SPONSORED RESEARCH AGREEMENT

     THIS  Agreement is made this ___ day of  _____________,  1998,  between The
University  of Texas M.D.  Anderson  Cancer  Center,  1515  Holcombe  Boulevard,
Houston,  Texas 77030  ("Institution"),  a component of The  University of Texas
System  ("System"),  and  Eurobiotech  Corporation  Limited of Hamilton House, 1
Temple Avenue, Victoria Embankment,  London, ECAY 0HA, ("Sponsor"), to conduct a
clinical and preclinical study and evaluation ("Study"). Institution and Sponsor
agree as follows:

     WHEREAS, SPONSOR is the manufacturer or licensee of the Clofarabine ("Study
Drug") which has potential utilization in patient care and treatment; and

                                   1. PROTOCOL

1.1  Institution  agrees to use its best  efforts  to conduct  the Study,  as an
     independent contractor, in accordance with Institutional policy, applicable
     laws and regulations and the  Preclinical  Workscope and Protocol  entitled
     "Clofarabine  Development  Plan"  ("Study"),  as  described  in  Exhibit  A
     attached hereto and  incorporated  herein.  The Study will be supervised by
     Michael J. Keating M.B., B.S. ("Principal  Investigator"),  at Institution,
     with assistance from associates and colleagues as required.

1.2  Sponsor  agrees to engage the services of  Institution to conduct the Study
     and further agrees to provide at no cost to Institution the Study Drug for
     the conduct of the Study.

                                    2. AWARD

     In consideration  for performance  Study by Institution,  Sponsor shall pay
     Institution a total of One Million One  Seventy-Seven  Thousand One Hundred
     Eighty-Eight  and No/l00 Dollars  ($1,177,188.00)  for the  preclinical and
     clinical  expenses for the Study,  which is detailed by budget  category in
     Exhibit B. The first  installment  of Two Hundred Fifty Thousand and No/l00
     Dollars   ($250,000.00)  is  payable  upon  execution  of  this  Agreement.
     Subsequent installments will be made as outlined in Exhibit B.

                                     3. TERM

3.1  This  Agreement  shall continue in force until the earlier of completion of
     the Study as mutually agreed upon by the parties or Three (3) year from the
     date set forth above;  provided,  however,  that either party may terminate
     the Agreement by giving thirty (30) days advance notice to the other.

3.2  Upon early  termination of this Agreement,  Sponsor shall be liable for all
     reasonable  costs  incurred or obligated by Institution at the time of such
     termination,  subject to the maximum amount specified in Article 2. Sponsor
     shall pay  Institution for such costs within thirty (30) days of receipt of
     an invoice for same.


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3.3  Upon  termination of this  Agreement,  Institution  shall return  Sponsor's
     materials and equipment to Sponsor.

                               4. INDEMNIFICATION

4.1  Institution shall, to the extent authorized under the Constitution and laws
     of the State of Texas,  indemnify and hold Sponsor  harmless from liability
     resulting from the negligent acts or omissions of  Institution,  its agents
     or employees pertaining to the activities to be carried out pursuant to the
     obligations of this Agreement;  provided,  however,  that Institution shall
     not hold Sponsor  harmless  from claims  arising out of the  negligence  or
     willful malfeasance of Sponsor, its officers,  agents, or employees, or any
     person or entity not subject to Institution's supervision or control.

4.2  Sponsor  shall  indemnify  and hold  harmless  System,  Institution,  their
     Regents,  officers,  agents  and  employees  from  any  liability  or  loss
     resulting  from  judgments  or  claims  against  them  arising  out  of the
     activities to be carried out pursuant to the obligations of this Agreement,
     including  but not  limited  to the use by  Sponsor  of the  results of the
     Study;  provided,  however,  that the following is excluded from  Sponsor's
     obligation to indemnify and hold harmless:

     a.   the negligent  failure of  Institution  to comply with any  applicable
          governmental  requirements  or to adhere to the terms of the Protocol;
          or

     b.   the negligence or willful malfeasance by a Regent,  officer, agent, or
          employee of Institution or System.

                          5. PUBLICATION AND PUBLICITY

5.1  Institution  reserves  the  right to  publish  the  results  of the  Study.
     Institution  will,  however,  notify Sponsor and will submit a draft of the
     manuscript  to Sponsor  for  comments  at least  thirty  (30) days prior to
     submission  for  publication  or oral  presentation.  Sponsor  shall notify
     Institution  in writing  within  thirty  (30) days of receipt of such draft
     whether such draft contains information deemed to be confidential under the
     provisions  of Article 6, or  information  that if published  within thirty
     (30) days  would have an adverse  effect on a patent  application  in which
     Sponsor owns full or part  interest,  or intends to obtain an interest from
     Institution pursuant to this Agreement.  In the latter case Sponsor has the
     right to request a delay and Institution  agrees to delay said  publication
     for a period not  exceeding  ninety  (90) days.  In any such  notification,
     Sponsor  shall  indicate  with   specificity  to  what  manner  and  degree
     Institution may disclose said information. Institution shall have the final
     authority to determine the scope and content of any  publication,  provided
     that such  authority  shall be  exercised  with  reasonable  regard for the
     commercial  interests  of Sponsor.  It is the intent of the parties that no
     publication  will  contain any of  confidential  information  disclosed  by
     Sponsor without Sponsor's prior written permission.



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5.2  Except as  otherwise  required by law or  regulation,  neither  party shall
     release or distribute any materials or  information  containing the name of
     the other party or any of its employees  without prior written  approval by
     an authorized  representative of the non-releasing party, but such approval
     shall not be unreasonably withheld.

                           6. CONFIDENTIAL INFORMATION

     The  parties  may  wish  from  time  to  time,  in  connection   with  work
     contemplated under this Agreement, to disclose confidential  information to
     each other  ("Confidential  Information").  Each party will use  reasonable
     efforts to prevent the disclosure of any of the other party's  Confidential
     Information  to third  parties for a period of three (3) years from receipt
     thereof,  provided that the recipient party's obligation shall not apply to
     information that:

     a.   is not  disclosed  in writing or reduced to writing and so marked with
          an  appropriate  confidentiality  legend  within  thirty  (30) days of
          disclosure;

     b.   is  already  in  the  recipient  party's  possession  at the  time  of
          disclosure thereof;

     c.   is or later becomes part of the public domain  through no fault of the
          recipient party;

     d.   is   received   from  a  third   party   having  no   obligations   of
          confidentiality to the disclosing party;

     e.   is  independently  developed by the recipient party; or

     f.   is required by law or regulation to be disclosed.

     In the event that  information  is  required  to be  disclosed  pursuant to
     subsection f, the party required to make disclosure  shall notify the other
     to allow that party to assert  whatever  exclusions  or  exemptions  may be
     available to it under such law or regulation.

                            7. INTELLECTUAL PROPERTY

7.1  Institution understands and acknowledges that the Study Drug which is being
     provided  to  Institution  for the purpose of  conducting  the Study is the
     property of Sponsor and/or that the pharmaceutical  compound may be subject
     to certain  intellectual  property  rights owned by or licensed to Sponsor.
     This  Agreement  shall not be deemed or construed to convey or transfer any
     of such  intellectual  property  rights to  Institution  except  insofar as
     necessary to permit  Institution  to conduct the Study which is the subject
     of this Agreement.

7.2  Sponsor understands and acknowledges that any new and patentable discovery,
     unpatentable technology,  technical know how or other intellectual property
     developed solely by Institution as a result of Institution's conduct of the
     Study hereunder  shall be and remain the property of  Institution.  Sponsor
     shall have an option to negotiate an  exclusive,  world wide license in and
     to any such  intellectual  property  developed and owned by Institution (as
     well as that owned by it jointly with the Sponsor) under  reasonable  terms
     and  conditions  which  shall be  negotiated  within one hundred and eighty
     (180) days following  written  notice to Sponsor by  Institution  that such
     intellectual  property has been developed as a result of the conduct of the
     Study which is the subject of this Agreement and  specifically  referencing
     the start of the one hundred eighty (180) day period in this


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     Section 7.2. In the event that Sponsor and Institution fail to enter into a
     license agreement during the time specified above, or during such extension
     of time as the parties may mutually agree, then  Institution's  obligations
     to Sponsor under this Section 7.2 shall cease.

                                   8. GENERAL

8.1  This  Agreement,  including the attached  Exhibit A and B,  constitutes the
     entire and only Agreement  between the parties  relating to the Study,  and
     all prior negotiations, representations, agreements, and understandings are
     superseded  hereby.  No  agreements  altering  or  supplementing  the terms
     hereof,  including the exhibits  attached  hereto,  may be made except by a
     written  document  signed  by the duly  authorized  representatives  of the
     parties.

8.2  Any conflicts  between the Protocol and this  Agreement  are  controlled by
     this Agreement.

8.3  This Agreement shall be construed and enforced  in accordance with the laws
     of the State of Texas.

     IN  WITNESS  WHEREOF,  Institution  and  Sponsor  hereby  enter  into  this
Agreement,  effective as of the date first set forth above,  and execute two (2)
original counterparts.

Eurobiotech  Corporation Limited             The University of Texas
                                             M.D. Anderson Cancer Center

By: /s/ [ILLEGIBLE]                          By: Donna S. Gilberg
    --------------------------------             ----------------------------
                                                  Donna S. Gilberg, CPA
                                                  Manager, Sponsored Programs
Title   CEO

Date    26/2/98                              Date      2/26/98

                                             I have read this agreement and
                                             understand my obligations
                                             hereunder:

                                             By: /s/ Michael J. Keating
                                                 -------------------------------
                                                  Michael J. Keating, M.B., B.S.
Make Payment To:                                  Principal Investigator
The University of Texas
M.D. Anderson Cancer Center                  By: /s/ Hagop Kantarjian
Atten: Manager, Sponsored Programs               -------------------------------
P.O. Box 297402                                   Hagop Kantarjian, M.D.,
Houston, TX 77297                                 Chairman, Leukemia Dept.
Tax I.D. 74 6001118 A1

                                             By: /s/ Robert C. Bast
                                                 -------------------------------
                                                  Robert C. Bast, Jr., M.D.
                                                  Head, Division of Medicine



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