Document:

<PAGE>

                                  VERSICOR INC.
                          EMPLOYEE STOCK PURCHASE PLAN

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                               Page
                                                                                                               ----
<S>      <C>                                                                                                    <C>
1.       PURPOSE.................................................................................................1

2.       DEFINITIONS.............................................................................................1

3.       ELIGIBILITY.............................................................................................4

4.       STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS...........................................................4

5.       OFFERING PERIODS........................................................................................4

6.       PARTICIPATION...........................................................................................5

7.       METHOD OF PAYMENT OF CONTRIBUTIONS......................................................................5

8.       GRANT OF OPTION.........................................................................................7

9.       EXERCISE OF OPTION......................................................................................7

10.      DELIVERY................................................................................................8

11.      TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS....................................................8

12.      ADMINISTRATION..........................................................................................9

13.      DESIGNATION OF BENEFICIARY.............................................................................10

14.      TRANSFERABILITY........................................................................................11

15.      USE OF FUNDS; INTEREST.................................................................................11

16.      REPORTS................................................................................................11

17.      ADJUSTMENTS OF AND CHANGES IN THE STOCK................................................................11

18.      POSSIBLE EARLY TERMINATION OF PLAN AND OPTIONS.........................................................12

19.      TERM OF PLAN; AMENDMENT OR TERMINATION.................................................................12

20.      NOTICES................................................................................................13

21.      CONDITIONS UPON ISSUANCE OF SHARES.....................................................................13

22.      PLAN CONSTRUCTION......................................................................................13

23.      EMPLOYEES' RIGHTS......................................................................................14

24.      MISCELLANEOUS..........................................................................................14

25.      EFFECTIVE DATE.........................................................................................15

26.      TAX WITHHOLDING........................................................................................15

27.      NOTICE OF SALE.........................................................................................16
</TABLE>

                                                       -i-
<PAGE>

                                  VERSICOR INC.
                          EMPLOYEE STOCK PURCHASE PLAN

         The following constitute the provisions of the Versicor Inc. Employee
Stock Purchase Plan (the "PLAN").

1.       PURPOSE

         The purpose of this Plan is to assist Eligible Employees in acquiring a
         stock ownership interest in the Corporation, at a favorable price and
         upon favorable terms, pursuant to a plan which is intended to qualify
         as an "employee stock purchase plan" under Section 423 of the Code.
         This Plan is also intended to encourage Eligible Employees to remain in
         the employ of the Corporation (or a Subsidiary which may be designated
         by the Committee as "Participating Subsidiary") and to provide them
         with an additional incentive to advance the best interests of the
         Corporation.

2.       DEFINITIONS

         Capitalized terms used herein which are not otherwise defined shall
         have the following meanings.

                  "ACCOUNT" means the bookkeeping account maintained by the
                  Corporation, or by a recordkeeper on behalf of the
                  Corporation, for a Participant pursuant to Section 7(a).

                  "BOARD" means the Board of Directors of the Corporation.

                  "CODE" means the Internal Revenue Code of 1986, as amended
                  from time to time.

                  "COMMITTEE" means the committee appointed by the Board to
                  administer this Plan pursuant to Section 12.

                  "COMMON STOCK" means the Common Stock, par value $.001 per
                  share, of the Corporation, and such other securities or
                  property as may become the subject of Options pursuant to an
                  adjustment made under Section 17.

                  "COMPANY" means, collectively, the Corporation, its Parent and
                  its Subsidiaries (if any).

                  "COMPENSATION" means an Eligible Employee's regular gross pay
                  for a 40-hour week. Compensation includes any amounts
                  contributed as salary reduction contributions to a plan
                  qualifying under Section 401(k), 125 or 129 of the Code. Any
                  other form of remuneration is excluded from Compensation,
                  including (but not limited to) the following: overtime
                  payments, commissions, prizes, awards, relocation or housing
                  allowances, stock option exercises, stock appreciation rights,
                  restricted stock exercises, performance awards, auto
                  allowances, tuition reimbursement and other forms of imputed
                  income, bonuses, incentive

                                       1

<PAGE>

                  compensation, special payments, fees and allowances.
                  Notwithstanding the foregoing, Compensation shall not include
                  any amounts deferred under or paid from any nonqualified
                  deferred compensation plan maintained by the Company.

                  "CONTRIBUTIONS" means all bookkeeping amounts credited to the
                  Account of a Participant pursuant to Section 7(a).

                  "CORPORATION" means Versicor Inc., a Delaware corporation, and
                  its successors.

                  "EFFECTIVE DATE" means [____________], the date this Plan was
                  adopted by the Board.

                  "ELIGIBLE EMPLOYEE" means any employee of the Corporation, or
                  of any Subsidiary which has been designated in writing by the
                  Committee as a "Participating Subsidiary" (including any
                  Subsidiaries which have become such after the date that this
                  Plan is approved by the stockholders of the Corporation).
                  Notwithstanding the foregoing, "Eligible Employee" shall not
                  include any employee:

                  (a)      whose customary employment is for 20 hours or less
                           per week; or

                  (b)      whose customary employment is for not more than five
                           months in a calendar year.

                  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
                  amended from time to time.

                  "EXERCISE DATE" means, with respect to an Offering Period, the
                  last day of that Offering Period.

                  "FAIR MARKET VALUE" on any date means:

                  (a)      if the Common Stock is listed or admitted to trade on
                           a national securities exchange, the closing price of
                           a Share on the Composite Tape, as published in the
                           Western Edition of The Wall Street Journal, of the
                           principal national securities exchange on which such
                           stock is so listed or admitted to trade, on such
                           date, or, if there is no trading of the Common Stock
                           on such date, then the closing price of a Share as
                           quoted on such Composite Tape on the next preceding
                           date on which there was trading in the Shares;

                  (b)      if the Common Stock is not listed or admitted to
                           trade on a national securities exchange, the
                           last/closing price for a Share on such date, as
                           furnished by the National Association of Securities
                           Dealers, Inc. ("NASD") through the NASDAQ National
                           Market Reporting System or a similar organization if
                           the NASD is no longer reporting such information;

                                      2
<PAGE>

                  (c)      if the Common Stock is not listed or admitted to
                           trade on a national securities exchange and is not
                           reported on the National Market Reporting System, the
                           mean between the bid and asked price for a Share on
                           such date, as furnished by the NASD or a similar
                           organization; or

                  (d)      if the Common Stock is not listed or admitted to
                           trade on a national securities exchange, is not
                           reported on the National Market Reporting System and
                           if bid and asked prices for the Common Stock are not
                           furnished by the NASD or a similar organization, the
                           value as established by the Committee at such time
                           for purposes of this Plan.

                  "GRANT DATE" means the first day of each Offering Period, as
                  determined by the Committee and announced to potential
                  Eligible Employees.

                  "OFFERING PERIOD" means the six-consecutive month period
                  commencing on each Grant Date; provided, however, that the
                  Committee may declare, as it deems appropriate and in advance
                  of the applicable Offering Period, a shorter (not to be less
                  than three months) Offering Period or a longer (not to exceed
                  27 months) Offering Period; provided further that the Grant
                  Date for an Offering Period may not occur on or before the
                  Exercise Date for the immediately preceding Offering Period.

                  "OPTION" means the stock option to acquire Shares granted to a
                  Participant pursuant to Section 8.

                  "OPTION PRICE" means the per share exercise price of an Option
                  as determined in accordance with Section 8(b).

                  "PARENT" means any corporation (other than the Corporation) in
                  an unbroken chain of corporations ending with the Corporation
                  in which each corporation (other than the Corporation) owns
                  stock possessing 50% or more of the total combined voting
                  power of all classes of stock in one or more of the other
                  corporations in the chain.

                  "PARTICIPANT" means an Eligible Employee who has elected to
                  participate in this Plan and who has filed a valid and
                  effective Subscription Agreement to make Contributions
                  pursuant to Section 6.

                  "PLAN" means this Versicor Inc. Employee Stock Purchase Plan,
                  as amended from time to time.

                  "RULE 16b-3" means Rule 16b-3 as promulgated by the Commission
                  under Section 16, as amended from time to time.

                  "SHARE" means a share of Common Stock.

                  "SUBSCRIPTION AGREEMENT" means the written agreement filed by
                  an Eligible Employee with the Corporation pursuant to Section
                  6 to participate in this Plan.

                                      3
<PAGE>

                  "SUBSIDIARY" means any corporation (other than the
                  Corporation) in an unbroken chain of corporations (beginning
                  with the Corporation) in which each corporation (other than
                  the last corporation) owns stock possessing 50% or more of the
                  total combined voting power of all classes of stock in one or
                  more of the other corporations in the chain.

3.       ELIGIBILITY

         Any person employed as an Eligible Employee as of a Grant Date shall be
         eligible to participate in this Plan during the Offering Period in
         which such Grant Date occurs, subject to the Eligible Employee
         satisfying the requirements of Section 6.

4.       STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS

         (a)      Subject to the provisions of Section 17, the capital stock
                  that may be delivered under this Plan will be shares of the
                  Corporation's authorized but unissued Common Stock and any of
                  its shares of Common Stock held as treasury shares. The
                  maximum number of Shares that may be delivered pursuant to
                  Options granted under this Plan is [___________] Shares,
                  subject to adjustments pursuant to Section 17.

                  In the event that all of the Shares made available under this
                  Plan are subscribed prior to the expiration of this Plan, this
                  Plan shall terminate at the end of that Offering Period and
                  the Shares available shall be allocated for purchase by
                  Participants in that Offering Period on a pro-rata basis
                  determined with respect to Participants' Account balances.

         (b)      The maximum number of Shares that any one individual may
                  acquire upon exercise of his or her Option with respect to any
                  one Offering Period is 3,000, subject to adjustments pursuant
                  to Section 17 (the "INDIVIDUAL LIMIT"); provided, however,
                  that the Committee may amend such Individual Limit, effective
                  no earlier than the first Offering Period commencing after the
                  adoption of such amendment, without stockholder approval. The
                  Individual Limit shall be proportionately adjusted for any
                  Offering Period of less than twelve months, and may, at the
                  discretion of the Committee, be proportionately increased for
                  any Offering Period of greater than twelve months.

5.       OFFERING PERIODS

         During the term of this Plan, the Corporation will offer Options to
         purchase Shares in each Offering Period to all Participants in that
         Offering Period. Unless otherwise specified by the Committee in advance
         of the Offering Period, an Offering Period that commences on or about
         July 1 will end the following December 31 and an Offering Period that
         commences on or about January 1 will end the following June 30. Each
         Option shall become effective on the Grant Date. The term of each
         Option shall be the duration of the related Offering Period and shall
         end on the Exercise Date. The first Offering Period shall commence no
         earlier than the Effective Date. Offering Periods

                                      4
<PAGE>

         shall continue until this Plan is terminated in accordance with
         Section 18 or 19, or, if earlier, until no Shares remain available for
         Options pursuant to Section 4.

6.       PARTICIPATION

         (a)      An Eligible Employee may become a participant in this Plan by
                  completing a Subscription Agreement on a form approved by and
                  in a manner prescribed by the Committee (or its delegate). To
                  become effective, a Subscription Agreement must be signed by
                  the Eligible Person and filed with the Corporation at the time
                  specified by the Committee, but in all cases prior to the
                  start of the Offering Period with respect to which it is to
                  become effective, and must set forth a whole percentage (or,
                  if the Committee so provides, a stated amount) of the Eligible
                  Employee's Compensation to be credited to the Participant's
                  Account as Contributions each pay period.

         (b)      Notwithstanding the foregoing, a Participant's Contribution
                  election shall be subject to the following limitations:

                           (i)   the $25,000 annual limitation set forth in
                  Section 8(c);

                           (ii)  unless the Committee otherwise provides, an
                  election of a stated amount of Compensation must result in a
                  Plan Contribution of at least $10.00 each pay period;

                           (iii) a Participant may not elect to contribute more
                  than fifteen percent (15%) of his or her Compensation as Plan
                  Contributions; and

                           (iv)  such other limits, rules, or procedures as the
                  Committee may prescribe.

         (c)      Subscription Agreements shall contain the Eligible Employee's
                  authorization and consent to the Corporation's withholding
                  from his or her Compensation the amount of his or her
                  Contributions. An Eligible Employee's Subscription Agreement,
                  and his or her participation election and withholding consent
                  thereon, shall remain valid for all Offering Periods until (i)
                  the Eligible Employee's participation terminates pursuant to
                  the terms hereof, (ii) the Eligible Employee files a new
                  Subscription Agreement that becomes effective, or (iii) the
                  Committee requires that a new Subscription Agreement be
                  executed and filed with the Corporation.

7.       METHOD OF PAYMENT OF CONTRIBUTIONS

         (a)      The Corporation shall maintain on its books, or cause to be
                  maintained by a recordkeeper, an Account in the name of each
                  Participant. The percentage of Compensation elected to be
                  applied as Contributions by a Participant shall be deducted
                  from such Participant's Compensation on each payday during the
                  period for payroll deductions set forth below and such payroll
                  deductions shall be credited to that Participant's Account as
                  soon as administratively practicable after

                                      5
<PAGE>

                  such date. A Participant may not make any additional
                  payments to his or her Account. A Participant's Account
                  shall be reduced by any amounts used to pay the Option Price
                  of Shares acquired, or by any other amounts distributed
                  pursuant to the terms hereof.

         (b)      Payroll deductions with respect to an Offering Period shall
                  commence as of the first day of the payroll period which
                  coincides with or immediately follows the applicable Grant
                  Date and shall end on the last day of the payroll period which
                  coincides with or immediately precedes the applicable Exercise
                  Date, unless sooner terminated by the Participant as provided
                  in this Section 7 or until his or her participation terminates
                  pursuant to Section 11.

         (c)      A Participant may terminate his or her Contributions during an
                  Offering Period (and receive a distribution of the balance of
                  his or her Account in accordance with Section 11) by
                  completing and filing with the Corporation, in such form and
                  on such terms as the Committee (or its delegate) may
                  prescribe, a written withdrawal form which shall be signed by
                  the Participant. Such termination shall be effective as soon
                  as administratively practicable after its receipt by the
                  Corporation. A withdrawal election pursuant to this Section
                  7(c) with respect to an Offering Period shall only be
                  effective, however, if it is received by the Corporation prior
                  to the Exercise Date of that Offering Period. Partial
                  withdrawals of Accounts, and other modifications or
                  suspensions of Subscription Agreements, except as provided in
                  Section 7(e) or 7(f), are not permitted.

         (d)      During leaves of absence approved by the Corporation and
                  meeting the requirements of Regulation Section 1.421-7(h)(2)
                  under the Code, a Participant may continue participation in
                  this Plan by cash payments to the Corporation on his normal
                  paydays equal to the reduction in his Plan Contributions
                  caused by his leave.

         (e)      A Participant may discontinue, increase, or decrease the level
                  of his or her Contributions (within Plan limits) by completing
                  and filing with the Corporation, on such terms as the
                  Committee (or its delegate) may prescribe, a new Subscription
                  Agreement which indicates such election. An election pursuant
                  to this Section 7(e) shall be effective no earlier than the
                  first Offering Period that commences after the Corporation's
                  receipt of such election.

         (f)      A Participant may discontinue (but not increase or otherwise
                  decrease) the level of his or her Contributions, by filing
                  with the Corporation, on such terms as the Committee (or its
                  delegate) may prescribe, a new Subscription Agreement which
                  indicates such election. A Participant may make only one
                  election under this Section 7(f) each Offering Period. An
                  election pursuant to this Section 7(f) shall be effective no
                  earlier than the first payroll period that starts after the
                  Corporation's receipt of such election.

                                      6
<PAGE>

8.       GRANT OF OPTION

         (a)      On each Grant Date, each Eligible Employee who is a
                  participant during that Offering Period shall be granted an
                  Option to purchase a number of Shares. The Option shall be
                  exercised on the Exercise Date. The number of Shares subject
                  to the Option shall be determined by dividing the
                  Participant's Account balance as of the applicable Exercise
                  Date by the Option Price.

         (b)      The Option Price per Share of the Shares subject to an Option
                  for an Offering Period shall be the lesser of: (i) 85% of the
                  Fair Market Value of a Share on the applicable Grant Date; or
                  (ii) 85% of the Fair Market Value of a Share on the applicable
                  Exercise Date.

         (c)      Notwithstanding anything else contained herein, a person who
                  is otherwise an Eligible Employee shall not be granted any
                  Option (or any Option granted shall be subject to compliance
                  with the following limitations) or other right to purchase
                  Shares under this Plan to the extent:

                           (i) it would, if exercised, cause the person to own
                  "stock" (as such term is defined for purposes of Section
                  423(b)(3) of the Code) possessing 5% or more of the total
                  combined voting power or value of all classes of stock of the
                  Corporation, or of any Parent, or of any Subsidiary; or

                           (ii) such Option causes such individual to have
                  rights to purchase stock under this Plan and any other plan of
                  the Corporation, any Parent, or any Subsidiary which is
                  qualified under Section 423 of the Code which accrue at a rate
                  which exceeds $25,000 of the fair market value of the stock of
                  the Corporation, of any Parent, or of any Subsidiary
                  (determined at the time the right to purchase such Stock is
                  granted, before giving effect to any discounted purchase price
                  under any such plan) for each calendar year in which such
                  right is outstanding at any time.

                  For purposes of the foregoing, a right to purchase stock
                  accrues when it first become exercisable during the calendar
                  year. In determining whether the stock ownership of an
                  Eligible Employee equals or exceeds the 5% limit set forth
                  above, the rules of Section 424(d) of the Code (relating to
                  attribution of stock ownership) shall apply, and stock which
                  the Eligible Employee may purchase under outstanding options
                  shall be treated as stock owned by the Eligible Employee.

9.       EXERCISE OF OPTION

         Unless a Participant's Plan participation is terminated as provided in
         Section 11, his or her Option for the purchase of Shares shall be
         exercised automatically on the Exercise Date for that Offering Period,
         without any further action on the Participant's part, and the maximum
         number of whole Shares subject to such Option (subject to the
         Individual

                                      7
<PAGE>

         Limit set forth in Section 4(b) and the limitations contained in
         Section 8(c)) shall be purchased at the Option Price with the balance
         of such Participant's Account.

         If any amount which is not sufficient to purchase a whole Share remains
         in a Participant's Account after the exercise of his or her Option on
         the Exercise Date: (i) such amount shall be credited to such
         Participant's Account for the next Offering Period, if he or she is
         then a Participant; or (ii) if such Participant is not a Participant in
         the next Offering Period, or if the Committee so elects, such amount
         shall be refunded to such Participant as soon as administratively
         practicable after such date. If the Share limit of Section 4(a) is
         reached, any amount that remains in a Participant's Account after the
         exercise of his or her Option on the Exercise Date to purchase the
         number of Shares that he or she is allocated shall be refunded to the
         Participant as soon as administratively practicable after such date.

         If any amount which exceeds the Individual Limit set forth in Section
         4(b) or one of the limitations set forth in Section 8(c) remains in a
         Participant's Account after the exercise of his or her Option on the
         Exercise Date, such amount shall be refunded to the Participant as soon
         as administratively practicable after such date.

10.      DELIVERY

         As soon as administratively practicable after the Exercise Date, the
         Corporation shall deliver to each Participant a certificate
         representing the Shares purchased upon exercise of his or her Option.
         The Corporation may make available an alternative arrangement for
         delivery of Shares to a recordkeeping service. The Committee (or its
         delegate), in its discretion, may either require or permit the
         Participant to elect that such certificates be delivered to such
         recordkeeping service. In the event the Corporation is required to
         obtain from any commission or agency authority to issue any such
         certificate, the Corporation will seek to obtain such authority. If the
         Corporation is unable to obtain from any such commission or agency
         authority which counsel for the Corporation deems necessary for the
         lawful issuance of any such certificate, or if for any other reason the
         Corporation can not issue or deliver Shares and satisfy Section 21, the
         Corporation shall be relieved from liability to any Participant except
         that the Corporation shall return to each Participant the amount of the
         balance in his or her Account.

11.      TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS

         (a)      Except as provided in the next paragraph, if a Participant
                  ceases to be an Eligible Employee for any reason, or if the
                  Participant elects to terminate Contributions pursuant to
                  Section 7(c), at any time prior to the last day of an Offering
                  Period in which he or she participates, such Participant's
                  Account shall be paid to him or her or in cash (or, in the
                  event of the Participant's death, to the person or persons
                  entitled thereto under Section 13 in cash), and such
                  Participant's Option and participation in the Plan shall be
                  automatically terminated.

                  If a Participant (i) ceases to be an Eligible Employee during
                  an Offering Period but remains an employee of the Company
                  through the Exercise Date, or (ii)

                                      8
<PAGE>

                  during an Offering Period commences a sick leave, military
                  leave, or other leave of absence approved by the Company,
                  and the leave meets the requirements of Treasury Regulation
                  Section 1.421-7(h)(2) and the Participant is an employee of
                  the Company or on such leave as of the applicable Exercise
                  Date, such Participant's Contributions shall cease (subject
                  to Section 7(d)), and the Contributions previously credited
                  to the Participant's Account for that Offering Period shall
                  be used to exercise the Participant's Option as of the
                  applicable Exercise Date in accordance with Section 9
                  (unless the Participant makes an election to terminate
                  Contributions in accordance with Section 7(c) at any time
                  prior to the last day of the applicable Offering Period, in
                  which case such Participant's Account shall be paid to him
                  or her in cash in accordance with the foregoing paragraph).

         (b)      A Participant's termination from Plan participation precludes
                  the Participant from again participating in this Plan during
                  that Offering Period. However, such termination shall not have
                  any effect upon his or her ability to participate in any
                  succeeding Offering Period, provided that the applicable
                  eligibility and participation requirements are again then met.
                  A Participant's termination from Plan participation shall be
                  deemed to be a revocation of that Participant's Subscription
                  Agreement and such Participant must file a new Subscription
                  Agreement to resume Plan participation in any succeeding
                  Offering Period.

         (c)      For purposes of this Plan, if a Participating Subsidiary
                  ceases to be a Subsidiary, each person employed by that
                  Subsidiary will be deemed to have terminated employment for
                  purposes of this Plan and will no longer be an Eligible
                  Employee, unless the person continues as an Eligible Employee
                  in respect of another Company entity.

12.      ADMINISTRATION

         (a)      The Board shall appoint the Committee, which shall be composed
                  of not less than two members of the Board. Each member of the
                  Committee, in respect of any transaction at a time when an
                  affected Participant may be subject to Section 16 of the
                  Exchange Act, shall be a "non-employee director" within the
                  meaning of Rule 16b-3. The Board may, at any time, increase or
                  decrease the number of members of the Committee, may remove
                  from membership on the Committee all or any portion of its
                  members, and may appoint such person or persons as it desires
                  to fill any vacancy existing on the Committee, whether caused
                  by removal, resignation, or otherwise. The Board may also, at
                  any time, assume or change the administration of this Plan.

         (b)      The Committee shall supervise and administer this Plan and
                  shall have full power and discretion to adopt, amend and
                  rescind any rules deemed desirable and appropriate for the
                  administration of this Plan and not inconsistent with the
                  terms of this Plan, and to make all other determinations
                  necessary or advisable for the administration of this Plan.
                  The Committee shall act by majority vote or by unanimous
                  written consent. No member of the Committee shall be entitled
                  to act

                                      9
<PAGE>

                  on or decide any matter relating solely to himself or herself
                  or solely to any of his or her rights or benefits under this
                  Plan. The Committee shall have full power and discretionary
                  authority to construe and interpret the terms and conditions
                  of this Plan, which construction or interpretation shall be
                  final and binding on all parties including the Company,
                  Participants and beneficiaries. The Committee may delegate
                  ministerial non-discretionary functions to third parties,
                  including individuals who are officers or employees of the
                  Corporation.

         (c)      Subject only to compliance with the express provisions hereof,
                  the Board and Committee may act in their absolute discretion
                  in matters within their authority related to this Plan. Any
                  action taken by, or inaction of, the Corporation, any
                  Participating Subsidiary, the Board or the Committee relating
                  or pursuant to this Plan shall be within the absolute
                  discretion of that entity or body and will be conclusive and
                  binding upon all persons. In making any determination or in
                  taking or not taking any action under this Plan, the Board or
                  Committee, as the case may be, may obtain and may rely on the
                  advice of experts, including professional advisors to the
                  Corporation. No member of the Board or Committee, or officer
                  or agent of the Company, will be liable for any action,
                  omission or decision under the Plan taken, made or omitted in
                  good faith.

13.      DESIGNATION OF BENEFICIARY

         (a)      A Participant may file, on a form and in a manner prescribed
                  by the Committee (or its delegate), a written designation of a
                  beneficiary who is to receive any Shares or cash from such
                  Participant's Account under this Plan in the event of such
                  Participant's death. If a Participant's death occurs
                  subsequent to the end of an Offering Period but prior to the
                  delivery to him or her of any Shares deliverable under the
                  terms of this Plan, such Shares and any remaining balance of
                  such Participant's Account shall be paid to such beneficiary
                  (or such other person as set forth in Section 13(b)) as soon
                  as administratively practicable after the Corporation receives
                  notice of such Participant's death and any outstanding
                  unexercised Option shall terminate. If a Participant's death
                  occurs at any other time, the balance of such Participant's
                  Account shall be paid to such beneficiary (or such other
                  person as set forth in Section 13(b)) in cash as soon as
                  administratively practicable after the Corporation receives
                  notice of such Participant's death and such Participant's
                  Option shall terminate. If a Participant is married and the
                  designated beneficiary is not his or her spouse, spousal
                  consent shall be required for such designation to be effective
                  unless it is established (to the satisfaction of the Committee
                  or its delegate) that there is no spouse or that the spouse
                  cannot be located. The Committee may rely on the last
                  designation of a beneficiary filed by a Participant in
                  accordance with this Plan.

         (b)      Beneficiary designations may be changed by the Participant
                  (and his or her spouse, if required) at any time on forms
                  provided and in the manner prescribed by the Committee (or its
                  delegate). If a Participant dies with no validly designated
                  beneficiary under this Plan who is living at the time of such
                  Participant's death, the Corporation shall deliver all Shares
                  and/or cash payable

                                      10
<PAGE>

                  pursuant to the terms hereof to the executor or administrator
                  of the estate of the Participant, or if no such executor or
                  administrator has been appointed, the Corporation, in its
                  discretion, may deliver such Shares and/or cash to the spouse
                  or to any one or more dependents or relatives of the
                  Participant, or if no spouse, dependent or relative is known
                  to the Corporation, then to such other person as the
                  Corporation may designate.

14.      TRANSFERABILITY

         Neither Contributions credited to a Participant's Account nor any
         Options or rights with respect to the exercise of Options or right to
         receive Shares under this Plan may be anticipated, alienated,
         encumbered, assigned, transferred, pledged or otherwise disposed of in
         any way (other than by will, the laws of descent and distribution, or
         as provided in Section 13) by the Participant. Any such attempt at
         anticipation, alienation, encumbrance, assignment, transfer, pledge or
         other disposition shall be without effect and all amounts shall be paid
         and all Shares shall be delivered in accordance with the provisions of
         this Plan. Amounts payable or Shares deliverable pursuant to this Plan
         shall be paid or delivered only to the Participant or, in the event of
         the Participant's death, to the Participant's beneficiary pursuant to
         Section 13.

15.      USE OF FUNDS; INTEREST

         All Contributions received or held by the Corporation under this Plan
         will be included in the general assets of the Corporation and may be
         used for any corporate purpose. Notwithstanding anything else contained
         herein to the contrary, no interest will be paid to any Participant or
         credited to his or her Account under this Plan (in respect of Account
         balances, refunds of Account balances, or otherwise).

16.      REPORTS

         Statements shall be provided to Participants as soon as
         administratively practicable following each Exercise Date. Each
         Participant's statement shall set forth, as of such Exercise Date, that
         Participant's Account balance immediately prior to the exercise of his
         or her Option, the Option Price, the number of whole Shares purchased
         and his or her remaining Account balance, if any.

17.      ADJUSTMENTS OF AND CHANGES IN THE STOCK

         Upon or in contemplation of any reclassification, recapitalization,
         stock split (including a stock split in the form of a stock dividend),
         or reverse stock split; any merger, combination, consolidation, or
         other reorganization; split-up, spin-off, or any similar extraordinary
         dividend distribution in respect of the Common Stock (whether in the
         form of securities or property); any exchange of Common Stock or other
         securities of the Corporation, or any similar, unusual or extraordinary
         corporate transaction in respect of the Common Stock; or a sale of
         substantially all the assets of the Corporation as an entirety occurs;
         then the Committee shall, in such manner, to such extent (if any) and
         at such time as it deems appropriate and equitable in the
         circumstances:

                                      11
<PAGE>

         (a)      proportionately adjust any or all of (i) the number and type
                  of Shares or the number and type of other securities that
                  thereafter may be made the subject of Options (including the
                  specific maxima and numbers of Shares set forth elsewhere in
                  this Plan), (ii) the number, amount and type of Shares (or
                  other securities or property) subject to any or all
                  outstanding Options, (iii) the Option Price of any or all
                  outstanding Options, or (iv) the securities, cash or other
                  property deliverable upon exercise of any outstanding Options;
                  or

         (b)      make provision for a cash payment or for the substitution or
                  exchange of any or all outstanding Options or the cash,
                  securities or property deliverable to the holder of any or all
                  outstanding Options based upon the distribution or
                  consideration payable to holders of the Common Stock upon or
                  in respect of such event.

         The Committee may adopt such valuation methodologies for outstanding
         Options as it deems reasonable in the event of a cash or property
         settlement and, without limitation on other methodologies, may base
         such settlement solely upon the excess (if any) of the amount payable
         upon or in respect of such event over the exercise or strike price of
         the Option.

         In each case, no adjustment, substitution, exchange or settlement will
         be made that would cause this Plan to violate Section 423 of the Code
         or any successor provisions without the written consent of the holders
         materially adversely affected thereby.

         In any of such events, the Committee may take such action sufficiently
         prior to such event to the extent that the Committee deems the action
         necessary to permit the Participant to realize the benefits intended to
         be conveyed with respect to the underlying shares in the same manner as
         is or will be available to stockholders generally.

18.      POSSIBLE EARLY TERMINATION OF PLAN AND OPTIONS

         Upon a dissolution of the Corporation, or any other event described in
         Section 17 that the Corporation does not survive, the Plan and, if
         prior to the last day of an Offering Period, any outstanding Option
         granted with respect to that Offering Period shall terminate, subject
         to any provision that has been expressly made by the Board for the
         survival, substitution, assumption, exchange or other settlement of the
         Plan and Options. In the event a Participant's Option is terminated
         pursuant to this Section 18 without a provision having been made by the
         Board for a substitution, exchange or other settlement of the Option,
         such Participant's Account shall be paid to him or her in cash without
         interest.

19.      TERM OF PLAN; AMENDMENT OR TERMINATION

         (a)      This Plan shall become effective as of the Effective Date. No
                  new Offering Periods shall commence on or after the day before
                  the tenth anniversary of the Effective Date and this Plan
                  shall terminate as of the Exercise Date on or immediately
                  following such date unless sooner terminated pursuant to
                  Section 4, Section 18, or this Section 19.

                                      12
<PAGE>

         (b)      The Board may, at any time, terminate or, from time to time,
                  amend, modify or suspend this Plan, in whole or in part,
                  without notice. Stockholder approval for any amendment or
                  modification shall not be required, except to the extent
                  required by Section 423 of the Code or other applicable law,
                  or deemed necessary or advisable by the Board. No Options may
                  be granted during any suspension of this Plan or after the
                  termination of this Plan, but the Committee will retain
                  jurisdiction as to Options then outstanding in accordance with
                  the terms of this Plan. No amendment, modification, or
                  termination pursuant to this Section 19(b) shall, without
                  written consent of the Participant, affect in any manner
                  materially adverse to the Participant any rights or benefits
                  of such Participant or obligations of the Corporation under
                  any Option granted under this Plan prior to the effective date
                  of such change. Changes contemplated by Section 17 or Section
                  18 shall not be deemed to constitute changes or amendments
                  requiring Participant consent. Notwithstanding the foregoing,
                  the Committee shall have the right to designate from time to
                  time the Subsidiaries whose employees may be eligible to
                  participate in this Plan and such designation shall not
                  constitute any amendment to this Plan requiring stockholder
                  approval.

20.      NOTICES

         All notices or other communications by a Participant to the Corporation
         contemplated by this Plan shall be deemed to have been duly given when
         received in the form and manner specified by the Committee (or its
         delegate) at the location, or by the person, designated by the
         Committee (or its delegate) for that purpose.

21.      CONDITIONS UPON ISSUANCE OF SHARES

         This Plan, the granting of Options under this Plan and the offer,
         issuance and delivery of Shares are subject to compliance with all
         applicable federal and state laws, rules and regulations (including but
         not limited to state and federal securities laws) and to such approvals
         by any listing, regulatory or governmental authority as may, in the
         opinion of counsel for the Corporation, be necessary or advisable in
         connection therewith. The person acquiring any securities under this
         Plan will, if requested by the Corporation and as a condition precedent
         to the exercise of his or her Option, provide such assurances and
         representations to the Corporation as the Committee may deem necessary
         or desirable to assure compliance with all applicable legal and
         accounting requirements.

22.      PLAN CONSTRUCTION

         (a)      It is the intent of the Corporation that transactions
                  involving Options under this Plan in the case of Participants
                  who are or may be subject to the prohibitions of Section 16 of
                  the Exchange Act satisfy the requirements for applicable
                  exemptions under Rule 16 promulgated by the Commission under
                  Section 16 of the Exchange Act so that such persons (unless
                  they otherwise agree) will be entitled to the exemptive relief
                  of Rule 16b-3 or other exemptive rules under Section 16 of the
                  Exchange Act in respect of those transactions and will not be
                  subject to avoidable liability thereunder.

                                      13
<PAGE>

         (b)      This Plan and Options are intended to qualify under Section
                  423 of the Code.

         (c)      If any provision of this Plan or of any Option would otherwise
                  frustrate or conflict with the intents expressed above, that
                  provision to the extent possible shall be interpreted so as to
                  avoid such conflict. If the conflict remains irreconcilable,
                  the Committee may disregard the provision if it concludes that
                  to do so furthers the interest of the Corporation and is
                  consistent with the purposes of this Plan as to such persons
                  in the circumstances.

23.      EMPLOYEES' RIGHTS

         (a)      Nothing in this Plan (or in any other documents related to
                  this Plan) will confer upon any Eligible Employee or
                  Participant any right to continue in the employ or other
                  service of the Company, constitute any contract or agreement
                  of employment or other service or effect an employee's status
                  as an employee at will, nor shall interfere in any way with
                  the right of the Company to change such person's compensation
                  or other benefits or to terminate his or her employment or
                  other service with or without cause. Nothing contained in this
                  Section 23(a), however, is intended to adversely affect any
                  express independent right of any such person under a separate
                  employment or service contract other than a Subscription
                  Agreement.

         (b)      No Participant or other person will have any right, title or
                  interest in any fund or in any specific asset (including
                  Shares) of the Company by reason of any Option hereunder.
                  Neither the provisions of this Plan (or of any related
                  documents), nor the creation or adoption of this Plan, nor any
                  action taken pursuant to the provisions of this Plan will
                  create, or be construed to create, a trust of any kind or a
                  fiduciary relationship between the Company and any Participant
                  or other person. To the extent that a Participant or other
                  person acquires a right to receive payment pursuant to this
                  Plan, such right will be no greater than the right of any
                  unsecured general creditor of the Corporation. No special or
                  separate reserve, fund or deposit will be made to assure any
                  such payment.

         (c)      A Participant will not be entitled to any privilege of stock
                  ownership as to any Shares not actually delivered to and held
                  of record by the Participant. No adjustment will be made for
                  dividends or other rights as a stockholder for which a record
                  date is prior to such date of delivery.

24.      MISCELLANEOUS

         (a)      This Plan, the Options, and related documents shall be
                  governed by, and construed in accordance with, the laws of the
                  State of Delaware. If any provision shall be held by a court
                  of competent jurisdiction to be invalid and unenforceable, the
                  remaining provisions of this Plan shall continue in effect.

         (b)      Captions and headings are given to the sections of this Plan
                  solely as a convenience to facilitate reference. Such captions
                  and headings shall not be

                                      14
<PAGE>

                  deemed in any way material or relevant to the construction of
                  interpretation of this Plan or any provision hereof.

         (c)      The adoption of this Plan shall not affect any other Company
                  compensation or incentive plans in effect. Nothing in this
                  Plan will limit or be deemed to limit the authority of the
                  Board or Committee (i) to establish any other forms of
                  incentives or compensation for employees of the Company (with
                  or without reference to the Common Stock), or (ii) to grant or
                  assume options (outside the scope of and in addition to those
                  contemplated by this Plan) in connection with any proper
                  corporate purpose; to the extent consistent with any other
                  plan or authority.

         (d)      Benefits received by a Participant under an Option granted
                  pursuant to this Plan shall not be deemed a part of the
                  Participant's compensation for purposes of the determination
                  of benefits under any other employee welfare or benefit plans
                  or arrangements, if any, provided by the Company, except where
                  the Committee or the Board expressly otherwise provides or
                  authorizes in writing.

25.      EFFECTIVE DATE

         Notwithstanding anything else contained herein to the contrary, the
         effectiveness of this Plan is subject to the approval of this Plan by
         the stockholders of the Corporation within twelve months after the
         Effective Date. Notwithstanding anything else contained herein to the
         contrary, no Shares shall be issued or delivered under this Plan until
         such stockholder approval is obtained and, if such stockholder approval
         is not obtained within such twelve-month period of time, all
         Contributions credited to a Participant's Account hereunder shall be
         refunded to such Participant (without interest) as soon as practicable
         after the end of such twelve-month period.

26.      TAX WITHHOLDING

         Notwithstanding anything else contained in this Plan herein to the
         contrary, the Company may deduct from a Participant's Account balance
         as of an Exercise Date, before the exercise of the Participant's Option
         is given effect on such date, the amount of any taxes which the Company
         reasonably determines it may be required to withhold with respect to
         such exercise. In such event, the maximum number of whole Shares
         subject to such Option (subject to the other limits set forth in this
         Plan) shall be purchased at the Option Price with the balance of the
         Participant's Account (after reduction for the tax withholding amount).

         Should the Company for any reason be unable, or elect not to, satisfy
         its tax withholding obligations in the manner described in the
         preceding paragraph with respect to a Participant's exercise of an
         Option, or should the Company reasonably determine that it has a tax
         withholding obligation with respect to a disposition of Shares acquired
         pursuant to the exercise of an Option prior to satisfaction of the
         holding period requirements of Section 423 of the Code, the Company
         shall have the right at its option to (i) require the Participant to
         pay or provide for payment of the amount of any taxes which the Company
         reasonably determines that it is required to withhold with respect to
         such event or (ii)

                                      15
<PAGE>

         deduct from any amount otherwise payable to or for the account of the
         Participant the amount of any taxes which the Company reasonably
         determines that it is required to withhold with respect to such event.

27.      NOTICE OF SALE

         Any person who has acquired Shares under this Plan shall give prompt
         written notice to the Corporation of any sale or other transfer of the
         Shares if such sale or transfer occurs (i) within the two-year period
         after the Grant Date of the Offering Period with respect to which such
         Shares were acquired, or (ii) within the twelve-month period after the
         Exercise Date of the Offering Period with respect to which such Shares
         were acquired.

                  IN WITNESS WHEREOF, the Corporation has caused its duly
authorized officer to execute this Plan on this ___ day of _________, 2000.

                                        VERSICOR INC.

                                        By:_____________________________________

                                        Its:____________________________________

                                      16<PAGE>

                                                                    Exhibit 10.7

                                LICENSE AGREEMENT

      THIS LICENSE AGREEMENT (the "Agreement") is made effective as of February
12, 1998 (the "Effective Date"), by and between VERSICOR INC., a Delaware
corporation ("Versicor") and BIOSEARCH ITALIA S.P.A., a corporation organized
under the laws of Italy ("Biosearch").

                                    RECITALS

      WHEREAS, Biosearch has developed a compound having the Biosearch code
number BI 397 (the "Compound" as defined below) and is the owner of patent
rights and know-how relating to the Compound;

      WHEREAS, Biosearch desires to have Versicor develop and register in
specified countries (the "Territory" as defined below) pharmaceutical products
containing the Compound for any therapeutic use;

      WHEREAS, Versicor desires to develop and commercialize Licensed Products
(as defined below) in the Territory either by itself or with another party with
whom Versicor will collaborate in developing and/or marketing such products and
to receive the right and license under the Licensed Patents and Licensed
Know-How (as defined below) to use, sell, offer for sale and import in the
Territory Licensed Products;

      WHEREAS, Biosearch is willing to grant in the Territory the
above-mentioned rights and license to Versicor under Licensed Patents and
Licensed Know-How relating to the Licensed Products;

      NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

      The following terms as used in this License Agreement shall have the
meanings set forth in this Article:

      1.1 "Affiliate" shall mean any entity that directly or indirectly Owns, is
Owned by or is under common Ownership with, a party to this Agreement. "Own" or
"Ownership" shall mean direct or indirect possession of at least fifty percent
(50%) of the outstanding voting securities of a corporation or a comparable
equity interest in any other type of entity, or means substantial control of a
corporation.

      1.2 "Compound" shall mean the chemical substance identified by Biosearch's
code number BI 397, formerly identified as MDL 63,397.

      1.3 "Licensed Compounds" shall mean the Compound or any other compound
claimed in the Licensed Patents.

                                       1.
<PAGE>

      1.4 "Licensed Know-How" shall mean all materials, data, techniques,
know-how, practices, methods, inventions and information which, as of the
Effective Date or during the term of the Agreement, (a) is owned by or licensed
(with right to sublicense) to Biosearch, and (b) which is necessary or useful to
the development, use, importation, or sale of the Licensed Products.

      1.5 "Licensed Patents" shall mean (i) U.S. patent application no.
08/640,681, filed July 29, 1992 and Canadian patent application no. 2109601,
filed July 14, 1992, and all divisionals, substitutions, continuations and
continuations-in-part, and (ii) any patents issuing therefrom, and all
extensions, reissues, and renewals of such patents.

      1.6 "Licensed Product" shall mean human therapeutic [or prophylactic]
products containing as an active ingredient the Licensed Compound, in any dosage
and in such formulations and modes of administration as may be determined by
Versicor.

      1.7 "Net Sales" shall mean the gross amount invoiced by Versicor, its
Affiliates, and sublicensees, as the case may be, for sales of a Licensed
Product to non-Affiliated third parties, less (a) discounts, including cash
discounts, quantity discounts, prompt payment discounts, charge-back payments
and rebates granted to managed health care organizations or to federal, state
and local governments, their agencies, and purchasers and reimbursers or to
trade customers, including but not limited to, wholesalers and chain and
pharmacy buying groups, retroactive price reductions or allowances actually
allowed or granted from the billed amount with respect to the licensed Product
in question, (b) credits or allowances actually granted upon claims, damaged
goods, rejections or returns of Licensed Products, including recalls, regardless
of the party requesting such, (c) freight, postage, shipping and insurance
charges actually allowed or paid for Licensed Product, (d) commissions paid to
third parties, (e) allowances for bad debt and (f) taxes, duties or other
governmental charges levied or otherwise imposed on sale of Licensed Products,
including without limitation value-added taxes, or other governmental charges
otherwise measured by the billing amount, when included in billing, as adjusted
for rebates and refunds.

      1.8 "Territory" shall mean the United States and Canada.

                                    ARTICLE 2

                                 GRANT OF RIGHTS

      2.1 Biosearch License Grant. Biosearch hereby grants to Versicor an
exclusive (even as to Biosearch) right and license, (with the right to
sublicense) under the Licensed Patent Rights and Licensed Know-How, to develop,
use, offer for sale, sell and import the Licensed Product(s) in the Territory.

                                    ARTICLE 3

                                   DISCLOSURE

      3.1 Disclosure of Know-How; Assistance of Biosearch Personnel. Promptly
following execution of this Agreement, Biosearch shall, at its expense, (a)
provide Versicor with

                                       2.
<PAGE>

copies of all written Licensed Know-How in its possession or control and (b) use
reasonable efforts to arrange for a complete disclosure and demonstration of all
Licensed Know-How, by personnel of Biosearch or other knowledgeable former
Biosearch personnel accessible to Biosearch, including making Biosearch
personnel available for periodic telephone consultation to Versicor at
reasonable intervals. Biosearch shall grant permission, upon written request and
reasonable notice by Versicor, for former Biosearch personnel and former
Biosearch consultants, as the case may be, to disclose and discuss Biosearch's
proprietary information on the Compound to Versicor or its sublicensees and
corporate partners solely in furtherance of the purposes of this Agreement.

                                    ARTICLE 4

                     DEVELOPMENT, REGISTRATION AND MARKETING

      4.1 Development Activities. Biosearch will conduct preclinical studies on
the Licensed Compound at its expense, as described in Appendix A. All human
clinical trials required for regulatory approval of a Licensed Product in
Territory, will be conducted by Versicor or its corporate partner, if any, at
the sole expense of Versicor or such partner. Versicor will have the right to
subcontract any part of its development and clinical trial obligations in the
Territory.

      4.2 Access to Consultants. Biosearch shall endeavor to provide access by
Versicor to all consultants who have been involved in the development of the
Compound by Biosearch and whom Versicor desires to retain for the purposes of
this Agreement, to the extent such consultants are available and willing to work
with Versicor. Subject to Section 3.1, all costs and expenses associated with
retaining such consultants shall be borne by Versicor.

      4.3 Access to Preclinical and Clinical Data. At reasonable intervals, each
party shall provide to the other copies of the providing party's preclinical and
clinical data and information solely for the receiving party's (or its
sublicensee's) use in obtaining regulatory approval to market Licensed Products
in the Territory, in the case of Versicor, and outside the Territory, in the
case of Biosearch.

      4.4 Commercialization. Versicor or its sublicensee shall use commercially
reasonable efforts consistent with accepted pharmaceutical business practices
and legal requirements to promote, market, distribute and sell the Licensed
Products with the same level of effort used by Versicor in the marketing of its
own products of similar market potential.

      4.5 Trademarks. The parties agree that the Licensed Products will be
marketed and distributed under one single trademark per indication to the extent
commercially practical and permitted by appropriate regulatory authorities. The
parties shall confer as appropriate during the period in which the Licensed
Products are in development to discuss and develop a trademark strategy or
strategies for the Licensed Products consistent with the parties' objectives for
commercialization of the Licensed Products in the parties' respective
territories.

                                       3.
<PAGE>

                                    ARTICLE 5

                                    PAYMENTS

      5.1 Payments. In consideration of the rights and license granted under
this Agreement, Versicor shall make the following payments to Biosearch:

            (a) License Fee. Subject to Section 5.8 below, Versicor shall pay
Biosearch [ * ] in cash upon execution of this Agreement, of which [ * ] is
non-refundable and [ * ] is subject to refund in accordance with Section 5.8.

            (b) Equity. Subject to Section 5.8, Versicor shall issue to
Biosearch [ * ] of Versicor (the "Shares") on January 1, 1999, pursuant to a
separate Stock Purchase Agreement to be entered into by the parties.

            (c) Milestone Payments. [ * ]

      5.2 Royalties. [ * ]

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.

                                       4.
<PAGE>

obligation to pay royalties to Biosearch, under this Section 5.2 shall be
imposed only once with respect to the same unit of the Licensed Product.

      5.3 Accrual; Reports. No royalties shall accrue on the sales by Versicor
to Versicor's Affiliated Companies or sublicensees of Versicor on any
transactions between such entities. Royalties shall accrue only on sales of the
Licensed Product from Versicor, Affiliated Companies of Versicor or sublicensees
of Versicor to third parties that are not Affiliates of those entities, on a
calendar quarter basis. Versicor shall pay to Biosearch the royalties due
hereunder, including any royalties due from the sales of Licensed Product by
Versicor's Affiliates or sublicensees on a quarterly basis, within two (2)
months following the end of each calendar quarter for which royalties are due
from Versicor. Each royalty payment shall be accompanied by a report summarizing
the Net Sales made and the royalty payable thereon, including a description of
any offsets or credits deducted from such royalty, on a product-by-product and
country-by-country basis during the relevant three-month period.

      5.4 Foreign Exchange. All amounts payable under this Agreement shall be
paid in U.S. dollars. The remittance of royalties payable on Net Sales made
outside the United States will be payable in U.S. dollars to Biosearch at a bank
and to an account designated by Biosearch using the selling rate of exchange for
the currency of the country from which the royalties are payable as published by
the Wall Street Journal, New York, N.Y., USA, for the last business day of the
quarterly period for which the royalties are due.

      5.5 Records. Versicor shall keep accurate books and records setting forth
the gross sales, adjusted gross sales, Net Sales, the amount of royalties
payable to Biosearch as provided for herein, for each country with regard to the
Licensed Product sold by Versicor, Versicor's Affiliated Companies or
sublicensees of Versicor. Such books and records shall be retained by Versicor
at its principal place of business for at least the three (3) years immediately
following the calendar year to which each shall pertain. Such records shall be
open during reasonable business hours for examination, at Biosearch's expense
and not more than once per year, by an independent certified public accountant
or accounting firm appointed by Biosearch and acceptable to Versicor, for the
sole purpose of verifying the correctness of the calculation of payments made
under this Agreement. Versicor shall not unreasonably withhold acceptance of an
independent certified public accountant or accounting firm appointed by
Biosearch. In the event that such audit shall indicate that in any calendar year
the royalties which should have been paid by Versicor are at least ten percent
(10%) greater than those which were actually paid by Versicor, then Versicor
shall pay the cost of such audit. Any records or information received by
Biosearch under this Section shall be Confidential Information for purposes of
Article 9.

      5.6 Taxes. Any tax required to be withheld by Versicor under the laws of
any country for the account of Biosearch shall be promptly paid by Versicor for
and on behalf of Biosearch to the appropriate governmental authority, and
Versicor shall furnish Biosearch with proof of payment of such tax. Any such tax
actually paid on Biosearch's behalf shall be deducted from royalty payments due
Biosearch.

      5.7 Duration of Royalty Obligation. Versicor's royalty obligation as to
each Licensed Product shall terminate on a country-by-country basis concurrently
with the later of (a)

                                       5.
<PAGE>

the fifth anniversary of the Effective Date of this Agreement or (b) the
expiration of the last to expire of the Licensed Patents coveting the use or
sale of such Licensed Product in such country.

      5.8 Unsuccessful Preclinical Studies. If the results of the preclinical
studies of the compound are not sufficiently successful to warrant commencement
of human clinical trials, as determined in good faith by Versicor [ * ].

      5.9 Third Party Licenses. In the event Versicor must obtain a
royalty-bearing license from a third party in order to use or sell a Licensed
Product, then Versicor may credit against the royalty otherwise owing to
Biosearch on Net Sales of such Licensed Product the amount paid as royalty to
such third party based on such Net Sales.

                                    ARTICLE 6

                               SUPPLY OF COMPOUND

      6.1 Biosearch Manufacturing Facility; Rights. The Parties acknowledge that
it is Biosearch's intention to establish a U.S. FDA approved manufacturing
facility for both the bulk as well as finished Licensed Product, at its own
expense. In the event Biosearch establishes such manufacturing facility in the
appropriate time flame, it shall have the right to manufacture all of Versicor's
requirements for preclinical, clinical and commercial quantities. Such right to
manufacture and supply, as it applies to Phase III clinical supplies and
commercial supplies, is contingent upon Biosearch having established such
manufacturing site in the agreed upon time frame and its ability to supply at
the commercial price referenced in Section 6.3. Should Biosearch not be able to
establish such manufacturing facility, or not be able to supply at such price,
Versicor shall have the right to contract with a Third Party for the manufacture
and supply of its requirements of Licensed Product for sale in the Territory and
Biosearch shall transfer to such Third Party all existing manufacturing know-how
for such manufacture at a price equal to two percent (2%) of Versicor's annual
Net Sales of Licensed Products.

      6.2 Clinical Supply. Biosearch shall supply all of Versicor's requirements
of Licensed Product for the conduct of clinical trials at a price equal to
Biosearch's cost to manufacture the Licensed Product on a timely basis.

      6.3 Commercial Supply. Biosearch shall supply all of Versicor's
requirements of Licensed Product for commercial use, distribution, and sale in
the Territory at a price not greater than fifteen percent (15%) of Versicor's
Net Sales of the Licensed Product, but not less than Seven Dollars and Fifty
Cents ($7.50) per gram of finished Licensed Product. The parties shall negotiate
a separate Manufacturing and Supply Agreement consistent with this Article 6.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.

                                       6.
<PAGE>

                                    ARTICLE 7

                                 INDEMNIFICATION

      7.1 Products Liability.

            (a) Versicor shall indemnify and hold harmless Biosearch, its
Affiliates, directors, employees and agents against any and all claims, suits,
actions, losses, damages, costs and expenses of any kind, including reasonable
attorneys fees ("Losses"), with respect to death or injury to any person or
damage to any property, resulting from the use, promotion, marketing and sale of
the Compound or any Licensed Products by Versicor, its Affiliates, its
sublicensees, distributors and customers, except to the extent such Losses
result directly from the negligence or intentionally wrongful act or omission of
Biosearch.

            (b) Biosearch shall indemnify and hold harmless Versicor, its
Affiliates, directors, employees and agents against any and all claims, suits,
actions, losses, damages, costs and expenses of any kind, including reasonable
attorneys fees ("Losses"), with respect to death or injury to any person or
damage to any property, resulting from the use, promotion, marketing and sale of
the Compound or any Licensed Products by Biosearch, its Affiliates, its
sublicensees, distributors and customers, except to the extent such Losses
result directly from the negligence or intentionally wrongful act or omission of
Versicor.

      7.2 Procedure. In the event Biosearch is seeking indemnification under
Article 7 it shall inform the Versicor of a claim as soon as reasonably
practicable after it receives notice of the claim, shall permit the Versicor to
assume direction and control of the defense of the claim (including the right to
settle the claim solely for monetary consideration), and shall cooperate as
requested in the defense of the claim; however, Versicor party shall not settle
or compromise any claim in a manner that imposes any restrictions or obligations
on Biosearch or grants any rights to the Licensed Products or the Licensed
Technology without the prior written consent of Biosearch, which consent shall
not be unreasonably withheld.

                                    ARTICLE 8

                              INTELLECTUAL PROPERTY

      8.1 Ownership of Intellectual Property Resulting from Development
Activities.

            (a) Versicor Results. Versicor shall own all inventions, proprietary
information, and know-how resulting from Versicor's development, program for the
Licensed Product (the "Versicor Results"), and any patents issuing therefrom.
During the term of this Agreement, Biosearch may use, on a royalty-free basis,
the Versicor Results solely for (i) the manufacture of Licensed Products, or
(ii) the development, use, sale or importation of Licensed Products outside the
Territory.

            (b) Biosearch Results. Biosearch shall own all processes,
inventions, formulations, proprietary information and know-how resulting from
Biosearch's preclinical work (the "Biosearch Results") and any patents issuing
therefrom. Such patents shall be deemed incorporated in the Licensed Patents and
shall be subject to the provisions of this Agreement to

                                       7.
<PAGE>

the extent the inventions claimed therein are necessary or useful to the
development, use, sale or importation of Licensed Products in the Territory.

      8.2 Maintenance of Patents. Biosearch agrees to prosecute and maintain, at
its own cost and expense, all of the patents and patent applications included in
the Licensed Patents. At Biosearch's request, Versicor shall cooperate, in all
reasonable ways in connection with the prosecution of all patent applications
included within the Licensed Patents. Biosearch shall advise Versicor promptly
of any significant developments in the prosecution of any Licensed Patent in the
Territory, in particular of the issuance of or rejection of or of opposition to
or of protest of any patent or application within the Licensed Patents. Should
Biosearch decide that it is no longer interested in maintaining or prosecuting
any Licensed Patent or part thereof, it shall promptly advise Versicor thereof
and, at the request of Versicor, Biosearch shall assign free of charge such
Licensed Patent or part thereof to Versicor. Upon assignment of such Licensed
Patent or part thereof, Versicor will thereafter prosecute and maintain such
Licensed Patent at its own cost to the extent that Versicor desires to do so.

      8.3 Infringement by Third Parties. Each party will notify the other
promptly upon its becoming aware of any third party infringement of a Licensed
Patent. The notice shall set forth the facts of such infringement in reasonable
detail. Versicor shall have the primary right, but not the obligation, to
initiate legal action with respect to such infringement at its own expense and
deduct up to fifty percent (50%) of its reasonable litigation expenses from
furore royalties or milestone payments due to Biosearch, provided that such
deduction does not reduce the royalties or milestone payments payable in any
quarter below fifty percent (50%) of the royalties or milestone payments
otherwise due in such quarter. Upon receiving a recovery or award from such
suit, such recovery and award shall be used first to reimburse Versicor for its
reasonable litigation expenses actually incurred, then to reimburse Biosearch
for the amounts of any unpaid royalties or milestone payments, and any remainder
of the recovery and award shall be retained by Versicor for its own benefit and
use. In any such infringement suit Biosearch shall, at the request of Versicor,
render all reasonable assistance in the prosecution of such suit.

      8.4 Defense and Settlement of Third Party Claims. If a third party asserts
that a patent or other right owned by it is infringed by the development, use,
marketing, distribution, importation, offer for sale or sale of any Licensed
Product, and such claim arises out of Versicor's use of a Licensed Patent or
Licensed Know-How licensed hereunder, Versicor shall be responsible for
defending such claim and all costs and expenses, including all damages and
settlement amounts, incurred in such defense shall be credited against royalties
payable by Versicor under Article 5.

                                    ARTICLE 9

                            CONFIDENTIAL INFORMATION

      9.1 Versicor shall keep the Biosearch Know-How in strict confidence and
shall not use Biosearch Know-How except for the purposes of this Agreement. Any
information disclosed pursuant to the Confidentiality Agreement between the
parties dated May 16, 1997 (the "Initial CDA") shall be considered Biosearch
Know-How and shall governed by the terms of this

                                       8.
<PAGE>

Agreement, and the Initial CDA shall terminate concurrently with the execution
of and shall be superceded by this Agreement.

      9.2 Both Versicor and Biosearch agree to keep in strict confidence all
other know-how as well as other information and data of confidential nature
received from the other party under this Agreement and not to make any use
thereof other than provided under this Agreement.

      9.3 The confidentiality obligations as per this Article 10 shall not apply
to the extent that the Biosearch Know-How or other know-how or information and
data are required by appropriate authorities to be submitted for purposes of
registration of the Licensed Product; provided, however, that to the extent
possible Such submissions shall be made on a confidential basis. The
confidentiality and non-use obligations under this Article 10 shall extend for
the term of this Agreement and five (5) years thereafter.

      9.4 The obligation of confidentiality and non-use as set forth in this
Article 10 shall not apply:

            (a) to information and data which, at the time of disclosure, was
known by the recipient party or an affiliate, or which after disclosure was
independently developed by the recipient party or an affiliate without use of
such information and data, and which can be so demonstrated by the records of
the recipient party or an affiliate, as the case may be; and/or

            (b) are public knowledge at the date of disclosure to the recipient
party; and/or

            (c) become public knowledge at a later date without any fault of the
recipient party or an affiliate; and/or

            (d) are disclosed to the recipient party or an affiliate by a third-
party having the right to do so.

      9.5 Nothing in this Article 9 or this Agreement shall be construed to
prevent either party from disclosing to its affiliates information and data
obtained from the other party during this Agreement, provided that such
information is used in a manner consistent with this Agreement, and further
provided that said affiliates are bound by a like confidentiality obligation
with respect to such information.

                                   ARTICLE 10

                         REPRESENTATIONS AND WARRANTIES

      10.1 Mutual Representations and Warranties. Each Party hereby represents
and warrants as follows:

            (a) such Party is duly organized and validly existing under the laws
of the state or government of its incorporation and has full corporate power and
authority to enter into this Agreement and to carry out the provisions hereof;

                                       9.
<PAGE>

            (b) such Party is duly authorized to execute and deliver this
Agreement and to perform its obligations hereunder; and

            (c) this Agreement is a legal and valid obligation binding upon such
Party and enforceable in accordance with its terms. The execution, delivery, and
performance of the Agreement by such Party does not conflict with any agreement,
instrument, or understanding, oral or written, to which it is a Party or by
which it is bound, nor violate any law or regulation of any court, governmental
body, or administrative agency having jurisdiction over it.

      10.2 Biosearch Representations and Warranties. Biosearch hereby represents
and warrants to Versicor that:

            (a) it has not granted any right to any Third Party with would
conflict with the rights granted to Versicor hereunder relating to the patent
applications, information, know-how, or data, which are the subject or this
Agreement;

            (b) as of the Effective Date, it owns or controls under valid
licenses and on an exclusive basis, all of the right, title, and interest in and
to the Licensed Patents and the information and materials required to be
disclosed to Versicor by it under Article 3 hereunder;

            (c) the manufacture, use, or sale of the Licensed Compound does not,
and will not to the best of Biosearch's knowledge, hereunder infringe the
intellectual property or other rights of any third party;

            (d) none of the Licensed Patents hereunder is invalid as of the
Effective Date and Biosearch will inform Versicor immediately if it makes any
determination to the contrary; and

            (e) as of the Effective Date the Licensed Patents have not been
involved in any reissue, reexamination, interference, opposition, or equivalent
proceeding.

      10.3 Disclaimer of Warranties. BIOSEARCH HEREBY DISCLAIMS ANY WARRANTIES,
WHETHER EXPRESS OR IMPLIED, OF ANY KIND, INCLUDING, WITHOUT LIMITATION, ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, WITH RESPECT
TO ANY COMPOUND OR OTHER MATERIALS IN WHATEVER FORM PROVIDED TO VERSICOR
HEREUNDER.

                                   ARTICLE 11

                              TERM AND TERMINATION

      11.1 Term. This Agreement shall commence as of the Effective Date and,
unless earlier terminated as provided herein, shall expire on the later of (i)
the date on which Biosearch is no longer entitled to receive a royalty on a
Licensed Product or (ii) the expiration of the last to expire of the licensed
patents. Upon expiration of all royalties payable hereunder, Versicor shall
retain a non-exclusive fully-paid and royalty-free licensed under the Licensed
Know-How to manufacture, use, import, sell and offer for sale Licensed Products
in the Territory.

                                      10.
<PAGE>

      11.2 Termination for Breach.

            (a) Breach by Versicor. If Versicor materially breaches this
Agreement at any time, and has not cured such breach within ninety (90) days
after written notice thereof from Biosearch, or, if such breach is not curable
within such ninety (90) day period, Versicor fails to use commercially
reasonable efforts to cure such breach, then Biosearch may terminate this
Agreement. Upon such termination, the licenses granted hereunder shall
terminate, without prejudice to the application of Section 11.5 hereunder.

            (b) Breach by Biosearch. If Biosearch materially breaches this
Agreement at any time, and has not cured such breach within ninety (90) days
after written notice thereof from Versicor, or, if such breach is not curable
within such ninety (90) day period, Biosearch fails to use commercially
reasonable efforts to cure such breach, then Versicor's remaining payment
obligations under this Agreement will be reduced by fifty percent (50%),
including any remaining and unpaid License Fees and Milestones, and Versicor's
royalty obligation hereunder shall be reduced to 5% of Net Sales of Licensed
Products. If there is any bona fide dispute between the parties regarding the
right of termination based on failure by Versicor to make a milestone or royalty
payment when due, the disputed milestone or royalty payment, as the case may be,
shall be paid into an interest bearing account by Versicor where it shall remain
during the pendency of the dispute, and upon resolution of the dispute, paid,
with accumulated interest, to the prevailing party.

      11.3 Early Termination by Versicor. If Versicor determines that in its
reasonable business judgment based on scientific, medical, economic or other
valid business reasons, it is not commercially reasonable to carry out further
development or marketing of the Licensed Products, Versicor may terminate the
Agreement, with sixty (60) days prior written notice, after any of the following
events:

            (i) the determination by Versicor that the results of the
pre-clinical studies are not sufficiently successful to warrant human clinical
trials, as discussed pursuant to Section 5.8;

            (ii) the conclusion of Phase I clinical trials of the Licensed
Product and receipt by Versicor of data sufficient to evaluate such trials;

            (iii) the conclusion of Phase II clinical trials of the Licensed
Product;

            (iv) the conclusion of Phase III clinical trial's of the Licensed
Product; Termination hereunder shall be effective sixty (60) days after receipt
by Biosearch of written notice from Versicor, provided, however that Versicor
may terminate any trial or development activity effective immediately on notice
to Biosearch if an applicable law or regulatory decree requires such
termination. In the event of any termination under this Section 11.3, the
licenses granted hereunder by Biosearch shall revert to Biosearch.

      11.4 Survival of Sublicenses. In the event of termination of the licenses
to Versicor under Section 11.2(a), any licenses granted to a Versicor
sublicensee or partner (collectively, "Versicor Partner") shall survive and this
Agreement may be assumed by the Versicor Partner

                                      11.
<PAGE>

for the Versicor Partner's portion of the Territory, subject to adequate
assurances to Biosearch of such Versicor partner's ability to perform Versicor's
obligations hereunder.

      11.5 Surviving Rights and Obligations. Termination or expiration of this
Agreement for any reason shall be without prejudice to any rights, which may
have accrued to the benefit of either party prior to such termination or
expiration. The obligations and rights of the Parties under Sections 4.3 and
5.5, and Articles 7, 8, 9, 10, 11 and 12 shall survive termination or expiration
of this Agreement.

                                   ARTICLE 12

                                  MISCELLANEOUS

      12.1 Assignment. Neither party shall assign or delegate the rights,
duties, and obligations of this Agreement, except as expressly provided herein,
without prior written consent of the other party. Either party may assign its
rights or delegate its duties hereunder to its affiliates, or in connection with
an acquisition, merger, sale of assets, or change of control of all or
substantially all of the business unit to which this Agreement relates.

      12.2 Entire Agreement; Amendments. This Agreement contains the entire
understanding between the parties relating to the subject matter hereof and
supersedes any and all prior agreements, understandings and arrangements,
whether written or oral, between the parties. No amendments, changes,
modifications or alterations of the terms and conditions of this Agreement shall
be binding upon either party hereto unless in writing and signed by both
parties.

      12.3 Publicity. Any public disclosure of this Agreement or of the
activities or rights hereunder, including but not limited to press releases,
shall be reviewed and consented to by each party prior to such disclosure;
provided, however, that the foregoing shall not apply to such disclosures (a) as
may be required by law (including securities laws), provided that the party
subject to such law shall seek confidential treatment of key commercial and
scientific terms to the extent such treatment is available under law; (b) made
in connection with an assertion of its rights under this Agreement; (c) made
under a binder of confidentiality to any person or entity who may be interested
in investing in or acquiring all or substantially all of the assets or
securities of such party, or (d) made to its financial advisors provided that
such party has used its best efforts in good faith to obtain a binder of
confidentiality. Any consent required hereunder shall not be untimely or
unreasonably withheld by either party.

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

      12.5 Force Majeure. Neither of the undersigned parties shall be liable for
loss, damage, or failure to perform its obligations under this Agreement, where
such loss, damage, or failure was occasioned by contingencies beyond its
control, including without limitation, strikes or work stoppages, lock-outs,
riots, wars, delay of carriers, Acts of God, fire, floods, storms, and
earthquakes, acts or failures to act by government or governmental agencies or
instrumentalities,

                                      12.
<PAGE>

or any other cause, beyond the reasonable control of the Parties, if and only
if, the Party affected shall have used commercially reasonable efforts to avoid
such occurrence. Each party will notify the other immediately, should any such
contingencies occur. Nothing herein shall relieve a party from the obligation to
pay promptly all payments that may be due under this Agreement.

      12.6 Notices. Any notice required to be given hereunder shall be
considered properly given if sent in English by registered air-mail, facsimile,
telecopier, telex or by personal courier delivery to the respective address of
each party as follows:

      for Biosearch:    Biosearch Italia S.P.A.
                        via R. Lepetit 34
                        21040 Gerenzano (Varese)

                        Attention: President, Francesco Parenti, Ph.D.

                        Facsimile: +39-2-96474.400

      With a copy to:   Pavia Ansaldo
                        Studio Legale
                        Via della Annunciata, 7
                        20121 Milan ITALY

                        Attention: Avv A. Migone De Amicis

                        Facsimile: +39.2.6570203

      For Versicor:     Versicor Inc.
                        34790 Ardentech Court
                        Fremont, California 94555

                        Attention: Chief Executive Officer

                        Facsimile: (510) 739-3003

      With a copy to:   Cooley Godward LLP
                        5 Palo Alto Square
                        3000 E1 Camino Real
                        Palo Alto, California 94306

                        Attention: Barbara Kosacz, Esq.

                        Facsimile: (650) 857-0663

or to such other address as a party may designate in a notice given in
accordance with this Section.

                                      13.
<PAGE>

      12.7 Governing Law. This Agreement shall be governed by the laws of
England and Wales, without regard for the choice of law provisions of that
jurisdiction or any other jurisdiction.

      12.8 Dispute Resolution. In the event of any controversy or claim arising
out of or relating to any provision of this Agreement or the breach thereof, the
parties shall first submit such dispute to the parties' respective executive
officers designated below or their successors, for attempted resolution by good
faith negotiations within fourteen (14) days after such notice is received. Such
designated officers are as follows:

For Versicor:  George Horner, III

               Chief Executive Officer

For Biosearch: Francesco Parenti, Ph.D.

               President

If such dispute is not resolved between the parties within thirty (30) days of
notice of such dispute as set forth above, either party may commence
international arbitration as provided in this Section 12.8. Such dispute shall
be referred to and finally resolved by arbitration under the London Court of
International Arbitration Rules, which Rules are deemed to be incorporated by
reference into this Section 12.8. The number of arbitrators shall be three, one
of whom shall be a solicitor of at least fifteen (15) years standing. The place
of arbitration shall be London, England. The language to be used in the arbitral
proceedings shall be English.

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

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

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

                                      14.
<PAGE>

      IN WITNESS WHEREOF, the parties have executed this Agreement by their
proper officers as of the date and year first above written.

VERSICOR INC.                                  BIOSEARCH ITALIA S.P.A.

/s/ George F. Horner, III                      /s/ Francesco Parenti, Phd.
------------------------------                 ---------------------------------
George F. Horner, III                          Francesco Parenti, Phd
CEO                                            President

Date:_________________________                 Date:____________________________

                                      15.
<PAGE>

                                   APPENDIX A

                         Development Plan Up to Phase I

                                      16.
<PAGE>

                                            Colleretto Giacosa, December 9, 1997
                                                                      0425/97mkt

Dr. Malabarba
BIOSEARCH Italia S.p.A.
Via R. Lepetit, 34
21040 Gerenzano (VA)

      Dear Dr. Malabarba,

      As for your request we are sending you the study programme for the
development of your product BI 397, up to Phase I.

TOXICOLOGY

1)    Acute Toxicity studies in rodents

      Animal species: S.D. rats and CD1 mice
      Administration routes: 2 (oral and intravenous)
      Type of study: LD50 determination
      Start of the study: beginning of January 1998
      Draft report: March 1998

2)    Dose Range Finding (DRF) Study in Sprague Dawley rats

      Treatment period: 2 weeks
      No animals/group: 12 (6M + 6F)
      Groups: 4 (control + 3 dose levels)
      No total animals: 48
      Administration route: intravenous
      Clinical signs: daily
      Body weight and food consumption: weekly
      Hematology, hematochemistry, urinalysis: 4th week
      Organ weights and Gross pathology; all animals
      Histopathology: target organs, all animals
      Start of the study: second half of January 1998
      Draft report: April 1998

<PAGE>

3)    4-Week Toxicity Study in Sprague Dawley rats; followed by recovery period

      Animal species: S.D. rats
      Administration route: intravenous
      Animals/group: 20 (10F + 10M)
      No groups: 4 (control + 3 dose levels)
      Additional animals for recovery: 40 (10 M + 10F in control and high dose
      groups)
      Recovery period: 4 weeks
      Total animals: 120
      Formulate analysis (*): 1st and 4th week
      Clinical signs: daily
      Body weight and food consumption: weekly
      Ophthalmoscopy: pre-study, 4th week and after recovery period
      Hematology, hematochemistry and urinalysis: on 10 animals/sex/group, at
      the end of the study and after recovery period
      Organ weights and Gross pathology: all animals
      Histopathology (**); control and high dose groups (C- D3)

      Toxicokinetics

      Sampling time: 5 times to be defined after the first and the last
      administration
      No. blood samplings/animal: 1
      N. animal/sampling time: 4 (2M + 2F)
      No. total unknown samples: 120
      Plasma levels of active ingredient by a HPLC analytical method in
      biological fluids supplied by the Sponsor. The method will be set-up and
      re-validated (short validation) for rat plasma.
      PK analysis and statistics
      Start of the study: half February 1998
      Draft report: June 1998

4)    Dose Range Finding (DRF) Study in Beagle dogs

      No animals/group: 2 (1M + 1F)
      Groups: 1, ascending doses up to the Maximum Tolerated Doses that will be
      maintained for 1 week
      Administration route: intravenous
      Body weight and food consumption: weekly
      Hematology, ematochemistry, urinalysis: pre-study and at the end of the
      study
      Organ weights and Gross pathology: all animals
      Histopathology: target organs, all animals
      Start of the study: second half of January 1998
      Draft report: April 1998

<PAGE>

3)    4-Week Toxicity Study in Beagle dogs; followed by recovery period

      Administration route: intravenous
      Animals/group: 6 (3 F+ 3M)
      No. groups: 4 (control + 3 dose levels)
      Additional animals for recovery: 8 (2M + 2F in control and high dose
      groups)
      Recovery period: 4 weeks
      Total animals: 32
      Formulate analysis (*): 1st and 4th week
      Clinical signs: daily
      Body weight and food consumption: weekly
      Ophthalmoscopy: pre-study, 4th week, and after recovery period
      Hematology, hematochemistry and urinalysis: pre-study,, at the end of the
      study and after recovery period
      Organ weights and Gross pathology: all animals
      Histopathology (**); control and high dose groups (C- D3)

      Toxicokinetics

      Sampling time: pre-dose + 5 times to be defined after the first and the
      last administration
      No. blood samplings/animal: 2
      N. animal/sampling time: 2 (1M + 1F)
      No. total unknown samples: 72
      Plasma levels of active ingredient by a HPLC analytical method in
      biological fluids supplied by the Sponsor. The method will be set-up and
      re-validated (short validation) for dog plasma.
      PK analysis and statistics
      Start of the study: half February 1998
      Draft report: June 1998

GENETIC TOXICOLOGY

6)    Gene mutation test in mammalial cells (V79)
      Two independent assays, in presence and absence of metabolic activation
      Start of the study: January 1998
      Draft report: March 1998

7)    Chromosome aberration test in human lymphocytes
      with and without metabolic activation
      two independent assays, two harvest times
      Start of the study: February 1998
      Draft report: May 1998

<PAGE>

PHARMACOKINETICS

8)    Pharmacokinetic study in dogs

      Animal species: dog
      Administration route: intravenous
      Dosage levels: 1
      No of animals: 6 (3M + 3F)
      Sampling times: 10-12 in 24-48 hours
      Analysis plasma levels of the active principle by a validated analytical
      method
      supplied by the Sponsor
      Start of the study: February 1998
      Draft report: May 1998

SAFETY PHARMACOLOGY

The studies hereunder detailed will be carried out by specialised Laboratory
which signed a cooperation agreement with RBM.
RBM itself will take care of the coordination and the monitoring of the studies.

A)    CNS - Irwin test (modified)

      Animal species: mouse
      Method: IRWIN neurobehavioural observation assessment test
      Effects sought: - pyschotropic, neurovegetative or neurobehavioural
                        effects
                      - neurotoxicity

B)    Bleeding time

      Animal species: rat
      Method: determination of the duration of bleeding following transection
      of the tip of the tail in anaesthetised animals
      N. animals/group: 8
      N. groups: 5 (vehicle, method-control, 3 test article dosage levels)
      Duration of the experimental period: 3 weeks
      Results by fax: 3 weeks after the end of the experimental period
      Draft report: 6 weeks after the end of the experimental period

<PAGE>

C)    Platelet aggregation

      Animal species: rabbit
      Method: the test is undertaken ex vivo on a platelet-rich plasma obtained
      from rabbit's blood. Kinetics of aggregation is measured ex vivo by
      turbidimetric method using and aggregometer.
      Effects sought: anti-aggregant effect
      Aggregating agents: arachidonic acid, collagen
      N. animals/group: 6
      For each aggregating agent, groups will be as follows:
      Group 1: vehicle
      Group 2: method-control group
      Group 3: test substance at a high concentration (often 10-4M)
      Note: If an effect is seen at a concentration of 10-4M, a second step will
      be undertaken with aiming to determine IC50 (concentration which inhibits
      50% of the aggregation induced by the aggregating agent)
      Other aggregating agents can be used (ie PAF acether, A23187, ADP)
      Duration of the experimental period: 4 weeks
      Results by fax: 3 weeks after the end of the experimental period
      Draft report: 6 weeks after the end of the experimental period

D)    Cardiovascular and respiratory effects in anaesthetized dogs

      Animal species: dog, Beagle
      N. animals: 5
      Method: spontaneously breathing animals anaesthetised with pentobarbital
      Parameters measured:
      - Air flow rate (by means of a pheumotacograph)
      - Tidal volume
      - Transpulmonary pressure
      - Airway resistance and dynamic compliance respiratory rate
      - Arterial blood gases (pO2, pCO2), arterial pH and HCO3-
      - Systolic, diastolic and mean blood pressure
      - Heart rate
      - ECG (lead U), cardiac conduction times; PR, QRS, QT and QTe intervals
      The vehicle and then the test substance will be tested on 5 animals at 3
      or 4 increasing doses administered at 30 min regular intervals
      Duration of the experimental period: 4 weeks
      Results by fax: 4 weeks after the end of the experimental period
      Draft report: 8 weeks after the end of the experimental period

<PAGE>

E     Effects on the autonomic nervous system

      Animal species: rat
      N. animals/group: 8
      N. groups: 5 (vehicle, method-control, 3 test article dosage levels)
      Test method:
      - measurement of arterial pressure and heart rate in conscious and
        catheterised freely-moving rats
      - measurement of the baroflex sensitivity using the steady-state method
      Effects sought:
      - effect on the baroflex, sensitivity
      - sympatholytic or parasympatholytic effect
      - sympathomimetic or parasympathomimetic effect
      - ganglioplecgic effect
      - anatagonism of serotonin
      Duration of the experimental period: 5 weeks
      Results by fax: 4 weeks after the end of the experimental period
      Draft report: 8 weeks after the end of the experimental period

PHASE I

The indicative proposal for a Single Ascending Dose and Repeated Dose studies in
healthy volunteers will be sent you within this week. The clinical phase of the
studies can be performed in our Clinical Pharmacology Unit at Bourn Hall Clinic,
Bourn - Cambridgeshire, UK.
The analytical phase of the studies will be carried out at RBM.

ADDITIONAL COSTS

Formulate analysis (*):
According to GLP requirements the test article formulates used in Repeated Dose
Toxicity studies must be checked for stability, homogeneity and concentration
prior to and during the study (at planned intervals).
These determinations may be performed either by RBM or by the Sponsor itself. In
both cases, Standard Operating Procedures must be followed.
Analysis performed by RBM: the additional cost will be quoted on the basis of
the analytical method available

Histopathology (in rodents) (**):
If deemed necessary by the Study Director, histological analysis of target
organs will be extended to the intermediate dose groups. Additional cost will be
charged.
Testicular staging assessment for the evaluation of possible effects on
spermatogenesys can be done as additional investigation.

<PAGE>

Hemodynamic parameters (in Dogs)
Blood Pressure (BP), Heart Rate (HR) and BCG recordings could be included in the
study design of repeated dose toxicity studies in dogs.

ANALYTICS

Prior to perform pharmacokinetic and toxicokinetic studies, we will proceed t
the transfer, check of performance and short validation of the anlytical method
supplied by the Sponsor in rat and dog plasma. Furthermore, a complete
validation in human plasms will also be performed in order to have the method
ready-to-use for Clinical Pharmacokinetics (Phase I studies).

Please do not hesitate to contact us for any further information you may need.
Best regards,

                                                /s/ Fabio Pizzocheri
                                                Fabio Pizzocheri
                                                Marketing Manager)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}]]