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                                                                   EXHIBIT 10.18


                       Dated the 31st day of August, 2000


                                PHARMAPRINT INC.


                                       AND


                        KINGSWAY PHARMAPRINT ASIA LIMITED


                       LICENCE AND DISTRIBUTION AGREEMENT


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THIS LICENCE AND DISTRIBUTION AGREEMENT IS MADE THE 31ST DAY OF AUGUST, 2000.

BETWEEN

(1)     PHARMAPRINT INC, a company incorporated under the laws of Delaware,
        United States of America and having its registered office at 4701 Von
        Karman Avenue, Suite 201, Newport Beach, CA 92660, U.S.A. ("Party A");
        and

(2)     KINGSWAY PHARMAPRINT ASIA LIMITED, a company incorporated under the laws
        of the British Virgin Islands and whose registered office is situate at
        P.O. Box 957 Offshore Incorporations Center, Road Town, Tortola, British
        Virgin Islands ("Party B").


WHEREAS:

(A)     Party A is a company that develops, manufactures and markets dietary
        supplements, functional foods and pharmaceuticals derived from natural
        plant extracts. Party A is the proprietary owner of the PharmaPrint(TM)
        Process technology. The PharmaPrint(TM) Process technology enables the
        precise identification and consistent replication of the active
        ingredients from the natural plant extracts that are scientifically
        believed to provide the desired health benefits.

(B)     Party A has entered into a joint venture shareholders' agreement with
        Capital Alert Investments Limited, a company incorporated under the laws
        of the British Virgin Islands on August 31, 2000 for the formation and
        operation of Party B.

(C)     Party A has agreed to grant to Party B a licence for the manufacturing,
        marketing and distribution of the Product in the Asia Pacific Region as
        set forth herein.


NOW IT IS AGREED between the parties as follows:

1.      DEFINITIONS

1.1     In this Agreement, unless the context otherwise requires, the following
        expressions shall have the following meanings:

        "Asia Pacific Region" are countries within Asia Pacific, including but
        not limited to, Hong Kong, The People's Republic of China, North and
        South Korea, Japan, Singapore, Taiwan, Macau, Indonesia, Malaysia,
        Thailand, Vietnam, The Philippines, India, Pakistan, Brunei, Bangladesh,
        Sri Lanka, Papua New Guinea and Myanmar, Australia and New Zealand.

        "Know-How" means Party A's information and manufacturing directions,
        drawings, processing information, standards and specifications as to the
        materials to be used, control methods and test data necessary to
        manufacture Products.


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        "Patented Technology" means the PharmaPrint(TM) Process technology
        itemized on Schedule 1.1 hereto including the modifications and updates
        developed by Party A and its Related Company and as further modified
        pursuant to clause 16.1. Schedule 1.1 may be amended from time to time
        as Party A applies for or is issued additional patents.

        "Product" means the dietary supplements, functional foods and
        pharmaceuticals derived from natural plant extracts produced by Party B
        or any sublicensee, contractor or other third party using the Patented
        Technology.

        "Related Company" in respect of a company means its Subsidiary, its
        Holding Company or another company within the same Group of Companies as
        the first mentioned company (as those terms are defined in Section 2 of
        the Companies Ordinance (cap. 32)).

        "Services" means the provision of access rights, maintenance and usage
        of the Patented Technology to third parties, and training programs.

1.2     In this Agreement, unless the context otherwise requires, words
        importing a gender shall include every gender and words importing the
        singular shall include the plural and vice versa.

1.3     Headings in this Agreement are inserted for convenience only and shall
        be ignored in construing this Agreement.

2.      LICENCE AND DISTRIBUTION AGREEMENT

        2.1 Party A hereby assigns, transfers and sets over to Party B all
        right, title and interest to all patents, registrations and/or
        applications filed by Party A or its agent in any jurisdiction in the
        Asia Pacific Region as set forth on Schedule 1.1 (the "Asia Patents").
        Party A hereby grants Party B a non-exclusive (subject to Section 9),
        perpetual, royalty- free (except pursuant to Section 5) and fully-paid
        license (i) to use, modify, reproduce, display, make, deploy and
        otherwise exploit the Patented Technology, Know-How and the associated
        intellectual property rights therein in the manufacturing of the
        Products, and (ii) to sublicense any of the foregoing rights pursuant to
        Section 14 in any jurisdiction in the Asia Pacific Region (collectively,
        the "Technology License"), each during the term of this Agreement. Party
        A hereby grants Party B an exclusive, perpetual, royalty-free (except
        pursuant to Section 5) and fully-paid license (i) to use the Licensed
        Marks (as defined in Section 10.2) in the Asia Pacific Region and (ii)
        to sublicense any of the foregoing rights pursuant to Section 14 in any
        jurisdiction in the Asia Pacific Region (collectively, the "Trademark
        License"), each during the term of this Agreement. Party A hereby grants
        to Party B an exclusive and perpetual right and license to market,
        promote and distribute ("the Distribution Right") the Product in the
        Asia Pacific Region on the terms and conditions set out below during the
        term of this Agreement. Notwithstanding the foregoing, the Technology
        License, Trademark License and Distribution Right granted in this
        Section 2 (collectively, the "Licenses") shall not include the right to
        pharmaceutical discovery or development of any Product which


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        would require U.S. Food and Drug Administration approval or any similar
        U.S. government approval process prior to their sale. Party B hereby
        grants to Party A a perpetual, royalty free non-exclusive and fully paid
        license to use, modify, reproduce, display, make, deploy and otherwise
        exploit the Asia Patents and to sublicense any of the foregoing rights
        subject to the limits provided for herein, including, without
        limitation, such rights that are granted exclusively to Party B.

3.      PRODUCTS AND SERVICES

3.1     The Licences shall include the right to manufacture, market, promote and
        distribute the Product manufactured by using the Patented Technology in
        the Asia Pacific Region and the right to sublicense the Patented
        Technology and Know-How for the manufacture, marketing, promotion and
        distribution of Products in the Asia Pacific Region.

3.2     For the avoidance of doubt, Party B shall have the unfettered right
        subject to the terms and conditions hereof to lay down the terms and
        conditions for the use of the Patented Technology and Services by
        customers and charge such fees and conditions as Party B may think fit.

4.      CUSTOMIZATION AND LAUNCHING OF SERVICE

4.1     Party B shall have the right to test the Product, by itself or a
        qualified person, before the Launch Date to verify that the Product
        complies with the legal requirements and standards in the Asia Pacific
        Region.

4.2     Party A and Party B shall discuss from time to time the standard of the
        Product and seek ways to improve and upgrade the Product.

4.3     Party A shall use reasonable efforts to make all improvements,
        modifications, enhancements and updates to the Patented Technology and
        Know-How as Party A reasonably considers necessary, but Party B shall
        bear and pay all cost for the customization of such improvements,
        modifications, enhancements and updates for the Asia Pacific Region
        requested by Party B. Party A shall provide an estimated cost prior to
        the customization.

4.4     Party A shall provide operating manuals and training to the extent such
        exist (including update manuals and training) and technical support
        services to Party B and its staff in a timely manner. Party B shall
        reimburse Party A for its reasonable costs and expenses associated with
        providing such training and services, including, without limitation, the
        per diem salary costs of Party A employees providing requested training
        and support services and the reasonable expenses for necessary travel.

5.      ROYALTY

        In consideration of the granting of the Licences, Party B agrees to pay
        a royalty of 5% of the gross sales of Products and 5% of any other
        revenues generated directly or indirectly


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        from the Patented Technology or Know-How, less reasonable provisions for
        bad debts computed in accordance with international accounting standards
        or those generally accepted in Hong Kong and agreed between the parties.
        The royalty is payable to Party A within 30 days after the end of each
        calendar quarter (i.e. no later than April 30, July 30, October 30 and
        January 30).

6.      NAME OF THE PRODUCTS AND SERVICES

        The Product shall be launched under "PharmaPrint" or in such other
        manner as mutually agreed between the parties.

7.      PROMOTION

        Party B will promote the Product in Hong Kong and other countries or
        cities within the Asia Pacific Region as Party B shall deem appropriate
        and as governed by this Agreement.

8.      CUSTOMIZATION FOR OTHER ASIAN MARKETS

        If requested by Party B, Party A shall customize the Product, within a
        time table and costs mutually agreeable to both parties, for other
        countries or cities within the Asia Pacific Region in manner as
        requested by Party B so as to make the Product suitable for market and
        distribution in such countries or cities. Party B shall have the same
        right to promote, market and use all such technology and know-how in the
        same manner as set out above.

9.      EXCLUSIVE AND PERPETUAL RIGHT

9.1     Party B shall have the perpetual, non-exclusive right to use the
        Patented Technology and Know-How to manufacture the Product during the
        term hereof and the exclusive and perpetual right and license to market
        and distribute the Product within the Asia Pacific Region during the
        term hereof as provided in Section 2 hereof.

9.2     Subject to the proviso in Section 2 hereof, Party A shall not, and shall
        not permit any other person except Party B during the license period to:

        (a)     license in connection with the sale or distribution of Product,
                the Patented Technology and Know-How or similar technology and
                know-how to any person or company within the Asia Pacific
                Region, or

        (b)     license in connection with the sale or distribution of Product,
                any person or company to use the Patented Technology and
                Know-How or any similar technology and know-how developed by
                Party A or its Related Companies in the Asia Pacific Region, or


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        (c)     license in connection with the sale or distribution of Product,
                any person or company to use the Patented Technology and
                Know-How or any similar technology and know-how developed by
                Party A or its Related Companies in a way as to compete with
                Party B's business in the Asia Pacific Region, or

        (d)     market and distribute the Product or similar products in the
                Asia Pacific Region utilizing the Patented Technology and
                Know-How or any similar technology and know-how in a way as to
                compete with Party B's business or license any third party to do
                any of the same.

9.3     Notwithstanding the foregoing, in the event that any third party (a
        "Manufacturing Licensee") will obtain a license to the Patented
        Technology, Know-How or similar technology from Party A or its Related
        Companies for the manufacture of the Products in the Asia Pacific
        Region:

        (a)     Party A shall provide to Party B prompt written notice of
                negotiations with a potential Manufacturing Licensee prior to
                the date that Party A and such Manufacturing Licensee enter into
                a definitive agreement(s);

        (b)     The shares of such Manufacturing Licensee's capital stock must
                be listed on the New York Stock Exchange or on the Nasdaq
                National Market; and

        (c)     Any definitive agreement between Party A and a Manufacturing
                Licensee shall include a provision whereby the Manufacturing
                Licensee acknowledges (i) that it has no rights to distribute
                Products in the Asia Pacific Region and (ii) that Party B has
                the exclusive right to distribute Products in the Asia Pacific
                Region.

9.4     Notwithstanding the foregoing, a Manufacturing Licensee may enter into
        subcontracts with entities which do not comply with the requirements
        contained in Clause 9.3(b) in connection with any such manufacturing
        license for the manufacture of the Products in the Asia Pacific Region.


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10.     USE OF PARTY A'S TRADEMARKS AND LOGOS

10.1    Party A has the right to use, adopt, incorporate, show and display the
        name of Party A and all trade marks, service marks, business names and
        all marks, signs and logos of Party A and its affiliates, including all
        names, marks, signs and logos which may in the future be used or adopted
        by Party A and its affiliates for or in connection with the Products or
        the Services or the promotion or marketing thereof.

10.2    Party B shall during the term hereof have the right to use, adopt,
        incorporate, show and display the name of Party A, service marks,
        business names and all marks, signs and logos of Party A as exhibited in
        Schedule 10.2 and future service marks, business names and all marks,
        signs and logos of Party A from time to time ("the Licensed Mark") for
        and in connection with the Product and the manufacture, promotion and
        marketing thereof.

10.3    Party B must not modify or alter the Licensed Mark without the prior
        written consent of Party A, which consent shall not be withheld
        unreasonably where such modification or alteration solely relates to the
        use of the logo in any particular country or city in the Asia Pacific
        Region in which the Services are provided.

10.4    If any Licensed Mark is modified or altered under clause 10.3, the
        property in that mark shall be the property of Party B and Party A must
        assign to Party B all intellectual property rights arising out of the
        modification or alteration.

11.     QUALITY STANDARDS

11.1    Party A shall establish reasonable quality standards for the Products
        and Services provided under the Licensed Marks for the purpose of
        protecting the Licensed Marks as provided herein.

11.2    Party B agrees to adopt the quality standards established by Party A
        pursuant to Clause 11.1 for the Products and Services provided under the
        Licensed Marks as the minimum standard of quality for the Products and
        Services.

11.3    Party B shall have the right to create and distribute promotional and
        marketing literature and materials for the Products and Services using
        the Licensed Marks and materials and content provided by Party A. Party
        A shall have the right to control the quality of all promotional and
        marketing literature and materials bearing the Licensed Marks and Party
        B's use of the Licensed Marks.

11.4    Party A shall use reasonable efforts to promptly inform Party B of all
        of their marketing initiatives and advertising campaigns that would be
        reasonably likely to significantly affect the Asia Pacific Region for
        the Products and Services. Upon request by Party B, Party A shall
        provide copies of their advertising and promotional materials to assist
        Party B in the development of its own such materials for the Asia
        Pacific Region.


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11.5    Party A shall as soon as reasonably practicable include an appropriate
        reference approved by Party B on its internet home page (as well as
        certain of its advertising and promotional materials as determined in
        Party A's sole discretion) that the Products and Services in relation to
        the Asia Pacific Region are being granted and will be available to
        customers through Party B.

12.     REPRESENTATIONS AND WARRANTIES

12.1    Party A warrants and represents to Party B that:

        (a)     it is a corporation duly organized, validly existing and in good
                standing under the laws of the State of Delaware and it has the
                corporate power and is authorized under its Certificate of
                Incorporation and its Bylaws to carry on its business as now,
                and as proposed to be, conducted;

        (b)     it has performed all corporate actions and received all
                corporate authorizations necessary to execute and deliver this
                Agreement and to perform its obligations hereunder;

        (c)     this Agreement has been validly executed and delivered by it and
                constitutes the valid, binding and enforceable obligations of it
                in accordance with its terms;

        (d)     it has and shall maintain the power and authority and all
                material governmental licenses, authorizations, consents and
                approvals to be obtained within the United States to own its
                assets, carry on its business and to execute, deliver, and
                perform its obligations under this Agreement;

        (e)     except as set forth on Schedule 12 hereto, there are no (A)
                non-governmental third parties and (B) governmental or
                regulatory entities in the United States who are entitled to any
                notice of the transaction, licenses and services contemplated
                hereunder or whose consent is required to be obtained by Party A
                for the consummation of the transaction contemplated hereunder;

        (f)     except as set forth on Schedule 12 hereto, it is the sole and
                rightful owner of all right, title and interest in and to the
                Patented Technology and the Licensed Marks and all related
                intellectual property rights therein or holds adequate licenses
                or otherwise holds all rights necessary to use the Patented
                Technology and the Licensed Marks and all related intellectual
                property rights therein free and clear of all liens, claims and
                encumbrances, and it has the unrestricted right to market,
                license and exploit the Patented Technology and the Licensed
                Marks and all related intellectual property rights therein and
                such marketing, licensing and exploitation of the Patented
                Technology and the Licensed Marks and all related intellectual
                property rights therein will in no way constitute an
                infringement or other violation of any patent, copyright, trade
                secret, or trademark or other third party rights;


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        (g)     except as set forth on Schedule 12 hereto, no claims have been
                made in respect of the Patented Technology or Licensed Marks and
                any related intellectual property rights therein and no demands
                of any third party have been made pertaining to them, and no
                proceedings have been instituted or are pending or, to the best
                of its knowledge, threatened that challenge the rights of Party
                A in respect thereof; and

        (h)     All services by Party A to Party B will be provided in a
                professional, diligent and timely manner using staff
                knowledgeable and suitably qualified for the performance of the
                respective tasks for which they are responsible and Party A will
                use reasonable efforts to ensure that the quality and
                reliability of such services are no less favorable to Party B
                than the equivalent services provided by Party A it for its own
                purposes.

12.2    Party B warrants and represents to Party A that:

        (a)     it is a company duly organized, validly existing and in good
                standing under the laws of the jurisdiction of its formation;
                and it has the corporate power and is authorized under its
                Articles and Memorandum of Association to carry on its business
                as now, and as proposed to be, conducted;

        (b)     it has performed all corporate actions and received all
                corporate authorizations necessary to execute and deliver this
                Agreement and to perform its obligations hereunder;

        (c)     this Agreement has been validly executed and delivered by it and
                constitutes the valid, binding and enforceable obligations of it
                in accordance with its terms;

        (d)     it has and shall maintain the power and authority and all
                material governmental licenses, authorizations, consents and
                approvals to be obtained in Hong Kong, as necessary, to own its
                assets, carry on its business and to execute, deliver, and
                perform its obligations under this Agreement;

        (e)     it is in compliance with all requirements of any Hong Kong, or
                to the best of its knowledge, any other law (statutory or
                common), treaty, rule or regulation or determination of an
                arbitrator or of a governmental authority, in each case
                applicable to or binding upon it or any of its property or to
                which any of its business related to the Products is subject,
                except where failure to be in compliance could not reasonably be
                expected to have a material adverse change in, or a material
                adverse effect upon, the operations, business, properties or
                condition (financial or otherwise) of Party B taken as a whole
                (subject to obtaining any special governmental licenses required
                in any particular jurisdiction to manufacture, market, promote
                and/or distribute the Products);

        (f)     there are no (A) non-governmental third parties or (B)
                governmental or regulatory entities in Hong Kong who are
                entitled to any notice of the transactions


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                contemplated hereunder or whose consent is required to be
                obtained by Party B for the consummation of the transaction
                contemplated hereunder; and

        (g)     it has the staff, capacity, skill and experience to market and
                promote the Service and Products in the Asia Pacific Region.

13.     INDEMNIFICATION

13.1    Party A shall defend, indemnify and hold harmless Party B, its Related
        Companies and any sublicensees and any of their respective officers,
        directors, agents and employees (each a "Party B Indemnified Party")
        from and against any damages, liabilities, losses, claims, demands,
        judgments, suits, costs and expenses, including but not limited to
        reasonable attorneys' fees, if any, suffered or incurred by a Party B
        Indemnified Party as a result of any breach of any warranty or
        representation given by Party A hereunder, provided that (i) Party A is
        promptly notified of any and all threats, claims and proceedings related
        thereto, (ii) Party A shall have sole control of the defense and/or
        settlement of any claim or proceeding, except that Party A may not enter
        into such settlement without Party B's prior written consent thereto,
        which shall not be unreasonably withheld, (iii) Party B furnishes to
        Party A, upon request, information available to Party B for such
        defense, and (iv) Party B provides Party A with reasonable assistance at
        Party A's expense.

13.2    Party B shall defend, indemnify and hold harmless Party A and its
        Related Companies and any of their respective officers, directors,
        agents and employees (each a "Party A Indemnified Party") from and
        against any damages, liabilities, losses, claims, demands, judgments,
        suits, costs and expenses, including but not limited to reasonable
        attorneys' fees, if any, suffered or incurred by a Party A Indemnified
        Party as a result of any breach of any warranty or representation given
        by Party B hereunder.

14.     RIGHT TO SUB-LICENSE

14.1    Party B shall have the exclusive right to sub-license the Patented
        Technology, KnowHow, Services and Licensed Marks to other persons or
        companies as necessary or required to distribute Products in the Asia
        Pacific Region. In addition, Party B shall have the exclusive right to
        sub-license the Distribution Right of Products to persons or other
        companies in the Asia Pacific Region only.

14.2    Any sub-licence granted by Party B:

        (a)     must expressly acknowledge and bind the sub-licensee to observe
                and preserve the rights of Party A granted under this Agreement;
                and

        (b)     must terminate immediately if this Agreement terminates for any
                reason whatsoever.


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        (c)     Party B will ensure that the sub-licensee follows the quality
                standards set by Party A as per clause 11.1. Party B will
                include a clause in its sub-license agreement that specifies
                compulsory quality compliance as part of the agreement for the
                sub-license.

15.     PARTY B'S RIGHT OF FIRST REFUSAL

        Party A agrees to negotiate in good faith a license agreement with Party
        B, prior to negotiating with any third party, for any and all new
        technology and know-how developed by Party A or its Related Company or
        its joint ventures, its partnerships or similar entities which are not
        directly related to or derivative of the Patented Technology and which
        does not constitute an update or modification to the Patented Technology
        (the "New Technology") for use in the Asia Pacific Region during the
        term of this Agreement, provided that no third party or partner of Party
        A that has ownership rights or a license to such New Technology (as a
        result of its support of the development of such New Technology) objects
        to such negotiations.

16.     INTELLECTUAL PROPERTY

16.1    To effect the physical transfer and/or operational availability of the
        Patented Technology by Party A to Party B, Party A shall provide to
        Party B, as soon as reasonably practicable after the Effective Date (and
        with respect to any modifications or updates, as soon as reasonably
        practical but no later than such modifications or updates are delivered
        to Party A's other customers or partners (joint venture or otherwise)),
        the Patented Technology in tangible form (including but not limited to
        those items described in Schedule 1.1). Party A agrees to undertake and
        provide services related to the Patented Technology and Services
        pursuant to this Agreement and as further mutually agreed to by the
        parties. Party A agrees to cooperate and, at the Party B's expense,
        assist in the filing of all patent applications in the Asia Pacific
        Region, assign existing patents and patent applications in the Asia
        Pacific Region, and take such other action for the protection of its
        rights in any jurisdiction within the Asia Pacific Region as reasonably
        requested by Party B; and, upon the completion of such registration,
        such rights shall be deemed to be Patented Technology hereunder. Any
        modifications or updates to the Patented Technology developed by Party B
        shall be owned solely by Party B. Party B agrees to negotiate in good
        faith a license agreement with Party A for any such modifications and
        updates.

16.2    Except as set forth in clause 16.1, the ownership of the Patented
        Technology and its modifications and updates shall remain with Party A.

16.3    If the Patented Technology contains any intellectual property belonging
        to third parties, Party A will notify Party B in writing of such third
        parties rights.

16.4    Party B will promptly notify Party A of any infringement of Party A's
        rights in or to the Patented Technology, Product and the Licensed Marks
        as soon as Party B is aware of such infringement. Party B agrees
        promptly to take such commercially reasonable steps and actions to
        protect and enforce Party A's right in or to the Patented Technology,


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        Product and the Licensed Marks on the condition that Party A agrees to
        pay and indemnify Party B against all costs and liabilities that may be
        incurred by Party B.

17.     CONFIDENTIALITY

17.1    "Confidential Information" means the confidential information of a party
        which relates to the subject matter of this Agreement and includes
        information relating to:

        (a)     the design, specification and content of the Patented
                Technology, the Product and the Services;

        (b)     the personnel, policies or business strategies of Party A and
                Party B; and

        (c)     the terms on which the Patented Technology and Product are being
                supplied and installed under this Agreement;

        all of which information is deemed proprietary.

17.2    A party must not, without the prior written approval of the other party,
        disclose the other party's Confidential Information.

17.3    It is not a breach of section 17 for a party to disclose Confidential
        Information which it is obliged by law to disclose to the person to whom
        it is disclosed or to the general public, if necessary or disclosure of
        Confidential Information in the ordinary course of a party's business
        provided such Confidential Information is not proprietary.

17.4    Each party must take all reasonable steps to ensure that its employees
        and agents, and any sub-contractors engaged for the purposes of this
        Agreement, do not make public or disclose the other party's Confidential
        Information.

17.5    Each party may at any time require the other party's employees, agents
        or sub-contractors engaged in the performance of this Agreement to
        execute a suitable confidentiality deed.

17.6    Each party must on demand return to each other any documents supplied by
        each other in connection with this Agreement.

17.7    Despite any other provision of this clause 17, each party may disclose
        the terms of this Agreement (other than Confidential Information of a
        technical nature) to its Related Company, solicitors, auditors, insurers
        or accountants, but must ensure that every person to whom that
        disclosure is made uses that information solely for the purposes of
        advising or reporting to such party.

17.8    This clause 17 survives the termination of this Agreement.

18.     MUTUAL EXCLUSIVITY


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        Each party agrees that they will not during the term of this Agreement,
        engage or approach other third parties with a purpose of licensing,
        distributing or providing the same or similar type of Patented
        Technology, in connection with the Product and Services, other than
        under the provisions of this Agreement.

19.     DEFAULT

19.1    Each of the following is an event of default ("Event of Default"):

        (a)     pursuant to the final decision of an arbitrator in accordance
                with clause 24 (if the Defaulting Party objects to the Notice of
                Default);

        (b)     any party fails to carry out any material provision of this
                Agreement and the failure is not capable of remedy or the
                failure is capable of remedy and such party does not remedy that
                failure within 30 days after written notice to the such party
                requiring it to be remedied; notwithstanding the foregoing,
                material breaches of clauses, other than clauses 2, 5, 10, 14
                and 17 by Party B, and other than clauses 2, 3, 4, 8, 9,
                12.1(f), 12.1(g), 14, 16 and 17 by Party A, shall not be Events
                of Default;

        (c)     it becomes unlawful for any party to perform its material
                obligations under clauses 2, 5, 9, 10 or 14 of this Agreement.

19.2    After an Event of Default occurs in relation to any party, the other
        party may, without prejudice to its other rights and remedies, terminate
        this Agreement by giving notice in writing to the defaulting party;
        provided, however, that if the Defaulting Party objects to such notice
        within 14 days, this agreement may be terminated only upon the final
        decision of an arbitrator in accordance with clause 24.

19.3    On termination of this Agreement under this clause 19.2 each party
        retains the rights it had against the other party in respect of any past
        breach, in addition to any other rights, powers or remedies provided by
        law.

19.4    In case an Event of Default occurs in relation to any party (the
        "Defaulting Party"), the Defaulting Party must on demand pay to the
        other party all of the expenses incurred by such other party in
        connection with the breach or default including the giving of a notice
        under clause 19.2 and otherwise in connection with the termination of
        this Agreement.

20.     TERMINATION

20.1    Notwithstanding the foregoing, Party A shall have the right to terminate
        this Agreement on thirty (30) days prior written notice if (i) the
        dollar amounts received by Party A under Section 5 hereof in any year,
        beginning in Party B's second accounting year, are less than US$50,000
        or (ii) if for any six month period beginning on that date which is six
        months after the date hereof Party B is either not actively
        manufacturing or marketing or distributing Products. Notwithstanding the
        foregoing, in the event that the dollar amounts


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        received by Party A under Section 5 hereof (i) in the aggregate during
        the first five years of this Agreement are less than US$500,000 or (ii)
        in any year, beginning in year six hereunder, are less than US$100,000,
        then the licenses granted hereunder shall become in all respects
        non-exclusive.

20.2    If, at any time during the term of this Agreement, Party A: (a) files a
        voluntary petition in bankruptcy under Chapter 7 or 11 of the United
        States Bankruptcy Code (the "Bankruptcy Code"); or (b) has an
        involuntary petition in bankruptcy filed against it under Chapter 7 of
        the Bankruptcy Code, which petition is not dismissed within ninety (90)
        days (each a "Party A Bankruptcy"), Party B may elect to retain its
        right in the licenses granted in this Agreement, subject to the terms of
        this Agreement, in accordance with Chapter 3, Section 365(n) of the
        Bankruptcy Code. The licenses granted in this Agreement will be deemed
        licenses of "intellectual property" under Section 365(n) of the
        Bankruptcy Code. In addition, in the event of a Party A Bankruptcy, the
        parties agree that such proceeding shall not affect the terms or
        validity of this Agreement.

20.3    Upon termination of this Agreement for any reason other than pursuant to
        clause 19.1(b) by reason of a material breach by Party A or by reason of
        Party A Bankruptcy, Party B shall automatically and without the parties
        having to take any action, assign, transfer and set over to Party A all
        right, title and interest to the Asian Patents. Party B shall agree to
        execute any and all instruments and documents reasonably requested by
        Party A to evidence such assignment. Party B will not, without Party A's
        prior written consent, transfer any interest in the Asian Patents other
        than the sublicenses contemplated hereunder

21.     LEGAL COSTS

        Each party shall bear and pay its own legal costs relating to the
        Licence and Distribution Agreement which inure after the date hereof.


22.     SEVERABILITY

        If any provision of this Agreement is held illegal, invalid or
        unenforceable by a court of competent jurisdiction or the parties
        otherwise mutually agree that a provision is or becomes illegal or
        invalid, that provision will be limited or eliminated to the minimum
        extent necessary so that this Agreement shall otherwise remain in full
        force and effect and enforceable.

23.     LAWS

        This Agreement shall be governed and interpreted in accordance with the
        laws of Hong Kong Special Administrative Region ("Hong Kong") of the
        People's Republic of China without regard to conflicts of law provisions
        thereof and without regard to the United Nations Convention on Contracts
        for the International Sale of Goods.

24.     ARBITRATION


<PAGE>   15

        The parties agree to submit all disputes arising out of the Licence and
        Distribution Agreement to arbitration in Hong Kong in accordance with
        the Model Law on International Commercial Arbitration adopted by the
        United Nations Commission on International Trade Law.

25.     NOTICES

        Any notice required or permitted to be given hereunder shall be in
        writing and shall be (a) personally delivered, (b) transmitted by
        internationally recognized air courier service, or (c) transmitted by
        facsimile, in each case to the parties as follows, as elected by the
        party giving such notice, to the other parties at the addresses set
        forth on the first page of this Agreement or as amended by notice
        pursuant to this subsection. Except as otherwise specified herein, all
        notices and other communications shall be deemed to have been duly given
        on (i) the date of receipt if delivered personally, (ii) three (3)
        Business Days after delivery to the courier, or (iii) the next Business
        Day in the jurisdiction of the recipient following the date of
        transmission with electronic confirmation if transmitted by facsimile,
        whichever shall first occur. Any party may change its address for
        purposes hereof by notice to the other parties. All notices and other
        communications shall be in the English language.

26.     ENTIRE AGREEMENT

        This Agreement, and all Attachments, schedules and exhibits hereto,
        supersedes all proposals, oral or written, all negotiations,
        conversations, or discussions between or among the parties relating to
        the subject matter of this Agreement and all past dealing or industry
        custom.

27.     COUNTERPARTS

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

        IN WITNESS WHEREOF the parties have duly executed this Agreement the day
and year first above written.

                                      PHARMAPRINT INC.


                                      By:
                                          -----------------------------------
                                          Steven A. Bowman
                                          Its: Chief Executive Officer


                                      KINGSWAY PHARMAPRINT
                                      ASIA LIMITED


<PAGE>   16

                                      By:
                                         -----------------------------------
                                                      Its:


<PAGE>   17

                                  SCHEDULE 1.1
                               PATENTED TECHNOLOGY

AUSTRALIA

<TABLE>
<CAPTION>
TITLE                                      FILING DATE  SERIAL NO.        STATUS
-----                                      -----------  ----------        ------
<S>                                        <C>          <C>               <C>
Pharmaceutical Grade Botanical Drugs       04/15/97     28131/97          Issued
Pharmaceutical Grade Echinacea             10/23/98     13634/99          Pending
Pharmaceutical Grade Ginkgo Biloba         10/23/98     13633/99          Pending
Pharmaceutical Grade Ginseng               10/23/98     11183/99          Pending
Pharmaceutical Grade Saw Palmetto,         10/23/98     13635/99          Pending
Serenoa Repens
Pharmaceutical Grade St. John's Wort       10/23/98     13631/99          Pending
Pharmaceutical Grade Valerian, Black       10/23/98     13632/99          Pending
Cohosh, Vitex Agnus-Castus, Bilberry and
Milk Thistle
</TABLE>

CANADA

<TABLE>
<CAPTION>
TITLE                                      FILING DATE  SERIAL NO.        STATUS
-----                                      -----------  ----------        ------
<S>                                        <C>          <C>               <C>
Pharmaceutical Grade Botanical Drugs       04/15/97     2252426           Pending
Pharmaceutical Grade Echinacea             10/23/98     2307614           Pending
Pharmaceutical Grade Garlic                10/23/98     2306812           Pending
Pharmaceutical Grade Ginkgo Biloba         10/23/98     2307194           Pending
Pharmaceutical Grade Ginseng               10/23/98     2307047           Pending
Pharmaceutical Grade Saw Palmetto,         10/23/98     2307602           Pending
Serenoa Repens
Pharmaceutical Grade St. John's Wort       10/23/98     2306818           Pending
Pharmaceutical Grade Valerian, Black       10/23/98     2307399           Pending
Cohosh, Vitex Agnus-Castus, Bilberry and
Milk Thistle
</TABLE>

CHINA

<TABLE>
<CAPTION>
TITLE                                      FILING DATE  SERIAL NO.        STATUS
-----                                      -----------  ----------        ------
<S>                                        <C>          <C>               <C>
Pharmaceutical Grade Botanical Drugs       04/15/97     97195565.4         Published
Pharmaceutical Grade Ginkgo Biloba         10/23/98     PCT/US98/22506     Pending
Pharmaceutical Grade Ginseng               10/23/98     N/A                Pending
</TABLE>

EUROPEAN PATENT CONVENT

<TABLE>
<CAPTION>
TITLE                                      FILING DATE  SERIAL NO.        STATUS
-----                                      -----------  ----------        ------
<S>                                        <C>          <C>               <C>
</TABLE>


<PAGE>   18

<TABLE>
<CAPTION>
                                           DATE
                                           ----
<S>                                        <C>          <C>                <C>
Mistletoe Extract and Method               04/13/96     96912546.7         Pending
Pharmaceutical Grade Botanical Drugs       04/15/97     97922474.8         Pending
Pharmaceutical Grade Echinacea             10/23/98     98957358.9         Published
Pharmaceutical Grade Ginkgo Biloba         10/23/98     98957357.1         Published
Pharmaceutical Grade Saw Palmetto,         10/23/98     N/A                Pending
Serenoa Repens
Pharmaceutical Grade St. John's Wort       10/23/98     98957355.5         Pending
</TABLE>

HONG KONG

<TABLE>
<CAPTION>
TITLE                                      FILING DATE  SERIAL NO.        STATUS
-----                                      -----------  ----------        ------
<S>                                        <C>          <C>               <C>
Pharmaceutical Grade Botanical Drugs       04/15/97     N/A                Pending
</TABLE>

JAPAN

<TABLE>
<CAPTION>
TITLE                                      FILING DATE  SERIAL NO.        STATUS
-----                                      -----------  ----------        ------
<S>                                        <C>          <C>               <C>
Mistletoe Extract and Method               04/3/96      08-531053         Pending
Pharmaceutical Grade Botanical Drugs       04/15/97     09-537454         Pending
Pharmaceutical Grade Ginkgo Biloba         10/23/98     2000-516688       Pending
Pharmaceutical Grade Ginseng               10/23/98     2000-516689       Pending
</TABLE>

MEXICO

<TABLE>
<CAPTION>
TITLE                                      FILING DATE  SERIAL NO.        STATUS
-----                                      -----------  ----------        ------
<S>                                        <C>          <C>               <C>
Pharmaceutical Grade Botanical Drugs       04/15/97     988527            Pending
</TABLE>

UNITED STATES

<TABLE>
<CAPTION>
TITLE                                      FILING DATE  SERIAL NO.        STATUS
-----                                      -----------  ----------        ------
<S>                                        <C>          <C>               <C>
Pharmaceutical Preparations Derived from   04/14/95     5,547,674         Issued
European Mistletoe
Pharmaceutical Preparations Derived from   04/14/95     5,565,200         Issued
Korean Mistletoe
Mistletoe Extract and Method               07/14/98     5,780,037         Issued
Pharmaceutical Grade Botanical Drugs       04/15/97     08/838,198        Pending
Pharmaceutical Grade Botanical Drugs       06/2/99      08/632,273        Pending
</TABLE>


<PAGE>   19

<TABLE>
<S>                                        <C>          <C>               <C>
Pharmaceutical Grade Valerian, Black       12/2/99      09/331,831        Pending
Cohosh, Vitex Agnus-Castus, Bilberry and
Milk Thistle
Pharmaceutical Grade Echinacea             06/23/99     09/331,797        Pending
Pharmaceutical Grade Garlic                06/23/99     09/331,824        Pending
Pharmaceutical Grade Ginkgo Biloba         06/23/99     09/331,827        Pending
Pharmaceutical Grade Saw Palmetto          10/23/97     6,039,950         Issued
Pharmaceutical Grade Saw Palmetto          08/20/99     09/378,774        Pending
Pharmaceutical Grade Saw Palmetto          06/23/99     09/331,832        Pending
Pharmaceutical Grade St. John's Wort       10/23/97     08/956,602        Allowed
Pharmaceutical Grade St. John's Wort       09/23/98     09/159,313        Pending
Standardized Functional Food Products      09/20/99     60/154,842        Pending
Pharmaceutical Grade Ginseng               10/22/98     09/177,702        Pending
</TABLE>


<PAGE>   20

                                  SCHEDULE 10.2

                                  LICENSED MARK


        United States:

1.      PharmaPrint: published for opposition.

2.      Three Leaf Logo: pending; office action was issued and has been
        addressed.

3.      PharmaPrint Certified: pending; office action was issued and has been
        addressed.



Canada:

1.      Notice of allowance given for PharmaPrint. Need to demonstrate that this
        mark has been commercially used in Canada to complete the registration.

2.      Notice of allowance given for Three Leaf Logo. Need to demonstrate that
        this mark has been commercially used in Canada to complete the
        registration.


Japan:

1.      Three Leaf Logo: is registered.

                        2.      PharmaPrint: is registered.


<PAGE>   21

                                   SCHEDULE 12

DISCLOSED MATTERS



Clause 12 (e): Consents to Transaction.

None.


Clause 12(f): Claims and Infringements.

None.


Clause 12(g): Claims and Proceedings.

None.