<PAGE>
 
THE SYMBOL "*" IS USED THROUGHOUT THIS EXHIBIT TO INDICATE THAT A PORTION OF THE
EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.

                                   AGREEMENT


          THIS AGREEMENT (the "Agreement") is entered into as of April 16, 1998
(the "Effective Date") by and between Children's Medical Center Corporation
("CMCC") and Neurobiological Technologies, Inc. ("NTI").

          WHEREAS, CMCC, NTI and Merz + Co. GmbH & Co. ("Merz") are concurrently
entering into a License and Cooperation Agreement of even date herewith (the
"License and Cooperation Agreement"); and

          WHEREAS, under the License and Cooperation Agreement, CMCC and NTI
will share certain payments to be made by Merz to CMCC and NTI as a result of
sales of Compound and Products in the Territory (as those terms are defined in
the License and Cooperation Agreement); and

          WHEREAS, CMCC and NTI now wish to set forth their agreements with
respect to how such payments will be shared between them; and

          WHEREAS, CMCC and NTI further wish to memorialize their mutual
agreement to terminate the Exclusive License Agreement between CMCC and NTI
dated September 11, 1995, as amended (the "License Agreement"); and

          WHEREAS, NTI has agreed to issue CMCC two warrants to purchase Common
Stock of NTI at the election of the Board of Trustees of CMCC.

          NOW, THEREFORE, in consideration for mutual promises and covenants
contained herein, the sufficiency of  which is hereby acknowledged, the parties
hereto agree as follows:

          1.  Unless otherwise expressly provided for herein, the defined terms
in this Agreement shall have the same meaning ascribed to them in the License
and Cooperation Agreement.

          2.  With respect to the sharing of Royalty Income between CMCC and NTI
under Section 8.4 and Exhibit C of the License and Cooperation Agreement, CMCC
and NTI agree as follows:

              (a)  [*] percent ([*]%) of the Royalty Income from sales of
Products in 
<PAGE>
 
the Territory for CMCC Indications shall be retained by Merz. CMCC shall receive
[*] percent ([*]%) of the Royalty Income from sales of Products in the Territory
for CMCC Indications (which [*] percent ([*]%) is equal to [*] percent ([*]%) of
the remaining [*] percent ([*]%) of the Royalty Income from sales of Products in
the Territory for CMCC Indications), and NTI shall receive [*] percent ([*]%) of
the Royalty Income from sales of Products in the Territory for CMCC Indications.

              (b)  In those countries listed in Section 5.2 of the License and
Cooperation Agreement, [*] percent ([*]%) of the Royalty Income from sales of
Products in those countries for CMCC Indications shall be retained by Merz.
CMCC shall receive [*] percent ([*]%) of the Royalty Income from sales of
Products in those countries for CMCC Indications (which [*] percent ([*]%) is
equal to [*] percent ([*]%) of the remaining [*] percent ([*]%) of the Royalty
Income from sales of Products in those countries for CMCC Indications), and NTI
shall receive [*] percent ([*]%) of the Royalty Income from sales of Products in
those countries for CMCC Indications.

              (c)  [*] percent ([*]%) of the Royalty Income from sales of
Products in the Territory for Merz Indications shall be retained by Merz. CMCC
shall receive [*] percent ([*]%) of the Royalty Income from sales of Products in
the Territory for Merz Indications (which [*] percent ([*]%) is equal to [*]
percent ([*]%) of the remaining [*] percent ([*]%) of the Royalty Income from
sales of Products in the Territory for Merz Indications), and NTI shall receive
[*] percent ([*]%) of the Royalty Income from sales of Products in the Territory
for Merz Indications.

              (d)  Notwithstanding Section 2(c) above, in those countries where
CMCC has not obtained any patent protection for CMCC Indications, [*] percent
([*]%) of the Royalty Income from sales of Products in those countries for Merz
Indications shall be retained by Merz. CMCC shall receive [*] percent ([*]%) of
the Royalty Income from sales of Products in those countries for Merz
Indications (which [*] percent ([*]%) is equal to [*] percent ([*]%) of the
remaining [*] percent ([*]%) of the Royalty Income from sales of Products in
those countries for Merz Indications), and NTI shall receive [*] percent ([*]%)
of the Royalty Income from sales of Products in those countries for Merz
Indications.

              (e)  If no Marketing Partner develops CMCC Indications, [*]
percent ([*]%) of the Royalty Income from sales of Products in the Territory for
Merz Indications shall be retained by Merz. CMCC shall receive [*] percent
([*]%) of the Royalty Income from sales of Products in the Territory for Merz
Indications (which [*] percent ([*]%) is equal to [*] percent ([*]%) of the
remaining [*] percent ([*]%) of the Royalty Income from sales of Products in the
Territory for Merz Indications), and NTI shall receive [*] percent ([*]%) of the
Royalty Income from sales of Products in the Territory for Merz Indications.

                                       2
<PAGE>
 
              (f)  Notwithstanding Section 2(e) above, if no Marketing Partner
develops CMCC Indications, in those countries where CMCC has not obtained any
patent protection for CMCC Indications, [*] percent ([*]%) of the Royalty Income
from sales of Products in those countries for Merz Indications shall be retained
by Merz.  CMCC shall receive [*] percent ([*]%) of the Royalty Income from sales
of Products in those countries for Merz Indications (which [*] percent ([*]%) is
equal to [*] percent ([*]%) of the remaining [*] percent ([*]%) of the Royalty
Income from sales of Products in those countries for Merz Indications), and NTI
shall receive [*] percent ([*]%) of the Royalty Income from sales of Products in
those countries for Merz Indications.

          3.  With respect to the sharing between CMCC and NTI of all down-
payments, lump-sum payments and milestone payments, other than Royalty Income,
under Section 8.5 of the License and Cooperation Agreement, CMCC and NTI agree
as follows:  [*] percent ([*]%) of each such payment shall be retained by Merz.
CMCC shall receive [*] percent [*] of each such payment (which [*] percent
([*]%) is equal to [*] percent ([*]%) of the remaining [*] percent ([*]%) of
each such payment), and NTI shall receive [*] percent ([*]%) of each such
payment.

          4.  With respect to the sharing between CMCC and NTI of any and all
payments that are to be made by Merz to CMCC and NTI pursuant to Article 9 of
the License and Cooperation Agreement, including payments to be made as a result
of: (a) sales of Compound by Merz or its affiliates to Marketing Partner(s), (b)
sales of finished Products by Merz or its affiliates to Marketing Partner(s), or
(c) sales of finished Products by Merz or its affiliates directly to third
parties other than Marketing Partner(s), CMCC and NTI agree that CMCC shall
receive [*] percent ([*]%) of the total of any such amounts paid by Merz to CMCC
and NTI pursuant to Article 9 of the License and Cooperation Agreement.

          5.  CMCC and NTI agree that immediately upon the execution and
delivery of this Agreement, the License Agreement shall be terminated, be void
and of no force and effect.  CMCC and NTI further agree upon such termination
NTI shall have no obligations remaining to CMCC under the License Agreement.

          6.  For value received, NTI agrees to issue and deliver to CMCC Common
Stock Purchase Warrants in substantially the forms attached hereto as Exhibits
A-1 and A-2 (the "Warrants") upon receipt from CMCC of  written notice that the
Board of Trustees of CMCC has elected to receive the Warrants; provided,
however, that NTI shall have no obligation to issue or deliver the Warrants if
such notice is not received by July 16, 1998; and provided, further, that CMCC's
election not to receive the Warrants shall in no way entitle CMCC to any
additional consideration hereunder.

                                       3
<PAGE>
 
          7.   Neither party is, nor will be deemed to be, an agent or legal
representative of the other party for any purpose.  Neither party will be
entitled to enter into any contracts, incur any debts or make any commitments in
the name of or on behalf of the other party, and neither party will be entitled
to pledge the credit of the other party in any way or hold itself out as having
authority to do so.

          8.   This Agreement will inure to the benefit of and be binding upon
the successors and assigns of CMCC and NTI respectively.

          9.   This Agreement shall be governed and construed in accordance
with the laws of the State of California, as applied to contracts executed and
performed entirely within the State of California, without regard to conflicts
of laws rules.  This Section 8 shall survive the termination or expiration of
this Agreement.

          10.  All notices and other communications hereunder will be in writing
and will be deemed given if delivered personally or by facsimile transmission
(receipt verified), telexed, or sent by express courier service, to the parties
at the addresses provided below  (or at such other address for a party as will
be specified by like notice; provided, that notices of a change or address will
be effective only upon receipt thereof).

          11.  No amendment, modification or supplement of any provision of this
Agreement will be valid or effective unless made in writing and signed by a duly
authorized officer of each party.

          12.  No provision of this Agreement unless such provision otherwise
provides will be waived by any act, omission or knowledge of a party or its
agents or employees except by an instrument in writing expressly waiving such
provision and signed by a duly authorized officer of the waiving party.

          13.  Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.

          14.  Except for the License and Cooperation Agreement, this Agreement
constitutes and contains the complete, final and exclusive understanding and
agreement of the parties and cancels and supersedes any and all prior
negotiations, correspondence, understandings and agreements, whether oral or
written, between the parties respecting the subject matter hereof.

          15.  Each of the parties represents and warrants that it has full
right and authority to enter into this Agreement and to perform its obligations
hereunder.

                                       4
<PAGE>
 
          16.  This Agreement may be executed in one or more counterparts with
the same force and effect as if the parties had signed a single instrument.

          IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, as of the date first written above.


<TABLE> 
<CAPTION> 
<S>                                                     <C> 
          Neurobiological Technologies, Inc.            Children's Medical Center Corp.

          Paul E. Freiman /s/                           William New /s/
          ------------------------------------------    -----------------------------------------

          By:                                           By:

          Paul E. Freiman                               William New
          ------------------------------------------    -----------------------------------------

          Name:                                         Name:

          President & CEO                                       
          ------------------------------------------    ------------------------------------------                   

          Title:                                        Title:

          1387 Marina Way                               VP Research Administration
          -------------------------------------------   ------------------------------------------                   

          Richmond, CA  94804                           Children's Medical Center Corp.
          -------------------------------------------   ------------------------------------------                   

          Address:                                      Address:

          (510) 215-8100                                300 Longwood Avenue, Boston, MA 02115
          -------------------------------------------   ------------------------------------------                   

          Facsimile Number:                             Facsimile Number:

                                                        617 232-7485

</TABLE> 

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