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                    Fujisawa Healthcare Inc.

                      CV Therapeutics, Inc.


               COLLABORATION AND LICENSE AGREEMENT


 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

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                        Table Of Contents


                                                             Page

1.   Definitions                                                1
     1.1  [ * ]                                                 1
     1.2  [ * ]
     1.3  "Affiliate"                                           1
     1.4  "Collaborative Clinical Data"                         1
     1.5  "Collaboration"                                       1
     1.6  "Confidential Information"                            1
     1.7  "Controlled"                                          2
     1.8  "CVT Manufacturing Activities"                        2
     1.9  "CVT Trademarks"                                      2
     1.10 "Designated Patents"                                  2
     1.11 "Development Costs"                                   2
     1.12 "Development Field"                                   2
     1.13 "Development Plan"                                    2
     1.14 "Development Program"                                 2
     1.15 "FDA"                                                 3
     1.16 "FHI Clinical Data"                                   3
     1.17 "FHI Development Technology"                          3
     1.18 "FHI Field"                                           3
     1.19 "FHI Manufacturing Activities"                        3
     1.20 "FHI Trademarks"                                      3
     1.21 "Full Time Employee" or "FTE"                         3
     1.22 "FTE Charges"                                         3
     1.23 "Fujisawa Japan"                                      3
     1.24 "GAAP"                                                3
     1.25 "Improvements"                                        3
     1.26 "IND"                                                 4
     1.27 "Information"                                         4
     1.28 "Lead Compound"                                       4
     1.29 "Licensed Compounds"                                  4
     1.30 "Licensed Know-How"                                   4
     1.31 "Licensed Patents"                                    4
     1.32 "Licensed Product"                                    4
     1.33 "Licensed Technology"                                 4
     1.34 "Management Committee"                                4
     1.35 [ * ]                                                 4
     1.36 "NDA"                                                 4
     1.37 "Net Sales"                                           4
     1.38 "Patent"                                              6
     1.39 "Phase I Clinical Trial"                              6
     1.40 "Phase II Clinical Trial"                             6

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

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     1.41 "Phase III Clinical Trial"                            6
     1.42 "Phase IV Trial"                                      6
     1.43 "Post Approval Regulatory Issues"                     6
     1.44 "Product Trademarks"                                  6
     1.45 "Regulatory Approval"                                 6
     1.46 "Regulatory Authority"                                6
     1.47 "Sublicensee"                                         7
     1.48 "Term"                                                7
     1.49 "Territory"                                           7
     1.50 "Third Party"                                         7
     1.51 "Trademarks"                                          7
     1.52 "Valid Claim"                                         7

2.   Management During Development of Licensed Compounds        7
     2.1  Management Committee.                                 7
     2.2  Limitation of Powers                                  8
     2.3  Liaisons                                              8
     2.4  Meetings.                                             8
     2.5  Decision-Making                                       9
     2.6  Collaboration Guidelines.                             9
     2.7  Termination                                           9
     2.8  Time Included in Development Costs                    9

3.   Development Program                                        9
     3.1  General                                               9
     3.2  Lead Compound                                        10
     3.3  Development Plan; Annual Plans and Budgets.          10
     3.4  Conduct of the Development Program including
          Manufacturing Activities.                            11
     3.5  Diligence.                                           13
     3.6  Disclosure of Information                            13
     3.7  Collaborative Clinical Data and FHI Clinical Data.   13

4.   Commercialization                                         15
     4.1  General                                              15
     4.2  Diligence                                            15
     4.3  Reviews with CVT                                     16
     4.4  Loss of Exclusive Rights.                            16
     4.5  Recognition of CVT                                   17

5.   Compensation                                              17
     5.1  License Fee                                          17
     5.2  Equity                                               17

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

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     5.3  IND Payment                                          17
     5.4  Milestones                                           18
     5.5  Royalties.                                           19
     5.6  Additional Royalties.                                19
     5.7  Payment of Royalties and Other Amounts.              20
     5.8  Third Party Royalties.                               20
     5.9  Withholding of Taxes                                 22
     5.10 Blocked Currency                                     22
     5.11 Non-Monetary Consideration                           22
     5.12 Foreign Exchange                                     22
     5.13 Late Payments                                        23

6.   Records and Publications                                  23
     6.1  Records                                              23
     6.2  Publications                                         23

7.   Regulatory Matters                                        24
     7.1  Regulatory Matters Before Transfer of NDA from CVT
          to FHI.                                              24
     7.2  Regulatory Matters After Transfer of NDA from CVT
          to FHI.                                              25
     7.3  Adverse Events                                       25
     7.4  Licensed Product Recalls, Withdrawals and Safety
          Notifications.                                       26

8.   Licenses                                                  26
     8.1  Licenses To FHI.                                     26
     8.2  Licenses To CVT                                      27
     8.3  Non-Compete                                          27
     8.4  Reservation of Rights                                28
     8.5  Right of First Negotiation for FHI.                  28
     8.6  Right of First Negotiation for CVT.                  29
     8.7  Trademarks.                                          30

9.   Intellectual Property                                     30
     9.1  Ownership.                                           30
     9.2  Patent Matters.                                      31
     9.3  Defense and Settlement of Third Party Claims         32
     9.4  Infringement By Third Parties                        33
     9.5  Settlements                                          33
     9.6  Cooperation                                          33

10.  Confidentiality                                           33
     10.1 Treatment of Confidential Information                33
     10.2 Permitted or Required Disclosures                    34

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

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     10.3 Publicity                                            34
     10.4 Terms of the Agreement                               35
     10.5 Survival of Confidentiality                          35

11.  Representations, Warranties and Covenants                 35
     11.1 Mutual Representations and Warranties                35
     11.2 CVT Representations, Warranties and Covenants        35
     11.3 FHI Representations, Warranties and Covenants        36
     11.4 Disclaimer of Warranty                               36

12.  Term and Termination                                      37
     12.1 Term                                                 37
     12.2 Termination by FHI                                   37
     12.3 Termination by CVT                                   37
     12.4 Termination For Breach.                              37
     12.5 Termination Prior to NDA Submission                  37
     12.6 Effect of Termination                                38
     12.7 Bankruptcy Rights                                    39
     12.8 Survival                                             40

13.  Indemnification and insurance                             40
     13.1 By FHI                                               40
     13.2 By CVT                                               40
     13.3 Notice and Procedures                                41
     13.4 Insurance                                            41
     13.5 Patent Infringement Matters                          41

14.  Dispute Resolution                                        41
     14.1 Disputes                                             41
     14.2 Disputes Under Sections 3.5(a) or 5.3                42
     14.3 Governing Law                                        44
     14.4 Injunctive Relief                                    45
     14.5 No Consequential Damages                             45

15.  Miscellaneous                                             45
     15.1 Entire Agreement; Amendment                          45
     15.2 Force Majeure                                        45
     15.3 Notices                                              45
     15.4 Consents Not Unreasonably Withheld or Delayed        46
     15.5 United States Dollars                                46
     15.6 No Strict Construction                               46
     15.7 Assignment                                           46

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

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     15.8 Performance by Affiliates                            47
     15.9 Counterparts                                         47
     15.10 Further Actions                                     47
     15.11 Severability                                        47
     15.12 Ambiguities                                         47
     15.13 Headings                                            47
     15.14 No Waiver                                           47

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

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               COLLABORATION AND LICENSE AGREEMENT


     This  Collaboration and license Agreement (this "Agreement")
is  entered  into  and made effective as of July  10,  2000  (the
"Effective  Date")  by  and  between  CV  Therapeutics,  Inc.,  a
Delaware  corporation ("CVT"), and Fujisawa Healthcare,  Inc.,  a
Delaware  corporation ("FHI").  CVT and FHI may  be  referred  to
herein  each  individually  as  a  "Party"  or  jointly  as   the
"Parties."

                            Recitals

     Whereas,  CVT  has  developed and owns or  controls  certain
proprietary  technology  relating to the discovery,  development,
manufacture,  use and/or sale of compounds that  may  selectively
stimulate the activity of the adenosine A2A receptor; and

     Whereas, CVT and FHI desire to establish a collaboration  to
identify  and  develop such compounds for use  in  the  field  of
pharmacological  stress testing, and FHI desires  to  acquire  an
exclusive  license to such compounds with the goal of developing,
manufacturing  and commercializing pharmaceutical products  based
on such compounds upon the terms and conditions contained in this
Agreement.

     Now, Therefore, the Parties hereby agree as follows:

1.   Definitions

     1.1  [ * ] means the patented and trademarked form of [ *  ]
indicated for the use of [ * ], including that associated with  [
*  ],  given  on  a [ * ] and supplied in a sterile  solution  in
normal saline.

1.2  [ * ] means the patented and trademarked form of [ * ]
indicated as an adjunct to [ * ] in patients unable to [ * ]
adequately, given as a continuous peripheral intravenous infusion
over a period of [ * ] and supplied as a non-pyrogenic solution
in normal saline.

1.3  "Affiliate"

       means any company or entity controlled by, controlling  or
under common control with a Party.  As used in this Section  1.3,
"control"  means (a) that an entity or company owns, directly  or
indirectly,  fifty percent (50%) or more of the voting  stock  of
another  entity, or (b) that an entity, person or group  has  the
actual  ability  to  control and direct  the  management  of  the
entity, whether by contract or otherwise.

     1.4  "Collaborative Clinical Data"

      shall have the meaning ascribed in Section 3.7(a).

     1.5  "Collaboration"

         means the collaboration to develop Licensed
Compounds that stimulate the activity of the adenosine A2A receptor
pursuant  to the terms and conditions of this Agreement.

     1.6  "Confidential Information"

        shall have the meaning ascribed in Section 10.1.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

     1.7  "Controlled"

       means,  with  respect  to  any  material,  Information  or
intellectual property right, possession of the ability by a Party
to  grant  access, a license, or a sublicense to  such  material,
Information or intellectual property right as provided for herein
without payment to a Third Party.

     1.8  "CVT Manufacturing Activities"

      shall have the meaning ascribed in Section 3.4(a).

     1.9  "CVT Trademarks"

       means  the Trademarks "CVT" and "CV THERAPEUTICS" and  any
other  Trademarks used to specifically identify CVT,  other  than
Product Trademarks.

     1.10 "Designated Patents"

      means the Patents designated on Schedule 1.10.

     1.11 "Development Costs"

        means  the  directly  allocable  out-of-pocket  costs  of
development (but not capital investment costs), plus FTE Charges,
incurred  by  CVT  or FHI in accordance with  Section  3.4(a)  in
conducting  their  respective work under this Agreement  and  the
Development  Program  in accordance with  the  Development  Plan,
including,  without limitation, costs associated with preparation
and  filing of submissions for Regulatory Approvals for  Licensed
Compounds  and/or  Licensed Products. Development  Costs  do  not
include any costs associated with marketing, sales, promotion  or
distribution  of  Licensed  Compounds and/or  Licensed  Products.
With  respect to the manufacture and supply of Licensed Compounds
and/or  Licensed Products, Development Costs shall  only  include
the  directly  allocable  out-of-pocket costs  (but  not  capital
investment  costs),  plus  FTE  Charges,  incurred  by   CVT   in
conducting CVT Manufacturing Activities under Section 3.4(a), and
the  directly  allocable  out-of-pocket costs  (but  not  capital
investment  costs),  plus  FTE  Charges,  incurred  by   FHI   in
conducting FHI Manufacturing Activities under Section 3.4(a), and
in   any  event  shall  not  include  the  costs  to  manufacture
registration  batches run at greater than ten  percent  (10%)  of
commercial scale or the costs of producing any Licensed Compounds
and/or Licensed Products which could be sold commercially. In  no
event  shall such directly allocable out-of-pocket costs  include
any costs which are otherwise included in FTE Charges.

     1.12 "Development Field"

      means the field in which CVT (and/or FHI under the terms of
this  Agreement) shall conduct the Development Program,  relating
to:    (a)  inducement  of  pharmacological  stress  and/or   (b)
vasodilation  of  the coronary vasculature, to  the  extent  that
either  such  stress  or  vasodilation is  induced  strictly  for
purposes of diagnosing cardiovascular disease.

     1.13 "Development Plan"

      means the detailed plan pursuant to which CVT shall conduct
the Development Program, as further described in Section 3.3.

     1.14 "Development Program"

       means  the program of research and development,  including
without  limitation  work  to  obtain  all  necessary  Regulatory
Approvals  to market, promote, distribute, manufacture  and  sell
Licensed  Compounds and/or Licensed Products in  the  Development
Field in the United States, which is to be conducted by CVT  with
respect  to  the  pre-clinical and clinical  development  of  the
Licensed  Compounds and Licensed Products,  and  by  FHI  to  the
extent  provided  in Sections 3.4(a) and 14.2(e)  below,  all  in
accordance  with  the Development Plan and  as  overseen  by  the
Management Committee and otherwise in accordance

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

with the terms and conditions of this Agreement. The Development Program
conducted  by CVT (and/or FHI under the terms of this  Agreement)
will  be  considered completed upon transfer of the  NDA  to  FHI
according to the terms and conditions of this Agreement.

     1.15 "FDA"

       means  the United States Food and Drug Administration  (or
any successor agency thereto).

     1.16 "FHI Clinical Data"

      shall have the meaning ascribed in Section 3.7(a).

     1.17 "FHI Development Technology"

       means any and all: (a) Collaborative Clinical Data in  the
FHI  Field;  (b) FHI Clinical Data in the Development Field;  (c)
Improvements  developed solely by FHI in the  Development  Field;
and  (d)  FHI's  joint  interest  in  any  and  all  Improvements
developed jointly by FHI and CVT in the FHI Field.

     1.18 "FHI Field"

      means any and all applications, uses and indications.

     1.19 "FHI Manufacturing Activities"

      shall have the meaning ascribed in Section 3.4(a).

     1.20 "FHI Trademarks"

       means  the  Trademarks "FHI", "Fujisawa Healthcare,  Inc."
and  "Fujisawa"  and  any other Trademarks used  to  specifically
identify FHI.

     1.21 "Full Time Employee" or "FTE"

       shall mean one or more employees or consultants of CVT  or
FHI who are directly involved in the research and development  of
Licensed  Compounds and/or Licensed Products under this Agreement
and   who   are   necessary  to  carry   out   CVT's   or   FHI's
responsibilities  under  the Development Program,  in  accordance
with Section 3.4(a), with such time and effort to constitute  one
such employee or consultant working the equivalent of a full year
of  effort on a full time basis (equal to 40 hours per week),  or
in  the  case  of  less  than a full-time dedicated  employee  or
consultant,  a  full-time employee or consultant  on  a  pro-rata
basis.

     1.22 "FTE Charges"

       means  during  the  first twelve  (12)  months  after  the
Effective Date the amount of [ * ] per year per FTE with  respect
to  FTEs at the director level and above, and [ * ] per year  per
FTE with respect to FTEs below the director level.  At the end of
the  first twelve (12) months after the Effective Date, and every
twelve  (12)  months  thereafter,  the  amounts  to  be  adjusted
according  to  the change in the San Francisco Bay Area  Consumer
Price Index during that twelve (12) month period.

     1.23 "Fujisawa Japan"

       means FHI's corporate parent, Fujisawa Pharmaceutical Co.,
Ltd., located in Osaka, Japan.

     1.24 "GAAP"

      means generally accepted accounting principles.

     1.25 "Improvements"

      means any and all inventions, enhancements, improvements or
modifications to any of the Licensed Compounds and/or  any of the
Licensed Products created or identified by either Party, or  both
Parties, under this Agreement.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

     1.26 "IND"

      means an investigational new drug application as defined in
21  C.F.R. 312 et seq. for the FDA, or equivalent application  to
the  relevant  regulatory authority of  a  country,  to  commence
clinical  testing of a drug in humans, as defined by the  FDA  or
other relevant Regulatory Authority, as the case may be.

     1.27 "Information"

       means  any and all information, data, know-how, processes,
manufacturing  processes, trade secrets, inventions,  discoveries
(whether   or  not  patentable),  inventions  (whether   or   not
patentable), developments, results, techniques (including without
limitation, manufacturing techniques) and materials.

     1.28 "Lead Compound"

      shall have the meaning ascribed in Section 3.2.

     1.29 "Licensed Compounds"

      means the compounds known as CVT 3146 and [ * ].

     1.30 "Licensed Know-How"

       means any and all Information Controlled by CVT as of  the
Effective Date or during the Term that is necessary or useful for
the  development,  use,  manufacture, registration,  formulation,
marketing,  promotion,  distribution  and/or  sale  of   Licensed
Compounds  and/or any Licensed Product in the FHI  Field  in  the
Territory, including, without limitation, CVT's interest  in  any
and all unpatented Improvements.

     1.31 "Licensed Patents"

       means:  (a)  the Designated Patents; and (b) any  and  all
Patents Controlled by CVT (including any Patents solely owned  by
CVT  and  any Patents jointly owned by CVT and FHI, under Section
9.1)  as  of the Effective Date or anytime during the  Term  that
contain  at  least  one claim that covers the  use,  manufacture,
importation,  exportation, offer for  sale  and/or  sale  in  the
Territory   of  Licensed  Compounds  and/or  Licensed   Products,
intermediates  or  methods  used  in  manufacturing  of  Licensed
Compounds and/or Licensed Products or methods of use of  Licensed
Compounds   and/or   Licensed   Products,   including,    without
limitation, CVT's interest in any and all patented or  patentable
Improvements.

     1.32 "Licensed Product"

       means any product containing or constituting either of the
Licensed  Compounds  in  any  formulation  or  dosage.  "Licensed
Products" shall mean more than one (1) Licensed Product.

     1.33 "Licensed Technology"

      means the Licensed Patents and the Licensed Know-How.

     1.34 "Management Committee"

       means  the committee established by the Parties to oversee
the Collaboration, as further described in Section 2.1.

     1.35 [ * ]

       means [ * ], or its successor in interest and/or assignee,
including  without  limitation [ *  ]  and/or  any  successor  in
interest and/or assignee to [ * ].

     1.36 "NDA"

       means an application for Regulatory Approval by the FDA as
defined in 21 CFR 314 et seq., to commence commercial sale  of  a
Licensed Product in the United States.

     1.37 "Net Sales"

       means, collectively, the gross invoiced sales price of all
Licensed  Products  sold by FHI (or for the purposes  of  Section
3.7(e)  only,  CVT  or  its Affiliates or

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

sublicensees), or its Affiliates or its Sublicensees to Third Party
purchasers after deduction  of the following items whether currently
in effect or which become effective during the Term as they pertain
to the Licensed Products:

          (a)  any and all normal and customary trade and quantity
discounts, customary allowances actually granted to purchasers of
a  Licensed  Product for returns and recalled  Licensed  Product,
chargeback  and  reporting  fees paid to  wholesalers  and  other
distributors,  allowances  to end users  participating  in  trial
support,  capitation, market share or other compliance  incentive
programs,  and  other  credit  adjustments  based  upon  shipping
discrepancies, order errors, etc.  The allowance may  be  in  the
form  of  a  credit, free goods, or cash and offset  against  the
gross invoiced sales at time of issuance;

(b)  Medicaid rebates given pursuant to agreements with U.S.
Department of Health and Human Services and any other rebates
given pursuant to government based rebate programs (including
without limitation state and local rebate programs).  Such
rebates will be offset against gross invoiced sales at the time
of payment;

(c)  normal and customary prompt payment discounts which will be
offset against gross invoiced sales at the time of sale.  Such
prompt payment discount will be specifically calculated only on
those customer classes in which the prompt payment terms are
offered at the discount percentage currently in effect at the
time of sale;

(d)  administrative fees to managed health care organizations
(including but not limited to group purchasing organizations,
HMOs, PBMs, etc.).  Such administrative fees will be offset
against gross invoiced sales at the time of sale in the case of a
direct sale to such organization and in the case of an indirect
sale (i.e., through a wholesaler or distributor), at the time of
receipt of such data.  The administrative fee will be calculated
as the units reported during the period multiplied by the rebate
percentage in effect during the period;

(e)  freight expenses for shipping finished Licensed Product
(including insurance) to such purchasers, which will be
calculated by multiplying units of the Licensed Product sold by a
per unit freight charge calculated based upon total freight and
insurance charges divided by total FHI units sold during the
previous fiscal year.  Such per unit amount will be updated
annually; and

(f)  any excise and value added taxes paid on sales of Licensed
Product in finished package form.

     No  deductions shall be made from Net Sales for  items  (a),
(b),  (d), (e) or (f) above, except to the extent of amounts  for
such  items  actually granted or paid with respect to a  Licensed
Product;  provided that FHI may reconcile such amounts  within  a
given calendar quarter.

     No  deductions shall be made from Net Sales for  commissions
paid  to  individuals  whether they are  with  independent  sales
agencies or are regularly employed by FHI (or for the purposes of
Section  3.7(e)  only,  CVT or its Affiliates  or  sublicensees),
and/or its Affiliates or its Sublicensees and are on its or their
payroll, or for the cost of collections.  Licensed Products shall
be  considered "sold" when billed out or invoiced. Sales  by  FHI
(or  for  the  purposes  of

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

Section  3.7(e)  only,  CVT  or  its
Affiliates or sublicensees), or its Affiliates or Sublicensees of
a  Licensed Product to a Third Party distributor of such Licensed
Product  in  any given country shall be considered a  sale  to  a
Third  Party  purchaser.  Sale or transfer  to  an  Affiliate  or
Sublicensee  for  re-sale by such Affiliate or Sublicensee  shall
not  be considered a sale for the purpose of this provision,  but
the  resale  by  such Affiliate or Sublicensee to a  Third  Party
shall be a sale for such purposes.

     1.38 "Patent"

       means  any and all patents, inventor certificates,  patent
applications  (including provisionals, divisionals, continuations
and   continuations   in   part),  patents   issuing   from   any
applications,    reissues,   reexaminations,    extensions    and
supplemental protection certificates, and all foreign cognates of
the foregoing.

     1.39 "Phase I Clinical Trial"

       means any human clinical trial in normal volunteers and/or
patients  intended to establish that a pharmaceutical product  is
safe  for its intended use, and to support its continued  testing
in a Phase II Clinical Trial.

     1.40 "Phase II Clinical Trial"

       means  any  human clinical trial in patients  intended  to
establish  the safety and biological activity of a pharmaceutical
product  for  its  intended  use, and  designed  to  support  its
continued testing in a Phase III Clinical Trial.

     1.41 "Phase III Clinical Trial"

       means  any  human clinical trial in patients  intended  to
establish  that a pharmaceutical product is safe and  efficacious
for  its  intended  use, and designed to  support  a  filing  for
Regulatory Approval of such pharmaceutical product for  marketing
and sale for such intended use.

     1.42 "Phase IV Trial"

       means  any  trial which is designed to fulfill  any  post-
approval commitments made to the FDA in the United States  or  to
any  other  Regulatory  Authority in any  other  country  in  the
Territory for a Licensed Product.

     1.43 "Post Approval Regulatory Issues"

       means those issues which are discussed with the FDA or any
other  Regulatory  Authority in the Territory that  primarily  or
exclusively  relate  to post-approval marketing  or  clinical  or
safety monitoring of Licensed Product such as any Phase IV  Trial
of a Licensed Product or the wording of any package insert and/or
labeling  for  a  Licensed Product or any post  marketing  safety
surveillance or spontaneous adverse event reports.

     1.44 "Product Trademarks"

       means all Trademarks which pertain to promotion, marketing
or sale of Licensed Products but excluding all CVT Trademarks and
all FHI Trademarks.

     1.45 "Regulatory Approval"

       means  any  approvals (including pricing and reimbursement
approvals),  licenses,  registrations or  authorizations  of  any
Regulatory Authority necessary for the manufacture, distribution,
use or sale of Licensed Compounds and/or Licensed Products in the
applicable jurisdiction in the Territory.

     1.46 "Regulatory Authority"

       means  any  national, supra-national, regional,  state  or
local  regulatory agency, department, bureau, commission, council
or   other  governmental  entity,

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 ACT OF 1934, AS AMENDED.

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with jurisdiction over the manufacture, distribution, use or sale of
Licensed Compounds or a Licensed Product in the applicable jurisdiction
in the Territory.

     1.47 "Sublicensee"

      shall have the meaning ascribed in Section 8.1(a).

     1.48 "Term"

      shall have the meaning ascribed in Section 12.1.

     1.49 "Territory"

        means   the   United  States  and  its  territories   and
possessions, Canada and Mexico.

     1.50 "Third Party"

       means  any Party other than CVT or FHI or their respective
Affiliates.

     1.51 "Trademarks"

      means all trademarks, service marks, trade names and logos,
whether registered or not, and all applications therefor, and all
goodwill associated therewith.

     1.52 "Valid Claim"

       means  a claim of an issued and unexpired Patent that  (a)
has not been revoked, declared unenforceable or unpatentable,  or
held invalid by a court or other governmental agency of competent
jurisdiction that is unappealable or unappealed within  the  time
allowed  for appeal,  (b) has not been admitted to be or rendered
invalid   or   unenforceable  through  reissue,   disclaimer   or
otherwise,  and  (c)  has not been finally cancelled,  withdrawn,
abandoned  or  rejected by any governmental agency  of  competent
jurisdiction.

2.   Management During Development of Licensed Compounds

     2.1  Management Committee.

          (a)  Formation.  Within ten (10) days after the Effective Date,
CVT and FHI shall establish the Management Committee, which shall
oversee,  review and coordinate the development of  the  Licensed
Compounds  and  Licensed Products in the  Development  Field  for
Regulatory  Approval in the United States under  the  Development
Program, under the terms and conditions of this Agreement.

(b)  Purpose and Principles.  The general purposes of the
Management Committee shall be (i) to determine the overall
Development Program, (ii) to coordinate the development
activities hereunder, and (iii) to approve plans and budgets for
the development of a  Licensed Product in the Development Field
for Regulatory Approval in the United States, as set forth more
fully in Article 3, all based on the principles of prompt,
diligent and commercially reasonable development of the Licensed
Product consistent with good pharmaceutical practices.  In
addition to its overall development responsibility, the
Management Committee in particular shall: (1) establish the
strategy for the pre-clinical and clinical development of
Licensed Compounds and Licensed Products in the Development
Field, and Regulatory Approval of Licensed Products in the
Development Field in the United States, together with preparing
the applicable Development Plans and Annual Plans and Budgets (as
defined in Section 3.3); and (2) perform such other functions as
are appropriate to further the purposes of this Agreement as
determined by the Parties.

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 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

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     2.2  Limitation of Powers

     . The Management Committee shall not have the right to amend
or interpret this Agreement.  Issues regarding the interpretation
of  this  Agreement  shall be referred to  the  respective  chief
executive  officers of each Party.  The actions of the Management
Committee  shall  not substitute for either  Party's  ability  to
exercise  any right set forth herein, nor excuse the  performance
of any obligation set forth herein.

     2.3  Liaisons

     .   Each Party will designate an individual to serve as  the
liaison between the Parties to undertake and coordinate any  day-
to-day  communications  as may be required  between  the  Parties
relating  to  their respective activities under  this  Agreement.
Each  Party may change such liaison from time to time during  the
Term upon written notice thereof to the other Party.

     2.4  Meetings.

          (a)  General.  The Management Committee shall hold meetings at
such  times  as  it elects to do so, but in no event  shall  such
meetings  be  held  less  frequently than  three  (3)  times  per
calendar  year.   The  Management  Committee  shall  meet  on  an
alternating basis at CVT's facilities in Palo Alto, CA and  FHI's
facilities  in Deerfield, IL, or at such other locations  as  the
Parties  may  otherwise agree.  Other representatives  of  either
Party  may  attend meetings of the Management Committee  as  non-
voting  participants. With the consent of the representatives  of
each  Party  serving on the Management Committee,  Third  Parties
involved  in  the  Development  Program  or  the  manufacture  or
commercialization of Licensed Compounds and/or Licensed  Products
may  attend  meetings of such Committee as non-voting  observers.
Meetings  of  the  Committee  may  be  held  by  audio  or  video
teleconference with the consent of each Party, provided  that  at
least two (2) meetings per year as set forth above shall be  held
in  person.  Each Party shall be responsible for all of  its  own
out-of-pocket   expenses  of  participating  in  the   Management
Committee.   Meetings  of  the  Management  Committee  shall   be
effective  only  if  a voting representative  of  each  Party  is
present or participating.

(b)  Membership. The Management Committee shall initially have
three (3)-voting representatives of each Party, each of whom
shall be authorized to vote on behalf of his or her respective
Party.  The Management Committee may change its size from time to
time by written agreement of the Parties; provided, however, that
at all times it shall be composed of an equal number of voting
representatives appointed by each of CVT and FHI. Each Party may
replace its Committee voting representatives at any time upon
notice to the other Party; provided, however, that each Party's
voting representatives shall at all times be persons possessing
the appropriate level of skill, experience and familiarity with
the Development Program.

(c)  Chairpersons.  The Management Committee shall be chaired by
a representative of CVT. The chairperson shall be responsible for
calling meetings, preparing and circulating an agenda in advance
of each meeting, and preparing and issuing minutes of each
meeting within thirty (30) days thereafter. Any such agenda and
minutes shall be approved by the other Party in advance of any
issuance. From time to time, the Management Committee may
establish subcommittees or subordinate committees (which may or
may not include members of the Management Committee itself) to
oversee particular projects or activities, and such

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 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
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subcommittees or subordinate committees shall be constituted and shall
operate as the Management Committee agrees.

     2.5  Decision-Making

     .   The  Management Committee shall attempt  to  operate  by
consensus, with each Party's voting representatives to present  a
unified  position on each issue.  The Management Committee  shall
attempt  in  good  faith  to resolve any disagreement  among  the
voting  representatives of the Management Committee in  light  of
the   principles  set  forth  in  this  Article  2.   Should  the
Management  Committee be unable to reach consensus on  an  issue,
however,  CVT shall have the right to cast the tie-breaking  vote
(subject to the terms of Sections 3.4(a), 6.2 and 14.2 below).

     2.6  Collaboration Guidelines.

          (a)  General.  In all matters related to the Collaboration, the
Parties  shall strive to balance as best they can the  legitimate
interests and concerns of the Parties and to realize the economic
potential of Licensed Compounds and Licensed Products.

(b)  Independence.  Subject to the terms of this Agreement, the
activities and resources of each Party shall be managed by such
Party, acting independently and in its individual capacity.  The
relationship between CVT and FHI is that of independent
contractors and neither Party shall have the power to bind or
obligate the other Party in any manner, other than as is
expressly set forth in this Agreement.

     2.7  Termination

     . Notwithstanding anything to the contrary contained herein,
the  Management  Committee shall disband and terminate  upon  the
transfer  of the NDA for the first Licensed Product from  CVT  to
FHI  in  accordance with Section 7.1(a) below; provided, however,
that  FHI  will provide semi-annual reports to CVT in  accordance
with Section 4.3.

     2.8  Time Included in Development Costs

     .  Time spent by CVT representatives attending and preparing
for meetings of the Management Committee shall be included in the
Development Costs and charged to FHI pursuant to Section  3.4(b).
Time  spent  by  FHI representatives attending and preparing  for
meetings  of  the Management Committee shall also be included  in
the  Development  Costs and shall be charged to CVT  pursuant  to
Section 3.4(c).

3.   Development Program

     3.1  General

     .   The Management Committee shall coordinate and facilitate
development of Licensed Compounds and Licensed Products in  order
to   obtain  Regulatory  Approvals  and  commercialize   Licensed
Products   in  the  U.S.  as  expeditiously  as  is  commercially
reasonable.   The Management Committee shall prepare and  approve
the  Development  Program, the Development Plan  and  the  Annual
Plans  and  Budgets as described in Section 3.3  and  direct  the
clinical   development  and  regulatory  program   for   Licensed
Compounds and Licensed Products.  Subject to Sections 3.4(a)  and
14.2(e)  below, and except as set forth in such plans and budgets
approved  by the Management Committee, or as otherwise agreed  to
by  the Management Committee (under Section 3.4(a) or otherwise),
the Development Program will be implemented by CVT.

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 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

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     3.2  Lead Compound

     .   The  Parties acknowledge and agree that CVT 3146 is  the
lead  development candidate ("Lead Compound").  CVT  may  replace
the  Lead  Compound  with [ * ] at any time during  the  Term  by
providing  FHI with forty five (45) days written notice  thereof,
which  notice  shall include the reason(s) for  making  any  such
replacement.  Upon FHI's receipt of such notice, FHI  shall  have
forty  five (45) days in which to notify CVT that: (a) CVT should
proceed with the development of [ * ] as the Lead Compound  under
the  terms  and  conditions of this Agreement; or  (b)  FHI  will
terminate  this  Agreement under Section  12.2  below;  provided,
however, that if FHI has not provided any written notice  by  the
end  of such forty five (45)-day period, FHI automatically  shall
be deemed to have elected clause (a).  If such notice from FHI to
CVT  indicates  that  FHI desires for CVT  to  proceed  with  the
development  of  [  *  ]  as  the Lead Compound,  the  Management
Committee   will  then  promptly  and  expeditiously  prepare   a
Development Program and Annual Plan and Budget for  [  *  ].  FHI
shall not be responsible for any Development Costs other than for
pre-clinical studies after the Effective Date in connection  with
[  * ], until the date that FHI notifies CVT that it accepts (or,
as set forth above, is deemed to have accepted) development of  [
*  ]  as the new Lead Compound. The Parties acknowledge and agree
that  while  CVT  3146 is the Lead Compound, CVT  shall  have  no
responsibility to conduct in parallel development activities with
respect  to  [  *  ]  other than pre-clinical studies  after  the
Effective Date, unless the parties otherwise mutually agree. Once
CVT  has  replaced CVT 3146 with [ * ] as the Lead Compound,  FHI
shall be free to develop CVT 3146 in the FHI Field at FHI's  sole
cost and expense.

     3.3  Development Plan; Annual Plans and Budgets.

          (a)  Development for Regulatory Approval in the United States.
The  development of the Licensed Compounds and Licensed  Products
in  the  Development Field for Regulatory Approval in the  United
States  shall  be  governed by a comprehensive  development  plan
("Development Plan") and a detailed and specific plan and  budget
for  all  development  proposed for the  Licensed  Compounds  and
Licensed  Products for each calendar year and  by  each  clinical
phase of development during the Development Program ("Annual Plan
and   Budget").   The  Development  Plan  will  be  the   planned
development program for Licensed Compounds and Licensed  Products
designed  to  generate the pre-clinical, clinical and  regulatory
information required for filing NDAs in the U.S. Each Annual Plan
and  Budget shall be consistent with the Development Plan as then
in  effect.   An  initial Development Plan and  Annual  Plan  and
Budget  for  activities through Phase I Trial(s)  for  the  first
Licensed  Compound is set forth as Schedule 3.3 to this Agreement
and  has  been  approved  by  both Parties.  Promptly  after  the
Effective  Date,  the  Management Committee  shall  complete  and
approve a detailed Development Plan and an Annual Plan and Budget
covering  the  remainder of calendar year 2000 and calendar  year
2001.   The  Development Plan and Annual Plan  and  Budget  shall
include commercially reasonable timelines in order to achieve the
prompt  and  diligent  development  of  Licensed  Compounds   and
Licensed   Products.   Periodically  thereafter,  the  Management
Committee   shall  assign  responsibilities  for   updating   the
Development  Plan and preparing the Annual Plan  and  Budgets  on
such  schedule and with such process as the Management  Committee
shall  determine.  The  Management  Committee  shall  review  and
approve the Annual Plan and Budget on a timely basis.

(b)  Development in the Territory Outside the U.S.  The Parties
acknowledge and agree that the development of Licensed Compounds
and Licensed Products in

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 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
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the Territory outside of the U.S. shall
be determined by FHI in its sole discretion, subject to the
remainder of this Section 3.3(b).  If FHI determines that it
would like to develop Licensed Compounds and/or Licensed Products
outside the U.S. prior to the transfer of the NDA from CVT in
accordance with 7.1(a) below, then FHI will coordinate such
development with CVT and such development will be managed by the
Management Committee under the terms and conditions of this
Agreement; provided, however, that FHI shall not conduct any
clinical studies of Licensed Compounds or Licensed Products prior
to the transfer of the NDA to FHI under Section 7.1(a) below
without obtaining CVT's prior written consent.  FHI will be
responsible at its sole expense for filing, obtaining and
maintaining any and all Regulatory Approvals for Licensed
Compounds and Licensed Products in the Territory outside the U.S.
FHI shall be responsible for any Development Costs for
development of Licensed Compounds and Licensed Products in the
Territory outside of the U.S.

(c)  Development Outside the Development Field in the Territory.
The Parties acknowledge and agree that the development of
Licensed Compounds and Licensed Products outside of the
Development Field in the Territory shall be determined by FHI in
its sole discretion. FHI shall be responsible for any Development
Costs for development of Licensed Compounds and Licensed Products
outside of the Development Field.

     3.4  Conduct of the Development Program including Manufacturing
Activities.

          (a)  CVT shall manage all pre-clinical and clinical development
of  Licensed  Compounds and Licensed Products in the  Development
Field  in  the  U.S. and all "CVT Manufacturing  Activities"  (as
defined below) under the oversight of the Management Committee as
provided  in  Section 2.1 and in accordance with the  Development
Program,  Development Plan, Annual Plan and Budget and the  terms
of  this  Agreement.   FHI  shall manage all  "FHI  Manufacturing
Activities"  (as  defined  below)  under  the  oversight  of  the
Management Committee as provided in Section 2.1 and in accordance
with  the Development Program, Development Plan, Annual Plan  and
Budget  and  the  terms  of this Agreement.   Specifically,  with
respect to each Party's respective Manufacturing Activities under
this  Agreement, the Parties will coordinate and  cooperate  with
each other as reasonably requested.  Notwithstanding anything  to
the  contrary  contained in this Agreement, and  subject  to  the
budget provisions of Section 3.4(c), FHI Manufacturing Activities
shall be within the sole control and discretion of FHI; provided,
however, that FHI will provide status reports at the meetings  of
the  Management  Committee  and  cooperate  with  the  Management
Committee.   CVT  will coordinate with FHI  from  and  after  the
Effective  Date  with  respect to CVT  Manufacturing  Activities.
Consistent  with  the  other terms of this  Section  3.4(a),  the
Management  Committee  shall determine the timeline(s)  for  each
Party's  respective Manufacturing Activities that will reasonably
allow  each  Party to meet its respective obligations under  this
Agreement,   including,  without  limitation,   the   timing   of
transition from CVT Manufacturing Activities to FHI Manufacturing
Activities  and  the timing of commencement of FHI  Manufacturing
Activities   hereunder.  As  used  herein,   "CVT   Manufacturing
Activities"   shall   mean  CVT's  activities   in   identifying,
selecting,  qualifying and entering into definitive  agreement(s)
with  Third  Party(ies)  to  manufacture  clinical  supplies   of
Licensed  Compounds  and  Licensed Products  and  to  supply  raw
materials  and  components  for  clinical  supplies  of  Licensed
Compounds   and   Licensed  Products.   As  used   herein,   "FHI
Manufacturing   Activities"  shall  mean  FHI's  activities,   in
accordance  with  the  timeline(s)  and

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 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
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transition  plan  to  be
determined by the Management Committee as provided above, to: (i)
identify,   select,   qualify  and  enter   into   a   definitive
agreement(s)  with  Third  Party(ies)  to  contract   manufacture
commercial  supplies of Licensed Compounds and Licensed  Products
and  to  supply  raw  materials  and  components  for  commercial
supplies of Licensed Compounds and Licensed Products; and (ii) to
conduct  process  development and scale  up  work  to  develop  a
commercial  process  for the manufacture and supply  of  Licensed
Compounds  and Licensed Products, including, without  limitation,
related  analytical  and  stability work.   In  addition  to  FHI
Manufacturing   Activities,  FHI  shall  undertake   such   other
development  activities as may be determined  by  the  Management
Committee  and set forth in the Development Plan,  and  shall  be
entitled to elect to assume development as (but only as) provided
in Section 14.2(e).

(b)  FHI shall reimburse CVT for seventy-five percent (75%) of
CVT's Development Costs incurred after the Effective Date with
respect to CVT's activities under Section 3.4(a) above, including
CVT Manufacturing Activities, provided that CVT's Development
Costs are in accordance with the applicable Annual Plan and
Budget.  CVT shall invoice FHI for such CVT Development Costs on
a quarterly basis, within thirty (30) days after the end of each
calendar quarter, and such invoices shall be accompanied by the
appropriate documentation, including a comprehensive summary of
FTE time, costs and listing of expenditures, and such completed
and acceptable reports as may be required under the Development
Plan and otherwise meeting the requirements of the applicable
Annual Plan and Budget. FHI shall pay all such invoices within
forty-five (45) days after the end of each such calendar quarter.

(c)  CVT shall reimburse FHI for twenty-five percent (25%) of
FHI's Development Costs incurred after the Effective Date with
respect to FHI's activities (if any) under Section 3.4(a) above,
including FHI Manufacturing Activities, provided that FHI's
Development Costs are in accordance with the applicable Annual
Plan and Budget; provided however, that if FHI elects to assume
development under Section 14.2(e), in such event CVT shall
reimburse FHI for twenty five percent (25%) of FHI's Development
Costs, up to a maximum of twenty-five percent (25%) of CVT's
Development Costs for the last Annual Plan and Budget approved in
good faith under which CVT was conducting the development
activities under this Agreement.  FHI shall invoice CVT for such
FHI Development Costs on a quarterly basis, within thirty (30)
days after the end of each calendar quarter, and such invoices
shall be accompanied by the appropriate documentation, including
a comprehensive summary of FTE time, costs and listing of
expenditures, and such completed and acceptable reports as may be
required under the Development Plan and otherwise meeting the
requirements of the applicable Annual Plan and Budget.  CVT shall
pay all such invoices within forty-five (45) days after the end
of each such calendar quarter.  At FHI's option, but only with
the prior written agreement of CVT, any monies owed by CVT under
this Section 3.4(c) may be deducted from amounts FHI owes to CVT
under Section 3.4(b).  In no event will CVT be responsible for
payment of any Development Costs incurred by FHI after the
transfer of the NDA to FHI pursuant to Section 7.1(a) below.

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 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

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     3.5  Diligence.

          (a)  Each Party shall use commercially reasonable, diligent
efforts  consistent with industry standards to  carry  out  their
respective  responsibilities under this Agreement to develop  and
market  Licensed Products in the Development Field in the  United
States.   In the event one Party in good faith believes that  the
other  Party is in material breach of its obligations under  this
Section  3.5(a)  not caused by the first Party, the  first  Party
shall  promptly notify the other Party of such breach in writing.
In  the event of any such notice hereunder, the other Party shall
have sixty (60) days thereafter to cure such material breach.  In
the  event  the  other Party fails to timely  cure  its  material
breach  within such sixty (60) day period, then either Party  may
submit  the  issue  for binding arbitration  under  Section  14.2
below.

(b)  The Parties will use commercially reasonable diligent
efforts to cooperate with each other in carrying out the
Development Plan and the applicable Annual Plan and Budget under
this Agreement.

     From and after the date of transfer of the NDA for the first
Licensed Product from CVT to FHI under Section 7.1(a) below,  FHI
shall  have the authority in its sole discretion to make any  and
all  decisions relative to all clinical matters and any Phase  IV
Trial,  Post  Approval Regulatory Issues or other  post  approval
research  studies relating to Licensed Compounds and/or  Licensed
Products, and with respect to all such matters CVT shall have  no
responsibility  to  make  any payments that  might  otherwise  be
required under Section 3.4(c) or to perform any activities  under
Section 3.4(a).

     3.6  Disclosure of Information

     .    CVT shall provide FHI with Information relating to  the
Licensed Compounds and/or Licensed Products, as follows:

          (a)  Promptly following the Effective Date (but in no event more
than  thirty (30) days thereafter), CVT shall provide FHI  access
(and upon request for specified items, provide copies to FHI), of
any  and  all  Information  that is in  CVT's  possession  and/or
Control relating specifically to the Licensed Compounds.

(b)  Thereafter, through the Management Committee CVT shall
disclose to FHI any material Information in CVT's possession
and/or Control specifically relating to the Licensed Compounds
and/or Licensed Products and shall provide FHI access to any and
all such Information, whether material or not, as is reasonably
requested by FHI at reasonable times and upon reasonable advance
written notice.

     Nothing   herein   shall   require   CVT   to   breach   any
confidentiality  obligations owed to Third  Parties.   CVT  shall
notify  FHI  of  any  such confidentiality  obligations  and,  if
requested  by  FHI, shall use good faith efforts  to  attempt  to
obtain a waiver of them for the benefit of FHI.

     3.7  Collaborative Clinical Data and FHI Clinical Data.

          (a)  Any and all pre-clinical and clinical data developed for,
related  to and/or relative to the Licensed Compounds and/or  any
Licensed Products and generated by CVT pursuant to this Agreement
is  referred to herein as the "Collaborative Clinical Data".  The

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 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

Collaborative  Clinical Data shall not include any "FHI  Clinical
Data", which means any and all pre-clinical and clinical data (if
any)  developed for, related to and/or relative to  the  Licensed
Compounds  and/or any Licensed Products and generated  solely  by
FHI  pursuant to this Agreement.  All Collaborative Clinical Data
and all FHI Clinical Data will be owned solely by FHI, subject to
the license rights for the benefit of CVT under Section 8.2 below
and the remaining provisions of this Section 3.7.

(b)  CVT shall have the right to disclose the Collaborative
Clinical Data in the FHI Field and/or the FHI Clinical Data in
the Development Field to potential partners for any use outside
the Territory, and to qualified potential financial investors in
CVT, under confidentiality obligations binding the recipients of
such information under terms that are consistent with Article 10,
provided that such partner and/or financial investor could not be
reasonably anticipated to compete with FHI in the Development
Field in the Territory.  In addition, CVT shall have the right to
disclose the Collaborative Clinical Data in the FHI Field and/or
the FHI Clinical Data in the Development Field to Regulatory
Authorities outside the Territory.

(c)  Either Party shall be entitled to use the Collaborative
Clinical Data in the FHI Field and/or the FHI Clinical Data in
the Development Field in scientific publications consistent with
standard industry practice, subject however to the terms of
Section 6.2 hereof.

(d)  CVT shall have the exclusive (except as to FHI) license
(with the right to sublicense) to use the Collaborative Clinical
Data in the FHI Field and/or the FHI Clinical Data in the
Development Field outside of the Territory under the license
granted to CVT under Section 8.2 below, in consideration for
which CVT shall make payment to FHI of the following percentages
of any and all monies, upfront fees, licensing fees, royalties,
milestones and premium on any equity investment and/or discount
on any research and development support and/or loans (but
excluding the fair market value of any research and development
support, loans or other amounts received in connection with the
purchase of equity and the like) received by CVT from a Third
Party sublicensee of CVT under CVT's license rights with respect
to such Collaborative Clinical Data in the FHI Field and FHI
Clinical Data in the Development Field (collectively the "Total
Consideration"), but only if such Third Party sublicensee
includes such Collaborative Clinical Data in the FHI Field and/or
the FHI Clinical Data in the Development Field in a filing
submitted to a Regulatory Authority outside of the Territory
(collectively, the "Third Party-Filed Clinical Data"):

               (i)  [ * ] of the Total Consideration if the Third Party-Filed
Clinical Data includes non-public safety data with respect  to  a
Licensed Compound and/or Licensed Product, but not any non-public
efficacy  data  from any Phase II Clinical Trial  of  a  Licensed
Compound and/or Licensed Product or any Phase III Clinical  Trial
of a Licensed Compound and/or Licensed Product; or

(ii) [ * ] of the Total Consideration if the Third Party-Filed
Clinical Data includes any non-public efficacy data from any
Phase II Clinical Trial of  a Licensed Compound and/or Licensed
Product, but not any non-public efficacy data from any Phase III
Clinical Trial of a Licensed Compound and/or Licensed Product; or

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

(iii)     [ * ] of the Total Consideration if the Third Party-
Filed Clinical Data includes any non-public efficacy data from
any Phase III Clinical Trial of a Licensed Compound and/or
Licensed Product.

          (e)  In the event CVT (rather than a Third Party as provided in
Section  3.7(d) above) includes such Collaborative Clinical  Data
in  the  FHI  Field and/or FHI Clinical Data in  the  Development
Field  in  a  filing  submitted by CVT to a Regulatory  Authority
outside   of  the  Territory  (collectively  "CVT-Filed  Clinical
Data"),  then  in consideration for CVT's license rights  to  use
such  CVT-Filed Clinical Data, CVT shall make payment to  FHI  of
the following percentages of Net Sales of Licensed Products:

               (i)  [ * ] of the Net Sales of Licensed Products by CVT or its
Affiliates  or  sublicensees  if  the  CVT-Filed  Clinical   Data
includes  non-public  safety  data with  respect  to  a  Licensed
Compound and/or Licensed Product, but not any non-public efficacy
data  from  any  Phase II Clinical Trial of a  Licensed  Compound
and/or  Licensed  Product or any Phase III Clinical  Trial  of  a
Licensed Compound and/or Licensed Product; or

(ii) [ * ] of the Net Sales of Licensed Products by CVT or its
Affiliates or sublicensees if the CVT-Filed Clinical Data
includes any non-public efficacy data from any Phase II Clinical
Trial of a Licensed Compound and/or Licensed Product, but not any
non-public efficacy data from any Phase III Clinical Trial of  a
Licensed Compound and/or Licensed Product; or

(iii)     [ * ] of the Net Sales of Licensed Products by CVT or
its Affiliates or sublicensees if the CVT-Filed Clinical Data
includes any non-public efficacy data from any Phase III Clinical
Trial of a Licensed Compound and/or Licensed Product.

     As  used  in  Sections  3.7(d) and  (e),  "non-public"  data
comprising  the Collaborative Clinical Data in the FHI  Field  or
the  FHI Clinical Data in the Development Field shall include any
Information published or otherwise disclosed by CVT in  violation
of  its  confidentiality obligations under Article 10. CVT  shall
promptly notify FHI in the event CVT and/or any Third Party  uses
any such Collaborative Clinical Data and/or FHI Clinical Data  as
provided in Sections 3.7(d) and (e) above.

4.   Commercialization

     4.1  General

     .   Except as otherwise provided in Section 4.4 below,  FHI:
(a)  shall  have  the exclusive right in its sole  discretion  to
commercialize the Licensed Compounds and Licensed Products in the
FHI  Field in the Territory; (b) shall be solely responsible  for
manufacturing,  marketing, promotion, sales and  distribution  of
the Licensed Compounds and each Licensed Product in the FHI Field
in  the Territory; and (c) shall have the sole responsibility and
decision-making authority over all aspects of the  manufacturing,
marketing, promotion, sale and distribution of Licensed Compounds
and Licensed Products in the FHI Field in the Territory.

     4.2  Diligence

     .   FHI  shall,  directly  or  through  its  Affiliates   or
Sublicensees,  use  commercially  reasonable,  diligent   efforts
consistent   with   industry   standards   to   carry   out   its
responsibilities under this Agreement to manufacture (or cause to
be  manufactured), market,

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

promote and sell Licensed Products  in
the Development Field in the United States.  Without limiting the
generality of the foregoing, FHI shall commence commercial  sales
of  each  Licensed Product in the United States for a  particular
indication  within [ * ] after receiving Regulatory  Approval  of
the  NDA  (or  NDA supplement) to market and sell  such  Licensed
Product in the United States for such indication, except  in  the
case  where  commercial  supplies of  the  Licensed  Product  are
unavailable  for  reasons reasonably outside  FHI's  control,  in
which  case  the  [  * ] time period may be extended  on  written
notice  from FHI to CVT (including an explanation of the  reasons
for  such  delay) for up to an additional [ * ].  Notwithstanding
the  foregoing,  however the Parties agree that  FHI's  diligence
obligations  under this Section 4.2 with respect  to  indications
outside of the Development Field and in the Territory outside the
United  States shall not apply unless FHI has determined, in  its
sole  discretion, to proceed under Section 3.3(b) and/or  Section
3.3(c), as the case may be.

     4.3  Reviews with CVT

     .   Subject to Section 4.4(b) below, following NDA  approval
for  the first Licensed Product, FHI shall provide CVT on a semi-
annual basis during the Term (every February 1 and August 1) with
reports  describing all of FHI's material marketing and  clinical
and  regulatory efforts with respect to Licensed Products  during
the  immediately preceding six (6) month period and forecasts and
plans for such efforts for the immediately following twelve  (12)
month  period.  Such  reports will be  provided  by  FHI  to  CVT
commencing  within  ninety (90) days after  the  first  such  NDA
approval,  with  the  next such report  to  be  provided  on  the
February 1 or August 1 deadline next following the initial report
(provided  that if this would result in the second  report  being
provided  within  less than six (6) months, FHI may  deliver  the
second report at the next applicable deadline). The Parties shall
meet once annually to review all such reports.

     4.4  Loss of Exclusive Rights.

          (a)  CVT shall have the right to convert the exclusive licenses
granted  to  FHI  pursuant to Section 8.1 below  to  co-exclusive
licenses to FHI (with co-exclusive licenses to CVT as provided in
Section   8.2  below),  with  such  conversion  to  take   effect
automatically  upon thirty (30) days' prior written  notice  from
CVT  to FHI if either of the following events occurs at any  time
during the Term of this Agreement:

               (i)  FHI's net royalty obligation to Third Parties on its sales
of  [  *  ]  in the U.S. is less than [ * ], provided  that  this
subsection  (i)  shall  not  apply if  FHI's  underlying  license
agreement(s) with all Third Parties with respect to [  *  ]  have
been  terminated, or if [ * ] or its manufacture, use or sale  in
the  U.S.  have  expired, terminated or lapsed or  is  no  longer
covered by a Valid Claim within any Patent in the U.S.; or

(ii) FHI files an NDA for, commercially launches or acquires
rights, in any case to any approved product for use in the
Development Field in the Territory, other than a Licensed Product
or any other product (if any) licensed by FHI from CVT.

     FHI  shall  notify CVT in writing promptly of the occurrence
of any event covered under this Section 4.4(a).

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

          (b)  In the event that FHI's licenses under Section 8.1 below
become co-exclusive with CVT as provided in Section 4.4(a) above,
from  and  after  the  effective date of the conversion  of  such
license  rights:  (i)  FHI's royalty  obligations  to  CVT  under
Section  5.5 below shall be reduced by [ * ]; (ii) FHI's  royalty
obligations  under  Section  5.6  shall  terminate;  (iii)  FHI's
obligations under Sections 4.3 and 8.6 shall terminate; and  (iv)
CVT  shall  no longer have any obligations to FHI under  Sections
3.7(d), 3.7(e) or 8.5 of this Agreement.  In addition, FHI  shall
provide   CVT,  at  CVT's  reasonable  request,  such  reasonable
cooperation   (including   any  information   included   in   FHI
Development  Technology) with respect to the  Licensed  Compounds
and/or Licensed Products or their development, manufacture or use
in  FHI's  possession or Control as may be necessary for  CVT  to
market and sell Licensed Products.

     4.5  Recognition of CVT

     .   CVT  shall receive recognition on all package labels  of
all Licensed Products in the Territory where legally permissible.
If  the  space  required  for such recognition  would  result  in
additional  production costs, FHI shall promptly  notify  CVT  in
writing of such costs, and shall only be required to include such
recognition based on CVT's written agreement to reimburse FHI for
such  additional  costs.  CVT shall receive  recognition  in  all
promotional  materials  for all Licensed Products  where  legally
permissible. The Parties acknowledge and agree that in the  event
CVT  exercises  its  option  under Section  4.4  to  convert  the
exclusive  licenses  granted  to FHI  hereunder  to  co-exclusive
licenses,  then,  at FHI's option, CVT shall  no  longer  receive
recognition on all package labels and/or promotional materials.

5.   Compensation

     5.1  License Fee

     .   On  the  Effective Date, FHI shall pay  to  CVT  a  non-
creditable,  non-refundable license fee of  Two  Million  Dollars
($2,000,000.00).

     5.2  Equity

     .  The Parties have entered into that certain stock purchase
agreement  of even date herewith, a copy of which is attached  as
Schedule  5.2, pursuant to which FHI shall make an investment  of
Four  Million  Dollars ($4,000,000) in return for shares  of  CVT
common  stock as further described in such agreement. Such equity
investment  as  described in accordance with the  terms  of  such
agreement shall be paid to CVT on the Effective Date.

     5.3  IND Payment

     .   On the Effective Date hereof, FHI shall pay to CVT a fee
of   Four  Million  Dollars  ($4,000,000)  in  consideration  for
successfully  filing the IND (the "IND Payment"). Notwithstanding
anything  to  the contrary contained herein, if the IND  (or  any
other  application  outside  the U.S  in  one  of  the  Permitted
Countries,  as  hereinafter defined,  to  permit  human  clinical
testing) for the Lead Compound is not successfully filed prior to
the Effective Date or within [ * ] after the Effective Date, then
CVT  shall within two (2) business days thereafter refund to  FHI
by  wire transfer the IND Payment.  CVT will use its commercially
reasonable diligent efforts consistent with industry standards to
successfully   file   the  IND  (or  such   other   application).
"Permitted Countries" shall mean [ * ].  If subsequently the  IND
or such other application is successfully filed by CVT under this
Agreement, then FHI shall within two (2) business days thereafter
either (a) repay CVT by wire transfer the full amount of the  IND
Payment  or  (b)  terminate  this Agreement  under  Section  12.2
(including  the  notice provision therein), in  which  event  FHI
shall be entitled to keep the IND Payment previously refunded  by
CVT.   Under this Section 5.3, a "successfully filed" IND or such
other  application shall mean

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

that (i) if an IND was  filed  with
the  FDA,  a  period  of thirty (30) days has passed  from  CVT's
receipt  of a notice from the FDA that the FDA has received  such
IND, and during such thirty (30) day period the FDA has not put a
clinical  hold  on  such IND (or did so but CVT has  subsequently
received a notice from the FDA confirming that the clinical  hold
has  been  removed), or (ii) if an application was filed  outside
the  U.S.  in  one  of the Permitted Countries  to  permit  human
clinical  testing,  such application has  been  accepted  by  the
appropriate  Regulatory Authority, or CVT is  otherwise  able  to
commence  human  clinical testing thereunder  as  provided  under
applicable laws and regulations. If within thirty (30) days after
the  expiration  of such twelve (12) month period,  FHI  in  good
faith  believes that CVT is in material breach of its obligations
to file the IND or such other application under this Section 5.3,
either  Party  may initiate arbitration pursuant to Section  14.2
below.

     5.4  Milestones

     .    FHI  shall  make  the  following  non-creditable,  non-
refundable  payments to CVT within five (5) business  days  after
receipt  by  FHI of written notice from CVT of the occurrence  of
each of the corresponding events:

                     Event                    Payment

          Initiation of the first              [ * ]
          Phase II Clinical Trial
          for the first Licensed
          Product under an IND filed
          in the U.S.

          Initiation of the first              [ * ]
          Phase III Clinical Trial
          for the first Licensed
          Product under an IND filed
          in the U.S.

          First submission of an NDA           [ * ]
          for the first Licensed
          Product in the U.S.

          First receipt of approval            [ * ]
          of an NDA for the first
          Licensed Product in the
          U.S.


     If  under the Development Program CVT is able to file an NDA
for  the  first Licensed Product without having had to conduct  a
Phase  II  Clinical Trial, or is able to file  such  NDA  without
having had to conduct a Phase III Clinical Trial, then FHI  shall
pay CVT the milestone payment applicable to such missed event  at
the  time of receipt of approval of the NDA, in addition  to  the
milestone payment payable at the time of such NDA approval.   FHI
shall make each of the foregoing milestone payments no more  than
once, regardless of the number of times a particular milestone is
achieved.    "Initiation" as used in this Section 5.4 shall  mean
the enrollment of the first patient in the study.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

     5.5  Royalties.

          (a)  Subject to Section 4.4(b) above:

               (i)  FHI shall owe and pay to CVT a royalty of [ * ] of Net Sales
of   all  Licensed  Products  by  FHI  and  its  Affiliates   and
Sublicensees in the Territory, subject to clause (ii) below.

(ii) On a country-by-country and Licensed Product-by-Licensed
Product basis, FHI's royalty obligation under clause (i) above
shall be reduced to [ * ] of Net Sales of a Licensed Product by
FHI and its Affiliates and Sublicensees in any country in the
Territory in which such Licensed Product or the manufacture,
sale, promotion, distribution or use thereof would not be covered
by a Valid Claim within the Licensed Patents.

          (b)  FHI's royalty obligations to CVT under Section 5.5(a)(i)
above shall expire, on a country-by-country and Licensed Product-
by-Licensed Product basis, on the later of (i) the expiration  of
the  last-to-expire  of  the  Valid Claims  within  the  Licensed
Patents  that  would (but for the licenses granted to  FHI  under
this Agreement) be infringed by the manufacture, sale, promotion,
distribution  or  use of a Licensed Product in such  country,  or
(ii)  the  tenth  (10th) anniversary of the  date  of  the  first
commercial sale of such Licensed Product in such country by  FHI,
its  Affiliates  or  its  Sublicensees hereunder.  FHI's  royalty
obligations  to CVT under Section 5.5(a)(ii) above shall  expire,
on  a country-by-country and Licensed Product-by-Licensed Product
basis,  on  the  tenth  (10th)  anniversary  date  of  the  first
commercial sale of such Licensed Product in such country by  FHI,
its   Affiliates  or  its  Sublicensees.   Following   any   such
expiration,  the  licenses granted to  FHI  by  CVT  pursuant  to
Section  8.1 below shall terminate with respect to such  Licensed
Product in such country, and CVT automatically shall be deemed to
have granted to FHI a non-exclusive, fully paid-up, royalty-free,
perpetual license under the Licensed Technology to develop,  use,
make,  have  made, import, export, offer for sale and  sell  such
Licensed Product in such country.

     5.6  Additional Royalties.

          (a)  Subject to Section 4.4(b) above, commencing at the start of
the first full calendar quarter which is at least forty-five (45)
days  after  the date on which the FDA approves the NDA  for  the
first  Licensed  Product, and terminating [ * ]  thereafter,  FHI
shall  owe and pay to CVT a royalty on Net Sales of [ * ] in  the
Territory as follows: (i) for that portion of Net Sales of [ *  ]
by  FHI or its Affiliates or sublicensees up to [ * ] in each one
(1)-year period (as defined below), FHI shall owe and pay CVT [ *
];  (ii)  for that portion of Net Sales of [ * ] by  FHI  or  its
Affiliates or sublicensees over [ * ] in each one (1)-year period
and  up  to [ * ] in each one (1)-year period, FHI shall owe  and
pay  CVT a royalty equal to [ * ] of such Net Sales of [ *  ]  by
FHI or its Affiliates or sublicensees; and (iii) for that portion
of  such  Net  Sales  of  [  *  ] by FHI  or  its  Affiliates  or
sublicensees in excess of [ * ] in each one (1)-year period,  FHI
shall owe and pay CVT a royalty equal to[ * ] of Net Sales of [ *
] by FHI or its Affiliates or sublicensees.  For purposes of this
provision, the one (1)-year periods for measurement of Net  Sales
of  [ * ] shall consist of periods of four (4) calendar quarters,
commencing as set forth above.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

(b)  Subject to Section 4.4(b) above, after the expiration of
such [ * ] period under clause (a), FHI shall pay CVT royalty
equal to [ * ] of Net Sales of [ * ] by FHI or its Affiliates or
sublicensees for that portion of Net Sales in excess of [ * ] per
one (1)-year period (as measured as provided above).

(c)  Subject to Section 4.4(b) above, FHI's obligations to pay
royalties to CVT under this Section 5.6 shall expire in the same
fashion and at the same time as FHI's obligations to CVT under
Section 5.5(a) hereof, as more fully described in Section 5.5(b)
hereof; provided, however, that if FHI's underlying license
agreement(s) with all Third Parties with respect to [ * ] have
been terminated, or if [ * ] or its manufacture, use or sale in
the U.S. have expired, terminated or lapsed or is no longer
covered by a Valid Claim within any Patent in the U.S., then
FHI's obligations to pay royalties to CVT under this Section 5.6
shall terminate upon the effective date set forth in Sections
4.4(a) and (b) for conversion of license rights.

     5.7  Payment of Royalties and Other Amounts.

          (a)  Within thirty (30) days of the end of each calendar quarter
following the first commercial sale of a Licensed Product in  the
Territory  hereunder: (i) FHI shall provide CVT  with  a  written
report of Net Sales of all Licensed Products and of [ * ] in  the
Territory during such quarter, accompanied by full payment of all
royalties accrued and owing to CVT under Sections 5.5 and 5.6 (if
applicable)  during such quarter; and (ii) CVT shall provide  FHI
with  a  written report of Net Sales of Licensed Products by  CVT
and   its  Affiliates  and  sublicensees  under  Section  3.7(e),
accompanied by full payment of all royalties accrued and owing to
FHI  under Section 3.7(e).  Within sixty (60) days following  the
end of each calendar year following the first commercial sale  of
a  Licensed  Product hereunder, FHI or CVT, as the  case  may  be
shall  provide the other Party with a written report of Net Sales
of all Licensed Products and FHI shall provide CVT with a written
report  of Net Sales of [ * ] during such year.  Each such report
shall  set  forth on a Licensed Product-by-Licensed  Product  and
country-by-country basis, aggregate Net Sales  of  such  Licensed
Product  and  of  [  * ], the number of units  of  such  Licensed
Product  and of [ * ] sold, gross sales for such Licensed Product
and  of [ * ], and the deductions taken from such gross sales  in
calculating any Net Sales.

(b)  All amounts due to each Party from the other Party under
this Agreement shall be made by wire transfer of immediately
available United States funds into an account designated in
writing by an officer of CVT or FHI, as the case may be.

     5.8  Third Party Royalties.

          (a)  During the Term:

               (i)  if FHI is ordered by a court of competent jurisdiction in a
final unappealable judgment to license Valid Claims under one (1)
or  more  Patents  owned  or Controlled  by  a  Third  Party,  or
otherwise to pay any monies to a Third Party (including,  without
limitation,  [ * ]) in order to make, have made, export,  import,
use,  offer for sale and/or sell any Licensed Product in the  FHI
Field in the Territory; or

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

(ii) if FHI  deems it necessary or desirable to enter into an
agreement for a license under one or more issued Patents owned or
Controlled by a Third Party (including, without limitation, [ *
]), to develop, make, have made, export, import, manufacture,
use, offer for sale and/or sell a Licensed Product in the FHI
Field in the Territory, and CVT agrees in writing that such
license agreement is necessary or desirable, or Independent
Patent Counsel as provided in Section 5.8(b) determines that such
license agreement is necessary or desirable; then,  for  purposes
of this Section 5.8 the Parties shall  share any  and all monies,
upfront fees, licensing fees, royalties  and milestones,  required
to be paid by FHI to any such  Third  Party (collectively  the "Total
Amount Payable to Third  Parties"),  as follows:

   (1)  If the Total Amount Payable to Third Parties includes any
lump sum payments, then FHI shall be entitled to offset [ * ]  of
such lump sum payments actually made by FHI, against up to [ *  ]
of the milestones payable to CVT under this Agreement pursuant to
Section 5.4 above, or in the event all milestones have been  paid
by  FHI  to CVT hereunder, then within thirty (30) days of  CVT's
receipt  of written notice from FHI that FHI has made  such  lump
sum payment to such Third Party, CVT shall promptly reimburse FHI
for  the  balance  of  the [ * ] of such  lump  sum  payment  not
otherwise offset against milestone payments as provided herein.

(2)  With respect to any payments comprising the Total Amount
Payable to Third Parties other than lump sum payments covered by
the foregoing clause (1), FHI shall be entitled to offset [ * ]
of such payments actually made by FHI (the "Offset Amount"),
against up to [ * ] of the royalties payable to CVT under
Sections 5.5 and 5.6 of this Agreement.  If the Offset Amount to
which FHI is entitled under the preceding sentence exceeds [ * ]
of the royalties due to CVT during any calendar quarter, then FHI
shall be entitled to carry forward such excess amount not yet
offset hereunder (the "Unused Offset Amount") to subsequent
calendar quarter(s) during the Term of this Agreement, and to
offset such Unused Offset Amount and future Offset Amounts (if
any) against up to [ * ] of the royalties subsequently due to CVT
hereunder, until the full Offset Amounts are repaid to FHI by the
offsetting mechanism under this provision.  If, upon the
expiration or termination of this Agreement, there remains any
Unused Offset Amount (and any unused offset under clause (1)
above), FHI shall be entitled to deduct any such remaining Unused
Offset Amount (and any unused offset under clause (1) above) from
the final royalty payment owed to CVT under this Agreement, and
if such final royalty payment is less than the amount of such
remaining Unused Offset Amount, CVT shall pay FHI an amount equal
to the difference within thirty (30) days after receipt of an
invoice from FHI.

          (b)  In the event FHI determines that it is necessary or
desirable to enter into an agreement for a license under  Section
5.8(a)(ii) above and CVT does not agree in writing with FHI, then
either  Party  may  submit  resolution  of  the  matter   to   an
independent  outside  patent  counsel  in  accordance  with   the
following  procedure  (such  counsel  shall  be  referred  to  as
"Independent  Patent  Counsel").  If  the  Parties  cannot  agree
whether such license is necessary or desirable, either Party  may
send   the  other  Party  written  notice  requesting   that   an
Independent  Patent Counsel render an opinion as to whether  such
agreement is necessary or desirable.  Each Party shall select its
own  outside patent counsel and both such outside patent  counsel
shall  select

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

the Independent Patent Counsel, within thirty  (30)
days  from the date of the first notice above.  Both Parties  and
their  respective  outside  patent counsel  will  cooperate  with
Independent  Patent Counsel, so that Independent  Patent  Counsel
can  render an opinion as expeditiously as possible.  Independent
Patent Counsel is to act as a neutral participant and shall  have
no  past,  present or anticipated future affiliation with  either
Party.   If  Independent  Patent  Counsel  determines  that  such
license  arrangement is necessary or desirable,  then  CVT  shall
share  in  the Total Amount Payable to Third Parties as  provided
for in this Section 5.8. If Independent Patent Counsel determines
that such license arrangement is not necessary or desirable, then
CVT  shall  not  be  obligated to so share in such  Total  Amount
Payable  to Third Parties, and FHI shall not be entitled to  such
offset against royalties due to CVT.  The decision of Independent
Patent Counsel shall be final and binding on the Parties, and the
cost  and expenses of Independent Patent Counsel shall be  shared
between  the  Parties. Each Party shall bear its  own  costs  and
expenses  with  respect  to  it  own  respective  outside  patent
counsel.

     5.9  Withholding of Taxes

     .  Any tax required to be withheld by a Party on account  of
royalties  payable to the other Party under this Agreement  shall
be  deducted  from  the amount of royalties  otherwise  due.  The
withholding  Party  shall  secure and send  to  the  other  Party
written proof of any such taxes withheld by the withholding Party
or its Sublicensees (or sublicensees, in the case of CVT) for the
benefit   of  the  other  Party.  The  withholding  Party   shall
reasonably assist the other Party in claiming exemption from such
deductions  or withholdings under any double taxation or  similar
agreement or treaty from time to time in force.

     5.10 Blocked Currency

     .  In  each country where the local currency is blocked  and
cannot be removed from the country, at the election of the  Party
paying royalties, royalties accrued in that country shall be paid
to  the  other Party in that country in local currency by deposit
in a local bank designated by the other Party.

     5.11 Non-Monetary Consideration

     .   In  the event FHI (or for the purposes of Section 3.7(e)
only,  CVT  or its Affiliates or sublicensees), or its Affiliates
or   Sublicensees  receives  any  non-monetary  consideration  in
connection with the sale of Licensed Products, the Net  Sales  of
such  Licensed  Product shall be calculated  based  on  the  fair
market  value  of such other consideration.  In such  case,  such
Party  shall disclose the terms of such arrangement to the  other
Party  and the Parties shall endeavor in good faith to  agree  on
such fair market value as promptly as possible. Similarly, in the
event  the Total Consideration received by CVT under Section  3.7
or  to  be paid by FHI under Section 5.8, is made up of any  non-
monetary consideration, such non-monetary consideration shall  be
calculated  based  on  the  fair  market  value  of  such   other
consideration.

     5.12 Foreign Exchange

     .  Subject to Section 5.10, for the purpose of computing the
Net  Sales  of  Licensed Products sold in a currency  other  than
United  States  Dollars, such currency shall  be  converted  into
United States Dollars using the rate of exchange set forth in the
Wall Street Journal for the close of business the last day of the
calendar quarter in which such sales occurred.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

     5.13 Late Payments

     .   Any  amount not paid when due under this Agreement shall
bear  interest at the lesser of (a) one and one half  percent  (1
1/2%)  per  month,  compounded monthly  or  (b)  the  highest  rate
permitted by applicable law.

6.   Records and Publications

     6.1  Records

     .  Each Party shall keep or cause to be kept such records as
are  required to determine, in a manner consistent with generally
accepted accounting principles in the United States, any sums  or
credits due under this Agreement, including, but not limited  to,
development  costs, royalties, etc. At the request (and  expense)
of  either  Party,  the  other Party  and  its  Sublicensees  (or
sublicensees,  in  the case of CVT) shall permit  an  independent
certified public accountant appointed by such Party who shall  be
subject  to the confidentiality restrictions set forth in Article
10  and  reasonably acceptable to the other Party, at  reasonable
times  not  more than once a year and upon reasonable notice,  to
examine only those records as may be necessary to determine, with
respect to any calendar year ending not more than three (3) years
prior to such Party's request, the correctness or completeness of
any  payment  made  under this Agreement.  Results  of  any  such
examination shall be (a) limited to information relating  to  the
Licensed  Compounds and Licensed Products, (b) made available  to
both  Parties and (c) deemed Confidential Information subject  to
Article  10.  The Party requesting the audit shall bear the  full
cost  of  the  performance of any such audit, unless  such  audit
discloses  a  variance of more than five percent  (5%)  from  the
amount  of  the original report, royalty or payment  calculation.
In such case, the Party being audited shall bear the full cost of
the  performance  of such audit, as well as promptly  paying  any
shortfall   reported   and  any  interest   due   thereon.    Any
overpayments  shall  be promptly repaid,  and  any  interest  due
thereon.

     6.2  Publications

     .   Prior  to  the filing of the first NDA for the  Licensed
Product  neither Party shall publish or present  the  results  of
studies  carried out under this Agreement without the opportunity
for  prior  review by the other Party.  Subject to Section  10.3,
each  Party agrees to provide the other Party the opportunity  to
review  any  proposed  abstracts,  manuscripts  or  presentations
(including  verbal presentations) which relate  to  the  Licensed
Compounds and/or any Licensed Product at least five (5)  business
days  prior  to  their  intended submission  for  publication  or
presentation and agrees, upon request of the other Party, not  to
submit   any  such  abstract,  manuscript  or  presentation   for
publication  or  publication until the other  Party  is  given  a
reasonable  period of time to file for patent application(s)  for
any  material  in  such  publication  or  presentation  which  it
believes  to  be  patentable.  The Parties agree  to  review  and
consider  delay of publication and filing of patent  applications
as appropriate.  In the event of a disagreement over publication,
the  Management Committee will review such requests and recommend
subsequent  action but in such event CVT shall not  have  a  tie-
breaking vote.  Neither Party shall have the right to publish  or
present  Confidential  Information of the other  Party  which  is
subject  to Section 10.1 without the prior consent of  the  other
Party.  Nothing contained in this Section 6.2 shall prohibit  the
inclusion  of  information necessary for  a  patent  application,
except  for  Confidential Information of  the  non-filing  Party,
provided  the non-filing Party is given a reasonable  opportunity
to  review the information to be included prior to submission  of
such patent application. Notwithstanding anything to the contrary
contained  in  this  Agreement, only FHI in its  sole  discretion
shall  have  the right to publish or present the results  of  any
Phase  IV

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

Trials conducted at its expense or any  other  studies
conducted  at its expense following the filing of the  first  NDA
for the Licensed Product.

7.   Regulatory Matters

     7.1  Regulatory Matters Before Transfer of NDA from CVT to FHI.

     The  Parties  agree that before the NDA is transferred  from
CVT to FHI in accordance with Section 7.1(a) below, the following
shall apply:

          (a)  CVT shall prepare and submit the IND for the Lead Compound
in  accordance  with Section 3.2 hereof.  CVT shall  prepare  and
submit  in  its  name  the  NDA for the first  Licensed  Product;
provided,  however,  that  the  CMC  section  of  the  NDA  ("CMC
Section")   shall  be  prepared  by  FHI,  in  coordination   and
cooperation  with CVT. The Parties will coordinate and  cooperate
with  respect  to the various activities needed to  complete  and
file  the  NDA. Within ten (10) days after FDA approval  of  such
NDA, CVT shall transfer such NDA to FHI.  Until such time as such
NDA  is transferred to FHI, CVT shall own and hold all Regulatory
Approvals  under the Development Program and shall be responsible
for  the filing and maintenance of all such Regulatory Approvals,
with  all  costs and expenses associated therewith to be included
in Development Costs under this Agreement.

(b)  Except for FHI Manufacturing Activities (as provided in
Section 3.4(a)), Post Approval Regulatory Issues (as provided in
Section 7.1(c)) and the preparation of the CMC Section (as
provided in Section 7.1(a)), CVT will have all other regulatory
responsibility under the Development Program in collaboration and
cooperation with FHI and under the oversight of the Management
Committee. Such regulatory responsibility of CVT shall include,
without limitation, the following: (i) preparation and
modification of all protocols, investigator brochures and other
clinical trial documentation; (ii) drug shipments; (iii) meetings
with FDA or any other Regulatory Authority, including, without
limitation, meeting preparation, meeting coordination,
preparation of minutes and reaching agreement with the FDA or any
other Regulatory Authority on applicable regulatory matters; (iv)
preparation and coordination of any FDA or other Regulatory
Authority advisory committee presentation for the first Licensed
Product (which FHI shall be entitled to attend); (v) the
processing, tracking and reporting of all IND adverse event
reports; and (vi) the maintenance of one (1) or more databases of
the Collaborative Clinical Data accumulated from all clinical
trials of Licensed Compounds and Licensed Products conducted by
CVT under this Agreement.

(c)  With respect to any Post Approval Regulatory Issues, FHI
shall be responsible for and control any and all decisions with
respect thereto, including without limitation meetings, meeting
minutes and reaching agreement with FDA or any other Regulatory
Authority. FHI will coordinate Post Approval Regulatory Issues
with CVT, but FHI shall have the final decision making authority
with respect to any Post Approval Regulatory Issues.

(d)  Prior to the transfer of the NDA to FHI under Section
7.1(a), FHI shall be entitled to attend the advisory committee
presentation (if any) for the first Licensed Product and any
preparatory practice sessions held with respect to such advisory
committee presentation (if any), as noted in Section 7.1(b)(iv)
above, and also to attend the end-of-Phase II Trials meeting

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

and pre-NDA meeting with the FDA relating to such Licensed Product.
CVT shall make all reasonable efforts to provide FHI copies of
any materials relating to any Post Approval Regulatory Issue
prior to their presentation or disclosure to the FDA or any other
Regulatory Authority in the Territory, so that FHI may have an
opportunity to review and provide comments, and CVT shall make
reasonable efforts to allow FHI to be involved in the preparation
for any meetings or telephone calls with the FDA or any other
Regulatory Authority in the Territory relating to any Post
Approval Regulatory Issue. Notwithstanding the foregoing, in the
event any such meetings and/or telephone calls with the FDA
and/or any other Regulatory Authority in the Territory relate to
and/or concern Post Approval Regulatory Issues, the Parties agree
that: (i) CVT shall not meet with the FDA without FHI; and (ii)
with respect to any such telephone calls, CVT will use reasonable
efforts to have FHI participate in such calls and to the extent
FHI is unable to so participate, CVT agrees that it will make no
commitments to FDA and/or any such Regulatory Authority regarding
any Post Approval Regulatory Issues without FHI's prior consent.

     7.2  Regulatory Matters After Transfer of NDA from CVT to FHI.

     The  Parties agree that after the transfer of the  NDA  from
CVT to FHI in accordance with Section 7.1(a) above, the following
shall apply:

          (a)  FHI shall have the authority in its sole discretion to make
any and all decisions relative to all clinical, manufacturing and
regulatory matters from and after the date of transfer of the NDA
for the first Licensed Product to FHI under Section 7.1(a) above,
including  without  limitation Post Approval  Regulatory  Issues.
Once  such NDA is transferred to FHI, FHI shall own and hold  all
such Regulatory Approvals, and any other Regulatory Approvals for
Licensed Products in the Territory, and shall be responsible  for
the maintenance thereof at its own cost and expense.

(b)  FHI shall have the sole authority and responsibility to
report any and all adverse events related to the use of Licensed
Products in the Territory from and after the date of  the NDA for
the first Licensed Product is transferred to FHI under Section
7.1(a) above.

     7.3  Adverse Events

     .   For so long as CVT is conducting any clinical trials  of
Licensed Compounds or Licensed Products under this Agreement, CVT
shall  own  and maintain (or cause to be maintained) one  (1)  or
more databases of adverse event information for such trials.   If
FHI  conducts  any  clinical  trials  of  Licensed  Compounds  or
Licensed  Products  under  this  Agreement,  FHI  shall  own  and
maintain  (or cause to be owned and maintained) one (1)  or  more
databases of adverse drug event information for such trials,  and
after  the transfer of the NDA to FHI under Section 7.1(a) above,
FHI shall own and maintain (or cause to be maintained) one (1) or
more  databases  of  product complaints and  adverse  drug  event
information  for  all  Licensed  Products  sold  by  FHI  or  its
Affiliates  or Sublicensees in the Territory.  Each  Party  shall
provide  the  other with access to such database as requested  to
meet  the requesting Party's regulatory obligations.  The Parties
shall  establish  in  writing and maintain a  procedure  for  the
mutual  exchange of adverse event reports and safety  information
associated  with  Licensed  Compounds or  Licensed  Products,  to
permit   each   Party   to  satisfy  its  respective   regulatory
requirements.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

     7.4    Licensed  Product  Recalls,  Withdrawals  and  Safety
Notifications.

          (a)  Licensed Product Sold by FHI.  Subject to Section 7.4(b),
with  respect  to  any  Licensed  Product  sold  by  FHI  or  its
Affiliates or Sublicensees under this Agreement, FHI in its  sole
discretion  as  the  controlling Party shall  determine  if  such
Licensed Product should be recalled, withdrawn or the subject  of
a safety notification.

(b)  Licensed Product Sold by CVT.  In the event the licenses to
FHI become co-exclusive with CVT under Section 4.4, or if this
Agreement is terminated under Section 12.3 with respect to a
particular indication for a Licensed Product, with respect to any
Licensed Product (if any) for any indication sold by CVT or its
Affiliates or sublicensees in such circumstances under this
Agreement, CVT in its sole discretion as the controlling Party
shall determine if such Licensed Product should be recalled,
withdrawn or the subject of a safety notification if such
Licensed Product (or a Licensed Product for such indication) is
not being sold under an NDA held by FHI; provided, however, that
if such Licensed Product (or a Licensed Product for such
indication) is being sold under an NDA held by FHI, FHI as the
NDA holder shall determine in good faith as the controlling Party
if such Licensed Product should be recalled, withdrawn or the
subject of a safety notification, after first consulting with
CVT, and if such Licensed Product (or a Licensed Product for such
indication) is being sold under an NDA held jointly by FHI and
CVT, the Parties shall consult and agree on how to proceed before
taking any such action hereunder.

(c)  Direction and Cooperation.  Any such action shall occur
under the direction of the controlling Party(ies) (as provided in
Sections 7.4(a) and (b) above),  who shall notify the other Party
promptly following its determination to take such action, and the
other Party shall cooperate as reasonably requested.

(d)  Expenses.  The out-of-pocket expenses incurred by either
Party in connection with any notification, shipping, disposal and
return of the Licensed Product that is the subject of a recall,
withdrawal or safety notification shall be paid by the
controlling Party(ies) (as provided in Sections 7.4(a) and (b)
above), except for any expenses or other Losses (as defined in
Section 13.1) that are the responsibility of an indemnifying
Party as provided in Article 13.

8.   Licenses

     8.1  Licenses To FHI.

          (a)  Subject to the terms of this Agreement, CVT hereby grants to
FHI  an  exclusive,  royalty-bearing license under  the  Licensed
Technology  to  develop, make, have made, use,  offer  for  sale,
sell,  import and export Licensed Compounds and Licensed Products
for  the  FHI  Field in the Territory.  FHI may grant sublicenses
under  such  license  rights  without  CVT's  prior  approval  to
Affiliates of FHI and to Third Parties, provided that CVT's prior
written  consent to a sublicense (not to be unreasonably withheld
or  delayed)  shall  be required if such sublicensee  shall  have
responsibility for marketing and sales of Licensed Compounds  and
Licensed    Products    (in   any   case,    a    "Sublicensee").
Notwithstanding the foregoing however, FHI may grant  sublicenses
under  such  license rights without CVT's prior approval  if  the
Sublicensee  is in the Territory outside of the U.S. and/or  will
not  be  the  primary entity marketing and selling

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

the Licensed Compound and/or Licensed Product in the Territory. Any
Sublicensee  shall agree to be bound by the terms and  conditions
of this Agreement.  FHI shall provide written notification to CVT
of  any Sublicensee for which CVT's prior consent is not required
hereunder,  within thirty (30) days of granting  the  sublicense.
Notwithstanding the foregoing exclusive grant of rights  to  FHI,
FHI  agrees  that CVT retains the right to use and  practice  the
Licensed  Technology to develop Licensed Compounds  and  Licensed
Products  as agreed upon under the Development Program and  under
this Agreement.

(b)  FHI hereby covenants that it will use and practice the
Licensed Technology in accordance with the terms and conditions
of this Agreement and in substantial compliance with all
applicable laws and regulations.

     8.2  Licenses To CVT

     .   FHI and CVT hereby agree on the following license rights
to  CVT  to  use  the FHI Development Technology (as  defined  in
Section  1.17), including, without limitation, the  Collaborative
Clinical Data in the FHI Field and the FHI Clinical Data  in  the
Development Field:

          (a)  As provided in Section 3.7 above, FHI hereby grants to CVT
an  exclusive  (except  as to FHI) license  (with  the  right  to
sublicense)  to use the Collaborative Clinical Data  in  the  FHI
Field  and the FHI Clinical Data in the Development Field outside
of  the Territory to develop, make, have made, use, market, sell,
export  and  import  any pharmaceutical products  (including  any
Licensed Products), in consideration for CVT's payment to FHI  of
the  royalty  provided  in Section 3.7 above,  and  an  exclusive
(except  as  to  FHI)  royalty-free license (with  the  right  to
sublicense)  to  use  and  practice  all  other  FHI  Development
Technology  (other  than  Collaborative  Clinical  Data  and  FHI
Clinical  Data) outside of the Territory to develop,  make,  have
made,  use,  market,  sell, export and import any  pharmaceutical
products (including any Licensed Products).

(b)  In the event CVT exercises its right to convert the licenses
granted to FHI hereunder from exclusive to co-exclusive under
Section 4.4 above, FHI automatically shall be deemed to grant to
CVT a co-exclusive (with FHI) license (with right to sublicense)
to use any and all FHI Development Technology to use, market,
sell, export and import any Licensed Product inside the
Territory.

(c)  In connection with termination of the Agreement (if any),
FHI automatically shall grant CVT an exclusive (except as to FHI)
license (with right to sublicense) to use any and all FHI
Development Technology as provided in Section 12.6(b) below.

     8.3  Non-Compete

     .   CVT  hereby covenants that for the Term, and for [  *  ]
following expiration thereof pursuant to Section 12.1, CVT  shall
not,  and shall not grant a license to a Third Party to, in whole
or   in   part,   develop,  manufacture,  sell,   distribute   or
commercialize products in the Territory in the Development Field;
provided  however,  that in the event that FHI's  licenses  under
Section  8.1 become co-exclusive with CVT as provided in  Section
4.4  above,  or  upon termination of this Agreement  pursuant  to
Section  12.2,  12.3,  12.4  or 12.5  below,  upon  such  license
conversion or termination, as the case may be, CVT shall have  no
further   obligations   to   FHI   under   this   Section    8.3.
Notwithstanding the foregoing, however, in the event  that  under
Section  12.3 below, there is only a partial termination of  this
Agreement and the

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

indication for which this Agreement is still in
effect  is  in the Development Field in the United States,  CVT's
obligations under this Section 8.3 shall remain in full force and
effect. Nothing in this Section 8.3 shall be construed or implied
in  any  manner  to limit or narrow the scope of FHI's  exclusive
licenses described in Section 8.1.

     8.4  Reservation of Rights

     .   CVT  reserves all rights to use the Licensed Technology,
except  as  otherwise expressly granted to FHI pursuant  to  this
Agreement, including, without limitation, the right of CVT  (with
or  without  Third Parties or Affiliates) to freely use,  assign,
transfer, grant licenses thereunder and otherwise dispose of  the
Licensed  Technology for any purpose(s) that do(es) not  conflict
with and is(are) consistent with the terms and conditions of this
Agreement.  Nothing  in  this Agreement  shall  be  construed  or
implied  in  any  manner  to grant FHI any  license  rights  with
respect  to  any  technology of CVT other than as  expressly  set
forth in this Agreement.

     8.5  Right of First Negotiation for FHI.

          (a)  Subject to the terms and conditions of this Section 8.5, CVT
hereby  grants to FHI a right of first negotiation  to  obtain  a
license under the Licensed Technology to develop, use, make, have
made,  import, export, offer for sale and sell Licensed  Products
in  the  rest of the world outside of the Territory (an "Ex-North
American License").

(b)  CVT shall notify FHI in writing if it intends to grant a
license under the Licensed Technology to a Third Party to
develop, use, make, have made, import, export, offer for sale or
sell Licensed Products for some or all of the world outside of
the Territory.  CVT will not grant a Third Party such a license
prior to the completion of the initial Phase I Clinical Trial for
a Licensed Product hereunder.  FHI shall then have a period of
forty-five (45) days from its receipt of such notice (the "FHI
Notification Period") to notify CVT in writing if FHI is
interested in obtaining an Ex-North American License.  If, by the
end of FHI Notification Period, CVT receives written notice from
FHI that it desires to obtain such a license, which notice shall
include FHI's proposed terms for such license, then CVT and FHI,
for a period of ninety (90) days or such longer period of time as
mutually agreed to in writing by the Parties (the "FHI
Negotiation Period"), shall negotiate in good faith the terms
upon which the Parties would be willing to enter into an
agreement for such license, and if such terms are agreed upon,
then the Parties shall enter into a definitive written agreement
pursuant to which CVT shall grant to FHI an Ex-North American
License.  Neither Party shall be obligated to enter into any
agreement under this Section 8.5 except on terms acceptable to
such Party in its sole discretion.

(c)  If the Parties fail to execute a definitive written
agreement for an Ex- North American License by the end of the FHI
Negotiation Period, or if CVT does not receive written notice
from FHI that it is interested in obtaining an Ex-North American
License by the end of the FHI Notification Period, then FHI's
right of first negotiation shall terminate and CVT shall have no
further obligations to FHI under this Section 8.5.

(d)  Notwithstanding Section 8.5(c) above, in the event that the
Parties have conducted negotiations pursuant to Section 8.5(b),
but have not executed a definitive written agreement for an Ex-
North American License by the end of the FHI Negotiation Period,
then CVT agrees that it shall not enter into an agreement to
grant a license under the Licensed

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

Technology with a Third Party,
the territory for which includes Japan, on economic terms (which
economic terms shall include without limitation marketing and
selling capabilities and other expertise of such Third Party)
that taken as a whole are less favorable to CVT than those last
proposed in writing by FHI, unless CVT first offers FHI the
opportunity to accept such terms.  CVT shall notify FHI in
writing of such terms, and unless within thirty (30) days of
FHI's receipt of such notice, CVT receives written notice from
FHI that FHI accepts such terms, then CVT shall have no further
obligations to FHI under this Section 8.5.

     8.6  Right of First Negotiation for CVT.

          (a)  Subject to the terms and conditions of any underlying
license agreements for [ * ] that FHI may have with [ * ]  and/or
any other Third Party and subject to the terms and conditions  of
this  Section  8.6, FHI hereby grants to CVT  a  right  of  first
negotiation to obtain a license of FHI's rights and interests  in
the Licensed Compounds, [ * ] in the [ * ] and [ * ].

(b)  FHI shall notify CVT in writing if it intends to grant a
license of its rights and interests in the [ * ] to a Third
Party. CVT shall then have a period of forty-five (45) days from
its receipt of such notice (the "CVT Notification Period") to
notify FHI in writing if CVT is interested in obtaining a license
to the [ * ].  If by the end of CVT Notification Period FHI
receives written notice from CVT that it desires to obtain such a
license, which notice shall include CVT's proposed terms for such
license, then CVT and FHI, for a period of ninety (90) days or
such longer period of time as mutually agreed to in writing by
the Parties (the "CVT Negotiation Period"), shall negotiate in
good faith the terms upon which the Parties would be willing to
enter into an agreement for such license, and if such terms are
agreed upon, then the Parties shall enter into a definitive
written agreement pursuant to which FHI shall grant to CVT such a
license.  Neither Party shall be obligated to enter into any
agreement under this Section 8.6 except on terms acceptable to
such Party in its sole discretion.

(c)  If the Parties fail to execute a definitive written
agreement for such license by the end of the CVT Negotiation
Period, or if FHI does not receive written notice from CVT that
it is interested in obtaining such a license by the end of the
CVT Notification Period, then CVT's right of first negotiation
shall terminate and FHI shall have no further obligations to CVT
under this Section 8.6.

(d)  Notwithstanding anything to the contrary contained in this
Agreement, in no event shall FHI have any obligation under this
Section 8.6 if FHI desires to license, sell and/or grant any
other rights in whole or in part to its parent or any Affiliate.

(e)  Notwithstanding Section 8.6(c) above, in the event that the
Parties have conducted negotiations pursuant to Section 8.6(b),
but have not executed a definitive written agreement for a
license to the [ * ] by the end of the CVT Negotiation Period,
then FHI agrees that it shall not enter into an agreement to
grant a license to a Third Party on economic terms (which
economic terms shall include without limitation marketing and
selling capabilities and other expertise of such Third Party)
that taken as a whole are less favorable to FHI than those last
proposed in writing by CVT, unless FHI first offers CVT the
opportunity to accept such terms.  FHI shall notify CVT in
writing of such terms, and unless within thirty (30) days of
CVT's

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

receipt of such notice, FHI receives written notice from
CVT that CVT accepts such terms, then FHI shall have no further
obligations to CVT under this Section 8.6.

     8.7  Trademarks.

          (a)  CVT Trademarks.  CVT hereby grants to FHI the non-exclusive,
royalty free license to use its relevant CVT Trademarks solely in
connection  with  the  commercialization  of  Licensed   Products
hereunder during the Term of this Agreement, and subject  to  the
terms and conditions of this Agreement including the remainder of
this Section 8.7.

          (b)  Use of CVT Trademarks.

               (i)  FHI agrees to conform to reasonable quality control
standards  of  CVT  with respect to the goods sold  and  services
provided  in connection with the CVT Trademarks.  FHI  recognizes
and  agrees that no ownership rights are vested or created by the
limited  rights  of  use granted to FHI in connection  with  this
limited  use  of  the CVT Trademarks, and that  all  use  thereof
inures to the benefit of CVT.  Further, except when used strictly
in  accordance  with such quality control standards  provided  by
CVT,  FHI  shall  submit  to CVT any materials  bearing  the  CVT
Trademarks  for review and approval prior to the use thereof  and
shall  make  no  use  of the CVT Trademarks without  CVT's  prior
written  consent. CVT agrees that it will cooperate with  FHI  in
order  to allow FHI to meet its obligations to CVT under  Section
4.5.

(ii) FHI shall execute any documents required in CVT's reasonable
opinion to be entered as a "registered user" or recorded licensee
of the CVT Trademarks, or to be removed as registered user or
licensee thereof.

          (c)  FHI Trademarks. CVT shall have no right to use FHI
Trademarks.

(d)  Product Trademarks. FHI shall own all Product Trademarks.

9.   Intellectual Property

     9.1  Ownership.

          (a)  Notwithstanding anything to the contrary in this Agreement,
but subject to Section 3.7(a), CVT shall remain the sole owner of
the Licensed Technology (except for any joint inventions or other
joint  Improvements  of  CVT  and FHI  under  this  Agreement  as
provided  under  Sections  9.1(c)  or  (d)  below),  and  of  all
intellectual property that it owned as of the Effective Date, and
FHI  shall be the sole owner of all of any FHI Clinical Data  (if
any),  the  Collaborative Clinical Data and the  FHI  Development
Technology and any intellectual property that it owned as of  the
Effective Date.

(b)  CVT shall own all right, title and interest to the CVT
Trademarks.  FHI shall own all right, title and interest to the
Product Trademarks and the FHI Trademarks.

(c)  Any and all inventions discovered solely by CVT under this
Agreement shall be solely owned by CVT.  Any and all inventions
discovered solely by FHI under this

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

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Agreement shall be solely
owned by FHI.  Any and all inventions made under this Agreement
jointly by employees or agents of (or others obligated to assign
inventions to) CVT and FHI respectively shall be jointly owned by
CVT and FHI, and the Parties shall jointly own any Patents on any
jointly owned inventions hereunder.  All determinations of
inventive contribution and inventorship shall be determined under
United States laws of inventorship.

(d)  Any and all Improvements that are not inventions (covered by
Section 9.1(c) above) and that are discovered solely by CVT under
this Agreement shall be solely owned by CVT.  Any and all such
Improvements discovered solely by FHI under this Agreement shall
be solely owned by FHI.  Any and all such Improvements made under
this Agreement jointly by employees or agents of (or others
obligated to assign any such Improvements to) CVT and FHI
respectively shall be jointly owned by CVT and FHI.

     9.2  Patent Matters.

          (a)  Licensed Patents.

               (i)  CVT shall have the first right, but not the obligation to
file  applications  for,  prosecute  and  maintain  the  Licensed
Patents (including, without limitation, any Licensed Patents that
consist  of  Patents  jointly owned with FHI  under  Section  9.1
above). CVT shall use commercially reasonable diligent efforts to
prosecute and maintain the Licensed Patents. CVT shall  keep  FHI
regularly  informed  as  to  the  status  and  issuance  of   the
applications  for  the  Licensed Patents. CVT  must  give  timely
advance notice to FHI of all intended actions and copies  of  all
correspondence that would impact on the existence or scope of the
Licensed  Patents  and CVT (along with its patent  counsel)  will
seriously consider all comments and suggestions made by  FHI  (or
its  patent counsel) relating to the prosecution of the  Licensed
Patents, before any documents, correspondence or other papers are
filed with the United States Patent and Trademark Office or other
comparable office in the Territory. FHI shall reimburse CVT for [
*  ]  of  the  costs and expenses incurred by CVT in the  filing,
prosecution  and  maintenance  of the  Licensed  Patents  in  the
Territory  following the Effective Date; provided that FHI  shall
have  no  payment obligations under this Section  9.2(a)(i)  with
respect  to  any extraordinary costs or expenses  related  to  an
interference proceeding (other than an interference brought by or
on  behalf  of  [  *  ])  or  legal or administrative  action  in
connection  with  the Licensed Patents. In  the  event  that  FHI
notifies CVT that it does not wish to pay its share of the  costs
and   expenses  of  filing,  prosecution  or  maintenance  of   a
particular Licensed Patent, such Licensed Patent thereafter shall
cease  to  be deemed a "Licensed Patent," and FHI shall  have  no
further obligations under this Section 9.2(a)(i) with respect  to
such  Patent and no further license rights with respect  to  such
Patent under this Agreement.

(ii) In the event that FHI notifies CVT in writing that FHI
desires that CVT file a patent application in a particular
country in the Territory covering a particular invention in the
Licensed Know-How, and CVT fails to file such application within
one hundred and twenty (120) days of receiving such notice, or
such shorter period of time that may be required to preserve such
patent rights, then FHI shall thereafter have the right but not
the obligation to file and prosecute such application and
maintain any Patents issuing therefrom in the Territory, at FHI's
expense.  Following CVT's receipt of written notice from FHI
confirming

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

that FHI intends to so file and prosecute such
application, CVT shall assign to FHI all of its right, title and
interest in such application and Patents issuing therefrom in the
Territory.

          (b)  In the event that a Party that has responsibility for the
filing,  prosecution  and maintenance  of  a  Patent  under  this
Section  9.2  (the "Responsible Party") intends  to  abandon  the
prosecution  or maintenance of such Patent, it shall  notify  the
other Party no later than one hundred twenty (120) days prior  to
the   date  that  it  intends  to  abandon  the  prosecution   or
maintenance, as applicable, of such Patent, and in any event,  no
later  than  sixty (60) days prior to the date  that  a  payment,
response  or  other  action is required by the applicable  patent
agency in order to keep such Patent effective.  Such other  Party
must  notify the Responsible Party within such one hundred twenty
(120)  day  period  that such other Party wishes  to  assume  the
responsibility  for prosecuting (if applicable)  and  maintaining
such  Patent,  whereupon the Responsible Party shall  permit  the
other  Party  to  take over the prosecution  (if  applicable)  or
maintenance of such Patent, and shall cooperate with  such  other
Party in the transfer of such responsibilities.  Thereafter,  the
original  Responsible Party shall have no further  obligation  or
rights  under this Section 9.2 with respect to such  Patent,  and
the other Party shall have the right, but not the obligation,  to
prosecute  (if  applicable)  and  maintain  such  Patent  at  its
expense.

(c)  Without limiting the generality of CVT's obligations to keep
FHI informed as to the status of the Licensed Patents described
in Section 9.2(a), the Responsible Party (as defined in Section
9.2(b) above) shall keep the other Party regularly informed as to
the status and issuance of all Patent applications for which the
Responsible Party has the obligation to prosecute under this
Section 9.2.  The Responsible Party must give timely advance
notice to the other Party of all intended actions and copies of
all correspondence that would impact on the existence or scope of
such Patents with respect to the manufacture, use or sale of the
Licensed Compounds and Licensed Products. The Responsible Party
(along with its patent counsel) will seriously consider all
comments and suggestions made by the other Party relating to the
filing and prosecution of such Patent applications before any
documents, correspondence, and other communications are filed
with the United States Patent and Trademark Office or its foreign
equivalent.  All Information, including without limitation all
documents and materials and the existence thereof, disclosed by
the Responsible Party to the other Party pursuant to this Section
9.2(c) shall be deemed Confidential Information and subject to
Article 10.

     9.3  Defense and Settlement of Third Party Claims

     .   FHI  shall control the defense of any suits, actions  or
claims  by a Third Party alleging infringement of a Third Party's
Patent  rights  by the manufacture, use, sale,  offer  for  sale,
export and/or import by FHI, its Affiliates or Sublicensees of  a
Licensed Compound and/or Licensed Product. If the basis for  such
claim  of  infringement  arises from  or  involves  any  Licensed
Technology, data and/or any Information provided to FHI by CVT or
developed  by  CVT  or otherwise generated  by  either  Party  in
connection with the Collaboration pursuant to this Agreement, the
Parties  shall  share all costs, expenses, fees, charges,  monies
and/or royalties (collectively "Costs"), paid in connection  with
any  such suits, actions or claims or to any Third Party in  past
or  prospective settlement as follows: [ * ] of all Costs  to  be
paid  by  FHI and [ * ] of all Costs to be paid by CVT; provided,
however, that such Costs to be shared hereunder shall not include
any costs, expenses or other amounts included or includible under
the  royalty  offset  provisions of Section 5.8  above.   Without
limiting the generality of the foregoing, the Parties shall  also
share in the same fashion [ * ]any

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 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

and all Costs (subject to  the
foregoing  proviso) in the event a suit, action or claim  brought
by [ * ] alleges that the practice of any of the Licensed Patents
infringes  any  of  [  *  ]  Patent  rights.   The  Parties  will
reasonably  cooperate with one another with respect to  any  such
Third Party suits, actions or claims.

     9.4  Infringement By Third Parties

     .   FHI  and  CVT shall each promptly notify  the  other  in
writing  if  it  learns  of  any actual,  alleged  or  threatened
infringement of the Licensed Patents by a Third Party. FHI  shall
have the first right, but not the obligation, at its own expense,
to  bring  suit (or take other appropriate legal action)  against
any  actual,  alleged or threatened infringement of the  Licensed
Patents  by  a Third Party, including the defense and  settlement
thereof  (subject  to  Section 9.5 below),  to  the  extent  such
infringement relates to a Licensed Compound or a Licensed Product
in  the  Territory.   If  FHI does not initiate  an  infringement
action  or otherwise abate any such actual, alleged or threatened
Third  Party  infringement of the Licensed Patents within  ninety
(90)  days  of the later of (i) receiving notification  from  CVT
under  this Section 9.4 of such infringement, (ii) sending notice
to  CVT  under this Section 9.4 of such infringement, or (iii)  a
written  request  from CVT to take action with  respect  to  such
infringement,  or if such infringement is outside  the  scope  of
FHI's  first  right to take action as provided  above,  then  CVT
shall have the right, but not the obligation, at its own expense,
to  bring  suit (or take other appropriate legal action)  against
any  such  actual,  alleged  or threatened  infringement  of  the
Licensed  Patents  by a Third Party, including  the  defense  and
settlement thereof (subject to Section 9.5 below).  In the  event
either  Party  brings an infringement action in  accordance  with
this  Section  9.4,  the  other Party  shall  provide  reasonable
assistance and authority to file and bring the action, including,
if  required  to  bring  such action, being  joined  as  a  party
plaintiff;  provided,  however,  that  neither  Party  shall   be
required to transfer any right, title or interest in or to any of
its  property  to  the  other Party or a Third  Party  to  confer
standing  on  a  Party hereunder.  In addition, if  either  Party
brings  an  infringement action hereunder, the other Party  shall
have  the  right to be represented separately in such  action  by
counsel  of  its  own choice, at its own expense.   Any  recovery
realized  as  a result of such suit, claim or action  or  related
settlement  shall  first be applied pro  rata  to  reimburse  the
Parties'  costs and expenses in connection with such suit,  claim
or  action, and any remaining amounts shall belong to  the  Party
bringing  the  suit, action or claim, or fifty percent  (50%)  to
each Party if the suit is brought jointly.

     9.5  Settlements

     .   Neither  Party may enter into any settlement or  consent
judgment  or  other voluntary final disposition of a  suit  under
this  Article  9 without the prior written consent of  the  other
Party.

     9.6  Cooperation

     .   Each  Party agrees to cooperate with the other and  take
all  reasonable additional actions as may be reasonably  required
to  achieve  the  intent  of this Article 9,  including,  without
limitation,   the   execution   of  necessary   and   appropriate
instruments and documents.

10.  Confidentiality

     10.1 Treatment of Confidential Information

     .   A  Party  receiving  or gaining access  to  Confidential
Information,  as defined below, (the "Receiving  Party")  of  the
other  Party  (the

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 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

"Disclosing  Party")  will  (i)  maintain  in
confidence  such Confidential Information to the same extent  the
Receiving Party maintains its own proprietary information (but at
a  minimum each Party shall use commercially reasonable efforts),
(ii)  not  disclose such Confidential Information  to  any  Third
Party  without  prior  written consent of the  Disclosing  Party,
except  for  disclosures made in confidence to  any  Third  Party
pursuant  to  a  plan  approved  in  advance  by  the  Management
Committee,  and  (iii) not use such Confidential Information  for
any  purpose except those permitted by this Agreement.   As  used
herein,  "Confidential Information" shall mean  all  Information,
and  other  information and materials, received by the  Receiving
Party  from  the Disclosing Party pursuant to this  Agreement  or
designated Confidential Information hereunder. A Party shall have
no  non-disclosure or non-use obligations under this  Article  10
with  respect  to  any  portion of any  Confidential  Information
which:

          (a)  is generally known or available to the public through no act
or failure to act on the part of the Receiving Party; or

(b)  was known to the Receiving Party as shown by its written
records, without obligation to keep it confidential, prior to
when it was received from the Disclosing Party; or

(c)  is subsequently disclosed to the Receiving Party by a Third
Party lawfully in possession thereof without obligation to keep
it confidential; or

(d)  has been independently developed by the Receiving Party
without the aid, application or use of Confidential Information
or any other breach of this Article 10 as shown by the Receiving
Party's written records.

     10.2 Permitted or Required Disclosures

     .   A  Party  shall have no non-disclosure obligation  under
this  Article  10  with  respect to any portion  of  Confidential
Information  which is required by law to be disclosed,  but  then
only  to  the limited extent of such legally required disclosure;
and provided that (a) the Disclosing Party is notified reasonably
in  advance of such disclosure by the Receiving Party and (b) the
Receiving  Party  cooperates  as reasonably  requested  with  the
Disclosing  Party in attempting to obtain confidential  or  other
protective  treatment  of  such  Confidential  Information.    In
addition to the foregoing, either Party may disclose Confidential
Information of the other Party under this Agreement to the extent
such disclosure is reasonably necessary in filing, prosecuting or
maintaining   Patents,   prosecuting  or  defending   litigation,
enforcing   rights  and/or  obligations  under  this   Agreement,
conducting  pre-clinical or human clinical  testing  of  Licensed
Products,  or  conducting  each Party's respective  Manufacturing
Activities under this Agreement, in each case consistent with the
other terms and conditions of this Agreement.

     10.3 Publicity

     .   The  Parties agree that the public announcement  of  the
execution  of  this Agreement shall be in the form of  the  press
release  attached as Schedule 10.3.  Any other publication,  news
release  or other public announcement relating to this  Agreement
or  to  the  performance hereunder, shall first be  reviewed  and
approved   by   both  Parties,  which  approval  shall   not   be
unreasonably withheld or delayed; provided, however, that a Party
may  reuse a previously approved disclosure without having to re-
obtain  the  other Party's consent.  In addition, notwithstanding
the  foregoing provisions any disclosure which is required by law
as  advised by the disclosing Party's counsel may be made without
the  prior  consent of the other

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

Party, although the other  Party
shall  be  given  prompt  notice of  any  such  legally  required
disclosure and to the extent practicable shall provide the  other
Party  an opportunity to comment on the proposed disclosure.   In
this  regard,  the Parties recognize that CVT is a  publicly-held
biotechnology company, that the Licensed Products are among CVT's
first  potential  products  and that CVT  will  need  to  provide
information  regarding the status of the Licensed  Compounds  and
Licensed Products to the investment community from time to  time.
The Parties acknowledge that CVT will be obligated to file a copy
of   this   Agreement  with  the  U.S.  Securities  and  Exchange
Commission.  CVT will submit a copy of its proposed filing to FHI
for review and comment prior to filing.

     10.4 Terms of the Agreement

     .   The  Parties  agree  that the  material  terms  of  this
Agreement  will  be considered Confidential Information  of  both
Parties.   Notwithstanding the foregoing, each Party  shall  have
the  right  to  disclose the material terms of this Agreement  in
confidence  to  any bona fide potential investor,  or  investment
banker,  provided  that  such Party shall  receive,  an  adequate
binder of confidentiality consistent and substantially similar to
the terms contained in this Article 10 and this Agreement.

     10.5 Survival of Confidentiality

     .   All  obligations of confidentiality and non-use  imposed
upon the Parties under this Agreement shall continue indefinitely
until  such  time  as  the information that is  subject  to  such
obligations  no  longer comprises Confidential Information  under
one of the exceptions set forth in Section 10.1.

11.  Representations, Warranties and Covenants

     11.1 Mutual Representations and Warranties

     .   CVT and FHI each represent, warrant and covenant to  the
other that: (a) it has the authority and right to enter into  and
perform   this   Agreement;  (b)  its  execution,  delivery   and
performance  of this Agreement will not conflict in any  material
fashion with the terms of any other agreement to which it  is  or
becomes a party or by which it is or becomes bound; (c) it  shall
comply in all material respects with all laws, rules, regulations
and  other  governmental requirements applicable to  its  actions
under  this Agreement; and (d) no consent of any Third  Party  is
required  for  either  Party to grant  the  licenses  and  rights
granted to the other Party under this Agreement and/or to perform
its obligations hereunder.

     11.2 CVT Representations, Warranties and Covenants

     .  CVT  hereby represents, warrants and covenants to FHI  as
follows:

          (a)  CVT owns or Controls the Licensed Technology;

(b)  CVT has not as of the Effective Date, and during the Term of
the Agreement will not, grant any right to any Third Party under
the Licensed Technology that would conflict with any of the
rights granted to FHI under this Agreement;

(c)  To the best of CVT's knowledge as of the Effective Date, the
practice of the Licensed Patents in the Territory would not
infringe any intellectual property rights of any Third Party, and
there has been no lapse of any claims within the Licensed
Patents;

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 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

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(d)  To the best of CVT's knowledge as of the Effective Date: (i)
CVT has disclosed to FHI all material Information in its
possession or Control relating to the Licensed Compounds and the
Licensed Products; and (ii) there is no prior art that has not
been cited by CVT to the United States Patent and Trademark
Office that CVT believes to be material to the patentability of
any claims within the Licensed Patents in the Territory;

(e)  CVT has conducted and shall conduct all pre-clinical studies
for the Licensed Compounds and Licensed Products in substantial
compliance with then-current good laboratory practices as defined
and/or required by Regulatory Authorities, and all applicable,
laws, rules, regulations and guidelines governing the conduct of
pre-clinical and clinical studies in the Territory. CVT shall
conduct all clinical studies for the Licensed Compounds and the
Licensed Products in substantial compliance with then-current
good clinical practices as they are defined and/or required by
Regulatory Authorities, and all applicable laws, rules,
regulations and guidelines governing the conduct of clinical
studies in the Territory.  To the best of CVT's knowledge as of
the Effective Date, neither CVT nor any of the laboratories or
other individuals or entities participating in such pre-clinical
studies have been or are "debarred" as such term is used in
Section 335a of the United States Code. To the best of CVT's
knowledge as of the Effective Date, any and all necessary
financial disclosures relating to clinical investigators have
been obtained in accordance with United States Code of Federal
Regulations 21 CFR part 54, from the investigators and/or
institutions participating in such clinical studies to the extent
required; and

(f)  As of the Effective Date, CVT has not received any notices
or communications that the development, manufacture, use, sale,
exportation or importation of the Licensed Compounds and/or
Licensed Products would infringe any intellectual property rights
of any Third Party in the Territory.

     11.3 FHI Representations, Warranties and Covenants

     .   FHI hereby represents, warrants and covenants to CVT  as
follows:

          (a)  FHI has not as of the Effective Date, and during the Term of
the  Agreement will not, grant any right to any Third Party under
any  agreement or arrangement that would conflict with any of the
rights granted to CVT under this Agreement;

(b)  With respect to any aspects of the Development Program
conducted by FHI or any other activities conducted by FHI to
develop Licensed Compounds and Licensed Products and/or
manufacturing capacity therefor, FHI shall conduct all such
activities in substantial compliance with then-current good
practices (including good manufacturing practices) as they are
defined and/or required by Regulatory Authorities, and all
applicable laws, rules, regulations and guidelines governing such
activities in the Territory.

     11.4 Disclaimer of Warranty

     .   Each  Party  acknowledges that the  other  Party  cannot
assure  the  safety,  usefulness  or  efficacy  of  any  Licensed
Compound  or  Licensed  Product for  any  use.   EXCEPT  FOR  THE
REPRESENTATIONS  AND  WARRANTIES SET  FORTH  IN  THIS  AGREEMENT,
NEITHER PARTY MAKES ANY WARRANTY CONCERNING ITS PATENT RIGHTS  OR
INFORMATION  LICENSED  UNDER  THIS AGREEMENT,  INCLUDING  WITHOUT
LIMITATION  THE  VALIDITY OR SCOPE OF ITS PATENT

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

RIGHTS OR THAT PRODUCTS WILL BE FREE FROM INFRINGEMENT OF THE PATENT RIGHTS
OF THIRD  PARTIES.  AND  NEITHER PARTY MAKES  ANY  WARRANTY  OF  ANY
TECHNOLOGY'S, COMPOUND'S OR PRODUCT'S MERCHANTABILITY OR  FITNESS
FOR A PARTICULAR PURPOSE.

12.  Term and Termination

     12.1 Term

     .   This  Agreement shall become effective on the  Effective
Date  and shall remain in effect until expiration of all of FHI's
royalty  obligations  under  Section  5.5  (the  "Term"),  unless
earlier  terminated as provided in Sections 12.2,  12.3  or  12.4
below.

     12.2 Termination by FHI

     .   FHI may terminate this Agreement at any time upon ninety
(90)  days prior written notice to CVT, without owing payment  of
any  milestones  falling  due after the effective  date  of  such
termination, but subject to Sections 12.5 and 12.6 below.

     12.3 Termination by CVT

     .   CVT  may  terminate this Agreement on thirty  (30)  days
prior  written  notice to FHI, on a Licensed  Product-by-Licensed
Product, indication-by-indication and country-by-country basis in
the  Territory,  in  the  event that FHI  or  its  Affiliates  or
Sublicensees  fail  to  launch a Licensed  Product  in  any  such
country  within  [ * ] after Regulatory Approval to  market  such
Licensed Product is obtained for a particular indication in  such
country,  except  if  FHI's right to sell such  Licensed  Product
indication-by-indication in such country has  been  suspended  by
the  applicable Regulatory Authority of such country for a reason
other   than   FHI's   or  its  Affiliate's,   Sublicensee's   or
distributor's misconduct.

     12.4 Termination For Breach.

          (a)  If either Party believes that the other Party is in material
breach  of  this  Agreement,  then the  non-breaching  Party  may
deliver notice of such breach to the other Party.  In such notice
the  non-breaching  Party shall identify the actions  or  conduct
that  such  Party would reasonably consider to be  an  acceptable
cure  of  such  material breach.  The allegedly  breaching  Party
shall have sixty (60) days from such notice to cure such material
breach, or ten (10) business days from such notice if such breach
consists  of a failure to pay any monies due and payable  to  the
other Party hereunder (in each case, the "Cure Period").  If  the
Party  receiving  notice of material breach fails  to  cure  such
breach  within  the applicable Cure Period, the Party  originally
delivering  the  notice  may terminate this  Agreement  effective
immediately  on  or after the end of the Cure Period  by  written
notice to the other Party.

(b)  Subject to Article 14, termination of the Agreement under
this Section 12.4 shall not prevent a non-breaching Party from
seeking any available legal and/or equitable remedies for the
damages arising from or in connection with such material breach.

     12.5 Termination Prior to NDA Submission

     .  Subject to Section 12.6, if FHI terminates this Agreement
pursuant  to  Section  12.2  above, or  if  CVT  terminates  this
Agreement  pursuant to Section 12.4 above for  FHI's  breach,  in
either  case  prior to CVT's submission of the first  NDA  for  a
Licensed  Product, then: (a) FHI shall reimburse CVT for seventy-
five percent (75%) of all budget completion fees incurred by  CVT
in  terminating any studies then being conducted pursuant to  the
applicable  Annual  Plan and Budget which CVT  (after  using  its

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

commercial reasonable efforts) was unable to cancel; and (b)  CVT
shall  reimburse FHI for twenty-five percent (25%) of all  budget
completion  fees incurred by FHI in terminating FHI Manufacturing
Activities  and  in terminating those development activities  (if
any)  assigned  to FHI by the Management Committee under  Section
3.4(a)  above, or in the event FHI has assumed development  under
Section  14.2(e) below, twenty five percent (25%) of  all  budget
completion fees incurred by FHI in such event in accordance  with
Section 3.4(c), in any case which FHI (after using its commercial
reasonable efforts) was unable to cancel. Such fees which  either
Party may owe the other under this Section 12.5 shall be due  and
payable  within  thirty  (30) days of a  Party's  receipt  of  an
invoice  detailing  such fees.  Such reimbursement  shall  be  in
addition to any other payments owed to either Party to the  other
Party under this Agreement.

     12.6 Effect of Termination

     .   Upon  the  effective  date of any  termination  of  this
Agreement at any time before expiration of the Term:

          (a)  All licenses granted by each Party to the other Party
pursuant  to  Article  8  above  shall  automatically  terminate;
provided, however, that if CVT terminates this Agreement pursuant
to  Section  12.3 above, then the foregoing termination  of  such
licenses shall only apply to the particular Licensed Product  for
the  particular indication in the particular country that was the
subject of such termination.

(b)  Subject to Section 12.6(e) below, FHI automatically shall be
deemed to have granted to CVT an exclusive (except as to FHI),
irrevocable, perpetual, license with the right to sublicense
under the Collaborative Clinical Data in the FHI Field, the FHI
Clinical Data in the Development Field and under any other FHI
Development Technology, to develop, use, make, have made, import,
offer for sale and sell Licensed Compounds, Licensed Products and
any other pharmaceutical products worldwide; provided, however,
that if CVT terminates this Agreement pursuant to Section 12.3,
then the foregoing grant of license rights from FHI to CVT shall
apply only to the particular Licensed Product for the particular
indication in the particular country that was the subject of such
termination.

(c)  Subject to Section 12.6(e) below, FHI automatically shall be
deemed to have granted to CVT an irrevocable, non-exclusive,
perpetual, sublicenseable right of reference to all Regulatory
Approvals (including without limitation NDAs) relating to the
Licensed Products, and shall cooperate with CVT (at CVT's
expense) to effect such grant in a timely and orderly fashion;
provided, however, that if CVT terminates this Agreement pursuant
to Section 12.3, then the foregoing grant of license rights from
FHI to CVT shall apply only to those Regulatory Approvals
relating to the particular Licensed Product for the particular
indication, in the particular country that was the subject of
such termination.

(d)  FHI automatically shall be deemed to have granted to CVT
exclusive (even as to FHI) irrevocable, perpetual, sublicenseable
license to use the Product Trademarks solely in connection with
the development and commercialization of Licensed Products,
subject to CVT's compliance with reasonable quality control
requirements of FHI as customary in a trademark license (to be
agreed upon by the Parties at such time); provided, however, that
if CVT terminates this Agreement pursuant to Section 12.3 above,
then the foregoing license shall apply only to those Product
Trademarks that relate to the particular Licensed Product for the

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

particular indication in the particular country that was the
subject of such termination. The license granted to CVT under
this Section 12.6(d) shall be in consideration of the payment by
CVT to FHI of a royalty equal to [ * ] of the Total Consideration
from the sale of any Licensed Products throughout the world (or
Licensed Products for the particular indication in the particular
country, if applicable) by CVT, its Affiliates and/or its
sublicensees, where such royalty shall accrue and be paid on the
terms equivalent to those set forth in Sections 5.5 and 5.7
above.  If FHI terminates this Agreement under Section 12.4
above, then the royalty in consideration of the license under
this Section 12.6(d) shall equal [ * ] of the Total
Consideration, and the other royalty terms set forth herein shall
apply.

(e)  If this Agreement is terminated by either Party pursuant to
Section 12.2 or 12.4 above or partially terminated under Section
12.3 above, then the licenses described in Sections 12.6(b) and
(c) above shall be in consideration for CVT's payment to FHI of a
royalty equal to [ * ] of the Total Consideration from the sale
of any Licensed Products throughout the world (or Licensed
Products for the particular indication in the particular country,
if applicable) by CVT, its Affiliates and/or its sublicensees,
where such royalty shall accrue and be paid on terms equivalent
to those set forth in Sections 5.5 and 5.7 above; provided,
however, that the foregoing royalty obligation shall continue
until such time as the royalties paid by CVT to FHI under this
Section 12.6(e) have totaled [ * ] of the total amount of
Development Costs incurred by FHI in accordance with the
Development Plan, whereupon the licenses granted to CVT under
this Section 12.6 shall become fully paid-up and royalty-free
(except that only in the case of CVT termination of this
Agreement under Section 12.4 for FHI's breach of a payment
obligation to CVT, the licenses granted to CVT under this Section
12.6 shall be fully paid up and royalty-free).

(f)  Following any termination of this Agreement or expiration of
the Term, FHI, its Affiliates and Sublicensees shall be entitled
to sell all of their finished inventory of Licensed Products in
existence on the date of any such termination or expiration,
subject to payment to CVT of royalties pursuant to Sections 5.5
and 5.7 above. Notwithstanding the foregoing, however, in no
event shall FHI, its Affiliates or Sublicensees be entitled to
manufacture any new inventory of Licensed Products (or for a
particular indication if there is a partial termination under
Section 12.3 above) from and after the effective date of such
termination.

     12.7 Bankruptcy Rights

     .   In  the  event  that  this Agreement  is  terminated  or
rejected  by a Party or its receiver or trustee under  applicable
bankruptcy  laws due to such Party's bankruptcy, then all  rights
and  licenses granted under or pursuant to this Agreement by such
Party  to  the other Party are, and shall otherwise be deemed  to
be, for purposes of Section 365(n) of the Bankruptcy Code and any
similar  law  or  regulation in any other  country,  licenses  of
rights  to  "intellectual  property"  as  defined  under  Section
101(52)  of  the  Bankruptcy Code.  The Parties  agree  that  all
intellectual   property  rights  licensed  hereunder,   including
without limitation any patents or patent applications of a  Party
in   any  country  covered  by  the  license  grants  under  this
Agreement,  are  part of the "intellectual property"  as  defined
under  Section  101(52) of the Bankruptcy  Code  subject  to  the
protections  afforded  the non-terminating  Party  under  Section
365(n)  of the Bankruptcy Code, and any similar law or regulation
in any other country.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

     12.8 Survival

     .   The following provisions shall survive any expiration or
termination  of this Agreement: Sections 3.7, 5.7,  5.8(a)(ii)(1)
and  (2),  8.3  (to  the extent provided therein)  and  15.3  and
Articles  6,  9,  10,  11, 12, 13 and 14.   Termination  of  this
Agreement  shall not relieve either Party of any liability  which
accrued hereunder prior to the effective date of such termination
nor  preclude either Party from pursuing all rights and  remedies
it  may have hereunder or at law or in equity with respect to any
breach  of this Agreement nor prejudice either Party's  right  to
obtain  performance  of  any obligation.  The  remedies  provided
under  this  Article 12 are cumulative, and are not exclusive  of
other remedies available to a Party in law or equity.

13.  Indemnification and insurance

     13.1 By FHI

     .   FHI hereby agrees to indemnify, defend and hold harmless
CVT and its Affiliates, and their respective officers, directors,
agents  and  employees from and against any and all  Third  Party
suits,  claims,  actions, demands, liabilities,  expenses  and/or
loss,  including  reasonable legal expenses and  attorneys'  fees
(collectively,  "Losses") resulting from (a) the development  (to
the  extent  FHI conducts any of the development of the  Licensed
Compounds  and/or Licensed Products), use, manufacture, handling,
storage,  transport, distribution, sale or other  disposition  of
the  Licensed  Compounds and/or Licensed  Products  by  FHI,  its
Affiliates,  agents or Sublicensees, except to  the  extent  such
Losses  result  from  the negligence or wrongdoing  of  CVT,  its
Affiliates,  sublicensees,  agents, representatives,  consultants
and/or  employees (Affiliates, Sublicensees (or in  the  case  of
CVT,  sublicensees),  agents,  representatives,  consultants   or
employees  of  either  Party shall be  collectively  referred  to
herein  as  such Party's "Representatives"); (b) FHI's breach  of
any  of its obligations, covenants, representations or warranties
under this Agreement; and/or (c) the negligence or wrongdoing  of
FHI  and/or  any  of  its Representatives under  this  Agreement,
except  to  the extent such Losses result from the negligence  or
wrongdoing of CVT and/or any of its Representatives.

     13.2 By CVT

     .   CVT hereby agrees to indemnify, defend and hold harmless
FHI,  its  Affiliates, and their respective officers,  directors,
agents  and  employees  from  and  against  any  and  all  Losses
resulting  from:  (a)  CVT's breach of any  of  its  obligations,
covenants,  representations or warranties under  this  Agreement;
(b)  the  negligence  or  wrongdoing of CVT  and/or  any  of  its
Representatives under this Agreement, except to the  extent  such
Losses result from the negligence or wrongdoing of FHI and/or any
of   its  Representatives;  and/or  (c)   the  development,  use,
handling  or  other disposition of the Licensed Compounds  and/or
Licensed  Products  by CVT and/or any of its  Representatives  in
connection with CVT's conduct of the Development Program,  except
to   the  extent  such  Losses  result  from  the  negligence  or
wrongdoing of FHI and/or any of its Representatives. In the event
the  licenses  granted  to  FHI  are  converted  to  co-exclusive
licenses  with CVT under Section 4.4 or in the event there  is  a
partial termination of this Agreement under Section 12.3 as to  a
particular  indication for a Licensed Product, CVT hereby  agrees
to  indemnify, defend and hold harmless FHI, its Affiliates,  and
their  respective officers, directors, agents and employees  from
and  against  any and all Losses resulting from the  development,
use,  manufacture,  handling, storage,  transport,  distribution,
sale  or  other  disposition  of the  Licensed  Compounds  and/or
Licensed  Products  by  CVT and/or any  of  its  Representatives,
except  to  the extent such Losses result from the negligence  or
wrongdoing of FHI and/or any of its Representatives.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

     13.3 Notice and Procedures

     .  In all cases where one Party seeks indemnification by the
other  under  this Article 13, the Party seeking  indemnification
shall  promptly notify the indemnifying Party of receipt  of  any
claim  or lawsuit covered by such indemnification obligation  and
shall  cooperate fully with the indemnifying Party in  connection
with the investigation and defense of such claim or lawsuit.  The
indemnifying  Party shall have the right to control the  defense,
with  counsel  of  its choice, provided that the non-indemnifying
Party  shall have the right to be represented by advisory counsel
at  its own expense.  The indemnifying Party shall not settle  or
dispose  of  the matter in any manner which could negatively  and
materially affect the rights or liability of the non-indemnifying
Party without the non-indemnifying Party's prior written consent,
which shall not be unreasonably withheld or delayed.

     13.4 Insurance

     .   The  Parties  shall  maintain  the  insurance  coverages
described on Schedule 13.4.

     13.5 Patent Infringement Matters

     .  Any suit, claim or action related to infringement of  any
Third  Party Patents (including, without limitation, [ * ]) shall
be  handled in accordance with the provisions of Section 9.3  and
each  Party's indemnification obligations under this  Article  13
shall not apply with respect to any such suit, claim or action.

14.  Dispute Resolution

     14.1 Disputes

     .  The Parties recognize that disputes as to certain matters
may  from  time  to time arise during the Term  which  relate  to
either  Party's rights and/or obligations hereunder,  or  to  the
interpretation, performance, breach, validity or  termination  of
this  Agreement (a "Dispute", but excluding any determination  as
to  the  validity  of any Patents).  It is the objective  of  the
Parties  to establish procedures to facilitate the resolution  of
Disputes  arising under this Agreement in an expedient manner  by
mutual   cooperation  and  without  resort  to  litigation.    To
accomplish  this  objective,  the Parties  agree  to  follow  the
procedures  set  forth in this Article 14 if and when  a  Dispute
arises  under this Agreement.  From the date of referral  of  any
Dispute   hereunder  to  the  Management  Committee   or   senior
management of the Parties as provided below, and until such  time
as  any  matter  has  been resolved by the Parties  or  has  been
finally settled by arbitration hereunder, the running of the cure
periods  (if any) as to which a Party must cure a breach that  is
part  of  the  subject matter of the Dispute shall be  suspended.
Subject  to  Section  14.2  below, the Parties  shall  refer  any
Dispute  promptly  to  the  Management  Committee  for  attempted
resolution, if it has not been disbanded as provided  in  Section
2.7  above.  If the Management Committee is unable to resolve any
dispute  within thirty (30) days, or if it has been disbanded  as
provided  in  Section  2.7 above, either Party  may,  by  written
notice  to  the other Party, have such Dispute referred  to  each
Party's  respective executive officers designated below or  their
other  senior management with settlement authority, for attempted
resolution  by  good faith negotiations within thirty  (30)  days
after  such  notice hereunder.  Said designated officers  are  as
follows:

          For FHI:       Theron Odlaug

          For CVT:       Louis G. Lange

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

In  the  event the designated executive officers are not able  to
resolve  such  Dispute  within such thirty (30)-day  period,  the
Parties  agree  that  such Dispute shall be resolved  by  binding
arbitration  in accordance with this Section 14.1.   If  a  Party
intends to begin arbitration to resolve such Dispute, such  Party
shall  provide written notice (the "Arbitration Notice")  to  the
other Party informing such other Party of such intention and  the
issues  to  be  resolved.  Any  arbitration  hereunder  shall  be
conducted  pursuant  to  the then-current Commercial  Arbitration
Rules  of the American Arbitration Association ("AAA"), including
the Supplementary Procedures for Large Complex Disputes (the "AAA
Rules"),  except  as modified herein.  The arbitration  shall  be
conducted  by a panel of three (3) arbitrators (the "Panel"),  to
be  mutually agreed upon by the Parties and appointed by the  AAA
within thirty (30) days after the date the Arbitration Notice  is
filed with the AAA by the Party initiating arbitration hereunder.
The  individuals  comprising the Panel  are  to  act  as  neutral
arbitrators and shall have no past, present or anticipated future
affiliation  with either Party or their respective  counsel.   If
the  Parties  are unable to agree upon all or any number  of  the
three (3) mutually acceptable arbitrators within thirty (30) days
after the filing of the Arbitration Notice with the AAA, the  AAA
promptly  shall appoint the arbitrator(s) to complete  the  Panel
after  the demand for arbitration in accordance with the criteria
set  forth  in this Section 14.1.  Also within thirty  (30)  days
after  the  filing of the Arbitration Notice with  the  AAA,  the
Parties   shall   mutually  agree  upon  the  location   of   the
arbitration;  provided,  however,  that  if  the  Parties  cannot
mutually  agree  on  a  location, then the arbitration  shall  be
conducted in the San Francisco Bay area, California, if the Party
initiating  the arbitration is FHI or in the Chicago metropolitan
area,  Illinois, if the Party initiating the arbitration is  CVT.
The  Panel  shall  apply the substantive  law  of  the  State  of
California,  without regard to its conflicts of laws  provisions,
except that the interpretation of and enforcement of this Section
14.1 shall be governed by the Federal Arbitration Act.  The Panel
shall  issue  appropriate  protective orders  to  safeguard  each
Party's Confidential Information.  If a Party can demonstrate  to
the  Panel  that  the complexity of the issue  or  other  reasons
warrant the extension of one or more of the timetables in the AAA
rules,  the  Panel may extend such timetables, but  in  no  event
shall the proceeding extend more than one (1) year from the  date
of  filing of the Arbitration Notice with the AAA.   The decision
of  the  Panel  shall  be  in writing  setting  forth  the  basis
therefor.  The Panel shall have the authority to award any remedy
allowed  by  law  or  in equity, including  but  not  limited  to
compensatory  damages and/or prejudgment interest, and  to  grant
final,  complete,  interim,  or interlocutory  relief,  including
specific performance, injunctions and other equitable relief, but
not  punitive or other damages set forth in Section 14.5 (and the
Parties shall be deemed to have waived any right to such excluded
damages).  Each Party shall bear its own costs, fees and expenses
in  the  arbitration  and shall share equally the  administrative
charges,   arbitrators'  fees  and  related   expenses   of   the
arbitration, unless the Panel determines that one Party prevailed
clearly and substantially over the other Party, in which case the
non-prevailing  Party shall also pay the fees of  the  Panel,  as
well  as  (if  ordered  by  the  Panel)  the  prevailing  Party's
reasonable  attorneys' fees, expert witness  costs  and/or  other
arbitration  expenses.   The Parties shall  abide  by  the  award
rendered  in the arbitration, and such award may be enforced  and
executed  upon  in any court having jurisdiction over  the  Party
against whom enforcement of such award is sought.

     14.2 Disputes Under Sections 3.5(a) or 5.3

     .   In  the event there is a Dispute (as defined in  Section
14.1)  regarding CVT's exercise of due diligence  under  Sections
3.5(a) or 5.3, the Parties shall follow the procedures set  forth
in  this Section 14.2.   From the date of referral of any Dispute
hereunder to senior management of the Parties as provided  below,
and until such

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

time as any matter has been  resolved  by  the
Parties or has been finally settled by arbitration hereunder, the
running  of  the cure periods (is any) as to which a  Party  must
cure  a  breach that is part of the subject matter of the Dispute
shall  be  suspended,  except as expressly  provided  in  Section
14.2(a) below.

          (a)  If CVT fails to cure its material breach under Section
3.5(a)  within the sixty (60) day cure period described  in  such
Section   ("CVT  Diligence  Cure  Period"),  the  Parties   shall
immediately   refer  the  Dispute  hereunder  to   each   Party's
respective  executive officers designated below  or  their  other
senior   management  with  settlement  authority  for   attempted
resolution by good faith negotiations immediately after  the  end
of the CVT Diligence Cure Period:

          For FHI:       Theron Odlaug

          For CVT:       Louis G. Lange

In  the  event the designated executive officers are not able  to
resolve such Dispute within ten (10) days thereafter, the Parties
agree  that such Dispute shall be resolved by binding arbitration
in accordance with Section 14.2(c).

          (b)  If FHI in its good faith judgment believes that CVT has not
been  diligent in filing the IND (or other application to  permit
human clinical testing outside of the United States) pursuant  to
Section  5.3  above, then during the thirty (30)-day time  period
set  forth in the last sentence of Section 5.3, the Parties shall
immediately  refer  the  Dispute hereunder  to  their  respective
officers   specified  in  Section  14.2(a)  above  for  attempted
resolution.  In the event such officers are not able  to  resolve
such  Dispute within five (5) days thereafter, the Parties  agree
that  such  Dispute shall be resolved by binding  arbitration  in
accordance with Section 14.2(c).

(c)  If a Party intends to begin arbitration to resolve any
Dispute under this Section 14.2, such Party shall provide an
Arbitration Notice (as defined in Section 14.1) to the other
Party informing such other Party of the intention to begin
arbitration and the issues to be resolved.   Any arbitration
hereunder shall be conducted by the AAA (as defined in Section
14.1) pursuant to the AAA Rules (as defined in Section 14.1),
except as modified herein.  In the event arbitration is initiated
under this Section 14.2, the arbitration shall be conducted by a
Panel (as defined in Section 14.1), to be mutually agreed upon by
the Parties and appointed by the AAA within ten (10) days after
the date the Arbitration Notice is filed with the AAA by the
Party initiating arbitration hereunder.  The Panel shall be
comprised of three (3) experts in the field of clinical trials
and/or drug development, and the individuals comprising the Panel
are to act as neutral arbitrators and shall have no past, present
or anticipated future affiliation with either Party or their
respective counsel.  If the Parties are unable to agree upon or
all or any number of the three mutually acceptable experts
comprising the Panel within ten (10) days after the filing of the
Arbitration Notice with the AAA, the AAA shall promptly (but in
no event more than thirty (30) days thereafter)_ appoint the
arbitrator(s) to complete the Panel in accordance with the
criteria set forth in this Section 14.2(c). Also within ten (10)
days after the filing of the Arbitration Notice with the AAA, the
Parties shall mutually agree upon the location of the
arbitration; provided, however, that if the Parties cannot
mutually agree on a location, then the location criteria set
forth in Section 14.1 shall control. The Panel shall apply the
substantive law

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

of the State of California, without regard to its
conflicts of laws provisions, except that the interpretation of
and enforcement of this Section 14.2 shall be governed by the
Federal Arbitration Act.   The Panel shall issue appropriate
protective orders to safeguard each Party's Confidential
Information.  If a Party can demonstrate to the Panel that the
complexity of the issue or other reasons warrant the extension of
one or more of the timetables in the AAA rules, the Panel may
extend such timetables, but any arbitration proceeding under this
Section 14.2 shall be on an expedited basis, as determined by the
Panel, and in no event shall the proceeding extend more than one
hundred and twenty (120) days from the date of filing of the
Arbitration Notice with the AAA.   The decision of the Panel
shall be in writing setting forth the basis therefor. The Panel
shall have the authority to determine whether or not CVT has met
its obligations under Section 3.5(a) or Section 5.3, as the case
may be, and/or has cured any material breach on its part within
the applicable CVT Due Diligence Cure Period, and the remedies
set forth in Sections 14.2(d) and (e) below shall be FHI's sole
remedy and recourse in the event of CVT's material breach under
Section 3.5(a) or Section 5.3.  Each Party shall bear its own
costs, fees and expenses in the arbitration and shall share
equally the administrative charges, arbitrators' fees and related
expenses of the arbitration, unless the Panel determines that one
Party prevailed clearly and substantially over the other Party,
in which case the non-prevailing Party shall also pay the fees of
the Panel, as well as (if ordered by the Panel) the prevailing
Party's reasonable attorneys' fees, expert witness costs and/or
other arbitration expenses.  The Parties shall abide by the
determination of the arbitrators, and such determination may be
enforced and executed upon in any court having jurisdiction over
the Party against whom enforcement of such award is sought.

(d)  In the event the Panel determines that CVT has met its
obligations under Section 3.5(a) or Section 5.3, as the case may
be, and/or has cured any material breach on its part within the
applicable CVT Diligence Cure Period, CVT shall continue with the
Development Program under the terms and conditions of this
Agreement.  In the event the Panel rules in CVT's favor, FHI
shall be precluded from sending CVT another Arbitration Notice
regarding CVT's material breach under Section 3.5(a) for a period
of at least twelve (12) months from the date of the Panel's
decision.

(e)  In the event the Panel determines that CVT has not met its
obligations under Section 3.5(a) or Section 5.3, as the case may
be, and/or has not cured any such breach within the applicable
CVT Diligence Cure Period, then FHI has the right to elect, on
written notice to CVT, either: (i) to terminate this Agreement
under Section 12.4 (provided that there will be no additional
notice or cure period thereunder); or (ii) to assume control of
the Development Program, including without limitation the right
to act as chair and cast the tie-breaking vote of the Management
Committee under Sections 2.4 and 2.5 above.  In the event the
Panel rules in FHI's favor, CVT shall still be responsible for
its twenty-five percent (25%) share of the Development Costs
under Section 3.4(c) above.

     14.3 Governing Law

     .   Subject  to  Section  14.1  and  14.2  in  the  case  of
arbitration thereunder, resolution of all Disputes arising out of
or  related  to  this Agreement or the performance,  enforcement,
breach or termination of this Agreement and any remedies relating
thereto, shall be governed by and construed under the substantive
laws  of  the  State  of  California,

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

as  applied  to  Agreements
executed  and to be performed entirely in the State of California
by residents of the State of California.

     14.4 Injunctive Relief

     .   Nothing  in  this Article 14 shall prevent either  Party
from  seeking a temporary restraining order or injunction against
the  other Party as required to prevent such other Party's misuse
of  the intellectual property or Confidential Information of  the
Party seeking such temporary restraining order or injunction.

     14.5 No Consequential Damages

     .  IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR
ANY  INDIRECT,  INCIDENTAL,  SPECIAL, CONSEQUENTIAL  OR  PUNITIVE
DAMAGES  INCURRED  BY  EITHER  PARTY  UNDER  THIS  AGREEMENT   OR
OTHERWISE.

15.  Miscellaneous

     15.1 Entire Agreement; Amendment

     .   This  Agreement  sets  forth  the  complete,  final  and
exclusive  agreement  between the Parties  with  respect  to  the
subject  matter  hereof,  and  all of  the  covenants,  promises,
agreements,    warranties,   representations,   conditions    and
understandings  between the Parties hereto with respect  to  such
subject   matter,  and  supersedes  and  terminates   all   prior
agreements and understandings between the Parties with respect to
such   subject   matter.   There  are  no  covenants,   promises,
agreements,    warranties,   representations,    conditions    or
understandings, either oral or written, between the Parties  with
respect to such subject matter other than as are set forth herein
and  therein.   No  subsequent alteration, amendment,  change  or
addition  to  this  Agreement shall be binding upon  the  Parties
unless reduced to writing and signed by an authorized officer  of
each Party.

     15.2 Force Majeure

     .   Both  Parties  shall be excused from the performance  of
their   obligations  under  this  Agreement  (including,  without
limitation, under Sections 3.5(a), 4.2 or 5.3) to the extent that
such  performance  is  prevented by force majeure  and  the  non-
performing  Party promptly provides notice of the  prevention  to
the  other Party.  Such excuse shall be continued so long as  the
condition  constituting  force majeure  continues  and  the  non-
performing   Party  takes  reasonable  efforts  to   remove   the
condition.  For purposes of this Agreement, "force majeure" shall
include  conditions beyond the control of the Parties,  including
without  limitation, an act of God, war, civil  commotion,  labor
strike  or  lock-out,  failure of supplier to  supply,  epidemic,
failure  or  default  of  public utilities  or  common  carriers,
destruction  of  production  facilities  or  materials  by  fire,
earthquake, storm or like catastrophe;

     15.3 Notices

     .   Any notice required or permitted to be given under  this
Agreement shall be in writing, shall specifically refer  to  this
Agreement and shall be deemed to have been sufficiently given for
all  purposes on the same business day as delivered in person  or
faxed (with machine confirmation of receipt), five (5) days after
mailing by U.S. first class certified or registered mail, postage
prepaid,  and  the  next business day after  express  or  courier
delivery  service.  Unless otherwise specified  in  writing,  the
mailing addresses of the Parties shall be as described below:

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

     For CVT:            CV Therapeutics, Inc.
                         3172 Porter Drive
                         Palo Alto, CA  94304
                         Attention: Chief Executive Officer
                         With a copy to:  General Counsel
                         Telephone:  (650) 812-0585
                         Telecopy:  (650) 858-0390

    With a copy to:      Cooley Godward LLP
                         3175 Hanover Street
                         Palo Alto, CA 94306
                         Attention:  Robert L. Jones, Esq.
                         Telephone:  (650) 843-5000
                         Telecopy:  (650) 849-7400

   For FHI:              Fujisawa Healthcare, Inc.
                         Three Parkway North Center
                         Deerfield, IL  60015
                         Attention: General Counsel
                         With a copy to:  the Chief Executive
                         Officer,
                              the Senior Vice President of
                         Finance, and
                              the Executive Vice President
                         Telephone: (847) 317-8870
                         Telecopy: (847) 317-7288

  With a copy to:        Richards & O'Neil, LLP
                         885 Third Avenue
                         New York, New York 10022-4873
                         Attention: Michael O. Braun, Esq.
                         Telephone: 212-207-1210
                         Telecopy: 212-750-9022

     15.4 Consents Not Unreasonably Withheld or Delayed

     .   Whenever provision is made in this Agreement for  either
Party  to  secure  the consent or approval  of  the  other,  that
consent  or  approval  shall  not  unreasonably  be  withheld  or
delayed,  and whenever in this Agreement provisions are made  for
one Party to object to or disapprove a matter, such objection  or
disapproval shall not unreasonably be exercised, unless expressly
stated  that  such  consent is to be given in such  Party's  sole
discretion.

     15.5 United States Dollars

     .   References in this Agreement to "Dollars" or  "$"  shall
mean the legal tender of the United States of America.

     15.6 No Strict Construction

     .  This Agreement has been prepared jointly and shall not be
strictly construed against either Party.

     15.7 Assignment

     .   Neither  Party may assign or transfer this Agreement  or
any  rights  or  obligations hereunder without the prior  written
consent  of the other, except a Party may make

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

such an assignment
without  the other Party's consent to a successor-in-interest  to
substantially all of the business assets of such Party  to  which
this  Agreement relates, whether in a merger, sale of stock, sale
of  assets  or  other  transaction.  Any permitted  successor  or
assignee  of  rights  and/or obligations hereunder  shall,  in  a
writing to the other Party, expressly assume performance of  such
rights  and/or  obligations.  Any permitted assignment  shall  be
binding on the successors of the assigning Party.  Any assignment
or attempted assignment by either Party in violation of the terms
of  this  Section  15.7 shall be null and void and  of  no  legal
effect.

     15.8 Performance by Affiliates

     .  The Parties recognize that each Party may perform some or
all  of its obligations under this Agreement through one or  more
of  its  Affiliates;  provided, however, that  each  Party  shall
remain  responsible for and shall guarantee such  performance  by
its  Affiliates and shall cause its Affiliates to comply with the
provisions of this Agreement in connection with such performance.
Each Party hereby expressly waives any requirement that the other
Party  exhaust any right, power or remedy, or proceed against  an
Affiliate, for any obligation or performance hereunder  prior  to
proceeding directly against such Party.

     15.9 Counterparts

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

     15.10     Further Actions

     .   Each  Party agrees to execute, acknowledge  and  deliver
such  further instruments, and to do all such other acts, as  may
be  necessary  or appropriate in order to carry out the  purposes
and intent of this Agreement.

     15.11     Severability

     .  If any one or more of the provisions of this Agreement is
held  to  be  invalid or unenforceable by any court of  competent
jurisdiction from which no appeal can be or is taken,  then  such
provision(s) shall be considered severed from this Agreement  and
shall  not  serve to invalidate any remaining provisions  hereof.
The Parties shall make a good faith effort to replace any invalid
or  unenforceable provision with a valid and enforceable one such
that  the  objectives contemplated by the Parties  when  entering
this Agreement may be realized.

     15.12     Ambiguities

     .   Ambiguities,  if  any, in this Agreement  shall  not  be
construed against any Party, irrespective of which Party  may  be
deemed to have authored the ambiguous provision.

     15.13     Headings

     .   The  headings  for  each Article  and  Section  in  this
Agreement  have  been inserted for convenience of reference  only
and  are  not intended to limit or expand on the meaning  of  the
language contained in the particular Article or Section.

     15.14     No Waiver

     .   Any  delay  in  enforcing a Party's  rights  under  this
Agreement  or  any  waiver as to a particular  default  or  other
matter  shall not constitute a waiver of such Party's  rights  to
the  future  enforcement  of  its rights  under  this  Agreement,
excepting only as to an express written and signed waiver as to a
particular matter for a particular period of time.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

     In Witness Whereof, the Parties have executed this Agreement
in  duplicate originals by their proper officers as of  the  date
and year first above written.


Fujisawa Healthcare, Inc.          CV Therapeutics, Inc.



By:  /s/ Noboru Maeda              By:  /s/ Louis Lange
                                        Louis G. Lange, M.D., Ph.D.
Title: Chairman & CEO              Title: Chairman & CEO

Date:  July 10, 2000               Date:     July 10, 2000

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

                          SCHEDULE 1.10

                       Designated Patents


     [ * ]

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

                          SCHEDULE 3.3

                     Initial Plan and Budget


[ * ]

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

                          SCHEDULE 5.2

                    STOCK PURCHASE AGREEMENT




      THIS  STOCK PURCHASE AGREEMENT (this "Agreement") is  dated
and  entered into as of July 10, 2000 (the "Effective Date"),  by
and   between  CV  THERAPEUTICS,  INC.,  a  Delaware  corporation
("Company"),   and   FUJISAWA  HEALTHCARE,   INC.,   a   Delaware
corporation ("Purchaser").

       WHEREAS,   Company  and  Purchaser  are   parties   to   a
Collaboration  and License Agreement, of even date  herewith  (as
amended, modified or supplemented from time to time, the "License
Agreement"), pursuant to which the parties desire to establish  a
collaboration  and  Purchaser  desires  to  obtain  an  exclusive
license from Company; and

     WHEREAS,  as  a  condition  to  entering  into  the  License
Agreement, Purchaser desires to acquire and Company is willing to
issue  and  sell to Purchaser shares of common stock,  $.001  par
value, of Company (the "Common Stock"), subject to the terms  and
conditions specified herein;

      NOW,  THEREFORE,  for good and valuable consideration,  the
receipt and sufficiency of which are hereby acknowledged  by  the
parties, the parties agree as follows:


                            ARTICLE I
                           DEFINITIONS

      1.01  Definitions.   For purposes  of  this  Agreement,  in
addition  to  the terms defined elsewhere herein,  the  following
terms shall have the meanings set forth below:

      "Affiliate" shall have the meaning given such term in  Rule
12b-2 of the Exchange Act.

     "Business  Day"  shall mean any day other than  a  Saturday,
Sunday or legal holiday on which banks in New York, New York  are
open for the conduct of their banking business.

     "Closing"  shall have the meaning specified in Section  2.02
herein.

     "Exchange  Act"  shall mean the Securities Exchange  Act  of
1934, as amended.

      "IPO  Documents"  shall  mean  Company's  (a)  Registration
Statement No. 333-12675 declared effective by the SEC on November
19,  1996,  and  Prospectus  dated November  19,  1996,  and  (b)
Registration  Statement No. 333-86447 declared effective  by  the
SEC on October 13, 1999, and Prospectus dated October 6, 1999.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

     "knowledge" of Company shall mean the knowledge  of  one  or
more of the executive officers of Company.

     "Per  Share  Fair Market Price" of the Common Stock  on  any
date  shall  mean  (a) if the Common Stock is then  traded  on  a
securities exchange or the Nasdaq National Market, the average of
the closing prices of the Common Stock on such exchange or market
over the thirty (30) Trading Days ending on such date; (b) if the
Common  Stock  is  then  regularly traded  over-the-counter,  the
average of the sale prices or secondarily the closing bid of  the
Common  Stock  over the thirty (30) Trading Days ending  on  such
date;  or (c) if there is no active public market for the  Common
Stock,  the fair market value thereof shall be determined  as  of
such  date  by  a nationally recognized investment  banking  firm
chosen in good faith by Company's board of directors.

     "Rule  144"  shall mean Rule 144 as promulgated by  the  SEC
under  the Securities Act, as such Rule may be amended from  time
to time, or any similar successor rule that may be promulgated by
the SEC.

     "Securities Act" shall mean the Securities Act of  1933,  as
amended.

     "SEC" shall mean the Securities and Exchange Commission.

     "Shares"  shall have the meaning specified in  Section  2.01
herein.

     "Trading  Day"  shall  mean a day  on  which  the  principal
national securities exchange on which the Common Stock is  listed
or  admitted  to trading is open for the transaction of  business
or,  if the Common Stock is not listed or admitted to trading  on
any national securities exchange, a Business Day.


                           ARTICLE II
                 PURCHASE AND SALE OF THE SHARES

      2.01  Issuance  of the Shares.  Subject to  the  terms  and
conditions  of this Agreement, at the Closing (as defined  below)
Company  agrees  to  issue and sell to Purchaser,  and  Purchaser
agrees  to purchase from Company, at an aggregate purchase  price
of  Four  Million  Dollars ($4,000,000), such  number  of  shares
(rounded  to  the  nearest  whole share)  of  Common  Stock  (the
"Shares") equal to $4,000,000 divided by an amount equal  to  the
product  of 4/3 multiplied by the Per Share Fair Market Price  as
of  the  date  which is one Business Day prior to  the  Effective
Date.  By way of illustration only, if the Per Share Market Price
on  such  date  were  $45.00, the number of  Shares  would  equal
$4,000,000 divided by $60.00 (the product of $45.00 multiplied by
4/3), or 66,667 Shares.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

     2.02      Closing; Delivery of the Shares.

           (a)   The  purchase and sale of the Shares shall  take
place  at a closing (the "Closing") to be held at the offices  of
Cooley  Godward LLP, Five Palo Alto Square, 3000 El Camino  Real,
Palo Alto, CA 94306 at 10:00 A.M. (Pacific Daylight Time) on  the
Effective Date, or at such other location, time and date  as  may
be  mutually agreed upon by the parties.  The Closing shall  take
place  contemporaneously with the execution and delivery of  this
Agreement and the License Agreement by Company and Purchaser.

            (b)   At  the  Closing,  subject  to  the  terms  and
conditions contained in this Agreement, Purchaser shall provide a
wire  transfer  of immediately available funds to an  account  of
Company  specified  to  Purchaser, in an  amount  equal  to  Four
Million  Dollars  ($4,000,000), in payment of the  full  purchase
price for the Shares.

           (c)   Within  five  (5) business days  after  Closing,
Company  shall deliver one or more stock certificates  evidencing
the  Shares, registered in the name of Purchaser and dated as  of
the date of the Closing.


                           ARTICLE III
                      CONDITIONS TO CLOSING

      3.01 Conditions to Purchaser's Obligations.  The obligation
of Purchaser to purchase and pay for the Shares at the Closing is
subject to each of the following additional conditions precedent:

          (a)  Opinion of Counsel.  Purchaser shall have received
at  the  Closing an opinion from Cooley Godward LLP,  counsel  to
Company,   regarding   this  Agreement   and   the   transactions
contemplated hereby;

           (b)   Board Resolutions. Purchaser shall have received
at  the  Closing  copies  of  the resolutions  of  the  Board  of
Directors  of Company authorizing the execution and  delivery  of
this Agreement and the performance by Company of all transactions
contemplated  hereby,  certified by  an  appropriate  officer  of
Company;

           (c)   Officer's  Certificate.   Purchaser  shall  have
received  at  the  Closing,  a  certificate,  executed   by   the
appropriate  officer of Company and dated as of the date  of  the
Closing,  together  with and certifying  (A)  the  names  of  the
officers of Company authorized to sign this Agreement; (B) a copy
of the certificate of incorporation of Company, as amended and in
effect as of the date of the Closing; (C) a copy of the bylaws of
Company,  as amended and in effect as of the date of the Closing;
and  (D)  that  the representations and warranties  contained  in
Article  IV  hereof are true and correct as of the  date  of  the
Closing; and

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

           (d)  License Agreement.  Purchaser shall have received
at  the  Closing  the  License Agreement,  duly  executed  by  an
authorized  officer of Company and dated as of the  date  of  the
Closing.

     3.02 Conditions to Company's Obligations.  The obligation of
Company to issue and sell the Shares at the Closing is subject to
the following additional conditions precedent:

          (a)  Board Resolutions.  Company shall have received at
the  Closing copies of the resolutions of the Board of  Directors
of  Purchaser  authorizing the execution  and  delivery  of  this
Agreement  and  the performance by Purchaser of all  transactions
contemplated  hereby,  certified by  an  appropriate  officer  of
Purchaser;

          (b)  License Agreement.  Company shall have received at
the Closing the License Agreement, duly executed by an authorized
officer of Purchaser and dated as of the date of the Closing; and

           (c)   Purchase Price.  Purchaser shall have  delivered
Four  Million Dollars ($4,000,000) in immediately available funds
to Company's specified account in accordance with Section 2.02(b)
herein.


                           ARTICLE IV
            REPRESENTATIONS AND WARRANTIES OF COMPANY

     Company represents and warrants to Purchaser as follows:

     4.01   Corporate  Status.  Company  is  a  corporation  duly
incorporated,  validly existing and in good  standing  under  the
laws  of  the State of Delaware, and has all requisite  corporate
power and authority to own and use its properties and assets  and
to transact the business in which it is currently engaged.

     4.02  Corporate  Power  and Authority.   The  execution  and
delivery  by  Company of this Agreement, the performance  of  the
terms and obligations herein, and the issuance, sale and delivery
of  the  Shares are each within Company's corporate  powers,  and
each  has been duly authorized by all necessary corporate  action
on  the  part  of  Company.  This Agreement,  when  executed  and
delivered  hereunder,  will  constitute  the  valid  and  legally
binding  obligation  of Company enforceable  against  Company  in
accordance  with its terms, subject to (a) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws  affecting
creditors'  rights  generally, and  (b)  the  effect  of  general
principles  of  equity,  regardless of whether  considered  in  a
proceeding in equity or at law.

     4.03   Government  Approvals.   No  authorization,  consent,
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the due
execution, delivery and performance by Company of this  Agreement
or  the  issuance and sale of the Shares to Purchaser except  for
the  filing  by  Company  with the SEC or  any  state  securities

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

authorities of any notices or filings required in connection with
the   exemptions   from   the   registration   or   qualification
requirements  of  the  Securities  Act  and/or  applicable  state
securities law.

     4.04  Capitalization.   As of May 31, 2000,  the  authorized
capital  stock of Company consists of: (a) 30,000,000  shares  of
Common  Stock,  $.001 par value, of which 18,528,069  shares  are
issued  and outstanding and of which 142,519 shares are  treasury
shares,  and (b) 5,000,000 shares of Preferred Stock,  $.001  par
value,   of  which  300,000  are  designated  Series   A   Junior
Participating   Preferred,  none  of   which   are   issued   and
outstanding.   As  of  May  31, 2000, an aggregate  of  2,331,143
shares  of  Company's  Common  Stock  were  reserved  for  future
issuance  pursuant  to  stock  options  granted  by  Company  and
outstanding on May 31, 2000 and an additional 1,087,179 shares of
Company's Common Stock were reserved and available for the  grant
of  future  stock options under all of Company's stock option  or
equity  incentive plans.  The Shares, when issued against payment
of  the aggregate purchase price set forth in Section 2.01,  will
be  duly  authorized, validly issued, fully paid,  non-assessable
and free and clear of all liens and encumbrances.  As of the date
hereof, except for the options described hereinabove or except as
described in the IPO Documents, the SEC Documents or the Schedule
of  Exceptions  attached hereto, there are no options,  warrants,
convertible  securities or other rights  to  purchase  shares  of
capital   stock  or  other  securities  of  Company   which   are
authorized,  issued or outstanding, nor is Company  obligated  in
any  other manner to issue shares of its capital stock  or  other
securities, and Company has no obligation to purchase, redeem  or
otherwise acquire any shares of its capital stock or any interest
therein or to pay any dividend or make any other distribution  in
respect thereof, except as contemplated by this Agreement. Except
as  described  in  the IPO Documents, the SEC  Documents  or  the
Schedule of Exceptions attached hereto, (a) no person is entitled
to  any  preemptive right, catch-up right, right of first refusal
or  similar  right with respect to the issuance  of  any  capital
stock  of  Company, (b) there are no restrictions on the transfer
of shares of capital stock of Company other than those imposed by
relevant  federal and state securities laws and (c) there  exists
no  agreement between Company's stockholders and to which Company
is  a  party with respect to the voting or transfer of  Company's
capital  stock or with respect to any other aspect  of  Company's
affairs.

     4.05 No Violation.  Neither the execution or delivery by Company
of   this  Agreement,  nor  the  performance  of  the  terms  and
obligations herein, will (a) violate Company's charter or bylaws,
(b)  constitute  a  breach  or default  under  any  agreement  or
instrument  to  which Company is a party or by which  Company  is
bound,  which  breach or default would have  a  material  adverse
effect  on Company, its assets or properties, or (c) violate  any
applicable law, rule or regulation, which violation would have  a
material  adverse  effect on Company, or (d) violate  any  order,
writ, injunction, decree or judgment of any court or governmental
authority  applicable to or binding upon Company, which violation
would have a material adverse effect on Company.




     4.06 Financial Statements.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

           (a)   All  financial statements contained in  the  SEC
Documents (as defined in Section 4.08) filed by Company with  the
SEC,  have  been  prepared in accordance with generally  accepted
accounting  principles ("GAAP") consistently  applied  throughout
the  periods indicated except as may be expressly stated  in  the
notes  thereto  and,  as  to the unaudited financial  statements,
subject  to normal recurring year-end audit adjustments  and  the
absence of notes thereto.  Each balance sheet fairly presents the
financial  condition of Company and its subsidiaries  as  at  the
date of such balance sheet, and each statement of operations,  of
stockholders'  equity  and  of cash flows,  fairly  presents  the
results  of  operations, the stockholders' equity  and  the  cash
flows of Company and its subsidiaries for the periods then ended,
all in accordance with GAAP.

           (b)  Since the date of Company's most recent filing of
financial  statements with the SEC, there has  been  no  material
adverse  change in the business, property, assets, operations  or
financial condition of Company and its subsidiaries.

     4.07  Litigation.   There  is no pending,  or  to  Company's
knowledge   overtly   threatened,   action,   suit,   proceeding,
arbitration,  or  investigation before  any  court,  governmental
agency,  instrumentality  or  arbitrator,  which,  if  determined
adversely  to Company, could reasonably be expected to materially
adversely  affect the business, property, assets,  operations  or
financial  condition  of Company and its  subsidiaries  or  which
purports  to  affect the legality, validity or enforceability  of
this Agreement.

     4.08 SEC Filings. Company has filed with the SEC on a timely
basis, or received a valid extension of such time of filing,  all
forms, reports and documents required to be filed by it under the
Exchange Act since November 19, 1996 (such documents collectively
referred  to  as  the "SEC Documents").  As of  their  respective
dates,  the SEC Documents complied in all material respects  with
the  requirements of the Securities Act and the Exchange Act  and
the  rules and regulations of the SEC promulgated thereunder, and
none  of  the  SEC  Documents, when filed, contained  any  untrue
statement of a material fact or omitted to state a material  fact
required to be stated therein or necessary to make the statements
therein,  in  light of the circumstances under  which  they  were
made, not misleading.

     4.9  Compliance with Statutes, etc.  Each of Company and its
subsidiaries  is in compliance with all applicable  laws,  rules,
regulations  and  orders  of,  and  all  applicable  restrictions
imposed by, all governmental bodies, in respect of the conduct of
its business and the ownership of its property except, where such
failure  to  be  in compliance would not have a material  adverse
effect on Company.

       4.10  Securities  Laws.   Assuming  the  accuracy  of  the
representations and warranties of Purchaser contained in  Article
V  hereof,  the  issuance  of  the  Shares  is  exempt  from  the
provisions   of  the  Securities  Act.   All  notices,   filings,
registrations, or qualifications under state securities or "blue-
sky"  laws which are required in connection with the offer, issue
and  delivery of the Shares pursuant to this Agreement,  if  any,
have been or will be completed by Company on a timely basis.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

      4.11  Tax  Returns and Payments.  Each of Company  and  its
subsidiaries  has  filed all federal, state, local,  foreign  and
other  tax  returns required to be filed by it and has  paid  all
taxes  and  other assessments which have become due  pursuant  to
such  tax returns and all other taxes and assessments which  have
become  due,  except for those contested in good  faith  and  for
which  adequate reserves have been established.  Each of  Company
and its subsidiaries has made adequate provisions on its books of
account for all taxes, assessments and governmental charges  with
respect to its business, properties and operations for all  prior
fiscal  years and for the current fiscal year to the date hereof.
No  governmental  authority has asserted a lien  or  other  claim
against Company or any of its subsidiaries with respect to unpaid
taxes which has not been discharged or resolved, which would have
a material adverse effect on Company.

      4.12  Insurance.  Company  and  each  of  its  subsidiaries
maintains  insurance  on all of its properties  with  financially
sound and reputable insurance companies against such risks and in
such  amounts  as  are  customarily maintained  by  companies  of
comparable size engaged in a similar business.

      4.13  No  Infringement. To its knowledge, Company  owns  or
possesses   rights  to  use  all  patents,  patent  applications,
trademarks,   service  marks,  trade  names,  copyrights,   trade
secrets, licenses and rights with respect to the foregoing  which
are   required  to  conduct  its  business  without   any   known
infringement  of  the rights of others.  No  event  has  occurred
which,  to the knowledge of Company, permits, or after notice  or
lapse of time or both would permit, the revocation or termination
of  any  such  rights, and, to the knowledge of Company,  neither
Company  nor any of its subsidiaries is liable to any  person  or
entity for infringement under applicable law with respect to such
rights.   As  of the Effective Date, Company is not pursuing  any
action  against any third party for the infringement of Company's
patents,  patent applications, trademarks, service  marks,  trade
names,  copyrights, trade secrets, or licenses  relating  to  its
business.


                            ARTICLE V
           REPRESENTATIONS AND WARRANTIES OF PURCHASER

     Purchaser represents and warrants to Company as follows:

      5.01  Corporate  Status.  Purchaser is a  corporation  duly
incorporated,  validly existing and in good  standing  under  the
laws  of  the State of Delaware, and has all requisite  corporate
power and authority to own and use its properties and assets  and
to transact the business in which it is currently engaged.

     5.02  Corporate  Power  and Authority.   The  execution  and
delivery by Purchaser of this Agreement, the performance  of  the
terms and obligations therein, and the purchase of the Shares are
each  within Purchaser's corporate powers, and each has been duly
authorized  by  all necessary corporate action  on  the  part  of
Purchaser. This Agreement, when executed and delivered hereunder,
will   constitute  valid  and  legally  binding  obligations   of
Purchaser enforceable against Purchaser in accordance with  their
terms,   subject   to  (a)  applicable  bankruptcy,   insolvency,

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

reorganization,  moratorium or similar laws affecting  creditors'
rights  generally,  and (b) the effect of general  principles  of
equity,  regardless  of whether considered  in  a  proceeding  in
equity or at law.

      5.03  Investment.  Purchaser is acquiring  the  Shares  for
Purchaser's  own  account,  not  as  a  nominee  or   agent   for
investment,  and not with a view to, or for resale in  connection
with,  any  distribution or public offering  thereof  within  the
meaning of the Securities Act.

      5.04 Shares Not Registered. Purchaser understands that  the
Shares  are not registered under the Securities Act on the ground
that the sale provided for in this Agreement and the issuance  of
Shares hereunder is exempt from registration under the Securities
Act pursuant to Section 4(2) thereof, and that Company's reliance
on  such  exemption is predicated on Purchaser's  representations
set forth herein.

     5.05 Accredited Investor. Purchaser represents that it is an
"accredited  investor"  within  the  meaning  of  Rule   501   of
Regulation D adopted pursuant to the Securities Act.

      5.06  Restricted  Shares. Purchaser  understands  that  the
Shares  may  not be sold, transferred, or otherwise  disposed  of
without  registration under the Securities Act  or  an  exemption
therefrom,  and that in the absence of an effective  registration
statement  covering  the  Shares or an available  exemption  from
registration  under the Securities Act, the Shares must  be  held
indefinitely. Purchaser is aware that the Shares may not be  sold
pursuant to Rule 144 promulgated under the Securities Act  unless
all of the conditions of that Rule are met.

      5.07 Legend. To the extent applicable, each certificate  or
other  document  evidencing  the  Shares,  whether  upon  initial
issuance or transfer thereof, shall be endorsed with the  legends
substantially in the form set forth below:

          "THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
          UNDER  THE SECURITIES ACT OF 1933, AS AMENDED, AND  MAY
          NOT  BE  SOLD,  TRANSFERRED, PLEDGED,  OR  HYPOTHECATED
          UNLESS  AND UNTIL REGISTERED UNDER SUCH ACT, OR  UNLESS
          COMPANY  HAS  RECEIVED AN OPINION OF COUNSEL  OR  OTHER
          EVIDENCE, SATISFACTORY TO COMPANY AND ITS COUNSEL, THAT
          SUCH REGISTRATION IS NOT REQUIRED."

          "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
          TO  CERTAIN  RESTRICTIONS ON TRANSFER SET FORTH  IN  AN
          AGREEMENT  BETWEEN  THE COMPANY AND THE  HOLDER  HEREOF
          DATED  AS OF JULY 10, 2000, A COPY OF WHICH IS ON  FILE
          AT  THE  COMPANY'S PRINCIPAL OFFICES AND  IS  AVAILABLE
          UPON REQUEST."

     5.08 Investment Information.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

            (a)   Purchaser  has  been  furnished  with  all  the
information  necessary to make an informed  investment  decision.
Purchaser  has been given access to such information relating  to
Company as Purchaser has requested.

               (b)  By reason of Purchaser's business or financial
experience,  Purchaser  has the capacity  to  make  the  decision
referred to in subsection (a) above.


                           ARTICLE VI
                      COVENANTS OF COMPANY

     6.01  Rule  144 Reporting.  With a view to making  available
the benefits of certain rules and regulations of the SEC that may
permit the sale of the Shares to the public without registration,
Company agrees to use its best efforts to:

          (a)  make and keep public information regarding Company
available (as those terms are understood and defined in Rule  144
under the Securities Act) at all times;

          (b)   file with the SEC in a timely manner all  reports
and  other documents required of Company under the Securities Act
and the Exchange Act at any time; and

          (c)  so long as Purchaser owns any Shares or securities
convertible  into,  exchangeable for or  exercisable  for  Common
Stock, furnish to Purchaser forthwith upon written request as  to
Company's compliance with the reporting requirements of Rule  144
and  of  the Securities Act and the Exchange Act, a copy  of  the
most recent annual or quarterly report of Company.


                           ARTICLE VII
                     COVENANTS OF PURCHASER

      7.01  Restrictions on Purchase of Common Stock.  Until  the
first anniversary of the expiration or termination of the License
Agreement,  Purchaser shall not purchase, and shall  ensure  that
none of its Affiliates purchases, any Common Stock other than the
purchase or acquisition of Shares contemplated by this Agreement.




                          ARTICLE VIII
                          MISCELLANEOUS

      8.01       Amendments, Etc.  No amendment or waiver of  any
provision  of  this Agreement, nor consent to  any  departure  by
Company  therefrom,  shall in any event be effective  unless  the

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

same  shall be in writing and signed by Purchaser, and then  such
waiver  or  consent  shall  be effective  only  in  the  specific
instance and for the specific purpose for which given.

     8.02 Notices.  All notices and other communications provided
for  hereunder shall be in writing, shall specifically  refer  to
this  Agreement,  shall  be addressed to  the  receiving  party's
address  set forth below or to such other address as a party  may
designate  by notice hereunder, and shall be deemed to have  been
sufficiently given for all purposes if (a) mailed by first  class
certified  or  registered  mail, postage  prepaid,  (b)  sent  by
express  delivery service, (c) personally delivered, or (d)  made
by  telecopy or facsimile transmission (with machine confirmation
of delivery).

   If to Company:   CV Therapeutics, Inc.
                    3172 Porter Drive
                    Palo Alto, CA 94304
                    Attn:  General Counsel
                    Telephone:  650-475-9611
                    Facsimile: 650-858-0388

   with a copy to:  Cooley Godward LLP
                    Five Palo Alto Square
                    3000 El Camino Real
                    Palo Alto, CA 94306
                    Attn:  Robert L.  Jones
                    Telephone:  650-843-5034
                    Facsimile: 650-857-0663

   If to Purchaser: Fujisawa Healthcare, Inc.
                    Three Parkway North Center
                    Deerfield, IL 60015
                    Attn: General Counsel
                    Telephone:  847-317-8870
                    Facsimile: 847-317-7288

  with a copy to:   Richards & O'Neil, LLP
                    885 Third Avenue
                    New York, NY 10022-4873
                    Attn: Michael Braun
                    Facsimile: 212-750-9022


      8.03       No Waiver; Remedies.  No failure on the part  of
Purchaser  to  exercise, and no delay in  exercising,  any  right
hereunder shall operate as a waiver thereof; nor shall any single
or  partial  exercise  of any such right preclude  any  other  or
further exercise thereof or the exercise of any other right.  The
remedies herein provided are cumulative and not exclusive of  any
remedies provided by law.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

      8.04       Attorneys' Fees.  In the event that any  dispute
among  the parties to this Agreement should result in litigation,
the prevailing party in such dispute shall be entitled to recover
from the losing party all fees, costs and expenses enforcing  any
right  of  such  prevailing party under or with respect  to  this
Agreement, including without limitation, such reasonable fees and
expenses  of  attorneys  and accountants,  which  shall  include,
without limitation, all fees, costs and expense of appeals.

      8.05      Binding Effect; Assignment.  This Agreement shall
be binding upon and inure to the benefit of Company and Purchaser
and  their  respective  successors  and  assigns,  provided  that
neither Company nor Purchaser may assign or transfer any  or  all
of  its  rights or obligations under this Agreement  without  the
prior  written  consent of the other party.  Notwithstanding  any
assignment  by Purchaser, the provisions of Sections  7.01  shall
continue  to  be  binding upon Purchaser in accordance  with  the
terms of this Agreement.

      8.06       Governing  Law; Consent to  Jurisdiction.   This
Agreement shall be governed by, and construed in accordance with,
the  laws  of  the  State of Delaware, without reference  to  the
conflicts  or  choice  of  law principles  thereof.  Company  and
Purchaser  hereby  irrevocably consent to the exclusive  personal
jurisdiction of any state or federal courts located in  Delaware,
in  any  action,  claim or other proceeding arising  out  of  any
dispute  in  connection  with  this  Agreement,  any  rights   or
obligations  hereunder, or the performance  of  such  rights  and
obligations.   Purchaser  and  Company  agree  to   waive   their
respective  rights to a jury trial with respect  to  any  action,
claim,  or  other  proceeding  arising  out  of  any  dispute  in
connection   with  this  Agreement,  any  rights  or  obligations
hereunder, or the performance of such rights and obligations.

      8.07  Severability.  To the extent any  provision  of  this
Agreement is prohibited by or invalid under applicable law,  such
provision  shall be ineffective to the extent of such prohibition
or   invalidity,  without  invalidating  the  remainder  of  such
provision or the remaining provisions of this Agreement.

      8.08  Entire Agreement.  This Agreement embodies the entire
agreement  and  understanding between  the  parties  hereto  with
respect to the provisions hereof and supersedes all prior oral or
written  agreements and understandings relating to the provisions
hereof.   No  statement,  representation, warranty,  covenant  or
agreement  of any kind not expressly set forth in this  Agreement
shall  affect,  or be used to interpret, change or restrict,  the
express terms and provisions of this Agreement.

     8.09  Further  Action.   Each party shall,  without  further
consideration, take such further action and execute  and  deliver
such  further  documents as may be reasonably  requested  by  the
other party in order to carry out the provisions and purposes  of
this Agreement.

     8.10 Counterparts.  This Agreement may be executed in one or
more  counterparts,  each  of which shall  be  deemed  to  be  an
original, but all of which, when taken together, shall constitute
one and the same instrument.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

     8.11        Survival.    The  representations,   warranties,
covenants  and  agreements made herein by Company  and  Purchaser
shall survive the Closing.


      [THE REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK;
                SIGNATURES ARE ON FOLLOWING PAGE]


 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

     IN  WITNESS WHEREOF, Company and Purchaser have caused  this
Stock  Purchase Agreement to be executed in their names by  their
duly  authorized officers or representatives effective as of  the
date first above written.

                              CV THERAPEUTICS, INC.

                              By: _____/s/ Louis Lange_________
                              Name:  Louis G. Lange, M.D., Ph.D.
                              Title:    Chairman & CEO


                              FUJISAWA HEALTHCARE, INC.


                              By:   __ /s/  Noboru  Maeda______
                              Name: Noboru Maeda
                              Title: Chairman & CEO



 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

                     SCHEDULE OF EXCEPTIONS


      This  Schedule of Exceptions is made and given with respect
to  Article  IV  of  the attached Stock Purchase  Agreement  (the
"Agreement"),  by and between CV Therapeutics, Inc.,  a  Delaware
corporation  (the  "Company"), and Fujisawa Healthcare,  Inc.,  a
Delaware corporation (the "Purchaser").

       The   section  numbers  in  this  Schedule  of  Exceptions
correspond to the section numbers in the Agreement, however,  any
information  disclosed herein under any section number  shall  be
deemed  to  be disclosed and incorporated into any other  section
number  under  the  Agreement where  such  disclosures  would  be
appropriate.    Unless  the  context  otherwise   requires,   all
capitalized terms shall have the same meaning as defined  in  the
Agreement.

Section 4.04

     As of May 31, 2000, an aggregate of 249,203 shares of Common
Stock  of  the Company were reserved for future issuance pursuant
to outstanding warrants granted by the Company.

     On February 2, 1999, the Company adopted a Preferred Share
Purchase Rights Plan pursuant to which shareholders have certain
rights to purchase shares of Series A Junior Participating
Preferred.

     $196,250,000 of 4_% Convertible Subordinated Notes due March
7, 2007 and Shares of Common Stock Issuable Upon Conversion of
the Notes.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

                          SCHEDULE 10.3

                      Form of Press Release





                          PRESS RELEASE


FOR IMMEDIATE RELEASE

Contacts: CV Therapeutics                 Fleishman-Hillard
          Dan Spiegelman                  Carol Harrison
          SVP & Chief Financial Officer   (212) 453-2442
          (650) 812-9509

          Christopher Chai
          Treasurer & Director,
          Investor Relations
          (650) 812-9560

          Fujisawa Healthcare
          Maribeth Landwehr
          Corporate Communications
          (847) 317-8988


        CV THERAPEUTICS AND FUJISAWA HEALTHCARE ANNOUNCE
          COLLABORATION ON CVT-3146 FOR CARDIAC IMAGING


CVT partners with market leader in pharmacologic cardiac imaging

     PALO  ALTO,  CA  and  DEERFIELD, IL (July  11,  2000)  -  CV
Therapeutics,  Inc. (Nasdaq: CVTX) and Fujisawa Healthcare,  Inc.
(FHI)  announced  today  a collaboration to  develop  and  market
second generation pharmacologic cardiac stress agents. Under this
agreement  FHI receives exclusive North American rights  to  CVT-
3146,  a  short acting selective A2A adenosine receptor  agonist,
and  a  backup  compound.  CVT and FHI will  collaborate  on  the
development  of  CVT-3146.   Leveraging  the  strengths  of  both
organizations, CVT will be responsible for managing the  CVT-3146
clinical development program. FHI will be responsible for selling
and  marketing  CVT-3146  in North America.    In  the  U.S.  FHI
currently  markets  Adenoscanr (adenosine),  the  market  leading
pharmacologic cardiac stress-imaging agent.

     CVT will receive $10.0 million from FHI, which consists of a
cash payment, the prepayment of a development milestone, and  the
purchase of CVT common stock at a premium.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

CVT may receive up to an additional $24.0 million in cash based upon
development and regulatory milestones. FHI will reimburse CVT for 75%
of the development costs, and if approved by the FDA, CVT will receive
a royalty  based  on product sales of CVT-3146 and  may  receive  a
royalty on other products.

     "We  are  pleased to collaborate with the market  leader  in
cardiac  perfusion  imaging," said Louis G. Lange,  M.D.,  Ph.D.,
Chairman  and  Chief Executive Officer of CV Therapeutics.   "The
structure  of  this  collaboration  reflects  our  leadership  in
adenosine  technology  and  cardiovascular  drug  discovery.   In
addition, this collaboration will allow us to focus our financial
resources on our two late stage clinical programs: ranolazine and
CVT-510."

     "Our partnership with CV Therapeutics and the development of
CVT-3146  represents  Fujisawa's  continued  commitment  to   the
cardiovascular therapeutic area," said Noboru Maeda, Chairman and
Chief  Executive Officer at Fujisawa Healthcare, Inc.   "CVT-3146
allows  us  to  expand  our current portfolio  of  cardiovascular
products available to clinicians."

About cardiac perfusion imaging studies

     Cardiac perfusion imaging studies are used for the detection
and  characterization of coronary artery disease  by  identifying
areas  of  insufficient  blood flow in the  heart.  During  these
tests, blood flow is measured when the patient's heart is at rest
and when it is working.  Relatively low blood flow when the heart
is  working  is  indicative of which areas of the  heart  may  be
diseased.

     To  stimulate the work of the heart sufficiently to  perform
the  test  many patients exercise on a treadmill.  However,  more
than  a  third  of the patients who take the test are  unable  to
exercise  adequately  because  of  medical  conditions  such   as
peripheral vascular disease and arthritis.  For these patients, a
pharmacologic agent that temporarily increases the coronary blood
flow  is  required  to  simulate the  heart  at  work.  In  1997,
approximately 5.2 million cardiac perfusion imaging studies  were
performed in the US, of which 1.8 million were conducted using  a
pharmacologic agent.

     Stimulation  of  the  A2A adenosine receptor  in  the  heart
induces vasodilation and thus increases coronary blood flow.   In
animal  studies,  CVT-3146 has been shown  to  increase  coronary
blood flow without adversely affecting peripheral blood pressure.

     Statements  in this press release concerning the development
and  potential  application of CVT-3146 and other  compounds  are
forward-looking statements that involve risks and  uncertainties,
including,  but  not limited to, uncertainties related  to  CVT's
early  stage of development and clinical trials.  Actual  results
could  differ materially.  Factors that could cause or contribute
to  such  differences are more fully discussed  in  CVT's  Annual
Report on Form 10-K for the year ended December 31, 1999.

     CV Therapeutics, Inc., headquartered in Palo Alto, CA, is  a
biopharmaceutical   company   focused   on   applying   molecular
cardiology to the discovery, development and commercialization of
novel,  small  molecule drugs for the treatment of cardiovascular
diseases.  CVT is currently conducting clinical trials for two of
its  products.  Ranolazine, the first in a new class of

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

compounds known as partial fatty acid oxidation (pFOX) inhibitors
for the potential treatment of angina, is in Phase III clinical trials.
CVT-510,  an  A1  adenosine receptor agonist, for  the  potential
treatment of atrial arrhythmias, is in Phase II clinical  trials.
For  more information, please visit CV Therapeutics' web site  at
www.cvt.com.

     Fujisawa  Healthcare, Inc., headquartered in Deerfield,  IL,
develops,  manufactures,  and markets proprietary  pharmaceutical
products  in  the United States and abroad. Fujisawa  Healthcare,
Inc.  is a subsidiary of Fujisawa Pharmaceutical Co., Ltd., based
in  Osaka,  Japan. Fujisawa Pharmaceutical Co., Ltd., founded  in
1894,   is   a  leading  pharmaceutical  manufacturer   and   has
international  operations  in North America,  Europe,  and  Asia.
Additional  information  on Fujisawa  Healthcare,  Inc.  and  its
products   can   be   found  on  the  Company's   web   site   at
www.fujisawa.com.

                              -end-

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

                          SCHEDULE 13.4

                            INSURANCE


FHI'S INSURANCE OBLIGATIONS

A.   FHI shall, at its sole cost and expense, obtain and keep  in
     force during the Term and for a period of not less than [  *
     ]  years  after  termination, cancellation or expiration  of
     this   Agreement  the  following  insurance:   (i)   general
     liability insurance, including blanket contractual liability
     coverage,  with  bodily injury, death  and  property  damage
     limits  of  [  *  ];  (ii)   clinical  studies  and  product
     liability  insurance with bodily injury, death and  property
     damage limits of not less than [ * ] (provided, however that
     with  respect to such clinical studies liability  insurance,
     FHI shall only be required to maintain such insurance for[ *
     ]  years after completion of the last clinical study on  the
     Licensed  Compounds and Licensed Products conducted  by  FHI
     under  this  Agreement);  and, (iii)  workers'  compensation
     insurance with limits to satisfy statutory requirements  and
     employer's liability insurance with limits of [  *  ].   FHI
     shall furnish to CVT upon within thirty (30) days after  the
     Effective   Date,   and   on   annual   renewals    thereof,
     certificate(s)   of  insurance  evidencing   the   insurance
     coverage  required by this Agreement and  providing  for  at
     least  thirty (30) days' prior written notice to CVT of  any
     cancellation, termination, material change or  reduction  of
     such coverage.

B.   FHI  shall use its commercially reasonable efforts to  cause
     Third  Parties  engaged  by  FHI  to  perform  services   in
     connection   with   the  Development  Program   and/or   the
     commercial   manufacturing  and/or  sale  of  the   Licensed
     Compounds and/or Licensed Products to maintain such types of
     insurance  coverages  and for such period  of  time  as  are
     customary  for  such Third Party given  the  nature  of  the
     services to be provided.


CVT'S INSURANCE OBLIGATIONS

A.   CVT shall, at its sole cost and expense, obtain and keep  in
     force  until such time as the NDA is transferred to  FHI  as
     provided for in Section 7.1(a) of this Agreement and  for  a
     period of not less than [ * ] years thereafter the following
     insurance:   (i)  general  liability  insurance,   including
     blanket  contractual liability coverage, with bodily injury,
     death  and  property damage limits of [ * ]; (ii)  overlying
     umbrella  liability coverage with limits of  [  *  ];  (iii)
     clinical studies and product liability insurance with bodily
     injury, death and property damage limits of not less than  [
     *  ]  (provided, however that with respect to such  clinical
     studies  liability insurance, CVT shall only be required  to
     maintain such insurance for [ * ] years after completion  of
     the  last  clinical  study  on the  Licensed  Compounds  and
     Licensed  Products conducted by CVT under  this  Agreement);
     and,  (iv)  workers' compensation insurance with  limits  to
     satisfy  statutory  requirements  and  employer's  liability
     insurance  with limits of U.S. [ * ].  CVT shall furnish  to
     FHI  upon within thirty (30) days after the Effective  Date,
     and  on annual renewals thereof, certificate(s) of insurance
     evidencing the insurance coverage required by this Agreement
     and  providing

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.

<PAGE>

     for at least thirty (30) days' prior  written
     notice  to  FHI  of any cancellation, termination,  material
     change or reduction of such insurance coverage.

B.   In the event the licenses granted to FHI are converted to co-
     exclusive  licenses with CVT under Section  4.4  or  in  the
     event there is a partial termination of this Agreement under
     Section  12.3 as to a particular indication for  a  Licensed
     Product, CVT shall, at its sole cost and expense, obtain and
     keep in force as of effective date such licenses become  co-
     exclusive  or  of  such partial termination (such  effective
     date shall be referred to herein as "CVT Insurance Effective
     Date") and until the termination, cancellation or expiration
     of  this Agreement and for a period of not less than [  *  ]
     years  thereafter  the  following  insurance:   (i)  general
     liability insurance, including blanket contractual liability
     coverage,  with  bodily injury, death  and  property  damage
     limits  of [ * ]; (ii) overlying umbrella liability coverage
     with  limits  of [ * ]; (iii) clinical studies  and  product
     liability  insurance with bodily injury, death and  property
     damage limits of not less than [ * ] (provided, however that
     with  respect to such clinical studies liability  insurance,
     CVT shall only be required to maintain such insurance for  [
     * ] years after completion of the last clinical study on the
     Licensed  Compounds and Licensed Products conducted  by  CVT
     under  this  Agreement);  and,  (iv)  workers'  compensation
     insurance with limits to satisfy statutory requirements  and
     employer's liability insurance with limits of U.S.  [  *  ].
     CVT  shall furnish to FHI upon within thirty (30) days after
     the  CVT  Insurance Effective Date, and on  annual  renewals
     thereof,   certificate(s)   of  insurance   evidencing   the
     insurance  coverage required by this Agreement and providing
     for  at least thirty (30) days' prior written notice to  FHI
     of   any  cancellation,  termination,  material  change   or
     reduction of such insurance coverage.

C.   CVT  shall use its commercially reasonable efforts to  cause
     Third  Parties  engaged  by  CVT  to  perform  services   in
     connection   with   the  Development   Program   and/or   if
     applicable, the commercial manufacturing and/or sale of  the
     Licensed Compounds and/or Licensed Products to maintain such
     types of insurance coverages and for such period of time  as
     are  customary for such Third Party given the nature of  the
     services to be provided.

 [ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED
 BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
 EXCHANGE COMMISSION PURSUANT TO RULE 24-b2 OF THE SECURITIES AND EXCHANGE
 ACT OF 1934, AS AMENDED.