Document:

<PAGE>

                                                                    EXHIBIT 10.1

                          REGISTRATION RIGHTS AGREEMENT

                           Dated as of August 5, 2002

                                  By and Among

                                    SCIOS INC.,

                                    as Issuer

                                       and

                            J.P. MORGAN SECURITIES INC.,
                                LEHMAN BROTHERS INC.
                         SG COWEN SECURITIES CORPORATION
                               NEEDHAM & COMPANY, INC.
                            ADAMS, HARKNESS & HILL, INC.
                                       and
                       PRUDENTIAL SECURITIES INCORPORATED

                               as Initial Purchasers

                  5.50% Convertible Subordinated Notes Due 2009

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                           Page
                                                                                                           ----
<S>      <C>                                                                                                <C>
1.       Definitions.........................................................................................1

2.       Shelf Registration..................................................................................4

         (a)      Shelf Registration.........................................................................4

         (b)      Subsequent Shelf Registrations.............................................................5

         (c)      Supplements and Amendments.................................................................5

         (d)      Information from Holders...................................................................5

3.       Liquidated Damages..................................................................................6

4.       Registration Procedures.............................................................................7

5.       Registration Expenses..............................................................................14

6.       Indemnification....................................................................................15

7.       Rules 144 and 144A.................................................................................17

8.       Underwritten Registrations.........................................................................18

9.       Miscellaneous......................................................................................18

         (a)      No Inconsistent Agreements................................................................18

         (b)      Adjustments Affecting Registrable Securities..............................................18

         (c)      Amendments and Waivers....................................................................19

         (d)      Notices...................................................................................19

         (e)      Successors and Assigns....................................................................20

         (f)      Counterparts..............................................................................20

         (g)      Headings..................................................................................20

         (h)      Governing Law.............................................................................21

         (i)      Severability..............................................................................21

         (j)      Securities Held by the Company or Its Affiliates..........................................21

         (k)      Third Party Beneficiaries.................................................................21

         (l)      Entire Agreement..........................................................................21
</TABLE>

                                     -i-

<PAGE>

                          REGISTRATION RIGHTS AGREEMENT

               This Registration Rights Agreement (the "Agreement") is dated as
         of August 5, 2002, by and among SCIOS INC., a Delaware corporation (the
         "Company"), J.P. MORGAN SECURITIES INC., LEHMAN BROTHERS INC., SG COWEN
         SECURITIES CORPORATION, NEEDHAM & COMPANY, INC., ADAMS, HARKNESS &
         HILL, INC. and PRUDENTIAL SECURITIES INCORPORATED (each individually,
         an "Initial Purchaser" and, together, the "Initial Purchasers").

               This Agreement is entered into in connection with the Purchase
         Agreement, dated July 30, 2002 (the "Purchase Agreement"), by and among
         the Company and the Initial Purchasers, which provides for the sale by
         the Company to the Initial Purchasers of $150,000,000 aggregate
         principal amount of the Company's 5.50% Convertible Subordinated Notes
         Due 2009 (the "Firm Notes"), which are convertible into Common Stock of
         the Company, par value $0.001 per share (the "Underlying Shares"), plus
         up to an additional $25,000,000 aggregate principal amount of the same
         that the Initial Purchasers may subsequently elect to purchase pursuant
         to the terms of the Purchase Agreement (the "Additional Notes" and,
         together with the Firm Notes, the "Convertible Notes"). The Convertible
         Notes are being issued pursuant to an indenture dated as of the date
         hereof (the "Indenture") between the Company and Wells Fargo Bank,
         National Association, as Trustee.

               In order to induce the Initial Purchasers to enter into the
         Purchase Agreement, the Company has agreed to provide the
         registration rights set forth in this Agreement for the benefit of the
         Initial Purchasers and subsequent holders of the Convertible Notes or
         Underlying Shares. The execution and delivery of this Agreement is a
         condition to the Initial Purchasers' obligation to purchase the Firm
         Notes under the Purchase Agreement.

               The parties hereby agree as follows:

         1.    Definitions.

               As used in this Agreement, the following terms shall have the
         following meanings:

               Agreement: See the first introductory paragraph hereto.

               Amount of Registrable Securities: (a) With respect to Convertible
         Notes constituting Registrable Securities, the aggregate principal
         amount of all such Convertible Notes outstanding, (b) with respect to
         Underlying Shares constituting Registrable Securities, the aggregate
         number of such Underlying Shares outstanding multiplied by the
         Conversion Price at the time such Convertible Notes were converted (as
         defined in the Indenture), and (c) with respect to combinations
         thereof, the sum of (a) and (b) for the relevant Registrable
         Securities.

               Business Day: Any day that is not a Saturday, Sunday or a day on
         which banking institutions in New York are authorized or required by
         law to be closed.

                                      -1-

<PAGE>

               Closing Date: August 5, 2002.

               Company: See the first introductory paragraph hereto.

               Convertible Notes: See the second introductory paragraph hereto.

               Counsel to the Holders: See Section 5(b) hereof.

               Damages Payment Date: See Section 3(c) hereof.

               Depositary: The Depository Trust Company until a successor is
         appointed by the Company.

               Effectiveness Date: The 180th day after the Closing Date.

               Effectiveness Period: See Section 2(a) hereof.

               Exchange Act: The Securities Exchange Act of 1934, as amended,
         and the rules and regulations of the SEC promulgated thereunder.

               Filing Date: The 90th day after the Closing Date.

               Holder: Any holder of Registrable Securities.

               Indemnified Holder: See Section 6 hereof.

               Indemnified Person: See Section 6 hereof.

               Indemnifying Person: See Section 6 hereof.

               Indenture: See the second introductory paragraph hereto.

               Initial Purchasers: See the first introductory paragraph hereto.

               Initial Shelf Registration: See Section 2(a) hereof.

               Inspectors: See Section 4(n) hereof.

               Liquidated Damages: See Section 3(a) hereof.

               NASD: See Section 4(q) hereof.

               Person: An individual, partnership, corporation, limited
         liability company, unincorporated association, trust or joint venture,
         or a governmental agency or political subdivision thereof.

                                      -2-

<PAGE>

               Prospectus: The prospectus included in any Registration Statement
         (including, without limitation, any prospectus subject to completion
         and a prospectus that includes any information previously omitted from
         a prospectus filed as part of an effective registration statement in
         reliance upon Rule 430A promulgated under the Securities Act), as
         amended or supplemented by any prospectus supplement, and all other
         amendments and supplements to the Prospectus, including post-effective
         amendments, and all material incorporated by reference or deemed to be
         incorporated by reference in such Prospectus.

               Purchase Agreement: See the second introductory paragraph hereto.

               Questionnaire Deadline: See Section 2(d) hereof.

               QIU: See Section 4(q) hereof.

               Records: See Section 4(n) hereof.

               Registrable Securities: Each Convertible Note and all Underlying
         Shares issuable upon conversion thereof and at all times subsequent
         thereto until the earliest to occur of (i) a Registration Statement
         covering such Convertible Note and Underlying Shares having been
         declared effective by the SEC and such Convertible Note or Underlying
         Shares have been disposed of in accordance with such effective
         Registration Statement, (ii) such Convertible Note or Underlying Shares
         having been sold in compliance with Rule 144 or could (except with
         respect to affiliates of the Company within the meaning of the
         Securities Act) be sold in compliance with Rule 144(k) or (iii) such
         Convertible Notes and any Underlying Shares cease to be outstanding.

               Registration Default: See Section 3(a) hereof.

               Registration Statement: Any registration statement of the Company
         filed with the SEC pursuant to the provisions of this Agreement,
         including the Prospectus, amendments and supplements to such
         registration statement, including post-effective amendments, all
         exhibits and all material incorporated by reference or deemed to be
         incorporated by reference in such registration statement.

               Rule 144: Rule 144 promulgated under the Securities Act, as such
         Rule may be amended from time to time, or any similar rule (other than
         Rule 144A) or regulation hereafter adopted by the SEC providing for
         offers and sales of securities made in compliance therewith resulting
         in offers and sales by subsequent holders that are not affiliates of an
         issuer of such securities being free of the registration and prospectus
         delivery requirements of the Securities Act.

               Rule 144A: Rule 144A promulgated under the Securities Act, as
         such Rule may be amended from time to time, or any similar rule (other
         than Rule 144) or regulation hereafter adopted by the SEC.

                                      -3-

<PAGE>

               Rule 415: Rule 415 promulgated under the Securities Act, as such
         Rule may be amended from time to time, or any similar rule or
         regulation hereafter adopted by the SEC.

               SEC: The Securities and Exchange Commission.

               Securities Act: The Securities Act of 1933, as amended, and the
         rules and regulations of the SEC promulgated thereunder.

               Shelf Registration: See Section 2(b) hereof.

               Shelf Registration Statement: See Section 2(b) hereof.

               Subsequent Shelf Registration: See Section 2(b) hereof.

               TIA: The Trust Indenture Act of 1939, as amended, and the rules
         and regulations of the SEC promulgated thereunder.

               Trustee: The Trustee under the Indenture.

               Underlying Shares: See the second introductory paragraph hereto.

               Underwritten registration or underwritten offering: A
         registration in which securities of the Company are sold to an
         underwriter for reoffering to the public.

         2.    Shelf Registration.

               (a) Shelf Registration. The Company shall use its reasonable best
         efforts to prepare and file with the SEC a Registration Statement for
         an offering to be made on a continuous basis pursuant to Rule 415
         covering all of the Registrable Securities (the "Initial Shelf
         Registration") on or prior to the Filing Date. The Initial Shelf
         Registration shall be on Form S-3 or another appropriate form
         permitting registration of such Registrable Securities for resale by
         Holders in the manner or manners designated by them (including, without
         limitation, one or more underwritten offerings). The Company shall not
         permit any securities other than the Registrable Securities to be
         included in the Initial Shelf Registration or any Subsequent Shelf
         Registration (as defined below).

               The Company shall use its reasonable best efforts to cause the
         Initial Shelf Registration to be declared effective under the
         Securities Act on or prior to the Effectiveness Date and, except as set
         forth in Section 3(b) hereof, to keep such Initial Shelf Registration
         continuously effective under the Securities Act until the date that is
         two years from the Closing Date or such shorter period ending on the
         earliest of (1) the date when all Registrable Securities have been
         registered on a Shelf Registration Statement and resold in the manner
         contemplated hereby, (2) the date on which all Registrable Securities
         are eligible to be sold to the public pursuant to Rule 144(k) under the
         Securities Act of 1933, (3) the date on which all Registrable
         Securities have been resold pursuant to Rule 144 under the Securities
         Act of 1933 and (4) the

                                      -4-

<PAGE>

         date on which all the Registrable Securities cease to be outstanding
         (such shortest time period referred to as the "Effectiveness Period").

               (b) Subsequent Shelf Registrations. If the Initial Shelf
         Registration or any Subsequent Shelf Registration (as defined below)
         ceases to be effective for any reason at any time during the
         Effectiveness Period (other than because of the sale of all of the
         securities registered thereunder), the Company shall use its reasonable
         best efforts to obtain the prompt withdrawal of any order suspending
         the effectiveness thereof, and in any event shall, within 45 days of
         such cessation of effectiveness, amend the Initial Shelf Registration
         in a manner to obtain the withdrawal of the order suspending the
         effectiveness thereof, or file an additional "shelf" Registration
         Statement pursuant to Rule 415 covering all of the Registrable
         Securities (a "Subsequent Shelf Registration"). If a Subsequent Shelf
         Registration is filed, the Company shall use its reasonable best
         efforts to cause the Subsequent Shelf Registration to be declared
         effective under the Securities Act as soon as practicable after such
         filing and to keep such Registration Statement continuously effective
         for a period equal to the number of days in the Effectiveness Period
         less the aggregate number of days during which the Initial Shelf
         Registration or any Subsequent Shelf Registration was previously
         continuously effective. As used herein the term "Shelf Registration"
         means the Initial Shelf Registration and any Subsequent Shelf
         Registration and the term "Shelf Registration Statement" means any
         Registration Statement filed in connection with a Shelf Registration.

               (c) Supplements and Amendments. The Company shall use its
         reasonable best efforts to promptly supplement and amend the Shelf
         Registration if required by the rules, regulations or instructions
         applicable to the registration form used for such Shelf Registration,
         if required by the Securities Act, or if reasonably requested by (i)
         the Holders of the majority in Amount of Registrable Securities covered
         by such Registration Statement or (ii) by any underwriter of such
         Registrable Securities.

               (d) Information from Holders. No Holder may include any of its
         Registrable Securities in the Shelf Registration Statement pursuant to
         this Agreement unless such Holder furnishes to the Company in writing,
         prior to or on the 20th Business Day after receipt of a request
         therefor (the "Questionnaire Deadline"), such information as the
         Company may reasonably request for use in connection with the Shelf
         Registration Statement or Prospectus or preliminary Prospectus included
         therein and in any application to be filed with or under state
         securities laws. In connection with all such requests for information
         from Holders of Registrable Securities, the Company shall notify such
         Holders of the requirements set forth in the preceding sentence. No
         Holder of Registrable Securities shall be entitled to Liquidated
         Damages pursuant to Section 3 hereof unless such Holder shall have
         provided all such reasonably requested information prior to or on the
         Questionnaire Deadline. Each Holder as to which the Shelf Registration
         Statement is being effected agrees to furnish promptly to the Company
         all information required to be disclosed in order to make information
         previously furnished to the Company by such Holder not materially
         misleading.

                                      -5-

<PAGE>

         3.    Liquidated Damages.

               (a) The Company and the Initial Purchasers agree that the Holders
         of Registrable Securities will suffer damages if the Company fails to
         fulfill its obligations under Section 2 hereof and that it would not be
         feasible to ascertain the extent of such damages with precision.
         Accordingly, the Company agrees to pay liquidated damages on the
         Registrable Securities ("Liquidated Damages") under the circumstances
         and to the extent set forth below (each of which shall be given
         independent effect; each a "Registration Default"):

                   (i)    if the Initial Shelf Registration is not filed on or
               prior to the Filing Date, then commencing on the day after the
               Filing Date, Liquidated Damages shall accrue on the Registrable
               Securities at a rate of 0.25% per annum on the Amount of
               Registrable Securities for the first 90 days immediately
               following the Filing Date, such Liquidated Damages increasing by
               an additional 0.25% per annum at the beginning of each subsequent
               90-day period;

                   (ii)   if the Initial Shelf Registration is not declared
               effective by the SEC on or prior to the Effectiveness Date, then
               commencing on the day after the Effectiveness Date, Liquidated
               Damages shall accrue on the Registrable Securities at a rate of
               0.25% per annum on the Amount of Registrable Securities for the
               first 90 days immediately following the day after such
               Effectiveness Date, such Liquidated Damages increasing by an
               additional 0.25% per annum at the beginning of each subsequent
               90-day period; and

                   (iii)  if a Shelf Registration has been declared effective
               and such Shelf Registration ceases to be effective at any time
               during the Effectiveness Period (other than as permitted under
               Section 3(b) hereof), Liquidated Damages shall accrue on the
               Registrable Securities at a rate of 0.25% per annum on the Amount
               of Registrable Securities for the first 90 days commencing on the
               day such Shelf Registration ceases to be effective, such
               Liquidated Damages increasing by an additional 0.25% per annum at
               the beginning of each such subsequent 90-day period;

         provided, however, that Liquidated Damages on the Registrable
         Securities may not accrue under more than one of the foregoing clauses
         (i), (ii) or (iii) at any one time and at no time shall the aggregate
         amount of Liquidated Damages accruing exceed in the aggregate 0.50% per
         annum of the Amount of Registrable Securities; provided, further,
         however, that (1) upon the filing of the Initial Shelf Registration as
         required hereunder (in the case of clause (a)(i) of this Section 3),
         (2) upon the effectiveness of the Initial Shelf Registration as
         required hereunder (in the case of clause (a)(ii) of this Section 3) or
         (3) upon the effectiveness of a Shelf Registration which had ceased to
         remain effective (in the case of clause (a)(iii) of this Section 3),
         Liquidated Damages on the Registrable Securities as a result of such
         clause (or the relevant subclause thereof), as the case may be, shall
         cease to accrue. It is understood and agreed that, notwithstanding any
         provision to the contrary, (x) so long as any Registrable Security is
         then covered by an effective Shelf Registration Statement, no
         Liquidated Damages shall accrue on such Registrable Security and (y) no
         Holder of Registrable Securities shall be

                                      -6-

<PAGE>

         entitled to Liquidated Damages unless such Holder has complied with its
         obligations to furnish the information required regarding such Holder
         by the terms of this Agreement.

               (b) Notwithstanding paragraph (a) of this Section 3, the Company
         shall be permitted to suspend the effectiveness of a Shelf Registration
         for a period not to exceed 45 days in any 90-day period, and not to
         exceed an aggregate of 120 days in any 360-day period, if (i) the
         Prospectus contained in such Shelf Registration Statement would, in the
         Company's judgment, contain a material misstatement or omission as a
         result of an event that has occurred and is continuing; and (ii) the
         Company reasonably determines that the disclosure of this material
         non-public information would have a material adverse effect on the
         Company and its subsidiaries taken as a whole. However, if the
         disclosure relates to a previously undisclosed proposed or pending
         material business transaction, the disclosure of which would impede the
         Company's ability to consummate such transaction, the Company may
         extend the suspension period from 45 days to 60 days. Each Holder of
         Registrable Securities, by its acceptance of thereof, agrees to hold
         any communication by the Company in response to a notice of proposed
         material pending business transaction in confidence.

               (c) So long as Convertible Notes remain outstanding, the Company
         shall notify the Trustee within two Business Days after each and every
         date on which an event occurs in respect of which Liquidated Damages is
         required to be paid. Any amounts of Liquidated Damages due pursuant to
         (a)(i), (a)(ii) or (a)(iii) of this Section 3 will be payable in cash
         semi-annually on each Interest Payment Date, as defined in the
         Convertible Notes (each a "Damages Payment Date"), commencing with the
         first such date occurring after any such Liquidated Damages commences
         to accrue, to Holders to whom regular interest is payable on such
         Damages Payment Date with respect to Convertible Notes that are
         Registrable Securities and to Persons that are registered Holders 15
         days prior to such Damages Payment Date with respect to Underlying
         Shares that are Registrable Securities. The amount of Liquidated
         Damages for Registrable Securities will be determined by multiplying
         the applicable rate of Liquidated Damages by the Amount of Registrable
         Securities outstanding on the Damages Payment Date following such
         Registration Default in the case of the first such payment of
         Liquidated Damages with respect to a Registration Default (and
         thereafter at the next succeeding Damages Payment Date until the cure
         of such Registration Default), multiplied by a fraction, the numerator
         of which is the number of days such Liquidated Damages rate was
         applicable during such period (determined on the basis of a 360-day
         year comprised of twelve 30-day months and, in the case of a partial
         month, the actual number of days elapsed), and the denominator of which
         is 360.

         4.    Registration Procedures.

               In connection with the filing of any Registration Statement
         pursuant to Section 2 hereof, the Company shall effect such
         registrations to permit the resale of the securities covered thereby in
         accordance with the intended method or methods of disposition thereof,
         and pursuant thereto and in connection with any Registration Statement
         filed by the Company hereunder the Company shall:

                                      -7-

<PAGE>

               (a) Prepare and file with the SEC on or prior to the Filing Date,
         a Registration Statement or Registration Statements as prescribed by
         Section 2 hereof, and use its reasonable best efforts to cause each
         such Registration Statement to become effective and remain effective as
         provided herein; provided, however, that before filing any Registration
         Statement or Prospectus or any amendments or supplements thereto, the
         Company shall furnish to and afford the Holders of the Registrable
         Securities that have provided the information required by the second
         full paragraph of this Section 4, Counsel (chosen in accordance with
         Section 5(b) hereof) to the Holders and the managing underwriters, if
         any, a reasonable opportunity to review copies of all such documents
         proposed to be filed (in each case, where possible, at least five
         Business Days prior to such filing, or such date as is reasonable under
         the circumstances). The Company shall not file any Registration
         Statement or Prospectus or any amendments or supplements thereto if the
         Holders of a majority in Amount of Registrable Securities that have
         provided the information required by the second full paragraph of this
         Section 4, Counsel to the Holders or the managing underwriters
         representing such Holders, if any, shall reasonably object.

               (b) Except as set forth in Section 3(b) hereof, prepare and file
         with the SEC such amendments and post-effective amendments to each
         Shelf Registration as may be necessary to keep such Registration
         Statement continuously effective for the Effectiveness Period; cause
         the related Prospectus to be supplemented by any Prospectus supplement
         required by applicable law, and as so supplemented to be filed pursuant
         to Rule 424 (or any similar provisions then in force) promulgated under
         the Securities Act; and comply with the provisions of the Securities
         Act and the Exchange Act applicable to it with respect to the
         disposition of all securities covered by such Registration Statement as
         so amended or in such Prospectus as so supplemented. The Company shall
         be deemed not to have used its reasonable best efforts to keep a
         Registration Statement effective during the Effectiveness Period if it
         voluntarily takes any action that would result in selling Holders of
         the Registrable Securities covered thereby not being able to sell such
         Registrable Securities during that period unless such action is
         required by applicable law or unless the Company complies with this
         Agreement, including, without limitation, the provisions of Sections
         3(b) and 4(k) hereof.

               (c) Notify the selling Holders of Registrable Securities, a
         single Counsel to the Holders (chosen in accordance with Section 5(b)
         hereof) and the managing underwriters, if any, promptly (but in any
         event within two Business Days) and, if requested by such persons,
         confirm such notice in writing, (i) when a Prospectus or any prospectus
         supplement or post-effective amendment has been filed, and, with
         respect to a Registration Statement or any post-effective amendment,
         when the same has become effective under the Securities Act (including
         in such notice a statement that any Holder may, upon request, obtain,
         at the sole expense of the Company, one conformed copy of such
         Registration Statement or post-effective amendment including financial
         statements and schedules), (ii) of the issuance by the SEC of any stop
         order suspending the effectiveness of a Registration Statement or of
         any order preventing or suspending the use of any preliminary
         Prospectus or the initiation of any proceedings for that purpose,

                                      -8-

<PAGE>

         (iii) of the happening of any event, the existence of any condition or
         any information becoming known that makes any statement made in such
         Registration Statement or related Prospectus or any document
         incorporated or deemed to be incorporated therein by reference untrue
         in any material respect or that requires the making of any changes in
         or amendments or supplements to such Registration Statement, Prospectus
         or documents so that, in the case of the Registration Statement, it
         will not contain any untrue statement of a material fact or omit to
         state any material fact required to be stated therein or necessary to
         make the statements therein, in light of the circumstances under which
         they were made, not misleading, and that in the case of the Prospectus,
         it will not contain any untrue statement of a material fact or omit to
         state any material fact required to be stated therein or necessary to
         make the statements therein, in the light of the circumstances under
         which they were made, not misleading and (iv) of the Company's
         determination that a post-effective amendment to a Registration
         Statement or the filing of a Prospectus Supplement would be
         appropriate.

               (d) Use its reasonable best efforts to prevent the issuance of
         any order suspending the effectiveness of a Registration Statement or
         of any order preventing or suspending the use of a Prospectus and, if
         any such order is issued, to use its reasonable best efforts to obtain
         the withdrawal of any such order at the earliest possible moment.

               (e) In the event of an underwritten offering pursuant to the
         terms of this Agreement, if requested by the managing underwriter or
         underwriters, if any, or the Holders of the majority in Amount of
         Registrable Securities being sold in connection with such underwritten
         offering (i) promptly incorporate in a Prospectus supplement or, if
         required, a post-effective amendment such information as the managing
         underwriter or underwriters (if any), such Holders or counsel for any
         of them reasonably determine is necessary to be included therein, (ii)
         make all required filings of such Prospectus supplement or such
         post-effective amendment as soon as reasonably practicable after the
         Company has received notification of the matters to be incorporated in
         such Prospectus supplement or post-effective amendment and (iii)
         supplement or make amendments to such Registration Statement.

               (f) Furnish to each selling Holder of Registrable Securities a
         single Counsel to the Holders and each managing underwriter, if any,
         who so requests, at the sole expense of the Company, one conformed copy
         of the Registration Statement or Registration Statements and each
         post-effective amendment thereto, including financial statements and
         schedules.

               (g) Deliver to each selling Holder of Registrable Securities, a
         single Counsel to the Holders and the underwriters, if any, at the sole
         expense of the Company, as many copies of the Prospectus (including
         each form of preliminary Prospectus) and each amendment or supplement
         thereto as such Persons may reasonably request; and the Company hereby
         consents to the use of such Prospectus and each amendment or supplement
         thereto by each of the selling Holders of Registrable Securities and
         the

                                      -9-

<PAGE>

         underwriters or agents, if any, and dealers (if any), in connection
         with the offering and sale of the Registrable Securities covered by
         such Prospectus and any amendment or supplement thereto.

               (h) Prior to any public offering of Registrable Securities, to
         use its reasonable best efforts to register or qualify, to the extent
         required by applicable law, and to cooperate with the selling Holders
         of Registrable Securities, the managing underwriter or underwriters, if
         any, and their respective counsel in connection with the registration
         or qualification (or exemption from such registration or qualification)
         of such Registrable Securities or offer and sale under the securities
         or Blue Sky laws of such jurisdictions within the United States as any
         selling Holder, or the managing underwriter or underwriters, if any,
         reasonably request; keep each such registration or qualification (or
         exemption therefrom) effective during the period such Registration
         Statement is required to be kept effective and do any and all other
         acts or things reasonably necessary or advisable to enable the
         disposition in such jurisdictions of the Registrable Securities covered
         by the applicable Registration Statement; provided, however, that the
         Company shall not be required to (A) qualify generally to do business
         in any jurisdiction where it is not then so qualified, (B) take any
         action that would subject it to general service of process in any such
         jurisdiction where it is not then so subject or (C) subject itself to
         taxation in excess of a nominal dollar amount in any such jurisdiction
         where it is not then so subject.

               (i) Cooperate with the selling Holders of Registrable Securities
         and the managing underwriter or underwriters, if any, to facilitate the
         timely preparation and delivery of certificates representing shares of
         Registrable Securities to be sold, which certificates, when such
         Registrable Securities are sold pursuant to the Shelf Registration
         Statement, shall not bear any restrictive legends and shall be in a
         form eligible for deposit with The Depository Trust Company; and enable
         such shares of Registrable Securities to be in such denominations and
         registered in such names as the managing underwriter or underwriters,
         if any, or Holders may reasonably request.

               (j) Use its reasonable best efforts to cause the Registrable
         Securities covered by any Shelf Registration Statement to be registered
         with or approved by such other governmental agencies or authorities in
         the United States as may be reasonably necessary to enable the seller
         or sellers thereof or the underwriter or underwriters, if any, to
         consummate the disposition of such Registrable Securities, except as
         may be required solely as a consequence of the nature of such selling
         Holder's business, in which case the Company will cooperate in all
         reasonable respects with the filing of such registration and the
         granting of such approvals.

               (k) Upon the occurrence of any event contemplated by paragraph
         4(c)(ii), 4(c)(iii) or 4(c)(iv) hereof, as promptly as practicable
         prepare and (subject to Section 4(a) and Section 3(b) hereof) file with
         the SEC, at the sole expense of the Company, a supplement or
         post-effective amendment to the Registration Statement or a supplement
         to the related Prospectus or any document incorporated or deemed to be
         incorpo

                                      -10-

<PAGE>

         rated therein by reference, or file any other required document so
         that, as thereafter delivered to the purchasers of the Registrable
         Securities being sold thereunder, any such Prospectus will not contain
         an untrue statement of a material fact or omit to state a material fact
         required to be stated therein or necessary to make the statements
         therein, in the light of the circumstances under which they were made,
         not misleading.

               (l) Prior to the effective date of the first Registration
         Statement relating to the Registrable Securities, (i) provide the
         Trustee with certificates for the Registrable Securities in a form
         eligible for deposit with The Depository Trust Company and (ii) provide
         required CUSIP numbers for the Registrable Securities.

               (m) In connection with any underwritten offering of Registrable
         Securities pursuant to a Shelf Registration, enter into an underwriting
         agreement as is customary in underwritten offerings of securities
         similar to the Registrable Securities and take all such other actions
         as are reasonably requested by the managing underwriter or underwriters
         in order to expedite or facilitate the registration or the disposition
         of such Registrable Securities and, in such connection, (i) make such
         representations and warranties to, and covenants with, the underwriters
         as such managing underwriter or underwriters reasonably request with
         respect to the business of the Company and its subsidiaries (including
         any acquired business, properties or entity, if applicable) and the
         Registration Statement, Prospectus and documents, if any, incorporated
         or deemed to be incorporated by reference therein, in each case, as are
         customarily made by issuers to underwriters in underwritten offerings
         of securities similar to the Registrable Securities and confirm the
         same in writing if and when requested; (ii) obtain the written opinion
         of counsel to the Company and written updates thereof in form, scope
         and substance reasonably satisfactory to the managing underwriter or
         underwriters, addressed to the underwriters covering the matters
         customarily covered in opinions requested in underwritten offerings of
         securities similar to the Registrable Securities and such other matters
         as may be reasonably requested by the managing underwriter or
         underwriters; and (iii) obtain "cold comfort" letters and updates
         thereof in form, scope and substance reasonably satisfactory to the
         managing underwriter or underwriters from the independent certified
         public accountants of the Company (and, if necessary, any other
         independent certified public accountants of any subsidiary of the
         Company or of any business acquired by the Company for which financial
         statements and financial data are, or are required to be, included or
         incorporated by reference in the Registration Statement), addressed to
         each of the underwriters, such letters to be in customary form and
         covering matters of the type customarily covered in "cold comfort"
         letters in connection with underwritten offerings of securities similar
         to the Registrable Securities and such other matters as reasonably
         requested by the managing underwriter or underwriters as permitted by
         the Statement on Auditing Standards No. 72. The above shall be done as
         and to the extent required by such underwriting agreement.

               (n) Make available for inspection by any selling Holder of such
         Registrable Securities being sold, any underwriter participating in any
         such disposition of Registrable Securities, if any, and any attorney,
         accountant or other agent retained by any

                                      -11-

<PAGE>

         such selling Holder, or underwriter (collectively, the "Inspectors"),
         at the offices where normally kept, during reasonable business hours at
         such time or times as shall be mutually convenient for the Company and
         the Inspectors as a group, all financial and other records, pertinent
         corporate documents and instruments of the Company and its subsidiaries
         (collectively, the "Records") as shall be reasonably necessary to
         enable them to exercise any applicable due diligence responsibilities,
         and cause the officers, directors and employees of the Company and its
         subsidiaries to supply all information reasonably requested by any such
         Inspector in connection with such Registration Statement. Records that
         the Company determines, in good faith, to be confidential and any
         Records that it notifies the Inspectors are confidential shall not be
         disclosed by any Inspector unless (i) the disclosure of such Records is
         necessary to avoid or correct a material misstatement or material
         omission in such Registration Statement, (ii) the release of such
         Records is ordered pursuant to a subpoena or other order from a court
         of competent jurisdiction, (iii) disclosure of such information is, in
         the opinion of counsel for any Inspector, necessary or advisable in
         connection with any action, claim, suit or proceeding directly
         involving or potentially involving such Inspector and arising out of,
         based upon, relating to, or involving this Agreement or any
         transactions contemplated hereby or arising hereunder or (iv) the
         information in such Records has been made generally available to the
         public other than through the acts of such Inspector or as a result of
         a breach of this Agreement; provided, however, that prior notice shall
         be provided as soon as practicable to the Company of the potential
         disclosure of any information by such Inspector pursuant to clause (i),
         (ii) or (iii) of this sentence to permit the Company to obtain a
         protective order (or waive the provisions of this paragraph (n)) and
         that such Inspector shall take such actions as are reasonably necessary
         to protect the confidentiality of such information (if practicable) to
         the extent such action is otherwise not inconsistent with, an
         impairment of or in derogation of the rights and interests of any
         Holder or Inspector.

               (o) Provide (i) the Holders of the Registrable Securities to be
         included in such Registration Statement and not more than one Counsel
         to the Holders (ii) the underwriters (which term, for purposes of this
         Registration Rights Agreement, shall include a Person deemed to be an
         underwriter within the meaning of Section 2(11) of the Securities Act),
         if any, thereof, (iii) the sales or placement agent, if any, thereof,
         and (iv) one counsel for such underwriters or agents, reasonable
         opportunity to participate in the preparation of such Registration
         Statement, each Prospectus included therein or filed with the SEC, and
         each amendment or supplement thereto.

               (p) Comply with all applicable rules and regulations of the SEC
         and make generally available to its securityholders earning statements
         satisfying the provisions of Section 11(a) of the Securities Act and
         Rule 158 thereunder (or any similar rule promulgated under the
         Securities Act) no later than 45 days after the end of any 12-month
         period (or 90 days after the end of any 12-month period if such period
         is a fiscal year) (i) commencing at the end of any fiscal quarter in
         which Registrable Securities are sold to underwriters in a firm
         commitment or best efforts underwritten offering and (ii) if not sold
         to underwriters in such an offering, commencing on the first day of

                                      -12-

<PAGE>

         the first fiscal quarter of the Company after the effective date of a
         Registration Statement, which statements shall cover said 12-month
         periods.

               (q) Cooperate with each seller of Registrable Securities covered
         by any Registration Statement and each underwriter, if any,
         participating in the disposition of such Registrable Securities and
         their respective counsel in connection with any filings required to be
         made with the National Association of Securities Dealers, Inc. (the
         "NASD"), including, if the Conduct Rules of the NASD or any successor
         thereto as amended from time to time so require, engaging a "qualified
         independent underwriter" ("QIU") as contemplated therein and making
         Records available to such QIU as though it were a participating
         underwriter for the purposes of Section 4(n) and otherwise applying the
         provisions of this Agreement to such QIU (including indemnification) as
         though it were a participating underwriter.

               (r) Cause the Indenture to be qualified under the TIA not later
         than the effective date of the first Registration Statement relating to
         the Registrable Securities; and in connection therewith, cooperate with
         the Trustee and the Holders of the Registrable Securities to effect
         such changes to the Indenture as may be required for the Indenture to
         be so qualified in accordance with the terms of the TIA; and execute,
         and use its reasonable best efforts to cause the Trustee to execute,
         all documents as may be required to effect such changes and all other
         forms and documents required to be filed with the SEC to enable the
         Indenture to be so qualified in a timely manner.

               (s) Use its reasonable best efforts to take all other steps
         necessary or advisable to effect the registration of the Registrable
         Securities covered by a Registration Statement contemplated hereby.

         Each Holder who intends to be named as a selling Holder in the Shelf
Registration Statement shall furnish to the Company in writing, within 20
Business Days after receipt of a request therefor as set forth in a
questionnaire in the form attached hereto as Annex A, such information regarding
such Holder and the proposed distribution by such Holder of its Registrable
Securities as the Company may reasonably request for use in connection with the
Shelf Registration Statement or Prospectus or preliminary Prospectus included
therein. Holders that do not complete the questionnaire and deliver it to the
Company shall not be named as selling securityholders in the Prospectus or
preliminary Prospectus included in the Shelf Registration Statement and
therefore shall not be permitted to sell any Registrable Securities pursuant to
the Shelf Registration Statement. Each Holder who intends to be named as a
selling Holder in the Shelf Registration Statement shall promptly furnish to the
Company in writing such other information as the Issuer may from time to time
reasonably request in writing. Each seller as to which any Shelf Registration is
being effected agrees to furnish promptly to the Company all information
required to be disclosed so that the information previously furnished to the
Company by such seller is not materially misleading and does not omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
were made.

                                      -13-

<PAGE>

         Each Holder of Registrable Securities agrees by acquisition of such
Registrable Securities that, upon actual receipt of any notice from the Company
of the happening of any event of the kind described in Section 3(b), 4(c)(ii),
4(c)(iii) or 4(c)(iv) hereof, such Holder will forthwith discontinue disposition
of such Registrable Securities covered by such Registration Statement or
Prospectus until such Holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 3(b) or Section 4(k) hereof, as the
case may be, or until it is advised in writing by the Company that the use of
the applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto.

5.       Registration Expenses.

         (a)    All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company,
including, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses of compliance with state securities or
Blue Sky laws (including, without limitation, reasonable fees and disbursements
of counsel in connection with Blue Sky qualifications of the Registrable
Securities and determination of the eligibility of the Registrable Securities
for investment under the laws of such jurisdictions as provided in Section 4(h)
hereof) and excluding fees with respect to filings required to be made with the
NASD in connection with an underwritten offering, (ii) printing expenses,
including, without limitation, expenses of printing certificates for Registrable
Securities in a form eligible for deposit with The Depository Trust Company and
of printing Prospectuses if the printing of Prospectuses is requested by the
managing underwriter or underwriters, if any, or by the Holders of the majority
in Amount of Registrable Securities included in any Registration Statement,
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) fees and disbursements of all independent certified
public accountants referred to in Section 4(m)(iii) hereof (including, without
limitation, the expenses of any special audit and "cold comfort" letters
required by or incident to such performance), (vi) Securities Act liability
insurance, if the Company desires such insurance, (vii) fees and expenses of all
other Persons retained by the Company, (viii) internal expenses of the Company
(including, without limitation, all salaries and expenses of officers and
employees of the Company performing legal or accounting duties), (ix) the
expense of any annual audit, (x) the fees and expenses incurred in connection
with the listing of the securities to be registered on any securities exchange,
if applicable, and (xi) the expenses relating to printing, word processing and
distributing all Registration Statements, and any other documents necessary in
order to comply with this Agreement (other than underwriting agreements and
securities sales agreements).

Notwithstanding anything in this Agreement to the contrary, each Holder shall
pay all underwriting discounts and brokerage commissions with respect to any
Registrable Securities sold by it.

         (b)    The Company shall reimburse the Holders of the Registrable
Securities being registered in a Shelf Registration for the reasonable fees and
disbursements of not more than one counsel chosen by the Holders of a majority
in Amount of Registrable Securities to be included in such Registration
Statement ("Counsel to the Holders").

                                      -14-

<PAGE>

6.       Indemnification.

         The Company agrees to indemnify and hold harmless (i) each Initial
Purchaser, (ii) each Holder, (iii) each Person, if any, who controls (within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act) any of the foregoing (any of the Persons referred to in this clause (iii)
being hereinafter referred to as a "controlling person"), (iv) the respective
officers, directors, partners, employees, representatives and agents of the
Initial Purchasers, the Holders or any controlling person (any person referred
to in clause (i), (ii), (iii) or (iv) may hereinafter be referred to as an
"Indemnified Holder"), from and against any and all losses, claims, damages,
liabilities and judgments (including, without limitation, reasonable legal fees
and other expenses incurred in connection with any suit, action or proceeding or
any claim asserted) caused by any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement or Prospectus, or any
amendment or supplement thereto or any related preliminary Prospectus, or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or judgments are
caused by any untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with information relating to
any Holder furnished to the Company in writing by such Holder expressly for use
therein; provided, however, that the Company shall not be liable to any
Indemnified Holder under the indemnity agreement of this Section 6 with respect
to any preliminary Prospectus to the extent that any such loss, claim, damage,
liability, judgment or expense of such Indemnified Holder results from the fact
that such Indemnified Holder sold Registrable Securities under a Registration
Statement to a Person as to whom it shall be established that there was not sent
or given, at or prior to the written confirmation of such sale, a copy of the
Prospectus (or of the preliminary Prospectus as then amended or supplemented if
the Company shall have furnished such Indemnified Holder with such amendment or
supplement thereto on a timely basis), and the loss, claim, damage, liability or
expense of such Indemnified Holder results from an untrue statement or omission
of a material fact contained in the preliminary Prospectus which was corrected
in the Prospectus (or in the preliminary Prospectus as then amended or
supplemented if the Company shall have furnished such Indemnified Holder with
such amendment or supplement thereto, as the case may be, on a timely basis).
The Company shall notify the Indemnified Holder promptly of the institution,
threat or assertion of any claim, proceeding (including any governmental
investigation) or litigation in connection with the matters addressed by this
Agreement which involves the Company or such Indemnified Holder.

         Each Holder and each Initial Purchaser agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, officers,
partners, employees, representatives and agents and each Person who controls the
Company within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act to the same extent as the foregoing indemnity from the
Company to each Holder, but only with reference to information relating to a
Holder furnished to the Company in writing by such Holder expressly for use in
any Registration Statement or Prospectus, or any amendment or supplement thereto
or any related preliminary Prospectus.

                                      -15-

<PAGE>

         If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "Indemnified Person") shall promptly
notify the Person or Persons against whom such indemnity may be sought (each an
"Indemnifying Person") in writing, and such Indemnifying Person, upon request of
the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others entitled
to indemnification pursuant to this Section 6 that the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such counsel
related to such proceeding. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) such
Indemnifying Person and the Indemnified Person shall have mutually agreed in
writing to the contrary, (ii) such Indemnifying Person has failed within a
reasonable time to retain counsel reasonably satisfactory to such Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include an Indemnifying Person and an Indemnified Person and
the Indemnified Person reasonably concludes, based upon the advice of legal
counsel, that representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that an Indemnifying Person shall not, in connection with any
proceeding or related proceedings in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Indemnified
Holders shall be designated in writing by the Holders of the majority in Amount
of Registrable Securities, and any such separate firm for the Company, its
directors, officers and such control Persons of the Company shall be designated
in writing by the Company. The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff,
such Indemnifying Person agrees to indemnify any Indemnified Person from and
against any loss or liability by reason of such settlement or judgment. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding.

         If the indemnification provided for in the first and second paragraphs
of this Section 6 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages, liabilities or judgments referred to
therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages, liabilities or judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Indemnifying Person on the one
hand, and the Indemnified Person on the other hand, pursuant to the Purchase
Agreement and from the offering of the Registrable Securities pursuant to any
Shelf Registration or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not

                                      -16-

<PAGE>

only the relative benefits referred to in clause (i) above but also the relative
fault of the Indemnifying Person on the one hand, and the Indemnified Person on
the other, in connection with the statements or omissions that resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand, and any Indemnified Holder on the other, shall be deemed to be in the
same proportion as the total net proceeds from the initial offering and sale of
Convertible Notes (before deducting expenses) received by the Company bear to
the total net proceeds received by such Indemnified Holder from sales of
Registrable Securities giving rise to such obligations. The relative fault of
the parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or such Indemnified Holder and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.

         Each of the Company and the Initial Purchasers agrees that it would not
be just and equitable if contribution pursuant to this Section 6 were determined
by pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 6, in no event shall any Holder
be required to contribute any amount in excess of the amount by which the net
proceeds received by such Holder from the sale of the Registrable Securities
pursuant to a Shelf Registration Statement exceeds the amount of damages which
such Holder would have otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.

         The remedies provided for in this Section 6 are not exclusive and shall
not limit any rights or remedies that may otherwise be available to any
Indemnified Person at law or in equity.

         The indemnity and contribution agreements contained in this Section 6
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder or any Person controlling any Holder or by or on behalf of the
Company, its officers or directors or any other Person controlling the Company
and (iii) acceptance of and payment for any of the Registrable Securities by the
Initial Purchasers.

7.       Rules 144 and 144A.

         The Company covenants that it will file the reports required to be
filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC there

                                      -17-

<PAGE>

under in a timely manner in accordance with the requirements of the Securities
Act and the Exchange Act and, for so long as any Registrable Securities remain
outstanding, if at any time the Company is not required to file such reports, it
will, upon the request of any Holder or beneficial owner of Registrable
Securities, make available such information necessary to permit sales pursuant
to Rule 144A under the Securities Act. The Company further covenants that, for
so long as any Registrable Securities remain outstanding, it will use its
reasonable best efforts to take such further action as any Holder of Registrable
Securities may reasonably request, all to the extent required from time to time
to enable such holder to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (a) Rule
144(k) and Rule 144A under the Securities Act, as such rules may be amended from
time to time, or (b) any similar rule or regulation hereafter adopted by the
SEC. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Company to register any of its securities pursuant to the Exchange
Act.

8.       Underwritten Registrations.

         If any of the Registrable Securities covered by any Shelf Registration
are to be sold in an underwritten offering, the investment banker or investment
bankers and manager or managers that will manage the offering will be selected
by the Holders of the majority in Amount of Registrable Securities to be
included in such offering and will be reasonably acceptable to the Company.

         No Holder of Registrable Securities may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.

9.       Miscellaneous.

         (a) No Inconsistent Agreements. The Company has not, as of the date
hereof, and the Company shall not, after the date of this Agreement, enter into
any agreement with respect to any of its securities that would prevent the
Company from satisfying its obligations hereunder or that would otherwise
conflict with the provisions hereof, other than the warrant agreement dated as
of January 10, 2001, by and between the company and PharmaBio Development, Inc.,
as amended and restated pursuant to the Amended and Restated Alliance Agreement
- Natrecor (Nesiritide), made as November 1, 2001, by and between the Company
and Innovex L.P.. The Company has not entered and will not enter into any
agreement with respect to any of its securities that will grant to any Person
piggyback registration rights with respect to a Registration Statement, other
than such rights that have been waived.

         (b) Adjustments Affecting Registrable Securities. The Company shall
not, directly or indirectly, take any action with respect to the Registrable
Securities as a class that

                                      -18-

<PAGE>

would adversely affect the ability of the Holders of Registrable Securities to
include such Registrable Securities in a registration undertaken pursuant to
this Agreement.

         (c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of the Company and the Holders of not less than the majority in Amount
of Registrable Securities. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders of Registrable Securities whose securities
are being sold pursuant to a Registration Statement and that does not directly
or indirectly affect, impair, limit or compromise the rights of other Holders of
Registrable Securities may be given by Holders of at least a majority in Amount
of the Registrable Securities being sold by such Holders pursuant to such
Registration Statement.

         (d) Notices. All notices and other communications (including, without
limitation, any notices or other communications to the Trustee) provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day courier or facsimile:

             (1) if to a Holder of the Registrable Securities, at the most
         current address of such Holder set forth on the records of the
         registrar under the Indenture, in the case of Holders of Convertible
         Notes, and the stock ledger of the Company, in the case of Holders of
         common stock of the Company.

             (2) if to the Initial Purchasers:

           J.P.          MORGAN       SECURITIES                  INC.
                 LEHMAN            BROTHERS                       INC.
                 SG       COWEN   SECURITIES               CORPORATION
                 c/o       J.P.  Morgan              Securities   Inc.
                 277                Park                        Avenue
                 19th                                            Floor
                 New        York,     New             York       10172
                 Attention:  Syndicate Department

         with copies to:

                  Cooley Godward LLP
                           Five       Palo           Alto       Square
                           3000        El           Camino        Real
                           Palo       Alto,        California    94306
                           Facsimile     No.:       (650)     849-7400
                           Attention: Robert J. Brigham

                                      -19-

<PAGE>

             (3)      if to the Company, at the addresses as follows:

             Scios                                                  Inc.
                   820           West              Maude          Avenue
                   Sunnyvale,              California              94085
                   Facsimile No.:                       (408)   616-8319
                   Attention:  Matthew R. Hooper, General Counsel

         with copies to:

             Latham                         &                    Watkins
                   505                  Montgomery                Street
                   Suite                                            1900
                   San              Francisco,       California    94111
                   Facsimile           No.:             (415)   395-8095
                   Attention:  Kimberly L. Wilkinson

         All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five Business Days after
being deposited in the mail, postage prepaid, if mailed; one Business Day after
being timely delivered to a next-day courier; and when receipt is acknowledged
by the addressee, if sent by facsimile.

         (e) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties hereto,
including the Holders; provided, however, that this Agreement shall not inure to
the benefit of or be binding upon a successor or assign of a Holder unless and
except to the extent such successor or assign holds Registrable Securities.
Notwithstanding the foregoing, if the Company consolidates or merges into any
other person in a transaction in which the Company is not the surviving
corporation, or conveys, transfers or leases its properties and assets
substantially as an entirety to, any person, then the successor entity shall
assume the Company's obligations under this Agreement. If any transferee of any
Holder shall acquire Registrable Securities in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Securities such person shall be conclusively deemed to have agreed to be bound
by and to perform all of the terms and provisions of this Agreement and such
person shall be entitled to receive the benefits hereof.

         (f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

         (g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

                                      -20-

<PAGE>

         (h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.

         (i) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.

         (j) Securities Held by the Company or Its Affiliates. Whenever the
consent or approval of Holders of a specified percentage in Amount of
Registrable Securities is required hereunder, Registrable Securities held by the
Company or its affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.

         (k) Third Party Beneficiaries. Holders of Registrable Securities are
intended third party beneficiaries of this Agreement and this Agreement may be
enforced by such Persons.

         (l) Entire Agreement. This Agreement is intended by the parties as a
final and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein and any and all prior
oral or written agreements, representations, or warranties, contracts,
understandings, correspondence, conversations and memoranda between the Initial
Purchasers on the one hand, and the Company on the other, or between or among
any agents, representatives, parents, subsidiaries, affiliates, predecessors in
interest or successors in interest with respect to the subject matter hereof are
merged herein and replaced hereby.

                                      -21-

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                   SCIOS INC.

                                   By:  /s/ David W. Gryska
                                        ---------------------------------------
                                        Name:     David W. Gryska
                                        Title:    CFO

                                   J.P. MORGAN SECURITIES INC.
                                   LEHMAN BROTHERS INC.
                                   SG COWEN SECURITIES CORPORATION
                                   NEEDHAM & COMPANY, INC.
                                   ADAMS, HARKNESS & HILL, INC.
                                   PRUDENTIAL SECURITIES INCORPORATED

                                   By:  J.P. MORGAN SECURITIES INC.

                                        By:  /s/  Michael R. Harris
                                             ----------------------------------
                                             Name:    Michael R. Harris
                                             Title:   Vice President

                                      -22-<PAGE>

                                                                    EXHIBIT 10.2

                                PLEDGE AGREEMENT

         This PLEDGE AGREEMENT (the "Pledge Agreement") is made and entered into
as of August 5, 2002, by and among SCIOS INC., a Delaware corporation (the
"Pledgor"), having its principal office at 820 West Maude Avenue, Sunnyvale,
California 94085, WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as
trustee (the "Trustee") for the holders from time to time (the "Holders") of the
Securities (as defined herein), issued by the Pledgor under the Indenture
referred to below, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as collateral
agent for the Trustee and the Holders (the "Collateral Agent"). Capitalized
terms used and not defined in this Pledge Agreement have the meanings set forth
or referred to in the Indenture (as defined below).

                                   WITNESSETH

         WHEREAS, the Pledgor and J.P. Morgan Securities Inc., Lehman Brothers
Inc., SG Cowen Securities Corporation, Needham & Company, Inc., Adams, Harkness
& Hill, Inc. and Prudential Securities Incorporated (collectively, the "Initial
Purchasers") are parties to a Purchase Agreement, dated as of July 30, 2002 (the
"Purchase Agreement"), pursuant to which the Pledgor will issue and sell
Initial Purchasers $150,000,000 aggregate principal amount of 5.50% Convertible
Subordinated Notes due 2009 (the "Initial Securities") and pursuant to which the
Pledgor has granted to the Initial Purchasers options to purchase all or any
part of up to an additional $25,000,000 aggregate principal amount of the
Securities (the "Option Securities" and together with the Initial Securities,
the "Securities");

         WHEREAS, the Pledgor and the Trustee have entered into that certain
indenture, dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the "Indenture"), pursuant to which the
Pledgor is issuing the Initial Securities on the date hereof;

         WHEREAS, the Pledgor is the beneficial owner of security entitlements
(the "Pledged Security Entitlements") with respect to (i) the United States
Treasury securities identified by CUSIP number in SCHEDULE I hereto, and
credited to the Pledgor's account with Wells Fargo Bank, National Association
(the "Account Holder"), ABA No. 091000019, CR: Corporate Trust Clearing, A/C:
0001038377, FFC: Scios Inc. A/C: 12948301 at its office at 45 Broadway, 12th
Floor, New York, New York 10006, in the name of Wells Fargo Bank, National
Association, as Collateral Agent for the benefit of the Trustee and the ratable
benefit of the Holders of the 5.50% Convertible Subordinated Notes due 2009 of
Scios Collateral Pledge Account" (the "Pledge Account") and (ii) all other
financial assets credited from time to time to the Pledge Account (collectively
with the assets described in clause (i) above, the "Pledged Financial Assets");

         WHEREAS, to secure the obligations of the Pledgor under this Pledge
Agreement, the Registration Rights Agreement, the Indenture and the Securities
to pay in full each of the first six scheduled interest payments on the
Securities when due and to secure repayment of a portion of the principal,
premium (if any) and interest on the Securities in the event that the Securities
become due and payable prior to such time as the first six scheduled interest
payments thereon shall have been paid in full (collectively, the "Obligations"),
the Pledgor has agreed to pledge to

                                      1.

<PAGE>

the Collateral Agent for the benefit of the Trustee and the ratable benefit of
the Holders of the Securities, a security interest in the Collateral (as defined
herein) securing the payment and performance by the Pledgor of all of the
Obligations;

         WHEREAS, it is a condition precedent to the initial purchase of the
Securities by the Initial Purchasers thereof that the Pledgor shall have
executed and delivered this Pledge Agreement; and

         WHEREAS, unless otherwise defined herein or in the Indenture, terms
used in Article 8 or 9 of the Uniform Commercial Code as in effect in the State
of New York ("UCC") and/or in the Federal Book Entry Regulations (as defined
below) are used in this Pledge Agreement as such terms are defined in such
Article 8 or 9 and/or the Federal Book Entry Regulations. The term "Federal Book
Entry Regulations" means (a) the federal regulations contained in Subpart B
("Treasury/Reserve Automated Debt Entry System (TRADES)") governing book-entry
securities consisting of U.S. Treasury bonds, notes and bills and Subpart D
("Additional Provisions") of 31 C.F.R. Part 357, 31 C.F.R. Section 357.2,
Section 357.10 through Section 357.14 and Section 357.41 through Section 357.44
and (b) to the extent substantially identical to the federal regulations
referred to in clause (a) above (as in effect from time to time), the federal
regulations governing other book-entry securities.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the premises herein contained, and
in order to induce the Holders of the Securities to purchase the Securities, the
Pledgor hereby agrees with the Collateral Agent, for the benefit of the Trustee
and for the ratable benefit of the Holders of the Securities, as follows:

         SECTION 1. Pledge and Grant of Security Interest. The Pledgor hereby
pledges to the Collateral Agent, for the benefit of the Trustee and the ratable
benefit of the Holders of the Securities, and hereby grants to the Collateral
Agent, a security interest and continuing lien in, all of the Pledgor's right,
title and interest in and to the following, in each case, whether now owned or
hereafter acquired by the Pledgor, wherever located and whether now or hereafter
existing or arising (hereinafter collectively referred to as the "Collateral"):

               (a)  the Pledged Financial Assets and the certificates, if
any, representing the Pledged Financial Assets, and all dividends, interest,
money (as defined in the UCC), instruments (as defined in the UCC, the
"Instruments") and other property from time to time received, receivable or
otherwise distributed or distributable in respect of or in exchange for any or
all of such Pledged Financial Assets;

               (b)  the Pledge Account and all security entitlements with
respect thereto, all Pledged Security Entitlements with respect to all Pledged
Financial Assets from time to time credited to the Pledge Account, any and all
securities accounts in which the Pledged Security Entitlements are carried, and
all dividends, interest, cash, instruments and other property from time to time
received, receivable or otherwise distributed or distributable in respect of or
in exchange for any or all of such Pledged Security Entitlements;

                                      2.

<PAGE>

               (c)  all other securities, securities entitlements and other
financial assets hereafter acquired by the Pledgor pursuant to Article 11 of the
Indenture; and

               (d)  all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the types
described in clauses (a), (b) and (c) of this Section 1) and, to the extent not
otherwise included, all cash.

         SECTION 2. Security for Obligations. This Pledge Agreement secures,
and the Collateral is collateral security for, the prompt and complete payment
and performance when due (whether at stated maturity, by acceleration or
otherwise) of all the Obligations or other obligations of the Pledgor, whether
for principal, interest, fees or otherwise, now or hereafter existing, under
this Pledge Agreement, the Securities, the Registration Rights Agreement and the
Indenture (all such obligations being the "Secured Obligations"). Without
limiting the generality of the foregoing, this Pledge Agreement secures, and the
Collateral is collateral security for, the payment of all amounts that
constitute part of the Secured Obligations and would be owed by the Pledgor to
the Collateral Agent, the Trustee or the Holders under this Pledge Agreement,
the Securities, the Registration Rights Agreement and the Indenture but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Pledgor.

         SECTION 3. Maintaining the Pledge Account. So long as any Secured
Obligation shall remain outstanding:

               (a)  The Pledgor will maintain separately the Pledge Account with
Wells Fargo Bank, National Association.

               (b)  Notwithstanding any term or condition to the contrary in any
other agreement relating to the Pledge Account, and except as otherwise provided
by the provisions of Section 5 and Section 18 hereof, no funds shall be paid or
released to or for the account of, or withdrawn by or for the account of, the
Pledgor or any other Person from the Pledge Account.

The Pledge Account shall be subject to such applicable laws, and such applicable
regulations of the Board of Governors of the Federal Reserve System and of any
other appropriate banking or governmental authority, as may now or hereafter be
in effect.

         SECTION 4. Delivery of Collateral.

               (a)  All cash, certificates or instruments representing or
evidencing the Pledged Financial Assets, the Pledged Security Entitlements or
the Pledge Account shall be delivered to and held by or on behalf of the
Collateral Agent pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, all in form and substance satisfactory to the Collateral
Agent. The Collateral Agent shall have the right, at any time in its discretion
and without notice to the Pledgor, to transfer to or to register in the name of
the Collateral Agent or any of its nominees any or all of the Collateral. In
addition, the Collateral Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing any or all of the
Collateral for certificates or instruments of smaller or larger denominations.
Also, the Collateral Agent shall have the right at any time to convert
Collateral consisting of financial assets credited to the

                                      3.

<PAGE>

Pledge Account to Collateral consisting of financial assets held directly by the
Collateral Agent, and to convert Collateral consisting of financial assets held
directly by the Collateral Agent to Collateral consisting of financial assets
credited to the Pledge Account.

               (b)  With respect to any Collateral in which the Pledgor has any
right, title or interest and that constitutes an uncertificated security, the
Pledgor shall cause the issuer thereof either (i) to register the Collateral
Agent as the registered owner of such security or (ii) to agree in writing with
the Pledgor and the Collateral Agent that such issuer will comply with
instructions with respect to such security originated by the Collateral Agent
without further consent of the Pledgor, such agreement to be in form and
substance satisfactory to the Collateral Agent.

               (c)  With respect to any Collateral in which the Pledgor has any
right, title or interest and that constitutes a security entitlement, the
Pledgor shall cause the securities intermediary with respect to such security
entitlement either (i) to identify in its records the Collateral Agent as the
entitlement holder of such security entitlement against such securities
intermediary or (ii) to agree in writing with the Pledgor and the Collateral
Agent that such securities intermediary will comply with entitlement orders
(that is, notifications communicated to such securities intermediary directing
transfer or redemption of the financial asset to which the Pledgor has a
security entitlement) originated by the Collateral Agent without further consent
of the Pledgor, such agreement to be in substantially the form of ANNEX A hereto
or otherwise in form and substance satisfactory to the Collateral Agent.

               (d)  With respect to any Collateral that constitutes a securities
account, the Pledgor will comply with subsection (c) of this Section 4 with
respect to all security entitlements carried in such securities account.

               (e)  Prior to or concurrently with the execution and delivery
hereof and prior to the transfer to the Collateral Agent of the Pledged Security
Entitlements, as provided in subsections (a) through (c) of this Section 4, the
Collateral Agent shall establish the Pledge Account with Wells Fargo Bank,
National Association. Upon transfer of the Pledged Financial Assets to the
Collateral Agent, as confirmed to the Collateral Agent by the securities
intermediary, the Collateral Agent shall make appropriate book entries
indicating that the Pledged Financial Assets have been credited to and are held
in the Pledge Account. Subject to the other terms and conditions of this Pledge
Agreement, all funds or other property held by the Collateral Agent pursuant to
this Pledge Agreement shall be held in the Pledge Account subject (except as
expressly provided in Sections 5(a), (b) and (c) hereof) to the exclusive
dominion and control of the Collateral Agent and exclusively for the benefit of
the Trustee and the ratable benefit of the Holders of the Securities and
segregated from all other funds or other property otherwise held by the
Collateral Agent.

               (f)  All Collateral shall be retained in the Pledge Account
pending disbursement pursuant to the terms hereof.

               (g)  Concurrently with the execution and delivery of this Pledge
Agreement, the Collateral Agent, the Trustee and the Account Holder is
delivering to the Pledgor a duly

                                      4.

<PAGE>

executed Control Agreement (the "Control Agreement"), in the form of ANNEX A
attached hereto.

               (h)  Concurrently with the execution and delivery of this Pledge
Agreement, the Collateral Agent is delivering, and concurrently with the
execution of any supplement to this Pledge Agreement, the Collateral Agent will
deliver, to the Pledgor and the Initial Purchasers, a duly executed certificate,
in the form of ANNEX B attached hereto, of an officer of the Collateral Agent.

               (i)  Concurrently with the execution and delivery of this Pledge
Agreement, the Pledgor is delivering to the Collateral Agent acknowledgment
copies or stamped receipt copies of proper financing statements, duly filed on
or before the Closing Date under the UCC, covering the Collateral described in
this Pledge Agreement.

         SECTION 5. Disbursements.

               (a)  At least three Business Days prior to the due date of any of
the first six scheduled interest payments on the Securities, the Pledgor may,
pursuant to written instructions given by the Pledgor to the Collateral Agent
(an "Issuer Order"), direct the Collateral Agent to release from the Pledge
Account and pay to the Holders of the Securities proceeds sufficient to provide
for payment in full of such interest then due on the Securities. Upon receipt of
an Issuer Order, the Collateral Agent will (i) issue a Payment Order (as defined
in the Control Agreement) to the Account Holder for the release from the Pledge
Account funds to the Collateral Agent in an amount sufficient to provide for the
payment of the interest on the Securities in accordance with such Issuer Order
and (ii) pay such funds to the Holders of the Securities in accordance with the
Indenture and the Securities. Nothing in this Section 5 shall affect the
Collateral Agent's rights to apply the Collateral to the payments of amounts due
on the Securities upon acceleration thereof.

               (b)  If the Pledgor makes any of the first six scheduled interest
payments on the Securities or portion of such an interest payment from a source
of funds other than the Pledge Account ("Pledgor Funds"), the Pledgor may, after
payment in full of such interest payment, direct the Collateral Agent pursuant
to an Issuer Order to issue a Payment Order (as defined in the Control
Agreement) to the Account Holder for the release to the Pledgor or to another
party at the direction of the Pledgor (the "Pledgor's Designee") proceeds from
the Pledge Account in an amount less than or equal to the amount of Pledgor
Funds applied to such interest payment. Upon receipt by the Collateral Agent of
such Issuer Order and provided the Collateral Agent has received such interest
payment, the Collateral Agent shall direct the Account Holder pursuant to a
Payment Order to pay over to the Pledgor or the Pledgor's Designee, as the case
may be, the requested amount from proceeds in the Pledge Account as soon as
practicable.

               (c)  At least three Business Days prior to the due date of each
of the first six scheduled interest payments on the Securities, the Pledgor
shall give the Collateral Agent notice (by Issuer Order) as to whether such
interest payment will be made pursuant to Section 5(a) or 5(b) above and the
respective amounts of interest that will be paid from the Pledge Account and
from Pledgor Funds. Any Pledgor Funds to be used to make any interest payment
shall be delivered to the Collateral Agent, in immediately available funds,
prior to 10:00 a.m. (New York

                                      5.

<PAGE>

time) on such interest payment date. If no such notice is given or such Pledgor
Funds have not been so delivered, the Collateral Agent will act pursuant to
Section 5(a) above as if it had received an Issuer Order pursuant thereto for
the payment in full of the interest then due from the Pledge Account.

               (d)  The Collateral Agent shall instruct the Account Holder to
liquidate Collateral in the Pledge Account (pursuant to written instructions
from Pledgor) in order to make any of the scheduled payments of interest on the
Securities, unless there are sufficient funds in the Pledge Account on such
interest payment date. The Collateral Agent shall be entitled to instruct the
Account Holder to sell any Collateral as contemplated hereunder prior to the
maturity of such Collateral and shall not be responsible for any costs and
expenses of such sale.

               (e)  Nothing contained in this Pledge Agreement shall (i) afford
the Pledgor any right to issue entitlement orders with respect to any of the
Pledged Security Entitlements or any securities account in which any such
security entitlement may be carried, or otherwise afford the Pledgor control of
any Pledged Security Entitlement or (ii) otherwise give rise to any rights of
the Pledgor with respect to the Pledged Financial Assets or any securities
account in which any such security entitlement may be carried, other than the
Pledgor's rights under this Pledge Agreement as the beneficial owner of
collateral pledged to and subject to the exclusive dominion and control (except
as expressly provided in Sections 5(a) and (b) hereof) of the Collateral Agent
in its capacity as such (and not as a securities intermediary) before the
payment in full, when due, of the Obligations. The Pledgor acknowledges,
confirms and agrees that the Collateral Agent is an entitlement holder of the
Pledged Security Entitlements solely as Collateral Agent for the benefit of the
Trustee and the ratable benefit of the Holders of the Securities and not as a
securities intermediary.

         SECTION 6. Investing of Amounts in the Pledge Account. If requested
and as directed by the Pledgor, the Collateral Agent will, subject to the
provisions of Sections 3, 5 and 14 of this Pledge Agreement, from time to time,
instruct the Account Holder to invest interest paid on the Pledged Financial
Assets and reinvest other proceeds of any Pledged Financial Assets that may
mature or be sold, in each case, in (i) identified United States Treasury
securities or (ii) selected shares of a money market fund registered under the
Investment Company Act of 1940, as amended, the portfolio of which consists of
United States Treasury securities, in each case credited to the Pledge Account.

         SECTION 7. Representations and Warranties.

               (a)  The Pledgor hereby represents and warrants that:

                    (1)  This Pledge Agreement has been duly authorized,
validly executed and delivered by the Pledgor and (assuming the due
authorization and valid execution and delivery of this Pledge Agreement by each
of the Trustee and the Collateral Agent and the enforceability of this Pledge
Agreement against each of the Trustee and the Collateral Agent in accordance
with its terms) constitutes a valid and binding agreement of the Pledgor,
enforceable against the Pledgor in accordance with its terms, except as (i) the
enforceability hereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, preference, reorganization, moratorium or similar laws now or
hereafter in effect relating to or affecting creditors' rights or

                                      6.

<PAGE>

remedies generally, (ii) the availability of equitable remedies may be limited
by equitable principles of general applicability and the discretion of the court
before which any proceeding therefore may be brought, (iii) the exculpation
provisions and rights to indemnification hereunder may be limited by U.S.
federal and state securities laws and public policy considerations and (iv) the
waiver of rights and defenses contained in Section 12(b), Section 19.8 and
Section 19.13 hereof may be limited by applicable law.

                    (2)  The Pledgor's exact legal name, as provided in
Section 9-503(a)(1) of the UCC, is Scios Inc. The Pledgor is located (within the
meaning of Section 9-307 of the UCC) in the State of Delaware.

                    (3)  The Pledgor is the legal and beneficial owner of the
Collateral free and clear of any Lien, claim, option or right of others (except
for the security interests created by this Pledge Agreement). No effective
financing statement or instrument similar in effect covering all or any part of
the Collateral is on file in any public or recording office, other than the
financing statements filed pursuant to this Pledge Agreement.

                    (4)  Upon the delivery of the Collateral in accordance
with the terms hereof, all filings and other actions (including, without
limitation, (A) actions necessary to obtain control of the Collateral as
provided in Sections 9-104, 9-105, 9-106 and 9-107 of the UCC and (B) actions
necessary to perfect the Collateral Agent's security interest with respect to
the Collateral evidenced by a certificate of ownership) necessary to perfect the
security interest in the Collateral created under this Pledge Agreement have
been duly made or taken and are in full force and effect, and this Pledge
Agreement creates in favor of the Collateral Agent for the benefit of the
Trustee and the ratable benefit of the Holders of the Securities a valid and,
together with such filings and other actions, perfected first priority security
interest in the Collateral, securing the payment of the Secured Obligations.

                    (5)  The execution and delivery by the Pledgor of, and
the performance by the Pledgor of its obligations under, this Pledge Agreement
will not contravene any provision of applicable law or the Certificate of
Incorporation of the Pledgor or any material agreement or other material
instrument binding upon the Pledgor or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Pledgor, or
result in the creation or imposition of any Lien on any assets of the Pledgor,
except for the security interests granted under this Pledge Agreement.

                    (6)  No consent of any other person and no approval,
authorization, order of, action by notice to, filing or qualification with, any
governmental authority, regulatory body, agency or other third party is required
for (i) the grant by the Pledgor of the assignment, pledge and security interest
granted under this Pledge Agreement, (ii) the execution or delivery by the
Pledgor of, or the performance by the Pledgor of its obligations under, this
Pledge Agreement, (iii) the perfection or maintenance of the assignment, pledge
and security interest created hereunder (including the first priority nature of
such assignment, pledge or security interest), or (iv) except for such consents,
approvals, authorizations or orders required to be obtained by the Collateral
Agent (or the Holders) for reasons other than the consummation of this
transaction, for the exercise by the Collateral Agent of its voting or other
rights provided for in this Pledge Agreement or the remedies in respect of the
Collateral pursuant to this Pledge

                                      7.

<PAGE>

Agreement, except as may be required in connection with the disposition of any
portion of the Collateral by laws affecting the offering and sale of securities
generally.

                    (7)  There are no legal or governmental proceedings
pending or, to the best of the Pledgor's knowledge, threatened to which the
Pledgor or any of the properties of the Pledgor is subject that would materially
adversely affect the power or ability of the Pledgor to perform its obligations
under this Pledge Agreement or to consummate the transactions contemplated
hereby.

                    (8)  The pledge of the Collateral pursuant to this Pledge
Agreement is not prohibited by law or governmental regulation (including,
without limitation, Regulations T, U and X of the Board of Governors of the
Federal Reserve System) applicable to the Pledgor.

                    (9)  No Event of Default (as defined below) exists.

                    (10) The jurisdiction (for purposes of Section 8-110(e)
of the UCC) of the securities intermediary that maintains the Pledge Account and
all securities accounts carrying the Pledged Security Entitlements is New York.

               (b)  The Collateral Agent hereby represents and warrants that:

                    (1)  This Pledge Agreement has been duly authorized,
validly executed and delivered by the Collateral Agent and (assuming the due
authorization and valid execution and delivery of this Pledge Agreement by each
of the Trustee and the Pledgor and the enforceability of this Pledge Agreement
against each of the Trustee and the Pledgor in accordance with its terms)
constitutes a valid and binding agreement of the Collateral Agent, enforceable
against the Collateral Agent in accordance with its terms, except as the
availability of equitable remedies may be limited by equitable principles of
general applicability and the discretion of the court before which any
proceeding therefore may be brought.

                    (2)  The execution and delivery by the Collateral Agent
of, and the performance by the Collateral Agent of its obligations under, this
Pledge Agreement will not contravene any provision of applicable law or its
organizational documents or any material agreement or other material instrument
binding upon the Collateral Agent or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Collateral
Agent.

                    (3)  No consent of any other person and no approval,
authorization, order of, action by notice to, filing or qualification with, any
governmental authority, regulatory body, agency or other third party is required
for (i) the execution or delivery by the Collateral Agent of, or the performance
by the Collateral Agent of its obligations under, this Pledge Agreement, or (ii)
except for such consents, approvals, authorizations or orders required to be
obtained by the Collateral Agent (or the Holders) for reasons other than the
consummation of this transaction, for the exercise by the Collateral Agent of
its voting or other rights provided for in this Pledge Agreement or the remedies
in respect of the Collateral pursuant to this Pledge Agreement, except as may be
required in connection with the disposition of any portion of the Collateral by
laws affecting the offering and sale of securities generally.

                                      8.

<PAGE>

                    (4)  There are no legal or governmental proceedings
pending or, to the best of the Collateral Agent's knowledge, threatened to which
the Collateral Agent or any of the properties of the Collateral Agent is subject
that would materially adversely affect the power or ability of the Collateral
Agent to perform its obligations under this Pledge Agreement or to consummate
the transactions contemplated hereby.

         SECTION 8. Further Assurances.

               (a)  The Pledgor agrees that from time to time, at the expense of
the Pledgor, the Pledgor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary,
or that the Collateral Agent may reasonably request, in order to perfect and
protect any pledge or security interest granted or purported to be granted
hereunder or to enable the Collateral Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, the Pledgor will: (i) if any Collateral shall be
evidenced by a promissory note or other instrument, deliver and pledge to the
Collateral Agent hereunder such note or instrument, duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Collateral Agent; (ii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Collateral
Agent may reasonably request, in order to perfect and preserve the pledge and
security interest granted or purported to be granted hereby; (iii) deliver and
pledge to the Collateral Agent for the benefit of the Trustee and the ratable
benefit of the Holders of the Securities certificates representing Collateral
that constitutes certificated securities, accompanied by undated stock or bond
powers executed in blank; and (iv) deliver to the Collateral Agent evidence that
all other action that the Collateral Agent may deem reasonably necessary or
desirable in order to perfect and protect the security interest created by
Pledgor under this Pledge Agreement has been taken.

               (b)  The Pledgor hereby authorizes the Collateral Agent to file
one or more financing or continuation statements, and amendments thereto,
including, without limitation, one or more financing statements indicating that
such financing statements cover all assets or all personal property (or words of
similar effect), in each case without the signature of the Pledgor, and
regardless of whether any particular asset described in such financing
statements falls within the scope of UCC or the granting clause of this Pledge
Agreement. A photocopy or other reproduction of this Pledge Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law. The Pledgor ratifies
its authorization for the Collateral Agent to have filed such financing
statements, continuation statements or amendments filed prior to the date
hereof.

               (c)  The Pledgor will furnish to the Collateral Agent from time
to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Collateral Agent may reasonably request, all in reasonable detail.

               (d)  The Pledgor will promptly pay all reasonable costs incurred
in connection with any of the foregoing within 30 days of receipt of an invoice
therefor. The Pledgor also agrees, whether or not requested by the Collateral
Agent, to take all actions that are necessary to

                                      9.

<PAGE>

perfect or continue the perfection of, or to protect the first priority of, the
Collateral Agent's security interest in and to the Collateral, including the
filing of all necessary financing and continuation statements, and to protect
the Collateral against the rights, claims or interests of third persons (other
than any such rights, claims or interests created by or arising through the
Collateral Agent).

         SECTION 9. Covenants. The Pledgor covenants and agrees with the
Collateral Agent for the benefit of the Trustee and ratable benefit of the
Holders of the Securities that from and after the date of this Pledge Agreement
until the earlier of payment in full in cash of (x) the Obligations when due
under the terms of the Indentures or (y) all obligations due and owing under the
Indenture and the Securities in the event such obligations become due and
payable prior to the payment of the first six scheduled interest payments on the
Securities:

               (a)  that (A) it will not (and will not purport to) sell, assign
or otherwise dispose of, or grant any option or warrant with respect to, any of
the Collateral or its beneficial interest therein, and (B) it will not create or
suffer to exist any Lien or other adverse interest upon or with respect to any
of the Collateral or its beneficial interest therein (except for the security
interests granted under this Pledge Agreement and any Lien arising under the
Indenture in favor of the Collateral Agent);

               (b)  that it will not (A) enter into any agreement or
understanding that restricts or inhibits or purports to restrict or inhibit the
Collateral Agent's rights or remedies hereunder, including, without limitation,
the Collateral Agent's right to sell or otherwise dispose of the Collateral or
(B) fail to pay or discharge any tax, assessment or levy of any nature with
respect to its beneficial interest in the Collateral not later than five days
prior to the date of any proposed sale under any judgment, writ or warrant of
attachment with respect to such beneficial interest;

               (c)  that it will not change its name, type of organization,
jurisdiction of organization, organizational identification number or location
from those set forth in Section 7(a)(2) hereof without first giving at least 30
days' prior written notice to the Collateral Agent and taking all action
reasonably required by the Collateral Agent under this Pledge Agreement for the
purpose of perfecting or protecting the security interest granted by this Pledge
Agreement;

               (d)  that it will, and cause the Collateral Agent and the Trustee
to, execute and deliver on or prior to any sale of Option Securities, a
supplement to this Pledge Agreement, in substantially the form attached hereto
as ANNEX C, providing for the pledge of additional Collateral to secure all
Obligations in respect of the Option Securities; and

               (e)  that it agrees with the Collateral Agent for the benefit of
the Trustee and the ratable benefit of the Holders of the Securities that in the
event of a Registration Default, as defined in the Registration Rights
Agreement, and the interest rate on the Securities is increased as provided in
the Registration Rights Agreement, the Pledgor shall, as promptly as
practicable, deliver free to the Collateral Agent additional Pledged Security
Entitlements in such amount as will be sufficient upon receipt of scheduled
interest and/or principal payments of all Pledged Security Entitlements
thereafter held in the Pledge Account, in the opinion of a nationally recognized
firm of independent public accountants selected by the Pledgor, to provide
payment

                                      10.

<PAGE>

for the first six scheduled interest payments due on the Securities (assuming
the additional interest requirement remains in effect for the entire period).
The additional Pledged Security Entitlements shall be pledged by the Pledgor to
the Collateral Agent for the benefit of the Trustee and the ratable benefit of
the Holders and shall be held by the Collateral Agent in the Pledge Account.

        SECTION 10. Power of Attorney. In addition to all of the powers
granted to the Collateral Agent pursuant to the Indenture, the Pledgor hereby
irrevocably appoints the Collateral Agent as the Pledgor's attorney-in-fact
(with full power of substitution), with full authority in the place and stead of
the Pledgor and in the name of the Pledgor or otherwise, from time to time in
the Collateral Agent's discretion, to take any action and to execute any
instrument that is necessary or advisable or as the Collateral Agent may deem
necessary or advisable to accomplish the purposes of this Pledge Agreement,
including:

               (a)  to ask for, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;

               (b)  to receive, indorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a) above;

               (c)  to file any claims or take any action or institute any
proceedings that the Collateral Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of the
Collateral Agent with respect to any of the Collateral; and

               (d)  to pay or discharge taxes or Liens levied or placed upon the
Collateral that the Pledgor has failed to pay or discharge in accordance
herewith, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by the Collateral Agent in its sole
reasonable discretion, and such payments made by the Collateral Agent to become
part of the Obligations of the Pledgor to the Collateral Agent, due and payable
immediately upon demand;

provided, however, that the Collateral Agent shall have no obligation to perform
any of the foregoing actions. The Collateral Agent's authority under this
Section 10 shall include, without limitation, the authority to endorse and
negotiate any checks or instruments representing proceeds of Collateral in the
name of the Pledgor, execute and give receipt for any certificate of ownership
or any document constituting Collateral, transfer title to any item of
Collateral, sign the Pledgor's name on all financing statements (to the extent
permitted by applicable law) or any other documents deemed necessary or
appropriate by the Collateral Agent to preserve, protect or perfect the security
interest in the Collateral granted hereunder and to file the same, prepare, file
and sign the Pledgor's name on any notice of Lien, and to take any other actions
arising from or incident to the powers granted to the Collateral Agent in this
Pledge Agreement. This power of attorney is coupled with an interest and is
irrevocable by the Pledgor.

        SECTION 11. No Assumption of Duties; Reasonable Care. The powers
conferred on the Collateral Agent hereunder are solely to protect the security
interest of the Collateral Agent for the benefit of the Trustee and the ratable
benefit of the Holders of the Securities in the

                                      11.

<PAGE>

Collateral and shall not impose any duty on the Collateral Agent to exercise any
such powers other than those expressly provided herein or imposed by applicable
law. Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral as to (i) ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not the Collateral Agent has or
is deemed to have knowledge of such matters, (ii) taking of any necessary steps
to preserve rights against any parties or any other rights pertaining to any
Collateral or (iii) except as otherwise set forth in Section 6 hereof, investing
or reinvesting any of the Collateral or any loss on any investment; provided
however, that in the case of clause (i) and clause (ii) of the sentence, nothing
contained in this Pledge Agreement shall relieve the Collateral Agent of any
responsibilities in its capacity as securities intermediary. The Collateral
Agent shall be deemed to have exercised reasonable care in the custody and
preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which it accords its own property. The
Collateral Agent shall be entitled to all the rights, benefits, privileges and
immunities accorded to it under the Indenture.

        SECTION 12. Indemnity and Expenses.

               (a)  The Pledgor agrees to indemnify, defend and save and hold
harmless each the Collateral Agent and the Trustee and its officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and against,
and shall pay on demand, any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or resulting from this
Pledge Agreement (including, without limitation, enforcement of this Pledge
Agreement), except to the extent such claim, damage, loss, liability or expense
results from such Indemnified Party's bad faith, gross negligence or willful
misconduct.

               (b)  The Pledgor will upon demand pay to the Collateral Agent and
the Trustee the amount of any and all reasonable expenses, including, without
limitation, the reasonable fees and expenses of its counsel and of any experts
and agents, that such party may incur in connection with (i) the review,
negotiation and administration of this Pledge Agreement, (ii) the custody or
preservation of, or the sale of, collection from or other realization upon, any
of the Collateral, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent, the Trustee or the Holders of the Securities hereunder or (iv)
the failure by the Pledgor to perform or observe any of the provisions hereof.

        SECTION 13. Remedies. If any Event of Default under the Indenture
or default hereunder (any such Event of Default or default being referred to in
this Pledge Agreement as an "Event of Default") shall have occurred and be
continuing:

               (a)  The Collateral Agent, the Trustee and the Holders of the
Securities may exercise in respect of the Collateral, in addition to all other
rights and remedies given by law or by this Pledge Agreement or the Indenture,
all of the rights and remedies of a secured party under the UCC (whether or not
the UCC applies to the affected Collateral) and also may: (i) require the
Pledgor to, and the Pledgor hereby agrees that it will at its expense and upon
request

                                      12.

<PAGE>

of the Collateral Agent forthwith, assemble all or part of the Collateral as
directed by the Collateral Agent and make it available to the Collateral Agent
at a place and time to be designated by the Collateral Agent that is reasonably
convenient to both parties and (ii) without notice except as specified below,
sell the Collateral or any part thereof in one or more parcels at any broker's
board or at public or private sale, in one or more sales or lots, at any of the
Collateral Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable. The Pledgor agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to the Pledgor of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Collateral Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. The purchaser of any or all Collateral so sold shall thereafter hold
the same absolutely, free from any claim, encumbrance or right of any kind
whatsoever created by or through the Pledgor. Any sale of the Collateral
conducted in conformity with reasonable commercial practices of banks, insurance
companies, commercial finance companies, or other financial institutions
disposing of property similar to the Collateral shall be deemed to be
commercially reasonable. The Collateral Agent, the Trustee or any Holder of
Securities may, in its own name or in the name of a designee or nominee, buy any
of the Collateral at any public sale and, if permitted by applicable law, at any
private sale. All expenses (including court costs and reasonable attorneys'
fees, expenses and disbursements) of, or incident to, the enforcement of any of
the provisions hereof shall be recoverable from the proceeds of the sale or
other disposition of the Collateral.

               (b)  Any cash held by or on behalf of the Collateral Agent and
all cash proceeds received by or on behalf of the Collateral Agent in respect of
any sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Collateral Agent, be held by the
Collateral Agent as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to the Collateral Agent pursuant
to Section 12(b) of this Pledge Agreement) in whole or in part by the Collateral
Agent for the benefit of the Trustee and the ratable benefit of the Holders of
the Securities against, all or any part of the Secured Obligations in such order
as the Collateral Agent shall elect. Any surplus of such cash or cash proceeds
held by or on behalf of the Collateral Agent and remaining after payment in full
of all the Secured Obligations shall be paid over to the Pledgor or to
whomsoever may be lawfully entitled to receive such surplus.

               (c)  The Collateral Agent may, without notice to the Pledgor
except as required by law and at any time or from time to time, charge, set off
and otherwise apply all or any part of the Secured Obligations against the
Pledge Account or any part thereof.

               (d)  The Pledgor agrees to (i) provide the Collateral Agent with
such information as may be necessary, or in the opinion of the Collateral Agent,
advisable to enable the Collateral Agent to effect the sale of the Collateral
and (ii) use its reasonable best efforts to do or cause to be done all such
other acts and things as may be necessary to make such sale or sales of all or
any portion of the Collateral pursuant to this Section 13 valid and binding and
in compliance with any and all other applicable requirements of law. The Pledgor
further agrees

                                      13.

<PAGE>

that a breach of any of the covenants contained in this Section 13(d) will cause
irreparable injury to the Collateral Agent, the Trustee and the Holders of the
Securities, that the Collateral Agent, the Trustee and the Holders of the
Securities have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 13(d) shall
be specifically enforceable against the Pledgor, and the Pledgor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred and
is continuing.

               (e)  The Pledgor acknowledges the impossibility of ascertaining
the amount of damages that would be suffered by the Collateral Agent, the
Trustee or any Holders of the Securities by reason of the failure by the Pledgor
to perform any of the covenants contained in Section 13(d) above and,
consequently, agrees that, if the Pledgor shall fail to perform any of such
covenants, it will pay, as liquidated damages and not as a penalty, an amount
equal to the value of the Collateral on the date the Collateral Agent shall
demand compliance with Section 13(d) above.

        SECTION 14. Security Interest Absolute. All rights of the Collateral
Agent, the Trustee and the Holders of the Securities and the pledges,
assignments and security interests hereunder, and all obligations of the Pledgor
hereunder, shall be irrevocable, absolute and unconditional and the rights of
the Collateral Agent hereunder shall be enforceable irrespective of any or all
of the following:

               (a)  any lack of validity or enforceability of the Indenture
or Securities or any other agreement or instrument relating thereto;

               (b)  any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other amendment
or waiver of or any consent to any departure from the Indenture or Securities or
any other agreement or instrument relating thereto;

               (c)  any taking, exchange or release of, or non-perfection of any
Liens on, any Collateral or any other collateral for all or any of the Secured
Obligations;

               (d)  any manner of application of any Collateral or any other
collateral, or proceeds thereof, to all or any of the Secured Obligations, or
any manner of sale or other disposition of any Collateral or any other
collateral for all or any of the Secured Obligations or any other assets of the
Pledgor;

               (e)  any change, restructuring or termination of the corporate
structure or existence of the Pledgor; or

               (f)  to the extent permitted by applicable law, any other
circumstance (including, without limitation, any statute of limitations) or any
existence of or reliance on any representation by the Collateral Agent, the
Trustee or any Holder of the Securities, which might otherwise constitute a
defense available to, or a discharge of, the Pledgor in respect of the Secured
Obligations or of this Pledge Agreement.

                                      14.

<PAGE>

This Pledge Agreement shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Secured Obligations is
rescinded or must otherwise be returned by the Collateral Agent, the Trustee or
any Holder of the Securities or by any other Person upon the insolvency,
bankruptcy or reorganization of the Pledgor or otherwise, all as though such
payment had not been made.

        SECTION 15. Amendments, Waivers and Consents. (a) No amendment or
waiver of any provision of this Pledge Agreement, and no consent to any
departure by the Pledgor from any provision of this Pledge Agreement, shall in
any event be effective unless the same shall be in writing and signed by the
Collateral Agent and the Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No failure on the part of the Collateral Agent, the Trustee or any Holder
of the Securities to exercise, and no delay in exercising any right hereunder,
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right.

        SECTION 16. Notices. Any notice or communication given hereunder
shall be sufficiently given if in writing and delivered in person or mailed by
first class mail, commercial courier service or telecopier communication,
addressed as follows; or, as to any party, at such other address as shall be
designated by such party in a written notice to the other parties:

              if to the Pledgor:

                    Scios Inc.
                    820 West Maude Avenue
                    Sunnyvale, California  94085
                    Fax:  (408) 616-8319
                    Attention:  General Counsel

              if to the Trustee:

                    Wells Fargo Bank, National Association
                    45 Broadway, 12th Floor
                    New York, New York 10006
                    Fax:  (212) 555-5252
                    Attn:  Corporate Trust Department

                    With a copy to:

                    Wells Fargo Bank, National Association
                    707 Wilshire Blvd., 17th Floor
                    Los Angeles, CA 90017
                    Fax:  (213) 614-3355
                    Attention:  Corporate Trust Department

                                      15.

<PAGE>

              if to the Collateral Agent:

                    Wells Fargo Bank, National Association
                    45 Broadway, 12th Floor
                    New York, New York 10006
                    Fax:  (212) 555-5252
                    Attn:  Corporate Trust Department

                    With a copy to:

                    Wells Fargo Bank, National Association
                    707 Wilshire Blvd., 17th Floor
                    Los Angeles, CA 90017
                    Fax:  (213) 614-3355
                    Attention:  Corporate Trust Department

All such notices and other communications shall, when mailed, delivered or
telecopied, respectively, be effective when deposited in the mails, delivered or
telecopied, respectively, addressed as aforesaid.

        SECTION 17. Continuing Security Interest. This Pledge Agreement shall
create a continuing security interest in the Collateral and (a) shall, unless
otherwise provided in this Pledge Agreement, remain in full force and effect
until terminated in accordance with Section 18 hereof, (b) be binding upon the
Pledgor, its successors and assigns and (c) inure, together with the rights and
remedies of the Collateral Agent hereunder, to the benefit of the Trustee and
the Holders of the Securities and their respective successors, transferees and
assigns.

       SECTION 18. Termination. So long as no Event of Default shall have
occurred and be continuing, this Pledge Agreement (other than Pledgor's
obligations under Section 12 hereof) shall terminate upon the earliest of (i)
the redemption of the Securities in whole, (ii) the payment in full of the
Obligations when due, or (iii) the discharge of the Indenture. Upon any such
termination, without any necessary action on the part of the Pledgor, (i) the
Control Agreement(s) will terminate and control of the Pledge Account and the
Pledged Security Entitlements shall revert to the Pledgor, (ii) the Collateral
Agent shall promptly obtain from the Account Holder and deliver to the Pledgor
all certificates and instruments representing any portion of the Pledged
Financial Assets constituting certificated securities and (iii) the Collateral
Agent shall no longer have any rights in any of the Collateral.

       SECTION 19. Miscellaneous Provisions.

           19.1    No Adverse Interpretation of Other Agreements. This Pledge
Agreement may not be used to interpret another pledge, security or debt
agreement of the Pledgor or any subsidiary thereof. No such pledge, security or
debt agreement (other than the Indenture) may be used to interpret this Pledge
Agreement.

           19.2    Severability. The provisions of this Pledge Agreement are
severable, and if any clause or provision shall be held invalid, illegal or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect in that jurisdiction only such

                                      16.

<PAGE>

clause or provision, or part thereof, and shall not in any manner affect such
clause or provision in any other jurisdiction or any other clause or provision
of this Pledge Agreement in any jurisdiction.

           19.3    Headings. The headings in this Pledge Agreement have been
inserted for convenience of reference only, are not to be considered a part
hereof and shall in no way modify or restrict any of the terms or provisions
hereof.

           19.4    Counterpart Originals. This Pledge Agreement may be signed
in two or more counterparts, each of which shall be deemed an original, but all
of which shall together constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Pledge Agreement by telecopier
shall be effective as delivery of an original executed counterpart of this
Pledge Agreement.

           19.5    Benefits of Pledge Agreement. Nothing in this Pledge
Agreement, express or implied, shall give to any person, other than the parties
hereto and their successors hereunder, and the Holders of the Securities and the
Account Holder, any benefit or any legal or equitable right, remedy or claim
under this Pledge Agreement. If the Pledgor consolidates or merges into any
other Person, in a transaction in which the Pledgor is not the surviving
corporation, or conveys, transfers or leases its properties and assets
substantially as an entirety to, any person, then the successor entity shall
assume the Pledgor's obligations under this Pledge Agreement in writing.

           19.6    Interpretation of Agreement. To the extent a term or
provision of this Pledge Agreement conflicts with the Indenture, the Indenture
shall control with respect to the subject matter of such term or provision.
Acceptance of or acquiescence in a course of performance rendered under this
Pledge Agreement shall not be relevant to determine the meaning of this Pledge
Agreement even though the accepting or acquiescing party had knowledge of the
nature of the performance and opportunity for objection.

           19.7    Survival of Representations and Covenants. All
representations, warranties and covenants contained herein shall survive the
execution and delivery of this Pledge Agreement, and shall terminate only upon
the termination of this Pledge Agreement, except as otherwise specified in such
representatives, warranties and covenants.

           19.8    Waivers. The Pledgor waives presentment and demand for
payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which the
Pledgor might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.

           19.9    Authority of the Collateral Agent.

                   (a)  The Collateral Agent shall have and be entitled to
exercise all powers hereunder that are specifically granted to the Collateral
Agent by the terms hereof, together with such powers as are reasonably incident
thereto. The Collateral Agent may perform any of its duties hereunder or in
connection with the Collateral by or through agents or employees and shall be
entitled to retain counsel and to act in reliance upon the advice of counsel
concerning all such matters. Except as otherwise expressly provided in this
Pledge Agreement

                                      17.

<PAGE>

or the Indenture, neither the Collateral Agent nor any director, officer,
employee, attorney or agent of the Collateral Agent shall be liable to the
Pledgor for any action taken or omitted to be taken by the Collateral Agent, in
its capacity as Collateral Agent, hereunder, except for its own bad faith, gross
negligence or willful misconduct, and the Collateral Agent shall not be
responsible for the validity, effectiveness or sufficiency hereof or of any
document or security furnished pursuant hereto. The Collateral Agent and its
directors, officers, employees, attorneys and agents shall be entitled to rely
on any communication, instrument or document believed by it or them to be
genuine and correct and to have been signed or sent by the proper person or
persons.

                   (b)  The Pledgor acknowledges that the rights and
responsibilities of the Collateral Agent and the Trustee under this Pledge
Agreement with respect to any action taken by the Collateral Agent or the
Trustee or the exercise or non-exercise by the Collateral Agent or the Trustee
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Pledge Agreement shall, as between
the Collateral Agent or the Trustee and the Holders of the Securities, be
governed by the Indenture and by such other agreements with respect thereto as
may exist from time to time among them, but, as between the Collateral Agent or
Trustee and the Pledgor, the Collateral Agent or the Trustee shall be
conclusively presumed to be acting as agent for the Holders of the Securities
with full and valid authority so to act or refrain from acting, and the Pledgor
shall not be obligated or entitled to make any inquiry respecting such
authority.

           19.10   Final Expression. This Pledge Agreement, together with the
Indenture and any other agreement executed in connection herewith, is intended
by the parties as a final expression of this Pledge Agreement and is intended as
a complete and exclusive statement of the terms and conditions thereof.

           19.11   Rights of Holders of the Securities. No Holder of
Securities shall have any independent rights hereunder other than those rights
granted to individual Holders of the Securities pursuant to Section 6.6 of the
Indenture; provided that nothing in this subsection shall limit any rights
granted to the Collateral Agent or the Trustee under the Securities or the
Indenture.

           19.12   Appointment of the Collateral Agent. The Trustee hereby
appoints the Wells Fargo Bank, National Association as Collateral Agent, in
accordance with the terms and conditions set forth herein and Wells Fargo Bank,
National Association hereby accepts such appointment.

           19.13   Governing Law; Submission to Jurisdiction; Waiver of Jury
Trial; Waiver of Damages.

                   (a)  This Pledge Agreement shall be governed by, and
construed in accordance with, the laws of the state of New York.

                   (b)  The Pledgor agrees that each the Collateral Agent and
the Trustee shall, in its respective capacity as collateral agent and trustee or
in the name and on behalf of any Holder of Securities, have the right, to the
extent permitted by applicable law, to proceed against

                                      18.

<PAGE>

the Pledgor or the Collateral in a court in any location reasonably selected in
good faith (and having personal or in rem jurisdiction over the Pledgor or the
Collateral, as the case may be) to enable the Collateral Agent or the Trustee to
realize on the Collateral, or to enforce a judgment or other court order entered
in favor of the Collateral Agent or the Trustee. The Pledgor agrees that it will
not assert any counterclaims, setoffs or crossclaims in any proceeding brought
by the Collateral Agent or the Trustee to realize on such property or to enforce
a judgment or other court order in favor of the Collateral Agent of the Trustee,
except for such counterclaims, setoffs or crossclaims which, if not asserted in
any such proceeding, could not otherwise be brought or asserted. The Pledgor
waives any objection that it may have to the location of the court in the city
of New York once the Collateral Agent or the Trustee has commenced a proceeding
described in this paragraph including, without limitation, any objection to the
laying of venue or based on the grounds of forum non conveniens.

                  (c)  The Pledgor agrees that neither any Holder of Securities
nor (except as otherwise provided in this Pledge Agreement or the Indenture),
the Collateral Agent nor the Trustee in its capacity as trustee shall have any
liability to the Pledgor (whether arising in tort, contract or otherwise) for
losses suffered by the Pledgor in connection with, arising out of, or in any way
related to, the transactions contemplated and the relationship established by
this Pledge Agreement, or any act, omission or event occurring in connection
therewith, unless it is determined by a final and nonappealable judgment of a
court that is binding on the Collateral Agent, the Trustee or such Holder of
Securities, as the case may be, that such losses were the result of acts or
omissions on the part of the Collateral Agent, the Trustee or such Holders of
Securities, as the case may be, constituting bad faith, gross negligence or
willful misconduct.

                  (d)  To the extent permitted by applicable law, the Pledgor
waives the posting of any bond otherwise required of the Collateral Agent, the
Trustee or any Holder of Securities in connection with any judicial process or
proceeding to enforce any judgment or other court order pertaining to this
Pledge Agreement or any related agreement or document entered in favor of the
Collateral Agent, the Trustee or any Holder of Securities, or to enforce by
specific performance, temporary restraining order or preliminary or permanent
injunction, this Pledge Agreement or any related agreement or document between
the Pledgor on the one hand and the Collateral Agent, the Trustee and/or the
Holders of the Securities on the other hand.

             [The remainder of this page intentionally left blank.]

                                      19.

<PAGE>

         IN WITNESS WHEREOF, the Pledgor, the Collateral Agent and the Trustee
have each caused this Pledge Agreement to be duly executed and delivered as of
the date first above written.

                        PLEDGOR:

                        SCIOS INC.

                        By:          /s/  David W. Gryska
                            ---------------------------------------------------

                        Name:        David W. Gryska
                             --------------------------------------------------

                        Title:       Chief Financial Officer
                              -------------------------------------------------

                        COLLATERAL AGENT:

                        WELLS FARGO BANK, NATIONAL
                        ASSOCIATION, as Collateral Agent

                        By:          /s/  Jeanie Mar
                           ----------------------------------------------------

                        Name:        Jeanie Mar
                             --------------------------------------------------

                        Title:       Vice President, Authorized Officer
                              -------------------------------------------------

                        TRUSTEE:

                        WELLS FARGO BANK, NATIONAL
                        ASSOCIATION, as Trustee

                        By:          /s/  Jeanie Mar
                           ----------------------------------------------------

                        Name:        Jeanie Mar
                             --------------------------------------------------

                        Title:       Vice President, Authorized Officer
                              -------------------------------------------------

                                      20.

<PAGE>

                                   SCHEDULE I

Pledged Financial Assets

Security                            Coupon Date                     CUSIP No.
U.S. Treasury Strips                2/15/03                         912820BF3
U.S. Treasury Strip                 8/15/03                         912820BG1
U.S. Treasury Strip                 2/15/04                         912820BH9
U.S. Treasury Strip                 8/15/04                         912820BK2
U.S. Treasury Strip                 2/15/05                         912833CM0
U.S. Treasury Strip                 8/15/05                         912803AG8

                                      1.

<PAGE>

                                    ANNEX A

                                CONTROL AGREEMENT

         THIS CONTROL AGREEMENT (the "Agreement"), dated as of August 5, 2002,
by and among SCIOS INC. (the "Pledgor"), WELLS FARGO BANK, NATIONAL ASSOCIATION,
in its capacity as trustee (the "Trustee") for the Holders (as defined in the
Pledge Agreement referred to below), WELLS FARGO BANK, NATIONAL ASSOCIATION, as
collateral agent for the Trustee and the Holders (the "Collateral Agent"), and
WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as securities
intermediary and depository bank (the "Account Holder").

                             PRELIMINARY STATEMENTS:

         (1) The Pledgor has granted the Collateral Agent a security interest
(the "Security Interest") in certain security entitlements (the "Pledged
Security Entitlements") with respect to certain U.S. Treasury securities (the
"Pledged Financial Assets") identified on SCHEDULE I attached hereto maintained
by the Collateral Agent with the Account Holder and carried from time to time in
an account with the Account Holder, ABA No. 091000019, CR: Corporate
Trust Clearing, A/C: 0001038377, FFC: Scios Inc. A/C: 12948301 at its office at
45 Broadway, 12th Floor, New York, New York 10006, in the name of "Wells Fargo
Bank, National Association, as the Collateral Agent for the benefit of the
Trustee and the ratable benefit of the Holders of the 5.50% Convertible
Subordinated Notes due 2009 of Scios Inc., Collateral Pledge Account" (the
"Pledge Account") and all additions thereto and substitutions and proceeds
thereof (collectively, the "Collateral"), pursuant to, and as more particularly
described in, a Pledge Agreement dated as of August 5, 2002, by and among the
Pledgor, the Collateral Agent and the Trustee (as the same may hereafter be
amended, restated, supplemented or otherwise modified from time to time, the
"Pledge Agreement"; terms defined in the Pledge Agreement and not otherwise
defined herein are used herein as therein defined). The Pledgor acknowledges
having received value for such pledge of the Collateral.

         (2) Terms defined in Article 8 or 9 of the Uniform Commercial Code as
in effect in the State of New York (the "UCC") are used in this Agreement
(including, without limitation, paragraph (1) above) as such terms are defined
in such Article 8 or 9. "FRB" means the Federal Reserve Bank or, as applicable,
a branch thereof. "FRB Account" means the FRB Member Securities Account
maintained in the name of the Collateral Agent by the FRB. "FRB Member" means
any person that is eligible to maintain (and that maintains) with the FRB one or
more FRB Member Securities Accounts in such person's name. "FRB Member
Securities Account" means, in respect of any person, the participant's
securities account maintained in the name of such person at the FRB, to which
account Government Securities held for such person are or may be credited.

         (3) The Pledgor, the Collateral Agent, the Trustee and the Account
Holder are delivering this Agreement pursuant to the terms of the Pledge
Agreement.

         NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto hereby agree as follows:

                                       1.

<PAGE>

         SECTION 1. Notice of Exclusive Control. The Pledgor, the Collateral
Agent and Trustee are entering into this Agreement to perfect, and confirm the
first priority lien of, the Collateral Agent's security interest in the
Collateral. The Account Holder agrees to promptly make all necessary entries or
notations in its books and records to reflect the Collateral Agent's security
interest in the Collateral and to apply any value distributed on account of any
Pledged Financial Assets as directed in writing by the Collateral Agent without
further consent from the Pledgor. The Account Holder acknowledges that the
Collateral Agent has exclusive control over the Pledge Account and all Pledged
Security Entitlements contained therein from time to time.

         SECTION 2. The Account. The Account Holder represents and warrants to,
and agrees with, the Pledgor, the Collateral Agent, the Trustee and the Holders
of the Securities:

                  (a)  That the Account Holder has established the Pledge
Account and shall not change the name or account number of the Pledge Account
without the prior written consent of the Collateral Agent;

                  (b)  That the Account Holder maintains the Pledge Account for
the Collateral Agent, and all property (including, without limitation, all funds
and financial assets) held by the Account Holder for the account of the
Collateral Agent is, and will continue to be, credited to the Pledge Account;

                  (c)  That, to the extent that funds are credited to the Pledge
Account, the Pledge Account is a deposit account; and to the extent that
financial assets are credited to the Pledge Account, the Pledge Account is a
securities account. The Account Holder is (i) the bank with which the Pledge
Account is maintained and (ii) the securities intermediary with respect to
financial assets held in the Pledge Account. The Collateral Agent is (x) the
Account Holder's customer with respect to the Pledge Account and (y) the
entitlement holder with respect to financial assets credited from time to time
to the Pledge Account;

                  (d)  That all financial assets in registered form or payable
to or to the order of and credited to the Pledge Account shall be registered in
the name of, payable to or to the order of, or endorsed to, the Account Holder
and in no case during the term of the Pledge Agreement will any financial asset
credited to the Pledge Account be registered in the name of, payable to or to
the order of, or endorsed to, the Pledgor, except to the extent the foregoing
have been subsequently endorsed by the Pledgor to the Account Holder or in
blank;

                  (e)  That, notwithstanding any other agreement to the
contrary, the Account Holder's jurisdiction with respect to the Pledge Account
for purposes of the UCC is, and will continue to be for so long as the Security
Interest shall be in effect, the State of New York;

                  (f)  That the Account Holder does not know of any claim to or
interest in the Pledge Account or any property (including, without limitation,
all funds and financial assets) credited to the Pledge Account, except for
claims and interests of the parties referred to in this Agreement;

                  (g)  That it is a commercial bank that in the ordinary course
of its business maintains securities accounts for others and is acting in that
capacity hereunder and with respect to the Pledge Account;

                                       2.

<PAGE>

                  (h)  That it maintains the FRB Account with the FRB;

                  (i)  That the Pledge Account shall be an account to which
funds or financial assets may be credited, and undertakes to treat the
Collateral Agent (in its capacity as such) as entitled to exercise rights that
comprise (and entitled to the benefits of) such funds or financial assets, and
entitled to exercise the rights of an entitlement holder in the manner
contemplated by the UCC;

                  (j)  That, subject to applicable law, it has not granted, and
covenants that so long as it acts as a securities intermediary or bank hereunder
it shall not grant, control over or with respect to any Collateral credited to
any Pledge Account from time to time to any other person other than the
Collateral Agent (in its capacity as such);

                  (k)  That it shall not, subject to applicable law, knowingly
take any action inconsistent with, and represents and covenants that it is not
and so long as this Agreement remains in effect will not knowingly become, party
to any agreement the terms of which are inconsistent with, the provisions of
this Agreement;

                  (l)  That any item of property credited to the Pledge Account
shall be treated as funds or a financial asset;

                  (m)  That any item of Collateral credited to the Pledge
Account shall not be subject to any security interest, lien or right of set-off
in favor of it as securities intermediary, except as may be expressly permitted
under the Indenture and the Pledge Agreement;

                  (n)  To maintain the Pledge Account and maintained appropriate
books and records in respect thereof in accordance with its usual procedures and
subject to the terms of this Agreement;

                  (o)  That, with respect to any Collateral that constitutes a
security entitlement, it shall comply with the provisions of Section 3(a) of
this Agreement and, with respect to any Collateral that constitutes a securities
account, it shall comply with the provisions of Section 3(a) of this Agreement
with respect to all security entitlements carried in such securities account;
and

                  (p)  That if its jurisdiction as securities intermediary shall
change from that jurisdiction specified in Section 2(e) of this Agreement, it
will promptly notify the Collateral Agent and the Trustee of such change and of
such new jurisdiction.

         SECTION 3. Control by the Collateral Agent.

                  (a)  The Account Holder will comply with (A) all written
instructions directing disposition of the funds in the Pledge Account (such
instructions, a "Payment Order"), (B) all notifications and entitlement orders
that the Account Holder receives directing it to transfer or redeem any
financial asset in the Pledge Account and (C) all other directions concerning
the Collateral, including, without limitation, directions to distribute to the
Collateral Agent proceeds of any such transfer or redemption or interest on any
property in the Pledge Account (any such instruction, notification or direction
referred to in clause (A), (B) or (C) above being an

                                       3.

<PAGE>

"Account Direction"), in each case of clauses (A), (B) and (C) above originated
by the Collateral Agent without further consent by the Pledgor or any other
person.

                  (b)  The Collateral Agent hereby acknowledges that it shall
maintain and exercise control of the Pledge Account on behalf of the Trustee and
the Holders of the Securities.

                  (c)  The Account Holder will not (i) comply with Account
Directions or other directions concerning the Collateral originated by the
Pledgor or (ii) distribute to the Pledgor interest or other distributions on or
in respect of the Collateral.

         SECTION 4. Priority of Collateral Agent's Security Interest.

                  (a)  The Account Holder (i) subordinates to the Security
Interest and in favor of the Collateral Agent any security interest, lien, or
right of setoff the Account Holder may have, now or in the future, against the
Pledge Account or property in the Pledge Account, and (ii) agrees that it will
not exercise any right in respect of any such security interest or lien or any
such right of setoff until the Security Interest is terminated, except that the
Account Holder will retain its prior lien on property in the Pledge Account to
secure payment for property purchased for the Pledge Account and normal
commissions and fees for the Pledge Account.

                  (b)  The Account Holder will not enter into any other
agreement with any Person relating to Account Directions or other directions
with respect to the Pledge Account.

         SECTION 5. Statements, Confirmations, and Notices of Adverse Claims.

                  (a)  The Account Holder will send copies of all statements and
confirmations for the Pledge Account simultaneously to the Pledgor and the
Collateral Agent.

                  (b)  When the Account Holder knows of any claim or interest in
the Pledge Account or any property credited to the Pledge Account other than the
claims and interests of the parties referred to in this Agreement, the Account
Holder will promptly notify the Collateral Agent and the Pledgor of such claim
or interest.

         SECTION 6. The Account Holder's Responsibility.

                  (a)  The Account Holder will not be liable to the Pledgor of
the Collateral Agent or the Trustee or the Holders of the Securities for
complying with an Account Direction or other direction concerning the Collateral
originated by the Collateral Agent, even if the Pledgor notifies the Account
Holder that the Collateral Agent is not legally entitled to issue the Account
Direction or such other direction unless the Account Holder takes the action
after it is served with an injunction, restraining order, or other legal process
enjoining it from doing so, issued by a court of competent jurisdiction, and had
a reasonable opportunity to act on the injunction, restraining order or other
legal process.

                  (b)  This Agreement does not create any obligation of the
Account Holder except for those expressly set forth in this Agreement and in
Part 5 of Article 8 of the UCC and in Article 4 of the UCC. In particular, the
Account Holder need not investigate whether the Collateral Agent is entitled
under the Collateral Agent's agreements with the Pledgor to give an

                                       4.

<PAGE>

Account Direction or other direction concerning the Pledge Account. The Account
Holder may conclusively rely on notices and communications it believes given by
the appropriate party.

                  (c)  In no event shall the Account Holder or any of its
affiliates, shareholders, directors, officers, employees or agents be liable for
indirect, special, punitive, incidental or consequential damages of any kind
whatsoever even if advised of the possibility of such damages, other than such
damages caused by its own bad faith, gross negligence or willful misconduct.

                  (d)  Without limiting the foregoing, and notwithstanding any
provision to the contrary elsewhere, the Account Holder and its affiliates,
shareholders, directors, officers, employees or agents:

                       (i)  shall have no responsibilities, obligations or
duties in respect of the subject matter hereof other than those expressly set
forth in this Agreement, and no implied duties, responsibilities, covenants or
obligations shall be read into this Agreement against the Account Holder.
Without limiting the foregoing, the Account Holder shall have no duty or
authority to determine and/or investigate whether or not an event of default
exists under any agreement between the Pledgor and the Trustee and/or the
Collateral Agent, or to determine and/or investigate whether or not the
Collateral Agent is entitled to give any Account Direction with respect to the
Collateral;

                       (ii)  may in any instance where the Account Holder
determines that it lacks or is uncertain as to its authority to take or refrain
from taking certain action hereunder, or as to any of the requirements of this
Agreement under the circumstance before it, delay or refrain from taking any
action unless and until it shall have received appropriate written instructions
from the Collateral Agent or advice from legal counsel selected by it (or other
appropriate advisor), as the case may be, detailing the action required to be
taken hereunder and the Account Holder may rely conclusively on any such
instructions or advice;

                       (iii) so long as it and they shall have acted (or
refrained from acting) in good faith and within the reasonable belief that such
action or omission is duly authorized or within the discretion or powers granted
to it hereunder, shall not be responsible or liable for any error of judgment in
any action taken, suffered or omitted by it or them, or for any act done or step
taken or omitted, or for any mistake of fact or law, unless such action
constitutes gross negligence or willful misconduct as finally determined by a
non-appealable judgment of a court of competent jurisdiction on its (or their)
part;

                       (iv)  will not be responsible or liable to the Pledgor,
the Collateral Agent, the Trustee, or any other person or entity whatsoever for
the due execution, legality, validity, enforceability, genuineness,
effectiveness or sufficiency of this Agreement (provided, however, that the
Account Holder warrants that the Account Holder has legal capacity and has been
duly authorized to enter into this Agreement) or for any statement, warranty or
representation made by any other party in connection with this Agreement;

                       (v)  will not incur any responsibility or liability by
acting or not acting in reliance upon advice of counsel, or upon any notice,
consent, certificate, instruction, Account

                                       5.

<PAGE>

Direction, statement, wire instruction, telecopy or other writing reasonably and
in good faith believed by it or them to be genuine and in conformance with this
Agreement and signed or sent by the proper party or parties and contemplated
herein; and

                       (vi)  shall not be required to expend or risk its or
their own funds, or to take any action (including the institution or defense of
legal proceedings) which in its or their reasonable judgment may cause it or
them to incur or suffer any expense or liability, unless the Account Holder
shall have been provided with security or indemnity, acceptable to Account
Holder in its sole discretion, for the payment of the costs, expenses (including
reasonable attorneys' fees) and liabilities which may be incurred therein or
thereby.

                  (e)  If any Collateral subject to this Agreement is at any
time attached or levied upon, or in case the transfer or delivery of any such
Collateral shall be stayed or enjoined, or in the case of any other legal
process or judicial order affecting such Collateral, the Account Holder is
authorized to comply with any such order in any manner as the Account Holder or
its legal counsel reasonably deems appropriate. The Account Holder shall give
prompt written notice to the Pledgor and the Collateral Agent of any such
attachment, levy, stay, injunction or legal process. If the Account Holder
complies with any process, order, writ, judgment or decree relating to the
Collateral subject to this Agreement, then the Account Holder shall not be
liable or responsible to the Pledgor, the Collateral Agent, the Trustee, or any
other person or entity whatsoever even if such order, writ, judgment, decree or
process is subsequently modified, vacated or otherwise determined to have been
without legal force or effect.

                  (f)  The Account Holder shall not be liable or responsible for
any delays or failures in performance of any of its duties hereunder which
result from events or conditions beyond its reasonable control and so long as
the same exist or continue and cannot reasonably be remedied by the Account
Holder in accordance with its normal business practices. Such events or
conditions shall include, but shall not be limited to, acts of God, strikes,
lockouts, riots, acts of war or terrorism, epidemics, nationalization,
expropriation, currency restrictions, governmental regulations superimposed
after the fact, fire, communication line failures (including the unavailability
of the Federal Reserve Bank wire or telex or other wire or communication
facility), power failures, earthquakes or other disasters.

         SECTION 7. Indemnity. The Pledgor will indemnify the Account Holder,
its officers, directors, employees and agents against claims, liabilities and
expenses arising out of this Agreement (including, without limitation,
reasonable attorney's fees and disbursements), except to the extent the claims,
liabilities or expenses are caused by the Account Holder's gross negligence or
willful misconduct as found by a court of competent jurisdiction in a final,
non-appealable judgment.

         SECTION 8. Termination; Survival.

                  (a)  This Agreement shall terminate automatically upon receipt
by the Account Holder of written notice executed by an officer of the Collateral
Agent that (i) all of the Secured Obligations have been paid in full in cash or
otherwise satisfied or (ii) all of the Collateral has been released, which ever
is earlier, and the Account Holder shall thereafter be relieved of all duties
and obligations hereunder. The Account Holder may terminate this Agreement on 60

                                       6.

<PAGE>

days' prior notice to the Collateral Agent, the Trustee and the Pledgor,
provided that before such termination the Account Holder and the Pledgor shall
make arrangements to transfer the property in the Pledge Account to another
securities intermediary that shall have executed, together with the Collateral
Agent, the Trustee and the Pledgor, a control agreement in favor of the
Collateral Agent for the benefit of the Trustee and the ratable benefit of the
Holders of the Securities in respect of such property in substantially the form
of this Agreement or otherwise in form and substance satisfactory to the
Collateral Agent.

                  (b)  In the event that the Collateral Agent no longer serves
as Collateral Agent for the Collateral, the Collateral Agent, the Trustee, the
Account Holder and the Pledgor shall make arrangements for another Person to
assume the rights and obligations of the Collateral Agent hereunder, and such
Person shall have executed, together with the Account Holder and the Pledgor, a
control agreement in favor of such Person for the benefit of the Trustee and the
ratable benefit of the Holders of the Securities in substantially the form of
this Agreement or otherwise in form and substance satisfactory to the Collateral
Agent.

                  (c)  Sections 7 and 8 will survive termination of this
Agreement.

         SECTION 9. Conflict with Other Agreements.

                  (a)  In the event of any conflict between this Agreement (or
any portion thereof) and any other agreement now existing or hereafter entered
into, the terms of this Agreement shall prevail;

                  (b)  No amendment or modification of this Agreement or waiver
of any right hereunder shall be binding on any party hereto unless it is in
writing and is signed by all of the parties hereto;

                  (c)  The Account Holder hereby confirms and agrees that:

                       (i)   There are no other agreements entered into between
the Account Holder and the Pledgor with respect to the Pledge Account;

                       (ii)  It has not entered into, and until the termination
of the this Agreement will not enter into, any agreement with any other person
relating to the Pledge Account and/or any financial assets credited thereto
pursuant to which it has agreed to comply with entitlement orders (as defined in
Section 8-102(a)(8) of the UCC) of such other person; and

                       (iii) It has not entered into, and until the termination
of this Agreement will not enter into, any agreement with the Pledgor or the
Collateral Agent purporting to limit or condition the obligation of the Account
Holder to comply with Account Directions as set forth in Section 3 hereof.

         SECTION 10. Permitted Investments. In accordance with the Pledge
Agreement, the Collateral Agent shall direct the Account Holder with respect to
the selection of investments to be made with the funds in the Pledge Account.

                                       7.

<PAGE>

         SECTION 11. Entire Agreement. This Agreement is the entire agreement,
and supersedes any prior agreements, and contemporaneous oral agreements, of the
parties concerning its subject matter. The Collateral Agent, the Trustee and the
Account Holder shall be entitled to all the rights, benefits, privileges and
immunities accorded to the Collateral Agent and the Trustee under the Indenture.

         SECTION 12. Amendments. No modification, amendment or waiver of, nor
consent to any departure by any party from, any provision of this Agreement will
be effective unless made in writing signed by the parties hereto, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given.

         SECTION 13. Financial Assets. The Account Holder agrees with the
Collateral Agent, the Trustee and the Pledgor that, to the fullest extent
permitted by applicable law, all property credited from time to time to the
Pledge Account will be treated as financial assets under Article 8 of the UCC.

         SECTION 14. Notices. All notices, demands, requests, consents,
approvals and other communications required or permitted hereunder must be in
writing and will be effective upon receipt if delivered personally, or if sent
by facsimile transmission with confirmation of delivery, or by nationally
recognized overnight courier service, to the Pledgor's, the Collateral Agent's
and the Trustee's addresses as set forth in the Pledge Agreement, and to the
Account Holder's address as set forth below, or to such other address as any
party may give to the others in writing for such purpose.

         SECTION 15. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Pledgor, the Collateral Agent, the Trustee
and the Account Holder, and thereafter shall be binding upon and inure to the
benefit of the Pledgor, the Collateral Agent, the Trustee and the Account Holder
and their respective successors and assigns. If the Pledgor consolidates or
merges into any other Person, in a transaction in which the Pledgor is not the
surviving corporation, or conveys, transfers or leases its properties and assets
substantially as an entirety to, any person, then the successor entity shall
assume the Pledgor's obligations under this Agreement in writing.

         SECTION 16. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of an original executed counterpart of
this Agreement.

         SECTION 17. Governing Law and Jurisdiction. THIS AGREEMENT WILL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK. Each of the parties hereby irrevocably submits for itself and its property
in any legal action or proceeding relating to this Agreement, or for recognition
and enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction and venue of the courts of the State of New York, the courts of the
United States of America in New York, and appellate courts from any thereof.

                                       8.

<PAGE>

         SECTION 18. Waiver Of Jury Trial. EACH OF THE PARTIES HERETO
IRREVOCABLY WAIVES ANY AND ALL RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR CLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) OF
ANY NATURE RELATING TO THIS AGREEMENT, ANY DOCUMENTS EXECUTED IN CONNECTION WITH
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED IN ANY OF SUCH DOCUMENTS. EACH
PARTY HERETO ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.

                                       9.

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

                                         PLEDGOR:

                                         SCIOS INC.

                                         By: ___________________________________

                                         Name: _________________________________

                                         Title: ________________________________

                                         COLLATERAL AGENT:

                                         WELLS FARGO BANK, NATIONAL
                                         ASSOCIATION, as Collateral Agent

                                         By: ___________________________________

                                         Name: _________________________________

                                         Title: ________________________________

                                         TRUSTEE:

                                         WELLS FARGO BANK, NATIONAL
                                         ASSOCIATION, as Trustee

                                         By: ___________________________________

                                         Name: _________________________________

                                         Title: ________________________________

<PAGE>

                                         ACCOUNT HOLDER:

                                         WELLS FARGO BANK, NATIONAL
                                         ASSOCIATION, as Account Holder

                                         By: ___________________________________

                                         Name: _________________________________

                                         Title: ________________________________

                                         Address: ________________________
                                         _________________________________
                                         Attn:  _______________________
                                         Fax:  ________________________

<PAGE>

                                   SCHEDULE I

Pledged Financial Assets

Security                                 Coupon Date                   CUSIP No.
U.S. Treasury Strips                     2/15/03                       912820BF3
U.S. Treasury Strip                      8/15/03                       912820BG1
U.S. Treasury Strip                      2/15/04                       912820BH9
U.S. Treasury Strip                      8/15/04                       912820BK2
U.S. Treasury Strip                      2/15/05                       912833CM0
U.S. Treasury Strip                      8/15/05                       912803AG8

                                       1.

<PAGE>

                                     ANNEX B

                     WELLS FARGO BANK, NATIONAL ASSOCIATION

                              OFFICER'S CERTIFICATE

         PURSUANT TO SECTION 4(H) OF THE PLEDGE AGREEMENT, dated as of August 5,
2002 (as amended, restated, supplemented or otherwise modified from time to
time, the "Pledge Agreement"), by and among SCIOS INC., a Delaware corporation
(the "Pledgor"), WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as
trustee (the "Trustee") for the holders from time to time (the "Holders") of the
Securities (as defined in the Pledge Agreement), and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as collateral agent for the Trustee and the Holders (the
"Collateral Agent"), the undersigned officer of the Collateral Agent, on behalf
of the Collateral Agent, makes the following certifications to the Pledgor and
the Initial Purchasers. Capitalized terms used and not defined in this Officer's
Certificate have the meanings set forth or referred to in the Pledge Agreement.

         1.   Substantially contemporaneously with the execution and delivery of
this Officer's Certificate, the Collateral Agent has acquired its security
entitlement to the [initial Pledged Financial Assets] [the additional Pledged
Financial Assets identified on Supplement No.__ to the Pledge Agreement] through
a "securities account" (as defined in Section 8-501(a) of the N.Y. Uniform
Commercial Code) maintained by the Collateral Agent, for value and without
notice of any adverse claim thereto. Without limiting the generality of the
foregoing, the Collateral Account, the Pledged Financial Assets and the other
Collateral are not, and the Collateral Agent's security entitlement to the
Collateral is not, to the actual knowledge of the corporate trust officer having
responsibility for the administration of the Pledge Agreement on behalf of the
Collateral Agent, subject to any Lien granted by or to or arising through or in
favor of any securities intermediary (including, without limitation, Wells Fargo
Bank, National Association) through which the Collateral Agent derives its
security entitlement to the Collateral.

         2.   The Collateral Agent has not knowingly caused or permitted the
Collateral Account or its security entitlement thereto to become subject to any
Lien created by or arising through the Collateral Agent.

                                       2.

<PAGE>

         IN WITNESS WHEREOF, the undersigned officer has executed this Officer's
Certificate on behalf of Wells Fargo Bank, National Association, as Collateral
Agent this 5th day of August, 2002.

                                      WELLS FARGO BANK, NATIONAL ASSOCIATION, as
                                      Collateral Agent

                                      By:_______________________________________
                                         Name:
                                         Title:

                                       3.

<PAGE>

                                     ANNEX C

                  [Form of Supplement to the Pledge Agreement]

         SUPPLEMENT NO. _____ dated as of ____________, 2002, to the PLEDGE
AGREEMENT dated as of August 5, 2002 (as amended, restated supplemented or
otherwise modified from time to time, the "Pledge Agreement") among SCIOS, INC.,
a Delaware corporation (the "Pledgor"), WELLS FARGO BANK, NATIONAL ASSOCIATION,
as trustee (in such capacity, the "Trustee") for the holders (the "Holders") of
the Securities (as defined below) issued by the Pledgor under the Indenture
referred to below, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as collateral
agent (in such capacity, the "Collateral Agent"). Capitalized terms used herein
and not otherwise defined herein shall have the meanings assigned to such terms
in the Pledge Agreement.

         WHEREAS, the Pledgor, J.P. Morgan Securities Inc., Lehman Brothers Inc.
and SG Cowen Securities Corporation (the "Initial Purchasers") are parties to a
Purchase Agreement dated as of July 30, 2002 (the "Purchase Agreement"),
pursuant to which the Pledgor granted the Initial Purchasers an overallotment
option to purchase up to $25,000,000 aggregate principal amount of the Pledgor's
5.50% Convertible Subordinated Notes due 2009 (the "Securities");

         WHEREAS, the Pledgor and the Trustee have entered into that certain
Indenture dated as of August 5, 2002 (as amended, restated supplemented or
otherwise modified from time to time, the "Indenture"), pursuant to which the
Pledgor is issuing the Securities.

         WHEREAS, pursuant to the Indenture, the Pledgor is required to
purchase, or cause the purchase of, and pledge to the Collateral Agent for the
benefit of the Trustee and the Holders, on or prior to any sale of Option
Securities Additional Collateral (as defined below) in an amount that will be
sufficient upon receipt of scheduled interest and principal payments of such
securities, according to a written report of a nationally recognized firm of
independent public accountants selected by the Pledgor and delivered to the
Trustee, to provide payment in full of the first six scheduled interest payments
due on the Securities;

         WHEREAS, the Pledgor, the Trustee and the Collateral Agent have entered
into the Pledge Agreement, pursuant to which the Pledgor has previously pledged
the Collateral to the Collateral Agent for the benefit of the Holders in
connection with the purchase by the Initial Purchasers of $__________ aggregate
principal amount of Securities;

         WHEREAS, the Initial Purchasers have exercised their overallotment
option under the Purchase Agreement to purchase $[__________] aggregate
principal amount of Securities;

         WHEREAS, it is a condition precedent to the purchase of the Securities
by the Initial Purchasers pursuant to the overallotment option granted in the
Purchase Agreement that the Pledgor purchase Additional Collateral and deposit
such Additional Collateral into the Pledge Account to be held therein subject to
the terms of the Pledge Agreement and shall have granted the assignment and
security interest and made the pledge and assignment contemplated by the Pledge
Agreement;

                                       1.

<PAGE>

         NOW THEREFORE, in consideration of the premises herein contained, and
in order to induce the Initial Purchasers to purchase the Securities, the
Pledgor, the Trustee and the Collateral Agent hereby agree, for the benefit of
the Initial Purchasers and for the ratable benefit of the Holders, as follows:

         SECTION 1. Pledge and Grant of Security Interest. Pursuant to Section 1
of the Pledge Agreement, as security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations, the Pledgor hereby assigns and pledges to the
Collateral Agent for the benefit of the Trustee and the ratable benefit of the
Holders and hereby grants to the Collateral Agent for the benefit of the Trustee
and for the ratable benefit of the Holders, a lien on and security interest in
all of the Pledgor's right, title and interest in, to and under the following
property: (a) the Government Securities identified by CUSIP No. in Part I of
Schedule I hereto (the "Additional Collateral") and the certificates
representing the Additional Collateral, the scheduled payments of principal and
interest thereon which will be sufficient to provide for payment in full of the
first six scheduled interest payments due on the Securities issued in connection
herewith and (b) the security entitlements described in Part II of Schedule I
hereto, with respect to the financial assets described, the securities
intermediary named, and the securities account referred to therein. The Pledge
Agreement is hereby incorporated herein by reference.

         SECTION 2. Supplement to Schedule I. The parties hereto agree that
Schedule I to the Pledge Agreement shall be supplemented by Schedule I hereto.

         SECTION 3. Transfer of Additional Collateral. Pursuant to Section 9(d)
of the Pledge Agreement, on or prior to the date hereof, the Pledgor agrees to
transfer, or caused to be transferred, to the Pledge Account, the Additional
Collateral in such amount that will be sufficient upon receipt of scheduled
interest, and principal payments of such securities, according to a written
report of a national recognized firm of independent public accountants selected
by the Pledgor and delivered to the Trustee, to provide for payment in full of
the first six scheduled interest payments due on the Securities.

         SECTION 4. Representations and Warranties.

                  (a) The Pledgor hereby represents and warrants to the Trustee
and the Collateral Agent that:

                           (1)  Each of this Supplement and the Pledge Agreement
as supplemented hereby has been duly authorized, validly executed and delivered
by the Pledgor and (assuming the due authorization and valid execution and
delivery of this Supplement by each of the Trustee and the Collateral Agent)
constitutes a valid and binding agreement of the Pledgor, enforceable against
the Pledgor in accordance with its terms, except as (i) the enforceability
hereof and thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, preference, reorganization, moratorium or similar laws now or
hereafter in effect relating to or affecting the rights or remedies of creditors
generally, (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability and the discretion of the court
before which any proceeding therefore may be brought, (iii) the exculpation
provisions and rights to indemnification under the Pledge Agreement may be
limited by U.S. federal and state securities

                                       2.

<PAGE>

laws and public considerations and (iv) the waiver of rights and defenses
contained in Section 12(b), Section 19.8 and Section 19.13 of the Pledge
Agreement may be limited by applicable law; and

                           (2)  The representations and warranties of the
Pledgor set forth in Section 7(a) of the Pledge Agreement are true and correct
in all material respects with the same effect as if made on and as of the date
hereof.

                  (b) The Collateral Agent hereby represents and warrants to the
Trustee and the Pledgor that:

                           (1)  Each of this Supplement and the Pledge Agreement
as supplemented hereby has been duly authorized, validly executed and delivered
by the Collateral Agent and (assuming the due authorization and valid execution
and delivery of this Supplement by each of the Trustee and the Pledgor)
constitutes a valid and binding agreement of the Collateral Agent, enforceable
against the Collateral Agent in accordance with its terms, except as the
availability of equitable remedies may be limited by equitable principles of
general applicability and the discretion of the court before which any
proceeding therefore may be brought; and

                           (2)  The representations and warranties of the
Collateral Agent set forth in Section 7(b) of the Pledge Agreement are true and
correct in all material respects with the same effect as if made on and as of
the date hereof.

         SECTION 5. Execution in Counterparts. This Supplement may be signed in
two or more counterparts, each of which shall be deemed an original, but all of
which shall together constitute one and the same agreement. This Supplement
shall become effective when the Collateral Agent shall have received
counterparts of this Supplement that, when taken together, bear the signatures
of the Pledgor, the Trustee and the Collateral Agent.

         SECTION 6. Effect of Supplement. Except as expressly supplemented
hereby, the Pledge Agreement shall remain in full force and effect.

         SECTION 7. Governing Law. This Supplement shall be governed by and
construed in accordance with the laws of the State of New York.

                                       3.

<PAGE>

         IN WITNESS WHEREOF, the Pledgor, the Trustee and the Collateral Agent
have caused this Supplement to be duly executed and delivered as of the date
first above written.

PLEDGOR:
                                         SCIOS INC.

                                         By: ___________________________________
                                             Name:______________________________
                                             Title:_____________________________

TRUSTEE:
                                         WELLS FARGO BANK, NATIONAL
                                         ASSOCIATION, as Trustee

                                         By: ___________________________________
                                             Name:______________________________
                                             Title:_____________________________

COLLATERAL AGENT:
                                         WELLS FARGO BANK, NATIONAL
                                         ASSOCIATION, as Collateral Agent

                                         By: ___________________________________
                                             Name:______________________________
                                             Title:_____________________________

                                       4.

<PAGE>

                                   SCHEDULE I

                              ADDITIONAL COLLATERAL

                          Part I Government Securities

Security                     Coupon Date                            CUSIP No.

                         Part II Securities Entitlements

Financial Asset            Securities Intermediary            Securities Account

                                       5.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00041-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00041-of-00352.parquet"}]]