Matrix  Pharmaceutical,  Inc.  v.  Chubb  Custom  Ins.  Co.,  et al.  Settlement
Agreement

                            SETTLEMENT AGREEMENT AND
                          RELEASE IN FULL OF ALL CLAIMS


         This   Settlement   Agreement   and  Release  in  Full  of  All  Claims
("Agreement")  is made and entered into this 3rd day of April,  1998 by, between
and among Matrix  Pharmaceutical  Company, Inc.  (hereinafter  "Matrix"),  Chubb
Custom   Insurance   Company  and  Vigilant   Insurance   Company   (hereinafter
"Defendants")  (collectively  "the  Parties"),  with  reference to the following
facts, representations, warranties and promises:


                                   WITNESSETH


         WHEREAS,  Matrix brought suit against Defendants in the matter filed in
the  Alameda  County  Superior  Court-Hayward  Division,  case no.  H-192476  9,
entitled Matrix  Pharmaceutical,  Inc. v. Chubb Custom Insurance Company, et al.
(hereinafter "the Case"); and

         WHEREAS, Defendants appeared through their counsel of record; and

         WHEREAS,  the Case  arose from  Defendants'  denial of  coverage  under
insurance policies issued by Defendants to Matrix; and

         WHEREAS,  Defendants vigorously deny that they did anything wrong, have
any liability under any theory  whatsoever,  or so caused Matrix's damages,  and
that by entering  into this  agreement,  Defendants do not concede they have any
liability for any claims brought or which could have been brought by Matrix, and
specifically deny any liability whatsoever for Matrix's claims; and

         WHEREAS,  the  Parties  desire  to  avoid  the  expense,   burden,  and
uncertainty of continued litigation; and

         WHEREAS,  the Parties reached a compromise during a two-part  mediation
before  Justice Harry W. Low of JAMS Endispute in San Francisco on March 3, 1998
and April 3, 1998.

         NOW THEREFORE, it is hereby agreed among the Parties as follows:

         1. In consideration of (1) the total payment by Defendants to Matrix in
the amount of Four Million Dollars  ($4,000,000.00)  to occur on or before April
13, 1998 and (2)


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Matrix  Pharmaceutical,  Inc.  v.  Chubb  Custom  Ins.  Co.,  et al.  Settlement
Agreement


the return by  Defendants,  its lawyers and  consultants of all of the documents
(including  electronic  data and those  used as  exhibits)  Defendants  obtained
relating to the  underlying  lawsuit,  entitled  Collagen  Corporation v. Matrix
Pharmaceutical,  Inc., Santa Clara County Superior Court, case no. CV 746197, to
Matrix's counsel,  Brobeck, Phleger & Harrison, LLP, to occur on or before April
20, 1998. The receipt of and adequacy of the  consideration  described herein is
hereby  acknowledged as an accord and  satisfaction,  and Matrix agrees that its
claims,  in their entirety,  as asserted  against  Defendants,  may and shall be
dismissed with prejudice and without any further cost to either party.

         2. Matrix, its successors, assigns, representatives, agents, employees,
attorneys,  and any person or persons acting by, through or for it, hereby fully
releases, acquits and forever discharges Defendants, their successors,  assigns,
officers, directors,  representatives,  agents, employees,  attorneys, insurers,
and any  person or  persons  acting  by,  for or  through  them from any and all
liability,  actual or  potential,  for any and all  claims,  damages  or demands
whatsoever  in law or in equity  which  Matrix has,  might have  asserted,  have
claimed or now or in the future might claim arose from or in connection with the
Collagen Action.;

         3. With respect to the claims  released  herein,  Matrix and Defendants
each  expressly  waive  any  rights  or  benefits  available  to them  under the
provisions of California Civil Code Section 1542, which provides as follows:

            A general  release does not extend to claims which the creditor does
            not know or suspect  to exist in his favor at the time of  executing
            the release,  which if known by him, must have  materially  affected
            the settlement with the debtor.

         4. It is understood and agreed that this is a full and final release of
any and all  claims  and  that the  parties  agree  that it  shall  apply to all
unknown,   unanticipated,   unsuspected,   and  undisclosed   claims,   demands,
liabilities, actions, or causes of action, as well as those which are now known,
anticipated, suspected or disclosed.

         5. This Agreement is made and entered into as a free and voluntary act,
and has been done only  after  Matrix  consulted  with its  attorneys,  Brobeck,
Phleger & Harrison, LLP,

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Matrix  Pharmaceutical,  Inc.  v.  Chubb  Custom  Ins.  Co.,  et al.  Settlement
Agreement


and  Defendants  consulted  with their  attorneys,  Rudloff  Wood & Barrows  LLP
(and formerly Gordon & Rees).

         6. The Parties  agree that any and all actions  necessary  to secure an
immediate  dismissal  with  prejudice of  Plaintiff's  claims in this lawsuit as
against  Defendants shall be taken by the Parties and that each party shall bear
its own cost and  expense  incurred  in  connection  with  such  claims  and the
dismissal thereof.

         7. The  undersigned  representatives  have full authority to enter into
this Agreement.

         8.  In the  event  that  any  of the  terms,  conditions  or  covenants
contained in this Agreement are held to be invalid,  then such invalidity  shall
not effect the remaining terms,  conditions,  or covenants contained herein, all
of which shall remain in full force and effect.

         9. This Agreement may be executed in  counterparts,  all of which shall
be considered one and the same document.

         10. The  Stipulation  for  Settlement  CCP  Section  664.6  executed in
Justice  Low's  presence on April 3, 1998,  is attached  hereto as an exhibit to
this Agreement, however, to the extent that any of its terms conflict with those
stated herein. this Agreement shall control.

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Matrix  Pharmaceutical,  Inc.  v.  Chubb  Custom  Ins.  Co.,  et al.  Settlement
Agreement


         11. This Agreement  contains the entire agreement  between the parties,
and the terms of this Release are contractual and not a mere recital.


         Dated this _____________ day of ____________, 1997.


/s/ J R Glynn
---------------------------------
MATRIX PHARMACEUTICAL, INC.

by J R Glynn,  its Chief Operating Officer.
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   print name                title


---------------------------------
CHUBB CUSTOM INSURANCE COMPANY

by           , its 
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---------------------------------
VIGILANT INSURANCE COMPANY

by           , its 
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