PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED (DESIGNATED BY AN ASTERISK (*)
          AND WHITE SPACE) AND FILED SEPARATELY WITH THE SECURITIES AND
                 EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
          CONFIDENTIAL TREATMENT DATED AUGUST 4, 1998; FILE NO. 0-15609

                          LICENSE AND SUPPLY AGREEMENT

         This License and Supply  Agreement  ("Agreement"),  effective as of the
30th day of June 1998, is by and between Japan Energy Corporation, a corporation
duly  organized  and existing  under the laws of Japan and having its  principal
place of business at 10-1, Toranomon 2-chome,  Minato-ku,  Tokyo 105-8407, Japan
(hereinafter  referred  to  as  "JE"),  and  Agouron  Pharmaceuticals,  Inc.,  a
corporation  duly  organized  and  existing  under  the  laws  of the  State  of
California,  U.S.A.,  and having its principal  place of business at 10350 North
Torrey Pines Road, La Jolla,  California 92037, U.S.A.  (hereinafter referred to
as "Agouron").  JE and Agouron are sometimes  hereinafter  each referred to as a
Party (collectively "Parties") to this Agreement.

                                   BACKGROUND

         JE possesses technical information and know-how pertaining to a certain
pharmaceutical compound designated JE-2147 and its related compounds that may be
useful  in  the  treatment  and  prevention  of  Human   Immunodeficiency  Virus
infections and other diseases.

         The Parties entered into a Confidentiality Agreement effective December
31, 1997 (the  "Confidentiality  Agreement") and a Material  Transfer  Agreement
effective  December 31, 1997 (the "Material  Transfer  Agreement"),  pursuant to
which Agouron has undertaken certain evaluations of JE-2147.

         JE  holds  patents  rights   pertaining  to  JE-2147  and  its  related
compounds.

         Agouron  desires  to obtain a  license  from JE to  enable  Agouron  to
develop and commercialize  Product (as hereinafter defined) in certain countries
of the  world,  and JE is  willing  to  grant  such  license  on the  terms  and
conditions hereinafter set forth.

         The Parties  wish to  cooperate  under the terms of this  Agreement  to
optimize the development and commercialization of Product.

         The Parties also wish to confirm their arrangement regarding the supply
of  Compound  by JE to Agouron  and the supply of Product by Agouron to JE (both
terms as hereinafter defined).

         On June 30, 1998, the parties  executed and delivered to each other, by
telefax,  a prior version of this  Agreement.  The parties now wish to supersede
such prior  version of this  Agreement  and to formally  enter into this revised
version of this Agreement.

         NOW,  THEREFORE,  in  consideration  of the  premises,  and the  mutual
covenants,  benefits and  obligations  set forth  herein,  the Parties  agree as
follows:
<PAGE>

                             ARTICLE I - DEFINITIONS

         When  used in this  Agreement,  the  following  terms  shall  have  the
meanings set out in this Article I. Except as otherwise explicitly provided, all
references to Articles and Sections  shall refer to the Articles and Sections of
this Agreement, and all references to Attachments,  Exhibits and Schedules shall
refer to the Attachments, Exhibits and Schedules to this Agreement, all of which
are incorporated herein by reference.

         SECTION 1.01 "Affiliate" means any person,  organization or entity that
is, directly or indirectly,  controlling, controlled by, or under common control
with JE or  Agouron,  as the case may be. The term  "control"  (including,  with
correlative meaning, the terms "controlled by" and "under common control with"),
as  used  with  respect  to  any  person,  organization  or  entity,  means  the
possession,  directly  or  indirectly,  of the  power to  direct,  or cause  the
direction  of, the  management  and  policies of such  person,  organization  or
entity,  whether through the ownership of voting  securities,  or by contract or
court  order or  otherwise.  The  ownership  of voting  securities  of a person,
organization  or entity shall not, in and of itself,  constitute  "control"  for
purposes  of this  definition,  unless  said  ownership  is of a majority of the
outstanding securities entitled to vote of such person,  organization or entity.
Affiliate shall also mean a limited partnership in which a subsidiary of Agouron
and/or JE is a general partner.

         SECTION 1.02 "Combination Product" means any pharmaceutical  product in
any dosage form that contains, in addition to * , one (1) or more * having *.
                                              .

         SECTION 1.03  "Compound"  means the chemical  compound  known by the JE
code name JE-2147 ("JE-2147"), whose chemical structure is as follows:






                                        *
                              (chemical structure)

     The definition of Compound also means: (i) * JE-2147; * JE-2147, * .

         SECTION 1.04  "Compound  Supply Plan" means the supply plan under which
JE will provide Compound to Agouron in accordance with the provisions of Section
4.04.

         SECTION 1.05 "Control," "Controlled" or "Controlling" means possession,
now or in the  future,  of the  ability  to grant a license  or  sublicense,  as
provided for herein,  without  violating  the terms of any  agreement  with,  or
arrangement with, or the rights of any third party.
<PAGE>

         SECTION  1.06  "Development  Program"  means all normal  and  customary
activities by or on behalf of JE or Agouron,  independently  or jointly,  as the
case may be, that are necessary for the timely  development of Compound and/or a
Product,  including,  but not limited to: (i) formulation and stability studies;
(ii) other non-clinical studies, including toxicology studies (or the applicable
equivalent), in preparation for regulatory submissions;  (iii) virology studies,
including   resistance  and  cross-resistance   studies;   (iv)  manufacture  of
preclinical and clinical materials and supplies;  (v) planning,  implementation,
evaluation,  administration  and  conduct of human  clinical  trials,  including
pharmaco-economic, quality of life and other clinical studies that are necessary
for the purposes of  Registration  or to expand the labeling of a Product;  (vi)
manufacturing  process  development  and  scale-up;  and (vii)  preparation  and
submission of  Registration  applications.  The normal and customary  activities
necessary for timely  development of Compound  and/or Product for indications in
the Field are, or will be, described  generally in the Development  Program that
is described in Exhibit 1, as such exhibit is amended in the future.

         SECTION 1.07  "Development  Program  Patent Rights" means patent rights
covering those  inventions  conceived or reduced to practice in the  Development
Program after the Effective  Date of this  Agreement  that are contained in: (i)
any patent  applications or issued patents that are,  respectively,  filed after
the Effective Date of this Agreement or issued from patent applications that are
filed after the Effective Date of this Agreement in the United States and/or any
other countries  throughout the world, and that are Controlled by either or both
of the Parties; and (ii) any reissues, extensions (or other governmental actions
that  provide  exclusive  rights to the patent  holder in the  patented  subject
matter   beyond   the   original   patent   expiration   date),   substitutions,
confirmations,   registrations,   revalidations,   re-examinations,   additions,
continuations,   continuations-in-part,  or  divisions  of  or  to  any  of  the
foregoing;   such  inventions  shall  include,   but  not  be  limited  to,  any
compositions  of matter of  intermediates  of the  Compound,  methods  of use or
processes of making the  Compound,  intermediates  thereof,  or Products,  which
compositions  of matter,  methods of use or  processes  of making the  Compound,
intermediates  thereof or Products  are  conceived or reduced to practice in the
Development  Program after the  Effective  Date of this  Agreement.  Development
Program Patent Rights shall not include any inventions  that are included in the
JE Patent Rights.  For purposes of this  Agreement,  the terms  "conceived"  and
"reduced to practice"  shall have the meanings  determined  under United  States
law, regardless of where such inventive acts take place.

         SECTION 1.08 "Development Program Technology" means any know-how, trade
secret,  experimental data, formula, expert opinion,  experimental procedure and
other confidential and/or proprietary  information  specifically  concerning the
Compound,  intermediates  thereof, or a Product that is developed or acquired by
or on behalf of JE or Agouron,  independently or jointly, as the case may be, in
the  Development  Program after the Effective  Date of this  Agreement  that are
useful or necessary for either: (i) the formulation (including sustained-release
formulations),  manufacture,  use  and/or  application  of a  Product;  or  (ii)
obtaining Registration of a Product,  including, but not limited to, information
and  data  arising  out  of  pre-clinical   and  clinical  trials  and  all  NDA
applications,  and  which is under  the  Control  of JE and  Agouron,  solely or
jointly. Development Program Technology shall not include JE Technology.
<PAGE>

         SECTION  1.09  "Dossier"  means  the  document  that is filed  with and
approved by a government or health authority for purposes of  Registration,  for
example, a Marketing Authorization Application.

         SECTION 1.10 "Effective Date" means June 30, 1998.

         SECTION  1.11 "EMEA" means the European  Agency for the  Evaluation  of
Medicinal Products.

         SECTION 1.12"FDA" means the United States Food and Drug Administration.

         SECTION  1.13  "Field"  means the  treatment  and  prevention  of Human
Immunodeficiency Virus ("HIV") infections.

         SECTION 1.14 "Initial Commercial Sale" means the first commercial sale 
of a Product *

         SECTION 1.15 "JE Territory" means Japan, Taiwan, South Korea 
and North Korea.

         SECTION  1.16 "JE Patent Rights" means: (i) the patents  and the patent
applications  that are  referred  to in Schedule 1 of this  Agreement;  (ii) all
patents * , and all  patents  and patent  applications  based on, or claiming or
corresponding  to the * of any * ; or (iii) any reissues,  extensions  (or other
governmental  actions that provide  exclusive rights to the patent holder in the
patented   subject  matter  beyond  the  original   patent   expiration   date),
substitutions,  confirmations,  registrations,  revalidations,  re-examinations,
additions,  continuations,  continuations-in-part,  or divisions of or to any of
the foregoing.

         SECTION  1.17  "JE  Technology"  means  any  know-how,   trade  secret,
experimental data, formula, expert opinion,  experimental  procedure,  and other
confidential  and/or  proprietary   information   specifically   concerning  the
Compound,  intermediates thereof, or a Product that was developed or acquired by
or on behalf of JE before the Effective Date of this Agreement that is necessary
or  useful  for  either:  (i)  the  formulation   (including  sustained  release
formulations),  manufacture,  use  and/or  application  of a  Product;  or  (ii)
obtaining Registration of a Product,  including, but not limited to, information
and  data  arising  out  of  pre-clinical   and  clinical  trials  and  all  NDA
applications, and which is Controlled by JE.

         SECTION 1.18  "Licensed  Territory"  means all  countries of the world,
except for Japan, Taiwan, South Korea and North Korea.

         SECTION 1.19 "MAA" means Marketing Authorization Application.

         SECTION 1.20 "Major Market European Country" means the United  Kingdom,
France,  Germany,  Spain or Italy.
<PAGE>

         SECTION 1.21 "Net Sales" means the gross amount invoiced for Product by
Agouron, its Affiliates and sublicensees to non-Affiliated third parties,  other
than separately itemized  transportation  costs, and sales taxes and other taxes
that are  directly  linked to and  included  in the gross  amount  invoiced,  as
computed on a product-by-product  basis for the countries  concerned,  less: (i)
deductions for returns, credits for rejected goods, and rebates, chargebacks and
allowances; (ii) usual and customary *  , sales  commissions,  transportation
insurance  charges,  normal  handling and packaging costs, and customs duties 
and other governmental charges.

         SECTION  1.22  "New  Drug  Application"  or  "NDA"  means  a  new  drug
application,  product license application or comparable regulatory submission to
the FDA,  the EMEA or an  equivalent  agency of a country in the  Territory  for
permission to commence commercial sale of a Product.

         SECTION 1.23 "Patent Rights" means, collectively,  JE Patent Rights and
Development Program Patent Rights.

         SECTION 1.24 "Product" means any  pharmaceutical  product in any active
ingredient form or finished-dosage  form that contains the Compound,  including,
without limitation, Combination Products.

         SECTION  1.25  "Registration"   means  the  official  approval  by  the
government  or health  authority in a country (or  supra-national  organization,
such as the European  Agency for the  Evaluation of Medicinal  Products) that is
required for a Product to be offered for sale in such  country,  including  such
authorizations  as may be required  for the  production,  importation,  pricing,
reimbursement and sale of such Product,  and for subsequent  regulatory  filings
for line extensions and/or additional indications of such Product.

         SECTION 1.26      "Territory" means the world.

         SECTION 1.27 "Trade Dress" means any materials directly  supporting the
commercialization  of a  Product,  including,  but not  limited  to,  packaging,
package inserts,  advertising or selling aids, brochures,  mailings and/or other
marketing or packaging materials.

         SECTION 1.28 "Trademark(s)" means any trademark selected and owned by a
Party and  registered  (or applied  for) by such  Party,  its  Affiliate(s)  and
sublicensee(s)  in the  Territory  for use in  connection  with the marketing of
Products.  The  definition  of  Trademark(s)  shall not refer to trade  names or
designs such as logos used by a Party to designate the name of such Party.

         SECTION  1.29  "United  States" or "U.S."  means the  United  States of
America, its territories, possessions and protectorates (including Puerto Rico),
and the District of Columbia.
<PAGE>

         SECTION 1.30 "Valid Claim" means a claim within issued and  enforceable
JE Patent Rights,  which claim has not been:  (i) abandoned or disclaimed;  (ii)
declared invalid or unenforceable by a decision of a court or other governmental
agency of competent  jurisdiction  that is unappealable or unappealed within the
time allowed for appeal; or (iii) admitted by JE to be invalid.

                         ARTICLE II - COMMERCIAL RIGHTS

         SECTION  2.01  LICENSE   GRANTS.   To  implement  the  development  and
commercialization of Compound and/or Products, the Parties, subject to the other
applicable  provisions of this  Agreement,  grant and accept the license  rights
provided below in this Article II.

         (a) Subject to the  provisions  of Section  2.01(c),  and Article V, JE
grants Agouron the exclusive right, even as to JE (with right of sublicense), to
use,  offer for sale,  sell  and/or  import in or into the  Licensed  Territory,
Compound and Products under applicable JE Patent Rights and Development  Program
Patent  Rights,  and using  applicable JE  Technology  and  Development  Program
Technology.

         (b) Subject to the provisions of Sections 2.01(c) and 4.04, and Article
V, JE grants  Agouron the  non-exclusive  right in the Territory  (with right of
sublicense)  under  applicable JE Patent Rights and  Development  Program Patent
Rights,  and using applicable JE Technology and Development  Program  Technology
to:  (i) make  and/or  have made  Compound,  intermediates  thereof  used in the
process  of  making  Compound  and/or  Products;  (ii)  use  or  have  used  any
intermediate(s) of Compound in the process of making Compound; and (iii) conduct
Development Program activities *
using  Compound  and/or  Product  in  countries  located  outside  the  Licensed
Territory,  which Agouron deems necessary or useful in obtaining Registration of
a Product  in the  Licensed  Territory.  It is  understood  and agreed to by the
Parties that Agouron shall have no rights to utilize the license  rights granted
in this  Section  2.01(b)(i)  and (ii) to make  and/or  have made  Compound  for
commercial  use unless and until Agouron  becomes  entitled to make  independent
arrangements  for the supply of Compound  pursuant to the  provisions of Section
4.04,and any such  exercise of these  license  rights is subject to the terms of
Section 4.04 and/or as otherwise set forth in the Agreement.

         (c) If Agouron has determined to enter into a sublicense agreement with
a non-Affiliated  third party,  Agouron shall notify JE of such fact,  including
the  expected  marketing  territory  and the names of any  non-Affiliated  third
parties which Agouron then intends to contact  concerning such sublicense.  When
Agouron enters into a sublicense agreement with a non-Affiliated third party, it
agrees to forward to JE within * after executing such  sublicense,  the name and
address of the new sublicensee,  as well as the *      .  Additionally,  Agouron
shall provide JE with written  evidence that each  sublicensee  has agreed to be
bound by the applicable terms and obligations of the licenses granted to Agouron
under this  Agreement  (including,  without  limitation,  Agouron's * ). Agouron
hereby acknowledges that any act or omission


<PAGE>


of a  sublicensee  that  would be a breach of this  Agreement  if  performed  by
Agouron, shall be deemed to be a breach by Agouron of this Agreement.

         (d)  Notwithstanding  the terms of this Section 2.01 and subject to the
provisions of Section  4.02(n),  each Party shall have a paid-up,  royalty-free,
non-exclusive right to use the Compound,  intermediates  thereof and/or Products
     in its * . Each Party shall give prior  written  notice to the other of its
intention to conduct any such * which are to be undertaken in the*    .

         (e) Agouron grants JE a paid-up, royalty-free non-exclusive right (with
right of  sublicense)  in the JE  Territory  to use the  applicable  Development
Program Patent Rights and applicable Development Program Technology in: (i) * of
Product in the JE Territory for indications in the Field;  and (ii) * Product in
the JE Territory for indications in the Field.

         (f)  Agouron  grants JE a  paid-up,  royalty-free  non-exclusive  right
anywhere  in  the  Territory  (with  right  of  sublicense)   under   applicable
Development  Program Patent Rights,  and using  applicable  Development  Program
Technology to: (i) * the Compound,  intermediates thereof used in the process of
making Compound and/or Products;  (ii) * any  intermediate(s) of Compound in the
process of making the Compound; and (iii) conduct Development Program activities
*          using   Compound   and/or
Product  in the  Licensed  Territory,  which JE deems  necessary  or  useful  in
obtaining  Registration of a Product in the JE Territory.  Agouron  acknowledges
that JE has the * in the JE  Territory  under  applicable  JE Patent  Rights and
using applicable JE Technology.

         (g) Agouron grants JE a paid-up, royalty-free non-exclusive right (with
right of  sublicense)  in the JE  Territory  to * Compound  and/or  Products for
indication(s)*  under  applicable  Development  Program Patent Rights that cover
inventions  which  were  * in the  Development  Program  by  Agouron  and  using
applicable  Development  ProgramTechnology that is * for the utilization of such
Development  Program  Patent  Rights.  Upon  discovery of an  indication(s)  * ,
Agouron shall promptly notify JE about such discovery.  JE's non-exclusive right
in the JE Territory to develop and  commercialize  Compound  and/or Products for
such specific  indication(s) * , shall be subject to JE's use of development and
commercialization efforts for such specific indication(s) * in the JE Territory.
Agouron acknowledges that JE has the * under  applicable  JE Patent  Rights  and
using applicable JE Technology.

         (h) Subject to the  provisions  of Section  4.04,  Agouron shall have a
paid-up, royalty-free, non-exclusive right anywhere in the Territory (with right
of sublicense) to *               originally    developed    outside    of   the
Development  Program that is * the Development  Program by JE, and any * thereon
developed in the Development Program for making,  having made, using and selling
the 
<PAGE>

Compound,  intermediates  thereof and/or Products in the Licensed Territory.
Subject  to  the   provisions   of  Section  4.04,  JE  shall  have  a  paid-up,
royalty-free,  non-exclusive  right  anywhere  in the  Territory  (with right of
sublicense) to *   developed outside of the Development Program that is utilized
in the  Development  Program  by  Agouron,  and any * thereon  developed  in the
Development  Program for making,  having made,  using and selling the  Compound,
intermediates thereof and/or Products in the JE Territory.  It is understood and
agreed  to by the  Parties  that *      shall  have *  granted  in this  Section
2.01(h)  to make  and/or  have  made * unless  and  until *  entitled  to make *
pursuant  to the  provisions  of  Section  4.04 and any such  exercise  of these
license  rights is subject to the terms of Section 4.04 and/or as otherwise  set
forth in the Agreement.

     (i) If a Party wishes to receive a non-exclusive license to which it is not
otherwise entitled under this Agreement to use * Compound and/or * Controlled by
another  Party,  which * is developed or acquired by the other Party  outside of
the  Development  Program  after * of this  Agreement  and which is required for
making,  having  made,  using and selling the  Compound,  intermediates  thereof
and/or  Products,  then the  Parties  shall  enter into good faith  negotiations
regarding the terms of such license. If a Party wishes to receive other licenses
to which it is not otherwise  entitled under this Agreement from the other Party
to * that such other Party  Controls  and which the Party  considers  useful for
making,  having  made,  using and selling the  Compound,  intermediates  thereof
and/or  Products,  then the Parties  shall  discuss the terms of such  licenses;
provided,  however,  that the other Party shall have no obligation to grant such
licenses.

     (j) Until the * , JE hereby grants to Agouron (with right of  sublicense) a
paid-up,  royalty-free,  non-exclusive  right to use the JE's  Trademark(s)  and
Trade Dress in the  applicable  country in the marketing of Products.  After the
expiration  of any royalty  obligations  * , JE hereby  grants to Agouron  (with
right of sublicense) *
of such Products in such country,  any  Trademark(s)  and Trade Dress previously
used to market such  Products in such  country;  if Agouron * , then the Parties
shall enter into good-faith  negotiations  regarding the royalty rate to be paid
to JE and the other terms of such license.

     (k) Until the * , Agouron  hereby grants to JE (with right of sublicense) a
paid-up,  royalty-free,  non-exclusive  right to use Agouron's  Trademark(s) and
Trade Dress in * in the  marketing of  Products.  After the  expiration  of such
royalty  obligations  in the * ,  Agouron  agrees to grant to JE (with  right of
sublicense * of such Products in such country,  any Trademark(s) and Trade Dress
previously  used to market  such  Products in such  country;  if JE * , then the
Parties shall enter into good-faith  negotiations  regarding the royalty rate to
be paid to Agouron and the other terms of such licenses.
<PAGE>

     (l) Agouron agrees to use reasonable efforts to not sell Product in the
Licensed  Territory to persons who it knows,  or has reason to know, will resell
and/or transfer such Product outside of the Licensed Territory.

     SECTION 2.02      DISCONTINUANCE OF THE DEVELOPMENT PROGRAM.

     (a) Agouron  shall,  in a timely manner,  use  reasonable  diligence in the
development  and  Registration  of a  Product  in  the  Field  in  the  Licensed
Territory.  Reasonable  diligence  means a commercially  reasonable  standard of
effort  based on the  commercial  potential  for such  Product  in the  Licensed
Territory.   Development   efforts   undertaken  by  Agouron's   Affiliates  and
sublicensees  shall be  attributed  to Agouron.  If, after  receipt of * written
notice of the failure by Agouron to use reasonable  diligence in a timely manner
in the  development  and  Registration of a Product in the Field in the Licensed
Territory,  Agouron fails to fulfill its obligations under this Section 2.02(a),
or fails to commence  reasonable  efforts to fulfill such obligations,  JE shall
have the right,  as its sole and  exclusive  remedy for such  failure,  * in the
country  in which  reasonable  efforts  have not been  used  under  the terms of
Section 2.01 * to Agouron, its Affiliates and sublicensees.  The Parties,  under
such * , shall have the right  (with right of  sublicense)  to * in or into such
country a * JE Patent Rights and  Development  Program Patent Rights,  and using
applicable  JE  Technology  and  Development  Program  Technology.   If  Agouron
disagrees with JE's conclusion that Agouron has failed to fulfill its obligation
under this Section 2.02, or fails to commence reasonable efforts to fulfill such
obligations,  the Parties shall resolve such disagreement in accordance with the
dispute resolution procedures set forth in Section 7.03.

         (b) In the event that Agouron  elects to  discontinue  the  Development
Program in all  countries  of the Licensed  Territory,  JE, its  Affiliates  and
sublicensees  shall be free,  without  any further  action by JE or Agouron,  to
discover,  develop,  manufacture and/or  commercialize  Products on their own or
with  any  third  party.  In  the  event  of  Agouron's  discontinuation  of the
Development Program in all countries of the Licensed Territory,  neither Agouron
nor its Affiliates and sublicensees  shall have any right to use its Development
Program  Technology  to  discover,  develop,  manufacture  and/or  commercialize
Products.  In such event,  the licenses  granted to Agouron,  its Affiliates and
sublicensees  by the  provisions  of Section 2.01 to use,  offer for sale,  sell
and/or  import  Products in the Licensed  Territory  under  applicable JE Patent
Rights and Development Program Patent Rights, and using applicable JE Technology
and Development Program Technology, shall be terminated. Agouron, its Affiliates
and sublicensees  shall have the right to use Development  Program Technology it
developed or acquired before the  discontinuation of the Development  Program in
all countries in the Territory for uses other than the  discovery,  development,
manufacture and/or  commercialization of Products.  Additionally,  Agouron shall
transfer ownership to JE of any Dossiers for Products,  and shall cooperate with
JE to effect an orderly  transition of Agouron's  development  and  Registration
responsibilities to JE.

         SECTION 2.03 DILIGENT EFFORTS TO MARKET. The right of Agouron to market
a Product in a country  located in the  Licensed  Territory  shall be subject to
diligent   marketing  efforts  by  Agouron   commensurate  with  the  commercial
opportunity for such Product.  Agouron shall provide a reasonable level of sales
and other promotional  support for such Product in a country. 
<PAGE>

Marketing  efforts undertaken by Agouron's Affiliates and sublicensees shall
be attributed to Agouron. If, after receipt of a * written notice of the failure
by Agouron to provide the  agreed-upon  level of sales and other * for a Product
in a country  located in the  Licensed  Territory,  * to fulfill its  obligation
under this Section 2.03, or * to * reasonable  efforts to * obligations,  JE * ,
as the sole and  exclusive  remedy for such * , to * in such  country  under the
terms  of  Section  2.01   converted  to  *  to  Agouron,   its  Affiliates  and
sublicensees.  The Parties, under such * , shall * to *in or into such country a
Product under applicable JE Patent Rights and Development Program Patent Rights,
and using  applicable JE  Technology  and  Development  Program  Technology.  If
Agouron  disagrees with JE's  conclusion  that Agouron has failed to fulfill its
obligation under this Section 2.03, or fails to commence  reasonable  efforts to
fulfill  such  obligations,  the Parties  shall  resolve  such  disagreement  in
accordance  with the dispute  resolution  procedures  set forth in provisions of
Section 7.03.

          ARTICLE III - SHARING AND PROTECTION OF INTELLECTUAL PROPERTY

         SECTION 3.01      PATENTS.

         (a) * the most appropriate manner to prepare, file, prosecute, maintain
and extend  patent  applications  and issued  patents to protect the  commercial
interests of * in patent applications and issued patents included within the * ;
provided, however, that * to reasonably * on the most appropriate manner to file
and prosecute patents to protect the commercial  interests of * in the Compound,
intermediates thereof, or Products. * the patent applications and issued patents
included  within the JE Patent Rights and is  responsible  for all  preparation,
filing, prosecution, maintenance and extension of patent applications and issued
patents for the JE Patent Rights. * be responsible for all preparation,  filing,
prosecution, maintenance and extension expenses for the JE Patent Rights payable
to third parties (including  expenses for the preparation,  filing,  prosecution
and  maintenance  of  patent  term  restoration  applications  and  supplemental
protection  certificates).  * promptly advise * of the grant, lapse, revocation,
surrender,  invalidation, or abandonment of any JE Patent Rights anywhere in the
world.  *  acknowledges  that all rights,  titles and  interest in and to the JE
Patent Rights are * , subject to * under this Agreement.

         (b) Each Party  shall  endeavor  to patent  inventions  or  discoveries
arising  during the conduct of the  Development  Program if such  inventions  or
discoveries may reasonably be considered  patentable under the particular law of
the country in question  and, in the exercise of reasonable  business  judgment,
the  patenting of such  inventions  in such country may be considered to provide
meaningful  protection,  all in accordance  with the standards  employed by such
Party in its usual course of business. As long as a Party has rights to Compound
and/or Products hereunder,  the Parties agree, if feasible,  and if commercially
reasonable, to prepare, file, prosecute, maintain and extend patent applications
and patents included within the Development  Program Patent Rights in accordance
with * .

<PAGE>

         (c) Any patent applications and patents included within the Development
Program Patent Rights covering  inventions jointly made by the employees of more
than one Party ("Jointly Invented  Development  Program Patent Rights") shall be
jointly assigned to the employers of such inventing  employees.  Any Development
Program  Patent  Rights  covering  inventions  solely made by the employees of a
single Party ("Separately  Invented Development Program Patent Rights") shall be
assigned to the  employer  of such  inventing  employees.  Subject to the rights
given the other Party, an assignee of Development Program Patent Rights shall be
entitled to * such assignee by operation of law; * to utilize Development
Program Patent Rights that have been assigned to * are set forth elsewhere in 
this Agreement.

         (d) *  Separately  Invented  Development  Program  Patent  Rights shall
determine the most appropriate manner to prepare, file, prosecute,  maintain and
extend  patent  applications  and  issued  patents  to  protect  the  commercial
interests of the Parties in the Separately  Invented  Development Program Patent
Rights; provided, however, that *
                 Separately Invented Development Program Patent Rights agrees to
reasonably  consult with the other Party on the most appropriate  manner to file
and prosecute patents to protect the commercial interests of the Parties in such
Separately  Invented  Development  Program Patent Rights. * Separately  Invented
Development  Program  Patent Rights shall be  responsible  for all  preparation,
filing,  prosecution,  maintenance  and  extension  expenses for the  Separately
Invented  Development  Program Patent Rights payable to third parties (including
expenses for the preparation, filing, prosecution and maintenance of patent term
restoration applications and supplemental protection certificates).

         (e) *  Jointly  Invented  Development  Program  Patent  Rights  shall *
determine the most appropriate manner to prepare, file, prosecute,  maintain and
extend  patent  applications  and  issued  patents  to  protect  the  commercial
interests  of the Parties in the Jointly  Invented  Development  Program  Patent
Rights.  *  shall  *  the  preparation,  filing,  prosecution,  maintenance  and
extension  expenses for all Jointly Invented  Development  Program Patent Rights
payable  to third  parties  (including  expenses  for the  preparation,  filing,
prosecution  and  maintenance  of  patent  term  restoration   applications  and
supplemental protection  certificates,  but excluding any travel expenses of the
Parties, which shall be borne by the Party incurring such expenses);  each Party
shall pay its share of such expenses  within * from the date of its receipt of a
proper invoice for such expenses.

       (f) Notwithstanding the preceding, if * its diligent efforts, in a timely
manner, in the preparation,  filing,  prosecution,  maintenance and extension of
such  patent  applications  and  issued  patents,  *  the  preparation,  filing,
prosecution,  maintenance and extension of such patent  applications  and issued
patents,  shall  *  such  preparation,  filing,  prosecution,   maintenance  and
extension activities for such patent applications and/or patents included within
the Development Program Patent Rights.

         (g) Upon * written  notice,  a Party may elect to  abandon  any  patent
applications and/or terminate its obligations to pay or share in the expenses of
preparing,   filing,   

<PAGE>

prosecuting,  maintaining  and/or  extending  a patent  application  and/or
issued patent by notifying the other Party of such election. Notwithstanding any
other  provision of this  Agreement,  after the effective date of such election,
the Party  electing  to abandon or  terminate  its  obligations  for such patent
application and/or patent shall not be responsible for the above-noted  expenses
that are incurred after the effective date of such election, and shall be deemed
to have  transferred  and assigned to the other Party all of its  ownership  and
license rights under such patent application and/or patent.  Additionally,  if *
its  obligation to * on a patent  application  and/or issued patent * , then any
claims included within such patent  application and/or patent shall be deemed to
not be a Valid Claim.  The electing  Party and its employees  shall  continue to
reasonably  assist  the other  Party in the  preparation,  filing,  prosecution,
maintenance and/or extension of such patent application and/or patent.

     (h)  Representatives  of Agouron and JE shall meet * (or * if necessary) to
review and discuss the actions  taken or to be taken by each of the Parties in *
interests of the Parties in the Development Program Patent Rights. Such meetings
may be conducted in person or by means of telephone conference calls. Each Party
shall * in such  meetings.  Prior to or  immediately  after  the  filing  of the
initial patent application for an invention,  the filing Party shall provide the
authorized  representatives of the other Party with an English-language  version
of the patent application for * . If requested by a non-filing Party, the filing
Party shall also provide such  non-filing  Party with a full copy of each patent
application  actually  filed  in  English  and in the  language  in which it was
originally filed. It is the intent of the Parties that any patent issuing to the
Parties hereunder shall be *

     not subject to this  Agreement.  Each of the Parties shall * prepare a list
that  reflects,  to the  best  of  its  knowledge,  the  current  status  of any
Development Program Patent Rights for which it controls the preparation, filing,
prosecution,  maintenance and/or extension of the patent applications and issued
patents, which list shall be submitted to the other Party * after * . JE shall *
prepare a list that reflects,  to the best of its knowledge,  the current status
of the JE Patent Rights. The Parties, if they so elect,* .

         (i) Each of the Parties agrees to provide all required  information and
to reasonably  assist the other Party in the preparation,  filing,  prosecution,
maintenance  and extension of patent  applications  and issued patents  included
within the Patent  Rights,  and for patent  term  restoration  applications  and
supplemental protection certificates for the Patent Rights.

         (j) Unless  otherwise  agreed,  each of the Parties shall require their
respective  employees  to: (i) assign all of their rights and ownership in joint
inventions that are included  within the Jointly  Invented  Development  Program
Patent  Rights  jointly  to  the  employers  of  the  inventing  employees  (or,
alternatively,  require  such  employees  to  assign  all of  their  rights  and
ownership in such joint inventions to their employer for reassignment jointly to
the  employers of the  inventing  employees);  and (ii) assist  without  further
compensation  (except for reimbursement for reasonable and necessary expenses) a
requesting  Party in preparing and  prosecuting  the patent  application on such
joint  inventions  throughout the Territory,  and in transferring  rights to the

<PAGE>

employers of the  inventing  employees  (including  executing  documents) to the
patents and patent applications for such joint inventions.

         (k) Each Party shall  promptly  notify the other Party of its knowledge
of any potential infringement of the Patent Rights by a third party. The Parties
agree to cooperate in taking  commercially  reasonable  legal actions to protect
the commercial interests of the Parties in the Compound,  intermediates  thereof
or Products against  infringement by third parties.  If, within three (3) months
following  receipt of  written  notice  requesting  a Party join in an action to
protect against such infringement by third parties, a Party fails to participate
in such  commercially  reasonable  action by the other  Party to halt an alleged
infringement,  the other Party shall, in its sole discretion,  have the right to
take such action in such country as it deems warranted in its own name and/or in
the  name of the  other  Party;  the  Party  maintaining  such  action  shall be
responsible  for the costs of  maintaining  the action and shall be  entitled to
receive all damages recovered from the action for the past infringement. If both
Parties  wish to  participate  in taking  action  to  protect  their  commercial
interests  in  the   Compound,   intermediates   thereof  or  Products   against
infringement,  then Agouron shall control such action in the Licensed  Territory
and JE shall control such action in the JE Territory.  The costs of  maintaining
such action shall be shared  equally by the Parties,  and the damages  recovered
from such  action for the past  infringement  shall be divided as  follows:  (i)
first, pro rata between JE and Agouron in an amount sufficient to reimburse each
them for their expenses incurred in such prosecution; *
thereafter,  between JE and Agouron based on good-faith  negotiations  regarding
how to apportion any remaining damage recovery. Each Party agrees to render such
reasonable assistance as the prosecuting Party may request.

     (l)  Agouron  agrees to notify JE at *  initially  * any JE  Technology  or
Compound in * any country in the Territory,  to allow JE time to make any patent
filings or to take any other actions  necessary to protect the JE Patent Rights,
JE Technology or Compound.

     SECTION 3.02  INFRINGEMENT  OF PATENTS OF THIRD  PARTIES.  Each Party,  its
Affiliates and sublicensees, and their respective employees and agents shall use
diligent  efforts to avoid  known  infringement  of patents of any third party *
and/or Products.  However,  a Party, its Affiliates and sublicensees,  and their
respective  employees  and * and their  respective  employees  and agents if the
practice  of the  Patent  Rights,  JE  Technology,  and/or  Development  Program
Technology in discovering,  developing,  manufacturing  or  commercializing  the
Compound, intermediates thereof and/or Products infringe any patent of any third
party.  If a Party  becomes  aware of any claim or suit by any  third  party for
infringement  of a  patent  of such  third  party  in  connection  with * of the
Compound,  intermediates  thereof and/or Products by a Party hereto,  such Party
shall  notify  the  other  Party  in  writing  of such  claim  or suit  within *
thereafter.  Each Party agrees to render such reasonable assistance as the other
Party may  request in  defending  any such claim or suit.  The  Parties* 


<PAGE>

of any  existing  or  potential  infringement  claim or action  that  would
require the * to a third party, except that if the Parties cannot promptly reach
agreement,  they shall appoint an independent patent counsel to give an opinion,
* the Parties,  as to whether there is a substantial  risk that the  third-party
patent  is  both  valid  and  infringed.  If the  opinion  is  that  there  is a
substantial  risk  that the  patent  is both  valid  and  infringed,  the  Party
marketing a Product in a country,  after consultation with the other Party, * as
it . Unless the Parties agree otherwise,*

     provided,  however, that in no case shall * with respect to a Product for a
country in a * be reduced * with  respect to such  Product  for such  country in
such *  period.  Any  remaining  *  amount  may be used as  described  above  in
subsequent * periods to * with respect to such Product for such country. Agouron
acknowledges  that  it  is  aware  of a  Cooperative  Research  and  Development
Agreement  between  JE and the *  (hereinafter  referred  to as "* ),  which was
originally   entered  into  in  September   1993  and  amended  in  March  1996.
Notwithstanding  the preceding* under the terms of the * , and for obtaining any
consent  required by the * for this  issuance of the  licenses  granted  Agouron
under the provisions of Section 2.01.  Agouron shall be entitled to * on account
of *

     SECTION 3.03 TRADEMARKS. A Party, its Affiliates and sublicensees,  if any,
* any trademark  office in the Territory any Trademark for use with Products for
which it holds license  rights to make, use and/or sell hereunder * Such Party *
, title  and  interest  in and to the  Trademark  in its own name or that of its
designated  Affiliate or sublicensee,  if any, during and after the term of this
Agreement.  If required by the laws of a specific country,  the Party owning the
Trademark  shall assist the other Party in  qualifying  as a registered  user of
such Trademark in such country. The Party owning a Trademark *

The  Parties  shall not use a  Trademark  used in  marketing  of Products in the
Territory   for  marketing   other   commercial   products  in  the   Territory.
Additionally,  the Parties agree to cooperate in  reasonable  efforts to protect
the  rights  of  the  Parties  in a  Trademark,  including  notification  of any
infringement which may come to a Party's attention, and the proper execution and
filing of appropriate registered user documents. *

Details  regarding the license  provisions of the Trademark  license  granted in
Article II, including  quality and  specifications  of Product,  shall be agreed
upon by the Parties and later attached as Attachment 1 to this Agreement.

         SECTION 3.04  INFORMATION  EXCHANGe.  Upon  execution of this Agreement
and, thereafter,  on an ongoing basis during the Development Program, each Party
shall  disclose  to the  other  Party in  confidence,  subject  to the  terms of
Sections 3.05 hereof, *

<PAGE>

     , as such items specifically relates to the Compound, intermediates thereof
or Products and are necessary or useful for the  development or  Registration of
Compound  and/or  Product,  including  the  JE  Patent  Rights,  JE  Technology,
Development Program Patent Rights and Development Program Technology; each Party
shall  provide  technical  assistance to the other Party to enable it to utilize
such information.  Notwithstanding the foregoing, a Party shall not be obligated
to  disclose  to the other  Party any  information  that it is  prohibited  from
disclosing to the other Party, either by reason of a contract with a third party
or by law. In the event of such a restriction, the Parties shall *
disclosure to be made.

         SECTION 3.05  CONFIDENTIALITY.  Except as otherwise expressly specified
in this  Agreement  and except for the proper  exercise  of any  license  rights
granted or rights reserved under this Agreement,  JE and Agouron shall each keep
in  confidence  and shall  each use its best  efforts  to cause  its  respective
Affiliates,   employees,  directors,  agents,  consultants,   clinical  research
associates, outside contractors, clinical investigators and sublicensees to whom
it is permitted to disclose  information pursuant to the terms of this Agreement
to retain in confidence  all  confidential  and  proprietary  information of the
other Party,  including the Patent Rights,  JE Technology,  Development  Program
Technology,   information  and  materials  exchanged  under  the  terms  of  the
Confidentiality  Agreement  and the  Material  Transfer  Agreement  between  the
Parties which were both originally entered into on December 22, 1997, accounting
and financial  information and/or the marketing and business plans of such other
Party that is disclosed to it hereunder.  Without limiting the foregoing, JE and
Agouron  shall each  exercise the same degree of diligence and care with respect
to the  above-described  information  as it exercises  with respect to its other
proprietary  information.  Each  Party  represents  to the other  Party  that it
maintains   policies  and  procedures   designed  to  prevent  the  unauthorized
disclosure of its proprietary  data and  information.  Each Party further agrees
that  it  shall  limit  dissemination  of and  access  to the  confidential  and
proprietary  information of the other Party within its  organization to those of
its and its Affiliates'  personnel who have a need to know the  information.  JE
and Agouron shall each be entitled to disclose the  above-described  information
to  its  consultants,   clinical  research   associates,   outside  contractors,
collaborators, clinical investigators and other third parties who are subject to
confidentiality  and use  obligations  equivalent  to  those  applicable  to the
disclosing  Party  hereunder,  and to  governmental or other  regulatory  and/or
health authorities,  to the extent that such disclosure is reasonably  necessary
to obtain  patents,  to obtain  authorization  or to conduct  clinical trials on
Compound or Products,  to prepare the Dossier,  and/or  otherwise to fulfill its
obligations  pursuant  to this  Agreement.  Each  Party  shall have the right to
disclose  Development  Program  Technology  to persons it proposes to enter into
business  relationships  with,  if such  persons are subject to  confidentiality
obligations  equivalent to those  applicable to the disclosing  Party hereunder.
The preceding  obligations of confidentiality  shall be waived as to information
that the Party claiming waiver can demonstrate,  based on written  records:  (i)
was in the public  domain at the time of disclosure  hereunder;  (ii) comes into
the public domain through no fault of the Party claiming waiver; (iii) was known
to the Party  claiming  waiver  prior to its  disclosure  under this  Agreement,
unless such  information  was  obtained  from the other Party on a  confidential
basis;  (iv) is  disclosed  on a  non-confidential  basis to the Party  claiming
waiver  by a third  party  having a lawful  right to make such  disclosure  on a
non-confidential  basis; (v) is published with the prior mutual agreement of the
Parties,  after having given  consideration to 

<PAGE>

appropriate  commercial factors;  (vi) comes into the public domain through
governmental  publication  of a patent  application;  or (vii) is required to be
disclosed  to file a patent or other  regulatory  application  or to comply with
applicable laws and regulations.  The obligations  under this Section 3.05 shall
survive  to the later of: (i) ten (10)  years  after the end of the  Development
Program; or (ii) the termination or expiration date of the last to expire of any
license(s)  granted  pursuant to this  Agreement,  to the extent the Development
Program  Technology  or JE  Technology  is  applicable to the practice of grants
under such license(s); or (iii) the expiration date of the last to expire of any
patent(s)  within the Patent Rights on a Product.  The Parties  acknowledge  and
agree  that the  Parties'  rights  and  obligations  under  the  Confidentiality
Agreement  and the Material  Transfer  Agreement  between the Parties which were
both originally  entered into on December 22, 1997 are hereby  superseded by the
provisions of this Section 3.05.

     SECTION 3.06 PUBLICATION. JE and Agouron each acknowledges the interests of
the other  Party in  publishing  certain of the results of its  development  and
Registration of a Product to obtain recognition within the scientific  community
and to advance the state of  scientific  knowledge.  The Parties also  recognize
their  mutual  interests in obtaining  valid  patent  protection  for their drug
products.  Consequently, a Party, its employees or consultants wishing to make a
publication  shall  provide  the other Party the  opportunity  to review a draft
manuscript at least * to the date of the intended  submission for publication (*
period as the Parties agree upon in light of the  availability  of clinical data
or other data to be described in the proposed  publication)  and, upon the other
Party's written request, shall delay submission for a period (not greater than *
from the date of such written  request)  sufficient to provide for the filing of
appropriate patent application(s) for any patentable subject matter disclosed in
such  publication.  Furthermore,  in  acknowledgment  that  certain  Development
Program Technology, while not of a patentable subject matter, could be necessary
to protect the commercial  interests of the Parties, the Parties agree that each
Party  shall  review in a timely  manner (not  greater  than * , in light of the
availability  of clinical  data or other data to be  described  in the  proposed
publication,  from  the  date  of a  written  request  to  such  Party)  a draft
manuscript,  and  propose  the  conditions  under  which  the  portion  of  such
technology  disclosed in the draft manuscript that could be necessary to protect
the  commercial  interests of the Parties can be  published.  If the other Party
does not  object  to the  publication  within  * from  the date of such  written
request, the requesting Party (subject to the other Party's right to request the
*  delay  described  above  for  patentable  subject  matter  disclosed  in such
publication) shall be free to publish such manuscript. If a Party objects to the
publication  of a portion of the draft  manuscript,  such Party  shall  indicate
specifically  what   modifications  to  the  draft  manuscript  it  believes  is
appropriate to protect the  commercial  interests of the Parties and the reasons
therefor.  After  giving  reasonable  consideration  to the  suggestions  of the
objecting  Party,  the Party wishing to make a publication  shall have the final
authority to determine the scope,  timing and content of the  publication.  Each
Party will use * inform the other Party about proposed oral presentations  which
such  Party  intends  to  make,  if it will  be  disclosing  new  scientifically
significant data concerning Product at such oral presentation.
<PAGE>

            ARTICLE IV - DEVELOPMENT AND COMMERCIALIZATION STRUCTURE

         SECTION 4.01 COORDINATION. Coordination of the Parties' development and
commercialization  efforts for Compound  and Products in the Licensed  Territory
shall be carried out as specified in Sections 4.02 and 4.03.

         SECTION  4.02   DEVELOPMENT  AND   REGISTRATION;   Responsibility   for
Development  Costs.  JE  and  Agouron  acknowledge  their  mutual  intention  to
cooperate  in a  commercially  reasonable  manner in the timely  development  of
Compound and Products in the Territory.  The Parties further  acknowledge  their
mutual  willingness  to  discuss  ad hoc  agreements  to  establish  appropriate
mechanisms for such cooperation. Recognizing the importance of timely initiation
of development activities,  however, JE and Agouron agree to the following basic
approach to development of Compound and Products in the Licensed Territory,  and
to the conduct and funding of their respective development activities.

         (a) A development plan prepared by Agouron listing the major activities
to be conducted under the Development Program for the Registration of Product in
the Field in the Licensed Territory during such period,  including the timelines
for pre-clinical  tests,  clinical trials, and any other procedures  required to
obtain such  Registration,  shall be set forth in Exhibit 1. After the execution
of this  Agreement,  Agouron  shall be  responsible  for the design,  update and
implementation  of the Development  Program that is undertaken by Agouron and JE
to accomplish the development plan. All costs for such  implementation  shall be
borne by Agouron.

         (b) The  Parties  acknowledge  that it will be  necessary  to amend and
update the  Development  Program as  additional  information  becomes  available
concerning  the  prerequisites  necessary  for  Registration  of  Product in the
Licensed  Territory.  Agouron shall have the right to amend,  from time to time,
the Development Program.  Agouron shall advise JE in writing with respect to any
change in the  Development  Program that may cause a delay of five (5) months or
more in any of the basic  milestones  thereunder or which consists of a material
change in the clinical  protocols.  In addition,  any change in the  Development
Program that materially affects the then-existing  Compound Supply Plan shall be
subject to the mutual agreement of JE and Agouron.

         (c) As soon as possible  after the  execution  of this  Agreement,  the
Parties shall  promptly  reach  agreement on the basic terms under which JE will
manufacture and supply Compound to Agouron,  its Affiliates and sublicensees for
use in development  and  registration  activities for Compound  and/or  Product,
including the amounts and timing of deliveries of Compound (the "Compound Supply
Plan"); the Compound Supply Plan, when agreed upon, will be incorporated as part
of the Development Program.

         (d) Agouron shall be responsible for conducting and paying the costs of
any studies that involve  Products,  and which Agouron  pursues for the Licensed
Territory  (including  Phase IV  studies  and any  studies  required  to achieve
Registration  of a Product in the Licensed  Territory).  Agouron  shall have the
responsibility,  in its sole discretion, for determining the magnitude and scope
of any Phase IV studies to be conducted  utilizing  such Product in the Licensed
Territory.  Except as provided in Section 4.02(h),  Agouron shall be responsible
for the costs of regulatory 

<PAGE>

applications  and  subsequent   amendments  thereto  and  fees  payable  to
regulatory  agencies  required  for the  commercialization  of  Products  in the
Licensed Territory.

         (e) Agouron,  at its own cost,  shall be responsible  for submission of
Dossiers for a Product to the regulatory  authorities in the Licensed  Territory
in  pursuit  of  approvals  to sell  such  Product  and shall  have the  primary
responsibility  in the  countries  of the  Licensed  Territory  for the  ongoing
correspondence  and  interaction  before and after  Registration of such Product
with the respective regulatory  authorities.  Agouron, at its own cost, shall be
responsible  for initially  obtaining and  amending,  if required,  all required
approvals  from  the  regulatory  authorities  in  the  Licensed  Territory  for
importing, distributing and selling a Product, including negotiating pricing and
reimbursement  for a Product with the  regulatory  authorities of the individual
countries  of the Licensed  Territory.  All Dossiers for Product in the Licensed
Territory shall be owned by and be in the name of Agouron.

         (f)  JE  shall   cooperate  with  Agouron  to  furnish  data  or  other
information  JE has access to that is related to  Compound  and/or  Product,  to
enable  Agouron,  at  Agouron's  expense,  to Register a Product in the Licensed
Territory. JE agrees to execute such documents as Agouron may reasonably request
in connection with such Product Registrations.

         (g) JE will be  responsible  for the  cost  and  implementation  of all
clinical  studies  that JE,  in its sole  discretion,  pursues  to  support  its
development and Registration of Products in the JE Territory.

         (h) JE shall be responsible for obtaining,  in its name and at its cost
and expense,  all necessary  governmental  approvals required to manufacture and
deliver Compound to Agouron. JE shall file and maintain the drug master file for
Compound with the FDA.

         (i) To the extent required to support  Registrations of a Product (such
as for Investigational New Drug Applications and New Drug Applications), Agouron
shall have reference rights to use the safety,  manufacturing  and other data in
such drug master file.  Each Party shall be entitled to have the  government  or
health authorities  cross-reference the information contained in any Dossier for
a Product filed in any country in the  Territory,  as may be necessary to obtain
and  maintain  the  Registration  on a  Product  in  any  other  country  in the
Territory.

         (j) Each Party agrees to use its diligent  efforts in  responding  in a
timely  manner,  but not more than thirty (30) days,  to requests from the other
Party for preclinical and clinical results and other information  concerning the
Development  Program to enable  the other  Party to comply  with the  regulatory
requirements for the Development  Program.  To the extent possible,  the Parties
shall develop and use compatible  reporting forms in the clinical  studies aimed
at achieving  Registration  of Products.  A Party  conducting a study  involving
Product shall assist the other Party with incorporating the data from such study
into their Dossiers, if necessary.

         (k) Agouron  shall keep JE informed of its progress in the  development
and Registration of Products.  This information exchange shall include, at least
two (2)  times per year,  regular  meetings  of the  Parties,  and such  written
progress  reports  as are  agreed to by the 

<PAGE>

Parties that summarize  Agouron's  activities  during each reporting period
and  Agouron's  planned  activities  for the  succeeding  period.  JE shall keep
Agouron  informed of its development and  Registration  activities for Products,
including any  significant  planned  activities  for the succeeding one (1) year
period.  The location for such meetings shall be at either Party's facilities or
such other sites agreed to by the  Parties.  Meeting  minutes  shall be promptly
prepared and approved by the designated  representatives of each of the Parties.
Each Party shall pay all of its respective  expenses for such meetings.  Each of
the Parties shall assign a representative to facilitate  communications  between
the  Parties;  each  representative  shall report to his/her  management  on the
matters discussed at each of the meetings of the Parties.  Each Party,  prior to
its  implementation  of a preclinical or clinical study involving a Product that
could have a material impact on the commercial  potential of such Product in the
other Party's marketing territories, shall use its reasonable efforts to provide
the  other  Party  with a copy of the  draft  protocol  for such  study,  and an
opportunity,  in a timely manner, but not more than thirty (30) days, to comment
on the purpose and proposed design and  implementation of such study. Each Party
shall provide the other Party with access to its relevant records and facilities
to  permit a  reasonable  review  of the  progress,  from  time to time,  of its
development and Registration  activities.  Each Party agrees to use its diligent
efforts in responding in a timely manner, but not more than thirty (30) days, to
requests from the other Party for  information  concerning the  development  and
Registration of Products.

         (l) JE and Agouron shall each use qualified  persons in the development
activities of the Development Program.

         (m) All  work  in  connection  with  the  development  of  Compound  or
Products,  to the extent required by applicable  laws or  regulations,  shall be
conducted in  accordance  with Good  Laboratory  Practices,  Good  Manufacturing
Practices  and Good  Clinical  Practices,  as such rules of practice are amended
from time to time. Each Party in the conduct of its activities shall comply with
all  applicable  laws,  rules and  regulations of each  jurisdiction  within the
Territory  that  are  applicable  to  the  development,   testing,  manufacture,
labeling,  packaging,  storage,  marketing,  distribution,  sale,  promotion and
import or export of Product.

         (n) If a Party is conducting a pre-clinical  study in a country located
in the other Party's marketing  territory,  the Party conducting the study shall
use its best efforts to avoid interfering with such other Party's  activities in
such country.

         SECTION 4.03 MARKETING.  Agouron shall be responsible for the marketing
of Products in the Licensed  Territory.  JE and Agouron  agree to the  following
basic  approach to the marketing of Products in the Licensed  Territory,  and to
the  conduct  of  their  marketing  activities  in  their  respective  marketing
territories.

         (a)  Agouron  shall  be   responsible   for  the  design,   update  and
implementation of the marketing programs and distribution and sale of Product in
the Licensed Territory, including the development and selection of the marketing
plan for a Product and the  promotional  messages and overall  positioning for a
Product in any countries located in the Licensed  Territory.  All costs for such
implementation shall be borne by Agouron. Agouron shall have the right to amend,
from time to time, its marketing programs.
<PAGE>


         (b) The promotional messages and overall positioning for a Product that
JE shall use in its marketing  programs in the JE Territory  shall be consistent
with a Product's marketing plan developed by Agouron for the Licensed Territory.
JE shall  modify the  positioning  and messages  only to the extent  required to
respond to country-specific needs.

         (c) Agouron  shall keep JE informed  of  Agouron's  current and planned
marketing activities in the Licensed Territory.  This information exchange shall
take place by means of  semi-annual  meetings of the  Parties,  and such written
progress  reports  as are  agreed to by the  Parties  that  summarize  Agouron's
activities  during a semi-annual  period and Agouron's  planned  activities  for
Products for the succeeding  semi-annual  period. JE shall keep Agouron informed
of JE's marketing activities in the JE Territory.  The location of such meetings
shall be at either of the Party's  facilities  or other  sites  agreed to by the
Parties.  Meeting  minutes  shall  be  promptly  prepared  and  approved  by the
designated representatives of each of the Parties. Each of the Parties shall pay
all of its  respective  expenses for such  meetings.  Each of the Parties  shall
assign a representative to facilitate  communications  between the Parties; each
representative  shall report to his/her  management on the matters  discussed at
the meetings of the Parties. At the meetings of the Parties, the representatives
of the Parties shall review and discuss the  consistency of Agouron's  marketing
plans for a Product in the Licensed Territory with JE's marketing plans for such
Product  in the JE  Territory,  and the  conduct  of  additional  marketing  and
post-Registration  clinical studies for a Product that are not conducted as part
of the Development  Program;  the conduct and funding of clinical  studies for a
Product that are conducted as part of the Development  Program shall be governed
by the provisions of Section 4.02.

         (d) Unless prohibited by law or regulation,  the labeling for a Product
in the  countries  in the  Licensed  Territory  shall state that such Product is
licensed from JE. To the extent  required to comply with the  provisions of this
Section 4.03(d),  each Party grants to the other Party the right to use its name
and logos in the labeling for a Product.

         (e) In accordance  with the provisions of the license rights granted in
Article  II,  Agouron  may,  without  charge,  market a Product in the  Licensed
Territory  using JE's  Trademarks  and Trade Dress or may use its own Trademarks
and  Trade  Dress,  and JE may,  without  charge,  market  a  Product  in the JE
Territory  using  Agouron's  Trademarks  and  Trade  Dress  or may  use  its own
Trademarks and Trade Dress.

         (f) Agouron and JE shall each use  qualified  persons in its  marketing
activities for a Product in its respective marketing territories.

         (g) Agouron shall be responsible for responding, in a timely manner, to
inquiries,  and for reporting  adverse drug reactions  related to a Product in a
country located in the Licensed  Territory.  Notwithstanding  Agouron's ultimate
responsibility  for the professional  services and the health and/or  regulatory
authorities'  communications  related to a Product  in a country  located in the
Licensed Territory,  to the extent reasonably possible,  JE shall have the right
to review,  comment and  participate in  communications  concerning such Product
with the health and/or  regulatory  authorities  in such  country.  Furthermore,
Agouron and JE shall each be entitled to respond to routine medical questions or
inquiries directed to them. Each Party shall use its best 

<PAGE>

efforts to provide  the other  Party with all  information  (other than any
proprietary  information  not related to such Product)  reasonably  necessary to
respond  properly and promptly to any such  questions or inquiries;  the Parties
shall also use their best efforts to keep such information  current. The Parties
shall confer with respect to responding to anticipated  inquiries and questions.
Each Party shall use its best  efforts to promptly  provide the other Party with
new information,  scientific  findings,  and summaries of regulatory or judicial
requests specifically related to a Product, to the extent that such information,
findings  or  requests  are  likely  to have a  significant  impact on the other
Party's marketing of such Product.

         (h) Each Party, its Affiliates and sublicensees,  agrees throughout the
duration of this  Agreement to notify the other Party  immediately in English of
any  information  concerning  any serious or  unexpected  side  effect,  injury,
toxicity or sensitivity reaction, or any unexpected incidents,  and the severity
thereof, associated with the clinical uses, studies,  investigations,  tests and
marketing of a Product,  whether  determined or not to be  attributable  to such
Product.  "Serious,"  as used in this Section  4.03(h),  refers to an experience
which  is  life-threatening  or  results  in  death,  permanent  or  substantial
disability,  in-patient  hospitalization or prolongation of hospitalization,  or
produces  a  congenital  anomaly or  cancer,  or is the  result of an  overdose.
"Unexpected," as used in this Section 4.03(h) for a non-marketed Product, is one
that is not identified in nature, severity, or frequency in the current clinical
investigator's confidential information brochure.  "Unexpected," as used in this
Section 4.03(h) for a marketed Product, is one that is not listed in the current
labeling for such Product and includes an event that may be symptomatically  and
pathophysiologically related to an event listed in the labeling but differs from
the event because of increased frequency, greater severity or specificity.  Each
Party shall cooperate with the other to resolve complaints received by the other
Party with respect to any Product.  Without  limiting the foregoing,  each Party
agrees to notify the other Party of any severe, serious,  alarming or unexpected
complaints that they receive,  whether or not determined to be attributable to a
Product, by telephone within twenty-four (24) hours, and in writing within three
(3) business days of receipt of the  complaint.  All other  complaints  shall be
forwarded by a Party to the other Party within  thirty (30) calendar days of its
receipt of the complaint.

         (i) Each Party further agrees to immediately  notify the other Party of
any  information  that such  Party,  its  Affiliates  or  sublicensees  receives
regarding any  threatened or pending  action by a  governmental  agency that may
affect the safety and efficacy claims of a Product or the continued  development
or marketing of a Product.  Upon  receipt of any such  information,  the Parties
shall  consult  with each other in an effort to arrive at a mutually  acceptable
procedure  for  taking  appropriate  action;  provided,  however,  that  nothing
contained herein shall be construed as restricting  either Party's right to make
a timely report of such matter to any  government  agency,  or take other action
that it deems to be appropriate or required by applicable law or regulation. The
information to be provided hereunder shall be provided in English.

         (j) Without  limiting the foregoing,  it is also  understood  that each
Party may  notify  its  Affiliates  or  sublicensees  of any  incident  or event
reported by the other Party under this Section 4.03.

         SECTION  4.04  SUPPLY  OF  COMPOUND.  It  is  anticipated  that  timely
development  of  Compound  and/or a Product  will  require  the  manufacture  of
significant   amounts   of  the  

<PAGE>

Compound, and that successful worldwide commercialization of a Product will
require annual production of large quantities of the Compound.

         (a) In accordance  with the  provisions of Section 4.04,  Agouron shall
purchase  from  JE,  and  JE  shall  timely  deliver  Compound  for  use  in the
development and Registration  activities for Compound and/or Product,  including
using Compound to make Product to be used in clinical studies and trials and for
special license sales. JE shall provide Agouron, * , in accordance with Compound
Supply  Plan,  not  more  than * of  Compound  to be  used in  implementing  the
Development  Program,  provided  that the total daily dose per patient  does not
exceed * of Compound; if such daily dose exceeds *
      of  Compound  per  patient,  then the amount to be provided by JE shall be
increased  by the amount (not to exceed,  in the  aggregate,  * ) necessary  for
Agouron to implement  the  Development  Program.  JE shall * Agouron  additional
Compound for use in implementing  the  Development  Program at * such Compound *
"FBMCC" or "Fully  Burdened  Manufacturing  Cost of Compound"  means the cost of
Compound  shipped,  and shall include the direct and indirect costs of procuring
and/or producing  Compound shipped in accordance with either generally  accepted
accounting  principles or the  equivalent  international  accounting  standards.
Direct costs shall include  direct labor  (including  fringe  benefits),  direct
materials  (including taxes and duties) and third-party  contract costs required
to manufacture the bulk product  Compound (or related  intermediates).  Indirect
costs (to be allocated  to the  production  effort)  shall  include,  but not be
limited to, items treated as  "manufacturing  overhead,"  such as indirect labor
and materials, fringe benefits,  occupancy costs (including electricity,  water,
waste disposal,  other utilities and property taxes),  depreciation of property,
plant and equipment used in the manufacturing  process and other costs allocable
to the manufacturing process. Overhead shall not include start-up costs, or idle
or  excess  capacity  charges.  Included  in  the  cost  of  Compound  shall  be
manufacturing   variances,   including  inventory  reserves  and  non-conforming
production  runs. In the event Agouron intends to use a chemical  compound other
than JE-2147 for use in the development and registration activities for Compound
and/or  Product,  Agouron  shall  timely  consult  with JE with  respect to such
intentions.  In the event the Parties mutually agree to utilize such alternative
chemical compound and JE agrees to be the supplier of such alternative  chemical
compound  to  Agouron,  then the  Parties  will  determine  supply  arrangements
therefore in accordance  with the general terms and  conditions set forth herein
for the  supply  of  Compound  *, of * the  amount  referred  to  above  of such
alternative  chemical  compound  to be  used  in  implementing  the  Development
Program;  provided,  however,  that,  if  Agouron  elects to  develop a chemical
compound other than JE-2147,  Agouron shall * , if any, of the cost of providing
Agouron's  requirements  of  such  alternative  chemical  compound  for  use  in
implementing  the Development  Program,  * in supplying  Agouron with the amount
referred to above of JE-2147.

         (b) In accordance  with the  provisions of Section 4.04,  Agouron shall
purchase  from JE, and JE shall  timely  deliver  Compound for use in making the
finished  dosage form(s) of Product to be sold in the Licensed  Territory,  at a
price which equals * and/or * such Compound, * of *
<PAGE>

         (c) JE shall  maintain  books of  account  and  complete  and  accurate
records of all of its FBMCC of  procuring  and/or  producing  such  Compound  in
sufficient  detail to permit  Agouron to confirm  the  correctness  of such cost
items.  JE shall  provide  Agouron,  upon  reasonable  request,  with  copies of
invoices supporting third-party expenditures for procuring and/or producing such
Compound.  If Agouron reasonably  believes that an audit of FBMCC is appropriate
after reviewing the information  received from JE, Agouron shall have the right,
by an  independent  accounting  firm  reasonably  acceptable to JE,  employed by
Agouron and at Agouron's own expense, to examine the pertinent books and records
of JE at all  reasonable  times (but not more often than * ) for the  purpose of
determining  and reporting on the  correctness of FBMCC reported to Agouron;  it
being  understood  that such  examination,  with  respect to any audit for a * ,
shall not  commence  later than *  following  the end of such * . If an error is
found in the  amount  of  FBMCC  which is more  than * of the  amount  initially
reported to Agouron,  then JE shall reimburse Agouron for the reasonable cost of
such audit.

         (d) If,  JE  notifies  Agouron  that it is  unable  to  timely  deliver
Compound  ordered by Agouron in accordance  with the  provisions of this Section
4.04(d),  or JE fails to  timely  deliver * of  aggregate  Compound  ordered  by
Agouron in accordance  with the provisions of this Section  4.04(d) during any *
period,  and  such  Compound  was  ordered  by  Agouron  in a timely  manner  in
accordance  with the  forecasting  and  ordering  procedures  agreed upon by the
Parties,  then JE  agrees  * to make or have  made an  adequate  commercial
supply of Compound needed to fulfill its  requirements of Compound to be used in
making   Product  for  sale  or   distribution   in  the   Licensed   Territory.
Notwithstanding the preceding, it is agreed and understood that if JE is able to
supply a portion,  but not all,  of  Agouron's  requirements  for  Compound in a
timely manner, then the parties shall * the amount of Compound which Agouron * ,
and/or * , to fully satisfy its requirements for Compound; at a minimum, Agouron
shall be entitled to make or have made,  for a commercially  reasonable  minimum
period, a commercially  reasonable minimum amount of Compound, and JE will grant
Agouron  and/or such third party * for such  limited  purpose.  The  agreed-upon
forecasting and ordering  procedures shall provide,  at minimum,  for Agouron to
provide JE * with an * of  Agouron's * of Compound  to be  purchased  by Agouron
from JE during  the  following  * ; for the first * , the * shall be * ; for the
next * , the estimate shall be * ; and for the subsequent * , the estimate shall
* . Agouron shall use all  reasonable  efforts to make each forecast as accurate
as  possible.  Compound  will be ordered * by  Agouron,  and such firm  purchase
order(s)  shall be placed at least * (or such shorter period of time agreed upon
by the Parties) in advance of the requested  delivery date(s);  unless agreed to
by the  Parties,  no *  purchase  order  shall be plus or minus * of the  volume
included in the most recent  forecast  for such * , which was  provided to JE at
least * prior to the  scheduled  delivery  date,  and shall not provide for more
than * . All orders shall be in writing.
<PAGE>

         (e) It is the present intention of the Parties that JE shall have *
              supply of Compound to Agouron  (hereinafter  referred to as the
"JE Compound Supply Option") in accordance with the following conditions:

                  (i) Within * after the * , the Parties shall agree upon a date
         by which JE must exercise the JE Compound Supply Option 
         ("Exercise Date"); the Exercise Date shall be approximately  the date 
         which is * the expected NDA filing date for the first Product.

                  (ii) All Compound shall be manufactured in accordance with the
         specifications  to be determined during  development.  JE warrants that
         each  shipment of Compound  will  conform to the  specifications  to be
         determined  during  development,  and will be made,  stored,  packaged,
         labeled and controlled by JE in accordance with  applicable  regulatory
         standards.  JE will provide to Agouron  concurrently with each shipment
         of Compound a Certificate of Analysis with respect to such compliance.

                  (iii) JE  warrants  that the  manufacturing  facility  and the
         equipment and personnel used to produce  Compound that will be used for
         clinical studies and/or commercial supply are now, and at the time each
         batch of  Compound  is  produced  shall  be,  properly  maintained  and
         qualified  to  make  pharmaceutical   grade  products  consistent  with
         applicable Good Manufacturing Practice requirements.  Agouron agrees to
         provide  to JE  technical  support in  meeting  the Good  Manufacturing
         Practice requirements imposed by the regulatory agencies of the various
         countries of the Licensed Territory. * .

                  (iv) Sale and delivery of Compound will be subject to an  
         agreed-upon  form of  purchase  order being  issued by Agouron  and  
         accepted by JE. All sales and deliveries of Compound  shall be on the 
         basis * (in  accordance  with  INCOTERMS 1990). Title and risk of loss,
         damage and delay shall pass to Agouron *

                  (v)  If  Agouron  is  prohibited  by  formal  governmental  or
         regulatory  action in a country  located within the Licensed  Territory
         from importing into and/or selling Product containing Compound, made by
         JE or its suppliers,  or is prohibited from importing into and/or using
         Compound  made by JE or its  suppliers in the  manufacture  of Product,
         Agouron  may * its  requirements  of  Compound  for such  country,  and
         purpose.  It is understood and agreed to by the Parties that such * are
         * during which such prohibitions are in effect.

                  (vi)  Each  Party  shall  grant  the  other  Party a right  of
         reference to the drug master file for Compound in the  countries  where
         the other Party, its Affiliates or sublicensees  are marketing  Product
         containing  the  Compound,  and shall  take all  other  steps as may be
         reasonably requested by a manufacturer of such Compound for the


<PAGE>


         limited  purpose of enabling it to manufacture  Compound for such other
         Party. The manufacturer  shall manufacture  Compound in compliance with
         the  Dossier for the  Compound.  Each Party  shall  promptly  and fully
         advise the other Party of any changes, alterations or amendments to the
         drug  master  file for  Compound  or any  amendments,  instructions  or
         specifications required by the health or regulatory authority,  and the
         Parties shall confer with respect to the best mode of  compliance  with
         any such requirements.

                  (vii) In the event that,  after delivery,  Agouron  determines
         that  Compound  does  not  meet  the  applicable  specifications,  JE's
         obligations shall be * , or * for such non-conforming Compound.

     (f) At  least  *  before  the  Exercise  Date,  Agouron  shall * JE to * of
Compound for use in making  Product.  On or before the Exercise  Date,  JE shall
notify Agouron * the JE Compound Supply Option.  If JE fails to notify Agouron *
of its election to exercise the JE Compound  Supply Option on or before Exercise
Date, the JE Compound  Supply Option shall * . If the JE Compound  Supply Option
expires unexercised the following provisions apply:

                  (i)  Agouron  may  manufacture   and/or  have  a  third  party
         manufacture  its commercial  requirements of Compound in the Territory,
         and JE shall grant Agouron, and third-party  manufacturers  utilized by
         Agouron, all necessary licenses on Compound for use solely in producing
         Compound for use in making Products.

                  (ii) In accordance with the provisions of Section 4.05, * 
         for use in the JE Territory.

     (g) As  part of the  Development  Program,  JE and  Agouron  may*  and * to
optimize the cost-effective  synthesis and delivery of Compound.  JE and Agouron
shall *  Compound  * as it is * ; the  Parties  also  agree to  continue  to use
technically  and  commercially   reasonable  efforts  to  reduce  the  costs  of
manufacturing  Compound throughout the period of  commercialization of a Product
containing  such  Compound.  In accordance  with the provisions of Section 3.05,
each Party further  specifically agrees that it shall limit dissemination of and
access to the confidential and proprietary  information of the other Party which
such Party receives  pursuant to the provisions of this Section 4.04(g),  within
such Party's organization to those of its and its Affiliates' personnel who have
a  need  to  know  the  information.   JE  and  Agouron  *  low-cost  commercial
manufacturing  sources for Compound.  To assure a continuous and  cost-effective
supply of Compound during clinical development and commercialization,  JE agrees
to use its  reasonable  efforts to  utilize  low-cost  commercial  manufacturing
sources  for the  manufacture  of  Compound  and JE  agrees to engage at least *
manufacturers for the production of Compound.

<PAGE>

         SECTION 4.05 SUPPLY OF PRODUCT.  The details for manufacturing  Product
will be  determined  after the  execution  of this  Agreement,  according to the
following conditions:

     (a) Agouron shall be responsible for manufacturing Product.

     (b)  Agouron  shall * , in  accordance  with a  Product  Supply  Plan to be
entered  into  between  the  Parties,  * the  amount  of  Product  which  can be
manufactured  from * of Compound,  to be used in  implementing  the  Development
Program in the JE Territory;  the Product Supply Plan, when agreed upon, will be
incorporated as part of the Development Program.  Agouron * JE * Product for use
in  implementing  the Development  Program * which equals * of procuring  and/or
producing such Product, * such * of * ; provided, however, that JE shall provide
Agouron,  * , all Compound  necessary to  manufacture  such Product for JE (or *
Agouron  for  the  cost  of the  Compound,  plus * such  * used  by  Agouron  to
manufacture such Product for JE).

     (c) In  accordance  with the  provisions  of Section  4.04, JE shall * from
Agouron,  and  Agouron  shall  timely  deliver  Product  to be  sold  in  the JE
Territory.  The price of Product to be sold to JE by Agouron shall be at a price
which * such Product,  plus a * . "FBMCP" or "Fully Burdened  Manufacturing Cost
of Product" means the cost of Product shipped,  and shall include the direct and
indirect costs of procuring  and/or producing such Product shipped in accordance
with  either  generally  accepted   accounting   principles  or  the  equivalent
international  accounting  standards.  Direct costs shall  include  direct labor
(including fringe benefits),  direct materials  (including taxes and duties) and
third-party contract costs required to manufacture the bulk product Compound (or
related intermediates) and the finished Product. Indirect costs (to be allocated
to the production effort) shall include, but not be limited to, items treated as
"manufacturing overhead," such as indirect labor and materials, fringe benefits,
occupancy costs (including electricity,  water, waste disposal,  other utilities
and property taxes),  depreciation of property,  plant and equipment used in the
manufacturing  process, and other costs allocable to the manufacturing  process.
Overhead shall not include  start-up costs, or idle or excess capacity  charges.
Included  in the cost of Product  shall be  manufacturing  variances,  including
inventory reserves and non-conforming production runs.

     (d) Agouron  shall  maintain  books of account and  complete  and  accurate
records  of all of its FBMCP of  procuring  and/or  producing  such  Product  in
sufficient  detail to permit JE to confirm the  correctness  of such cost items.
Agouron  shall  provide JE,  upon  reasonable  request,  with copies of invoices
supporting third-party expenditures for procuring and/or producing such Product.
If JE reasonably  believes that an audit of FBMCP is appropriate after reviewing
the  information  received  from  Agouron,  JE  shall  have  the  right,  by  an
independent accounting firm reasonably acceptable to Agouron, employed by JE and
at JE's own expense,  to examine the  pertinent  books and records of Agouron at
all reasonable times (but not more often than * ) for the purpose of determining
and reporting on the  correctness of FBMCP  reported to JE; it being  understood
that such  examination,  with  respect  to any  audit for a * period,  shall not
commence  later than * following the end of such

<PAGE>

     * period.  If an error is found in the  amount of FBMCP that is more than *
of the amount initially reported to JE, then * .

     (e) Agouron  shall supply  Product to JE in  accordance  with the following
conditions:

                  (i) All Product shall be  manufactured  in accordance with the
         specifications  to be determined during  development.  Agouron warrants
         that  each  shipment  of  Product  to JE  will * be  determined  during
         development, and will be made, stored, packaged, labeled and controlled
         by Agouron in accordance with applicable regulatory standards.  Agouron
         will  provide  to JE  concurrently  with  each  shipment  of  Product a
         Certificate of Analysis with respect to such compliance.

                  (ii) Agouron warrants that the manufacturing  facility and the
         equipment and personnel  used to produce  Product that will be supplied
         to JE, at the time each batch of Product is produced shall be, properly
         maintained  and  qualified  to  make   pharmaceutical   grade  products
         consistent with applicable Good Manufacturing Practice requirements. JE
         agrees to  provide  to Agouron  technical  support in meeting  the Good
         Manufacturing  Practice requirements imposed by the regulatory agencies
         of the various countries of the JE Territory. * .

                  (iii) Sale and delivery of Product to JE will be subject to *
         being  issued by JE and  accepted by Agouron. All sales and  deliveries
         of   Product   shall   be   on   the   basis   *   (in   accordance    
         with INCOTERMS  1990). Title and risk of loss, damage and delay shall*.
                                                                  
                  (iv) JE shall grant  Agouron a right of  reference to the drug
         master file for Product in the countries of the JE Territory, and shall
         take all other steps as may be reasonably  requested by a  manufacturer
         of such  Product *  enabling  it to  manufacture  Product  for JE.  The
         manufacturer  shall manufacture  Product in compliance with the Dossier
         for the Product.  Each Party shall  promptly and fully advise the other
         Party of any changes, alterations or amendments to the drug master file
         for Product in the  countries of the JE  Territory  or any  amendments,
         instructions  or  specifications  required by the health or  regulatory
         authorities in the countries of the JE Territory, and the Parties shall
         confer  with  respect  to the  best  mode of  compliance  with any such
         requirements.

                  (v) In the event that,  after  delivery,  JE  determines  that
         Product  does  not  meet  the  applicable   specifications,   Agouron's
         obligations shall be *.

     (f)  JE,  * ,  shall  assist  Agouron  in the  identification  of  low-cost
formulating  sources for making Product.  JE shall * , to

<PAGE>

the extent available, technical and manufacturing assistance and use of its
technology and  proprietary  information to Agouron in an effort to decrease the
costs of making such Product.

     (g) In the event that: (i) any governmental or regulatory authority
issues a request, directive, or order that any Product be recalled or withdrawn;
or (ii) a court of competent  jurisdiction  in a final,  nonappealable  judgment
orders a recall or withdrawal of any Product; or (iii) JE and Agouron agree that
a Product  should be recalled or  withdrawn,  each of the Parties shall take all
appropriate  corrective  actions  to  effect  the  recall or  withdrawal  in its
respective territories,  and shall cooperate fully with each other in conducting
such recall to the full extent necessary to ensure that the recall is effective.
The costs and expenses of notification and destruction or return of the recalled
or  withdrawn  Product in the  Licensed  Territory  shall be * comply  with this
Agreement, * , its  Affiliates  or  sublicensees,  in  which  event  the  costs
and expenses s  a determination based on *. In the event that either Party has 
reasonable  scientific  grounds to  request  the other  Party  (respectively,  
the  "Requesting  Party"  and the "Requested  Party") to recall or withdraw a 
Product from the  Requested  Party's territory for health or safety  reasons and
the Requested  Party does not recall or withdraw said Product, * .

     (h) As  part  of  the  Development  Program,  JE and  Agouron  may  conduct
formulation  development  activities to optimize the cost-effective  formulation
and  delivery of Product.  JE and  Agouron  shall * their * Product  formulation
technology  * to each  other;  the  Parties  also  agree  to *  technically  and
commercially  reasonable efforts to * formulating  Product throughout the period
of * of such Product.  In accordance  with the provisions of Section 3.05,  each
Party  further  specifically  agrees  that it shall limit  dissemination  of and
access to the confidential and proprietary  information of the other Party which
such Party receives  pursuant to the provisions of this Section 4.05(h),  within
such Party's organization to those of its and its Affiliates' personnel who have
a need to know the  information.  JE and Agouron  agree to cooperate to identify
low-cost commercial  formulating sources for Product. To assure a continuous and
cost-effective  supply  of  Product  during  commercialization  of the  Product,
Agouron  agrees to use its  reasonable  efforts to utilize  low-cost  commercial
formulating sources for the formulation of Product.

                   ARTICLE V - ADVANCE PAYMENTS AND ROYALTIES

         SECTION 5.01      ADVANCED PAYMENTS AND ROYALTIES.

         (a)  Subject  to the  terms and  conditions  of this  Agreement  and in
consideration  for the rights granted to Agouron under this  Agreement,  Agouron
shall make the following one-time-only payments to JE:
<PAGE>



                                     PAYMENT

MILESTONE EVENT                                              (U.S. Dollars)

(i)   Within thirty (30) days of execution of this Agreement 
      (actually paid July 17, 1998)                          $6,000,000

(ii)  Within thirty (30) days of the earlier of:
      (1) the first completion of a Phase I Clinical
      Study for any Product; or (2) September 30, 2000*      $3,000,000

(iii) Within thirty (30) days of the earlier of:
      (1)  the first completion of a Pilot Phase II 
      Study for any Product; or (2) December 31, 2000*       $3,000,000

(iv)  Within thirty (30) days of first U.S. NDA or EMEA 
      filing for any Product                                 $6,000,000

(v)   Within thirty (30) days of first U.S. NDA approval
      for any Product                                        $3,000,000

(vi)  Within thirty (30) days of the first European 
      Commission approval for any Product
      (but not before receipt of pricing approval 
      for such Product in
      at least one (1) Major Market European Country)        $5,000,000

     TOTAL  PAYMENTS:                                       $26,000,000

     * The specified  calendar  milestone payment dates referred to in items (1)
and (2) above (i.e. for item (1):  September 30, 2000; or for item (2): December
31, 2000) shall be extended by the number of day(s) which the  completion of the
applicable  milestone  (i.e.  for item (1):  the first  completion  of a Phase I
Clinical Study for any Product;  or for item (2) the first  completion of a of a
Pilot  Phase II Study for any  Product) is delayed by reasons  beyond  Agouron's
control,  as a result of: (i) governmental  and/or regulatory actions or changes
in  policies of the  applicable  authorities;  (ii) safety or efficacy  concerns
about  JE-2147;  (iii)  failure  of JE to timely  provide  ordered  Compound  to
Agouron;  (iv)  difficulties  to find  effective  Product  formulations  despite
Agouron's  reasonable  efforts;  or (v) such other  reasons as Parties may agree
upon after good faith negotiations.
________________________________________________________________________________


* of the payments made pursuant to the provisions of this Section  5.01(a) shall
be creditable  against future royalty  payments to be made to JE pursuant to the
provisions of Section  5.01(b);  provided,  however,  that in no case shall such
credits against royalties payable to JE with respect for a semi-annual  calendar
period  exceed  more than * of the amount of  royalties  otherwise  due for such
semi-annual period. Any remaining creditable amount may be credited as described
above in subsequent  semi-annual  calendar periods against  royalties due JE for
such  semi-annual  periods.  Except  as  expressly  provided  elsewhere  in this
Agreement,  payments  made pursuant to the  provisions  of this Section  5.01(a)
shall be nonrefundable.  If Agouron elects to terminate its marketing rights for
a Product in all of the countries located in the Licensed  Territory pursuant to
the provisions of Section 6.02(b),* .

     (b)  Subject  to  the  terms  and  conditions  of  this  Agreement  and  in
consideration  for the rights granted to Agouron under this  Agreement,  Agouron
shall pay to JE a royalty * whose manufacture,  use or sale would have infringed
(in the absence of license rights granted by JE to Agouron under this Agreement)
a Valid Claim in the country(s) where such  manufacture,  use or sale of Product
occurred.

     (c) The Parties agree that the  calculation  of the amount of royalties due
shall be subject to and in accordance with the following provisions:

                  (i) Royalties under Section 5.01(b) shall be payable only once
         with  respect to a given unit of Product,  regardless  of the number of
         Valid Claims  pertaining  to such 

<PAGE>

         Product or the number of countries in which the manufacture, use or
         sale of a given unit of Product occurs.

                  (ii)  Royalties  due on the sale of a Product  shall  only be
         owed from the date of the *by a Party,  its  Affiliates or sublicensees
         of such Product in a country in the Licensed Territory, until the 
         latest of: (i) the * anniversary of the * in any dosage form of such 
         Product in such country if * in making,  using or selling such Product,
         or such earlier date as the antitrust law (or other law of similar
         nature) in such country  limiting the  accrual of royalties  requires; 
         or (ii) the * that  would  have been * by the  manufacture, use or sale
         of such Product in the  country(s)  where the  manufacture, use or sale
         of such Product occurred.

                  (iii)  Royalties  under  Section  5.02(b)  shall be payable if
         either the  manufacture,  use or sale of a Product would have infringed
         (in the absence of license  rights  granted by JE to Agouron under this
         Agreement) a Valid Claim in the country(s) where such manufacture,  use
         or sale of Product occurred.  Thus, royalties under 5.02(b) are payable
         if a Product is  manufactured in a country where a Valid Claim would be
         infringed by such manufacture,  and then is transferred for use or sale
         into a  country  where  no  such  Valid  Claims  exist.  Alternatively,
         royalties  under  5.02(b)  are  payable if a Product is first sold in a
         country where a Valid Claim would be infringed by such sale, even if no
         Valid Claims were  infringed by the  manufacture of that Product in the
         country of manufacture.

                  (iv)  If any  patent  included  within  the JE  Patent  Rights
         expires,  Agouron's  obligation  to  pay or  cause  to be  paid  patent
         royalties  on Net Sales of a Product  shall cease with  respect to such
         patent,  but patent  royalties  will  continue to be payable by Agouron
         under any other Valid Claim  covering such Product in the  jurisdiction
         where such Product was made, used or sold.

                  (v) Where no Valid  Claims are  utilized  in making,  using or
         selling  a  Product  but  JE  Technology,  and/or  Development  Program
         Technology developed  independently by JE, is utilized in making, using
         or selling the  applicable  Product,  the royalty  rate on Net Sales of
         such Product that would otherwise apply to the Net Sale of such Product
         for such  semi-annual  period in such country shall be reduced by fifty
         percent (50%).  Where no Valid Claims are utilized in making,  using or
         selling a  Product  and no JE  Technology  and/or  Development  Program
         Technology developed  independently by JE, is utilized in making, using
         or selling the applicable  Product,  no royalty shall be due on the Net
         Sales of such Product.

                  (vi) If in any country  where no such Valid Claims  exist,  or
         where the Parties mutually agree that it is not commercially reasonable
         to  pursue  third-party  infringers,   the  amount  of  non-Affiliated,
         third-party  sales of a Product  containing  Compound  in such  country
         exceeds * of the total  sales of all  products  containing  Compound in
         such country in any semi-annual  calendar period, the royalty rate that
         would  otherwise  apply for such  semi-annual  calendar  period in such
         country shall be

<PAGE>

         reduced by fifty percent (50%). The amount of sales of
         products  (for  calculations  to be made  pursuant to Section  5.02(b))
         shall be ascertained by the reputable published marketing data for such
         country or as otherwise  mutually agreed.  If the Parties are unable to
         agree  whether it is  commercially  reasonable  to pursue a third-party
         infringer, then the issue shall be decided by arbitration in accordance
         with the provisions of Section 7.03.

                  (vii) In the event that: (i) compulsory licenses for a Product
         (which compulsory  licenses have a maximum royalty rate lower than that
         which  would  otherwise  apply to Net  Sales of such  Product)  must be
         granted in a country located in the Licensed Territory, and sales under
         such  compulsory  licenses  exceed * of the total sales of all Products
         containing Compound in such country in any semi-annual calendar period;
         or (ii) a governmental authority in a country imposes a maximum royalty
         rate lower than that which would  otherwise  apply to Net Sales of such
         Products in such country,  then the royalty rate which would  otherwise
         apply for such  semi-annual  period in such country shall be reduced to
         equal such lower rate.

                  (viii) In calculating  royalties with respect to a Combination
         Product, the Parties shall enter into good-faith negotiations regarding
         the percentage of the Net Sales of such Combination  Product to be used
         in  calculating  royalties  payable  with  respect to such  Combination
         Product on a  country-by-country  basis.  If the  Parties are unable to
         agree upon such  percentage,  royalties  with respect to a  Combination
         Product in a country shall be equal to the royalty rate on Net Sales of
         such Product that would otherwise apply to the Net Sale of such Product
         for such semi-annual  period,  multiplied by a fraction whose numerator
         is a Party's, its Affiliates' or sublicensees' published sales price in
         such country for equivalent  dosages of all active ingredients that are
         Compounds  contained  in  a  given  Combination   Product,   and  whose
         denominator is such Party's, its Affiliates' or sublicensees' published
         sale  price  in such  country  for  equivalent  dosages  of all  active
         ingredients  contained therein. If the numerator and denominator cannot
         be determined in the manner set forth above,  then the numerator  shall
         be the manufacture or acquisition cost of Compounds  contained therein,
         and the  denominator  shall  be the sum of the  numerator  and the cost
         (calculated on the same basis if manufactured;  otherwise, on the basis
         of purchase price) of all other active  ingredients  contained therein.
         In each  case,  the cost is to be  determined  in  accordance  with the
         Party's standard accounting procedures. If specific value is added to a
         Product by special devices for dispensing or administering such Product
         or by diluents or similar  exogenous  materials  which  accompany  such
         Product as it is sold, the Parties,  using mechanisms  similar to those
         described above in this Section 5.01(c)(viii),  shall determine in good
         faith an amount to be deducted from the gross amount  invoiced for such
         Product to remove from the amount of Net Sales the specific value added
         to such Product by such special devices or exogenous materials.
<PAGE>

         SECTION 5.02      GENERAL LICENSING TERMS.

         (a) No sales  shall be deemed to have  occurred  as the result of sales
between and among the  Parties,  their  Affiliates  and  sublicensees;  it being
understood that sales occur when made to non-Affiliated  third-party purchasers.
A sale of a Product  shall be  deemed  to have  occurred  upon the  earliest  of
invoicing or delivery of such Product for value to a non-Affiliated  third-party
purchaser.  In the case of a sale or other disposal of a Product for value other
than in an arm's-length  transaction  exclusively  for money,  such as barter or
counter-trade,  sales shall be  calculated  using the fair market  value of such
Product (if higher than the stated sales price) in the country of disposal.

         (b) The Parties  agree that the  accounting  and  payment of  royalties
shall comply with the following terms and conditions:

                  (i) The royalty  payments  will be made  semi-annually  within
         sixty (60) days  after the last day of the months of June and  December
         during the royalty  term of this  Agreement.  Upon  payment of the such
         royalties,  Agouron shall provide JE with royalty reports that indicate
         the Net Sales by calendar month upon which the royalty is based.

                  (ii) Agouron shall remit in  immediately  available  funds the
         milestone  payments and all royalty  payments which are due pursuant to
         the  provisions  of Section 5.01 to JE by bank wire  transfer to the JE
         bank account specified by JE to Agouron. A payment shall be deemed paid
         as of the date on  which it was  wired  to the  account  JE  designated
         pursuant to the provisions of the immediately  preceding sentence.  Any
         royalty  payments  due  that are not paid on or  before  the date  such
         payments  are due shall  bear  interest  at the lower of: (A) the prime
         rate applied by the Chase Manhattan Bank in New York, New York, U.S.A.,
         on the due  date,  plus one  hundred  (100)  basis  points;  or (B) the
         highest  interest rate permitted by applicable  law,  calculated on the
         number of days in each month that such payment is delinquent.

                  (iii)  Agouron shall be entitled to withhold from a royalty or
         other  payment  due JE, the  amount,  if any,  of any  withholding  tax
         assessable  to JE,  provided  evidence  of  payment  of any such tax is
         promptly  provided to JE. If any taxes (other than  value-added  taxes)
         are  imposed on  payments  of  royalties  to JE and are  required to be
         withheld therefrom,  such taxes shall be for the account of JE, and the
         payments due to JE shall be reduced  accordingly.  Agouron shall advise
         JE and  provide  it with  copies  of the  tax  receipts  for all  taxes
         deducted  from the payment of royalties  due JE, and shall give JE such
         assistance  as may  reasonably  be  necessary  to  enable  JE to  claim
         exemption from such  withholding  liability.  The Parties will exercise
         their best  efforts to ensure that any  withholding  taxes  imposed are
         reduced  as far as  possible  under the  provisions  of any  future tax
         treaty between the United States and Japan or any other relevant treaty
         or law.

                  (iv)  Agouron  shall  maintain  and cause its  Affiliates  and
         sublicensees  to maintain  books of account and  complete  and accurate
         records  pertaining to the sale or other disposition of Products and of
         the  royalties  and other  amounts  payable  under  this  Agreement  in
         sufficient  detail to  permit JE to  confirm  the  correctness  of such
         items. 
<PAGE>

         Upon the annual  request by JE,  Agouron,  at its own  expense,
         agrees to instruct its independent  accounting firm to perform,  during
         Agouron's  annual  audit,  such  additional   auditing  and  accounting
         procedures as are necessary to enable such  accounting  firm to confirm
         to JE the correctness of the amounts stated in any reports  provided by
         Agouron.  Notwithstanding the preceding, if JE reasonably believes that
         an additional  audit is  appropriate  after  reviewing the  information
         received from Agouron's independent  accounting firm, JE shall have the
         right, by an independent  accounting or audit specialty firm reasonably
         acceptable  to  Agouron,  employed  by JE and at JE's own  expense,  to
         examine  pertinent  books and records of Agouron and its Affiliates and
         sublicensees,   including  royalty  reports  of  sublicensees,  at  all
         reasonable  times (but not more often than once each calendar year) for
         the purpose of  determining  and reporting on the  correctness  of such
         accounting; it being understood that such examination,  with respect to
         any annual audit, shall not commence later than two (2) years following
         the end of such annual  auditing  period.  If an error is found in such
         accounting which is more than five percent (5%) of the amount initially
         stated in such  accounting,  then  Agouron  shall  reimburse JE for the
         reasonable  cost of such audit.  Adjustments in the amounts due because
         of an audit shall be settled on or before the next semi-annual  payment
         date.  Any payments  due pursuant to the terms of this Section  5.02(b)
         that are not paid on or  before  the date such  payments  are due shall
         bear  interest at the lower of: (i) the prime rate applied by the Chase
         Manhattan Bank in New York, New York, U.S.A., on the due date, plus one
         hundred (100) basis points; or (ii) the highest interest rate permitted
         by applicable law,  calculated on the number of days in each month that
         such payment is delinquent.

         (c) Upon the  expiration  of the  foregoing  royalty  obligations  in a
country,  Agouron  shall  be  thereafter  free,  at no  cost  to JE,  to use any
remaining JE Technology to  commercialize  generic  equivalents of the Compound,
intermediates  thereof and  Products in such country on a  non-exclusive  basis;
provided,   however,  that  such  commercialization  is  subject  to  any  other
continuing  obligations due JE, including license  obligations under Article II,
if any.

         (d) The Parties agree in the future to use their reasonable  efforts to
negotiate any additional licensing terms for the Compound, intermediates thereof
and/or  Products which may be necessary to clarify the rights and obligations of
the Parties.

         SECTION 5.03      FOREIGN CURRENCY.

         (a) Net Sales and any milestone and royalty  amounts shall be stated in
United States  dollars.  Remittal of milestone  payments and royalties  shall be
made in United States  dollars.  Any required  conversion of Net Sales to United
States dollars shall be done using the monthly  average rate of exchange for the
calendar month in which such Net Sales  occurred.  The conversion from a foreign
currency  to United  States  dollars  shall be made by using the  average of the
daily  official  rates  of  exchange  for  each day in the  calendar  month,  as
published  by the New  York  edition  of the Wall  Street  Journal,  or  another
qualified source that is mutually acceptable to the Parties.

         (b) To the extent the local  currency of the country in which a sale of
Product  occurs can be freely  converted into United States dollars and remitted
to a United States bank account,  

<PAGE>

payments  of  royalties  shall be made in United  States  dollars to a bank
account  designated by JE. If, due to restrictions or prohibitions  imposed by a
national or  international  authority,  such conversion or remittance  cannot be
made,  the Parties shall consult to find a prompt and acceptable  solution,  and
Agouron  shall,  from time to time,  deal with  such  monies as JE may  lawfully
direct,  but  at  no  additional  out-of-pocket  expense.   Notwithstanding  the
foregoing,  if  required  remittances  in any  country  cannot be  converted  or
remitted to JE for any reason  within three (3) months after such  remittance is
otherwise  due,  then Agouron  shall be obligated to deposit the local  currency
equivalent of the required United States dollar  remittance in a bank account in
such  country  in the name of JE.  If free  conversion  of such  funds to United
States  dollars  is not  possible  within  twelve  (12)  months of the  original
remittance due date, Agouron shall transfer such local currency funds (including
any  interest  earned  from the  deposit of the local  currency)  to JE. If free
conversion of such funds to United States dollars becomes possible within twelve
(12)  months of the  original  remittance  due  date,  the  conversion  of local
currency to United States dollars shall be based on the monthly  average rate of
exchange for the calendar  month  immediately  preceding the month in which such
remittance is made, as such average rate of exchange is computed above.

                        ARTICLE VI - TERM AND TERMINATION

         SECTION 6.01  TERMINATION FOR BREACH.  Either Party may, at its option,
terminate  this  Agreement for cause in the event the other Party shall commit a
material breach of this Agreement and shall fail to cure such breach during: (i)
the one hundred  twenty (120) day period  (thirty (30) day period in the case of
any payment default)  following  receipt of a written notice of such breach from
the  non-breaching  Party if such  material  breach can be  reasonably  remedied
within such one hundred  twenty (120) day period;  or (ii) the two hundred forty
(240) day period  following  receipt of a written notice of such breach from the
non-breaching Party if such material breach cannot be reasonably remedied within
one hundred  twenty  (120) days after such  notice,  provided  that the Party in
material breach diligently  endeavors to remedy such material breach, and it may
be reasonably  concluded that such material breach is remediable within such two
hundred forty (240) day period. After the end of the applicable cure period, the
Party who has the right of termination  may exercise its  termination  option by
giving the breaching Party prior written notice of at least fifteen (15) days of
its election to terminate.  Any  termination of this Agreement shall not release
the  breaching  Party  from  any  obligations   incurred   hereunder,   and  the
non-breaching Party shall be entitled to pursue an action for damages arising as
a result of such material breach.

         SECTION 6.02      TERMINATION BY AGOURON.

         (a) Agouron may elect to cancel the development  and  Registration of a
Product in a country  located in the Licensed  Territory  upon ninety (90) days'
written notice.  In the event that Agouron elects to discontinue the development
and  Registration of a Product in a country  located in the Licensed  Territory,
JE, its Affiliates and sublicensees shall be free, without any further action by
JE or Agouron, to develop and/or commercialize Products in such country on their
own or with any third party,  and to retain,  use and disclose to any such third
party  information and materials that have been developed in the development and
Registration  of a Product;  provided  that JE shall not  disclose to such third
party the  confidential  and  proprietary  information  of 

<PAGE>

Agouron (other than clinical,  regulatory and manufacturing information and
materials   specifically  relating  to  such  Product).  In  the  event  of  the
discontinuation  of Agouron's  development  and  Registration  of a Product in a
country,  the licenses  granted to it by the  provisions of Section 2.01 to use,
offer for sale,  sell and/or import in or into such country,  such Product under
applicable JE Patent Rights and  Development  Program Patent  Rights,  and using
applicable JE Technology and Development Program Technology shall be terminated.
Agouron shall  transfer  ownership of any Dossiers for a Product in such country
to JE, and shall cooperate with JE to effect an orderly  transition of Agouron's
development and Registration responsibilities in such country to JE.

         (b) Agouron may elect to terminate its  marketing  rights for a Product
on a  country-by-country  basis upon ninety (90) days'  written  notice.  In the
event that Agouron  elects to terminate its marketing  rights for a Product in a
country:  (i) the licenses  granted to Agouron by the provisions of Section 2.01
to use, offer for sale,  sell and/or import in or into such country such Product
under  applicable JE Patent Rights and  Development  Program Patent Rights,  and
using  applicable JE Technology  and  Development  Program  Technology  shall be
terminated,  and JE and its Affiliates and sublicensees  shall be free to market
such Product in such  country on its own or with any third  party;  (ii) Agouron
shall transfer ownership to JE of any Dossiers for such Product in such country;
and (iii) Agouron  shall  cooperate  with JE to effect an orderly  transition of
Agouron's marketing responsibilities in such country to JE.

         (c) If there is a material  breach of this  Agreement by JE but Agouron
nevertheless  wishes to retain its rights granted by the terms of this Agreement
in Compound  and/or  Products,  then Agouron  shall be entitled to terminate the
licenses  granted to JE and to pursue an action for damages  arising as a result
of such material breach.

         SECTION 6.03 TERMINATION BY MUTUAL  AGREEMENT. The Parties may at any
time terminate  this  Agreement,  in  part  or in its  entirety,  by  mutual  
written agreement.

         SECTION 6.04 TERMINATION UPON BANKRUPTCY.  In the event that a Party is
subject to any proceeding under the bankruptcy laws, including  appointment of a
receiver,   trustee,   liquidator   or  other   custodian  of  its  business  or
substantially  all of its assets,  and such proceeding,  if involuntary,  is not
dismissed  or  discharged  within  one  hundred  fifty  (150)  days  after  such
proceeding is instituted, or upon the liquidation, dissolution, or winding up of
its business,  then this Agreement, at the election of the other Party, shall be
terminated  in its  entirety  for  cause  upon a notice in  writing  of at least
fifteen (15) days from the Party who is not bankrupt or insolvent.

         SECTION 6.05 DISPOSITION OF INVENTORY. In the event of the cancellation
or termination of any license rights with respect to a Product, the inventory of
such Product may be sold for up to six (6) months after date of  cancellation or
termination, provided the required payments, if any, are paid thereon.

         SECTION 6.06 EFFECT OF  TERMINATION.  The termination of this Agreement
shall, to the extent not otherwise  expressly provided herein, have no effect on
the rights and  obligations of the Parties under this Agreement with respect to:
(i)  the  Parties'   obligations   of   confidentiality,   

<PAGE>

indemnification  and  compensation for services  performed;  (ii) a Party's
liability  for failure to fulfill its  obligations  or  undertakings  under this
Agreement;  and  (iii)  the  rights  or  obligations  of the  Parties  otherwise
expressly stated in this Agreement to survive the termination of this Agreement.
Any other  provisions  of this  Agreement  that by their  nature are intended to
survive  termination shall also survive.  Upon any termination of this Agreement
in its entirety because of a breach of a Party,  neither Party waives any rights
to any remedies it may have arising out of the termination.  In the event of any
breach  by a Party  with  respect  to the  obligations  which  continue  after a
termination in its entirety of this  Agreement,  the  non-breaching  Party shall
have all remedies  available to it, as if the Agreement  were still in effect on
the date of such breach.

                     ARTICLE VII - WARRANTIES AND COVENANTS;
                   INDEMNITIES; INSURANCE; DISPUTE RESOLUTION

         SECTION 7.01      WARRANTIES AND COVENANTS.

         (a) Each Party  represents  and warrants to the other Party that it has
the legal power, authority and right to enter into this Agreement and to perform
all of its respective  obligations  set forth herein,  including the attachments
hereto.

         (b)  JE  acknowledges  and  represents  that  the  patents  and  patent
applications  listed in Schedule 2 are the only patents and patent  applications
included  within the JE Patent  Rights that are jointly  owned by JE and a third
party,  and that such  patents and patent  applications  are only subject to the
conditions and  restrictions  noted on Schedule 2 and, except as otherwise noted
on Schedule 2, that the  license of such JE Patent  Rights to Agouron  under the
terms of this  Agreement  do not  require the  consent of such joint  owner.  JE
further represents and warrants that none of the JE Patent Rights are subject to
the provisions of the * .

         (c) JE represents  and warrants  that, as of the date this Agreement is
executed,  it was not  aware of the  existence  of any  patent  applications  or
patents  owned and  Controlled  by a third party  covering  Compound  that might
materially  prevent the Parties  from  commercializing  Compound in the Licensed
Territory, except for the patent application listed in Schedule 7.01(c).

         (d) JE represents  and warrants that: (i) it has the right to grant the
licenses  set forth in  Article  II;  and (ii)  there  are no  suits,  claims or
proceedings pending in any court or by or before any governmental body or agency
with  respect to the JE Patent  Rights or JE  Technology  that would  materially
interfere with the ability of Agouron to fully exercise the licenses  granted to
it under this  Agreement,  including the exclusive  license rights under Section
2.01(a). Agouron represents that, to the best of its knowledge, it does not have
any  know-how,  trade  secret,   experimental  data,  formula,  expert  opinion,
experimental  procedure or other  confidential  and/or  proprietary  information
specifically  concerning the Compound,  intermediates thereof, or a Product that
was developed or acquired by or on behalf of Agouron  before the Effective  Date
of this Agreement that is necessary for either:  (i) the formulation  (including
sustained-release formulations), manufacture, use and/or application of Product;
or (ii)  obtaining  Registration  of  Product,  including,  but not  limited to,
information and data arising out of pre-clinical  and clinical trials  involving
Product and all NDA applications for Product,  and which is under the Control of
Agouron.

<PAGE>

         (e) Each  Party  covenants  that it shall not commit any act or fail to
take any action that,  in any  significant  way,  would be in conflict  with its
material obligations under this Agreement and the attachments hereto.

         (f) Each Party  promises to comply in all  material  respects  with the
terms of the licenses granted to it under this Agreement,  and with all federal,
state,  local  and  foreign  laws,  rules  and  regulations  applicable  to  the
development,   manufacture,   distribution,  import  and  export,  and  sale  of
pharmaceutical products pursuant to this Agreement.

         (g) EXCEPT AS OTHERWISE  EXPRESSLY PROVIDED IN THIS AGREEMENT,  EACH OF
THE PARTIES MAKES NO WARRANTIES,  EXPRESSED OR IMPLIED,  OF  MERCHANTABILITY  OR
FITNESS FOR A  PARTICULAR  PURPOSE OF ANY  SUBJECT  MATTER  INCLUDED  WITHIN THE
CLAIMS OF THE PATENT RIGHTS,  INCLUDING THE COMPOUND. THE PARTIES UNDERSTAND AND
AGREE THAT  DEVELOPMENT AND  COMMERCIALIZATION  OF COMPOUND AND/OR PRODUCTS WILL
INVOLVE  APPROVAL BY REGULATORY  AUTHORITIES,  AND THAT NO PARTY IS GUARANTEEING
THE SAFETY OR EFFICACY OF COMPOUND  AND/OR  PRODUCTS,  OR THAT  COMPOUND  AND/OR
PRODUCTS WILL RECEIVE THE REQUIRED APPROVALS.

         SECTION 7.02      INDEMNITIES; INSURANCE.

         (a) Agouron shall  indemnify  and hold harmless JE and its  Affiliates,
employees,  and agents (a "JE  Indemnified  Party") from and against any and all
liabilities,   losses,   damages,   costs,  or  expenses  (including  reasonable
investigative  and attorneys'  fees) which the JE  Indemnified  Party may incur,
suffer or be required to pay resulting  from or arising in  connection  with any
product  liability or other claims  (other than claims for patent  infringement)
arising  from the use by any person of any  Product,  to the extent such product
liability or other claim  results from the  negligent,  reckless or  intentional
misconduct of Agouron,  its  Affiliates  or  sublicensees,  or their  respective
employees  and  agents,  or on account  of  Agouron's  failure  to  fulfill  its
obligations or undertakings under this Agreement;  provided, however, that in no
event  shall  Agouron  be liable  to a JE  Indemnified  Party for any  indirect,
incidental,  special or  consequential  damages,  including  loss of revenues or
profits from sales of Products.

         (b) JE shall  indemnify and hold harmless  Agouron and its  Affiliates,
employees,  and agents (an "Agouron Indemnified Party") from and against any and
all  liabilities,  losses,  damages,  costs, or expenses  (including  reasonable
investigative and attorneys' fees) that the Agouron Indemnified Party may incur,
suffer or be required to pay,  resulting from or arising in connection  with any
product  liability or other claims  (other than claims for patent  infringement)
arising  from the use by any person of any  Product,  to the extent such product
liability or other claim  results from the  negligent,  reckless or  intentional
misconduct of JE, its Affiliates or sublicensees,  or their respective employees
and  agents,  or on  account  of JE's  failure to  fulfill  its  obligations  or
undertakings under this Agreement;  provided, however, that in no event shall JE
be liable to an Agouron Indemnified Party for any indirect,  incidental, special
or  consequential  damages,  including loss of revenues or profits from sales of
Products.


<PAGE>

         (c) To the extent that a product liability or other claim (other than a
claim  for  patent  infringement)  results  from  the  negligent,   reckless  or
intentional  misconduct of more than one Party, their Affiliates,  sublicensees,
or their  respective  employees  and agents,  the  Parties  agree to share in an
equitable  manner  such  liabilities,  losses,  damages,  costs,  or expenses in
proportion  to the  relative  fault of each of the  Parties,  their  Affiliates,
sublicensees, or their respective employees and agents.

         (d) Unless the Parties agree otherwise, all other liabilities,  losses,
damages,  costs, or expenses (including reasonable  investigative and attorneys'
fees) under this Section  7.02  relating to or involving a Product in a country,
except as provided by the terms of Sections  7.02(a),  (b) and (c), shall be the
responsibility  of the Party  marketing such Product in such country.  The Party
marketing a Product in a country shall indemnify the non-marketing Party in such
country from and against any and all  liabilities,  losses,  damages,  costs, or
expenses  (including  reasonable  investigative  and attorneys' fees) which such
non-marketing  Party may incur,  suffer or be required to pay resulting  from or
arising in  connection  with any product  liability or other claims  (other than
claims  for  patent  infringement)  arising  from the use by any  person of such
Product  in such  country.  Section  3.02  sets  forth  the  Parties'  liability
obligations arising from claims for patent infringement.

         (e) The  aforesaid  obligations  of the  indemnifying  Party  shall  be
subject to the indemnified Party fulfilling the following obligations:

                  (i) The  indemnified  Party  shall  fully  cooperate  with the
         indemnifying Party in the defense of any claims,  actions,  etc., which
         defense shall be controlled by the indemnifying Party.

                  (ii) The indemnified  Party shall not, except at its own cost,
         voluntarily  make any payment or incur any expense  with respect to any
         claim or suit  without the prior  written  consent of the  indemnifying
         Party, which consent such Party shall not be required to give.

                  (iii) The  indemnified  Party  shall  notify the  indemnifying
         Party  promptly  after receipt of a notice of the  commencement  of any
         litigation or threat  thereof that may  reasonably  lead to a claim for
         indemnification.

         (f) The  Parties  agree to  maintain  appropriate  amounts  of  product
liability  insurance  coverage  and to  have  the  other  Party  included  as an
additional insured on such policies.

         SECTION 7.03 DISPUTE  RESOLUTION.  In the event of any  controversy  or
claim arising out of or relating to any provision of this  Agreement or any term
or condition hereof, or the performance by a Party of its obligations hereunder,
the Parties shall try to settle their differences  amicably between  themselves.
If the  representatives of the Parties are unable to reach agreement on any such
issue, the issue shall be submitted for  consideration,  in the case of Agouron,
to a  designee  of its  Chief  Executive  Officer  and,  in the case of JE, to a
designee of its Managing Director of Pharmaceuticals  and Biobusiness  Division.
If such designees are unable to agree,

<PAGE>

then the issue  shall be  resolved,  in the case of  Agouron,  by its Chief
Executive  Officer  and,  in  the  case  of  JE,  by its  Managing  Director  of
Pharmaceuticals and Biobusiness Division.  Any unresolved issues arising between
the  Parties  relating  to,  arising out of, or in any way  connected  with this
Agreement or any term or condition  hereof, or the performance by a Party of its
obligations  hereunder,  whether before or after  termination of this Agreement,
except as otherwise  provided in this  Agreement,  shall be finally  resolved by
binding  arbitration.  Whenever a Party shall  decide to  institute  arbitration
proceedings, it shall give written notice to that effect to the other Party. The
Party  giving  such  notice  shall  refrain  from  instituting  the  arbitration
proceedings for a period of sixty (60) days following such notice.  If JE is the
Party  initiating the arbitration,  the arbitration  shall be held in San Diego,
California,  according  to the  rules of the  American  Arbitration  Association
("AAA").  If Agouron is the Party  initiating the  arbitration,  the arbitration
shall be held in Tokyo,  Japan,  according to the rules of the Japan  Commercial
Arbitration Association ("JCAA"). The arbitration shall be conducted by a single
arbitrator  mutually  chosen by the Parties.  If the Parties cannot agree upon a
single  arbitrator  within  fifteen  (15)  days  after  the  institution  of the
arbitration  proceeding,  then the arbitration  shall be conducted by a panel of
three  arbitrators  appointed in accordance  with  applicable AAA or JCAA rules;
provided,  however,  that each Party  shall,  within  thirty (30) days after the
institution of the  arbitration  proceedings,  appoint one  arbitrator  with the
third arbitrator  being chosen by the other two  arbitrators.  If only one Party
appoints an  arbitrator,  then such  arbitrator  shall be entitled to act as the
sole arbitrator to resolve the controversy.  Any arbitration  hereunder shall be
conducted  in  the  English  language,  to  the  maximum  extent  possible.  All
arbitrator(s)  eligible to conduct the  arbitration  must agree to render  their
opinion(s)  within  thirty  (30)  days of the  final  arbitration  hearing.  The
arbitrator(s)  shall have the authority to grant injunctive  relief and specific
performance and to allocate between the Parties the costs of arbitration in such
equitable manner as he/she determines;  provided, however, that each Party shall
bear its own costs and attorneys' and witness' fees.  Notwithstanding  the terms
of this Section 7.03, a Party shall also have the right to obtain,  prior to the
arbitrator(s)   rendering  the  arbitration   decision,   provisional  remedies,
including  injunctive  relief  or  specific  performance,  from a  court  having
jurisdiction thereof. The arbitrator(s) shall, upon the request of either Party,
issue a written opinion of the findings of fact and conclusions of law and shall
deliver a copy to each of the Parties.  Decisions of the arbitrator(s)  shall be
final and binding on all of the  Parties.  Judgment on the award so rendered may
be entered in any court having jurisdiction thereof.

                     ARTICLE VIII - DISCLOSURE OF AGREEMENT

         SECTION  8.01  DISCLOSURE  OF  AGREEMENT.  Except  as  agreed to by the
Parties,  and as required  for the  performance  of its  obligations  hereunder,
neither JE nor Agouron  shall  release any  information  to any third party with
respect to any of the terms of this Agreement  without the prior written consent
of the other Party,  which  consent  shall not  unreasonably  be withheld.  This
prohibition  includes,  but is not limited to, press  releases,  educational and
scientific  conferences,  promotional  materials and discussions with the media.
The Parties shall jointly  prepare and release a public  announcement  regarding
the existence of this  Agreement.  If a Party  determines that it is required by
law,  including  securities laws and  regulations  pertaining to publicly traded
companies, to release information to any third party regarding the terms of this
Agreement,  it shall notify the other Party of this fact prior to releasing  the
information.  The  notice  to the  other  Party  shall  include  the text of the
information proposed for release. The other Party shall have 

<PAGE>

the right to confer with the  notifying  Party  regarding the necessity for
the disclosure  and the text of the  information  proposed for release,  but the
notifying Party shall have the discretion to release the information as it deems
necessary to fulfill its requirements under law.  Notwithstanding the preceding,
JE and Agouron shall each have the right to disclose the terms of this Agreement
to persons  it  proposes  to enter into  business  relationships  with,  if such
persons are subject to confidentiality  and use obligations  equivalent to those
applicable to the disclosing Party hereunder.

                         ARTICLE IX - GENERAL PROVISIONS

         SECTION 9.01 NO IMPLIED LICENSES. Only the licenses granted pursuant to
the express terms of this Agreement  shall be of any legal force and effect.  No
license rights shall be created by implication or estoppel.

         SECTION  9.02 NO WAIVER.  Any  failure by a Party to enforce  any right
which it may have  hereunder  in any  instance  shall not be deemed to waive any
right which it or the other Party may have in any other instance with respect to
any provision of this  Agreement,  including the provision  which such Party has
failed to enforce.

         SECTION  9.03  SEVERABILITY;  GOVERNMENT  ACTS.  In the event  that any
provision  of  this  Agreement  is  judicially,  or  by a  competent  authority,
determined to be  unenforceable,  in part or in whole, with regard to any or all
of the countries in the Territory,  the remaining provisions or portions of this
Agreement  shall be valid and binding to the fullest  extent  possible,  and the
Parties shall endeavor to negotiate  additional terms, as feasible,  in a timely
manner so as to fully  effectuate  the original  intent of the  Parties,  to the
extent  possible,  in the  applicable  countries.  In the  event  that  any act,
regulation,  directive, or law of a country, including its departments, agencies
or courts  should make  impossible  or prohibit,  restrain,  modify or limit any
material act or obligation of a Party under this Agreement,  and if any Party to
this  Agreement is  materially  adversely  affected  thereby,  the Parties shall
attempt in good faith to negotiate a lawful and enforceable modification to this
Agreement that  substantially  eliminates the material adverse effect;  provided
that,  failing  any  agreement  in that  regard,  the  Party  who is  materially
adversely  affected shall have the right, at its option, to suspend or terminate
this Agreement as to such country.

         SECTION 9.04 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.

         SECTION 9.05 NOTIFICATION AND GOVERNMENTAL  APPROVALS.  After execution
of this Agreement,  to the extent required by law, Agouron,  after  consultation
with JE,  shall notify the  appropriate  authorities  in the Licensed  Territory
about the terms of this Agreement;  JE, after  consultation with Agouron,  shall
notify the  appropriate  authorities in the JE Territory about the terms of this
Agreement.  JE and Agouron shall obtain any government  approval(s)  required to
enable this Agreement to become effective, or to enable any payment hereunder to
be  made,  or any  other  obligation  hereunder  to be  observed  or  performed.
Third-party costs and expenses incurred in notifying governmental authorities or
obtaining  governmental  approval shall be 

<PAGE>

shared equally  between the Parties.  Each Party shall keep the other Party
informed  of  its  progress  in  notifying  such  governmental  authorities  and
obtaining such government approval,  and shall cooperate with the other Party in
any such efforts.

         SECTION 9.06 U.S. EXPORT CONTROLS. The Parties agree to comply with the
United  States laws and  regulations  governing  exports and  re-exports  of the
Compound,  intermediates thereof,  Products,  Development Program Technology, JE
Technology  or any other  technology  or software  developed  or  disclosed as a
result of this Agreement.  The Parties  acknowledge  that any performance  under
this Agreement is subject to any restrictions which may be imposed by the United
States laws and regulations governing exports and re-exports.  Each Party agrees
to provide the other Party with any  reasonable  assistance,  including  written
assurances  which may be required by a competent  governmental  authority and by
applicable  laws  and  regulations  as a  precondition  for  any  disclosure  of
technology or software by the other Party under the terms of this Agreement. The
obligations of this Section 9.06 shall survive termination or expiration of this
Agreement.

         SECTION  9.07 NO  AGENCY.  JE and  Agouron  shall  have the  status  of
independent contractors under this Agreement and, except as otherwise explicitly
provided in this  Agreement,  nothing in this Agreement shall be construed as an
authorization of a Party to act as an agent of the other Party.

         SECTION 9.08 CAPTIONS;  NUMBER;  OFFICIAL LANGUAGE. The captions of the
articles  and  sections  of this  Agreement  are  for  general  information  and
reference  only, and this Agreement  shall not be construed by reference to such
captions.  Where applicable in this Agreement,  the singular includes the plural
and vice  versa.  To the extent  appropriate,  the  meaning of terms whose first
letters  are  capitalized,  but which are  variations  of terms that are defined
elsewhere  in this  Agreement,  shall each have the same  meaning as the defined
term.  English shall be the official  language of this Agreement and any license
agreement  provided for hereunder,  and all  communications  between the Parties
hereto shall be conducted in that language.

         SECTION 9.09 FORCE  MAJEURE.  A Party shall not be  responsible  to the
other Party for any failure,  delay or interruption in the performance of any of
its obligations  under this Agreement if such failure,  delay or interruption is
caused by any act of God,  earthquake,  fire,  casualty,  flood, war,  epidemic,
riot,  insurrection,  or  any  act,  exercise,  assertion  or  requirement  of a
governmental  authority,  or other cause  beyond the  reasonable  control of the
Party  affected if the Party  affected shall have used its best efforts to avoid
such  occurrence.  If a  Party  believes  that  the  performance  of  any of its
obligations  under this Agreement shall be delayed or interrupted as a result of
any of the reasons  stated in this Section 9.09, and provided such Party is able
to do so,  such Party  shall  promptly  notify the other  Party of such delay or
interruption and the cause therefor, and shall provide such other Party with its
estimate of when the performance of its obligations shall  recommence.  When the
Party affected is able to recommence the  performance of obligations  delayed or
interrupted  as a result of any of the reasons  stated in this Section  9.09, it
shall so notify  the other  Party  and,  except as  otherwise  provided  in this
Agreement, it shall promptly resume the performance of such obligations.


<PAGE>

         SECTION 9.10  AMENDMENT.  This  Agreement,  including the  Attachments,
Exhibits  and  Schedules,  constitutes  the full  agreement  of the Parties with
respect to the subject  matter of this  Agreement,  and  incorporates  any prior
discussions  between them with respect to such subject  matter.  This  Agreement
supersedes the rights and  obligations of JE and Agouron under the  Confidential
Disclosure  Agreement and the Material  Transfer  Agreement  between the Parties
which were both  originally  entered into on December 22, 1997.  This Agreement,
including  the  attachments  hereto,  shall  not  be  amended,  supplemented  or
otherwise modified, except by an instrument in writing signed by duly authorized
officers of the Parties.

         SECTION 9.11  APPLICABLE LAW. This Agreement shall be construed and the
rights of the Parties shall be determined in accordance  with the laws of Japan;
provided,  however,  that with  regard to issues  concerning  the  validity  and
construction of patents,  trademarks and other intellectual property, the rights
of the Parties shall be  determined  in accordance  with the laws of the country
under which such intellectual property rights were granted.

         SECTION  9.12  NOTICES.  Any notice  required or  permitted to be given
under this Agreement shall be in writing and shall be given in person, delivered
by recognized overnight delivery service, sent by mail (certified or registered,
or air mail for addresses  outside of the  continental  U.S.), or by telefax (or
other similar means of electronic communication),  whose receipt is confirmed by
confirming telefax,  and addressed,  in the case of JE, to its Managing Director
of Pharmaceuticals and Biobusiness  Division and, in the case of Agouron, to the
Senior Vice President, Commercial Affairs (with a copy to the Legal Department),
at the addresses shown at the beginning of this Agreement,  or such other person
and/or address as may have been  furnished in writing to the notifying  Party in
accordance  with the  provisions  of this  Section  9.12.  Except  as  otherwise
provided herein,  any notice shall be deemed delivered upon the earliest of: (i)
actual  receipt;  (ii) four (4) business days after delivery to such  recognized
overnight  delivery service;  (iii) eight (8) business days after deposit in the
mail; or (iv) the date of receipt of the confirming telefax.

         SECTION 9.13 ASSIGNMENT.  This Agreement shall be assignable by a Party
to its Affiliates; if this Agreement is assigned by a Party to an Affiliate, the
Party shall still be responsible for all of its obligations as specified in this
Agreement.   This   Agreement   shall  only  be  assignable  by  a  Party  to  a
non-Affiliated  third party with the prior  written  consent of the other Party,
which consent may be withheld at the sole  discretion  of such other Party.  Any
such  assignment  without the prior written  consent of the other Party shall be
void.  Notwithstanding the preceding, in the event of: (i) a sale or transfer of
all  or  substantially   all  of  a  Party's  assets;  or  (ii)  the  merger  or
consolidation  of  a  Party  with  another  company,  this  Agreement  shall  be
assignable to the transferee or successor company.

          SECTION  9.14  SUCCESSION. This Agreement shall be  binding  upon  all
successors in interest, assigns, trustees and other legal representatives of the
Parties.

<PAGE>

         IN WITNESS WHEREOF,  the Parties hereto have executed this Agreement at
a formal  signing  ceremony on July 28, 1998, in duplicate  originals,  by their
respective officers thereunto duly authorized.

JAPAN ENERGY CORPORATION                     AGOURON PHARMACEUTICALS, INC.


By:       /s/ Nimoyama                       By:      /s/ Johnson
Name:    Akihiko Nimoyama                    Name:    Peter Johnson
Title:   Representative Director and         Title:   Chief Executive Officer
         President                                    and President

By:      /s/ Irino                           By:      /s/ Friedman
Name:    Ken Irino                           Name:    Gary E. Friedman, Esq.
Title:   Senior Management Director          Title:   Corporate V.P. and
                                                      General Counsel


WITNESSED BY:

By:       /s/ Miyake                         By:      /s/ Snyder
Name:    Toshinobu Miyake                    Name:    R. Kent Snyder
Title:   Assoc. Dir.,                        Title:   Senior Vice President
         General Mgr. of Coordination                 Business Development
         Pharmaceuticals & Biobusiness Division                                 


<PAGE>


                                                      
                                   SCHEDULE 1

                                        *




<PAGE>


                                                       
                                   SCHEDULE 2


                                        *



<PAGE>


                                                   
                                SCHEDULE 7.01(c)


                                        *



<PAGE>


                                                       
                                    EXHIBIT 1


                                        *


<PAGE>


                                                       
                                  ATTACHMENT 1


                                        *