<PAGE>
                                                                   EXHIBIT 10.31





                                LICENSE AGREEMENT

                                     BETWEEN

                             UAB RESEARCH FOUNDATION

                                       AND

                          NOVIRIO PHARMACEUTICALS, LTD.
<PAGE>
                                TABLE OF CONTENTS

                                                                           Page
                                                                           ----


LICENSE AGREEMENT............................................................1

INTRODUCTION.................................................................1

ARTICLE 1.  Definitions......................................................1

      1.1   "Affiliate"......................................................1
      1.2   "Confidential Information".......................................1
      1.3   "Effective Date".................................................2
      1.4   "First Commercial Sale"..........................................2
      1.5   "IND"............................................................2
      1.6   "Intellectual Property Rights"...................................2
      1.7   "Licensed Product"...............................................2
      1.8   "NDA"............................................................2
      1.9   "Net Sales"......................................................2
      1.10  "Party"..........................................................3
      1.11  "Patent Rights"..................................................3
      1.12  "Sublicensee"....................................................3
      1.13  "Sublicense Payments"............................................3
      1.14  "Sublicence Royalties"...........................................4
      1.15  "Valid Claim"....................................................4

ARTICLE 2.  License Grant....................................................4

      2.1   License Grant from UABRF.........................................4
      2.2   Sublicense Rights................................................4
      2.3   Diligence........................................................5

ARTICLE 3.  Payment Obligations..............................................5

      3.1   License Fee......................................................5
      3.2   Reimbursement of Patent Expenses.................................5
      3.3   Milestone Payment................................................5
      3.4   Royalties........................................................5
      3.5   Payment Currency.................................................7
      3.6   Records; Audit...................................................8

ARTICLE 4.  Intellectual Property Rights.....................................8

      4.1   Prosecution and Maintenance of Patent Rights.....................8
      4.2   Infringement of Licensed Technology..............................8
      4.3   Use of Name in Suit..............................................9
      4.4   Detect and Report Infringements..................................9

ARTICLE 5.  Representations and Warranties...................................9

      5.1   Representations and Warranties of UABRF..........................9
      5.2   Representations and Warrants of Novirio.........................10


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<PAGE>
                                TABLE OF CONTENTS

                                   (continued)

                                                                           Page
                                                                           ----

      5.3   Disclaimer......................................................10

ARTICLE 6.  Confidential Information........................................10

      6.1   Treatment of Confidential Information...........................10
      6.2   Release from Restrictions.......................................11

ARTICLE 7.  Term and Termination............................................11

      7.1   Term............................................................11
      7.2   Termination for Breach..........................................11
      7.3   Consequences of Termination for Breach..........................11
      7.4   Survival of Obligations.........................................12

ARTICLE 8.  Miscellaneous...................................................12

      8.1   Governing Law...................................................12
      8.2   Patent Marking..................................................12
      8.3   Export Laws.....................................................12
      8.4   Dispute Resolution..............................................12
      8.5   Waiver..........................................................13
      8.6   Notices.........................................................13
      8.7   No Agency.......................................................13
      8.8   Entire Agreement................................................14
      8.9   Headings........................................................14
      8.10  Severability....................................................14
      8.11  Assignment......................................................14
      8.12  Successors and Assigns..........................................14
      8.13  Counterparts....................................................14
      8.14  Force Majeure...................................................14
      8.15  Place of Execution..............................................14

EXHIBIT A...................................................................19



                                     - ii -
<PAGE>
                                LICENSE AGREEMENT

      This AGREEMENT is made by and between Novirio Pharmaceuticals Ltd., a
corporation organized under the laws of the Cayman Islands ("Novirio"), and the
UAB Research Foundation, a 501(c) not-for-profit charitable foundation,
organized in the State of Alabama and having its principal place of business at
701 South 20th Street, Suite 1120-G, Birmingham, Alabama, 35242, U.S.A.
("UABRF").

                                  INTRODUCTION

      1. UABRF, Emory University ("Emory") and Centre National De la Recherche
Scientifique ("CNRS") are the co-owners of certain intellectual property rights,
including (a) pending U.S. patent application serial no. 08/612,965, filed March
11, 1996 relating to nucleosides with anti-viral and anti-hepatitis B activity;
(b) pending U.S. patent application serial no. 08/485,716, filed June 7,1995;
and (c) pending U.S. patent application serial no. 08/829,748, a CIP application
of serial no. 08/485,716.

      2. Pursuant to an Agreement for Commercialization of Anti-Viral Compounds
dated June 3, 1994 among UABRF, Emory and CNRS (the "1994 Agreement"), UABRF has
been appointed the sole and exclusive agent for the licensing of the
intellectual property rights described in paragraph 1 above.

      3. Novirio is a dedicated to the development and production of anti-viral
compounds and desires to obtain a license to the patent applications referenced
above, and all U.S. and corresponding foreign patents issuing therefrom.

      In consideration of the mutual covenants and promises contained in this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Novirio and UABRF agree as
follows:

                             ARTICLE 1. Definitions

      As used in this Agreement, the following terms, whether used in the
singular or plural, shall have the following meanings:

      1.1 "Affiliate" means any corporation, company, partnership, joint
venture, firm and/or entity which controls, is controlled by or is under common
control with a Party. For purposes of this Section 1.1, "control" shall mean (i)
in the case of corporate entities, direct or indirect ownership of at least
fifty percent (50%) of the stock or shares entitled to vote for the election of
directors, and (ii) in the case of non-corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the equity interest with the power
to direct the management and policies of such non-corporate entities.

      1.2 "Confidential Information" means all materials, trade secrets or other
information, including, without limitation, proprietary information and
materials (whether or not patentable) regarding a Party's technology, products,
business information or objectives, which is designated as confidential in
writing by the disclosing Party, whether by letter or by the use of an
appropriate stamp or legend, prior to or at the time any such material, trade
secret or other


                                     - 1 -
<PAGE>
information is disclosed by the disclosing Party to the other Party.
Notwithstanding the foregoing to the contrary, materials, trade secrets or other
information which is orally, electronically or visually disclosed by a Party, or
is disclosed in writing without an appropriate letter, stamp or legend, shall
constitute Confidential Information if the disclosing Party, within thirty (30)
days after such disclosure, delivers to the other Party a written document or
documents describing the materials, trade secrets or other information and
referencing the place and date of such oral, electronic, visual or written
disclosure and the names of the persons to whom such disclosure was made.

      1.3 "Effective Date" means the later of (i) the date on which Novirio
executes this Agreement, or (ii) the date on which UABRF executes this
Agreement.

      1.4 "First Commercial Sale" means, with respect to each Licensed Product,
the first commercial sale by Novirio, its Affiliates, sublicensees and/or
distributors of such Licensed Product, other than for clinical trial purposes or
compassionate use.

      1.5 "IND" means an Investigational New Drug Application filed with the
United States Food and Drug Administration ("FDA").

      1.6 "Intellectual Property Rights" means (i) the Patent Rights and (ii)
any other intellectual property rights relating to the technology disclosed in
or developed from the Patent Rights that UABRF owns or otherwise has the right
to grant licenses under, including, but not limited to, Intellectual Property
Rights of Emory and CNRS that are subject to the 1994 Agreement.

      1.7 "Licensed Product" means a product which, or the manufacture, use or
sale of which, is covered by a Valid Claim of any of the Patent Rights in the
country where the product is manufactured, used or sold.

      1.8 "NDA" means a New Drug Application filed with the FDA.

      1.9 "Net Sales" means the gross amount received by Novirio and/or its
Affiliates, as applicable, from sales or other dispositions of a Licensed
Product to independent third parties, less the following items provided that
such items are included in the amount invoiced and do not exceed reasonable and
customary amounts in the country in which such sale or other disposition
occurred: (i) trade, cash and quantity discounts actually allowed and taken;
(ii) excises, sales taxes or other taxes imposed upon and paid with respect to
such sales (excluding national, state or local taxes based on income); (iii)
freight, insurance and other transportation charges incurred in shipping a
Licensed Product to third parties; (iv) amounts repaid or credited by reason of
rejections, defects, recalls or returns or because of retroactive price
reductions; and (v) rebates paid pursuant to government regulations. Such
amounts shall be determined from the books and records of Novirio and/or its
Affiliates, maintained in accordance with generally accepted accounting
principles, consistently applied.

      If a Licensed Product is sold, leased, used or otherwise commercially
disposed of for value (including, without limitation, disposition in connection
with the delivery of other products or services) in a transaction that is not an
outright arm's length sale to an independent third party, then the gross amount
invoiced in such transaction shall be deemed to be the gross amount that


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would have been paid had there been such a sale at the average sale price of
such Licensed Product during the applicable royalty reporting period. Net Sales
shall not include any consideration received by Novirio and/or its Affiliates in
respect of the sale, use or other disposition of a Licensed Product in a country
prior to the receipt of all regulatory approvals required to commence full
commercial sales of such Licensed Product in such country (e.g., sales under
"treatment INDs," "named patient sales," "compassionate use sales," or their
equivalents).

      In the event the Licensed Product is sold as part of a Combination Product
(as defined below), the Net Sales from the Combination Product, for the purposes
of determining royalty payments, shall be determined by multiplying the Net
Sales of the Combination Product (as defined in the standard Net Sales
definition), during the applicable royalty reporting period, by the fraction,
A/A+B where A is the average sale price of the Licensed Product when sold
separately in finished form and B is the average sale price of the other
product(s) included in the Combination Product when sold separately in finished
form, in each case during the applicable royalty reporting period or, if sales
of both the Licensed Product and the other product(s) did not occur in such
period, then in the most recent royalty reporting period in which sales of both
occurred. In the event that such average sale price cannot be determined for
both the Licensed Product and all other product(s) included in the Combination
Product, Net Sales for the purposes of determining royalty payments shall be
calculated by multiplying the Net Sales of the Combination Product by the
fraction C/C+D where C is the fair market value of the Licensed Product and D is
the fair market value of all other pharmaceutical product(s) included in the
Combination Product. As used above, the term "Combination Product" means any
pharmaceutical product which comprises the Licensed Product and other active
compounds and/or ingredients.

      1.10 "Party" means Novirio or UABRF; "Parties" means Novirio and UABRF.

      1.11 "Patent Rights" means all patents and patent applications listed in
attached Exhibit A (which shall be updated as additional patents or patent
applications are added to this Agreement by mutual agreement of the Parties)
throughout the world, including any substitutions, extensions, reissues,
reexaminations, renewals, divisions, continuations or continuations-in-part,
which UABRF owns, or otherwise has the right to grant licenses under, including,
but not limited to, Patent Rights of Emory and CNRS that are subject to the 1994
Agreement.

      1.12 "Sublicensee" means any third party other than an Affiliate granted
the right, subject to the terms and conditions of Article 2, to make, use and
sell a Licensed Product, but not including a third party that is not granted the
right to make such Product but merely purchases such Product in finished form
for resale.

      1.13 "Sublicense Payments" means sublicense fees, milestone payments and
other cash consideration (excluding royalties) received by Novirio from a
Sublicensee, provided that in no event shall Sublicense Payments include any
funds provided by a Sublicensee to fund research and development, to reimburse
Novirio for research and development expenses or to purchase equity securities
of Novirio.



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<PAGE>
      1.14 "Sublicence Royalties" means royalties on sales of Licensed Product
received by Novirio from a Sublicensee.

      1.15 "Valid Claim" means a claim which (i) in the case of any unexpired
United States or foreign patent, shall not have been donated to the public,
disclaimed, nor held invalid or unenforceable against the other Party by a court
of competent jurisdiction in an unappealed or unappealable decision, or (ii) in
the case of any United States or foreign patent application, shall not have been
cancelled, withdrawn, abandoned nor been pending for more than five (5) years.

                            ARTICLE 2. License Grant

      2.1 License Grant from UABRF. Subject to the payment of the license fee
and royalties provided in Article 3 and the fulfillment of the other terms and
conditions of this Agreement, UABRF hereby grants to Novirio, and Novirio hereby
accepts, an exclusive license, including the right to grant sublicenses pursuant
to Section 2.2, under the Intellectual Property Rights for the sole and
exclusive purpose of making, having made, importing, using, having used,
offering to sell, selling and having sold products and services for all human or
animal medical purposes.

      2.2 Retained License. UABRF (and all entities within the UAB Medical
Center, which are under the control of the Board of Trustees of the University
of Alabama and any other nonprofit entity under the control of the Board of
Trustees of the University of Alabama System), Emory, and CNRS shall retain on
behalf of themselves and any research collaborators, a royalty-free right and
license to make and use Licensed Products and to practice Licensed Technology
for research and educational purposes only.

      2.3 Sublicense Rights. Novirio shall have the right to grant sublicenses
under the license granted pursuant to Section 2.1 above to parties with whom
Novirio has agreed to jointly develop and/or commercialize Licensed Products;
provided that any sublicense granted by Novirio under this Agreement shall be
subject and subordinate to, and consistent with, the terms and conditions of
this Agreement, and shall provide that any such Sublicensee shall not further
sublicense except on terms consistent with this Section 2.3. Novirio shall
provide UABRF with a copy of any sublicense granted pursuant to this Section 2.3
within one (1) month after the execution thereof. Such copy may be redacted to
exclude confidential scientific information and other information required by a
Sublicensee to be kept confidential, provided that all relevant financial terms
and information shall be retained therein. In the event of a material default by
any Sublicensee under a sublicense agreement, Novirio will inform UABRF and take
such action, after consultation with UABRF, which in Novirio's reasonable
business judgment will address such default.

      2.4 Sublicensee Rights Upon Termination. In the event of a termination
hereof under Section 7.2, all payments then or thereafter due to Novirio from
each of its sublicensees shall, upon notice from UAW to any such sublicensee,
become owed directly to UABRF for the account of Novirio; provided that UABRF
shall remit to Novirio the amount by which such payments in the aggregate exceed
the total amount owed by Novirio to UABRF. Notwithstanding the foregoing, UABRF
agrees that, if this License Agreement terminates pursuant to Section 7.2 any
sublicensee of Novirio shall, with respect to the Licensed Patents and


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<PAGE>
Licensed Technology, automatically become a direct license with UABRF on the
terms stated therein, subject to the rights of other sublicenses granted by
Novirio.

      2.5 Continued Duties of Novirio. Even if Novirio enters into sublicenses,
Novirio remains primarily liable to UABRF for all of Novirio's duties and
obligations contained in this Agreement, and in the event of any act or omission
of a sublicensee that would be a breach of its sublicense, Novirio shall be
liable for the performance of its duties and obligations under this Agreement in
respect of those matters as to which such breach by sublicense has occurred.

      2.6 Consideration for Sublicense. Except as provided for in Section 2.7,
Novirio shall not receive from sublicensees anything of value in lieu of cash
payments in consideration for any sublicense under this Agreement without the
prior written permission of UABRF.

      2.7 U.S. Manufacture. LICENSEE, either directly or through Affiliates or
sublicensees, agrees to use its best efforts to substantially manufacture
Licensed Products for United States Sales in the United States.

      2.8 Diligence. Novirio shall use reasonable commercial efforts to identify
and develop Licensed Products and to commercialize Licensed Products through a
thorough, vigorous and diligent research and development program. Without
limiting the generality of the foregoing, Novirio shall use reasonable
commercial efforts to commence clinical trials of a Licensed Product prior to
the fourth anniversary of the Effective Date.

      2.9 Lack of Diligence. If UABRF concludes that Novirio is not diligent in
development or Sales of Licensed Products pursuant to Section 2.7 for any reason
other than a) the withholding by a regulatory agency of marketing approval
despite Novirio's diligent effort to obtain such approval; or b) unanticipated
technical or scientific problems which have been promptly reported to UABRF in
writing; or c) other causes beyond the reasonable control of Novirio which have
been promptly reported to UABRF in writing; then UABRF may give notice to
Novirio stating the basis for their conclusion and, upon the request of UABRF,
Novirio shall show cause why the license granted hereunder should not be
terminated. If within ninety (90) days after Novirio's receipt of said notice,
the parties have not resolved the matter through good faith negotiations in a
mutually acceptable manner, the parties shall submit the dispute to arbitration
under the provisions of Section 8.4 of this Agreement.

                         ARTICLE 3. Payment Obligations

      3.1 License Fee. In consideration of the rights granted to Novirio under
this Agreement, Novirio shall pay to UABRF a $100,000 non-refundable, non
creditable license fee, payable within ninety (90) days after the Effective
Date.

      3.2 Reimbursement of Patent Expenses. Within thirty (30) days after the
end of each calendar quarter, UABRF shall provide Novirio with an accounting of
all patent related expenses incurred by UABRF, as described in Section 4.1,
below, during such calendar quarter. Novirio shall reimburse UABRF for all such
patent related expenses within thirty (30) days after receipt of such
accounting.



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      3.3 Milestone Payment.

            (a) Within thirty (30) days after the occurrence of the milestones
specified below, Novirio shall make the following non refundable, non-creditable
payments:

<TABLE>
<CAPTION>
                  Milestone                               Payment
                  ---------                               -------
<S>                                                     <C>
                  Submission of IND                     $  300,000
                  Approval of NDA                       $1,000,000
</TABLE>

            (b) The foregoing milestone payments shall be payable with respect
to each significant disease indication for which the milestones are applicable.

            (c) Milestone payments shall be paid directly to UABRF, Emory and
CNRS in equal amounts (i.e., the $300,000 milestone payable upon submission of
an IND shall be paid $100,000 to UABRF, $100,000 to Emory and $100,000 to CNRS)
as follows: (i) all payments to CNRS shall be in cash; (ii) payments to UABRF
shall be two-thirds (2/3) in cash and one-third (1/3) in Novirio Equity (as
defined below); and (iii) payments to Emory shall be one-third (1/3) in cash and
two-thirds (2/3) in Novirio Equity. As used above, "Novirio Equity" means (a)
until such time as the Common Stock of Novirio is registered under the
Securities Exchange Act of 1934, as amended (the "1934 Act"), a series of
Preferred Stock of Novirio with terms substantially similar to the terms of the
most recently issued series of Preferred Stock (or comparable securities),
valued at the fair market value as of the occurrence of the applicable milestone
established in good faith by the Board of Directors of Novirio, and (b) after
such time as the Common Stock is so registered, Common Stock of Novirio valued
at the closing price of the Common Stock on the exchange or market on which the
Common Stock is principally traded, averaged over the twenty (20) trading days
ending on the day before the occurrence of the applicable milestone. For
example, if (i) an IND is submitted on November 1, (ii) the Common Stock is
registered under the 1934 Act, and (iii) the 20-day average price ending on
October 31 is $30, then Novirio shall pay (A) $100,000 in cash to CNRS, (B)
$66,667 in cash and 1,111 shares of Common Stock to UABRF, and (C) $33,333 in
cash and 2,222 shares of Common Stock to Emory.

      3.4 Royalties.

            (a) Novirio shall pay to UABRF, during the applicable term described
in subsection (b), earned royalties at the rate of (i) six percent (6 %) of Net
Sales of Licensed Products for all Net Sales in a calendar year up to
$50,000,000 of Net Sales of all Licensed Products (prorated for any partial
calendar year), and (ii) three percent (3%) of Net Sales of Licensed Products
for all Net Sales in a calendar year in excess of $50,000,000 of Net Sales of
all Licensed Products (prorated for any partial calendar year).

            (b) Novirio shall be obligated to pay royalties at the rate set
forth in subsection (a), on a country by country basis, so long as there
continues to be a Valid Claim included in the Patent Rights that covers the
applicable Licensed Product in such country or until the tenth anniversary of
the First Commercial Sale of such Licensed Product in such country, whichever is
longer.



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            (c) Novirio shall pay to UABRF (i) twenty percent (20%) of
Sublicense Payments.

            (d) Novirio shall pay to UABRF (i) thirty percent (30%) of
Sublicense Royalties.

            (e) Notwithstanding the foregoing, Novirio may deduct from royalties
otherwise owed under subsections (a) and (d) fifty percent (50%) of any
royalties or other payments required to be paid for licenses under intellectual
property rights of third parties.

            (f) The royalties payable pursuant to subsection (a) and (d) shall
be subject to the following minimum requirements: (i) in the first full calendar
year following receipt of NDA approval in the United States (the "NDA
Approval"), $100,000; (ii) in the second full calendar year following NDA
Approval, $250,000; (iii) in the third full calendar year following NDA
Approval, $500,000; (iv) in the fourth full calendar year following NDA
Approval, $750,000; (v) in the fifth full calendar year following NDA Approval,
$1,000,000; and (vi) during each full calendar year thereafter, the minimum
requirement will decrease by $100,000, provided that the minimum requirement
shall in no case be reduced to less than $250,000. If the sum of the royalties
payable in any calendar quarter under subsections (a) and (d) are less than
twenty-five percent (25%) of the applicable annual minimum level, Novirio shall,
at the time of making the payment for such calendar quarter under subsection
(g), also pay to UABRF the difference between twenty-five percent (25%) of the
applicable annual minimum level and the actual earned royalties for such
calendar quarter. If the sum of the royalties paid in any calendar quarter under
subsections (a) and (d) are greater than twenty-five percent (25%) of the
applicable annual minimum level, the amount over such minimum level shall
constitute a "Credit Pool", which shall be credited against future minimum
payments under this subsection (f).

            (g) During the term of this Agreement and for so long thereafter as
Novirio is required to report royalties payable under this Section 3.4, Novirio
shall deliver to UABRF within forty-five (45) days after March 31, June 30,
September 30 and December 31 of each year a report indicating (i) Net Sales for
each Licensed Product, on a country by country basis, including an accounting of
the deductions from Net Sales permitted by the definition thereof; (ii) total
royalties owed under subsection (a); (iii) minimum royalties owed, if
applicable, under subsection (f); (iv) Sublicense Payments received by Novirio;
(v) Sublicense Royalties received by Novirio; and (vi) deductions from royalty
payments under subsection (e). Simultaneously with the delivery of each such
report, Novirio shall pay to UABRF the payments due under this Agreement for the
period covered by such report. If no royalties are due, it shall be so reported.
In the event that any royalty, milestone, or other payment due under this
Agreement is overdue beyond thirty (30) days of the due date, interest shall
accrue on said overdue payment at a rate equal to two (2) percent above the
prime rate set forth in the Wall Street Journal on the first business day after
the due date.

      3.5 Payment Currency. All amounts due under this Agreement shall be paid
to the designated Party in United States currency by wire transfer to an account
in a United States bank specified by such Party or in such other form and/or
manner as such Party may reasonably request. The payments due on sales in
currencies other than United States dollars shall be calculated using the
appropriate exchange rate of such currency quoted in the Wall Street Journal


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on the close of business on the last business day of the calendar quarter for
which such payment is made.

      3.6 Records; Audit. For a period rot less than five (5) years after the
relevant period, each Party shall keep full, true and accurate books of account
sufficient to determine the amounts payable pursuant to this Article 3. Each
Party shall have the right, not more than once during any calendar year, to have
the books and records of the other Party audited by a qualified independent
accounting firm of its choosing, under appropriate confidentiality provisions,
to ascertain the accuracy of the reports and payments hereunder and compliance
by the other Party and its Affiliates and sublicensees with their obligations
under this Agreement. Such audit shall be conducted upon at least ten (10) days'
advance notice during normal business hours and in a manner that does not
interfere unreasonably with the business of the audited entity. If the audited
Party has underpaid or overbilled an amount due under this Agreement by more
than five percent (5%), the audited Party shall promptly pay or refund the
appropriate amount to the other Party and shall also reimburse the other Party
for the cost of such audit.

                     ARTICLE 4. Intellectual Property Rights

      4.1 Prosecution and Maintenance of Patent Rights. UABRF shall be
responsible for prosecution and maintenance of patent applications and patents
covering Patent Rights, subject to ongoing consultation with Novirio. UABRF
shall provide Novirio with copies of all correspondence from patent offices, and
shall provide Novirio with copies of all proposed communications with patent
offices in sufficient time to allow Novirio to comment thereon. In the event
that UABRF decides not to file, prosecute or maintain a patent or patent
application included in the Patent Rights in any country, it shall first notify
Novirio of such decision, and Novirio shall have the right to file, prosecute
and maintain such patent or patent application in such country. Novirio shall
(a) reimburse UABRF for accrued patent expenses to date relating to the Patent
Rights (approximately [$98,000]) within ninety (90) days after the Effective
Date, and (b) reimburse UABRF for patent expenses relating to the Patent Rights
incurred after the Effective Date within thirty (30) days after receipt of
invoices with reasonable supporting documentation.

      4.2 Infringement of Licensed Technology.

            (a) Novirio may take any and all actions, legal or otherwise, which
are necessary to terminate infringements of any part of the Intellectual
Property Rights, including without limitation obtaining damages, injunction and
all other appropriate relief. UABRF shall have the right to be kept informed of
the status and progress of all actions instituted by Novirio pursuant to this
Section 4.2(a). Novirio shall bear all the expenses of all actions which it
initiates pursuant to this Section 4.2(a) (including without limitation
attorneys' fees).

            (b) If Novirio does not institute an action within one hundred
twenty (120) days after receiving notice from UABRF of an infringement of any
part of the Intellectual Property Rights, then UABRF may institute an action
with respect thereto. Novirio shall have the right to be kept informed of the
status and progress of all such actions instituted by Novirio pursuant to this
Section 4.2(b). UABRF shall bear all the expenses of all actions which it
initiates pursuant to this Section 4.2(b) (including without limitation
attorneys' fees).



                                     - 8 -
<PAGE>
            (c) Any recoveries or settlement fees received from suits or
settlements involving an action initiated pursuant to Sections 4.2(a) or (b)
above shall be paid: (i) first, to the Party who initiates the suit as
reimbursement for the expenses of such action (including without limitation
attorneys' fees) which it incurred; and (ii) the balance (if any) to the Party
which initiated such action in accordance with Sections 4.2(a) or (b) hereof,
for such Party's own use and benefit.

            (d) Notwithstanding Sections 4.2(a), (b) or (c) above, Novirio and
UABRF may agree to jointly institute an action in order to terminate
infringements of any part of Intellectual Property Rights. Novirio shall bear
all the expenses of all actions which they initiate pursuant to this Section
4.2(d) (including without limitation attorneys' fees). Any recoveries or
settlement fees received from suits or settlements involving an action initiated
pursuant to this Section 4.2(d) shall be paid: (i) to Novirio as reimbursement
for the expenses of such action (including without limitation attorneys' fees)
which it incurred; and (iii) the balance shall be divided between the Parties,
with Novirio receiving 75% of the balance and UABRF receiving 25% of the
balance.

      4.3 Use of Name in Suit. Where, in the judgment of the Party initiating an
action under Section 4.2 above, it is necessary to use the other Party's name to
prosecute such action, or in the event the other Party is a legally
indispensable party to such action, such other Party agrees to allow the
initiating Party to so use the name of such other Party; provided, however, that
the initiating Party agrees to hold such other Party harmless against the award
of court costs or damages resulting solely from the use of such other Party's
name by the initiating Party in such action.

      4.4 Detect and Report Infringements. Novirio agrees to keep watch to
detect any actual or suspected unauthorized use of any part of the Intellectual
Property Rights, and shall notify UABRF of any such actual or suspected
unauthorized use within thirty (30) days after receiving knowledge of the actual
or suspected unauthorized use.

                    ARTICLE 5. Representations and Warranties

      5.1 Representations and Warranties of UABRF. UABRF represents and warrants
to Novirio as follows:

            (a) All corporate action on the part of UABRF, its officers and
directors necessary for (i) the authorization, execution and delivery of this
Agreement and (ii) the performance of all obligations of UABRF hereunder has
been taken and this Agreement constitutes the legal and binding obligation of
UABRF, enforceable against UABRF in accordance with its terms. The execution of
this Agreement and the performance of the transactions contemplated by this
Agreement by UABRF will not conflict with or result in a breach of any of the
terms, conditions or provisions of, or constitute a default under, or require a
consent under its Certificate of Incorporation or Bylaws] (as amended or
restated to date) or any agreement or other instrument to which UABRF is a party
or by which it or any of its property is bound;



                                     - 9 -
<PAGE>
            (b) UABRF owns or is licensed to use the UABRF Intellectual Property
Rights and Patent Rights and has the right to grant the rights granted to
Novirio and its Affiliates herein. As of the date hereof, UABRF is not aware of
any claims, threatened or pending, or any grounds for the assertion of any
claim, that (i) the development of the Licensed Products as contemplated in this
Agreement would infringe the proprietary rights of any third party, or (ii)
UABRF does not have the right to use, license or sublicense the Intellectual
Property Rights and Patent Rights for the development of Licensed Products as
contemplated in this Agreement.

            (c) UABRF has obtained all consents and approvals required under the
1994 Agreement and, by executing this Agreement, is granting to Novirio a
license, under the terms set forth in Section 2.1, to all rights relating to the
Intellectual Property Rights and Patent Rights, including all rights owned or
held by CNRS and Emory.

      5.2 Representations and Warrants of Novirio. Novirio represents and
warrants to UABRF that all corporate action on the part of Novirio, its
officers, directors aid stockholders necessary for (i) the authorization,
execution and delivery of this Agreement and (ii) the performance of all
obligations of Novirio hereunder has been taken and this Agreement constitutes
the legal and binding obligation of Novirio, enforceable against Novirio in
accordance with its terms. The execution of this Agreement and the performance
of the transactions contemplated by thus Agreement by Novirio will not conflict
with or result in a breach of any of the terms, conditions or provisions of, or
constitute a default under, or require a consent under its [Certificate of
Incorporation or Bylaws] (as amended or restated to date) or any agreement or
other instrument to which Novirio is a Party or by which it or any of its
property is bound.

      5.3 Disclaimer. THE FOREGOING REPRESENTATIONS AND WARRANTIES ARE IN LIEU
OF ALL OTHER REPRESENTATIONS AND WARRANTIES NOT EXPRESSLY SET FORTH HEREIN.
UABRF AND NOVIRIO DISCLAIM ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED,
WITH RESPECT TO EACH OF THEIR RESEARCH, DEVELOPMENT AND COMMERCIALIZATION
EFFORTS HEREUNDER, INCLUDING, WITHOUT LIMITATION, WHETHER THE LICENSED PRODUCTS
CAN BE SUCCESSFULLY DEVELOPED OR MARKETED, THE ACCURACY, PERFORMANCE, UTILITY,
RELIABILITY, TECHNOLOGICAL OR COMMERCIAL VALUE, COMPREHENSIVENESS,
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WHATSOEVER OF THE LICENSED
PRODUCTS. IN NO EVENT SHALL EITHER UABRF OR NOVIRIO BE LIABLE FOR SPECIAL,
INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT
BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY.

                       ARTICLE 6. Confidential Information

      6.1 Treatment of Confidential Information. Each Party hereto shall
maintain the Confidential Information of the other Party in confidence, and
shall not disclose, divulge or otherwise communicate such Confidential
Information to others, or use it for any purpose, except pursuant to, and in
order to carry out, the terms and objectives of this Agreement, and hereby
agrees to exercise every reasonable precaution to prevent and restrain the
unauthorized disclosure (except to the extent incident to the development,
manufacture, use or sale of Licensed


                                     - 10 -
<PAGE>
Products) of such Confidential Information by any of its directors, officers,
employees, consultants, subcontractors, licensees or agents.

      6.2 Release from Restrictions. The provisions of Section 6.1 shall not
apply to any Confidential Information disclosed hereunder which:

            (a) was known or used by the receiving Party prior to its date of
disclosure to the receiving Party; or

            (b) either before or after the date of the disclosure to the
receiving Party is lawfully disclosed to the receiving Party by sources other
than the disclosing Party rightfully in possession of the Confidential
Information; or

            (c) either before or after the date of the disclosure to the
receiving Party becomes published or generally known to the public, other than
through the sale of Licensed Products in the ordinary course, through no fault
or omission on the part of the receiving Party, its Affiliates or sublicensees;
or

            (d) is independently developed by or for the receiving Party without
reference to or reliance upon the Confidential Information; or

            (e) is required to be disclosed by the receiving Party to comply
with applicable laws, to defend or prosecute litigation or to comply with
governmental regulations, provided that the receiving Party provides prior
written notice of such disclosure to the other Party and takes reasonable and
lawful actions to avoid and/or minimize the degree of such disclosure.

In any event, both Parties shall be released from any confidential obligations
under Section 6.1 after a period of five (5) years from the date of receipt of
the said Confidential Information.

                         ARTICLE 7. Term and Termination

      7.1 Term. This Agreement shall be effective as of the Effective Date.
Unless earlier terminated upon the mutual agreement of the Parties or in
accordance with the provisions of this Article 7, this Agreement shall continue
in force until the expiration of all royalty and other payment obligations under
Article 3 hereof.

      7.2 Termination for Breach. UABRF shall be entitled to terminate this
Agreement by written notice to Novirio in the event that Novirio is in default
of any of its material obligations hereunder and fails to remedy such default
within sixty (60) days after written notice thereof by UABRF. Any such notice
shall specifically state that UABRF intends to terminate this Agreement in the
event that Novirio shall fail to remedy the default.

      7.3 Consequences of Termination for Breach. If this Agreement terminates
pursuant to Section 7.2 following an unremedied breach the exclusive license
granted to Novirio under this Agreement may shall terminate or be rendered
nonexclusive at the sole option of UABRF. In the event of termination, Novirio
shall transfer and assign to UABRF all clinical and other


                                     - 11 -
<PAGE>
data in Novirio's possession that relate to the performance of the Licensed
Products, and all regulatory filings relating thereto.

      7.4 Survival of Obligations. Notwithstanding any termination of this
Agreement, (a) neither Party shall be relieved of any obligations incurred prior
to such termination, and (b) the obligations of the Parties with respect to the
protection and nondisclosure of Confidential Information (Article 6) as well as
any other provisions which by their nature are intended to survive any such
termination, shall survive and continue to be enforceable. Upon any termination
of this Agreement pursuant to Section 7.1 or 7.2, each Party shall promptly
return to the other Party all written Confidential Information, and all copies
thereof, of such other Party, provided, however, that UABRF need not return any
Confidential information provided to it pursuant to Section 7.3.

                            ARTICLE 8. Miscellaneous

      8.1 Governing, Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Alabama.

      8.2 Patent Marking. Novirio agrees to use reasonable efforts to mark and
have its Affiliates and Sublicensees mark all patented licensed Products they
sell or distribute pursuant to this Agreement in accordance with the applicable
patent statutes or regulations in the country or countries of manufacture and
sale thereof.

      8.3 Export Laws. Notwithstanding anything to the contrary contained
herein, all obligations of Novirio are subject to prior compliance with United
States export regulations and such other United States laws and regulations as
may be applicable, and to obtaining all necessary approvals required by the
applicable agencies of the government of the United States. UABRF and Novirio
shall cooperate with each other and shall provide assistance to the other as
reasonably necessary to obtain any required approvals.

      8.4 Dispute Resolution. In the event of any dispute arising out of or
relating to this Agreement or to a breach thereof, including its interpretation,
performance or termination, the Parties shall try to settle such conflicts
amicably between themselves. In the event that the conflict is not resolved
within sixty (60) days after one Party so notifies the other Party in writing
concerning a dispute or conflict, then the dispute or conflict shall be referred
to executive officers of both Parties for resolving by negotiation in good faith
as soon as practicable but no later than sixty (60) days after its referral. In
the event that the parties are still unable to resolve the dispute or conflict
by negotiation, the dispute or conflict may then be submitted by a Party to a
mediator, mutually agreed to by the Parties, for nonbinding mediation. The
Parties shall cooperate with the mediator in an effort to resolve such dispute.
If the dispute is not resolved within sixty (60) days of its submission to the
mediator, either Party may submit the dispute for binding arbitration. The
arbitration shall be conducted by three (3) arbitrators, one to be appointed by
UABRF, one to be appointed by Novirio, and the third to be appointed by the
other two arbitrators. The arbitration shall be conducted in accordance with the
commercial rules of the American Arbitration Association, which shall administer
the arbitration. The arbitration, including the rendering of the award, shall
take place in Birmingham, Alabama, and shall be the exclusive forum for
resolving such dispute. The decision of the arbitrators shall be executory,


                                     - 12 -
<PAGE>
final and binding upon the Parties hereto, and the expense of the arbitration
(including without limitation the award of attorneys' fees to the prevailing
Party) shall be paid as the arbitrators determine.

      8.5 Waiver. The waiver by a Party of a breach or a default of any
provision of this Agreement by the other Party shall not be construed as a
waiver of any succeeding breach of the same or any other provision, nor shall
any delay or omission, on the part of a Party to exercise or avail itself of any
right, power or privilege that it has or may have hereunder operate as a waiver
of any right, power or privilege by such Party.

      8.6 Notices. All notices, instructions and other communications hereunder
or in connection herewith shall be in writing and shall be (a) delivered
personally, (b) sent by registered or certified mail, return receipt requested,
postage prepaid, (c) sent via a reputable nationwide overnight courier service,
or (d) sent by facsimile transmission, in each case to an address set forth
below. Any such notice, instruction or communication shall be deemed to have
been delivered upon receipt if delivered by hand, three business days after it
is sent by registered or certified mail, return receipt requested, postage
prepaid, one business day after it is sent via a reputable nationwide overnight
courier service, or when transmitted with electronic confirmation of receipt, if
transmitted by facsimile (if such transmission is on a business day; otherwise,
on the next business day following such transmission).

            Notices to Novirio shall be      Novirio Pharmaceuticals Ltd.
            addressed to                     c/o MPM Asset Management LLC
                                             One Cambridge Center, 7th Floor
                                             Cambridge, MA 02142
                                             Telephone: 617-225-2360
                                             Fax: 617-225-0036

            with a copy to:                  Hale and Dorr LLP
                                             60 State Street
                                             Boston, MA 02109
                                             Attn: Steven D. Singer, Esq.
                                             Telephone. 617-526-6000
                                             Fax: 617-526-5000

            Notices to UABRF shall be        UAB Research Foundation
            addressed to:                    701 South 20th Street
                                             Suite 1160-G
                                             Birmingham, AL 35242
                                             Telephone: 205-934-9911
                                             Fax: 205-975-5560

A Party may change its address by giving notice to the other Parties in the
manner herein provided.

      8.7 No Agency. Nothing herein shall be deemed to constitute UABRF or
Novirio as the agent or representative of the other, or as joint venturers or
partners for any purpose.



                                     - 13 -
<PAGE>
      8.8 Entire Agreement. This Agreement and Exhibit A attached hereto (which
Exhibit A is deemed to be a part of this Agreement for all purposes) contain the
full understanding of the Parties with respect to the subject matter hereof and
supersede all prior understandings and writings relating thereto. No waiver,
alteration or modification of any of the provisions hereof shall be binding
unless made in writing and signed by the Parties.

      8.9 Headings. The headings contained in this Agreement are for convenience
of reference only and shall not be considered in construing this Agreement.

      8.10 Severability. In the event that any provision of this Agreement is
held by a court of competent jurisdiction to be unenforceable because it is
invalid or in conflict with any law of any relevant jurisdiction, the validity
of the remaining provision shall not be affected, and the Parties shall
negotiate a substitute provision that, to the extent possible, accomplishes the
original business purpose.

      8.11 Assignment. Novirio may not assign this Agreement or any of the
rights or obligations hereunder without the prior written consent of UABRF,
except to an Affiliate of Novirio or to any other party who acquires all or
substantially all of the business of Novirio, or all of the business relating to
the Licensed Product by merger, sale of assets or otherwise, so long as such
Affiliate or other party agrees in writing to be bound by the terms of this
Agreement.

      8.12 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their successors and permitted
assigns.

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

      8.14 Force Majeure. A Party to this Agreement shall not be responsible to
the other Parties for nonperformance or delay in performance of the terms or
conditions of this Agreement due to acts of God, acts of governments, war,
riots, strikes, accidents in transportation, or other causes beyond the
reasonable control of such Party.

      8.15 Place of Execution. This Agreement and any subsequent modifications
or amendments hereto shall be deemed to have been executed in Jersey, Channel
Islands.

      8.16 Use of Names. Novirio shall obtain the prior written approval of
UABRF prior to the use of UABRF, Emory, or CNRS names or any adaption thereof,
prior to making use of the name for any commercial purpose, except as required
by law. As an exception to the foregoing, both UABRF and Novirio have the right
to publicize the existence of this Agreement; however, neither UABRF nor Novirio
shall disclose the terms and conditions of this Agreement without the other
Party's consent, except as required by law.



                                     - 14 -
<PAGE>
      IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed in their names by their properly and duly authorized officers or
representatives as of the date first above written.

NOVIRIO PHARMACEUTICALS LTD.             UAB RESEARCH FOUNDATION


/s/ Bruno Lucidi

By:    Bruno Lucidi                      By:    /s/ illegible
       -------------------------------          -------------------------------

Title: President and CEO                 Title: Vice President
       -------------------------------          -------------------------------

Date:  June 20, 1998                     Date: June 20, 1998
       -------------------------------          -------------------------------



                                     - 15 -
<PAGE>
                                    EXHIBIT A

                                  Patent Rights

<TABLE>
<CAPTION>
     Serial No.           Inventors            Patent Title         Date Filed
     ----------           ---------            ------------         ----------
<S>                       <C>                  <C>                  <C>
1. 08/612,965
2. 08/829,748
3. 05/485,716
</TABLE>



                                     - 16 -
<PAGE>
                                   Notary Page

<TABLE>
<S>                      <C>
S.A. PEARMAIN            TO ALL to whom these presents shall come I SUSAN ANN PEARMAIN
Notary Public,           (nee Eastick) Notary Public by Royal Authority duly admitted and
P.O. Box 75,             sworn, dwelling and practicing in the Island of Jersey, DO
One The Forum,           HEREBY CERTIFY AND ATTEST unto all who it may concern
Grenville Street,
St. Helier,              THAT I was present on this day and saw Dr. Bruno Lucidi sign the
Jersey,                  document overleaf at St. Peter in the Island of Jersey and that
JE4 8PP.                 the name "B. Lucidi" subscribed thereto is in the true and
                         genuine handwriting of the said person who has identified
Tel: 814814              himself to me by producing to me his passport, namely, a French
Fax: 814815              passport number 7801947290
UK Code: 01534
International: 44 1534   IN FAITH AND TESTIMONY WHEREOF I have hereunto set my hand and
                         affixed my Seal of Office at Saint Peter, in the Island of
                         Jersey aforesaid (where stamps are not used), this 20th day
                         of June one thousand nine hundred ninety-eight.
</TABLE>

                                                     /s/ SA Pearmain
                                                     -------------------------
                                                     Notary Public
                                                     Jersey Channel Islands




                                     - 17 -
<PAGE>
                            FIRST AMENDMENT AGREEMENT

      THIS FIRST AMENDMENT AGREEMENT is made and entered into as of the 20th day
of June 1998, by and between by and between Novirio Pharmaceuticals Ltd., a
corporation organized under the laws of the Cayman Islands ("Novirio"), and the
UAB Research Foundation, a 501(c) not-for-profit charitable foundation,
organized in the State of Alabama and having its principal place of business at
701 South 20th Street, Suite 1120-G, Birmingham, Alabama, 35242, U.S.A.
("UABRF").

                                  INTRODUCTION

      WHEREAS, the Parties have entered into that certain License Agreement of
even date herewith pursuant to which, inter alia, UABRF has licensed certain
rights to Novirio ("the License Agreement"); and

      WHEREAS, the Parties hereto deem it advisable to effect certain
modifications to the License Agreement as provided for herein;

      NOW, THEREFORE, for and in consideration of the foregoing, the mutual
covenants herein contained and other good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:

1. THE INTRODUCTION IS AMENDED AS FOLLOWS:

      1. UABRF, Emory University ("Emory") and Centre National de la Recherche
Scientifique ("CNRS") are the co-owners of certain intellectual property rights,
including (a) pending U.S. patent application serial no. 08/612,965, filed March
11, 1996 relating to nucleosides with anti-viral and anti-hepatitis B activity;
(b) pending U.S. patent application serial no. 08/485,716, filed June 7, 1995;
and (c) pending U.S. patent application serial no. 08/829,748, a CIP application
of serial no. 08/485,716.

      2. Pursuant to an Agreement for Commercialization of Anti-Viral Compounds
dated June 3, 1994 among UABRF, Emory and CNRS (the "1994 Agreement"), UABRF has
been appointed the sole and exclusive agent for the licensing of the
intellectual property rights described in paragraph 1 above. References in the
Agreement made herein to UABRF shall include Emory and CNRS; notices to UABRF or
actions that can be taken by UABRF is also meant to include notices to Emory and
CNRS and actions that can be taken by Emory and CNRS.

2. ARTICLE 1, DEFINITIONS, IS AMENDED AS FOLLOWS:

      1.7. "Licensed Product" means a product which, or the manufacture, use or
sale of which, is covered by Licensed Technology or by a Valid Claim of any of
the Patent Rights in the country where the product is manufactured, used or
sold.

      1.9. "Net Sales" second and third paragraphs, are amended to read:



                                     - 1 -
<PAGE>
      If a Licensed Product is sold, leased, used or otherwise commercially
disposed of for value (including, without limitation, disposition in connection
with the delivery of other products or services) in a transaction that is not an
outright arm's length sale to an independent third party, then the gross amount
invoiced in such transaction shall be deemed to be the gross amount that would
have been paid had there been such a sale at the average sale price of such
Licensed Product during the applicable royalty reporting period. Net Sales shall
not include any consideration received by Novirio and/or its Affiliates in
respect of the sale, use or other disposition of a Licensed Product in a country
prior to the receipt of all regulatory approvals required to commence full
commercial sales of such Licensed Product in such country (e.g., sales under
"treatment INDs," "named patient sales," "compassionate use sales," or their
equivalents). In the event that there is not a sale of a Licensed Product during
the applicable royalty period, then Novirio shall use the sale price of a
comparable product to determine the price to be used for Net Sales under this
provision.

      "In the event the Licensed Product is sold as part of a Combination
Product (as defined below), the Net Sales from the Combination Product, for the
purposes of determining royalty payments, shall be determined by multiplying the
Net Sales of the Combination Product (as defined in the standard Net Sales
definition), during the applicable royalty reporting period, by the fraction,
A/A+B where A is the average sale price of the Licensed Product when sold
separately in finished form and B is the average sale price of the other
product(s) included in the Combination Product when sold separately in finished
form, in each case during the applicable royalty reporting period or, if sales
of both the Licensed Product and the other product(s) did not occur in such
period, then in the most recent royalty reporting period in which sales of both
occurred. In the event that such average sale price cannot be determined for
both the Licensed Product and all other product(s) included in the Combination
Product, Net Sales for the purposes of determining royalty payments shall be
calculated by multiplying the Net Sales of the Combination Product by the
fraction C/C+D where C is the fair market value of the Licensed Product and D is
the fair market value of all other FDA registered or approved anti-viral
pharmaceutical product(s) included in the Combination Product. As used above,
the term "Combination Product" means any pharmaceutical product which comprises
the Licensed Product and other active compounds and/or ingredients.

      1.13. "Sublicense Payments" means sublicense fees, milestone payments and
other cash consideration (excluding royalties) received by Novirio from a
Sublicensee, provided that, in no event shall Sublicense Payments include any
funds provided by a Sublicensee solely to fund research and development of
Licensed Products, to reimburse Novirio for research and development expenses
used solely for Licensed Products or solely to purchase equity securities of
Novirio.

      Add a new paragraph 1.16:

      1.16 "Licensed Technology" means all designs, technical information,
know-how, knowledge, data, specifications, test results and other information,
whether or not patented, which is known to UABRF on the date of this Agreement
and is useful of the manufacture, use, or sale of any Licensed Product.



                                     - 2 -
<PAGE>
3. ARTICLE 2, LICENSE GRANT, IS AMENDED AS FOLLOWS:

      2.7. Government Rights and U.S. Manufacture. The Licensed Patents,
Licensed Technology, or portions thereof were developed with financial or other
assistance through grants or contracts funded by the United States government.
Novirio acknowledges that in accordance with Public Law 96-517 and other
statutes, regulations, and Executive Orders as now exist or may be amended or
enacted, the United States government has certain rights in the Licensed Patents
and Licensed Technology. Novirio shall take all action necessary to enable UABRF
to satisfy its obligations under any federal law relating to the Licensed
Patents or Licensed Technology. If the United States government should take
action which renders it impossible or impractical for UABRF to grant the rights
and license granted herein to Novirio under this Agreement or otherwise perform
UABRF's obligations under this Agreement, UABRF or Novirio may terminate this
Agreement immediately by notice to the other party. Novirio shall not have any
right to the return of any payments of any kind made by it to UABRF prior to the
date of termination. Novirio, either directly or through Affiliates or
Sublicensees, agrees to use its best efforts to substantially manufacture
Licensed Products for United States sales in the United States.

      2.9. Lack of Diligence. In line 2, change Section 2.7 to Section 2.8.

4. ARTICLE 3, PAYMENT OBLIGATIONS, IS AMENDED AS FOLLOWS:

      3.3. Milestone Payments, is amended in subparagraphs (c) and (d) as
follows:

      (c) For HBV disease indications, milestone payments shall be paid directly
to UABRF, Emory and CNRS in equal amounts (i.e., the $300,000 milestone payable
upon submission of an IND shall be paid $100,000 to UABRF, $100,000 to Emory and
$100,000 to CNRS) as follows: (i) all payments to CNRS shall be in cash; (ii)
payments to UABRF shall be two-thirds (2/3) in cash and one-third (1/3) in
Novirio Equity (as defined below); and (iii) payments to Emory shall be
one-third (1/3) in cash and two-thirds (2/3) in Novirio Equity. As used above,
"Novirio Equity" means (a) until such time as the Common Stock of Novirio is
registered under the Securities Exchange Act of 1934, as amended (the "1934
Act"), a series of Preferred Stock of Novirio with terms substantially similar
to the terms of the most recently issued series of Preferred Stock (or
comparable securities), valued at the fair market value as of the occurrence of
the applicable milestone established in good faith by the Board of Directors of
Novirio, and (b) after such time as the Common Stock is so registered, Common
Stock of Novirio valued at the closing price of the Common Stock on the exchange
or market on which the Common Stock is principally traded, averaged over the
twenty (20) trading days ending on the day before the occurrence of the
applicable milestone. For example, if (i) an IND is submitted on November 1,
(ii) the Common Stock is registered under the 1934 Act, and (iii) the 20-day
average price ending on October 31 is $30, then Novirio shall pay (A) $100,000
in cash to CNRS, (B) $66,667 in cash and 1,111 shares of Common Stock to UABRF,
and (C) $33,333 in cash and 2,222 shares of Common Stock to Emory.

      (d) For HIV disease indications, milestone payments shall be paid 25% to
UABRF, 25% to Emory and 50% to CNRS (i.e., the $300,000 milestone payable upon
submission of an IND shall be paid $75,000 to UABRF, $75,000 to Emory and
$150,000 to CNRS) as follows: (i)


                                     - 3 -
<PAGE>
all payments to CNRS shall be in cash; (ii) payments to UABRF shall be
two-thirds (2/3) in cash and one-third (1/3) in Novirio Equity (as defined in
Section 3.3(b) above); and (iii) payments to Emory shall be one-third (1/3) in
cash and two-thirds (2/3) in Novirio Equity.

      3.4. Royalties, is amended in subparagraphs (e) and (f) as follows:

      (e) Notwithstanding the foregoing, Novirio may deduct from royalties
otherwise owed under subsections (a) and (d) up to fifty percent (50%) of any
royalties or other payments required to be paid for licenses under intellectual
property rights of third parties and on a proportional basis with third parties
in the event that the third parties' royalties or other payments are three
percent (3%) or greater, provided, however, that in no event shall royalties
payable to UABRF be less than three percent (3%) for Net Sales between 0 and 50
million dollars each year, or one and one-half percent (1-1/2%) for Net Sales in
excess of 50 million dollars each year, except for Sublicense Royalties payable
under subsection (d).

      (f) The royalties payable pursuant to subsection (a) and (d) shall be
subject to the following minimum requirements: (i) in the first full calendar
year following receipt of NDA approval in the United States (the "NDA
Approval"), $100,000; (ii) in the second full calendar year following NDA
Approval, $250,000; (iii) in the third full calendar year following NDA
Approval, $500,000; (iv) in the fourth full calendar year following NDA
Approval, $750,000; (v) in the fifth full calendar year following NDA Approval,
$1,000,000; and (vi) during each full calendar year thereafter, the minimum
requirement will decrease by $100,000, provided that the minimum requirement
shall in no case be reduced to less than $250,000. If the sum of the royalties
payable in any calendar quarter under subsections (a) and (d) are less than
twenty-five percent (25%) of the applicable annual minimum level, Novirio shall,
at the time of making the payment for such calendar quarter under subsection
(g), also pay to UABRF the difference between twenty-five percent (25%) of the
applicable annual minimum level and the actual earned royalties for such
calendar quarter. If the sum of the royalties paid in any calendar quarter under
subsections (a) and (d) are greater than twenty-five percent (25%) of the
applicable annual minimum level, the amount over such minimum level shall
constitute a "Credit Pool", which shall be credited against future minimum
payments for that year only under this subsection (f).

      3.6. Records; Audit. For a period not less than five (5) years after the
relevant period, each Party shall keep full, true and accurate books of account
sufficient to determine the amounts payable pursuant to this Article 3. Each
Party shall have the right, not more than once during any calendar year, to have
the books and records of the other Party, including Novirio's sublicensees,
audited by a qualified independent accounting firm of its choosing, under
appropriate confidentiality provisions, to ascertain the accuracy of the reports
and payments hereunder and compliance by the other Party and its Affiliates and
sublicensees with their obligations under this Agreement. Such audit shall be
conducted upon at least ten (10) days' advance notice during normal business
hours and in a manner that does not interfere unreasonably with the business of
the audited entity. If the audited Party has underpaid or overbilled an amount
due under this Agreement by more than five percent (5%), the audited Party shall
promptly pay or refund the appropriate amount to the other Party and shall also
reimburse the other Party for the cost of such audit.



                                     - 4 -
<PAGE>
5. ARTICLE 4, INTELLECTUAL PROPERTY RIGHTS, IS AMENDED AS FOLLOWS:

      4.2. Infringement of Licensed Technology.

            (a) Novirio may take any and all actions, legal or otherwise, which
are necessary to terminate infringements of any part of the Intellectual
Property Rights, including without limitation obtaining damages, injunction and
all other appropriate relief. UABRF (or Emory or CNRS) shall have the right to
be kept informed of the status and progress of all actions instituted by Novirio
pursuant to this Section 4.2(a). Novirio shall bear all the expenses of all
actions which it initiates pursuant to this Section 4.2(a) (including without
limitation attorneys' fees).

            (b) If Novirio does not institute an action within one hundred
twenty (120) days after receiving notice from UABRF (or Emory or CNRS) of an
infringement of any part of the Intellectual Property Rights, then UABRF (or
Emory or CNRS) may institute an action with respect thereto. Novirio shall have
the right to be kept informed of the status and progress of all such actions
instituted by Novirio pursuant to this Section 4.2(b). UABRF (or Emory or CNRS)
shall bear all the expenses of all actions which it initiates pursuant to this
Section 4.2(b) (including without limitation attorneys' fees).

            (c) Any recoveries or settlement fees received from suits or
settlements involving an action initiated pursuant to Sections 4.2(a) or (b)
above shall be paid: (i) first, to the Party who initiates the suit as
reimbursement for the expenses of such action (including without limitation
attorneys' fees) which it incurred; and (ii) the balance (if any) to the Party
which initiated such action in accordance with Sections 4.2(a) or (b) hereof,
for such Party's own use and benefit, provided however, if such Party is
Novirio, such balance shall be treated as specified in Section 4.2(d) of this
Agreement.

            (d) Notwithstanding Sections 4.2(a), (b) or (c) above, Novirio and
UABRF (or Emory or CNRS) may agree to jointly institute an action in order to
terminate infringements of any part of Intellectual Property Rights. Novirio
shall bear all the expenses of all actions which they initiate pursuant to this
Section 4.2(d) (including without limitation attorneys' fees). Any recoveries or
settlement fees received from suits or settlements involving an action initiated
pursuant to this Section 4.2(d) shall be paid: (i) to Novirio as reimbursement
for the expenses of such action (including without limitation attorneys' fees)
which it incurred; and (ii) the balance shall be divided between the Parties,
with Novirio receiving 75% of the balance and UABRF (or Emory or CNRS) receiving
25% of the balance.

6. ARTICLE 5, REPRESENTATIONS AND WARRANTIES, IS AMENDED AS FOLLOWS:

      The title of this Article 5 is amended to read: "Representations,
Warranties, Damages, Indemnification, and Insurance."

            5.1 Representations and Warranties of UABRF is amended in
subparagraph (b) as follows:


            (b) UABRF owns or is licensed to use the UABRF Intellectual Property
Rights and Patent Rights and has the right to grant the rights granted to
Novirio and its Affiliates


                                     - 5 -
<PAGE>
herein. As of the date hereof, UABRF is not aware of any claims, threatened or
pending, or any grounds for the assertion of any claim, that (i) the development
of the Licensed Products as contemplated in this Agreement would infringe the
proprietary rights of any third party, or (ii) UABRF does not have the right to
use, license or sublicense the Intellectual Property Rights and Patent Rights
for the development of Licensed Products as contemplated in this Agreement.
Notwithstanding the above, ISIS Pharmaceuticals, through an exclusive license
arrangement between ISIS Pharmaceuticals and CNRS relating to PCT/FR93/00498,
has certain rights to some of the SATE prodrug claims in PCT/US96/00026
(published claims 3 and 9). Novirio understands that it will may need to obtain
a license if it wishes to develop any products which are dependent on claims 3
and 9 of PCT/US96/00026.

      Add the new Paragraphs 5.4 to 5.8, as follows:

      5.4 No Liability. UABRF, Emory, and CNRS shall not be liable to Novirio or
Novirio's customers, sublicensees or Affiliates for special, incidental,
indirect, or consequential damages resulting from defects in the design,
testing, labeling, manufacture, or other application of Licensed Products
manufactured, tested, designed, sublicensed, or sold pursuant to this Agreement.

      5.5 Indemnification. Novirio shall defend, indemnify, and hold harmless
the Indemnitees (defined as UABRF, Emory, and CNRS, and their officers,
directors and employees, and their heirs, executors, administrators, and legal
representatives) from and against any and all claims, demands, loss, liability,
expense, or damage (including investigative costs, court costs and attorneys'
fees). Indemnitees may suffer, pay, or incur as a result of claims, demands or
actions against any of the Indemnitees arising or alleged to arise by reason of
or in connection with any and all personal injury and property damage caused or
contributed to in whole or in part by Novirio's manufacture, testing, design,
use, sale, or labeling of any Licensed Products, or the practice of any Licensed
Patents. Novirio's obligations under this Article shall survive the expiration
or termination of this Agreement for any reason.

      5.6 Agreement Not to Sue. To the extent that the rights have not already
been licensed exclusively to another party, UABRF, Emory, and CNRS agree not to
sue Novirio or its Affiliates or sublicensees for patent infringement for
practicing a claim of a patent assigned or licensed from UABRF, Emory, or CNRS
if practicing said claim is required to make, have made, use, import, offer for
Sale, Sell or have Sold Licensed Products.

      5.7 Insurance. Without limiting Novirio's indemnity obligations under the
preceding paragraph, Novirio, its Affiliates, and sublicensees shall maintain
throughout the term of this Agreement and for ten (10) years thereafter a
liability insurance policy which:

            i.    insures Indemnitees for all claims, damages, and actions
                  mentioned in Section 5.5, above;

            ii.   includes a contractual endorsement providing coverage for all
                  liability which may be incurred by Indemnitees in connection
                  with this Agreement;



                                     - 6 -
<PAGE>
            iii.  requires the insurance carrier to provide UABRF with no less
                  than thirty (30) days written notice of any change in the
                  terms or coverage of the policy or its cancellation; and

            iv.   provides Indemnitees product liability coverage in an amount
                  no less than One Million Dollars ($1,000,000) per occurrence
                  for bodily injury and. One Million Dollars ($1,000,000) per
                  occurrence for property damage, subject to a reasonable
                  aggregate amount.

      5.8 Notice of Claims. Novirio shall promptly notify UABRF of all claims
involving the Indemnitees and will advise UABRF of the policy amounts that might
be needed to defend and pay any such claims.

7. ARTICLE 7, TERM AND TERMINATION, IS AMENDED AS FOLLOWS:

      7.1. Term. This Agreement shall be effective as of the Effective Date.
Unless earlier terminated upon the mutual agreement of the Parties or in
accordance with the provisions of this Article 7, this Agreement shall continue
in force until the expiration of all royalty and other payment obligations under
Article 3 hereof. In the event of termination, Novirio shall transfer and assign
to UABRF all clinical and other data in Novirio's possession that relate to the
performance of the Licensed Products, and all regulatory filings relating
thereto.

8. ARTICLE 8, MISCELLANEOUS, IS AMENDED AS FOLLOWS:

      8.15. Place of Execution. This Agreement and any subsequent modifications
or amendments hereto shall be deemed to have been executed in the Cayman
Islands.

9. OTHER THAN AS EXPRESSLY PROVIDED FOR HEREIN, THE TERMS AND PROVISIONS OF THE
LICENSE AGREEMENT REMAIN IN FULL FORCE AND EFFECT AND ARE UNAFFECTED HEREBY.

      IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed in their names by their properly and duly authorized officers or
representatives as of the date first above written.

NOVIRIO PHARMACEUTICALS LTD.             UAB RESEARCH FOUNDATION

/s/ B. Lucidi

By:    /s/ B. Lucidi                     By:    /s/ illegible
       -----------------------------            -----------------------------

Title: President and CEO                 Title: VP- UABRF
       -----------------------------            -----------------------------

Date:  December 4, 1998                  Date:  Dec. 4, 1998
       -----------------------------            -----------------------------



                                     - 7 -
<PAGE>
                           SECOND AMENDMENT AGREEMENT

THIS SECOND AMENDMENT AGREEMENT is made and entered into as of the 16 day of
July 1999, by and between Novirio Pharmaceuticals Limited, a corporation
organized under the laws of the Cayman Islands ("Novirio") and the UAB Research
Foundation, a 501(c) not-for-profit charitable foundation, organized in the
State of Alabama and having its principal place of business at 710 South 20P
Street, Suite 1120-G, Birmingham, AL ("UABRF").

                                  INTRODUCTION

      1. Novirio and UABRF are parties to a certain License Agreement dated as
of June 20, 1998, as amended by a First Amendment Agreement also dated as of
June 20, 1998 (as amended, the "License Agreement"), pursuant to which, inter
alia, UABRF has licensed certain rights to Novirio; and

      2. The parties hereto deem it advisable to effect certain modifications to
the License Agreement as provided herein;

      NOW THEREFORE, for and in consideration of the foregoing, the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:

1.    All references in the License Agreement to "Novirio Pharmaceuticals Ltd."
      are hereby deleted and replaced with "Novirio Pharmaceuticals Limited."

2.    Exhibit A to the License Agreement is hereby deleted in its entirety and
      replaced with the Exhibit A attached to this Second Amendment Agreement.
      The parties hereto agree that each of the patents and patent applications
      identified on the attached Exhibit A are deemed to be "Patent Rights" as
      such term in defined in the License Agreement.

3.    Except as otherwise provided in the License Agreement, the parties hereto
      agree that no consideration is due and payable with respect to the
      amendments to the License Agreement effected hereby.

4.    Other than as expressly provided for herein, the parties hereto agree that
      the terms and provisions of the License Agreement remain in full force and
      effect and are unaffected hereby.



                                     - 1 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
Agreement to be executed in their respective name by a properly and duly
authorized officer or representative as of the date first written above.

                                    NOVIRIO PHARMACEUTICALS LIMITED



                                    By: /s/ Bruno Lucidi
                                        ---------------------------------------
                                          Bruno Lucidi, President

                                    UAB RESEARCH FOUNDATION



                                    By: /s/ illegible
                                        ---------------------------------------
                                        Name:
                                        Title: UABRF - Vice President





                                     - 2 -
<PAGE>
                                    EXHIBIT A

                                  PATENT RIGHTS

<TABLE>
<CAPTION>
     Serial No.                  Inventors                     Patent Title                    Date Filed
     ----------                  ---------                     ------------                    ----------
<S>                      <C>                          <C>                                      <C>
1. 08/612,965            Schinazi, Raymond F.         Nucloesides with Anti-Hepatitis B          7/29/97
                         Sommadossi, Jean-Pierre      Activity
                         Gosselin, Giles
                         Imbach, Jean-Louis

2. 08/829/748            Schinazi, Raymond F.         Nucloesides with Anti-Hepatitis B          3/12/97
                         Sommadossi, Jean-Pierre      Activity
                         Gosselin, Giles
                         Imbach, Jean-Louis
3. 09/112,898 CIPCON     Schinazi, Raymond F.         2' or 3'-Deoxy and                          7/9/98
   05/485,716 CIP        Sommadossi, Jean-Pierre      2'-Dideoxy-B-L-Pentafuranonucleoside
                         Gosselin, Giles              Compounds, Method of Preparation
                         Imbach, Jean-Louis           and Application in Therapy

                                                      especially as Anti-viral Agents

4. 60/107,116            Sommadossi, Jean-Pierre      B-L-(2' or 3')-Azido -                     11/5/98
                         Schinazi, Raymond F.         5-Fluorocytidine Nucleosides for
                                                      the Treatment of HBV Infection

5. 60/107,178            Gosselin, Giles              B-L-(2' or 3')-Azido -                     11/5/98
                         Imbach, Jean-Louis           5-Fluorocytidine Nucleosides for
                         Sommadossi, Jean-Pierre      the Treatment of HIV Infection
                         Schinazi, Raymond F.
</TABLE>



                                     - 3 -