6.4   Product Liability..................................................17

     6.5   Trade Marks........................................................17

7.   CONFIDENTIALITY..........................................................17

     7.1   Definition.........................................................17

     7.2   Obligations........................................................17

     7.3   Exceptions.........................................................17

     7.4   Term of Confidentiality............................................18

     7.5   Return of Information..............................................18

     7.6   Business Publications..............................................18

8.   INVENTIONS AND PATENTS...................................................18

     8.1   Rights In Inventions...............................................18

     8.2   Sole Inventions....................................................18

     8.3   Joint Inventions...................................................19

     8.4   Invention Disclosure...............................................19

     8.5   Know-how...........................................................19

     8.6   CNSI Patent Maintenance............................................19

     8.7   BAYER Patent Maintenance...........................................19

     8.8   BAYER/CNSI Patents.................................................19

     8.9   Assignment of Rights...............................................19

     8.10  No Waiver..........................................................19

     8.11  Cost of CNSI Patents...............................................19

     8.12  Reimbursement of Costs.............................................20
<PAGE>   6

     8.13  No Further Interest in Patents/Applications........................20

9.   PATENT INFRINGEMENT......................................................20

     9.1   Infringement by Third Parties......................................20

           9.1.1    Notification..............................................20

           9.1.2    Initiating Proceedings....................................20

           9.1.3    Distribution of Awards....................................20

           9.1.4    Voluntary Disposition.....................................21

     9.2   Claims Against Licensed Technology.................................21

           9.2.1    Notice....................................................21

           9.2.2    Damages...................................................21

           9.2.3    Patent Indemnification....................................21

10.  TERM AND TERMINATION.....................................................22

     10.1  Term and Expiration................................................22

     10.2  Termination by CNSI................................................22

     10.3  Termination by BAYER...............................................22

           10.3.1   Upon Written Notice.......................................22

           10.3.2   Duty to Mitigate..........................................22

           10.3.3   Without Cause.............................................23

           10.3.4   With Cause................................................23

           10.3.5   Termination Upon Reorganization...........................23

     10.4  Disposition of Inventory...........................................23

11.  REPRESENTATIONS AND WARRANTIES...........................................24

     11.1  Corporate Existence and Power......................................24

     11.2  Authorization and Enforcement of Obligations.......................24

     11.3  Consents...........................................................24

     11.4  No Conflict........................................................24

     11.5  Authorization of Obligations.......................................24

     11.6  CNSI Representations...............................................24

     11.7  Certain Covenants of CNSI and BAYER................................25
<PAGE>   7
12.  MISCELLANEOUS............................................................25

     12.1  Indemnification....................................................25

           12.1.3   Force Majeure.............................................26

           12.1.4   Survival..................................................26

           12.1.5   Notice....................................................26

     12.2  Waivers............................................................26

     12.3  Applicable Law.....................................................26

     12.4  Dispute Resolution.................................................27

     12.5  Assignment.........................................................27

     12.6  Severability.......................................................27

     12.7  Integration Clause.................................................27

     12.8  Amendment of Agreement.............................................27



     APPENDICES

     Appendix 1 CNSI KNOW HOW.................................................29

     Appendix 2 CNSI PATENT RIGHTS............................................37

     Appendix 3 RESEARCH PROTOCOL.............................................39

     Appendix 4 CNSI THIRD PARTY CONTRACTS....................................47

Appendix 5 CNSI SUBCONTRACTEES AND PROPOSED BUDGET............................55
<PAGE>   8

                             RESEARCH COLLABORATION
                              AND LICENSE AGREEMENT

         This Agreement is between Cambridge NeuroScience, Inc., a Delaware
corporation, with offices located at One Kendall Square, Building 700,
Cambridge, MA 02139 ("CNSI"), and Bayer AG, a German corporation, on behalf of
its Pharmaceutical Division, with offices located at D-51368 Leverkusen, Germany
("BAYER").

         WHEREAS CNSI owns or is the exclusive licensee, through
the*******************************************************, of certain
technology and patent rights relating to glial growth factor 2 ("GGF2"), its
manufacture and use for the treatment of multiple sclerosis and other
pharmaceutical indications;

         WHEREAS CNSI and BAYER are interested in forming a collaboration
concerning the research, development, manufacture and commercialization of GGF2
product(s) where, generally, CNSI would license certain patent rights
exclusively to BAYER, CNSI and BAYER both would collaborate on GGF2 research,
and BAYER could develop, manufacture and commercialize GGF2 product(s)
worldwide.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained and intending to be legally bound hereby, the Parties
hereto agree as follows:

                                    Article 1
                                   DEFINITIONS

1.1      Meaning: Whenever a term is written in this Agreement with capital
         letters, it shall have the following meaning.

1.2      AFFILIATES. shall mean any business entity which directly or indirectly
         controls, is controlled by, or is under common control with either
         Party to this Agreement. A business entity shall be deemed to "control"
         another business entity if it owns, directly or indirectly, more than
         fifty percent of the outstanding voting securities, capital stock, or
         other comparable equity or ownership interest of such business entity.
         If the laws of the jurisdiction in which such entity operates prohibit
         ownership by a Party or more than fifty percent (50%) , control shall
         be deemed to exist at the maximum level of ownership allowed by such
         jurisdiction.

1.3      CNSI KNOW HOW: shall mean all information and data including but not
         limited to formulae, protocols, techniques and results of
         experimentation and testing, which, except for published patent
         applications which are also included within this definition, is
         generally not known to the public, and in which CNSI holds rights, and
         which provides or may provide a competitive advantage in relation to
         research, development, manufacture, use and/or sale of PRODUCT. CNSI
         KNOW HOW includes that information which exists at the EFFECTIVE DATE
         and in which CNSI has either ownership or licensed rights such as those
         which arise directly out of CNSI's conduct, or out of its contract
         service providers conduct under previous agreements between CNSI and
         other parties (see Appendix 4, CNSI Third Party Contracts). CNSI KNOW
         HOW also includes all IMPROVEMENTS which arise after the EFFECTIVE DATE
         either out of CNSI's or its contract service providers conduct under
         this Agreement. CNSI KNOW HOW includes that information which is not
         the subject of any patent application, as well as that information
         which is the subject of a patent application that has not yet issued.
         Such patent applications that have not issued as of the EFFECTIVE DATE
         are included in Appendix 1, which is incorporated herein. Appendix 1
         shall be updated periodically to include CNSI KNOW HOW embodied in
         patent applications arising after the EFFECTIVE DATE and during the

<PAGE>   9
         term of this Agreement, and CNSI KNOW HOW that is the subject of a
         patent application shall be deemed to be and shall be transferred from
         Appendix 1 to Appendix 2 (CNSI PATENT RIGHTS) upon grant.

1.4      CNSI PATENT RIGHTS: shall mean all rights held by CNSI in any of the
         following patents: any patent issuing on any patent application
         identified in Appendix 1, as well as any patent issuing from any
         continuing applications of the patents listed in Appendix 2, such
         applications including any divisions, continuations, and
         continuation-in-part applications, as well as any patents issuing on
         any reissue and/or reexamination application, and including any Patent
         Term Restoration of any such patents. CNSI PATENT RIGHTS also includes
         any foreign patents which correspond to or are generally equivalent to
         those described above, and includes any patents in which CNSI holds
         rights that claim IMPROVEMENTS. This definition includes CNSI's
         interest in any patent rights CNSI may have in any joint invention with
         BAYER or a third party, and includes any third party patent rights
         licensed by CNSI that relate to CNSI TECHNOLOGY and (a) that exist at
         the EFFECTIVE DATE and (b) that arise after the EFFECTIVE DATE (i.e.,
         IMPROVEMENTS). CNSI PATENT RIGHTS that exist as of the EFFECTIVE DATE
         are listed in Appendix 2, which is attached hereto and incorporated
         herein. The Parties intend that Appendix 2 include all CNSI patent
         rights that relate to CNSI TECHNOLOGY in the FIELD and are in existence
         at the EFFECTIVE DATE, as well as all CNSI patent rights arising under
         this Agreement. If at any time it is discovered that such CNSI PATENT
         RIGHTS are not but should be included in Appendix 2, the Parties agree
         to amend Appendix 2 accordingly, and such amendment will be
         incorporated herein and shall supersede any previous Appendix 2.

1.5      CNSI TECHNOLOGY: shall mean GGF2 , neuregulin-1, DNA sequences,
         protein(s) and other related materials covered by CNSI PATENT RIGHTS or
         CNSI KNOW HOW, any modification and fraction thereof, including any
         preparation containing GGF2, and/or any modification and/or fraction
         thereof, as well as all materials relating to the manufacture, use
         and/or delivery (including gene delivery) of GGF2, modifications and/or
         fractions thereof. This definition includes the following : cDNA,
         genomic DNA, vectors, cell lines and probes which relate to GGF2, any
         modification and/or fraction thereof that CNSI owns or otherwise holds
         rights in as of the EFFECTIVE DATE. This definition includes any and
         all IMPROVEMENTS. *********************************.

1.6      COMPETITIVE PRODUCT : shall mean any drug product(s) that promotes the
         growth and differentiation of glial cells and is used for the treatment
         of a PRIMARY INDICATION or other indication contemplated hereunder,
         that is sold by one or more third party which is not a Bayer
         sublicensee or Affiliate, and the individual or cumulative sales or
         other distribution of such third party product(s), in a given calendar
         year in the applicable country, are equivalent to ******************or
         more of NET SALES of PRODUCT in such country,

1.7      COST OF RESEARCH: shall mean actual costs incurred by CNSI for
         conducting research hereunder calculated by adding (a) all out of
         pocket costs incurred in a calendar year that are directly related to
         research conducted by CNSI hereunder, as verified by itemized invoices
         therefor, and (b) the cost of CNSI personnel who actively conduct
         research in a calendar year hereunder at the annualized rate of
         *************per full-time personnel for either Ph.D. or technical
         personnel, calculated as a percent of the full time rate, depending on
         what percent of time was actually spent conducting research hereunder
         in a calendar year. The sum of (a) and (b) includes all direct and
         indirect costs of CNSI hereunder.

1.8      DATA:  is defined in Article 2.2.10 (Records and Reports).



2
<PAGE>   10


1.9      DECISION POINT: is not a defined term in this Agreement.

1.10     EFFECTIVE DATE: The date of the last signature required below or the
         date of any required United States governmental approval or
         registration of this transaction, whichever is later.

1.11     FIELD : shall mean all uses of the CNSI TECHNOLOGY in animals,
         including humans, including but not limited to all therapeutic,
         prophylactic, and diagnostic uses, except this definition does not
         include the field of *************

1.12     IMPROVEMENTS: shall mean any information and/or material including, not
         by way of limitation, know-how, discoveries, technology and information
         of any type whatsoever, compositions, methods, processes, techniques
         and the uses thereof, whether patented or not, that arise after the
         EFFECTIVE DATE out of conduct by CNSI and/or its subcontractees as a
         result of conduct under this Agreement. IMPROVEMENTS include any sole
         CNSI IMPROVEMENT, and any CNSI IMPROVEMENT held jointly with BAYER or
         with any subcontractee, as well as any subcontractee IMPROVEMENT in
         which CNSI has or may obtain rights during this Agreement.

1.13     LAUNCH: shall mean the date of the first invoice for the sale of
         PRODUCT in a MAJOR MARKET after receipt of governmental approval to
         sell PRODUCT in that market.

1.14     LICENSED TECHNOLOGY: shall mean that CNSI TECHNOLOGY, the use of which,
         but for the licenses granted hereunder, would infringe CNSI PATENT
         RIGHTS or misappropriate CNSI KNOW HOW.

1.15     MAJOR MARKET: shall mean the United States, United Kingdom, Germany, or
         France.

1.16     MARKET APPROVAL: shall mean, for each country in which sales of PRODUCT
         is contemplated, the date upon which the last of all governmental
         approvals required for the sale of PRODUCT in that country has been
         granted.

1.17     NET SALES: shall mean the invoiced sales price billed to third party
         customers by BAYER, its AFFILIATES and sublicensees less (a) actual
         credits, allowances, discounts (including trade, cash, and quantity
         discounts), and rebates to (including documented price reduction
         programs) and charge backs from the account of such third party
         customer for spoiled, damaged, out-dated, recalled or returned PRODUCT;
         (b) amounts equivalent to five percent (5%) of the invoiced sales price
         for PRODUCT as an allowance for transportation and insurance costs, and
         (c) all direct taxes including sales, value-added and other direct
         taxes incurred, as well as all customs fees, duties, surcharges and
         other governmental charges incurred in connection with the exportation
         or importation of PRODUCT for sale as far as they are not charged
         separately to third party customers.

1.18     PHASE I STUDY: shall mean the first study designed for introduction of
         a PRODUCT into humans for the primary purpose of determining the safety
         of the PRODUCT.

1.19     PHASE III STUDY: shall mean the first study designed for administration
         of PRODUCT to a number of human patients adequate to produce
         statistically significant evidence of efficacy and designed for the
         primary purpose of proving the efficacy of PRODUCT in order to obtain
         approval of the Biological License Application therefor, or any
         equivalent approval in any MAJOR MARKET.



3
<PAGE>   11


1.20     PRIMARY INDICATION: shall mean therapeutic or prophylactic uses
         relating to multiple sclerosis and/or peripheral neuropathy. This
         definition does not include any reference to diagnostic uses of
         LICENSED TECHNOLOGY.

1.21     PRODUCT: shall mean that LICENSED TECHNOLOGY that is advanced for
         development and/or sold by or on behalf of BAYER under this Agreement.

1.22     RESEARCH STEERING COMMITTEE: shall mean the committee comprising
         representatives of CNSI and BAYER as defined in Article 2.1.

1.23     RESEARCH PROTOCOL: shall mean the program of research as described in
         Appendix 3, which is incorporated herein, as revised from time to time
         as authorized in this Agreement. The RESEARCH PROTOCOL is designed to
         acquire sufficient efficacy and safety information to enable BAYER to
         determine whether recombinant human GGF2 (rhGGF2) should be nominated
         for clinical development. A series of preclinical experiments including
         in vitro studies as well as animal models of Multiple Sclerosis and/or
         other indications will be conducted. Identification of potential target
         cells and issues of toxicity including the induction of hyperplasia and
         potential carcinogenic effects will be determined. This work will
         include an initial, scaleable manufacturing process for rhGGF2. Except
         for the above description, if there is any material conflict between
         the terms of Appendix 3 (Research Protocol) and the terms of the rest
         of this Agreement, then the Parties agree that the rest of the
         Agreement, and not Appendix 3, shall control.

1.24     TERRITORY:  shall mean all countries in the world.

                                    Article 2
                            RESEARCH AND DEVELOPMENT

2.1      RESEARCH STEERING COMMITTEE

         2.1.1    Formation: Promptly after the EFFECTIVE DATE, the Parties
                  shall form a RESEARCH STEERING COMMITTEE for the purpose of
                  overseeing and managing research conducted by both Parties
                  under the RESEARCH PROTOCOL, up to completion of conduct
                  required to be conducted by CNSI and funded by BAYER
                  hereunder.

         2.1.2    Membership: The RESEARCH STEERING COMMITTEE shall be composed
                  of up to three (3) representatives of CNSI and three (3)
                  representatives of BAYER. One (1) of each party's three
                  representatives shall serve as co-chair of the COMMITTEE. Each
                  co-chair shall be authorized by her/his company to make
                  decisions with respect to matters within the scope of the
                  RESEARCH STEERING COMMITTEE's functions and power as described
                  in Article 2.1.5 (Functions and Authority). The initial
                  members of the RESEARCH STEERING COMMITTEE shall be:

                      for CNSI                                    for BAYER
                  co-chair: ********                          co-chair: ********
                  member: **********                          member: **********
                                                              member: **********


         2.1.3    Voting Powers: Unless specifically stated to the contrary in
                  this Article 2.1 (Research Steering Committee), Bayer shall
                  have one vote and CNSI shall have one vote regarding any
                  action to be taken by the RESEARCH STEERING COMMITTEE. Each
                  Party's vote shall be given by each Party's respective co-



4
<PAGE>   12


                  chair. Any action authorized by the RESEARCH STEERING
                  COMMITTEE must be authorized by unanimous vote of both
                  co-chairs and shall be recorded in the meeting minutes
                  following the authorization.

         2.1.4    Meetings: The RESEARCH STEERING COMMITTEE shall meet not less
                  than once a quarter during the term of BAYER's funding of CNSI
                  research hereunder, on such dates and at such times and places
                  as are agreed to by the RESEARCH STEERING COMMITTEE.
                  Responsibility for arranging the meetings, including, at
                  least, providing notice and an agenda and providing minutes of
                  the meeting, shall alternate between the Parties. The first
                  meeting will take place as soon as practicable after the
                  EFFECTIVE DATE, but in no event later than forty-five (45)
                  days after the EFFECTIVE DATE, and will be organized by BAYER.
                  Meetings may be conducted in person or by telephone
                  conference, and the RESEARCH STEERING COMMITTEE may act
                  without a meeting if, prior to such action, a written consent
                  thereto is signed by each co-chair. Except for Article 2.1.3.
                  (Voting Powers), the RESEARCH STEERING COMMITTEE may amend or
                  expand upon the foregoing procedures for its internal
                  operation by co-chair agreement.

2.1.5    Functions and Authority:

         2.1.5.1  The RESEARCH STEERING COMMITTEE shall manage and coordinate
                  research conducted by each Party under the RESEARCH PROTOCOL.

         2.1.5.2  Each Party shall provide the RESEARCH STEERING COMMITTEE with
                  a copy of DATA it generates under the RESEARCH PROTOCOL. The
                  COMMITTEE shall treat this DATA as confidential under the
                  terms of Article 7 (Confidentiality) of this agreement and
                  shall be used for the sole purpose of furthering the purpose
                  of this Agreement. The RESEARCH STEERING COMMITTEE has the
                  authority to review DATA submitted by each Party and amend the
                  RESEARCH PROTOCOL as described in Article 2.1.5.3 on the basis
                  of that DATA and/or other information, if necessary, according
                  to its best judgment.

         2.1.5.3  To be authorized, any amendment to the RESEARCH PROTOCOL shall
                  be in writing, signed and dated by each co-chair. The RESEARCH
                  STEERING COMMITTEE shall retain copies of all such amended
                  signed versions of the RESEARCH PROTOCOL generated during the
                  term of this Agreement, and each shall become incorporated
                  herein by reference as of the date of last signature required
                  thereto.

         2.1.5.4  The RESEARCH STEERING COMMITTEE does not have the authority to
                  amend the RESEARCH PROTOCOL in a manner
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************

         2.1.5.5  The RESEARCH STEERING COMMITTEE has the sole authority to
                  authorize transfer of any material that incorporates and/or
                  includes LICENSED TECHNOLOGY to any third party during the
                  term of the RESEARCH STEERING COMMITTEE. Such authorization
                  shall be through the RESEARCH STEERING COMMITTEE's approval of
                  appropriate research, material transfer, or other agreements
                  hereunder. After the RESEARCH STEERING COMMITTEE disbands


5
<PAGE>   13



                           according to Article 2.1.8 (Disbanding) and during
                           the term of the Agreement, BAYER shall have the sole
                           right to transfer any material that is LICENSED
                           TECHNOLOGY.

                  2.1.5.6  The RESEARCH STEERING COMMITTEE shall have further
                           functions and authority as are stated in Article
                           2.2.5 (Subcontracting).

         2.1.6    Expenses: Each Party shall be responsible for its own RESEARCH
                  STEERING COMMITTEE members' expenses.

         2.1.7    Dispute Resolution: In the event of a dead-lock regarding any
                  issue within the RESEARCH STEERING COMMITTEE's powers, the
                  RESEARCH STEERING COMMITTEE shall present the issue to the
                  President of Bayer AG's Pharmaceutical Division and to the
                  President of Cambridge NeuroScience, Inc. who shall attempt to
                  resolve the deadlock in good faith. If no resolution is
                  reached between these two individuals, then BAYER's decision
                  shall control.

         2.1.8    Disbanding: On or before sixty (60) days after CNSI's
                  completion of the research funded by BAYER hereunder, the
                  RESEARCH STEERING COMMITTEE shall disband and have no further
                  duties or authority. Upon the disbanding of the RESEARCH
                  STEERING COMMITTEE, each Party may keep all DATA, meeting
                  minutes and authorized RESEARCH PROTOCOL amendments received
                  during RESEARCH STEERING COMMITTEE membership, as long as such
                  information is treated according to Articles 2.2.11 (Rights in
                  Data) and Article 7 (Confidentiality).

2.2      CNSI RESEARCH

         2.2.1    Representation: CNSI represents that it has the expertise,
                  facilities and personnel to carry out and/or monitor third
                  party research described in the RESEARCH PROTOCOL in a manner
                  that is safe and that protects the confidentiality of the
                  research conducted hereunder and the results generated
                  therefrom in a manner that is consistent with the terms of
                  this Agreement.

         2.2.2    Scope of Research: CNSI shall conduct and/or monitor third
                  party research generally in the area of efficacy studies
                  relating to PRODUCT. CNSI's specific responsibilities
                  regarding such research are described in the RESEARCH PROTOCOL
                  which is attached hereto as Appendix 3, and incorporated
                  herein.

         2.2.3    Payment: BAYER will pay CNSI its COST OF RESEARCH not to
                  exceed one million dollars ($1,000,000) for CNSI to complete
                  the purpose and procedures for which it is responsible,
                  according to the RESEARCH PROTOCOL. CNSI will pay third party
                  subcontractees that perform services under this Agreement out
                  of this one million dollar payment generally as described in
                  Appendix 5 (CNSI Subcontractees and Proposed Budget). On or
                  before January 11, 1999, BAYER shall pay CNSI five hundred
                  thousand dollars ($500,000) of the maximum one million dollar
                  payment for research already committed to or conducted by CNSI
                  prior to the EFFECTIVE DATE. Starting April 1, 1999, CNSI
                  shall invoice BAYER quarterly for COST OF RESEARCH incurred
                  during the previous quarter, and BAYER shall pay the invoice
                  amount within thirty (30) days of receipt of the invoice.

         2.2.4    Records and Audits: CNSI will maintain accounting records in
                  such form and detail as to substantiate CNSI's accounting of
                  COST OF RESEARCH. CNSI



6
<PAGE>   14
                  shall make those records available for audit by a mutually
                  agreeable nationally recognized accounting firm at BAYER's
                  written request and expense. CNSI shall preserve its records
                  for any calendar year for a period of three years or until the
                  period for completion of tax audits for any calendar year has
                  expired, whichever is longer.

         2.2.5    Subcontracting: Prior to the RESEARCH STEERING COMMITTEE's
                  being disbanded under Article 2.1.8 (Disbanding), either Party
                  may contract with, manage, and be responsible for certain
                  subcontractees performance of the respective Party's research
                  obligations, in whole or in part, under the RESEARCH PROTOCOL.
                  Such subcontracting by CNSI shall be funded under the research
                  payments in Article 2.2.3 (Payment). Any and all such
                  subcontract(s) are subject to the RESEARCH STEERING
                  COMMITTEE's prior approval of the subcontractee as well as of
                  the actual written agreement that shall control such
                  subcontract transaction, and are subject to the
                  subcontractee's agreement to assume all applicable obligations
                  of this Agreement relating to research conducted hereunder.
                  Approval of any particular subcontractee (except that
                  subcontractees listed in Appendix 5 (CNSI Subcontractees) are
                  already deemed approved), and of terms of any particular
                  agreement shall be made in a timely manner in a writing signed
                  by both co-chairs of the RESEARCH STEERING COMMITTEE or
                  his/her respective delegate.

         2.2.6    Subcontractee Improvements:
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************

         2.2.7    Independent Contractor: Execution of CNSI's responsibilities
                  under the RESEARCH PROTOCOL is solely under the direction and
                  control of CNSI as an independent contractor, and not as an
                  employee of BAYER. CNSI will provide whatever is necessary for
                  completion of the RESEARCH PROTOCOL except for any material to
                  be provided by BAYER which is specifically identified in the
                  RESEARCH PROTOCOL or elsewhere in this Agreement as such.

         2.2.8    Technology Transfer: BAYER's representatives may consult
                  informally with CNSI personnel and/or subcontractees at
                  reasonable times during the term of this Agreement. Except for
                  supply of MATERIAL, which is controlled by Article 5 (Supply
                  of Material), CNSI shall, at BAYER's request, deliver to BAYER
                  reasonable quantities of representative materials developed by
                  CNSI under the RESEARCH PROTOCOL, and also provide timely
                  technical assistance to BAYER to ensure transfer of any
                  technology developed under this Agreement in 

7
<PAGE>   15
                  sufficient detail to enable BAYER to readily practice any
                  license or right granted in this Agreement.

         2.2.9    Research Warranty: CNSI warrants that no materials, ideas,
                  reagents, methods, or supplies proprietary to any entity other
                  than CNSI shall be used in the course of CNSI's conduct of its
                  responsibilities under the RESEARCH PROTOCOL without the
                  express written consent of BAYER, unless CNSI shall first
                  obtain those rights from said entity and include such rights
                  in its grant of CNSI PATENT RIGHTS and/or CNSI KNOW HOW of
                  Article 3 (License Grant).

         2.2.10   Records and Reports: Each Party shall keep complete, accurate
                  and authentic accounts, notes, technical reports, raw data,
                  IMPROVEMENTS, information and records of the work performed by
                  that Party or its subcontractee(s) under the RESEARCH PROTOCOL
                  (collectively, "DATA") and shall provide the RESEARCH STEERING
                  COMMITTEE with quarterly reports thereof promptly after the
                  end of each quarter. Each Party shall also submit to the
                  RESEARCH STEERING COMMITTEE a comprehensive final report
                  within ninety (90) days after expiration or termination of the
                  research period.

         2.2.11   Rights in DATA:
                 
                  **************************************************************
                  CNSI shall treat all DATA as confidential according to Article
                  7 (Confidentiality). If BAYER terminates this Agreement under
                  Article 10.3.3 (Without Cause), then, except where this
                  Agreement is to the contrary, BAYER may grant or share
                  ownership of DATA with CNSI, and BAYER's granting or sharing
                  of such rights to DATA will not be unreasonably withheld.

2.3      BAYER Research and Development

         2.3.1    Scope of Research: BAYER shall conduct research generally in
                  the area of process and product development of PRODUCT.
                  BAYER's specific responsibilities regarding such research are
                  described in the RESEARCH PROTOCOL which is incorporated
                  herein. BAYER shall be responsible for its costs of research
                  hereunder.

         2.3.2    Development Studies: BAYER also has the right to and will be
                  solely responsible for conducting, or having conducted, all
                  studies relating to the clinical development of PRODUCT for
                  commercialization. BAYER will provide whatever is necessary
                  for conducting such development studies, including PRODUCT
                  manufactured by BAYER.

         2.3.3    Contracted Clinical Trials: During development of PRODUCT, if
                  BAYER, at its sole discretion, decides to contract out any
                  clinical trial(s) of PRODUCT, and, if CNSI demonstrates that
                  it has the personnel and experience necessary, in BAYER's
                  opinion, to conduct such work in a competent, timely and
                  cost-effective manner, then BAYER will consider contracting
                  with CNSI to perform such trials, in part or in their
                  entirety, on behalf of BAYER. Any such agreement, to be
                  binding and enforceable, shall be the subject of a separate
                  written contract.

         2.3.4    Regulatory Filings: BAYER shall be responsible for the
                  preparation, submission and prosecution of all regulatory
                  authority filings and applications required to obtain all
                  necessary marketing and pricing approvals to commercially sell
                  and use PRODUCT in each country in the TERRITORY in which
                  BAYER will sell 

8
<PAGE>   16
                  PRODUCT. BAYER shall be the owner and party of record for all
                  such filings and applications.

         2.3.5    Assistance: CNSI agrees to provide timely assistance as
                  requested by BAYER and as reasonably necessary in preparation
                  and prosecution of such filings and applications as described
                  in Article 2.3.4 (Regulatory Filings).

         2.3.6    Costs: BAYER shall be responsible for its costs associated
                  with preparation, submission and prosecution of all filings
                  and applications required. BAYER shall reimburse CNSI for any
                  reasonable expenses pre-approved by BAYER and actually
                  incurred by CNSI as a result of CNSI's providing such
                  assistance as is described in Article 2.3.5 (Assistance).

         2.3.7    Reporting: At least in January and July of each year during
                  the term of this Agreement until all PRODUCT approvals
                  hereunder are obtained, BAYER shall provide CNSI with a
                  written summary report which shall describe the progress of
                  the following: the clinical development and testing of PRODUCT
                  in clinical trials, all regulatory filings and submissions
                  made, and all approvals obtained. Such reports and information
                  shall be received by CNSI subject to the obligations of
                  Article 7 (Confidentiality).

         2.3.8    Diligence: BAYER shall diligently proceed with the
                  development, manufacture and sale of any and all PRODUCTS that
                  are approved for advancement and/or commercialization by
                  BAYER's management according to BAYER's standard business
                  practice for similar products of similar indication in similar
                  sized markets in the MAJOR MARKETS, and, as development
                  progresses, that are approved for commercialization by
                  appropriate regulatory agencies.

         2.3.9    Excused Performance: In addition to the terms of Article 12.2
                  (Force Majeure), BAYER's diligent development, manufacture
                  and/or sale of PRODUCT is expressly conditioned upon the
                  continuing absence of any adverse condition relating to the
                  safety or efficacy of PRODUCT which, in BAYER's opinion,
                  materially limits, reverses or restricts the development
                  and/or marketing of PRODUCT. BAYER's obligations to diligently
                  develop any PRODUCT that demonstrates such an adverse
                  condition shall be delayed or suspended so long as any such
                  condition exists.

2.4      Research Publications: Subject to the restrictions of confidentiality
         and restricted use set forth in this Agreement, in the event either
         Party wants to publish research data and/or information, including
         DATA, that directly relates to CNSI TECHNOLOGY and/or arises out of
         conduct under the RESEARCH PROTOCOL, whether in writing or orally, each
         Party shall cooperate to achieve a mutually acceptable publication in a
         timely manner, and the Parties shall follow standard procedures used in
         scientific journals regarding authorship and acknowledgments. The
         publishing Party shall take reasonable steps to allow the other Party
         to provide comments and/or proposed modifications to the proposed
         publication and/or to request a reasonable delay in publication in
         order to protect patentable information including IMPROVEMENT(s). Such
         steps include, but are not limited to, submission of any and all
         proposed research publications that relate to the CNSI TECHNOLOGY
         and/or DATA to the other Party at least forty five (45) days prior to
         any disclosure to any outside party. The publishing Party agrees to
         postpone publication of any sole or joint IMPROVEMENT for up to ninety
         (90) days from the date BAYER received the proposed publication in
         order to first protect potential global patent rights to such
         IMPROVEMENT(s). Any information that the RESEARCH STEERING COMMITTEE
         deems should not be published but should be held as a trade secret
         shall


9
<PAGE>   17
         not be published, and shall be so held during the term of this
         Agreement. In any event, the publishing Party must get written consent
         from the other Party prior to publication of any CONFIDENTIAL
         INFORMATION that belongs to the other Party. In the event that
         agreement(s) between CNSI and a third party concerning the subject
         matter of this Agreement are already signed by both CNSI and the third
         party before the EFFECTIVE DATE, and such agreement(s) contain terms
         regarding publication of DATA that conflict with the terms in this
         Article 2.4 (Research Publications), then CNSI shall promptly so advise
         BAYER in order to allow for a timely review of the proposed publication
         by BAYER.

                                    Article 3
                                  LICENSE GRANT

3.1      CNSI Grant of Patent Rights: CNSI hereby grants BAYER and its
         AFFILIATES as designated by BAYER a royalty-bearing, exclusive license
         (or in the case of CNSI PATENT RIGHTS that CNSI has licensed from a
         third party, an exclusive sublicense) to make, use, sell, import,
         sublicense, and have made, used, sold, and imported LICENSED TECHNOLOGY
         under CNSI PATENT RIGHTS (which includes IMPROVEMENTS) in the FIELD in
         the TERRITORY.

3.2      Term of Grant: The license granted in Article 3.1 (CNSI Grant of Patent
         Rights) shall remain in force and effect until the expiration of the
         last to expire of the CNSI PATENT RIGHTS unless this Agreement is
         terminated earlier by either Party under Article 10 (Term and
         Termination).

3.3      Reservation of Rights to CNSI: The above notwithstanding, CNSI retains
         the right under CNSI PATENT RIGHTS to perform that research and other
         conduct that is specifically identified as CNSI's obligation under this
         Agreement. CNSI also retains the right to perform research and/or have
         research performed under CNSI PATENT RIGHTS in the FIELD
         *************************************ONLY AFTER BAYER is made aware of
         the proposed research in reasonable detail, and after BAYER approves in
         writing any third party with whom CNSI would contract for such research
         services, and after BAYER approves in writing any actual CNSI/third
         party research agreement relating to such research. Any such written
         approval will be provided by BAYER within sixty (60) days of CNSI's
         request for such approval.

3.4      CNSI Grant of Rights in Know How: CNSI hereby grants BAYER a
         royalty-bearing exclusive license, including the right to sublicense,
         to unlimited use of CNSI KNOW HOW (which includes IMPROVEMENTS) in the
         FIELD in the TERRITORY. The foregoing notwithstanding, CNSI retains the
         right under CNSI KNOW HOW to perform that research and other conduct
         that is specifically identified as CNSI's obligation under this
         Agreement. CNSI also retains the right to perform research and/or have
         research performed under CNSI KNOW HOW in the FIELD at its own expense
         ***********************************************************************
         ***********************************************************************
         **********************************************************************

3.5      CNSI Funded Research: CNSI may pursue research that is within the FIELD
         but outside the scope of BAYER funded research hereunder only according
         to the terms of Articles 3.3 (Reservation of Rights to CNSI), and 3.4
         (CNSI Grant of Rights in Know How). CNSI must keep BAYER promptly
         informed of all material data and results of any such research that
         CNSI performs and/or has performed on at least a quarterly basis during
         the term of this agreement. *******************************************


10
<PAGE>   18
         ***********************************************************************
         ***********************************************************************
         ***********************************************************************
         ***********************************************************************
         **********************************************************************.
         For clarification, any and all CNSI TECHNOLOGY, including IMPROVEMENTS,
         that arises out of CNSI funded research under Articles 3.3 (Reservation
         of Rights to CNSI), and 3.4 (CNSI Grant of Rights in Know How) during
         the term of this Agreement falls within the scope of the licenses
         granted herein and shall not be disposed of or otherwise used by CNSI
         contrary to the terms of this Agreement.
         **********************************************************************.

3.6      Term of Grant: The license granted in Article 3.4 (CNSI Grant of Rights
         in Know How) shall remain in force and effect according to Article
         4.3.2.3, or Article 10.1 (Term and Expiration) or Article 10.2.2
         (Effect of Termination), whichever occurs first.

3.7      BAYER Grant of Rights:

         3.7.1    BAYER grants no rights to CNSI hereunder for BAYER patents
                  and/or know how that originate solely from BAYER EXCEPT for
                  the limited right to use such patents and/or know how for the
                  sole purpose of performing research and other conduct
                  specifically identified under this Agreement.

         3.7.2    If BAYER terminates this Agreement upon notice under Article
                  10.3.3 (Without Cause), then all rights granted by BAYER in
                  Article 3.7.1 shall be revoked upon termination, and BAYER
                  will negotiate in good faith with CNSI regarding a license of
                  any BAYER patent and/or know how rights relating directly to
                  PRODUCT that would, but for that license, preclude CNSI from
                  making, using or selling PRODUCT.

3.8      Bankruptcy or Insolvency: All rights and licenses granted to BAYER
         under this Article 3 are, and shall be deemed to be, for purposes of
         Section 365(n) of the Bankruptcy Code, licenses of rights to
         "Intellectual Property" as defined under Section 101(35A) of the
         Bankruptcy Code. The Parties agree that BAYER, as a licensee of such
         rights under this Agreement, shall retain and may fully exercise all of
         its rights and elections under the Bankruptcy Code, including but not
         limited to BAYER's rights to continue to exercise the rights licensed
         hereunder.

                                    Article 4
                      LICENSE FEE, MILESTONES AND ROYALTIES

4.1      Consideration for License Granted: In consideration for the licenses
         granted under Articles 3.1 (CNSI Grant of Patent Rights) and 3.4 (CNSI
         Grant of Rights in Know How), BAYER shall pay CNSI one million dollars
         ($1,000,000) on or before January 11, 1999.

4.2      Milestone Payments :

         4.2.1    **************************************************************
                  **************************************************************
                  **************************************************************


11
<PAGE>   19

         4.2.2    **************************************************************
                  **************************************************************
                  *************************************************************.

         4.2.3    **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  *************************************************************.

         4.2.4    **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************

         4.2.5    BAYER shall pay CNSI:
                           
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************

         4.2.6    **************************************************************
                  **************************************************************
                  **************************************************************

         4.2.7    **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************

4.3      Royalty Payments:

         4.3.1    Royalties for Patent Rights: In each country in which CNSI
                  PATENT RIGHTS exist at the time of the first sale of PRODUCT
                  in that country, and during such time that such rights have
                  not been held invalid or unenforceable by a decision of a
                  court or other governmental agency of competent jurisdiction,
                  unappealable or unappealed within the time allowed for appeal,
                  or which has not been admitted to be invalid or unenforceable
                  through reissue or disclaimer or otherwise, or has not
                  expired, the following shall apply:

                  4.3.1.1  BAYER shall pay CNSI a royalty of
                           ******************************of NET SALES of each
                           PRODUCT sold in each country
                           for***************************** NET SALES for that
                           PRODUCT invoiced


12
<PAGE>   20
                           in all such countries during each January through
                           December fiscal year, and

                  4.3.1.2  *****************************************************
                           *****************************************************
                           *****************************************************
                           *****************************************************

                  4.3.1.3  Except for Article 4.3.1.4 below, when CNSI PATENT
                           RIGHTS cease to exist in any country, as long as
                           BAYER is not in default on any material term of this
                           Agreement, then the patent license granted in this
                           Agreement shall be deemed paid up, and BAYER shall be
                           free to continue to commercialize PRODUCT in that
                           country without any further payment due CNSI under
                           this Agreement.

                  4.3.1.4  In any country in which CNSI PATENT RIGHTS cease to
                           exist before
                           *************************************years from the
                           first invoiced sale of PRODUCT in that country has
                           passed, then a royalty on NET SALES for that PRODUCT
                           in that country shall be calculated under Article
                           4.3.2 (Royalties for Know How) for the remainder of
                           the *************************************year period,
                           whereupon Article 4.3.2.3 shall apply.

         4.3.2    Royalties for Know How: In each country in which no CNSI
                  PATENT RIGHTS exist at the time of the first sale of PRODUCT
                  in that country (that is, where no patents have issued by that
                  date, or where patents have expired, or where patents have
                  been found invalid and/or unenforceable by a court,
                  governmental or administrative agency of competent
                  jurisdiction, or where no patent applications were ever
                  filed), The following shall apply:

                  4.3.2.1  *****************************************************
                           *****************************************************
                           *****************************************************
                           ***************************************

                  4.3.2.2  *****************************************************
                           *****************************************************
                           *****************************************************
                           ***************************************.

                  4.3.2.3  *****************************************************
                           *****************************************************
                           *****************************************************
                           *****************************************************
                           *****************************************************

                  4.3.2.4  The above notwithstanding, if PRODUCT is sold in a
                           country where a patent application that is CNSI
                           KNOW-HOW hereunder has been filed but has not yet
                           issued as of the date of the first invoiced sale of


13
<PAGE>   21
                           PRODUCT in that country, then, upon grant of CNSI
                           PATENT RIGHTS in that country, a royalty on NET SALES
                           of PRODUCT in that country shall be calculated
                           according to Article 4.3.1 (Royalties for Patent
                           Rights), and upon expiration of the patent term,
                           Article 4.3.1.3 shall apply.

         4.3.3    **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************

         4.3.4    **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  *************************************************************.

         4.3.5    License to Third Party Patent Rights:

                  4.3.5.1  If upon advice of its legal counsel, BAYER reasonably
                           determines that, but for a license under any third
                           party's issued United States patent and/or published
                           patent application or patent granted outside the
                           United States, BAYER could not legally develop and/or
                           commercialize LICENSED TECHNOLOGY in the FIELD, then
                           BAYER shall endeavor to obtain such license rights.
                           *****************************************************
                           *****************************************************
                           *****************************************************
                           *****************************************************

                  4.3.5.2  If BAYER chooses to enhance manufacture of any
                           PRODUCT hereunder in a manner that would require a
                           license from a third party to incorporate the desired
                           (but not necessary to make, use and/or sell PRODUCT)
                           enhancement, then BAYER may endeavor to obtain such
                           license rights at its own expense.

         4.1.1    **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************

4.4      Accounting Records and Procedures

         4.4.1    Royalty Payments: BAYER shall make royalty payments due CNSI
                  on a quarterly basis, within *************days following the
                  end of each calendar quarter for which 

14
<PAGE>   22

                  royalties are due. Each royalty payment shall be accompanied
                  by a report summarizing the NET SALES of the PRODUCT on a
                  country by country basis during the relevant three-month
                  period, the currency conversion rate, if applicable, which
                  royalty rate is being applied, the total royalty payments due,
                  the taxes withheld, if any.

         4.4.2    Currency: Royalty payments shall be made in United States
                  dollars. The currency in which NET SALES were invoiced shall
                  be converted to United States dollars on the date of payment
                  of the royalty due using the applicable commercial rate of
                  exchange for buying US dollars with that currency that is the
                  closing selling rate for such currency, quoted as local
                  currency per US$1, published in the Wall Street Journal for
                  the last business day of the Quarter for which such payments
                  are due.

         4.4.3    Records and Audits: BAYER will maintain accounting records in
                  such form and detail as to substantiate BAYER's accounting of
                  royalty payments to CNSI. BAYER shall make those records
                  available for audit by a mutually agreeable nationally
                  recognized accounting firm at CNSI's written request and
                  expense for the sole purpose of verifying the correctness of
                  calculations and classifications of such revenues, net sales,
                  costs, expenses, or payments made under this Agreement. BAYER
                  shall preserve its records for any calendar year for a period
                  of three (3) years following the close of that calendar year.
                  Upon expiration of three (3) years, the calculation of
                  royalties payable with respect to such year shall be binding
                  and conclusive upon CNSI, and BAYER shall be released from any
                  liability or accountability with respect to royalties for such
                  year.

         4.4.4    Confidentiality of Financial Reports: CNSI agrees to hold in
                  confidence according to Article 7 (Confidentiality) all
                  information concerning royalty payments and financial reports,
                  and all information learned in the course of any audit except
                  to the extent disclosure by CNSI is required by law. If CNSI
                  believes disclosure is required by law, CNSI shall immediately
                  so notify BAYER and shall assist BAYER in maintaining BAYER's
                  rights at BAYER's expense.

         4.4.5    Payment of taxes: CNSI shall be responsible for any and all
                  taxes, levies or charges assessed against royalty payments it
                  receives under this Agreement. If laws or regulations require
                  that taxes be withheld on royalty payments, BAYER will

                  a)       deduct those taxes from the amount of royalty payment
                           due CNSI,

                  b)       pay the taxes to the proper taxing authority in a
                           timely manner, and

                  c)       send proof of payment to CNSI within sixty (60) days
                           following that payment.

                  The Parties agree to cooperate to obtain the benefit of any
                  tax treaty with respect to such royalty payments.

         4.4.6    Sublicensees: In the event BAYER sublicenses PRODUCT to any
                  third party for the purpose of allowing the third party to
                  sell PRODUCT other than contract manufacturing for BAYER, the
                  agreement with the sublicensee shall include an obligation for
                  the sublicensee to account for and report its net sales of
                  PRODUCT on the same basis as if such sales were made by BAYER,
                  and BAYER shall pay royalties to CNSI under this Agreement as
                  if the net sales of PRODUCT of the sublicensee were NET SALES
                  of BAYER.


15
<PAGE>   23
         4.4.7    Non-Product Related Sublicenses: In the event BAYER
                  sublicenses any CNSI PATENT RIGHTS and/or CNSI KNOW HOW to a
                  third party for the purpose of the third party's avoiding
                  infringement of such rights, or for some other reason other
                  than for third party sale of PRODUCT under Article 4.4.6
                  (Sublicensees), then *************************************of
                  any payment paid to BAYER by the third party shall pass
                  through BAYER to CNSI, and rights in such agreement shall be
                  assignable to CNSI in the event of termination of this
                  Agreement.

                                    Article 5
                               SUPPLY of MATERIAL

5.1      Research Material: All material, whether made by or on behalf of either
         CNSI or BAYER, that is within the scope of CNSI TECHNOLOGY and that
         exists on the EFFECTIVE DATE shall be freely shared between the
         Parties, as designated by the RESEARCH STEERING COMMITTEE, for the
         purpose of completing the RESEARCH PROTOCOL. All amounts of such
         material required beyond what exists as of the EFFECTIVE DATE shall be
         supplied by BAYER, as shall be determined by the RESEARCH STEERING
         COMMITTEE. ***********************************************************
         ***********************************************************************
         ***********************************************************************

5.2      Other Material: Subject to Article 5.1 (Research Material), BAYER has
         the right to and shall manufacture or otherwise provide all amounts of
         material within the scope of LICENSED TECHNOLOGY necessary for BAYER to
         perform its responsibilities under this Agreement, including all
         material required to perform all development studies, as well as all
         material necessary for BAYER's marketing and sale of PRODUCT hereunder.

5.3      BAYER Cost of Manufacture: BAYER shall be responsible for all its costs
         of manufacture of material under Article 5.2 (Other Material),
         including all fixed and variable costs.

                                    Article 6
                            PRODUCT COMMERCIALIZATION

6.1      Right to Commercialize: BAYER and its designated AFFILIATES, as the
         exclusive licensees of LICENSED TECHNOLOGY in the FIELD in the
         TERRITORY as stated in Article 3, have the sole right to promote,
         market, distribute and sell, and/or have promoted, marketed,
         distributed and sold, PRODUCT in its name in the TERRITORY.

6.2      Co-Promotion : If BAYER, *************************************, decides
         to sell any PRODUCT in the United States under a trade mark through the
         efforts of its own sales force as well as another entity's sales force
         ("co-promote"), and if, at that time, CNSI has its own sales force
         *************************************experienced in marketing products
         in the appropriate therapeutic areas, and the combination of CNSI sales
         staff with BAYER sales staff will,
         *************************************, synergistically increase product
         sales in a cost effective manner, then the Parties will negotiate in
         good faith to determine if they can reach agreement regarding such
         co-promotion. To be authorized, any such co-promotion shall be the
         subject of a separate written agreement between the Parties.

6.3      Cost of Commercialization: BAYER shall be responsible for all costs of
         commercialization of PRODUCT hereunder except, should CNSI co-promote
         PRODUCT under Article 6.2 (Co-Promotion), costs and benefits of
         commercialization shall be negotiated in good faith between the Parties
         and shall be the subject of a separate written agreement.


16
<PAGE>   24
6.4      Product Liability:  See Article 12.1 (Indemnification).

6.5      Trade Marks: BAYER and/or its AFFILIATES shall own all rights in any
         and all trademarks for PRODUCT(s) commercialized hereunder. BAYER
         and/or its AFFILIATES shall have sole responsibility for selection,
         clearance and registration of said trademarks and for quality assurance
         pertaining to the PRODUCT(s) bearing said trademarks. CNSI shall
         cooperate with BAYER and/or its AFFILIATES and assist BAYER, if so
         requested by BAYER, in the registration, defense and maintenance of
         said trademarks. BAYER shall be responsible for all decisions and costs
         relating to clearance, registration, defense and maintenance of
         trademarks for the PRODUCT(s).

                                    Article 7
                                 CONFIDENTIALITY

7.1      Definition: CONFIDENTIAL INFORMATION is any meeting minutes generated
         by the RESEARCH STEERING COMMITTEE and any RESEARCH PROTOCOL(s), as
         well as all DATA generated hereunder, and any and all data and/or other
         information related to the CNSI TECHNOLOGY and/or the FIELD which is
         proprietary to the disclosing Party and not generally known, including
         technological information not limited to compound(s), composition(s),
         formulation(s) and/or, manufacturing information, and including
         business information not limited to commercial forecasts, plans,
         programs, customers, assets, financial projections, and costs.
         CONFIDENTIAL INFORMATION also includes information described in Article
         2.1.5.2 (Functions and Authority), Article 2.1.8 (Disbanding), Article
         2.2.11 (Rights in DATA), Article 2.3.7 (Reporting), Article 4.4.4
         (Confidentiality of Financial Reports), and Article 8.4 (Invention
         Disclosure).

7.2      Obligations: Each Party agrees to hold all of the other Party's
         CONFIDENTIAL INFORMATION received or generated hereunder in confidence
         and neither disclose it to any third party nor allow any third party
         access to it nor use it for any purpose other than as specified by this
         Agreement. The above notwithstanding, BAYER may disclose CONFIDENTIAL
         INFORMATION to its AFFILIATES which are bound by like terms of
         confidentiality as those stated herein..

7.3      Exceptions: These obligations of non-disclosure and non-use shall not
         apply to CONFIDENTIAL INFORMATION which:

         (a)      was, at the time of disclosure, in the possession of the
                  receiving Party and was not previously acquired from or on
                  behalf of the disclosing Party on a confidential basis,

         (b)      was in the public domain prior to disclosure, or became, after
                  disclosure, publicly known through no fault of the receiving
                  Party,

         (c)      was developed by or on behalf of the receiving Party
                  independent of its receipt of CONFIDENTIAL INFORMATION from
                  the disclosing Party,

         (d)      was received from a third party who rightfully made such
                  disclosure,

         (e)      was approved for use or release by written authorization from
                  the disclosing Party prior to such use or release by the
                  receiving Party, or

         (f)      is required to be disclosed by operation of law, governmental
                  regulation or court order provided the receiving Party gives
                  the disclosing Party notice of such disclosure prior to making
                  such disclosure, and the receiving Party uses all reasonable
                  effort to cooperate in securing confidential protection for
                  such information.


17
<PAGE>   25
         Any specific CONFIDENTIAL INFORMATION shall not be deemed to fall
         within (a), (b), (c), (d), (e) or (f) above merely because it falls
         within the scope of more general information within one of these
         exceptions.

7.4      Term of Confidentiality: These obligations of confidentiality and
         nonuse are binding throughout the duration of this Agreement and remain
         in force for a period of ten (10) years from the date of its
         expiration.

7.5      Return of Information: Upon termination and upon request from the
         disclosing Party, the receiving Party agrees to promptly return all
         originals and copies of CONFIDENTIAL INFORMATION received, as well as
         permanently delete all electronically or otherwise stored CONFIDENTIAL
         INFORMATION from all systems containing such INFORMATION, except that
         one copy may be retained by legal counsel solely as a measure of the
         receiving Party's obligations under this Agreement.

7.6      Business Publications:

         7.6.1    Neither Party may disclose any information regarding the
                  nature and/or occurrence of this transaction, or the nature
                  and/or occurrence of any event or information occurring as a
                  result of this transaction without the prior written consent
                  of the other Party, except that BAYER may disclose such
                  information to its AFFILIATES or sublicensees that are under
                  like terms of confidentiality as those stated herein without
                  such consent. Any such information that is required by law to
                  be disclosed by either Party shall first be submitted to the
                  non-disclosing Party for such written approval, which shall
                  not be unreasonably withheld, prior to such publication. This
                  restriction shall not apply to such information that is
                  already publicly available through no fault of the disclosing
                  Party.

         7.6.2    **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************

                                    Article 8
                             INVENTIONS AND PATENTS

8.1      **************************************************************
         **************************************************************
         **************************************************************
         **************************************************************
         **************************************************************

8.2      **************************************************************
         **************************************************************
         **************************************************************
         **************************************************************
         **************************************************************


18
<PAGE>   26
8.3      Joint Inventions: Each Party shall own an undivided, one-half interest
         in any IMPROVEMENT(s) made jointly by BAYER and CNSI under this
         Agreement. The Parties agree to consult with one another prior to
         taking any action to obtain patent protection for such joint
         IMPROVEMENT(s).

8.4      Invention Disclosure: CNSI shall promptly disclose to BAYER any
         IMPROVEMENTS arising under this Agreement. BAYER agrees to hold such
         disclosure on a confidential basis under the same terms regarding
         confidentiality as described in Article 7 (Confidentiality). CNSI
         agrees to keep BAYER informed of the filing and status of any patent
         application or patent pertaining to this Agreement, and, if BAYER so
         requests, shall give BAYER ample time in which to review and comment on
         the substance and scope of any proposed submission to any patent
         authority concerning any CNSI patent application hereunder.

8.5      Know-how: Any CNSI IMPROVEMENT which is not patented due to its failure
         to qualify for patent protection or due to a determination not to
         submit a patent application, shall be considered CNSI KNOW HOW
         hereunder.

8.6      CNSI Patent Maintenance: CNSI shall not abandon or for any other reason
         allow any CNSI PATENT RIGHTS to be terminated without first giving
         BAYER sufficient notice to allow BAYER to determine whether it would be
         interested in pursuing those rights in its own name and at its own
         expense.

8.7      BAYER Patent Maintenance: : BAYER shall not abandon or for any other
         reason allow any BAYER patent rights relating to the research performed
         by BAYER hereunder to be terminated without first giving CNSI
         sufficient notice to allow CNSI to determine whether it would be
         interested in pursuing those rights in its own name and at its own
         expense.

8.8      **************************************************************
         **************************************************************
         **************************************************************
         **************************************************************
         **************************************************************
         **************************************************************
         **************************************************************
         **************************************************************
         **************************************************************
         **************************************************************

8.9      Assignment of Rights: To the extent that BAYER assumes the
         responsibility for filing, obtaining and/or maintaining any patent
         applications and/or patents on IMPROVEMENTS under Article 8.8
         (BAYER/CNSI Patents), CNSI agrees to promptly assign such patent
         application(s) and/or patent(s) to BAYER and to readily assist BAYER in
         obtaining, maintaining and defending such patents at BAYER's expense
         but without further payment to CNSI. Any CNSI PATENT RIGHTS assigned to
         BAYER under this Article 8.9 (Assignment of Rights) shall become BAYER
         patent rights and shall no longer be considered CNSI PATENT RIGHTS
         hereunder.

8.10     No Waiver: By entering into this Agreement, subject to Article 8.9
         (Assignment of Rights) and the licenses granted in this Agreement,
         neither Party waives or forfeits any of its rights to any patent that
         it owns and that exists at the EFFECTIVE DATE, or to any IMPROVEMENT
         that it owns either jointly or solely.

8.11     Cost of CNSI Patents: BAYER may, in its sole discretion, choose to have
         CNSI continue to file, prosecute and maintain patent applications that
         are CNSI KNOW HOW and CNSI PATENT RIGHTS and shall be given reasonable
         time and notice to comment on 


19
<PAGE>   27
         proposed actions concerning such rights, or it may choose to assume
         filing, prosecution and maintenance of such rights directly or
         indirectly, through outside counsel of its choice, and will give CNSI
         reasonable time and notice to comment on proposed actions concerning
         CNSI KNOW HOW and CNSI PATENT RIGHTS. In any event BAYER shall
         reimburse CNSI for all necessary and reasonable, direct, actual patent
         costs incurred by CNSI for CNSI PATENT RIGHTS and patent applications
         that are CNSI KNOW HOW (including IMPROVEMENTS) that accrue after the
         EFFECTIVE DATE but during the term of this Agreement.

8.12     Reimbursement of Costs: All patent costs to be reimbursed by BAYER
         under Article 8.11 (Cost of CNSI Patents) shall be first paid by CNSI.
         The invoice shall then be forwarded to BAYER. BAYER will pay CNSI the
         invoice amount, not including fees for unreasonable extensions of time
         and other extra fees that were under the control of CNSI, within forth
         five (45) days of receipt of such invoice.

8.13     No further interest in patents/applications: If, at any time during the
         Agreement, BAYER determines that it has no further commercial interest
         in any particular patent(s)/application(s) that are CNSI KNOW HOW or
         CNSI PATENT RIGHTS, then BAYER shall so notify CNSI in writing. BAYER
         shall incur no further payment obligations regarding those particular
         patents/applications as of the date of such written notice, and the
         license granted to BAYER for those particular patents/applications
         hereunder shall be revoked as of the same date. BAYER shall give CNSI
         the notice described above in sufficient time to allow CNSI to maintain
         any rights in any such CNSI KNOW HOW or CNSI PATENT RIGHTS in which
         BAYER is no longer interested.

                                    Article 9
                               Patent Infringement

9.1      Infringement by Third Parties:

         9.1.1    Notification: If any claims in CNSI PATENT RIGHTS exclusively
                  licensed to BAYER hereunder are believed to be infringed by a
                  third party in a country where LICENSED TECHNOLOGY is being or
                  will be sold, the Party first having knowledge of such
                  infringement shall promptly so notify the other Party in
                  writing. Such notice shall set forth in reasonable detail the
                  facts of that infringement as are then known.

         9.1.2    **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************

         9.1.3    Distribution of Awards:
                  **************************************************************
                  **************************************************************
                  If CNSI brings suit under Article 9.1.2 (Initiating
                  Proceedings), then BAYER shall reimburse CNSI within
                  forty-five (45) days of receipt of an itemized invoice for
                  CNSI's reasonable expenses incurred in pursuing the award.
                  ********************************


20
<PAGE>   28
                  
                  **************************************************************
                  ********************** Any award monies shall be added to
                  BAYER's NET SALES for the calendar year in which they were
                  received, and shall be included in the calculation of NET
                  SALES for purposes of determining the amount of royalties due
                  according to Article 4.3 (Royalty Payments). If BAYER brings
                  suit under Article 9.1.2 (Initiating Proceedings), then BAYER
                  shall first credit against any award received BAYER's
                  reasonable expenses incurred in pursuing the award, after
                  which the remaining amount shall be added to BAYER's NET SALES
                  for the calendar year in which they were received, and shall
                  be included in the calculation of NET SALES for purposes of
                  determining the amount of royalties due according to Article
                  4.3 (Royalty Payments).

         9.1.4    Voluntary Disposition: No settlement or consent judgment or
                  other voluntary final disposition of a suit under this Article
                  9.1 may be entered into by either Party without the prior
                  consent of the other Party.

9.2      Claims Against LICENSED TECHNOLOGY:

         9.2.1    **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************

         9.2.2    **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************

         9.2.3    **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************


21
<PAGE>   29
                 ************************************************
                 *******************************
                                   Article 10
                              Term and Termination

10.1     Term and Expiration: This Agreement shall be effective as of the
         EFFECTIVE DATE and, unless terminated earlier pursuant to this Article
         10 (Term and Termination), the Agreement shall expire on a country by
         country basis on the expiration of BAYER's obligations to pay royalties
         under the Agreement, at which time, as long as BAYER is not in material
         default hereunder, BAYER shall have a paid-up, irrevocable, license to
         practice LICENSED TECHNOLOGY as stated elsewhere herein.

10.2     Termination by CNSI:

         10.2.1   For Cause: If CNSI believes in good faith that BAYER is in
                  material breach of any material provision of this Agreement,
                  including failure to make payments due hereunder, and BAYER
                  has not cured such breach or initiated dispute resolution
                  measures according to Article 12.6 (Dispute Resolution)
                  concerning the alleged breach within ninety (90) days of
                  receipt of written notice of material breach from CNSI
                  detailing the alleged breach, then CNSI may terminate this
                  Agreement as of the ninetieth (90th) day after the date of
                  BAYER's receipt of its written notice of material breach.

         10.2.2   Effect of Termination: Termination of this Agreement for cause
                  by CNSI under Article 10.2 shall not relieve BAYER of any
                  obligation that accrued prior to such termination. Termination
                  for cause shall cause the revocation of all licenses and other
                  rights granted under this Agreement as of the date of
                  termination. However, BAYER shall have the right to dispose of
                  any inventory of bulk and/or finished PRODUCT it has as of the
                  date of termination, according to the terms of this Agreement.
                  This Article shall survive termination of this Agreement.

10.3     Termination by BAYER:

         10.3.1   Upon Written Notice: At any time during this Agreement, BAYER
                  may terminate this Agreement one hundred twenty (120) days
                  from the date of written notice to CNSI of such termination
                  whereupon all licenses granted hereunder stand revoked, and
                  any inventory remaining shall be forwarded to CNSI at CNSI's
                  expense or destroyed, at CNSI's option. If such termination
                  takes place before CNSI completes all research described in
                  the RESEARCH PROTOCOL for which CNSI is responsible hereunder,
                  and, therefore, an overage has been paid by BAYER in relation
                  to the actual COST OF RESEARCH, the amount of the overage
                  shall be refunded to BAYER in full within ninety (90) days of
                  such termination.

         10.3.2   Duty to Mitigate: BAYER will pay CNSI's COST OF RESEARCH
                  through the 120 day termination period identified in Article
                  10.3.1 (Upon Written Notice). However, immediately upon
                  receipt by CNSI of notice of termination according to Article
                  10.3.1 (Upon Written Notice), CNSI shall take immediate steps
                  to cease accruing, or, if that is not possible, to mitigate
                  any COST OF RESEARCH that was not already incurred or
                  committed as of the date of receipt of such notice.


22
<PAGE>   30
         10.3.3   Without Cause: If such termination is without cause against
                  CNSI, (for example, or failure to receive necessary regulatory
                  approvals, or economic unfeasibility in BAYER's judgment,)
                  then CNSI shall have the right to negotiate in good faith for
                  a license from BAYER for any BAYER patents, patent
                  applications, know-how, trademarks (excluding the Bayer Cross,
                  trademarks containing the word "Bayer", and trademarks
                  containing the syllable "Bay"), and/or right of reference to
                  regulatory filings and/or approvals the lack of which could
                  preclude CNSI from practicing LICENSED TECHNOLOGY as sold or
                  contemplated to be sold by BAYER hereunder. If CNSI chooses to
                  exercise its right to negotiate under this clause within one
                  year of termination without cause, then BAYER shall negotiate
                  in good faith for such a license.

         10.3.4   With Cause: If CNSI is in material breach of this Agreement
                  (for, for example but not by way of limitation, failure to
                  meet its obligations under the RESEARCH PROTOCOL), and has not
                  cured such breach or initiated dispute resolution procedures
                  under Article 12.7 (Dispute Resolution) within ninety (90)
                  days of receipt of notice of termination under Article 10.3.1
                  (Upon Written Notice), then such termination is with cause,
                  and BAYER may, at its option, terminate the entire Agreement,
                  or may terminate only the Research Program hereunder whereupon
                  the RESEARCH STEERING COMMITTEE disbands according to Article
                  2.1.7 (Disbanding), and CNSI's reservation of rights under
                  Article 3.3 (Reservation of Rights to CNSI) are revoked, and,
                  all other terms and conditions of this Agreement, including
                  royalty obligations, remain in full force and effect, and
                  BAYER has the right to perform or have performed any research
                  concerning LICENSED TECHNOLOGY in the FIELD at its own expense
                  during the remaining term of this Agreement. If BAYER chooses
                  to terminate only the Research Program hereunder, CNSI agrees
                  to the timely transfer of technology along with technical
                  assistance (provided BAYER reimburses CNSI for all
                  pre-approved actual costs incurred by CNSI therefor).

         10.3.5   Termination Upon Reorganization
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************

10.4     Disposition of Inventory: BAYER may dispose of its inventory of
         PRODUCT(s) on hand as of the effective date of termination, and may
         fill any orders for PRODUCT(s) accepted prior to the effective date of
         termination, for a period of twelve (12) months after the effective
         date of termination, and, within thirty (30) days after disposition of
         such inventory and fulfillment of such orders (and in any event within
         fourteen (14)months after termination) BAYER will forward to CNSI a
         final report and pay all royalties due for NET SALES in such period.


23
<PAGE>   31
                                   Article 11
                         Representations and Warranties

11.1     Corporate Existence and Power: Each Party represents and warrants to
         the other Party that (a) it is a corporation duly organized and validly
         existing and in good standing under the laws of the state in which it
         is incorporated; (b) it has the corporate power and authority and the
         legal right to own its property and assets, to lease the property and
         assets it operates under lease, and to carry on its business as it is
         now being conducted; and (c) it is in compliance with all requirements
         of applicable law, except to the extent that any noncompliance would
         not have a material adverse effect on the properties, business,
         financial or other condition of such Party and would not materially
         adversely affect such Party's ability to perform its obligations under
         this Agreement.

11.2     Authorization and Enforcement of Obligations: Each Party represents and
         warrants to the other Party that it has the corporate power and
         authority and legal right to enter into this Agreement and to perform
         its obligations hereunder; and that this Agreement has been duly
         executed and delivered on behalf of each Party and, except as it may be
         limited by applicable law, constitutes a legal, valid, binding
         obligation, according to its terms.

11.3     Consents: Each Party represents and warrants to the other Party that
         all necessary consents, approvals and authorizations of all
         governmental authorities and others required to be obtained by each
         Party in connection with this Agreement have been obtained.

11.4     No Conflict: Each Party represents and warrants to the other Party that
         the execution and delivery of this Agreement and the performance of
         such Party's obligations hereunder do not conflict with or violate any
         requirement of applicable laws or regulations, and do not conflict
         with, or constitute a default under any contractual obligation of such
         Party.

11.5     Authorization of Obligations: The execution, delivery and performance
         by each Party of this Agreement have been duly authorized by all
         necessary corporate action and do not and will not (a) require any
         consent or approval of its stockholders or any other third party that
         has not been received by the EFFECTIVE DATE, (b) violate any provision
         of any law, rule, regulation, order, writ, judgment, injunction,
         decree, determination or award presently in effect that have
         applicability to it or any provision of its charter documents or (c)
         result in a breach of or constitute a default under any material
         agreement, mortgage, lease, license, permit or other instrument or
         obligation to which it is a party or by which it or its properties may
         be bound or affected.

11.6     CNSI Representations: CNSI represents and warrants to BAYER that as of
         the date of this Agreement:

         11.6.1   CNSI has disclosed to BAYER any and all pertinent information
                  of which it is aware and of which it, using its best efforts,
                  should be aware as of the EFFECTIVE DATE of this Agreement as
                  is material to and reasonably necessary for BAYER to
                  accurately evaluate its interest in entering into this
                  Agreement.

         11.6.2   CNSI is the sole owner of, or the exclusive worldwide licensee
                  of CNSI PATENT RIGHTS and CNSI KNOW HOW, with right to grant
                  to BAYER the rights granted in this Agreement, free and clear
                  of any liens or encumbrances which would prevent or impair the
                  grant of such rights. 


24
<PAGE>   32
         11.6.3   CNSI has not assigned or conveyed any interest in CNSI PATENT
                  RIGHTS or CNSI KNOW HOW licensed to BAYER under this
                  Agreement, or entered into any agreement or made any
                  commitment which is inconsistent with or in derogation of the
                  rights granted to BAYER hereunder.

11.7     Certain Covenants of CNSI and BAYER: Throughout the term of this
         Agreement, CNSI and BAYER each shall:

         11.7.1   Maintain and preserve its corporate existence, rights,
                  franchises and privileges in the jurisdictions of its
                  formation.

         11.7.2   Comply in all material respects with the requirements of all
                  applicable laws, rules, regulations and orders of any
                  government authority to the extent necessary to perform its
                  obligations hereunder, except for those laws, rules,
                  regulations, and orders it may be contesting in good faith.

                                   Article 12
                                  Miscellaneous
12.1     Indemnification:

         12.1.1   **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************

         12.1.2   **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************


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                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************

         12.1.3   Force Majeure: Any delay in the performance of any of the
                  obligations of either Party (except for the payment of money)
                  shall not be considered a breach of this Agreement and the
                  time required for performance shall be extended for a period
                  equal to the period of such delay, provided that such delay
                  has been caused by or is the result of any act of God, acts of
                  the public enemy; insurrections; riots; embargoes; labor
                  disputes such as strikes, lockouts or boycotts; fires;
                  explosions; floods; earthquakes; mudslides; or other
                  unforeseeable causes beyond the control of the Party so
                  affected. The Party so affected shall give prompt notice to
                  the other Party of such cause, and shall take whatever
                  reasonable steps are necessary to relieve the effect of such
                  cause as rapidly as reasonable.

         12.1.4   Survival: The following Articles shall survive expiration or
                  termination of this Agreement: Article 3.7.2 (Bayer Grant of
                  Rights); Article 4.4.3 (Records and Audits); Article 4.4.4
                  (Confidentiality of Financial Reports); Article 4.4.5 (Payment
                  of Taxes); Article 4.4.7 (Non-Product Related Sublicenses);
                  Article 6.5 (Trademarks); Article 7 (Confidentiality); Article
                  8.2 (Sole Inventions); Article 8.3 (Joint Inventions); Article
                  9.1.3 (Distribution of Awards); Article 9.2.3 (Patent
                  Indemnification); Article 10.2.2 (Effect of Termination);
                  Article 10.4 (Disposition of Inventory); Article 12.1
                  (Indemnification); and Article 12.7 (Dispute Resolution).

         12.1.5   Notice: Whenever any notice is to be given hereunder, it shall
                  be in writing and shall be deemed received on the day
                  delivered, if delivered by courier on a business day, or if
                  sent by first-class certified or registered mail, postage
                  prepaid, to the following addresses

         CNSI:             Cambridge NeuroScience, Inc.
                           One Kendall Square, Building 700
                           Cambridge, MA 02139
                           Attention: President and CEO

         BAYER:            Bayer AG
                           Pharmaceuticals Business Group
                           D-51368 Leverkusen, Germany
                           Attention: International Cooperations and Licensing

         with a copy to:   Bayer AG
                           KB-RP
                           D-51368 Leverkusen, Germany
                           Attention:  Patents and Licensing/Pharma

12.2     Waivers: No waiver of any term, provision, or condition of this
         Agreement, whether by conduct or otherwise, in any one or more
         instances, shall be deemed to be construed as a further or continuing
         waiver of any such term, provision, or condition of this Agreement
         unless reduced to writing signed by an authorized representative of
         each Party.

12.3     Applicable Law: This Agreement shall be construed under the substantive
         laws of the State of Connecticut, without reference to its conflicts of
         laws provisions.


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<PAGE>   34
12.4     Dispute Resolution: Except when the provisions in Article 2.1.7
         (Dispute Resolution) apply, should any dispute arise between the
         Parties concerning this Agreement, the Parties agree to first attempt
         to resolve the dispute in good faith between the Parties through
         meetings between the President of BAYER's Pharmaceutical Division and
         the President of CNSI before resorting to any other forum for a remedy.
         If resolution of the dispute is not reached between the Presidents
         within sixty (60) days of their first meeting to discuss such dispute,
         then the Parties must promptly initiate mediation in good faith through
         JAMS Endispute or another mutually agreeable, recognized mediation
         group. If settlement has not been reached through mediation within
         sixty (60) days of the first meeting among each Party and the mediator,
         then either Party may bring suit against the other. If CNSI files suit
         against BAYER, CNSI agrees to do so in New Haven County, Connecticut,
         and If BAYER files suit against CNSI, BAYER agrees to do so in Suffolk
         County, Massachusetts.

12.5     Assignment:************************************************************
         ***********************************************************************
         ***********************************************************************
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         ***********************************************************************
         ***********************************************************************
         ***********************************************************************
         ***********************************************************************
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         ***********************************************************************

12.6     Severability: If any provision of this Agreement is held to be illegal
         or unenforceable, that provision shall be limited to the minimum extent
         necessary or, if necessary, eliminated, so that this Agreement shall
         otherwise remain enforceable and in full force and effect

12.7     Integration Clause: This Agreement is the sole agreement with respect
         to the subject matter hereof, and supersedes all proposals,
         negotiations, conversations, discussions, agreements and/or
         representations, whether oral or written, including any industry custom
         or past dealing between the Parties relating to the subject matter of
         this Agreement. The Parties agree that any and all obligations between
         the Parties that are outside the terms of this Agreement and that
         relate to the subject matter of this Agreement that preceded the
         EFFECTIVE DATE of this Agreement have been satisfactorily executed or
         are null and void.

12.8     Amendment of Agreement: No change, modification, extension,
         termination, waiver or other amendment of this Agreement or any of the
         provisions contained herein, shall be valid unless made in writing and
         signed by a duly authorized representative of each Party.


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<PAGE>   35
This Agreement is agreed to and accepted by:

Bayer AG                                        Cambridge NeuroScience, Inc.

By:  /s/ Dr. Brandan                            By:/s/ Harry W. Wilcox

Title:Direktor                                  Title: President and CEO

Date:December 18, 1998                          Date: December 23, 1998


                  and


By:  /s/ I Villetebro

Title:  Patents and licensing

Date: December 18, 1998


                                 [IN DUPLICATE]


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<PAGE>   36
                                   Appendix 1
                                  CNSI KNOW HOW
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<PAGE>   37
                                   Appendix 2
                               CNSI PATENT RIGHTS

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<PAGE>   38
                                   Appendix 3
                               RESEARCH PROTOCOL

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<PAGE>   39
                                   Appendix 4
                           CNSI Third Party Contracts
                           Related to CNSI TECHNOLOGY
       CAMBRIDGE NEUROSCIENCE'S GGF-2 RELATED MATERIAL TRANSFER AGREEMENTS

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<PAGE>   40
                                   Appendix 5
                     CNSI Subcontractees and Proposed Budget

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