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                                                                   EXHIBIT 10.97

LICENSE AGREEMENT

         This License Agreement (the "Agreement") dated April 29, 1998 (the
"Effective Date") is by and between the Administrators of the Tulane Educational
Fund, the corporate entity of the Tulane University, a non-profit corporation
organized under the laws of the State of Louisiana, located at 1430 Tulane Ave.,
New Orleans, Louisiana 70112 (hereinafter referred to as TULANE) and Interneuron
Pharmaceuticals, Inc., a Delaware corporation having its principal place of
business at 99 Hayden Avenue, Lexington, Massachusetts, 02173 (hereinafter
referred to as INTERNEURON).

W I T N E S S E T H

         WHEREAS, TULANE is the sole owner of certain patent rights developed by
Akira Arimura, M.D., Ph.D. and those under his direction and control, and may
become a co-owner of certain patent rights in conjunction with Takeda Chemical
Industries Ltd. ("Takeda"), all concerning Pituitary Adenylate Cyclase
Activating Polypeptide (PACAP) and its use for neuroprotection, and;

         WHEREAS, TULANE desires to use the patent rights to benefit TULANE and
to result in public utilization, consistent with TULANE'S educational and
research objectives, and is willing to grant a license thereunder; and

         WHEREAS, INTERNEURON desires to obtain a license under the patent
rights and has represented to TULANE that it shall commit itself to thorough and
diligent efforts to develop, produce, manufacture, market and sell products
under the patent rights;

         NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:

ARTICLE I

DEFINITIONS

         1.1 AFFILIATE shall mean (i) any corporation or business entity of
which more than fifty percent (50%) of the securities or other ownership
interests representing the equity, the voting stock or general partnership
interest are owned, controlled or held, directly or indirectly, by a party; (ii)
any corporation or business entity which, directly or indirectly, owns, controls
or holds more than fifty percent (50%) (or the maximum ownership interest
permitted by law) of the securities or


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other ownership interests representing the equity, the voting stock or, if
applicable, the general partnership interest, of a party; or (iii) any
corporation or business entity of which a party has the right to acquire,
directly or indirectly, at least fifty percent (50%) of the securities or other
ownership interests representing the equity, voting stock or general partnership
interests.

         1.2 FIELD shall mean all uses other than those previously licensed by
TULANE as specifically set forth in the agreements provided to INTERNEURON and
set forth on Schedule 1.2 hereto, or uses related to the promotion or inhibition
of spermatogenesis.

         1.3 FIRST COMMERCIAL SALE shall mean, with respect to the LICENSED
PRODUCT, the first sale for end use or consumption of such LICENSED PRODUCT in
any country in the Territory after all required approvals, including marketing
and pricing approvals, have been granted by the governing health authority of
such country or, where government approval is not required, the first sale in
that country in connection with a launch of LICENSED PRODUCT in that country.

         1.4 GMP MATERIAL shall mean drug substance comprised of PACAP or an
active segment or fragment thereof, which is manufactured in accordance with
United States current good manufacturing practices.

         1.5 IMPROVEMENTS shall mean any enhancements in the manufacture,
formulation, ingredients, preparation, presentation, means of delivery, dosage
or packaging of INVENTION or LICENSED PRODUCT and shall include any homologs,
analogs, derivatives, or conjugates of INVENTION or LICENSED PRODUCT or any new
uses of the foregoing discovered or co- discovered under the RESEARCH AGREEMENT.

         1.6 IND shall mean an investigational new drug application and any
supplements and additions thereto relating to the use of INVENTION or LICENSED
PRODUCT.

         1.7 INVENTION(S) shall mean Pituitary Adenylate Cyclase Activating
Polypeptide (PACAP) and any segments or fragments thereof (including their use
as a neuroprotectant) discovered by any of the INVENTORS and included in the
PATENT RIGHTS or arising under the RESEARCH AGREEMENT.

         1.8 INVENTOR(S) shall mean Akira Arimura, M.D., Ph.D. or those under
Dr. Arimura's direction and control.


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         1.9 KNOW-HOW shall mean any information and materials, including but
not limited to, discoveries, information, enhancements, processes, formulas,
data, inventions, know-how and trade secrets, patentable or otherwise, which are
in TULANE'S possession and control and which relate to INVENTION, LICENSED
PRODUCT or IMPROVEMENTS in the FIELD or which are developed, produced, conceived
or invented under the RESEARCH AGREEMENT. Such know-how shall include, without
limitation, all chemical, pharmaceutical, toxicological, clinical, assay
control, manufacturing, regulatory, and any other information which relate to
the INVENTION, LICENSED PRODUCT or IMPROVEMENTS.

         1.10 LICENSED PRODUCT shall mean a pharmaceutical preparation in form
for human use utilizing the INVENTION or IMPROVEMENTS.

         1.11 MAJOR MARKETS shall mean any of (i) North America, (ii) Japan or
(iii) the European Economic Community ("EEC").

         1.12 NDA shall mean a New Drug Application filed with the U.S. Food and
Drug Administration for use of LICENSED PRODUCT.

         1.13 NET SALES shall mean the gross sales amount invoiced for LICENSED
PRODUCT by INTERNEURON, its AFFILIATES or sublicensees (which term does not
include distributors) to the first independent third party after deducting, if
not previously deducted, from the amount invoiced using United States generally
accepted accounting principles ("GAAP"): (a) trade, cash, promotional or
quantity discounts or rebates or chargebacks actually allowed, (b) recalls,
returns and allowances actually credited to third parties, including, without
limitation, allowances for breakage and spoilage, (c) sales and excise taxes and
other taxes or governmental charges paid by INTERNEURON, which taxes are based
or levied on the sales price (and not income) of the LICENSED PRODUCT, (d)
transportation, (e) insurance charges if actually included in the gross sales
price (not to exceed the original billing or invoice amount), (f) retroactive
price reductions, and (g) reserves for bad debts or allowances not covered in
(a) through (f), net of recovery amounts.

         1.14 PATENT RIGHTS shall mean (i) the patents or patent applications,
whether domestic or foreign, relating to INVENTION discovered or developed by
any of the INVENTORS and listed on Schedule 1.14(a) attached hereto and (ii)
contingent upon and after the assignment thereof to TULANE, TULANE's rights in
the TAKEDA PATENT RIGHTS, in each case including any patents that may issue
thereon and any other patents or patent applications, whether domestic or


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foreign, including any patents that may issue thereon, which during the term of
this Agreement are owned or co-owned by TULANE and which relate to LICENSED
PRODUCT or their uses or to INVENTIONS or IMPROVEMENTS and which are discovered
under the RESEARCH AGREEMENT, including certificates of invention and
applications for certificates of invention, all divisions, continuations,
continuations-in-part, reissues, renewals, extensions, supplementary protection
certificates or the like of any such patents and patent applications and foreign
equivalents thereof.

         1.15 PROPRIETARY INFORMATION shall mean any and all scientific,
clinical, regulatory, marketing, financial and commercial information or data,
whether communicated in writing, orally or by any other means, which is provided
by one party to the other party in connection with this Agreement.

         1.16 REGULATORY APPROVAL shall mean, with respect to a given country,
the governmental approvals necessary to market LICENSED PRODUCT in such country
to the public.

         1.17 REGULATORY DATA shall mean INTERNEURON'S medical, toxicological,
pharmacological, preclinical, clinical, adverse reaction reports, processes for
manufacturing LICENSED PRODUCT and other data, relating to any LICENSED PRODUCT.

         1.18 RESEARCH AGREEMENT shall mean the Research Funding Agreement dated
as of the Effective Date by and between TULANE and INTERNEURON, as amended from
time to time, or any other research funding agreements entered into between
TULANE and INTERNEURON or an AFFILIATE relating to research by an INVENTOR.

         1.19 SALE or SOLD shall mean the transfer or disposition of a LICENSED
PRODUCT commencing with the FIRST COMMERCIAL SALE to a party other than
INTERNEURON or AFFILIATE for value whether in the form of cash payments,
royalties, fees, stock, or any other form of compensation including but not
limited to rights to compounds under the control of other companies or business
entities, provided that the value of any compensation other than cash payments
shall be determined by mutual agreement between INTERNEURON and TULANE using
GAAP as the basis for such agreement. For the purposes of determining NET SALES,
a sale shall be deemed to have occurred when an invoice therefor shall be
generated or the LICENSED PRODUCT shipped for delivery.


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         1.20 TAKEDA PATENT RIGHTS shall mean the patents and/or patent
applications, whether domestic or foreign, currently owned by Takeda subject to
TULANE's rights to obtain co-ownership thereof, and listed on Schedule 1.14(b)
attached hereto.

ARTICLE II

GRANT OF LICENSE

         2.1 The grant of the License shall be subject to the obligations of
TULANE to the United States Government, to the extent such obligations exist
with respect to the subject matter of this Agreement, under any and all
applicable laws, regulations, executive orders, and circulars, including those
set forth in 35 U.S.C. ss.200, et seq.

         2.2 (a) TULANE hereby grants to INTERNEURON, subject to all the terms
and conditions of this Agreement and those set forth in Section 2.1 above, an
exclusive (even as to TULANE) worldwide, royalty bearing license under the
PATENT RIGHTS and KNOW-HOW to manufacture, have manufactured, import, use, offer
for sale and sell LICENSED PRODUCT in the FIELD.

                  (b) TULANE hereby grants to INTERNEURON, subject to all the
terms and conditions of this Agreement and those set forth in Section 2.1 above,
an exclusive (even as to TULANE) worldwide, royalty bearing license under the
PATENT RIGHTS and KNOW-HOW generated under the Research Agreement to
manufacture, have manufactured, import, use, offer for sale and sell LICENSED
PRODUCT.

         2.3 INTERNEURON shall have the right to extend the license granted
herein to any AFFILIATE provided that such AFFILIATE consents to be bound by
this Agreement to the same extent as INTERNEURON and that INTERNEURON provides
to TULANE in writing evidence of such consent.

         2.4 INTERNEURON shall have the right to grant one or more sublicenses
under the exclusive license granted hereunder consistent with this Agreement
provided that INTERNEURON shall be responsible for the operations of its
sublicensees relevant to this Agreement as if such operations were carried out
by INTERNEURON including the payment of royalties whether or not paid to
INTERNEURON by the sublicensees. INTERNEURON also agrees to use its best efforts
to incorporate in each such sublicense all terms with respect to TULANE and
TULANE'S rights as


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herein set forth. INTERNEURON further agrees to provide TULANE with a draft of a
proposed sublicense agreement (and any amendments thereto) it proposes to enter
into, for TULANE'S approval, which will not be unreasonably withheld, before
entering into such sublicense and TULANE agrees to use its best efforts to
provide such approval within five (5) business days after INTERNEURON provides
such draft to TULANE.

         2.5 TULANE reserves the right to practice the PATENT RIGHTS and
KNOW-HOW for TULANE's own research and educational purposes; provided, however,
that (i) such use is for non- commercial academic purposes only and for no other
purpose; and (ii) TULANE shall promptly notify INTERNEURON of any intellectual
property, discoveries or inventions relating to or emanating from the INVENTION,
LICENSED PRODUCT or IMPROVEMENTS as a result of such use if generated under the
RESEARCH AGREEMENT, and that such intellectual property, discoveries or
inventions, and any domestic or foreign patents or patent applications that may
embody, disclose or claim such further intellectual property, discovery or
invention, once conceived and/or reduced to practice in the course of conducting
or performing such non-commercial academic activity, shall automatically become
part of the PATENT RIGHTS and KNOW-HOW at no additional cost to INTERNEURON.

ARTICLE III

CONFIDENTIAL INFORMATION

         3.1 TULANE and INTERNEURON each agree that all PROPRIETARY INFORMATION
which are disclosed by INTERNEURON to TULANE and, to the extent contained in
documents marked "CONFIDENTIAL," by TULANE to INTERNEURON, shall be received in
strict confidence, used only for the purposes of this Agreement, and not
disclosed by the recipient party (except as required by law or court or
administrative agency order), its agents or employees without the written
consent of an authorized officer of the other party, unless such information (a)
was in the public domain at the time of disclosure, (b) later became part of the
public domain through no act or omission of the recipient party, its employees,
agents, successors or assigns, (c) was lawfully disclosed to the recipient party
by a third party having the right to disclose it, (d) was already known by the
recipient party at the time of disclosure, (e) is developed by the receiving
party independently of PROPRIETARY INFORMATION received from the other party, as
documented by research and


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development records, or (f) is required to be submitted to a government agency
or court to obtain and maintain the approvals and clearances of LICENSED
PRODUCT.

         3.2 Each party's obligation of confidence hereunder shall be fulfilled
by using at least the same degree of care with the other party's PROPRIETARY
INFORMATION as it uses to protect its own PROPRIETARY INFORMATION. This
obligation shall exist while this Agreement is in force and for a period of two
(2) years thereafter except in the event of termination for breach on the part
of INTERNEURON, in which event INTERNEURON'S obligation to maintain the
PROPRIETARY INFORMATION confidential will exist for a period of five (5) years
after termination for breach.

         3.3 Notwithstanding Sections 3.1 and 3.2 above, disclosure of
PROPRIETARY INFORMATION may be made by INTERNEURON to governmental agencies to
the extent required or desirable to conduct clinical trials or obtain REGULATORY
APPROVAL for LICENSED PRODUCT, obtain patents or as required by law or court or
administrative agency order. Disclosure may also be made to assignees,
sublicensees, distributors, customers, and agents, to nonclinical and clinical
investigators, and to consultants, where necessary or desirable, with
appropriate safeguards to protect the confidential underlying disclosure. In the
event of any required confidential disclosure pursuant to a court order or
administrative agency requirement, INTERNEURON shall provide to TULANE as much
advance notice of the required disclosure as possible, and TULANE in its sole
discretion, may seek through appropriate legal remedies to prevent the required
disclosure; provided, however, it is understood that (i) INTERNEURON, including
any AFFILIATE, may make disclosure of this Agreement and the terms hereof in a
press release and in any filings required by the United States Securities and
Exchange Commission and (ii) either party may publicly announce the existence of
this Agreement, its financial terms, the areas of responsibility of each party,
and the impact of this Agreement upon the financial position of the party.

         3.4 This Agreement may be distributed solely (a) to those employees,
agents and independent contractors of TULANE and INTERNEURON who have a need to
know its contents, (b) to those persons whose knowledge of its contents will
facilitate performance of the obligations of the parties under this Agreement,
(c) to those persons, if any, whose knowledge of its contents is essential in
order to permit INTERNEURON to maintain or secure the benefits under policies of


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insurance, or (d) as may be required by law, regulation, or judicial order
including any filings required by the Securities and Exchange Commission.

ARTICLE IV

MILESTONES

         4.1 INTERNEURON shall proceed diligently with the development of
LICENSED PRODUCT with the goal of obtaining governmental approvals for the
marketing of LICENSED PRODUCT. INTERNEURON shall be deemed to satisfy the
foregoing obligation if it achieves the following described milestones within
the time frame indicated:

                  (a) Commencement of Phase 1 clinical trials -- twenty-four
(24) months from the Effective Date, provided adequate quantities of GMP
MATERIAL to conduct preclinical and Phase 1 clinical trials in accordance with
INTERNEURON's protocols for such trials are available within twelve (12) months
of the Effective Date;

                  (b) Commencement of Phase 2 clinical trials -- twelve (12)
months from the successful completion of Phase 1 clinical trials;

                  (c) Commencement of Phase 3 clinical trials -- twelve (12)
months from the successful completion of Phase 2 clinical trials;

                  (d) FIRST COMMERCIAL SALE in each MAJOR MARKET in which an NDA
or equivalent is approved and, if required in the respective MAJOR MARKET,
reimbursement prices acceptable to INTERNEURON are approved -- as soon as
practicable after such approvals issue, but no later than six (6) months after
such approvals issue. Sales under treatment INDS or analogous regulatory
requirements shall not be construed to have satisfied the terms of this
milestone.

                  (e) Submission for regulatory approval in each of Japan and
the EEC -- two (2) years after U.S. NDA approval, provided that a patent
covering the use of LICENSED PRODUCT in the FIELD has issued in the applicable
market.

         A milestone shall be deemed to be achieved by INTERNEURON if achieved
by any sublicensee or AFFILIATE of INTERNEURON.

         4.2 At the written request of INTERNEURON, TULANE, at the expense of
INTERNEURON, agrees to assist and cooperate with INTERNEURON or its sublicensees
in the


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preparation and processing of the IND, NDA and any other applications, whether
or not similar to the IND or NDA, for REGULATORY APPROVAL.

         4.3 In the event INTERNEURON shall fail to achieve any of the
milestones in Section 4.1 (a) through (e) within the time frame indicated,
INTERNEURON shall be entitled to a reasonable extension of such time period, not
to exceed six (6) months, if requested in writing by INTERNEURON and supported
by evidence provided to TULANE of technical difficulties, delays in preclinical
or clinical studies, regulatory processes or other commercially justifiable
reasons or delays which INTERNEURON could not have reasonably avoided. If
INTERNEURON shall fail to achieve any of these milestones for reasons other than
those set forth in the preceding sentence, or if INTERNEURON shall fail to
achieve a milestone within an applicable six (6) month extension as provided for
in the preceding sentence, INTERNEURON shall automatically be entitled to one
twelve (12) month extension of the time period (or an additional twelve (12)
month extension of the six (6) month extension if the preceding sentence was
applicable) for each such milestone in exchange for payments to TULANE of
$12,500 per month for each month during the extension period in which the
milestone is not met. If any milestones set forth in Section 4.1 (a) through (d)
are not met within such twelve (12) month extension, TULANE may, on ninety (90)
days prior written notice (and provided INTERNEURON shall not have achieved the
milestone during such 90 day period) at its sole discretion, terminate this
Agreement or terminate the exclusivity of this Agreement. If the milestone set
forth in Section 4.1(e) is not met in either MAJOR MARKET referred to in Section
4.1(e) within such twelve (12) month extension, TULANE may, on ninety (90) days
prior written notice (and provided INTERNEURON shall not have achieved the
milestone during such 90 day period) at its sole discretion, terminate this
Agreement or terminate the exclusivity of this Agreement, in either case solely
with respect to the MAJOR MARKET in which the milestone was not met. In the
event only the exclusivity of this Agreement is terminated, INTERNEURON shall
have no further obligations to achieve the milestones set forth in Section 4.1.

         4.4 INTERNEURON shall own, control and retain primary legal
responsibility for the preparation, filing and prosecution of all regulatory
filings and applications required to obtain approvals for and/or commercially
sell and use LICENSED PRODUCT in each country.

         4.5 Any LICENSED PRODUCT sold by INTERNEURON shall be sold under a
trademark selected, owned and maintained by INTERNEURON.


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ARTICLE V

CONSIDERATION

         In consideration of the exclusive license granted by TULANE to
INTERNEURON under this Agreement, INTERNEURON agrees to pay TULANE the
following:

         5.1 A one-time, non-creditable, non-refundable licensing fee of
$100,000 (One Hundred Thousand Dollars) upon execution of this Agreement.

         5.2 One-time milestone payments upon achievement of the particular
milestones listed below in the development of LICENSED PRODUCT:

                  (a) $150,000 upon successful completion of a Phase 1 clinical
trial, non-creditable and non-refundable;

                  (b) $300,000 upon successful completion of Phase 2 clinical
trial, non-creditable and non-refundable;

                  (c) $500,000 upon successful completion of Phase 3 clinical
trials, non-creditable and non-refundable;

                  (d) $750,000 upon approval of an NDA in the United States,
non-refundable and creditable against future running royalties, provided,
however, that under no circumstances shall the royalty payable be reduced by
more than 50% of the royalty otherwise due in any calendar quarter;

                  (e) $750,000 upon approval of an NDA in Japan or the EEC
whichever comes first, non-refundable and creditable against future running
royalties, provided, however, that under no circumstances shall the royalty
payable be reduced by more than 50% of the royalty otherwise due in any calendar
quarter;

                  (f) $150,000 per year commencing twelve (12) months after the
commencement of Phase 3 clinical trials and expiring upon the submission of an
NDA in the United States.

         5.3 INTERNEURON shall notify TULANE in writing within thirty (30) days
after the achievement of each milestone set forth in 5.2 (a) through (e) and
such notice shall be accompanied by payment of the applicable milestone payment.
The payments described in 5.2 (a) through (e) above shall be (i) payable only
upon the initial achievement of such milestone, and no amounts shall be due
hereunder for subsequent or repeated achievement of such milestones and (ii)
subject to potential increase under the terms and conditions set forth in
Section 5.5 of this Agreement.


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         5.4 Effective as of the date of FIRST COMMERCIAL SALE of LICENSED
PRODUCT, a running royalty of five percent (5%) of annual NET SALES by
INTERNEURON, its AFFILIATES or its sublicensees on any LICENSED PRODUCT if such
LICENSED PRODUCT is covered by any patent included in said PATENT RIGHTS in the
country where such LICENSED PRODUCT is sold, or a royalty equal to 2.5 percent
(2.5%) of annual NET SALES of LICENSED PRODUCT sold in any country where such
LICENSED PRODUCT is not covered by any patent included in said PATENT RIGHTS,
subject to the following conditions:

                  (i)      that only one royalty shall be due with respect to
                           the same unit of LICENSED PRODUCT;

                  (ii)     that no royalties shall be due upon the sale or other
                           transfer among INTERNEURON, its AFFILIATES or
                           sublicensees, but in such cases the royalty shall be
                           due and calculated upon INTERNEURON's, its
                           AFFILIATE's or sublicensees' NET SALES to the first
                           independent third party;

                  (iii)    that no royalties shall accrue on the disposition of
                           LICENSED PRODUCT in reasonable quantities by
                           INTERNEURON, AFFILIATES or sublicensees as samples
                           (promotion or otherwise) or as donations (for
                           example, to non-profit institutions or government
                           agencies for a non-commercial purpose); and

                  (iv)     that in those cases where INTERNEURON, its AFFILIATES
                           or its sublicensee sells bulk compound to be
                           incorporated into LICENSED PRODUCT for commercial
                           purposes (excluding sales of bulk compound for
                           development or testing purposes), rather than
                           LICENSED PRODUCT, to an independent third party and
                           excluding sales within or among INTERNEURON, its
                           AFFILIATES or its sublicensees, and is unable to
                           determine NET SALES, the royalty obligations of this
                           Article V shall be applicable to the bulk compound
                           sold.

         5.5 INTERNEURON will pay TULANE twenty-five percent (25%) (a "TRANSFER
PAYMENT") of any lump sum, periodic or other cash payments (other than running
royalties) received by INTERNEURON from sublicensees of INTERNEURON which
payments constitute advance royalties or other consideration for a sublicense
agreement relating to PATENT RIGHTS


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and KNOW-HOW, excluding amounts received by INTERNEURON from third parties in
connection with the issuance or debt or equity securities in INTERNEURON or to
fund research and development of LICENSED PRODUCT; provided, however, that (i)
any TRANSFER PAYMENTS made to TULANE under this Section 5.5 that arise as a
result of payments from sublicensees that are creditable against royalties
payable by such sublicensee to INTERNEURON shall be similarly credited against
future running royalties payable to TULANE hereunder; (ii) any TRANSFER PAYMENTS
made to TULANE under this Section 5.5 that arise as a result of payments from
sublicensees that are refunded by INTERNEURON shall be credited against the
milestones payable to TULANE listed under Section 5.2(a) through (e); (iii) in
the event that in connection with the execution of a sublicense agreement
INTERNEURON issues to a sublicensee equity or debt securities (and "INTERNEURON
INVESTMENT") in exchange for cash or equity securities of the sublicensee then,
upon the achievement of the first milestone listed under Section 5.2 (a) through
(e) which occurs after the date of execution of the sublicense agreement, the
milestone payment otherwise due TULANE upon achievement of the applicable
milestone event shall be increased by 25% of the cash received by INTERNEURON in
exchange for the INTERNEURON INVESTMENT or, if INTERNEURON receives equity
securities, 25% of the number of securities received by INTERNEURON, up to a
maximum increase in the milestone payment of $500,000 (or securities having a
fair market value of $500,000); (iv) only one TRANSFER PAYMENT shall be due with
respect to the same payment or investment made to or in INTERNEURON by a
sublicensee and (v) TRANSFER PAYMENTS shall be payable within sixty (60) days of
receipt by INTERNEURON of the applicable payment from a sublicensee except for
payments due under subparagraph (iii) which shall be payable at the time the
applicable milestone payment is payable.

         5.6 Beginning with the calendar year in which the FIRST COMMERCIAL SALE
of LICENSED PRODUCT is made, a minimum payment of $250,000 will be paid to
TULANE, which minimum payment will be applicable against payments required under
paragraph 5.4. Such minimum payment of $250,000 shall be paid to TULANE each
succeeding year, which succeeding minimum payment will be applicable against
payments required under paragraph 5.4.

         5.7 Commencing at such time as generic product prescriptions exceed
twenty five percent (25%) of prescriptions of LICENSED PRODUCT over any six
month period, on a country by country basis, no running royalties will be due on
SALES of LICENSED PRODUCT in said country.

         5.8 If laws, rules or regulations require withholding of income taxes
or other taxes imposed upon payments set forth in this Article V, INTERNEURON
shall make such withholding


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payments as required and subtract such withholding payments from the payments
set forth in this Article V. INTERNEURON shall submit appropriate proof of
payment of the withholding taxes to TULANE within a reasonable period of time.
INTERNEURON will use efforts consistent with its usual business practices to
ensure that any withholding taxes imposed are reduced as far as possible under
the provisions of the current or any future double taxation treaties or
agreements between foreign countries, and the parties shall cooperate with each
other with respect thereto, with the appropriate party under the circumstance
providing the documentation required under such treaty or agreement to claim
benefits thereunder.

         5.9 If a compulsory license is granted to a third party with respect to
LICENSED PRODUCT in any country in which LICENSED PRODUCT is covered by an
issued patent included in the PATENT RIGHTS with a royalty rate lower than the
royalty rate provided by Section 5.4, then the royalty rate to be paid by
INTERNEURON on Net Sales in that country under Section 5.4 shall be reduced to
the rate paid by the compulsory third party licensee.

ARTICLE VI

REPORTS AND REPORTING

         6.1 Within three (3) months after March 31, June 30, September 30, and
December 31 of each year, INTERNEURON shall deliver to TULANE a true and
accurate report, showing the SALES of LICENSED PRODUCT by INTERNEURON, its
AFFILIATES and its sublicensees, on a country-by-country basis if any exist,
during each three (3) calendar months preceding March 31, June 30, September 30,
and December 31 (each, a "Royalty Payment Period") as are pertinent to an
accounting for payments hereunder. Such report shall include at least (a) the
quantities of LICENSED PRODUCT manufactured and sold by INTERNEURON; (b) the
gross amount invoiced from total SALES and computation of NET SALES of LICENSED
PRODUCT on a country by country basis; (c) the calculation of royalties thereon;
and (d) the total royalties so computed and due TULANE; and (e) designation of
all payments received by INTERNEURON subject to Section 5.5 of this Agreement
during the aforementioned periods. Simultaneously with the delivery of each
report, INTERNEURON shall pay to TULANE the amount, if any, due for the period
of such report. If no payments are due, it shall be so reported. In the event
restrictions on the transfer of currency exist in any country so as to prevent
INTERNEURON from making payments in the United States, INTERNEURON shall take
all reasonable steps to obtain a waiver of such restrictions


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<PAGE>   14



or to otherwise enable INTERNEURON to make such payments, failing which
INTERNEURON make the royalty payments due upon sale in such country in local
currency and deposit such payments in a local bank or other depository agreed to
the parties.

         6.2. Beginning twelve (12) months after the Effective Date and annually
on such date thereafter INTERNEURON shall deliver to TULANE a written report as
to INTERNEURON'S efforts and accomplishments during the preceding year in
developing and commercializing LICENSED PRODUCT and its development and
commercialization plans for the upcoming year.

         6.3 Amounts payable under this Agreement shall be paid in U.S. dollars
to TULANE or in such other currencies as the parties may agree upon in writing.
Such payments shall be subject to applicable law and regulations existing at the
place of remittance. NET SALES of LICENSED PRODUCT not denominated in U.S.
dollars and the royalties payable thereon shall first be determined in the
currency in which such LICENSED PRODUCT was sold and shall then be converted
into the equivalent number of U.S. dollars in accordance with GAAP based on the
average of the conversion rates on the first and last business day of each month
during each Royalty Payment Period, as published in the Wall Street Journal,
Eastern edition.

         6.4 During the Term of this Agreement and for three (3) years
thereafter, INTERNEURON shall keep complete and accurate records of its, its
AFFILIATES' and its sublicensees' SALES and NET SALES of LICENSED PRODUCT under
the license granted in this Agreement in sufficient detail to enable the
royalties payable hereunder to be determined. Upon the written request of TULANE
and not more than once in each year, INTERNEURON shall permit a firm of
independent accountants (who shall be reasonably acceptable to INTERNEURON), at
TULANE'S expense, to periodically examine such of INTERNEURON'S books, ledgers,
and records during regular business hours at times mutually convenient to the
parties and upon reasonable notice to INTERNEURON for the purpose of and to the
extent necessary to verify any report required under this Agreement for any year
ending not more than thirty-six (36) months prior to the date of such request.
If such audit finds that any royalties were owed during such period, INTERNEURON
shall pay the additional royalties within thirty (30) days of the date TULANE
delivers to INTERNEURON such accounting firm's written report so concluding and,
in the event that the amounts due to TULANE are determined to have been
underpaid by more than five percent (5%), INTERNEURON shall pay the cost of such
examination, as well as accrued interest on the additional royalties due at an
annual rate


                                      -14-

<PAGE>   15



equal to two percent (2%) over the prime rate, as published in the Wall Street
Journal, Eastern edition. Upon the expiration of thirty-six (36) months
following the end of any year the calculation of royalties payable with respect
to such year shall be binding and conclusive upon TULANE, and INTERNEURON and
its sublicensees shall be released from any liability or accountability with
respect to royalties for such year. TULANE shall treat all financial information
subject to review under this Section 6.4 or under any sublicense agreement in
accordance with the confidentiality provisions of this Agreement.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES

         7.1 (a) Each party represents and warrants to the other that:

                           (i) it is a corporation duly incorporated and validly
existing under the laws of its jurisdiction of incorporation, with full power
and authority to own or license its properties and conduct its business as
currently owned or licensed and conducted;

                           (ii) it has the corporate power and authority to
execute and deliver this Agreement, and to carry out all the terms and
provisions hereof to be carried out by it;

                           (iii) the execution and delivery of this Agreement
have been duly authorized by all necessary corporate action and this Agreement
has been duly executed and delivered by it and is a legal, valid and binding
obligation enforceable in accordance with its terms;

                  (b)      TULANE represents and warrants that:

                           (i) the PATENT RIGHTS listed on Schedule 1.14(a) are
owned solely by TULANE free and clear of any liens, charges and encumbrances,
and no other person, corporate or other private entity, or governmental entity
or subdivision thereof, has any valid claim of ownership with respect to the
PATENT RIGHTS and KNOW-HOW, whatsoever, except as may be subject to the rights
of the United States Government;

                           (ii) it has not previously assigned, transferred,
conveyed or otherwise encumbered its right, title and interest in the PATENT
RIGHTS or KNOW-HOW or entered into any agreement with any third party which is
in conflict with the rights granted to INTERNEURON pursuant to this Agreement,
except as set forth on Schedule 1.2 to this Agreement;


                                      -15-

<PAGE>   16



                           (iii) to its knowledge, the PATENT RIGHTS and
KNOW-HOW practiced as contemplated herein and the development, importation,
manufacture, use, offer for sale and sale of LICENSED PRODUCT does not and will
not infringe any patent rights owned or possessed by any third party;

                           (iv) there are no claims, judgments or settlements
against or owed by TULANE or pending or, threatened claims or litigation
relating to the PATENT RIGHTS and KNOW-HOW; and

                           (v) it has disclosed to INTERNEURON all information
known by it that is reasonably believed by TULANE to be related to the PATENT
RIGHTS and the activities contemplated under this Agreement.

                  (c) EXCEPT AS SET FORTH IN THIS AGREEMENT TULANE MAKES NO
REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, CONCERNING THE
QUALITY, COMMERCIAL UTILITY, PATENTABILITY, FREEDOM FROM INFRINGEMENT,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR ANY OTHER CHARACTERISTICS
OF THE PATENT RIGHTS.

ARTICLE VIII

INFRINGEMENT

         A.  Infringement Action Brought By a Third Party

         8.1 If INTERNEURON, its AFFILIATES or sublicensees or TULANE is (are)
notified that INTERNEURON, its AFFILIATES, sublicensees or TULANE allegedly
infringe(s) any patent owned by or licensed to a third party, in connection with
any of the activities contemplated by this Agreement, TULANE or INTERNEURON
shall promptly notify the other in writing.

         8.2 TULANE shall have no obligation to defend or settle any claim by a
third party that the manufacture, importation, offer for sale, sale, or other
use of the INVENTION, LICENSED PRODUCT, or IMPROVEMENTS infringes any patent
right owned by or licensed to the third party.

         8.3 If a third party makes an infringement claim or files an
infringement action against TULANE, INTERNEURON, its AFFILIATES or sublicensees
arising out of INTERNEURON's. its AFFILIATE'S or sublicensee's manufacture,
importation, offer for sale, sale, or other use of the INVENTION, LICENSED
PRODUCT or IMPROVEMENTS, INTERNEURON shall defend the


                                      -16-

<PAGE>   17



claim or action at its expense and shall have the right to settle the claim or
action at its expense. TULANE shall, at INTERNEURON'S request, cooperate with
INTERNEURON by providing relevant records, documents, samples, information and
such other assistance as may be appropriate with respect to such action.

         8.4 INTERNEURON shall defend, hold harmless, and indemnify TULANE from
and against any loss, expense (including reasonable attorneys' fees, court
costs, and other legal expenses), injury, damage, or act resulting from any
infringement action referred to in Section 8.3.

         8.5 Should INTERNEURON, its AFFILIATES, or sublicensees obtain one or
more licenses under any patent not licensed hereunder, which are required in
order to make, use, or sell the INVENTIONS or LICENSED PRODUCT in a particular
country (whether as a condition of settlement of an infringement action, by
court order or otherwise required), the royalties payable to TULANE for sale in
the country involved shall be reduced by the amount of the royalty payable by
INTERNEURON, its AFFILIATES, or sublicensees, under any or all such additional
licenses; provided that in no circumstances shall the royalty provided for
herein be reduced by more than a total of fifty percent (50%) of royalties
otherwise due in the country involved.

         8.6 In the event INTERNEURON, its AFFILIATES, or sublicensees, is
permanently enjoined from exercising its license rights granted hereunder
pursuant to an infringement action brought by a third party, or if the proposed
terms of settlement or judgment render the production of LICENSED PRODUCT
impracticable in INTERNEURON'S reasonable judgment, then INTERNEURON shall have
the right to terminate this Agreement with respect to the country where the
action is or was pending following thirty (30) days' written notice to TULANE.

         B.  Infringement Action Brought Against a Third Party

         8.7 If any third party shall, in the reasonable opinion of either
party, infringe any of the PATENT RIGHTS, then such party shall promptly notify
the other party. INTERNEURON (or its AFFILIATES or sublicensee) shall have the
initial sole right to commence an action for infringement against the third
party, in its own name and/or in the name of TULANE, together with the right to
enforce and collect any judgment thereon. If INTERNEURON (or its sublicensee)
elects to exercise the right to commence an action, then TULANE shall, at
INTERNEURON'S request, and at INTERNEURON'S expense for TULANE'S out-of-pocket
costs and expenses, assist in the prosecution of such action, including, but not
limited to, consenting to being joined in such action


                                      -17-

<PAGE>   18



as a voluntary plaintiff. INTERNEURON shall bear its own internal and external
legal and other costs and expenses associated with the prosecution of the
action. TULANE shall have the right to independently retain legal counsel and
consultants, at TULANE'S sole cost and expense, but such counsel or consultants
shall not have the right to affect INTERNEURON'S (or its AFFILIATE(S) or
sublicensee(s)) sole management of the prosecution of the action.

         8.8 Any monetary recovery (whether by settlement or judgment) in
connection with an infringement action commenced by INTERNEURON or its AFFILIATE
or sublicensee shall be applied first to reimburse INTERNEURON, its AFFILIATE
and its sublicensee, if applicable, for their out-of-pocket expenses (including
reasonable attorneys fees) incurred in prosecuting such action and the expenses
of TULANE borne by INTERNEURON hereunder. Any balance remaining shall be shared
between INTERNEURON and TULANE in the ratio of 75:25 (INTERNEURON:
TULANE), respectively.

         8.9 Should neither INTERNEURON, its AFFILIATE nor its sublicensee take
appropriate and diligent action with respect to any such infringement within
three months after receiving notice of any infringement or possible
infringement, then TULANE shall have the right but not the obligation to take
such action, at its own expense, in its own name, and the right to enforce and
collect and keep the entirety of any judgment thereon.

         8.10 Neither party shall settle any infringement action without the
prior consent of the other party, not to be unreasonably denied or delayed.

ARTICLE IX

PATENTS

         9.1 TULANE shall use all commercially reasonable efforts to obtain the
assignment by TAKEDA to TULANE of TULANE's interest in the TAKEDA PATENT RIGHTS,
whereupon the TAKEDA PATENT RIGHTS shall automatically become part of the PATENT
RIGHTS and subject to this Agreement at no additional cost to INTERNEURON.

         9.2 Ownership of PATENT RIGHTS shall remain with TULANE either solely
or jointly with Takeda, as the case may be, subject to the license granted
hereunder. INTERNEURON, using counsel of its choice, shall prosecute and
maintain patents and patent applications included in the PATENT RIGHTS, which
are owned solely by TULANE. TULANE


                                      -18-

<PAGE>   19



shall be provided with copies of all patents and patent applications and shall
be entitled to review and comment upon all actions undertaken in the prosecution
and maintenance of all patents and patent applications owned solely by TULANE.
TULANE shall use its best efforts to obtain Takeda's agreement to permit
INTERNEURON, through INTERNEURON's counsel of choice, to assist Takeda, on
behalf of TULANE, with the prosecution and maintenance of all patents and patent
applications included in the TAKEDA PATENT RIGHTS. Moreover, TULANE shall use
its best efforts to ensure that INTERNEURON shall receive from Takeda or its
agents copies of all appropriate documents relating to the prosecution and
maintenance of the TAKEDA PATENT RIGHTS including, but not limited to, copies of
correspondence, office actions, responses, appeals and the like. INTERNEURON
shall be entitled to review and comment upon all actions in a reasonable time in
advance of when such actions are due or undertaken in the prosecution and
maintenance of the TAKEDA PATENT RIGHTS.

         9.3 The costs for preparing, filing, prosecuting, and maintaining
patents and patent applications included in the PATENT RIGHTS, which are owned
solely by TULANE, and one-half the costs for preparing, filing, prosecuting and
maintaining patents and patent applications included in the PATENT RIGHTS, which
become jointly owned by TULANE with Takeda, shall be borne by INTERNEURON.
INTERNEURON'S obligation to pay patent prosecution and maintenance costs shall
continue as long as this Agreement remains effective.

         9.4 TULANE shall have the right to terminate this license in any
particular country only in which INTERNEURON fails to pay the costs set forth in
paragraph 9.2 above, according to the provisions of Article 11.3.

ARTICLE X

INTELLECTUAL PROPERTY OWNED SOLELY BY INTERNEURON

         Ownership of all intellectual property rights related to INVENTIONS,
LICENSED PRODUCT or IMPROVEMENTS, including, but not limited to, modifications,
technical information, know-how, delivery systems, processes, procedures,
compounds, compositions, methods, formula, protocol, techniques or any
improvements thereon (whether or not patentable), which are conceived or made
solely by INTERNEURON, its employees or agents, or its AFFILIATES, and ownership
of any corresponding domestic and foreign patent applications and


                                      -19-

<PAGE>   20



patents, trademarks, tradenames, copyrights, trade dress, trade secrets, designs
and the like (collectively, "INTERNEURON RIGHTS"), shall accrue to and remain
with INTERNEURON.

ARTICLE XI

TERM AND TERMINATION

         11.1 This Agreement shall become effective on the Effective Date.
Unless sooner terminated as provided for below, this Agreement shall continue in
effect for ten (10) years after the FIRST COMMERCIAL SALE of the LICENSED
PRODUCT or until the expiration of the last to expire of any patent included in
the PATENT RIGHTS, whichever is longer on a country by country basis.
Thereafter, INTERNEURON shall have a fully paid up license without further
obligation to TULANE.

         11.2 The provisions of ARTICLE III (Confidentiality) and ARTICLE XIII
(Indemnification) shall survive termination or expiration of this Agreement in
accordance with their respective terms.

         11.3 Unless otherwise specified, if (1) either party breaches any
material obligation imposed by this Agreement; (2) either party makes any
general assignment for the benefit of its creditors; (3) a petition is filed by
or against either party, or any proceeding is initiated against either party as
a debtor, under any bankruptcy or insolvency law, unless the laws then in effect
void the effectiveness of this provision; or (4) a receiver, trustee, or any
similar officer is appointed to take possession, custody, or control of all or
any part of either party's assets or property, then the other party may, at its
option, send a written notice that it intends to terminate the license granted
by this Agreement.

         11.4 If the party in breach does not cure the breach or remedy the
event within ninety (90) days from the notice date, then the other party shall
have the right to terminate the license granted by this Agreement, which
termination shall be effective immediately upon the date of mailing of a written
notice of termination to the party in breach.

         11.5 Notwithstanding anything contained herein to the contrary,
INTERNEURON shall have the right to terminate this Agreement at any time by
giving ninety (90) days written notice to TULANE in the event of any event,
condition or regulatory action that affects the safety or efficacy or
marketability of LICENSED PRODUCT or in the event INTERNEURON is unable to
obtain sufficient quantities of GMP MATERIAL to conduct clinical trials. In the
event of such termination, (i) the rights and obligations hereunder, including
any payment obligations not due and owing as of


                                      -20-

<PAGE>   21



the termination date, shall terminate and (ii) INTERNEURON shall have no further
rights with respect to the PATENT RIGHTS or KNOW-HOW.

         11.6 Upon termination of this Agreement for any cause, nothing herein
shall be construed to release either party of any obligation that has matured
prior to the effective date of such termination. INTERNEURON may, after the
effective date of such termination, sell all LICENSED PRODUCT that it may have
on hand at the date of termination, provided that it pays earned royalty thereon
as provided in this Agreement.

         11.7 In the event of termination of this Agreement for material breach
by INTERNEURON, INTERNEURON agrees no longer to use any of the PATENT RIGHTS or
KNOW-HOW after the effective date of termination. In such event, upon the
written request of TULANE, INTERNEURON and TULANE shall negotiate in good faith
an agreement granting TULANE a license to use INTERNEURON'S REGULATORY DATA and
INTERNEURON RIGHTS in exchange for the following payments and such other terms
and conditions as INTERNEURON and TULANE may mutually agree:

                  (a) payments equal to 30% of royalties received by TULANE for
any license by TULANE utilizing the REGULATORY DATA or the INTERNEURON RIGHTS,
not to exceed the following percentages of net sales (to be defined similarly to
NET SALES) of products:

                           (i) if termination of this Agreement occurs prior to
commencement of Phase 1 clinical trials: 2% of net sales;

                           (ii) if termination of this Agreement occurs after
commencement of Phase 1 clinical trials but before completion of Phase 2
clinical trials: 4% of net sales;

                           (iii) if termination occurs after completion of Phase
2 clinical trials: 8% of net sales; and

                  (b) a payment equal to 30% of any payments received by TULANE
from a licensee of TULANE other than royalties.

         11.8 In the event of termination of this Agreement by INTERNEURON, upon
written request of TULANE, INTERNEURON and TULANE shall negotiate in good faith
an agreement granting TULANE a license to use INTERNEURON'S REGULATORY DATA and
INTERNEURON RIGHTS in exchange for payments equal to 50% of the payments set
forth in Section 11.7 of this Agreement.


                                      -21-

<PAGE>   22




ARTICLE XII

ASSIGNMENT

         This Agreement shall not be assignable in whole or in part by any party
without the written consent of the other which consent shall not be unreasonably
withheld and shall be given provided that the assignment is consistent with the
parties' overall objectives in connection with this Agreement; provided,
however, that INTERNEURON may, without such consent, assign the Agreement in
whole or in part and its rights and obligations hereunder or in connection with
the transfer or sale of all or substantially all of its assets related to
LICENSED PRODUCT or all or substantially all of its business or in the event of
its merger or consolidation or change in control or similar transaction. Any
assignee shall assume all obligations of its assignor under this Agreement.

ARTICLE XIII

INDEMNIFICATION

         13.1 TULANE assumes no responsibility for the manufacture or product
specification or end-use of any LICENSED PRODUCT which is manufactured by or
sold by or for INTERNEURON.

         13.2 INTERNEURON shall defend, hold harmless and indemnify TULANE, its
administrators, trustees, officers, directors, employees and agents and the
insurers of TULANE and the successors and heirs of the insurers and these
persons, at the expense of INTERNEURON, from any and all claims, causes of
action, court or administrative orders, and liability (including, but not
limited to, product liability, strict liability, and negligence and including,
but not limited to, personal injury and property damage, including environmental
damage) for any loss, expense (including reasonable attorneys' fees, court
costs, and other legal expenses) injury, damage, or act arising out of the use
of any product or service utilizing the PATENT RIGHTS or LICENSED PRODUCT, or
arising out of the negligence or wilful malfeasance of INTERNEURON or its
employees or agents in the manufacture, use or sale of LICENSED PRODUCT except
to the extent such liability arises from the negligence of TULANE. INTERNEURON
agrees to maintain product liability insurance naming TULANE as additional
insured with a reputable insurance company approved by TULANE, in an amount not
less than Three Million Dollars ($3,000,000.00) per person per occurrence with


                                      -22-

<PAGE>   23



an aggregate limit of Ten Million Dollars ($10,000,000). At TULANE's request,
INTERNEURON agrees to provide TULANE with a certified copy of such policy or
policies within thirty (30) days of purchase of each policy, which insurance
will be obtained no later than thirty (30) days prior to the commencement of
clinical trials.

         13.3 TULANE shall hold harmless and indemnify INTERNEURON from
liability resulting from TULANE'S acts or omissions within the terms of this
Agreement; provided however, TULANE shall not indemnify or hold INTERNEURON
harmless from any claims, demands, or causes of action arising in favor of any
person or entity growing out of, incident to, or resulting directly or
indirectly from negligence (whether sole, joint, concurring or otherwise) of
INTERNEURON, its officers, agents, representative, or employees, or any person
or entity not subject to TULANE'S supervision or control.

ARTICLE XIV

GENERAL

         14.1 TULANE will be free to publish the results of any research related
to INVENTIONS and use any information for purposes of research, teaching, and
other educationally-related matters under the following conditions: In order to
avoid loss of PATENT RIGHTS as a result of premature disclosure of patentable
information, TULANE shall submit any prepublication or predisclosure material in
the FIELD to INTERNEURON for review at least thirty (30) days prior to planned
submission for publication or disclosure. INTERNEURON shall have the right to
request alterations or revisions, and such request shall not be unreasonably
withheld. INTERNEURON shall notify TULANE within such thirty (30) days whether
it desires to file patent applications on any inventions contained in the
material and in such case, TULANE shall proceed to file a patent application in
due course at the expense of INTERNEURON. INTERNEURON may request a delay in
submission for publication, but in no event shall such delay exceed an
additional sixty (60) days. If the proposed materials contain confidential
information of INTERNEURON, TULANE shall, at INTERNEURON'S request, delete said
confidential information from the intended publication.

         14.2 If there is any dispute between INTERNEURON and TULANE arising
under this Agreement, the parties shall first attempt initially to solve all
claims, disputes, or controversies by conducting good faith negotiations. If the
Parties are unable to settle the matter between themselves,


                                      -23-

<PAGE>   24



the matter shall thereafter be resolved by an appropriate alternative dispute
resolution mechanism, including mediation, arbitration, or otherwise. In the
event the parties cannot agree on an appropriate alternative dispute mechanism,
the dispute shall be settled by binding arbitration in accordance with the rules
of the American Arbitration Association (AAA). Whenever a Party shall decide to
institute arbitration proceedings, it shall give written notice to that effect
to the other Party. The Party giving such notice shall refrain from instituting
the arbitration proceedings for a period of sixty (60) days following such
notice. During such period, the Parties shall continue to make good faith
efforts to amicably resolve the dispute without arbitration. The arbitration
shall be conducted in Louisiana or, if requested by INTERNEURON and if
INTERNEURON agrees to pay the related out-of-pocket expenses of TULANE to attend
such arbitration, Delaware, by a panel of three arbitrators: one arbitrator
shall be appointed by each of INTERNEURON and TULANE and the third shall be
appointed by the American Arbitration Association and each shall have
demonstrable experience in, or knowledge of, the drug development and
registration process in one or more of the MAJOR MARKETS. The decision of the
arbitrators shall be final and binding on the parties with respect to the
subject matter thereof, and judgment upon the award rendered by the arbitrators
may be entered in any court with competent jurisdiction. In no event shall a
demand for arbitration be made after the date when institution of a legal or
equitable proceeding based on such claim, dispute or other matter in question
would be barred by the applicable statute of limitations. Each party shall bear
its own costs and expenses incurred in connection with any arbitration
proceeding, and the parties share equally the costs of the arbitration levied by
the AAA.

         14.3 This Agreement constitutes the complete agreement between the
parties with regard to the PATENT RIGHTS. No agreements altering or
supplementing the terms hereof may be made except by means of a written document
signed by the duly authorized representative of the parties.

         14.4 INTERNEURON agrees not to use the names of TULANE or any member of
its staff in sales promotions or advertising or in any other form of publicity
without the written permission of TULANE, except in accordance with Article III,
which permission shall not be unreasonably withheld and shall be given promptly.

         14.5 Headings included herein are for convenience only and shall not be
used to construe this Agreement.


                                      -24-

<PAGE>   25



         14.6 Failure of either party to enforce a right under this Agreement
shall not act as a waiver of that right or the ability to later assert that
right relative to the particular situation involved.

         14.7 This Agreement shall be construed and enforced in accordance with
the laws of the United States of America and of the State of Delaware without
regard to Delaware's internal conflict of law principles.

         14.8 If any provision of this Agreement shall be found to be void,
invalid or unenforceable, the same shall be reformed to comply with applicable
law or stricken if not so conformable, so as not to affect the validity of
enforceability of this Agreement. The parties shall replace the invalid, illegal
or unenforceable provision(s) with valid, legal and enforceable provision(s)
which, insofar as practical, implement the purposes of this Agreement.

         14.9 INTERNEURON shall comply in all material respects with all laws,
governmental regulations, and standards applicable to the manufacture,
distribution, sale, promotion, and use of all LICENSED PRODUCT.

         14.10 To the extent required by applicable law, INTERNEURON shall mark
all LICENSED PRODUCT or their containers in accordance with the applicable
patent marking laws.

         14.11 INTERNEURON agrees to register this Agreement with any foreign
governmental agency which requires such registration, and INTERNEURON shall pay
all costs and legal fees in connection therewith.

         14.12 TULANE agrees to report to INTERNEURON as soon as possible any
information received from any source concerning any major unexpected side
effect, adverse reaction or injury and any substantial increase in the number of
unexpected side effects, adverse reactions or injuries associated with the use
and marketing of LICENSED PRODUCT, whether or not determined to be attributable
thereto. INTERNEURON agrees to report to TULANE similar information as set forth
in the preceding sentence at such time as such information is, and to the extent
required to be, submitted to the FDA.

         14.13 To the extent required by applicable United States laws, if at
all, INTERNEURON agrees that LICENSED PRODUCT will be manufactured in the United
States, or its territories, subject to such waivers as may be required or
obtained, if at all, from the United States Government.



                                      -25-

<PAGE>   26



ARTICLE XV

NOTICES

         15.1 All notices, disclosures, and all other communications hereunder
shall be in writing and shall be deemed to be duly given if delivered
personally, sent by facsimile (and promptly confirmed by personal delivery,
registered or certified mail or overnight courier), or delivered by courier
service or mailed by registered or certified mail prepaid and return receipt
requested) addressed as follows:

         (a)  If to INTERNEURON:

                  Interneuron Pharmaceuticals, Inc.
                  99 Hayden Avenue
                  Lexington, MA  02173
                  Attn:  Glenn L. Cooper, M.D., President
                         and Chief Executive Officer
                  Fax No.: (781) 862-3859


         (b)  If to TULANE:

                  John C. LaRosa, Chancellor
                  Tulane University Medical Center
                  1430 Tulane Avenue SL 76
                  New Orleans, Louisiana 70112
                  Attn:  Office of Technology Development




                                      -26-

<PAGE>   27



IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.

INTERNEURON PHARMACEUTICALS, INC.:

By:         /s/  Mark Butler
    ---------------------------------
Mark Butler, Executive Vice President
  and Chief Administrative Officer

Date:        April 29, 1998
    ---------------------------------

THE ADMINISTRATORS OF THE TULANE EDUCATIONAL FUND:

By:        /s/ John  C. LaRosa
    ---------------------------------
John C. LaRosa, Chancellor
Tulane University Medical Center

Date:        April 29, 1998
    ---------------------------------


Agreed and Acknowledged By:



       /s/ Akira Arimura
    ---------------------------------
Akira Arimura, M.D., Ph.D.


                                      -27-

<PAGE>   28



                                  SCHEDULE 1.2


Patent License Agreement by and between the Administrators of the Tulane
Educational Fund and Peninsula Laboratories effective July 7, l992 concerning
Pituitary Adenylate Cyclase Activating Polypeptide (PACAP) for use as a reagent
for scientific research.

Patent License Agreement by and between the Administrators of the Tulane
Educational Fund and American Peptide Company effective December 1, l991
concerning Pituitary Adenylate Cyclase Activating Polypeptide (PACAP) for use as
a reagent for scientific research.

Patent License Agreement by and between the Administrators of the Tulane
Educational Fund and Bachem California effective August 1, l992 concerning
Pituitary Adenylate Cyclase Activating Polypeptide (PACAP) for use as a reagent
for scientific research.

Patent License Agreement by and between the Administrators of the Tulane
Educational Fund and Peptide Institute, Inc. effective July 7, l992 concerning
Pituitary Adenylate Cyclase Activating Polypeptide (PACAP) for use as a reagent
for scientific research.



                                      -28-

<PAGE>   29



                                SCHEDULE 1.14(A)


Pituitary Adenylate Cyclase Activating Polypeptide (PACAP) Patents owned solely
by the Administrators of the Tulane Educational Fund


U.S. Patent #5,128,242 entitled "Novel Hypothalamic Polypeptides with Adenylate
Cyclase Stimulating Activity", filed 6/19/89. Issued 7/7/92

Canadian patent application - #CA 2,018,714 filed 6/11/90 entitled"Novel
Hypothalamic Polypeptides with Adenylate Cyclase Stimulating Activity"

Japanese patent application - #2-158,895 filed 6/19/90 entitled "Novel
Hypothalamic Polypeptides with Adenylate Cyclase Stimulating Activity"

Japanese filing - 08-510838, National Stage of PCT/US94/10752 entitled "Method
and Pharmaceutical Composition for Prevention and Treatment of Brain Damage".

U.S. Serial #08/809,500 entitled "Method and Pharmaceutical Composition for
Prevention and Treatment of Brain Damage", National Stage of PCT/US95/12057,
which was a continuation of PCT/US94/10753.




                                      -29-

<PAGE>   30


                                SCHEDULE 1.14(B)


Pituitary Adenylate Cyclase Activating Polypeptide (PACAP) patents invented
jointly with Takeda Chemical Industries, Ltd. These patents will become part of
the Patent Rights, contingent upon co-assignment by Takeda Chemical Industries
Ltd. to the Administrators of the Tulane Educational Fund, which assignments
have not been finalized on the effective date of this License.

U.S. Patent #5,198,542 entitled "DNA Encoding a Pituitary Adenylate Cyclase
Activating Protein and Use Thereof"

U.S. Patent #5,326,860 entitled "Pituitary Adenylate Cyclase Activating Protein
Precursor"

U.S. Patent #5,521,069 entitled "Genomic DNA Exons Having Exons Encoding Human
Pituitary Adenylate Cyclase Activity Peptide With 38 Amino Acids Residues
(PACAP38) And A Promoter Thereof"

European patent application # 96114503.4- entitled "Polypeptide Having c-AMP
Producing Activity for the Prevention of Neuronal Cell Death". Published
application EP-0768090-A2.



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