LICENSE AGREEMENT

         THIS LICENSE AGREEMENT (the  "Agreement")  effective as of the 22nd day
of September 1998, between HOECHST MARION ROUSSEL, INC., a corporation organized
under the laws of the State of Delaware with offices at Route 202-206,  P.O. Box
6800,  Bridgewater,  NJ 08807-0800  ("HMR") and MATRIX  PHARMACEUTICAL,  INC., a
corporation  organized  under the laws of the State of  Delaware  and having its
principal  office  at 34700  Campus  Drive,  Fremont,  CA 94555  ("Matrix,"  and
together the "Parties"),


                                    RECITALS

         WHEREAS,  HMR is the owner of all right,  title and interest in certain
patents and patent  applications,  identified in Appendix A hereto, and know-how
relating to a compound known as MDL 101,731; and

         WHEREAS,  Matrix desires to obtain certain exclusive worldwide licenses
from HMR under such patents and patent  applications  and know-how,  and HMR, is
willing to grant to Matrix such licenses;

         NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

1.       DEFINITIONS

         1.1  "Affiliate"  means any  corporation,  firm,  partnership  or other
entity, whether de jure or de facto, which directly or indirectly owns, is owned
by or is under common  ownership with a party to this Agreement to the extent of
at least fifty percent (50%) of the equity (or such lesser  percentage  which is
the  maximum  allowed  to be  owned by a  foreign  corporation  in a  particular
jurisdiction)  having the power to vote on or direct  the  affairs of the entity
and  any  person,  firm,  partnership,  corporation  or  other  entity  actually
controlled  by,  controlling  or  under  common  control  with a  party  to this
Agreement.

         1.2  "Compound"  means the  composition  of matter known as MDL 101,731
whose  more  specific  chemical  name  is 2'-  Fluoromethylene-2'-Deoxycytidine,
including any salts, hydrates, solvates, and/or stereoisomers thereof, including
any salts,  hydrates,  solvates  and/or  stereoisomers  of such  compounds,  the
intellectual  property  rights  to which are owned in whole or in part by HMR in
accordance with Article 2 of this Agreement as of the Effective Date or acquires
such right during the term of this Agreement.

         1.3 "Development"  means  preclinical,  clinical,  pharmaceutical,  and
chemical research on a Compound or Product conducted  primarily with the intent,
and for the purpose, of generating data for submission to a regulatory authority
in the Territory in support of an application for governmental approval required
for commercializing Product for any indication.

         1.4  "Effective  Date"  means the date as of which  this  Agreement  is
effective and shall be the date of this Agreement first written above.



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         1.5  "Enforceable  Patent" as used in this  Agreement  means an issued,
unexpired Patent in a particular country within the Territory, where such Patent
contains  a  claim  or  claims  which:   (a)  have  not  been  held  invalid  or
unenforceable by a court or other legal or administrative tribunal from which no
appeal  is or can be  taken,  and (b) is or are  infringed  by:  (i) the sale of
Product,  or (ii) the use of Compound or Product for any approved  indication in
such country for Compound or Product.

         1.6  "Field"  means  any and all  fields  in which a  Product  may have
application,  including,  without limitation,  the prevention,  treatment and/or
diagnosis of any disease or disorder.

         1.7 "FDA" means the United States Food and Drug Administration.

         1.8 "Know-How" means all technical  information and know-how  presently
developed and owned or controlled  by HMR and its  Affiliates,  or developed and
owned or  controlled  by HMR and its  Affiliates  after the date  hereof,  which
relates to Compound or Product in the Field and which  constitutes a proprietary
"trade  secret" or other valid  intellectual  property right under U.S. or other
applicable law which is substantial, secret and identifiable, including, without
limitation, all biological, chemical, pharmacological,  toxicological, clinical,
regulatory,  analytical,  quality control and  manufacturing  data and any other
information  (whether  technical or commercial)  relating to Compound or Product
that may be useful for the  Development,  regulatory  approval,  manufacture and
commercialization of that Compound or Product.

         1.9 "Liabilities"  means liabilities of any kind or nature,  primary or
secondary, direct or indirect,  absolute or contingent,  known or unknown, which
are caused by or  allegedly  caused by the  manufacture,  marketing,  promotion,
distribution,  use or sale of the Product,  including  without  limitation,  any
liabilities  for  claims  of  personal  injury  or  death,  and  all  reasonable
attorneys' fees incurred in connection with the defense of any such claims.

         1.10 "MAA Approval" means Marketing Authorization  Application approval
by the appropriate regulatory agency(ies) for commercialization of a Compound or
Product in a Major European Country.

         1.11 "Major Country" means any one of [*].

         1.12  "NDA"  means  a New  Drug  Application  in  accordance  with  the
requirements of the FDA.

         1.13 "Net Sales"  means gross  sales of  Products  sold by Matrix,  its
Affiliates and licensees to  unaffiliated  third parties in the Territory,  less
the total of: (a) trade, cash and/or quantity discounts;  (b) excise,  sales and
other consumption taxes and customs duties to the extent included in the invoice
price;  (c) freight,  insurance and other  transportation  charges to the extent
included  in the  invoice  price;  (d)  amounts  repaid or credited by reason of
rejections and defects;  (e) returns,  or retroactive price reductions;  and (f)
compulsory  payments  and  rebates,   accrued,  paid  or  deducted  pursuant  to
agreements  (including,   but  not  limited  to,  managed  care  agreements)  or
governmental regulations.

                                       2

<PAGE>


         The computation of Net Sales shall not include sales between or among a
party and its  Affiliates  or  Sublicensees,  except  where such  Affiliates  or
Sublicensees  are end users.  For purposes of this License  Agreement,  sales of
Product to independent  distributors,  wholesalers or other parties who purchase
and take  title to  Product  are  considered  to be sales to Third  Parties.  If
Product is sold through intermediaries such as agents or co-promoters who do not
purchase and take title to Product, royalties shall be due on Net Sales to Third
Parties who purchase Product through such intermediaries.

         1.14 "Patents" means all patents and patent  applications  which are or
become owned by or licensed to HMR, or to which HMR otherwise has, now or in the
future,  the right to grant licenses  during the term of this  Agreement,  which
generically  or   specifically   claim  Compound  or  Product,   a  process  for
manufacturing  Compound or Product,  an  intermediate  used in such  process,  a
method to  formulate  or deliver  Compound  or Product or a use of  Compound  or
Product.  Included  within  the  definition  of Patents  are any  continuations,
continuations-in-part,  divisions,  patents of addition,  reissues,  renewals or
extensions  thereof.  Also  included  within the  definition  of Patents are any
patents or patent  applications  which  generically  or  specifically  claim any
improvements on Compound or Product or intermediates or manufacturing  processes
required or useful for  production of Compound or Product which are developed by
HMR,  or which  HMR  otherwise  has the right to grant  licenses,  now or in the
future,  during  the  term  of  this  Agreement.  The  current  list  of  patent
applications and patents  encompassed  within Patents is set forth in Appendix A
attached hereto. Appendix A shall be updated by HMR on an annual basis.

         1.15   "Product"   means  any  bulk  active   ingredient   or  finished
pharmaceutical  composition  containing  Compound as a  pharmaceutically  active
ingredient   (either   alone  or  in   combination   with  one  or  more   other
pharmaceutically active ingredients), for use in the Field.

         1.16  "Sublicensee"  means a Third  Party  (as  defined  below) to whom
Matrix  sublicenses  rights to manufacture  and sell (or have  manufactured  and
sold) Product under Patents.

         1.17 "Territory" means all the countries of the world except Japan [*].

         1.18  "Third  Party(ies)"  means any party  other  than a party to this
Agreement or an Affiliate of Matrix or HMR.

2.       GRANT [*]

         2.1 HMR hereby  grants to Matrix an exclusive  license in the Field and
in the  Territory,  with the  right  to grant  sublicenses,  under  Patents  and
Know-How to develop, have developed,  make, have made, use and sell Compound and
Product in the  Territory,  subject to the other  terms and  conditions  of this
Agreement.  [*]

3.       PAYMENTS AND ROYALTIES

                                       3

<PAGE>


         3.1 In consideration  for the exclusive license to Patents and Know-How
granted to Matrix under  Section 2.1 hereof,  Matrix shall pay HMR within thirty
(30) days of the first time  Compound or Product  reaches each of the  following
milestones:

Effective Date                                                         [*]
[*]                                                                    [*]


[*]

[*]                                                                    [*]

[*]                                                                    [*]

[*]                                                                    [*]

[*]                                                                    [*]

[*]                                                                    [*]


Such payments  shall be paid once by Matrix,  even if multiple  formulations  or
other variations of Compound or Product achieve such milestones. As used in this
Section 3.1, the term "Initiation of pivotal trials to be used for registration"
means the first patient treated in a large scale, multi-center, pivotal efficacy
trial.  The term "Notice of NDA or MAA  Approval"  means the first  notification
from the FDA or  equivalent  regulatory  agency,  that  Product is approved  for
marketing and commercialization  (and including pricing approval, if applicable)
by Matrix,  its Affiliate or  Sublicensee in the United States or Major European
Country. In any country where pricing approval is required and product launch is
permitted pending such pricing approval, payment under this Section 3.1 pursuant
to Notice of NDA or MAA Approval shall be triggered upon such launch.

         3.2 Subject to Sections 8.1 and 3.4, as a consideration for the license
under Patents and Know-How granted to Matrix under this Agreement,  Matrix shall
pay to HMR royalties in the following manner provided that, for purposes of this
Section 3.2, the Product sold is covered by an Enforceable Patent:

o   [*]
         -     The first [*] of Annual Sales :       [*] royalty on Net Sales
         -     All Annual Sales greater than [*]:    [*] royalty on Net Sales


o   [*]:                                             [*] royalty on Net Sales.

         3.3 Royalty  obligations  for a particular  Product  under  Section 3.2
shall  become  effective  in each  country in the  Territory  at such time as an
Enforceable  Patent is granted in such

                                       4

<PAGE>


country.  In the event that any legal or administrative  proceeding is initiated
challenging the validity,  scope or enforceability of such Enforceable Patent in
any country in the Territory, which, if successful,  would relieve Matrix of its
royalty obligations under Section 3.2 in such country,  Matrix shall continue to
pay royalties.  However,  upon the  imposition of a final  judgement in any such
proceeding,  HMR shall  promptly  refund to Matrix any royalties paid during the
pendency of the  proceeding  in the event and to the extent that such  judgement
invalidates  the  patent  coverage  for  the  Matrix  Product  in  the  relevant
country(ies);  however,  in no event  shall  the  amount  refunded  result in an
effective  royalty to HMR less than or equal to the minimum amounts set forth in
Section 3.4. In the event of any  judgement  requiring  the payment by Matrix of
royalties  or other  damages  ("Infringement  Damages")  to any Third Party as a
result of such judgement,  Matrix shall be entitled to deduct such  Infringement
Damages from payment  otherwise  owing to HMR, and HMR shall reimburse to Matrix
or  pay  the  Third  Party  from  amounts  already  collected  from  Matrix  any
Infringement  Damages  for past  infringement;  provided,  however,  subject  to
Section  3.4,  the  royalties  payable to HMR shall not [*] Net Sales during the
term of this Agreement,  unless such judgment includes an injunction against the
further sale of Product and the  Infringement  Damages equal or exceed  Matrix's
net profit on the sale of Product in such country.

         3.4 In those  countries were no Enforceable  Patents have issued during
the term of this Agreement,  the royalty rate shall be [*] percent ([*]%) of Net
Sales; provided however, if a generic version of the Product is marketed in such
countries,  the  royalty  rate in such  country  shall be reduced to [*] percent
([*]%) of Net Sales. In those countries were Enforceable Patents have expired or
have been held invalid during the term of this Agreement, the royalty rate shall
be [*] percent ([*]%) of Net Sales;  provided  however,  if a generic version of
the Product is marketed in such  countries,  the royalty rate in such  countries
shall be reduced to [*] percent ([*]%) of Net Sales.

         3.5 For the purpose of  calculating  payments,  the  currency  exchange
rates for  converting  any currency to US dollars  shall be the exchange rate in
the key  currency  cross  rates  table in the final  edition of The Wall  Street
Journal (US Eastern  Edition) or in the case the currency  exchange  rate is not
published  in the Wall Street  Journal,  the midpoint of the closing bid and the
ask price of "Reuter's 2000 Information  Service" historical  databases,  on the
last  business day of each  calendar  quarter to which such payment  relates.  A
"business  day" is a day on which banks are open for  business in the country of
the currency to be translated.

Account information:

                  Citibank, New York
                  Hoechst Marion Roussel, Inc.
                  ABA# 021000089
                  Account # [*]

4.       COMPULSORY LICENSES AND THIRD PARTY LICENSES

         4.1 In the event that a  governmental  agency in any country within the
Territory  grants  or  compels  HMR to grant a license  to any  Third  Party for
Compound or Product,  Matrix shall

                                       5

<PAGE>


have the benefit in such country of the terms granted to such Third Party to the
extent that such terms,  taken as a whole, are more favorable to the Third Party
than those of this Agreement, provided that such Third Party commercializes such
Product in such country.

         4.2 If a governmental authority in a country in the Territory imposes a
maximum  royalty rate,  such that lower royalty rates than would otherwise apply
under this  Agreement  are  mandated in such  country,  then the  royalty  rates
provided  for herein  shall be  reduced  to equal such lower  rates for sales of
Product in such  country for the period such lower  royalty  rate is required by
any  governmental  authority  and shall  cease  when  Matrix's  royalty  payment
obligations to HMR cease under this Agreement.

         4.3 If, during the term of this Agreement after  consultation with HMR,
Matrix, in Matrix's sole discretion,  determines that patent(s) of a Third Party
exists in the  Territory  covering the  manufacture,  use or sale of Compound or
Product,  and it is  impractical  or impossible  for Matrix or its Affiliates or
Sublicensees  to continue the activity or activities  licensed  hereunder in the
Field without  obtaining a  royalty-bearing  license from such Third Party under
such patent(s),  then Matrix shall be entitled to enter into a license with such
Third Party and deduct from any royalties  payable  hereunder the royalties paid
to such Third  Party or account  of the Net Sales on which  such  royalties  are
paid.  Subject to Section 3.4, the royalties payable to HMR shall not be [*] Net
Sales during the term of this Agreement.

5.       DEVELOPMENT

         5.1 Matrix shall have full legal and financial  responsibility  for all
costs that are incurred and all activities that are undertaken after the signing
of this  Agreement,  which are  related to  Development,  safety,  and  required
periodic reporting to the FDA and such equivalent regulatory agency,  marketing,
regulatory approvals,  price registrations,  compliance with all applicable laws
and  regulations,  and  other  activities  required  by  or  of  Matrix  or  its
Sublicensee(s)  (or their respective  agents or  distributors)  elsewhere in the
Territory to obtain appropriate  government approvals for, and to commercialize,
Product in the  Territory.  Other than as expressly  provided for herein  Matrix
shall not  assume,  nor shall  Matrix be  liable  for,  any costs or  activities
(whether scientific, financial or otherwise) relating to the Compound or Product
that  were  incurred  or  undertaken  prior to the  signing,  of this  Agreement
(including  without  limitation any costs,  expenses,  damages,  losses,  fines,
penalties or the like that may be awarded or assessed  after the signing of this
Agreement,  but which arise out of events and activities  that occurred prior to
the signing of this Agreement).

         5.2 Provided that the Affiliates,  Sublicensees and other Third Parties
agree to substantially the same terms of  confidentiality  in Article 10 hereof,
Matrix may appoint such  Affiliates,  Sublicensee(s)  and other Third Parties to
perform  any and all  Development  activities  necessary  to  obtain  government
approvals for Product in the Territory.

         5.3 Matrix shall, in a manner consistent with the effort Matrix devotes
to its own  products  having the same or  similar  potential  value as  Product,
exercise its  reasonable  commercial  efforts and  diligence in  developing  and
commercializing  Product,  and in undertaking those  investigations  and actions
required to obtain appropriate  governmental  approvals to market

                                       6

<PAGE>


Product in the Territory.  HMR shall use reasonable efforts to assist or provide
consultation  at Matrix's  expense in support of the  Development of Compound or
Product, but in its discretion may limit its resources and assistance; provided,
however, that such limitation shall not apply to the HMR's obligation to provide
information and assistance as set forth in Sections 6.2, 10.1, and 10.2.

         5.4 Development of the Product shall be governed by a separate  written
plan  attached as Appendix C  ("Development  Plan"),  which shall be prepared by
Matrix and  submitted  to HMR for its  information.  The  Development  Plan will
describe  the  proposed  overall  program of  Development  for the  Compound  or
Product, including,  process development,  clinical studies and regulatory plans
and other elements of obtaining Regulatory  Approval.  The Development Plan will
be updated  annually  by Matrix  and,  together  with any  updates  thereto,  be
provided to HMR solely for its information.

         5.5 If Product is not launched  [*] by Matrix,  its  Affiliates  and/or
Sublicensee  within [*] after the date of receiving the  approvals  necessary to
commercialize Product (including,  without limitation, pricing approval in those
jurisdictions  wherein  pricing  approval is required)  [*] HMR and Matrix shall
review the  progress  of launch  efforts.  Matrix  shall keep HMR  informed on a
regular basis of the status of its launch efforts after  receiving the approvals
necessary to  commercialize  Product [*] until such time that launch is achieved
[*]. If other than for reasons beyond the reasonable  control of Matrix,  launch
[*] is not  achieved  within  [*] after  the date of  receiving  such  approvals
necessary  to  commercialize  Product  in such  country(ies),  then the  license
granted  by this  Agreement  shall  terminate,  but  only  with  respect  to the
particular  country where launch was not achieved within such [*] time frame, as
the case may be,  unless the Parties agree in writing to extend such time frame.
If, upon  receipt of any such  notification  HMR  determines  that it desires to
itself or through an Affiliate  commercialize such Product in a country in which
Matrix  foresees  difficulty,  then HMR shall  discuss  with Matrix  appropriate
compensation for Matrix's efforts in bringing such Product to market.

         5.6 Any  inventions or  discoveries  or  improvements  which arise from
Matrix's,  its  Affiliate's or  Sublicensee's  work relating to the  Development
and/or  manufacture of the Compound and/or Product shall be owned by Matrix. HMR
shall  have the  right of  first  negotiation  to  license  any such  invention,
discovery or improvement.

         6.       COMPOUND & PRODUCT SUPPLY

         6.1 HMR shall deliver its entire  existing  supply of Product to Matrix
and at least one (1)  Product  lot that is fully  conforming  with the  Compound
specifications  as  defined  in the IND  ("Compound  Specifications")  under the
following conditions:

                  (a)  Within  sixty  (60)  days  with  respect  to bulk  active
ingredient  and within  thirty (30) days with  respect to finished  product,  of
written notice by Matrix to HMR, HMR shall, at its own cost  (including  without
limitation,  duties,  tariffs and the like),  ship to Matrix or its designee [*]
all existing quantities of Product.

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<PAGE>


                  (b) Title to, and risk of loss with  respect  to, all  Product
supplied by HMR to Matrix  under this  Section 6.1 shall pass to Matrix upon the
receipt of such Product by Matrix or its designee at their point of delivery.

                  (c) HMR shall provide available  existing testing  information
on the Product, and shall transfer the analytical methods.  Prior to shipment of
Product to Matrix,  HMR shall test an agreed upon lot of bulk active  ingredient
for conformance with the Compound  Specifications  and provide such test data to
Matrix. HMR shall test an agreed upon stability time point for the drug products
which are on stability.

                  (d) Matrix agrees to inspect each  shipment of Product  within
thirty (30) days of receipt to determine  whether such shipment is in conformity
with the Compound  Specifications  or whether there exists any defects which can
be detected upon ordinary diligent  examination of the shipment.  If any portion
of the shipment is not in conformity  with the foregoing,  Matrix may reject the
non conforming  shipment by giving notice of rejection to HMR as follows:  i) in
case of any defects  arising out of a breach by HMR which could be detected upon
ordinary  diligent  examination  when the shipment was received,  within six (6)
days after the date of receipt of the shipment by Matrix; and ii) in the case of
other  defects  (except any defect  arising  out of a breach by Matrix),  within
thirty (30) days after the date of receipt of the shipment by Matrix.

                  (e) If Matrix notifies HMR of any  non-conformance  of Product
with the Compound  Specifications  therefor,  the Parties  shall discuss in good
faith such non-conformance and if it cannot be resolved within thirty (30) days,
the  Parties  shall  have  an  independent  reputable   laboratory,   reasonably
acceptable to both Parties, test representative  samples from such shipment, and
the results of such  laboratory  shall be final and binding on the Parties.  The
Party whose  determination is not upheld by the laboratory's  results shall bear
the costs of such testing.

                  (f) The  Parties  shall  continue  to perform  the testing and
verification  steps on HMR's  existing  supply of bulk active  ingredient as set
forth in Sections  6.1(c)-(e) until a bulk active ingredient lot is delivered to
Matrix that is fully conforming with the Compound  Specifications.  In the event
that no such existing lot is fully conforming with Compound Specifications,  HMR
shall  provide  Matrix,  at  HMR's  expense,  with  one (1) lot of  twenty  (20)
kilograms   of  bulk  active   ingredient   fully   conforming   with   Compound
Specifications.

         6.2 HMR shall provide information and assistance to Matrix with respect
to Product as follows:

                  (a) Upon the signing of this  Agreement,  HMR shall deliver to
Matrix any and all Know-How, documentation, data, and other information owned or
controlled by HMR and its Affiliates, that Matrix may reasonably require for the
manufacture  of  Product  in the  Territory,  such  information  and  technology
transfer to be  accomplished  within  three (3) months  after the  Agreement  is
signed.   Such  information  and  technology   transfer  shall  include  without
limitation  the  specifications  for Product and methods of analysis for testing
Product,  as  currently  described  within  the  IND  regulatory   documentation
including  Chemistry/Manufacturing/Controls (CMC) information amendments and the
technology  transfer  file,  and  all  manufacturing  records  for  the

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<PAGE>


Product generated by contract manufacturers.  At the end of such three (3) month
period,  the parties  shall discuss in good faith  whether the  information  and
technology transfer process has been satisfactorily completed. In the event that
Matrix  feels it has not  appropriately  received  such  information  or related
assistance,  then the  parties  shall in good  faith  determine  an  alternative
procedure to properly  complete such transition  process,  and the Parties shall
implement such procedure during the three (3) months immediately  following such
determination.  Thereafter  and for the remaining  term of this  Agreement,  HMR
shall be obligated to provide only such assistance to Matrix which is limited to
material historical information and technology.

                  (b) HMR shall provide to Matrix or its designated  Third Party
assistance for the transfer of manufacturing technology,  through documentation,
consultation  and  face-to-face  meetings,  to enable  Matrix or Third  Party to
proceed with  development  of  commercial-scale  manufacturing.  If requested by
Matrix or the Third Party, HMR shall designate  appropriate personnel reasonably
acceptable to Matrix,  who shall visit the  designated  manufacturing  facility,
with the  limitation  of three  (3)  visits,  not to  exceed a total of ten (10)
business  days,  within one (1) year after the  Agreement  is signed,  for which
Matrix shall bear all the costs of travel and other out-of-pocket expenses.

                  (c) To the  extent  that  Matrix  from  time to time  requires
materials  contained in laboratory  notebooks of HMR employees (past or present)
with respect to the manufacture,  use in clinical trials, governmental approvals
or  otherwise  of  Compound or  Product,  HMR shall make either such  laboratory
notebooks or appropriate excerpts therefrom  (excerpting  unrelated  information
dealing with other products) available to Matrix as promptly as possible.

         6.3      HMR represents and warrants that:

                  (a) all Product  supplied  hereunder  shall meet the  Compound
Specifications  therefor  at the time  Product  are  delivered  to Matrix or its
designee;

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

                  (c)  none  of  the  Product   supplied   hereunder   shall  be
adulterated or misbranded as provided for under applicable laws and regulations.

         6.4 Matrix represents and warrants that all Product supplied  hereunder
for use in humans shall be  manufactured,  stored and shipped in accordance with
GMPs and all other applicable laws and regulations.

         6.5 Upon the Effective  Date,  Matrix shall be solely  responsible  for
handling Product complaints, and reporting Product complaints as required by the
authorities in the Territory. However, HMR will cooperate to provide data in its
possession which may be necessary in connection with such matters.

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<PAGE>


7.       REGULATORY AND LEGAL REQUIREMENTS

         7.1  Upon  the  Effective   Date,   Matrix  shall  be  responsible  for
maintaining  the global drug  surveillance  database for the Product,  and shall
support  any other HMR  licensee  of the  Compound or Product to the extent such
licensees  are willing to enter into an agreement  with Matrix  whereby any such
licensee  (a)  assumes  reporting  obligations  from  the  database  for its own
territory;  and (b) agrees to provide  and  provides  Matrix  with all  required
information  from its own  territory  to add to the  database.  Matrix  shall be
responsible for adverse event reporting only in its own Territory.

         7.2 Matrix agrees throughout the duration of this Agreement to maintain
records  and  otherwise  establish  procedures  to  assure  compliance  with all
regulatory,  professional,  or  other  legal  requirements  which  apply  to the
Development, manufacturing, promotion and marketing of Compound or Product.

8.       TERM AND TERMINATION

         8.1 Matrix's royalty obligations for a particular Product under Section
3.2 in each  country  of the  Territory  shall  be [*] upon  the  expiration  or
invalidation  of  the  last  remaining   Enforceable  Patent  in  such  country.
Expiration of this  Agreement or Matrix's  royalty or payment  obligations  with
respect to a particular  Product under this Article 8 shall not preclude  Matrix
from  continuing  to market any  Product  and to use  Know-How  anywhere  in the
Territory without further royalty or other payments.

         8.2 [RESERVED]

         8.3 Unless  otherwise  terminated,  this Agreement shall expire fifteen
(15) years from the date of first marketing in the last country in the Territory
in which a Product is marketed by Matrix.

         8.4 In the event the  Development  of Compound or Product is terminated
altogether  by Matrix  for  reasons of  toxicology,  safety,  efficacy,  product
stability or the like deemed  unacceptable by the FDA or its equivalent non-U.S.
regulatory agency to commercialize  Product, then this Agreement shall terminate
in its entirety and the license granted  hereunder shall revert back to HMR. HMR
shall retain all upfront license fees and milestone  payments it had received up
to the date of  termination  if,  and only  if,  termination  was not due to any
misrepresentations,  omissions (of information owned or controlled by HMR or its
Affiliates  as of the  date  hereof)  or  falsifications  with  respect  to such
Know-How,  information or data or fraud by HMR or its Affiliates,  in which case
HMR shall repay in full to Matrix within  ninety (90) days of such  termination,
the upfront  license fee and milestone  payments HMR had received from Matrix up
to the date of such termination.

         8.5 If  either  party  materially  fails or  neglects  to  perform  its
obligations  set forth in this  Agreement  and if such default is not  corrected
within sixty (60) days after receiving  written notice from the other party with
respect to such default, such other party shall have the right to

                                       10

<PAGE>


terminate  this  Agreement  by giving  written  notice  to the party in  default
provided the notice of termination is given within six (6) months of the default
and prior to correction of the default.

         8.6 Matrix may terminate this Agreement in its entirety or with respect
to any country in the  Territory by giving HMR at least thirty (30) days written
notice  thereof based on a reasonable  determination,  using the same  standards
Matrix  would  use in  assessing  whether  or not to  continue  Development  and
marketing of a product of its own making,  that the patent,  medical/scientific,
technical,  regulatory  or  commercial  profile of Compound or Product  does not
justify continued  Development or marketing of Compound or Product.  Termination
of this  Agreement  with  respect  to any  country in the  Territory  under this
provision shall  terminate all licenses  granted to Matrix in such country under
Article 2 with full reversion to HMR of all HMR's interest and rights in Patents
and Know-How in such country.

         8.7 Either party may  terminate  this  Agreement  if, at any time,  the
other  party  shall  file in any  court or agency  pursuant  to any  statute  or
regulation  of any state or country,  a petition in  bankruptcy or insolvency or
for reorganization or for an arrangement or for the appointment of a receiver or
trustee of the party or of its assets,  or if the other party proposes a written
agreement of composition or extension of its debts,  or if the other party shall
be served  with an  involuntary  petition  against it,  filed in any  insolvency
proceeding,  and such  petition  shall not be  dismissed  within sixty (60) days
after the filing  thereof,  or if the other party shall propose or be a party to
any  dissolution  or  liquidation,  or if the other  party  shall make a general
assignment for the benefit of creditors.

         8.8 All rights and licenses granted under or pursuant to this Agreement
by HMR to Matrix  are,  and shall  otherwise  be deemed to be, for  purposes  of
Section 365(n) of the U.S.  Bankruptcy Code, licenses of rights to "intellectual
property" as defined  under Section  101(52) of the U.S.  Bankruptcy  Code.  The
Parties  agree that Matrix,  as a licensee of such rights under this  Agreement,
shall retain and may fully  exercise all of its rights and  elections  under the
U.S.  Bankruptcy  Code,  subject  to  performance  by Matrix of its  preexisting
obligations  under this Agreement.  The Parties further agree that, in the event
of the commencement of a bankruptcy  proceeding by or against HMR under the U.S.
Bankruptcy  Code,  Matrix  shall be  entitled  to a  complete  duplicate  of (or
complete  access to, as  appropriate)  any such  intellectual  property  and all
embodiments  of such  intellectual  property,  and same,  if not  already in its
possession, shall be promptly delivered to Matrix (i) upon any such commencement
of a bankruptcy  proceeding upon written request therefor by Matrix,  unless HMR
elects to continue to perform all of its obligations  under this  Agreement,  or
(ii) if not delivered  under (i) above,  upon the rejection of this Agreement by
or on behalf of HMR upon written request therefor by Matrix, provided,  however,
that upon HMR's (or its successor's)  written  notification to Matrix that it is
again willing and able to perform all of its  obligations  under this Agreement,
Matrix shall promptly return all such tangible materials to HMR, but only to the
extent that Matrix does not require continued access to such materials to enable
Matrix to perform its obligations under this Agreement.

                                       11

<PAGE>


9.       RIGHTS AND DUTIES UPON TERMINATION

         9.1 Upon termination of this Agreement,  HMR shall (except as otherwise
provided  herein)  have the  right to  retain  any sums  already  paid by Matrix
hereunder, and Matrix shall pay all sums accrued hereunder which are then due.

         9.2   Termination  of  this  Agreement   shall   terminate  all  future
obligations  and  rights  between  the  Parties  arising  from  this  Agreement,
including  but not  limited to the  payment  obligations  outlined in Article 3,
except those  described in Sections 8.1, 8.3, 9.1, 9.2, 9.4, 10.3,  10.4,  10.5,
10.6, 10.7, 10.8, for data or other information  generated or provided by either
Party during the term of the  Agreement,  and the rights and  obligations of the
Parties pursuant to Sections 10.9, 12.1, 12.3, 12.4 and Articles 11, 13, 14, 15,
18, 19, 20, 21, 22, and 23 and except  existing  rights  against the other Party
for a breach by that Party.

         9.3  Termination of this  Agreement  under Section 8.5 for a default by
HMR shall terminate Matrix's  obligation to make any remaining payments required
by Article 3 for the period effective as of the date HMR received written notice
from Matrix with  respect to such default if after the elapse of sixty (60) days
from receipt of such notice such default is not  corrected.  Termination of this
Agreement with respect to all countries of the Territory under Section 8.6 shall
terminate Matrix's obligation to make any remaining payments required by Article
3 for periods after the effective date of termination.

         9.4 All rights to terminate,  and rights upon termination  provided for
either  Party in this  Agreement  are in  addition  to other  remedies in law or
equity which may be available to either Party.

         9.5 Upon early partial or entire  termination of this license Agreement
pursuant to Sections 8.4, 8.5 (as to Matrix defaults), or 8.6, HMR shall receive
an exclusive (even as to Matrix, but subject to any Third Party's  then-existing
rights) right and license, with the right to grant sublicense, to all data, know
how,  results  and other  information  related to the  Compound  or Product  and
generated by Matrix,  its Affiliates  and  Sublicensees,  to import,  use, sell,
offer for sale,  and have sold Product in the countries of the  Territory  where
the Agreement was terminated.  Any IND or other regulatory filing effected prior
to termination  (for each country in which such  termination is effective) shall
be assigned by Matrix to HMR (or its  designees).  Matrix  shall  provide to HMR
within one (1) month of HMR's request, copies of all regulatory  correspondence,
including,  but not limited to, IND  Information  Amendments,  IND Reports,  IND
Safety  Reports,  NDA Submission,  NDA  Post-marketing  Reports,  and reports of
written/phone  contacts  to/from  regulatory  agencies,  as well  as the  safety
database  (as  applicable).   In  addition,   Matrix  shall  provide  reasonable
assistance  to HMR,  at  Matrix's  expense if such  termination  is  pursuant to
Sections 8.5 or 8.6, otherwise at HMR's expense,  for the transfer of such data,
know how, results and other  information  related to the Compound or Product and
generated by Matrix, its Affiliates, and Sublicensees prior to such termination,
such  transfer  to  be  completed  by  Matrix  within  one  (1)  month  of  such
termination.

                                       12

<PAGE>


10.      EXCHANGE OF INFORMATION AND CONFIDENTIALITY

         10.1 Upon the signing of this  Agreement,  HMR shall  deliver to Matrix
all available  Know-How through  documentation,  consultation,  and face-to-face
meetings,  which is owned or controlled by it and its Affiliates,  and which may
be  reasonably  expected  to  assist  Matrix  in  developing,  registering,  and
manufacturing  Compound and Product in the Territory ("HMR Information").  After
the execution of this  Agreement,  there shall be a three (3) months  transition
during which HMR shall provide,  reasonable resources,  expertise,  Know-How and
documents to effectively  transfer the  Development  activity to Matrix with the
limitations as described in this  Agreement.  At the end of such three (3) month
period,  the parties  shall discuss in good faith  whether the  information  and
technology transfer process has been satisfactorily completed. In the event that
Matrix  feels it has not  appropriately  received  such  information  or related
assistance,  then the  parties  shall in good  faith  determine  an  alternative
procedure to properly  complete such transition  process,  and the Parties shall
implement such procedure during the three (3) months immediately  following such
determination.  Thereafter  and for the remaining  term of this  Agreement,  HMR
shall be obligated to provide only such assistance to Matrix which is limited to
material historical information and technology.

         10.2  Within  ten (10) days  after the date of the  receipt  of written
notification, HMR shall transfer the U.S. IND, including without limitation, the
drug master file ("DMF"), for Compound or Product to Matrix. Until such transfer
is made,  Matrix  shall have the right to make  reference  to such  Compound  or
Product owned or controlled by HMR or its Affiliate.

         10.3 HMR may not, during the term of this Agreement and for a period of
[*] after the date of termination of this Agreement, disclose or reveal to Third
Parties any confidential information received from Matrix or otherwise developed
by Matrix in the  performance  of activities in  furtherance  of this  Agreement
which  relates  substantially  to a  Compound  or  Product  that  Matrix  has in
Development or is commercializing, except in the event that rights granted under
this  Agreement  shall  revert to HMR pursuant to Section 9.5 and solely for the
purpose of finding a licensee  to such  reverted  rights.  This  confidentiality
obligation shall not apply to such  information  which is or becomes a matter of
public  knowledge,  or came or comes into the possession of HMR independently of
this Agreement (unless otherwise disclosed  confidentially at any time by Matrix
to HMR),  or is  disclosed to HMR by a Third Party having the right to do so, or
is subsequently  and  independently  developed by employees of HMR or Affiliates
thereof who had no  knowledge of the  confidential  information  disclosed.  The
Parties shall take  reasonable  measures to ensure that no  unauthorized  use or
disclosure is made by others to whom access to such information is granted.

         10.4 Matrix may not, upon the  termination  of this Agreement and for a
period of [*] after  the date of  termination  of this  Agreement,  disclose  or
reveal  to Third  Parties  any  confidential  information  received  from HMR or
otherwise  developed by HMR in the  performance  of activities in furtherance of
this  Agreement  which  relates  to a  Compound  or  Product  that  HMR  has  in
Development or is commercializing. Matrix shall bind any Sublicensee to the same
terms  of   confidentiality   relating  to  the   Compound   or  Product.   This
confidentiality  obligation  shall  not  apply to such  information  which is or
becomes a matter of public  knowledge,

                                       13

<PAGE>


or came or comes into the possession of Matrix  independently  of this Agreement
(unless otherwise disclosed  confidentially at any time by HMR to Matrix), or is
disclosed  to  Matrix  by a  Third  Party  having  the  right  to do  so,  or is
subsequently  and  independently  developed by employees of Matrix or Affiliates
thereof who had no  knowledge of the  confidential  information  disclosed.  The
Parties shall take  reasonable  measures to ensure that no  unauthorized  use or
disclosure is made by others to whom access to such information is granted.

         10.5 Nothing herein shall be construed as preventing  either party from
disclosing  any  information  received  from the other party to an  Affiliate or
Sublicensee of the receiving  party,  provided such Affiliate or Sublicensee has
undertaken  a  similar  obligation  of  confidentiality   with  respect  to  the
confidential information.

         10.6 Nothing herein shall be construed as preventing Matrix or HMR from
disclosing  information  received from the disclosing  Party for the purposes of
investigating,  developing,  manufacturing,  or marketing Compound or Product or
for securing  essential or desirable  authorizations,  privileges or rights from
governmental  agencies,  or as is required  to be  disclosed  to a  governmental
agency or as is necessary to file or prosecute  patent  applications  concerning
Compound  or  Product  or to carry out any  litigation  concerning  Compound  or
Product.

         10.7 All confidential  information  disclosed by one party to the other
shall remain the  intellectual  property of the disclosing  party.  In the event
that a court or other legal or administrative  tribunal,  directly or through an
appointed master, trustee or receiver,  assumes partial or complete control over
the assets of a party to this Agreement based on the insolvency or bankruptcy of
such party,  the bankrupt or insolvent  party shall promptly notify the court or
other tribunal (i) that confidential  information  received from the other party
under this  Agreement  remains  the  property of the other party and (ii) of the
confidentiality  obligations under this Agreement.  In addition, the bankrupt or
insolvent party shall, to the extent  permitted by law, take all steps necessary
or desirable to maintain the  confidentiality of the other party's  confidential
information and to insure that the court, other tribunal or appointee  maintains
such information in confidence in accordance with the terms of this Agreement.

         10.8 No  public  announcement  or other  disclosure  to  Third  Parties
concerning  the existence of or terms of this  Agreement  shall be made,  either
directly or  indirectly,  by either  party to this  Agreement,  except as may be
legally  required or as may be required for  recording  purposes,  without first
obtaining the written  approval of the other party and agreement upon the nature
and text of such  announcement or disclosure,  provided that such approval shall
not be unreasonably withheld.

         The  party  desiring  to make any  such  public  announcement  or other
disclosure  shall  use  reasonable  efforts  to inform  the  other  party of the
proposed  announcement  or  disclosure in  reasonably  sufficient  time prior to
public release, and shall use reasonable efforts to provide the other party with
a written copy thereof,  in order to allow such other party to comment upon such
announcement or disclosure.

         10.9  HMR  shall  not  submit  for  written  or  oral  publication  any
manuscript,  abstract  or the like  which  includes  data or  other  information
generated or provided by either party in the

                                       14

<PAGE>


course of, or  otherwise  as a result of  Development  or  otherwise  related to
Compound  or Product,  without  first  obtaining  the prior  written  consent of
Matrix.  The  contribution  of each party shall be noted in all  publications or
presentations by acknowledgment or coauthorship, whichever is appropriate.

         10.10 Nothing in this Agreement  shall be construed as preventing or in
any way  inhibiting  either party from  complying  with statutory and regulatory
requirements  governing the manufacture,  use and sale or other  distribution of
Compound  or  Product  in  the  Territory  in any  manner  it  reasonably  deems
appropriate,  including,  for example,  by disclosing to regulatory  authorities
confidential or other information received from each other or Third Parties.

11.      INVENTIONS, PATENTS AND PATENT PROSECUTION

         11.1 HMR shall provide  Matrix with a copy of the complete texts of all
Patents  filed by HMR prior to the  Effective  Date which  relate to Compound or
Product  as well as all  information  received  concerning  the  institution  or
possible institution of any interference, opposition,  re-examination,  reissue,
revocation, nullification or any official proceeding involving a Patent anywhere
in the Territory. Matrix shall have the right to review all such Patents and all
proceedings related thereto and make  recommendations to HMR concerning material
aspects  of their  conduct.  HMR  agrees to copy  Matrix on all  aspects  of the
prosecution or other  proceedings of such Patents  including by providing Matrix
with  copies of  substantive  communications,  search  reports  and third  party
observations  submitted to or received from patent offices within the Territory.
Matrix shall provide such patent  consultation to HMR related to such Patents at
no cost to HMR.  Matrix  shall have the right to assume  responsibility  for any
such  Patent or any part of any such  Patent  which HMR  intends  to  abandon or
otherwise cause or allow to be forfeited provided that the claims of such Patent
covers Compound or Product.

12.      PATENT LITIGATION

         12.1 In the  event  of the  institution  of any  suit by a Third  Party
against HMR, Matrix and/or its Sublicensee for patent infringement involving the
manufacture,  use,  sale,  distribution  or  marketing  of  Compound  or Product
anywhere in the Territory,  the party sued shall promptly notify the other party
in writing.  Matrix shall have the right but not the  obligation  to defend such
suit at its own expense.  HMR and Matrix shall assist one another and  cooperate
in any such  litigation at the other's request without expense to the requesting
party.

         12.2 In the  event  that  HMR or  Matrix  becomes  aware of  actual  or
threatened infringement of a Patent related to Compound or Product,  anywhere in
the Territory, or any alleged patent invalidity or non-infringement of patent or
patents  pursuant to a paragraph  IV patent  certification  by a party filing an
Abbreviated New Drug Application ("ANDA"),  that party shall promptly notify the
other party in writing,  but in any event no later than ten (10)  business  days
after  receipt of notice of such action.  HMR shall have the first right but not
the obligation to bring, at its own expense,  an infringement action or file any
other appropriate action or claim directly,  related to infringement of a Patent
owned in whole or in part by HMR, wherein such infringement  relates to Compound
or  Product,  against  any Third Party and to use  Matrix's  name in  connection
therewith.  If HMR does not commence a  particular  infringement  action  within

                                       15

<PAGE>


ninety (90) days after it received such written notice,  Matrix, after notifying
HMR in writing, shall be entitled to bring such infringement action or any other
appropriate action or claim at its own expense. The party conducting such action
shall have full control over its conduct,  including  settlement thereof. In any
event,  HMR and  Matrix  shall  assist one  another  and  cooperate  in any such
litigation at the other's request without expense to the requesting party.

         12.3 HMR and Matrix shall recover their respective actual out-of-pocket
expenses,  or equitable  proportions thereof,  associated with any litigation or
settlement  thereof from any recovery made by any party. Any excess amount shall
be  shared  between  Matrix  and  HMR,  with  each  party  receiving  an  amount
proportional  to the amount spent by such party on such litigation or settlement
thereof relative to the total amount spent by both Parties on such litigation or
settlement thereof.

         12.4 The Parties  shall keep one another  informed of the status of and
of their respective  activities  regarding any litigation or settlement  thereof
concerning Compound or Product.

         12.5 HMR shall  authorize  Matrix to act as HMR's agent for the purpose
of  making  any  application  for  any  extensions  of the  term of  Patents  or
application for  Supplementary  Protection  Certificate or any other application
for  equivalent  right of which HMR is  entitled  to act as such an agent in any
country of the Territory in which such extensions are or become  available,  and
shall provide reasonable assistance therefor to Matrix, at HMR's expense.

         12.6  Each  party  shall  provide  prompt  notice  to the  other of any
inquiries as to any Patent which have claims to manufacturing  processes,  which
inquiries are provided  pursuant to 35 USC ss. 271(g),  and shall cooperate with
respect to responses thereto.

         12.7 Each party shall  provide  (i) notice of patents  relevant to a US
NDA,  prior to the time the NDA is  filed,  and  (ii)  immediate  notice  of the
issuance of any other patents relevant to a US NDA and the parties shall jointly
decide  within thirty (30) days of the patent issue date, if the patent is to be
listed pursuant to any Drug Approval  Application  (particularly  in Canada) and
any  pending or approved  Health  Registration  or NDA in the United  States for
Product.

13.      TRADEMARKS AND TRADE NAMES

         13.1 Matrix,  at its expense,  shall be responsible  for the selection,
registration  and maintenance of all trademarks and trade names which it employs
in connection with any Product.  Nothing in this Agreement shall be construed as
a grant of rights,  by license or otherwise,  to HMR to use such  trademarks and
trade  names or any other  trademarks  and trade  names  owned by Matrix for any
purpose.  Matrix shall own such trade names and trademarks and shall retain such
ownership upon termination of this Agreement.

         13.2 Nothing in this Agreement shall be construed as a grant of rights,
by license or otherwise,  to either party, to use the name of the other party or
any  entity  affiliated  therewith  for any  purpose  whatsoever  except  as may
otherwise be expressly provided for in this Agreement.

                                       16

<PAGE>


         13.3 If rights  granted  to Matrix  under this  Agreement  in a country
shall revert to HMR  pursuant to Sections 8.4 and 8.6 above,  HMR shall have the
option to obtain a royalty free license to any Matrix trademark  relating to the
Product in such country.

14.      STATEMENTS AND REMITTANCES

         14.1 Matrix shall keep and require its Affiliates and  Sublicensees  to
keep  complete and accurate  records of all sales of Product  under the licenses
granted herein. HMR shall have the right, at HMR's expense,  through a certified
public  accountant or like person  reasonably  acceptable to Matrix,  to examine
such records during regular business hours during the life of this Agreement and
for six (6)  months  after  the  later of its  termination  or the last  sale of
Product by Matrix  subject to the royalty  obligations  outlined in Section 3.2;
provided,  however,  that such examination  shall not take place more often than
once a year and shall not cover such records for more than the preceding two (2)
years and provided  further that such accountant  shall report to HMR only as to
the  accuracy  of  the  royalty  statements  and  payments.   However,   if  the
accountant's  report  results in finding an error which  resulted in an under or
overpayment  of  royalties  on Net Sales  more than [*] then the  expense of the
examination  shall be borne by Matrix (provided HMR shall first refund to Matrix
any overpayment  reflected by such audit).  The new Net Sales calculations shall
apply.

         14.2 Within sixty (60) days after the close of each  calendar  quarter,
Matrix shall deliver to HMR a true  accounting of all Product sold by Matrix and
its  Sublicensees  during  such  quarter  and  shall  at the  same  time pay all
royalties  due.  Such  accounting  shall  show  gross  sales  and Net Sales on a
country-by-country and Product-by-Product basis.

         14.3 Any tax paid or  required  to be  withheld by Matrix on account of
royalties  payable to HMR under this Agreement shall be deducted from the amount
of royalties otherwise due. Matrix shall secure and send to HMR written proof of
any such taxes withheld and paid by Matrix or its  Sublicensees  for the benefit
of HMR in a form  sufficient  to satisfy  the  United  States  Internal  Revenue
Service.

         14.4 All  payments  due under this  Agreement  shall be payable in U.S.
dollars.  In each  country  where the local  currency  is  blocked  or cannot be
removed  from such  country,  Matrix will pay the royalty  owed on sales in that
country in U.S. dollars to HMR at the exchange rate set forth in Section 3.5.

15.      WARRANTIES, REPRESENTATIONS, INSURANCE, AND INDEMNIFICATIONS

         15.1 As of the Effective  Date,  HMR warrants  that, to the best of its
belief and  knowledge,  it owns the entire  right and title to the extent of its
ownership  interest in Patents and Know-How,  has the right to grant the license
outlined in Article 2 with respect to Patents and Know-How, and has the right to
enter into this Agreement.

         15.2 HMR warrants  that, as of the Effective  Date, it has disclosed to
Matrix the  complete  texts of all Patents as well as all  information  received
concerning  the  institution  or  possible   institution  of  any  interference,
opposition,  re-examination,  reissue, revocation,

                                       17

<PAGE>


nullification  or any  official  proceeding  involving a Patent  anywhere in the
Territory.  Nothing in this  Agreement  shall be  construed  as a warranty  that
Patents are valid or  enforceable  or that their  exercise does not infringe any
valid  patent  rights of Third  Parties.  HMR hereby  represents  that it has no
present knowledge from which it can be inferred that Patents are invalid or that
their exercise would infringe valid patent rights of Third Parties. A holding of
invalidity or unenforceability of any Patent, from which no further appeal is or
can be taken, shall not affect any obligation already accrued hereunder.

         15.3 HMR acknowledges that, in entering into this Agreement, Matrix has
relied or will rely upon information supplied by HMR, information to be supplied
by HMR,  and  information  which HMR has caused or will cause to be  supplied to
Matrix by HMR's agents and/or representatives,  pursuant to Articles 6 and 10 of
this Agreement and HMR warrants and  represents  that, to the best of its belief
and  knowledge,  all such  information is and will be timely and accurate in all
material  respects.  HMR further  warrants  and  represents  that it has not, up
through and  including the Effective  Date,  omitted to furnish  Matrix with any
information  requested  by Matrix  concerning  the  Compound  or  Product or the
transactions contemplated by this Agreement, which would be material to Matrix's
decision to enter into this  Agreement  and to  undertake  the  commitments  and
obligations set forth herein.

         15.4 HMR warrants and  represents  that it has no present  knowledge of
the existence of any pre-clinical or clinical data or information concerning the
Compound or Product which suggests that there may exist toxicity,  safety and/or
efficacy  concerns which may materially  impair the utility and/or safety of the
Compound or Product, other than as has already been disclosed to Matrix.

         15.5 Subject to Section 15.8,  Matrix shall indemnify and hold harmless
HMR, its officers, directors,  shareholders,  employees,  successors and assigns
from any loss,  damage,  or liability,  including  reasonable  attorney's  fees,
resulting from any claim, complaint, suit, proceeding or cause of action against
any of them alleging physical or other injury, including death, brought by or on
behalf of an injured  party;  loss of service or  consortium  or a similar  such
claim,  complaint,  suit,  proceeding  or cause of action  brought  by a friend,
spouse, relative or companion of an injured party due to such physical injury or
death and rising out of the  administration,  utilization  and/or  ingestion  of
Compound  or Product  manufactured,  sold or  otherwise  provided to the injured
party by Matrix (or its  permitted  Sublicensee  or other third  parties such as
contract  manufacturers),  except to the extent  such  damages,  claims,  costs,
losses,  liabilities  or expenses are directly and  proximately  caused by HMR's
negligent or wrongful actions and provided:

                  (a) Matrix shall not be obligated  under this Section if it is
shown by  evidence  acceptable  in a court of law having  jurisdiction  over the
subject matter and meeting the appropriate degree of proof for such action, that
the  injury  was the  result of the  negligence  or  willful  misconduct  of any
employee or agent of HMR;

                  (b) Matrix shall have no obligation  under this Section unless
HMR (i) gives  Matrix  prompt  written  notice of any claim or  lawsuit or other
action for which it seeks to be

                                       18

<PAGE>


indemnified  under this  Agreement,  (ii) Matrix is granted full  authority  and
control over the defense, including settlement, against such claim or lawsuit or
other  action,  and (iii) HMR  cooperates  fully  with  Matrix and its agents in
defense of the claims or lawsuit or other action; and

                  (c) HMR shall have the right to  participate in the defense of
any such claim,  complaint,  suit,  proceeding or cause of action referred to in
this Section utilizing attorneys of its choice,  provided,  however, that Matrix
shall have full authority and control to handle any such claim, complaint, suit,
proceeding  or cause of action,  including any  settlement or other  disposition
thereof, for which HMR seeks indemnification under this Section.

         15.6 Subject to Section  15.8,  HMR shall  defend,  indemnify  and hold
harmless Matrix and its officers, directors, shareholders, employees, successors
and  assigns  from and  against  any and all  damages,  claims,  costs,  losses,
liabilities or expenses (including  reasonable  attorneys' fees) arising out of,
or resulting from or in connection  with HMR's  activities  under this Agreement
including,  but not limited to HMR's  activities  related to Development,  HMR's
transfer of Know-How to Matrix,  and any breach of a representation  or warranty
made to Matrix by HMR under this Agreement,  except such damages, claims, costs,
losses,  liabilities  or expenses which are directly and  proximately  caused by
Matrix's negligent or wrongful actions,  provided Matrix shall have the right to
participate  in the defense of any such claim,  complaint,  suit,  proceeding or
cause of action referred to in this Section  utilizing  attorneys of its choice,
provided,  however, that HMR shall have full authority and control to handle any
such  claim,  complaint,  suit,  proceeding  or cause of action,  including  any
settlement or other disposition thereof, for which Matrix seeks  indemnification
under this  Section.  HMR shall have no  obligation  under this  Section  unless
Matrix  (i) gives HMR  prompt  written  notice of any claim or  lawsuit or other
action  for which it seeks to be  indemnified  under  this  Agreement,  and (ii)
Matrix  cooperates  fully  with HMR and its  agents in  defense of the claims or
lawsuit or other action.

         15.7 Subject to Section 15.8,  Matrix shall defend,  indemnify and hold
harmless HMR and its officers, directors,  shareholders,  employees,  successors
and  assigns  from  and  against  any and all  damages,  claims,  costs,  losses
liabilities or expenses (including  reasonable  attorneys' fees) arising out of,
or  resulting  from  or  in  connection  with  Matrix's  activities  under  this
Agreement,  including,  but  not  limited  to  Matrix's  activities  related  to
Development, or any breach of a representation or warranty made to HMR by Matrix
under this Agreement, except such damages, claims, costs, losses, liabilities or
expenses  which  are  directly  and  proximately  caused by HMR's  negligent  or
wrongful  actions,  provided  HMR  shall  have the right to  participate  in the
defense  of any such  claim,  complaint,  suit,  proceeding  or cause of  action
referred  to in  this  Section  utilizing  attorneys  of its  choice,  provided,
however,  that Matrix shall have full  authority  and control to handle any such
claim, complaint,  suit, proceeding or cause of action, including any settlement
or other disposition  thereof,  for which HMR seeks  indemnification  under this
Section. Matrix shall have no obligation under this Section unless HMR (i) gives
Matrix prompt  written  notice of any claim or lawsuit or other action for which
it seeks to be indemnified  under this Agreement,  and (ii) HMR cooperates fully
with Matrix and its agents in defense of the claims or lawsuit or other action.

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         15.8 As between Matrix and HMR, Matrix shall be solely  responsible for
any Liabilities ("Matrix Liabilities") on or after the Effective Date during the
term of this Agreement  caused in a country where Matrix held the rights granted
in this  Agreement  at the time the Matrix  Liabilities  were  caused;  provided
however,  in the event that the rights granted in this Agreement shall revert to
HMR in any  country  for any  reason,  HMR shall be solely  responsible  for any
Liabilities ("HMR  Liabilities")  caused in any such country where HMR held such
reverted rights at the time the HMR Liabilities were caused.  These  obligations
shall survive the termination of this Agreement.

         15.9  During  the term of this  Agreement  and for a period of five (5)
years after its  expiration  or earlier  termination,  each party  shall  obtain
and/or maintain,  respectively,  at its sole cost and expense, product liability
insurance in amounts,  respectively,  which are  reasonable and customary in the
U.S.  pharmaceutical  industry for companies of comparable  size and activities.
Such product liability  insurance shall insure against all liability,  including
product liability,  personal liability, physical injury or property damage. Each
party shall  provide  written  proof of the  existence of such  insurance to the
other party upon request therefor.

16.      FORCE MAJEURE

         16.1 If the  performance of any part of this Agreement by either party,
or of any obligation under this Agreement, is prevented, restricted,  interfered
with or delayed  by reason of any cause  beyond  the  reasonable  control of the
party liable to perform, unless conclusive evidence to the contrary is provided,
the party so affected  shall,  upon giving written notice to the other party, be
excused from such  performance  to the extent of such  prevention,  restriction,
interference or delay, provided that the affected party shall use its reasonable
best  efforts  to avoid or  remove  such  causes  of  non-performance  and shall
continue  performance with the utmost dispatch whenever such causes are removed.
When  such  circumstances  arise,  the  Parties  shall  discuss  what,  if  any,
modification  of the terms of this  Agreement may be required in order to arrive
at an equitable solution.

17.      GOVERNING LAW

         17.1 This Agreement  shall be construed and governed in accordance with
the law of the State of  Delaware  and the  United  States of  America,  without
giving effect to conflict of law provisions.

18.      DISPUTE RESOLUTION

         18.1 Any dispute, controversy or claim (except as to any issue relating
to  intellectual  property  owned in whole or in part by HMR)  arising out of or
relating to this Agreement, or the breach,  termination,  or invalidity thereof,
shall be settled by  arbitration in accordance  with the Commercial  Arbitration
Rules of the  American  Arbitration  Association,  except  as  modified  by this
Section  18.1.  The number of  arbitrators  shall be three (3). The  arbitration
decision   shall  be  binding  and  not  be  appealable  to  any  court  in  any
jurisdiction.  No arbitrator (nor the panel of arbitrators) shall have the power
to award  punitive  damages  under this  Agreement  and such award is  expressly
prohibited.  The  prevailing  party may enter such  decision in any court having

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competent  jurisdiction.  The arbitration  proceeding  shall be conducted in the
English  language in New York,  New York unless the Parties  agree in writing to
conduct the arbitration in another location.

19.      SEPARABILITY

         19.1 In the event any portion of this Agreement  shall be held illegal,
void or  ineffective,  the remaining  portions hereof shall remain in full force
and effect.

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

         19.3 In the event that the terms and  conditions of this  Agreement are
materially  altered  as a result of  Sections  19.1 or 19.2,  the  Parties  will
renegotiate   the  terms  and  conditions  of  this  Agreement  to  resolve  any
inequities.

20.      ENTIRE AGREEMENT

         20.1 This Agreement, entered into as of the Effective Date, constitutes
the entire  agreement  between the Parties relating to the subject matter hereof
and supersedes all previous writings and understandings.  No terms or provisions
of this  Agreement  shall be  varied  or  modified  by any  prior or  subsequent
statement,  conduct or act of either of the Parties, except that the Parties may
amend  this  Agreement  by written  instruments  specifically  referring  to and
executed in the same manner as this Agreement.

21.      NOTICES

         21.1 Any notice  required or permitted  under this  Agreement  shall be
sent by certified mail or overnight  courier  service,  postage  pre-paid to the
following addresses of the Parties:

         If to HMR:             Hoechst Marion Roussel
                                Route 202-206
                                P.O. Box 6800
                                Bridgewater, NJ 08807-0800
                                Attention: General Counsel
                                Telephone: (908) 231 3537
                                Facsimile: (908) 231 2243

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         With copies to:        Hoechst Marion Roussel
                                Route 202-206
                                P.O. Box 6800
                                Bridgewater, NJ 08807-0800
                                Attention: Vice President, Licensing & Alliances
                                Telephone: (908) 231 3509
                                Facsimile: (908) 231-3730

         If to Matrix:          Matrix Pharmaceutical, Inc.
                                34700 Campus Drive
                                Fremont, CA 94555
                                Attention: Harry D. Pedersen, Vice President
                                Telephone:(510) 742-9900
                                Facsimile:(510) 510-8510

         With copies to:        Brobeck Phleger & Harrison LLP
                                Two Embarcadero Place
                                2200 Geng Road
                                Palo Alto, CA 94303-1913
                                Attention: J. Stephan Dolezalek, Esq.
                                Telephone:(650) 496-2842
                                Facsimile:(650) 496-2736

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

22.      ASSIGNMENT

         22.1 This  Agreement and the licenses  herein  granted shall be binding
upon and inure to the benefit of the  successors  in interest of the  respective
Parties.  Neither this Agreement nor any interest  hereunder shall be assignable
by either party without the written consent of the other provided, however, that
either  party  may  assign  this  Agreement  or any  Patent  owned  by it to any
Affiliate or to any corporation  with which it may merge or  consolidate,  or to
which it may  transfer  all or  substantially  all of its  assets to which  this
Agreement relates, without obtaining the consent of the other party.

23.      EXECUTION IN COUNTERPARTS

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

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



HOECHST MARION ROUSSEL INC.                MATRIX PHARMACEUTICAL, INC.

By: ________________________________       By:  ________________________________

Name: ______________________________       Name: _______________________________

Title: _____________________________       Title: ______________________________

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                               APPENDIX A-PATENTS


                                       [*]




<PAGE>


                                   APPENDIX B


                                       [*]




<PAGE>


                           APPENDIX C DEVELOPMENT PLAN