Document:

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                                                                   EXHIBIT 10.1

                             COLLABORATION AGREEMENT

         THIS COLLABORATION AGREEMENT (the "Agreement") is made as of August 7,
2000 (the "Effective Date"), by and between Maxim Pharmaceuticals, Inc., a
Delaware corporation having its principal offices at 8899 University Center
Lane, San Diego, California 92122 ("Maxim") and Hoffmann-La Roche, Inc., having
its principal offices at 340 Kingsland Street, Nutley, New Jersey 07110 and F.
Hoffmann-La Roche Ltd, Grenzacherstrasse 124, CH-4070 Basel, Switzerland
(collectively, "Roche").

         WHEREAS, Maxim is developing Maxamine (as defined below) in combination
with certain drugs for the treatment of certain diseases, and has rights to
certain intellectual property related thereto;

         WHEREAS, Roche is developing Pegasys and Ribavirin (as defined below)
for the treatment of hepatitis C virus and certain cancers; and

         WHEREAS, Roche and Maxim wish to undertake clinical trials and related
activities in order to obtain marketing approval of combination therapy with
Maxamine, Pegasys and Ribavirin for the treatment of hepatitis C virus and with
Maxamine and Pegasys for the treatment of certain cancers, subject to and in
accordance with the terms and conditions of this Agreement; and

         WHEREAS, Roche and Maxim wish to coordinate sales strategies of
Maxamine, Pegasys and Ribavirin in order to facilitate marketing of the
combination therapy of such products.

         NOW THEREFORE, in consideration of the mutual covenants and obligations
set forth herein the parties hereto agree as follows:

1.       DEFINITIONS

         The following terms as used in this Agreement will have the meanings
set forth in this Section:

     1.1 "AFFILIATE" means an individual, trust, business trust, joint venture,
partnership, corporation, association or any other entity which owns, is owned
by or is under common ownership with a party. For the purposes of this
definition, the term "owns" (including, with correlative meanings, the terms
"owned by" and "under common ownership with") as used with respect to any party,
shall mean the possession (directly or indirectly) of 50% or more of the
outstanding voting securities of a corporation or comparable equity interest in
any other type of entity. The term Affiliate of Roche does not include Genentech
Inc., 1 DNA Way, South San Francisco, California 94080-4990, U.S.A., unless
Roche explicitly opts for such inclusion by giving a written notice to Maxim.

     1.2          "AGREEMENT PERIOD" means the period referred to in
                  Section 9.1.

     1.3          "ANNUAL BUDGET" has the meaning set forth in
                  Section 3.1(e).

               *** Text Omitted and Filed Separately
                   Confidential Treatment Requested
                   Under 17 C.F.R. Sections 200.80(b)(4),
                   200.83 and 240.24b-2

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     1.4 "APPLICABLE LAWS" means all laws, rules, regulations, directives,
ordinances, guidelines, policies and orders applicable to the activities
described hereunder, including, without limitation, the FDCA and all rules and
regulations of the FDA.

     1.5 "CGMPS" means current good manufacturing practices as defined from time
to time in regulations promulgated under the FDCA or issued by the European
Union or Japan, or any successor laws or regulations, governing the manufacture
of Maxamine or Pegasys.

     1.6 "CLINICAL TRIAL" means pivotal or other human clinical trials of the
Combination Therapy for a specified Indication as described in Exhibit A and B
of this Agreement that are designed to support Regulatory Approval of the
Combination Therapy for treatment of such Indication in the United States, the
European Union, Japan and such other jurisdictions as are determined appropriate
by the JDC. Without limiting the foregoing, a Clinical Trial would be required
to test the Combination Therapy according to a Protocol for the purpose of
establishing that the Combination Therapy is safe and efficacious for its
intended use and to define warnings, precautions and adverse reactions that are
associated with the Combination Therapy in the dosage range to be prescribed.

     1.7 "COLLABORATION" means the collaboration established by this Agreement.

     1.8 "COLLABORATION PERIOD" means the period that commences on the Effective
Date and continues until all Clinical Trials in the United States and the
European Union have been completed or terminated and all necessary filings
regarding the Combination Therapy with the FDA in the United States and the
European Union have been made.

     1.9 "COMBINATION THERAPY" means, as applicable, (a) Maxamine, Pegasys and
Ribavirin used in combination as a treatment for HCV, or (b) Maxamine and
Pegasys used in combination as a treatment for RCC and Other Cancer Indication.

     1.10 "CONFIDENTIAL INFORMATION" means discoveries, inventions, proprietary
information, data, know-how, trade secrets, techniques, methods and materials
techniques and data, including, but not limited to, pharmacological,
toxicological and clinical test data, analytical and quality control data,
regulatory submissions, correspondence and communications, marketing, pricing,
distribution, cost, sales, manufacturing, patent and legal data or descriptions,
received by the receiving party from the disclosing party pursuant to this
Agreement; provided that all data and reports derived from the Clinical Trials
will be deemed Confidential Information of both parties. Without limiting the
generality of the foregoing, the Maxim Intellectual Property will be deemed
Confidential Information of Maxim, and the Roche Intellectual Property will be
deemed Confidential Information of Roche.

     1.11 "CONTROL" means possession of the ability to grant a license or
sublicense without violating the terms of any agreement with or other
arrangement with any Third Party.

     1.12 "FDA" means the United States Food and Drug Administration, the EMEA
or the Japanese Ministry of Health and Welfare, and any successor entity, or any
other applicable Regulatory Authority.

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     1.13 "FDCA" means the Federal Food, Drug and Cosmetics Act and all
regulations and rules promulgated thereunder.

     1.14 "HCV" means hepatitis C virus.

     1.15 "INVENTION" has the meaning set forth in Section 5.1.

     1.16 "IND" means the Investigational New Drug application, as defined by
the FDCA and any foreign equivalent, for the Combination Therapy.

     1.17 "INDICATION" means (a) HCV or (b) RCC and Other Cancer Indication.

     1.18 "JDC" means the joint development committee described in Section 2.1
that oversees the parties' collaborative activities under this Agreement.

     1.19 "MAXAMINE" means Maxamine-R-, Maxim's histamine dihydrochloride
product.

     1.20 "MAXAMINE MARKETING AGREEMENT" means a marketing or license agreement
granting to a Third Party or Roche the right to market and promote Maxamine
within a Territory. Maxamine Marketing Agreement excludes any distribution,
wholesale or other agreement designed to facilitate the marketing and promotion
of Maxamine within a Territory by Maxim.

     1.21 "MAXIM INTELLECTUAL PROPERTY" means all discoveries, inventions,
information, data, know-how, trade secrets, techniques, methods and materials
(whether or not patentable) that are Controlled by, owned by, licensed by, or
assigned to Maxim as of the Effective Date or during the Agreement Period and
that are necessary or useful for the development, manufacture, use or sale of
Maxamine and all Patents or other intellectual property rights Controlled by,
owned by, licensed by, or assigned to Maxim that cover the foregoing.

     1.22 "NDA" means the New Drug Application or Biologics License Application,
as defined by the FDCA, or any foreign equivalent, for the Combination Therapy.

     1.23 "OTHER CANCER INDICATION" means a cancer indication other than RCC
selected by the JDC for testing in a Clinical Trial.

     1.24 "PATENTS" means (a) unexpired letters patent (including inventor's
certificates) which have not been held invalid or unenforceable by a court of
competent jurisdiction from which no appeal can be taken or has been taken
within the required time period, including without limitation any substitution,
extension, registration, confirmation, reissue, re-examination, renewal or any
like filing thereof and (b) pending applications for letters patent, including
without limitation any continuation, continuation-in-part or division thereof
and any provisional applications.

     1.25 "PEGASYS" means Pegasys-R-, Roche's pegylated interferon-alfa 2a
product.

     1.26 "PROTOCOL" means, with respect to a Clinical Trial, the protocol for
the Clinical Trial as approved by the JDC.

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     1.27 "RCC" means renal cell carcinoma.

     1.28 "REGULATORY APPROVAL" means any approvals (including pricing and
reimbursement approvals), licenses, registrations or authorizations of any
Regulatory Authority necessary for the manufacture, distribution, use or sale of
Maxamine and Pegasys, or Maxamine, Pegasys and Ribavirin, as a Combination
Therapy in the applicable jurisdiction.

     1.29 "REGULATORY AUTHORITY" means any national, supra-national, regional,
state or local regulatory agency, department, bureau, commission, council or
other governmental entity, with jurisdiction over the manufacture, distribution,
use or sale of Maxamine and Pegasys as a Combination Therapy.

     1.30 "RIBAVIRIN" means Roche's branded version of ribavirin product.

     1.31 "ROCHE INTELLECTUAL PROPERTY" means all discoveries, inventions,
information, data, know-how, trade secrets, techniques, methods and materials
(whether or not patentable) that are Controlled by, owned by, licensed by, or
assigned to Roche as of the Effective Date or during the Agreement Period and
that are necessary or useful for the development, manufacture, use or sale of
Pegasys or Ribavirin and all Patents or other intellectual property rights
Controlled by, owned by, licensed by, or assigned to Roche that cover the
foregoing.

     1.32 "TERRITORY" means any country or group of countries, excluding
Australia, New Zealand, Israel, the West Bank and the Gaza-Palestine Autonomous
Authority.

     1.33 "THIRD PARTY" means any person or entity other than Maxim or Roche or
an Affiliate of Maxim or Roche.

     1.34 "THIRD PARTY COSTS" means (a) the actual costs incurred by Roche in
excess of $200,000 for non-clinical and clinical pharmacology work performed by
Third Parties necessary to support any filing with respect to the Clinical
Trials with the FDA, and (b) the actual Third Party clinical trial site,
clinical investigator, patient, nursing, investigator meeting, non-drug clinical
supply, and related costs incurred by Roche or Maxim in connection with the
Clinical Trials, as documented in reasonable detail; provided that Third Party
Costs for a given calendar year will not exceed the amount budgeted by the JDC
for Third Party Costs in the Annual Budget for that calendar year.

     1.35 "TRIAL DESIGN" means the design for a Clinical Trial, as agreed to by
the parties and attached hereto as Exhibit A or Exhibit B, as applicable.

2.   JOINT DEVELOPMENT COMMITTEE

     2.1 ESTABLISHMENT OF JDC. The parties will establish the JDC to oversee and
coordinate the development of the Combination Therapy. The JDC will have only
such powers as are specifically delegated to it hereunder and will have no power
to amend this Agreement. The general purpose of the JDC is to (i) establish the
strategy for the clinical development and Regulatory Approval of the Combination
Therapy on a worldwide basis; (ii) oversee the Clinical Trials; and (iii)
coordinate the parties' activities under the Collaboration, all based on the
principles of prompt and diligent development of the Combination Therapy
consistent with good

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pharmaceutical practices. In addition to its overall responsibility for the
Collaboration, the JDC will, in particular, (1) review, modify (if appropriate)
and approve Protocols for the Clinical Trials in accordance with the Trial
Designs; (2) review, modify (if appropriate) and approve IND and NDA filings for
the Clinical Trials; and (3) review, modify (if appropriate) and approve the
Annual Budget.

     2.2 COMPOSITION. The JDC will be composed of an equal number of
representatives from each party, selected from the ranks of senior scientists
and senior clinical development management of each party, and will initially
consist of a total of six members. The parties may agree to change the total
number of JDC members from time to time. Within 10 days after the Effective
Date, the parties will designate their representatives on the JDC and will
thereafter notify one another in writing of any change in the membership of the
JDC. With the approval of the JDC, other representatives of each party or of
Third Parties involved in the development, manufacture or commercialization of
Maxamine or Pegasys may attend meetings of the JDC as nonvoting observers. Each
Party shall be responsible for all of its own expenses of participating in the
JDC.

     2.3 MEETINGS. The JDC will hold meetings at such times and places as will
be determined by the JDC (it being expected that meetings will alternate between
the offices of each party) but in no event will such meetings be held in person
less frequently than once every quarter. Meetings may be conducted in person or
by audio or video teleconference, provided that two meetings per year will be
conducted in person. The JDC may form and subsequently disband subcommittees
with appropriate representation from each party and may otherwise amend or
expand upon the foregoing procedures for its internal operation.

     2.4 VOTING. Meetings of the JDC will be effective only if at least one
representative of each party on the JDC is present or participating. In taking
actions by the JDC, each party will have one vote. All actions by the JDC will
require unanimous approval. If the JDC fails to reach unanimity on a matter
before it for decision, the matter will be referred for resolution to the Chief
Executive Officer of Maxim and the Head of Global Development and/or Head of
Strategic Marketing of Roche (or its appointed designee) for their consideration
and agreement. If they are unable to agree after negotiation in good faith,
either party may request resolution of the matter pursuant to Section 10, except
that adoption of any initial or amended Trial Design or any Annual Budget or
determination of whether Maxim should be the filing party for an IND or NDA must
be by agreement of the parties and may not be determined by dispute resolution
in accordance with Section 10

     2.5 CO-CHAIRPERSONS. One representative of Maxim and one representative of
Roche on the JDC will be selected as co-chairpersons of the JDC. The
co-chairpersons of the JDC will have alternating responsibility for preparing
and circulating an agenda in advance of each meeting and preparing and issuing
minutes of each meeting within 30 days thereafter, which minutes will report in
reasonable detail the actions taken by the JDC, the status of any ongoing
development programs, issues requiring resolution and resolutions of previously
reported issues. Final minutes of JDC meetings are to be signed by both of the
JDC co-chairpersons.

     2.6 SUBCOMMITTEES. Any subcommittee established by the JDC will have
appropriate representation of each party and may include representatives who are
not members

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of the JDC. Any such subcommittee will be given assignments from the JDC, will
be subject to the authority of the JDC and will report its actions to the JDC.
At the request of either party at any time, any such subcommittee will be
dissolved and its powers and functions returned to the JDC. The JDC will retain
the right of final approval before the implementation of any actions by the
subcommittees.

3.   DEVELOPMENT OF COMBINATION THERAPY

     3.1 CLINICAL TRIALS.

          (a) Roche will be responsible for managing and monitoring two Clinical
Trials of the Combination Therapy for the treatment of HCV in humans, including,
without limitation, site recruitment, site monitoring, safety and medical
monitoring, laboratory testing, data management, document control, analysis of
results, regulatory reporting, and provision of information and reports in
accordance with Section 3.4. The initial Trial Design for such Clinical Trials
will be finalized and attached hereto as Exhibit A within 30 days after the
Effective Date and may be amended only by mutual written agreement of the
parties.

          (b) Roche will be responsible for managing and monitoring two Clinical
Trials of the Combination Therapy for the treatment of RCC and Other Oncology
Indication in humans, including, without limitation, site recruitment, site
monitoring, safety and medical monitoring, laboratory testing, data management,
document control, analysis of results, regulatory reporting, and provision of
information and reports in accordance with Section 3.4. The initial Trial Design
for such Clinical Trials will be finalized and attached hereto as Exhibit B
within 30 days after the Effective Date and may be amended only by mutual
written agreement of the parties.

          (c) The Clinical Trials described in Section 3.1(a) and (b) would be
conducted globally as is determined appropriate by the JDC. Roche, and Maxim,
will prepare the Protocol for each Clinical Trial in accordance with the Trial
Design for such Clinical Trial. Roche will submit the Protocol to the JDC for
review, modification (if appropriate) and approval. Roche and Maxim will make
any modification to the Protocol recommended by the JDC. Roche and Maxim will
perform their obligations with respect to such Clinical Trials in accordance
with the Protocol and Applicable Laws and will ensure that any research
institution or organization and any investigator that participates in any such
Clinical Trial will conduct such Clinical Trial in accordance with the Protocol
and Applicable Laws. Roche and Maxim will be responsible for supervising and
managing research institutions or organizations and investigators that
participate in the Clinical Trials. Maxim will provide personnel experienced in
the use of Maxamine to participate in the training of, and act as a liaison to,
such research institutions or organizations and investigators.

          (d) Roche will prepare the IND and NDA filings associated with the
Clinical Trials described in Section 3.1(a) and (b). Maxim will provide to Roche
such assistance and technical support related to Maxamine as is necessary or
appropriate to prepare the IND and NDA filings associated with such Clinical
Trials, including, without limitation, the chemistry, manufacturing and controls
section of the NDA filings. Roche and Maxim will submit the IND and NDA filings
associated with such Clinical Trials to the JDC for review, modification (if

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appropriate) and approval. Roche and Maxim will make any modification to the IND
and NDA filings recommended by the JDC. Once an IND or NDA filing associated
with such Clinical Trials is approved by the JDC, Roche will file the IND or
NDA, unless the JDC determines that Maxim should be the filing party, in which
case Maxim will file the IND or NDA; provided that, if the JDC cannot reach
agreement over whether Maxim should be the filing party, then Roche will be the
filing party. The filing party will be responsible for strategy, as approved by
the JDC, and communications with the FDA with regard to the Clinical Trials
consistent with the Protocol and the IND and NDA filings; provided, however,
that the non-filing party will have the right to participate in all meetings
with the FDA involving such IND or NDA. The filing party will provide the
non-filing party with a copy of all correspondence submitted to or received from
the FDA within one week after its submission or receipt. Each party will provide
to the other party such assistance and technical support related to Maxamine or
to Pegasys or Ribavirin, as applicable, as is necessary or appropriate with
respect to FDA comments or requests with respect to the IND and NDA filings
associated with the Clinical Trials. The filing party will be responsible for
maintaining any registrations for the Combination Therapy in the United States
during the Agreement Period in compliance with Applicable Laws.

          (e) Roche and Maxim will prepare an annual budget for all Third Party
Costs to be incurred in the following calendar year (the "Annual Budget"). Roche
and Maxim will submit the Annual Budget to the JDC for review, modification (if
appropriate) and approval at least 60 days prior to the beginning of the
calendar year to which the Annual Budget applies. The JDC will make any
appropriate modification to the Annual Budget and approve the Annual Budget no
later than the first day of the calendar year to which the Annual Budget
applies.

          (f) Either party may terminate a Clinical Trial in the event of
identification of any medical risk to subjects in the Clinical Trial,
unsatisfactory results from the Clinical Trial, non-compliance with applicable
requirements of any Regulatory Authority or notice of action by any Regulatory
Authority terminating or suspending the Clinical Trial.

     3.2  SUPPLY OF DRUGS FOR CLINICAL TRIALS.

          (a) Maxim will have the exclusive right and the obligation to supply,
without charge, to Roche all requirements for Maxamine for use in the Clinical
Trials described in Section 3.1(a) and (b) (including manufacturing, packaging,
labeling and quality assurance). Maxim warrants that the Maxamine supplied by
Maxim will be manufactured in accordance with Applicable Laws, including cGMPs.

          (b) Roche will have the exclusive right and the obligation to supply,
without charge, all requirements for Pegasys and ribavirin for use in the
Clinical Trials described in Section 3.1(a) and (b) in accordance with the
Protocol (including manufacturing, packaging, labeling and quality assurance).
Roche warrants that the Pegasys and ribavirin supplied by Roche will be
manufactured in accordance with Applicable Laws, including cGMPs.

          (c) EXCEPT AS EXPRESSLY STATED IN THIS SECTION 3.2, MAXIM MAKES NO
OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO MAXAMINE SUPPLIED
HEREUNDER, AND ROCHE MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT
TO PEGASYS OR RIBAVIRIN

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SUPPLIED HEREUNDER. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE ARE HEREBY EXPRESSLY DISCLAIMED.

     3.3  COSTS OF CLINICAL TRIALS.

          (a) Roche and Maxim will share equally all Third Party Costs. On a
quarterly basis, Roche will provide Maxim with a statement showing the Third
Party Costs incurred during the applicable quarter in reasonable detail. Maxim
will reimburse Roche for 50% of the Third Party Costs reflected on such
statement within 30 days after the end of the applicable quarter. Roche shall
maintain, and cause its Affiliates and Third Parties acting for its account to
maintain, books of account and complete and accurate records pertaining to Third
Party Costs in sufficient detail to permit confirmation of the correct
calculation of these Third Party Costs. Upon the request by Maxim, Roche at
Maxim's expense, agrees to instruct its independent accounting firm to perform
such additional auditing and accounting procedures as are necessary to enable
such accounting firm to confirm to Maxim the correct calculation of Third Party
Costs; it being understood that such auditing shall not be requested to be
performed more frequently than once per calendar year nor more frequently than
once with respect to records covering any specific period of time and shall not
commence later than two years following the end of the period requested to be
audited. The failure of Maxim to request verification of any calculation of
Third Party Costs during the period when records have to be retained shall be
considered acceptance of the accuracy of such reporting by Maxim. Roche will
promptly pay to Maxim any amounts that Maxim overpaid as determined by the
independent accounting firm.

          (b) Maxim will bear all costs incurred by Maxim in connection with
Maxim's responsibilities under Sections 3.1(d) and 3.2(a).

          (c) Roche will bear all costs incurred in connection with the Clinical
Trials, except as specifically provided in Section 3.3(a) and (b). Roche and
Maxim will equally share the cost of maintaining any registrations for the
Combination Therapy during the Agreement Period.

     3.4  REPORTS AND ACCESS.

          (a) During the course of the Clinical Trials, Roche will provide to
Maxim information, data and reports with regard to the Clinical Trials as
appropriate to enable Maxim to monitor the progress of the Clinical Trials on a
monthly basis. In addition, Roche will provide to Maxim clinical data,
statistical reports and related documentation derived from the Clinical Trials
promptly following the time that such data or reports are available to or
prepared by Roche.

          (b) Roche's personnel will make periodic visits to the sites at which
the Clinical Trials are conducted. Roche will provide Maxim with schedules of
the visits relating to such Clinical Trials. Maxim personnel may, upon
reasonable notice, accompany Roche's personnel on such site visits.

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          (c) Each party will promptly notify the other party of inspections by
the FDA or any other governmental or regulatory authority relating to the
Clinical Trials of which it becomes aware. Maxim will have the right to be
present at any such inspections, and the parties will cooperate in preparing any
responses which may be required. In connection with any such inspection, Roche
and Maxim will provide representatives of FDA with access to any of its
facilities, personnel, documentation, procedures, equipment, records and
activities involved in the Clinical Trials or otherwise required for Regulatory
Approval.

          (d) The party that filed the IND and NDA will hold the IND and NDA but
will give the non-filing party access to all IND, NDA and related filings and
underlying data, reports and information associated with the Combination Therapy
and the Clinical Trials which have been generated during the term of this
agreement. Each party will be entitled to use such data, reports and information
for its own filings, if any; provided that neither party will use such data,
reports and information relating to the Combination Therapy for any filing to
the FDA without the other party's prior written approval, which will not be
unreasonably withheld, or unless required by the FDA.

     3.5  EXCLUSIVITY.

          (a) During the Collaboration Period, Maxim agrees not to conduct,
or support the conduct, of any clinical trial of Maxamine and any pegylated
interferon (other than Pegasys) used in combination as a treatment for HCV or
for RCC and Other Cancer Indication, provided that such exclusivity agreement
will terminate if (a) Roche does not obtain approval to market Pegasys in the
United States by [...***...]; or (b) worldwide sales of Pegasys do not
represent at least [...***...]% of the global market for pegylated interferon
in HCV by [...***...], and at least [...***...]% of the global market for
pegylated interferon in HCV by [...***...], based on IMS data; or (c) the
objectives regarding IND filing deadlines, Clinical Trial commencement date
deadlines, or NDA filing deadlines detailed in Exhibit C are delayed by more
than three months.

          (b) Maxamine must be approved and marketed in the United States by
[...***...] or Roche may terminate this Agreement upon 30-day written notice
to Maxim.

4.   MARKETING

     4.1 STRATEGIC MARKETING EFFORTS. The parties agree that, with respect to
the Combination Therapy, Maxim will be responsible for the marketing and sales
of Maxamine and Roche will be responsible for the marketing and sales of Pegasys
and Ribavirin. Maxim and Roche agree that they will cooperate in the development
of promotional materials which reference Maxamine and Pegasys and Ribavirin, and
in the training of their respective sales forces in order to maximize the
opportunity to market and sell Maxamine, and Pegasys and Ribavirin,
respectively, as a Combination Therapy. Each party will bear the costs of
training of its own sales force. Each party's respective package insert will
refer to the brand name of the other party's components of the Combination
Therapy.

     4.2 RIGHT OF FIRST REFUSAL. Maxim agrees that prior to entering into any
Maxamine Marketing Agreement with any Third Party in any Territory it will offer
to Roche the right of first refusal to enter into an agreement with Maxim under
terms that are substantially equivalent to the terms of the proposed agreement
with such Third Party. Prior to entering into a Maxamine

*Confidential Treatment Requested*

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Marketing Agreement with any Third Party in any Territory, Maxim will
communicate to Roche a copy of the proposed term sheet negotiated under arms'
length conditions for this agreement, and Roche will have 45 days to notify
Maxim in writing if Roche is electing to enter into such Maxamine Marketing
Agreement for that Territory under terms that are substantially equivalent to
the terms which have been negotiated by Maxim with the Third Party. In the event
that Roche makes the aforementioned election on a timely basis, then Maxim and
Roche agree to negotiate and complete a Maxamine Marketing Agreement consistent
with the proposed terms within 30 days of such election.

     4.3 COMPLIANCE WITH APPLICABLE LAWS. Roche will comply with all Applicable
Laws with respect to its promotion of Pegasys as part of the Combination
Therapy. Maxim will comply with all Applicable Laws with respect to its
promotion of Maxamine as part of the Combination Therapy. Each party will also
ensure that any Third Parties that are involved in the marketing, sale or
distribution of the Combination Therapy through any contract or arrangement with
such party comply with the material provisions of this Agreement, as well as
with all Applicable Laws with respect to the promotion of the Combination
Therapy.

5.   INTELLECTUAL PROPERTY RIGHTS

     5.1 OWNERSHIP. Except as otherwise set forth herein, ownership of any
inventions (whether or not patentable) that are conceived of by any employee or
agent of Maxim or Roche and arise from the Clinical Trials or other activities
performed in accordance with this Agreement ("Inventions") shall be determined
in accordance with United States laws of inventorship and any contractual
obligations of the inventors as to the assignment of such inventions,

     5.2 MAXIM INTELLECTUAL PROPERTY. Maxim will own all right, title and
interest in and to Maxamine and all Maxim Intellectual Property. All Inventions
arising from the Clinical Trials or other activities performed in accordance
with this Agreement that comprise enhancements or improvements to the Maxim
Intellectual Property, whether made solely by Maxim, solely by Roche or jointly
by Maxim and Roche, will be owned solely by Maxim. Roche hereby irrevocably
assigns to Maxim all of its right, title and interest in and to any such
Inventions and intellectual property rights therein.

     5.3 ROCHE INTELLECTUAL PROPERTY. Roche will own all right, title and
interest in and to Pegasys, Ribavirin and all Roche Intellectual Property. All
Inventions arising from the Clinical Trials or other activities performed in
accordance with this Agreement that comprise enhancements or improvements to the
Roche Intellectual Property, whether made solely by Roche, solely by Maxim or
jointly by Roche and Maxim, will be owned solely by Roche. Maxim hereby
irrevocably assigns to Roche all of its right, title and interest in and to any
such Inventions and intellectual property rights therein.

     5.4 LICENSE. Each party will retain a royalty-free, fully paid up,
worldwide, perpetual license under any Invention (and any intellectual property
rights covering such Invention) owned by the other party to sell its respective
product (Pegasys and Ribavirin on the part of Roche and Maxamine on the part of
Maxim) as part of a Combination Therapy for the therapeutic indications
developed in the Clinical Trials.

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     5.5 ENFORCEMENT. Roche will act in good faith to inform Maxim of any
infringement of which Roche becomes aware by any Third Party of the Maxim
Intellectual Property. Maxim will act in good faith to inform Roche of any
infringement of which Maxim becomes aware of Roche Intellectual Property. Both
parties agree not to infringe or encourage the infringement of the Intellectual
Property of the other party.

6.   CONFIDENTIALITY

     6.1 TREATMENT OF CONFIDENTIAL INFORMATION. During the Agreement Period and
for five years thereafter, a party receiving or gaining access to Confidential
Information, as defined below, of the other Party will (i) maintain in
confidence such Confidential Information to the same extent the receiving party
maintains its own proprietary information, (ii) not disclose such Confidential
Information to any Third Party without prior written consent of the disclosing
party, and (iii) not use such Confidential Information for any purpose except as
permitted by this Agreement. A party shall have no obligations under this
Section 6 with respect to any portion of such Confidential Information which:

          (a) is publicly disclosed by the disclosing party, either before or
after it becomes known to the receiving party; or

          (b) was known to the receiving party, without obligation to keep it
confidential, prior to when it was received from the disclosing party; or

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

          (d) has been independently developed by the receiving party without
the aid, application or use of Confidential Information; or

          (e) is required by law to be disclosed, but then only to the limited
extent of such legally required disclosure; and provided that the disclosing
party is notified reasonably in advance of such disclosure and that the
receiving party cooperates fully with the disclosing party in attempting to
obtain confidential treatment of such Confidential Information.

     6.2 PUBLICITY. The parties agree that the public announcement of the
execution of this Agreement shall be substantially in the form of the press
release attached as Exhibit D. Any other publication, news release or other
public announcement relating to this Agreement or to the performance hereunder,
shall first be reviewed and approved by both parties, which approval shall not
be unreasonably withheld or delayed; provided, however, that any disclosure
which is required by law as advised by the disclosing party's counsel may be
made without the prior consent of the other party, although the other party
shall be given prompt notice of any such legally required disclosure and to the
extent practicable shall provide the other party an opportunity to comment on
the proposed disclosure. In this regard, the parties recognize that Maxim is a
publicly held biotechnology company, Maxamine is among Maxim's first potential
products and Maxim will need to provide information regarding the status of
Maxamine, its clinical trials, and clinical trial results to the investment
community from time to time.

                                       11
<PAGE>

     6.3 PUBLICATIONS. The parties will cooperate in appropriate publication of
the results of the Clinical Trials, but subject to the predominating interest to
obtain patent protection for any patentable subject matter. To this end, prior
to any public disclosure of such results, the party proposing disclosure will
send the other party a copy of the information to be disclosed, and shall allow
the other party 30 days from the date of receipt in which to determine whether
the information to be disclosed contains subject matter for which patent
protection should be sought prior to disclosure, or otherwise contains
Confidential Information of the reviewing party. The party proposing disclosure
will be free to proceed with the disclosure unless prior to the expiration of
such 30-day period the non-disclosing party notifies the other party that the
disclosure contains subject matter for which patent protection should be sought
or Confidential Information of the non-disclosing party, and the party proposing
publication will then delay public disclosure of the information for an
additional period of up to three months to permit the preparation and filing of
a patent application on the subject matter to be disclosed or for the parties to
determine a mutually acceptable modification to such publication to protect the
Confidential Information of the non-disclosing party adequately. The party
proposing disclosure will thereafter be free to publish or disclose the
information. The determination of authorship for any paper will be in accordance
with accepted scientific practice as determined by the JDC. Both parties shall
have the right to present the Clinical Trial results, with requests for such
presentations to be approved by the JDC.

     6.4 TERMS OF THE AGREEMENT. The parties agree that the material terms of
this Agreement will be considered Confidential Information of both parties.
Notwithstanding the foregoing, each party shall have the right to disclose the
material terms of this Agreement in confidence to any bona fide potential
investor, investment banker, acquirer, merger partner or other potential
financial partner, and where reasonably practicable, shall obtain an adequate
agreement of confidentiality consistent with the terms of this Agreement. A
party that makes any disclosure pursuant to the preceding sentence will notify
the other party of such disclosure.

7.   REPRESENTATIONS; DISCLAIMERS

     7.1 MUTUAL AUTHORITY. Each party represents and warrants to the other party
that (a) it has the authority and right to enter into and perform this
Agreement, and (b) its execution, delivery and performance of this Agreement
does not conflict with the terms of any other agreement to which it is a party
or by which it is bound.

     7.2 DISCLAIMER. The parties understands that Maxamine, Pegasys and
ribavirin are the subject of ongoing clinical research and development and that
no assurance can be made with regard to the safety or usefulness of Maxamine,
Pegasys or ribavirin or the Combination Therapy. Except as expressly set forth
in Section 3.2(a) and (b) and Section 7.1, NEITHER PARTY MAKES ANY
REPRESENTATION NOR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.

     7.3 LIMITATION OF LIABILITY. SUBJECT TO THE PARTIES' INDEMNIFICATION
OBLIGATIONS UNDER SECTION 8, NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY
INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL

                                       12
<PAGE>

DAMAGES, INCLUDING LOST PROFITS, REGARDLESS OF WHETHER THE CLAIM IS BASED ON
CONTRACT, TORT, WARRANTY, OR OTHERWISE, EVEN IF THE OTHER PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES.

8.   INDEMNIFICATION.

     8.1 BY MAXIM. Maxim will indemnify, defend and hold Roche, its Affiliates
and their officers, agents and employees harmless from and against any and all
Third Party claims, damages, losses, costs and expenses, including reasonable
attorneys' fees (collectively, "Claims") arising directly or indirectly from (a)
the manufacture, use, handling, storage, transport, distribution, sale or other
disposition of Maxamine by Maxim or its Affiliates, agents or sublicensees, or
(b) any breach of any of Maxim's warranties under Section 3.2(a) or 7.1 hereof,
except to the extent that such Claims result from negligence or willful
misconduct of Roche.

     8.2 BY ROCHE. Roche will indemnify, defend and hold Maxim, its Affiliates
and their officers, agents and employees harmless against any Claim arising
directly or indirectly from (a) the manufacture, use, handling, storage,
transport, distribution, sale or other disposition of Pegasys or ribavirin by
Maxim or its Affiliates, agents or sublicensees, , or (b) any breach of any of
Roche's warranties under Section 3.2(b) or 7.1, except to the extent that such
Claims result from negligence or willful misconduct of Maxim.

     8.3          PROCEDURE.

          (a) In the event that a party receives notice of or becomes aware of a
Claim in respect of which it may seek indemnity hereunder from the other party,
the indemnified party will promptly provide the indemnifying party with notice
of such Claim and of its intention to seek indemnity.

          (b) The indemnifying party will have the right at its option and its
own expense, to defend the indemnified party against, negotiate, settle or
otherwise deal with any such Claim, provided that the indemnifying party will
not enter into any settlement or compromise of any such Claim which could lead
to liability or create any financial or other obligation on the part of the
indemnified party without the indemnified party's prior written consent. The
indemnified party may participate in the defense of any Claim with counsel of
its own choice and its own expense. The parties agree to cooperate fully with
each other in connection with the defense negotiation or settlement of any such
Claims.

          (c) In the event that the indemnifying party does not undertake the
defense, compromise or settlement of a Claim, the indemnified party will have
the right to control the defense or settlement of such Claim with counsel of its
choosing at the expense of the indemnifying party, provided, however, that the
indemnified party will not settle or compromise any such claim without the
indemnifying party's prior written consent, which consent will not be
unreasonably withheld.

                                       13
<PAGE>

9.   TERM AND TERMINATION

     9.1 AGREEMENT PERIOD. The term of this Agreement will commence as of the
Effective Date and will expire five years after completion or termination of the
last Clinical Trials, unless earlier terminated pursuant to Section 3.5(b) or
9.2.

     9.2 TERMINATION. This Agreement may be terminated (a) by the parties by
mutual agreement, or (b) by either party upon written notice to the other party
in the event the other party has breached a material term of this Agreement and
has not cured such breach within 60 days after receiving notice of such breach
from the non-breaching party.

     9.3 SURVIVAL. All rights and obligations of the parties under this
Agreement will terminate upon termination or expiration of this Agreement,
except that (a) termination or expiration of this Agreement will not relieve
either party of any liability or obligation that accrued hereunder prior to the
effective date of such termination or expiration, and (b) the provisions of
Sections 3.2(c), 3.3 (excluding the first three sentences and only for the
two-year period following the date of such termination or expiration), 3.4(d),
5, 6.1, 7.2, 7.3, 8, 9.3, 9.4, 10 and 11 will survive any termination or
expiration of this Agreement.

     9.4 REMEDIES. In the event of any breach of any provision of this
Agreement, in addition to the termination rights set forth herein, each party
shall have all other rights and remedies at law or equity to enforce this
Agreement.

10.  DISPUTE RESOLUTION

     10.1 DISPUTES. The parties recognize that disputes as to certain matters
may from time to time arise which relate to either party's rights and/or
obligations hereunder. It is the objective of the parties to establish
procedures to facilitate the resolution of such disputes in an expedient manner
by mutual cooperation and without resort to arbitration. To accomplish this
objective, the parties agree to follow the procedures set forth in Section 10.2
if and when such a dispute arises between the parties.

     10.2 PROCEDURES. If any dispute arises between the parties relating to the
interpretation, breach or performance of this Agreement or the grounds for the
termination of this Agreement, and the parties cannot resolve the dispute within
30 days of a written request by either party to the other party, the parties
agree to hold a meeting, attended by the Chief Executive Officer of Maxim and
the Head of Global Development and/or the Head of Strategic Marketing of Roche
or their assignees, to attempt in good faith to negotiate a resolution of the
dispute prior to pursuing other available remedies. If, within 60 days after
such written request, the parties have not succeeded in negotiating a resolution
of the dispute, such dispute shall be submitted to final and binding arbitration
under the then current commercial rules and regulations of the American
Arbitration Association ("AAA") relating to voluntary arbitrations. The
arbitration proceedings shall be held in New Jersey. The arbitration shall be
conducted by three arbitrators, who are knowledgeable in the subject matter at
issue in the dispute and who shall be selected by mutual agreement of the
parties or, failing such agreement, shall be selected in accordance with the AAA
rules. Each party shall initially bear its own costs and legal fees associated
with such arbitration. The prevailing party in any such arbitration shall be
entitled to

                                       14
<PAGE>

recover from the other party the reasonable attorneys' fees, costs and expenses
incurred by such prevailing party in connection with such arbitration. The
decision of the arbitrator shall be final and binding on the parties. The
arbitrator shall prepare and deliver to the parties a written, reasoned opinion
conferring its decision. Judgment on the award so rendered may be entered in any
court having competent jurisdiction thereof.

11.  MISCELLANEOUS

     11.1 NO WAIVER. Failure of either party to insist upon strict observance of
or compliance with any of the terms of this Agreement in one or more instances
will not be deemed to be a waiver of its right to insist upon such observance or
compliance with those or other terms of this Agreement with respect to
subsequent breaches of any of the terms of this Agreement.

     11.2 NOTICES. All notices and demands required or permitted hereunder will
be in writing and delivered (a) by certified or registered mail, postage
prepaid, (b) by a nationally recognized express mail service, (c) by hand
delivery, or (d) by facsimile, with receipt confirmed, at the following
addresses:

                  If to Roche:    Roche Pharmaceuticals Inc
                                  340 Kingsland Street
                                  Building 85/8th Floor
                                  Nutley, New Jersey  07110
                                  Attn: Frederick C. Kentz, Corporate Secretary
                                  Tel: (+1 973) 235-5000
                                  Fax: (+1 973) 235-3500

                                  F-Hoffmann-La Roche Ltd.
                                  Law Department
                                  Grenzacherstrasse 123
                                  CH-4070 Basel
                                  Switzerland
                                  Tel: +41 61 688 11 11

                  If to Maxim:    Maxim Pharmaceuticals, Inc.
                                  8899 University Center Lane
                                  San Diego, California 92122
                                  Attn: Chief Executive Officer
                                  Tel: (858) 453-4040
                                  Fax: (858) 453-4005

or to such other address as to which either part may notify the other. Notice
will be deemed to be effective three (3) days after mailing, or upon receipt if
hand delivered or sent by express mail service or by facsimile.

     11.3 ASSIGNMENT. Except as expressly provided hereunder, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the prior written consent of the other party (which consent shall
not be unreasonably withheld); PROVIDED,

                                       15
<PAGE>

HOWEVER, that either party may assign this Agreement and its rights and
obligations hereunder without the other party's consent (a) in connection with
the transfer or sale of all or substantially all of the business of such party
to which this Agreement relates to a Third Party, whether by merger, sale of
stock, sale of assets or otherwise, or (b) to any Affiliate. Notwithstanding the
foregoing, any such assignment to an Affiliate shall not relieve the assigning
party of its responsibilities for performance of its obligations under this
Agreement. The rights and obligations of the parties under this Agreement shall
be binding upon and inure to the benefit of the successors and permitted assigns
of the parties. Any assignment not in accordance with this Section 11.3 shall be
void.

     11.4 GOVERNING LAW. This Agreement is governed by the laws of the State of
California as applied to agreements executed and to be performed entirely in the
State of California by residents of the State of New Jersey.

     11.5 SEVERABILITY. In the event any one or more of the provisions of this
Agreement should for any reason be held by any court of authority having
jurisdiction over eider the parties or this Agreement to be invalid, illegal or
unenforceable, such provision or provisions will be validly reformed so as to
nearly approximate the intent of the parties as possible or, if such provision
or provisions cannot be validly reformed, will be divisible and deleted in such
jurisdiction; otherwise, this Agreement will continue in full force effect.

     11.6 INDEPENDENT CONTRACTORS. Nothing in this Agreement is intended or will
be deemed to constitute a partnership, agency, employer-employee or joint
venture relationship between the parties. All activities by the parties
hereunder will be performed by them as independent contractors. Neither party
will incur any debts or make any commitments for the other party, except the
extent specifically provided herein.

     11.7 ENTIRE AGREEMENT; AMENDMENT. This Agreement (including the exhibits
attached hereto) sets forth all of the covenants, promises, agreements,
warranties, representations, conditions and understandings between the parties
hereto with respect to the subject matter hereof and supersedes and terminates
all prior agreements and understandings between the Parties. There are no
covenants, promises, agreements, warranties, representations conditions or
understandings, either oral or written, between the parties other than as set
forth herein. No subsequent alteration, amendment, change or addition to this
Agreement shall be binding upon the parties hereto unless reduced to writing and
signed by the respective authorized officers of the parties.

     11.8 FORCE MAJEURE. Neither party shall be held liable or responsible to
the other Party nor be deemed to have defaulted under or breached this Agreement
for failure or delay in fulfilling or performing any term of this Agreement
(other than non-payment) when such failure or delay is caused by or results from
causes beyond the reasonable control of the affected party, including, but not
limited to, fire, floods, embargoes, war, acts of war (whether war be declared
or not), insurrections, riots, civil commotions, strikes, lockouts or other
labor disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or the other party.

                                       16
<PAGE>

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

                                       17
<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the day and year
indicated below.

<TABLE>
<CAPTION>
F. HOFFMANN-LA ROCHE LTD.                             MAXIM PHARMACEUTICALS, INC.

<S>                                                   <C>
By: /s/ BERTRAND LEHUU                                By: /s/ LARRY G. STAMBAUGH
   --------------------------------------                ------------------------------------------
Title: Licensing Manager                              Title: Chairman and Chief Executive Officer
      -----------------------------------                   ---------------------------------------
Date: August 7, 2000                                  Date: August 2, 2000
     ------------------------------------                  ----------------------------------------
</TABLE>

By: /s/ PASCAL BUERGIN
   --------------------------------------
Title: Legal Counsel
      -----------------------------------
Date: August 7, 2000
     ------------------------------------

HOFFMANN-LA ROCHE INC.

By: /s/ FREDERICK C. KENTZ
   --------------------------------------
Title: Vice President & General Counsel
      -----------------------------------
Date:  August 7, 2000
     ------------------------------------

<PAGE>

                                    EXHIBIT A

                               TRIAL DESIGNS - HCV

[The Agreement contemplates that this Exhibit will be agreed upon by the
parties at a future date. As a result, this Exhibit has not been prepared or
agreed upon by the parties as of the date the Agreement was executed and
at the time this Exhibit was filed with the SEC.]
<PAGE>

                                    EXHIBIT B

                 TRIAL DESIGNS - RCC AND OTHER CANCER INDICATION

[The Agreement contemplates that this Exhibit will be agreed upon by the
parties at a future date. As a result, this Exhibit has not been prepared or
agreed upon by the parties as of the date the Agreement was executed and
at the time this Exhibit was filed with the SEC.]

<PAGE>

                                    EXHIBIT C

                               TIMELINE OBJECTIVES

<TABLE>
<CAPTION>
                                                                Clinical Trial             NDA
Indication                                  IND Filing           Commencement            Filing
----------                                  ----------           ------------            ------

<S>                                        <C>                 <C>                      <C>
1ST HCV CLINICAL TRIAL                       [...***...]           [...***...]           [...***...]
(OR INITIAL SAFETY OR DOSE FINDING STUDY LEADING TO IND
ACCEPTANCE)

2ND HCV CLINICAL TRIAL                       [...***...]           [...***...]           [...***...]

RCC                                          [...***...]           [...***...]           [...***...]
(OR INITIAL SAFETY OR DOSE FINDING STUDY LEADING TO IND
ACCEPTANCE)

OTHER CANCER INDICATION                      [...***...]           [...***...]           [...***...]
</TABLE>

*Confidential Treatment Requested*

<PAGE>

                                    EXHIBIT D

                                  PRESS RELEASE

                                     [Logo]

Contacts:
Larry G. Stambaugh                                Ethan Denkensohn (Investors)
Chairman, President and CEO                       Kathy Jones, Ph.D. (Media)
Dale A. Sander                                    Burns McClellan
Chief Financial Officer                           (212) 213-0006
(858) 453-4040

                  MAXIM PHARMACEUTICALS AND HOFFMANN - LA ROCHE
                ENTER INTO SIGNIFICANT DEVELOPMENT COLLABORATION

      - MAXIM AND ROCHE EXPECT COLLABORATION TO LEAD TO IMPORTANT ADVANCES
                  IN THE TREATMENT OF CANCER AND HEPATITIS C -

San Diego, CA, August 10, 2000 - Maxim Pharmaceuticals (Nasdaq NM: MAXM, SSE:
MAXM) announced that it has entered into a comprehensive development
collaboration with F. Hoffmann - La Roche Ltd, Switzerland and its US branch
Hoffmann - La Roche, Inc. for the development of Maxim's lead drug MAXAMINE-R-
(histamine dihydrochloride) in combination with the investigational compound
Pegasys-R-, Roche's pegylated interferon-alpha agent. Both parties expect that
the combination of MAXAMINE and Pegasys will lead to important advances in the
treatment of cancer and hepatitis C.

"Roche clearly represents a great development partner for Maxim due to the
success they have had with the clinical development of Pegasys, and the fact
that they share our commitment to advancing the treatment of hepatitis C and
cancer," said Larry G. Stambaugh, Maxim's Chairman and Chief Executive
Officer. "This collaboration not only produces a substantial strategic and
economic benefit to us, it allows us to accelerate and expand the clinical
development of MAXAMINE."

"We are excited about the potential contribution that the combination of
MAXAMINE and Pegasys may make to the treatment of hepatitis C and the targeted
cancers," said Simon Pedder, Ph.D., Pharmaceutical Business Director for
Pegasys. "Hepatitis C in particular is a substantial unmet need. Our hope is
that the addition of MAXAMINE to Pegasys, an agent that has produced promising
clinical data in hepatitis C as a monotherapy, will result in a combination
therapy that represents a further improvement in patient care. In addition, the
data from the Phase III trial of MAXAMINE in advanced malignant melanoma
encouraged us to move aggressively forward with the development of the
Pegasys/MAXAMINE combination treatment in cancer."

Under the agreement, Maxim and Roche will undertake clinical trials and other
activities designed to seek regulatory approval of the combination of MAXAMINE
and Pegasys for the treatment of hepatitis C and certain cancers. Specifically,
the collaboration program will include two Phase III trials of the MAXAMINE and
Pegasys combination for the treatment of hepatitis C, one Phase III trial of
MAXAMINE and Pegasys for the treatment of advanced-stage renal cell carcinoma,
and an additional Phase III trial in another cancer to be selected by the two
companies. Roche will perform the management, monitoring and data management of
the trials

<PAGE>

at its own cost and Roche and Maxim will share equally the third party costs of
the trials. Each company will retain marketing responsibilities and revenues for
their respective drugs, although under the collaboration agreement they will
cooperate in the training of their respective sales forces.

The U.S. Phase III trial of MAXAMINE for the treatment of malignant melanoma was
completed in March 2000 and the related New Drug Application was filed by Maxim
with the U.S. Food and Drug Administration in July 2000. In addition, interim
24-week results from a Phase II dose-ranging hepatitis C study showed that the
combination of the optimal dosing regimen of MAXAMINE and interferon-alpha
achieved a complete viral response in 69 percent of all patients, compared to
the 29 percent or less response that is commonly observed in patients treated
with interferon-alpha alone.

MAXAMINE MODE OF ACTION

Research suggests that a universal mechanism in the human body suppresses the
capacity of the immune system to detect and destroy tumor cells or virally
infected cells in patients with cancer and chronic infectious diseases. MAXAMINE
is designed to reverse this immune suppression, thereby enhancing the
effectiveness of immunotherapy, a class of therapies that employ the body's
immune system to fight these diseases. MAXAMINE protects critical immune cells
and is administered in combination with stimulators of these same immune cells
(cytokines such as interferon-alpha and IL-2). More than 1,200 patients have
been treated in the Maxim's completed and ongoing clinical trials.

In addition to the U.S. Phase III trial for the treatment of malignant melanoma
completed in March 2000, MAXAMINE is currently being tested in two additional
Phase III cancer clinical trials in 12 countries for malignant melanoma and
acute myelogenous leukemia. Phase II trials of MAXAMINE are also underway for
the treatment of hepatitis C and advanced renal cell carcinoma. MAXAMINE is an
investigational drug and safety and efficacy have not been established at this
time. However, clinical trial results to date suggest that MAXAMINE THERAPY, the
administration of MAXAMINE in combination with cytokines, is a safe, at-home
treatment that may improve patient survival.

MAXIM OVERVIEW

Maxim Pharmaceuticals is a late-stage biopharmaceutical company developing
advanced drugs and therapies for cancer, infectious diseases, degenerative
diseases and topical disorders. In addition to MAXAMINE, the Company has also
developed product candidates based on its MAXDERM-TM- technology that are
designed for the treatment of medical conditions for which topical therapy is
appropriate such as oral mucositis, herpes, decubitus ulcers, shingles, burns
and related conditions. Further, Maxim is developing small-molecule inhibitors
and activators of caspases, key enzymes that modulate and carry out the cellular
signaling pathways involved in programmed cell death, also known as apoptosis.
Compounds that can either inhibit caspases or induce caspases may form the basis
for important new drugs for a wide variety of disease targets, such as cancer,
cardiovascular disease and other degenerative diseases.

THIS NEWS RELEASE CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS
AND UNCERTAINTIES. SUCH FORWARD-LOOKING STATEMENTS INCLUDE STATEMENTS REGARDING
THE EFFICACY AND

<PAGE>

INTENDED UTILIZATION OF MAXAMINE, MAXDERM AND THE CASPASE
MODULATOR COMPOUNDS, AND REGARDING THE COMPANY'S CLINICAL TRIALS. SUCH
STATEMENTS ARE ONLY PREDICTIONS AND THE COMPANY'S ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM THOSE ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS. FACTORS
THAT MAY CAUSE SUCH DIFFERENCES INCLUDE THE RISK THAT PRODUCTS THAT APPEARED
PROMISING IN EARLY RESEARCH AND CLINICAL TRIALS DO NOT DEMONSTRATE SAFETY OR
EFFICACY IN LARGER-SCALE CLINICAL TRIALS, THE RISK THAT THE COMPANY WILL NOT
OBTAIN APPROVAL TO MARKET ITS PRODUCTS, AND THE RISKS ASSOCIATED WITH THE
DEPENDENCE UPON COLLABORATIVE PARTNERS. THESE FACTORS AND OTHERS ARE MORE FULLY
DISCUSSED IN THE COMPANY'S PERIODIC REPORTS AND OTHER FILINGS WITH THE
SECURITIES AND EXCHANGE COMMISSION.

Note: MAXAMINE-Registered Trademark-, MAXAMINE THERAPY-Trademark-,
MAxDerm-Trademark-, and the Maxim logo are trademarks of the Company.

Editor's Note:  This release is also available on the
Internet at: http://www.maxim.com.Prepared by MERRILL CORPORATION www.edgaradvantage.com

QuickLinks
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  HORIZON PHARMACIES, INC.
       2000 STOCK OPTION PLAN
       EFFECTIVE JULY 1, 2000         

  TABLE OF CONTENTS         

	1.	 	Purpose	 	1
	 

2.	 
 	 

Definitions	 
 	 

1
	 

3.	 
 	 

Administration	 
 	 

3
	 	 	(a)  Authority of the Committee	 	3
	 	 	(b)  Manner of Exercise of Committee Authority	 	3
	 	 	(c)  Limitation of Liability	 	4
	 

4.	 
 	 

Stock Subject to Plan	 
 	 

4
	 	 	(a)  Overall Number of Shares Available for Delivery	 	4
	 	 	(b)  Application of Limitation to Grants of Options	 	4
	 	 	(c)  Availability of Shares Not Delivered under Options	 	4
	 	 	(d)  Stock Offered	 	4
	 

5.	 
 	 

Eligibility; Per Person Option Limitations	 
 	 

5
	 

6.	 
 	 

Specific Terms of Options	 
 	 

5
	 	 	(a)  General	 	5
	 	 	(b)  Options	 	5
	 

7.	 
 	 

Certain Provisions Applicable to Options	 
 	 

6
	 	 	(a)  Stand-Alone, Additional and Substitute Options	 	6
	 	 	(b)  Term of Options	 	6
	 	 	(c)  Form and Timing of Payment under Options; Deferrals	 	6
	 	 	(d)  Exemptions from Section 16(b) Liability	 	7
	 	 	(e)  Non-Competition Agreement	 	7
	 

8.	 
 	 

Performance Awards	 
 	 

7
	 	 	(a)  Performance Conditions	 	7
	 	 	(b)  Performance Awards Granted to Designated Covered Employees	 	7
	 	 	(c)  Written Determinations	 	9
	 	 	(d)  Status of Section 8(b) Performance Awards under Code Section 162(m)	 	9
	 

9.	 
 	 

Recapitalization or Reorganization	 
 	 

9
	 	 	(a)  Existence of Plans and Options	 	9
	 	 	(b)  Subdivision of Consolidation of Shares	 	10
	 	 	(c)  Corporate Restructuring	 	10
	 	 	(d)  Additional Issuances	 	10
	 

10.	 
 	 

General Provisions	 
 	 

11
	 	 	(a)  Restricted Securities	 	11
	 	 	(b)  Limits on Transferability; Beneficiaries	 	11
	 	 	(c)  Taxes	 	11
	 	 	(d)  Changes to the Plan and Options	 	11
	 	 	(e)  Limitation on Rights Conferred under Plan	 	12
	 	 	(f)  Unfunded Status of Options	 	12
	 	 	(g)  Nonexclusivity of the Plan	 	12
	 	 	(h)  Fractional Shares	 	12
	 	 	(i)  Governing Law	 	12
	 	 	(j)  Other Laws	 	12
	 	 	(k)  Plan Effective Date and Shareholder Approval	 	13

2

 

  HORIZON PHARMACIES, INC.
       2000 STOCK OPTION PLAN
       EFFECTIVE JULY 1, 2000         

    1.  Purpose.  The purpose of the HORIZON Pharmacies, Inc. 2000 Stock Option Plan (the "Plan") is
to provide a means through which HORIZON Pharmacies, Inc. (the "Company"), and its subsidiaries may attract and retain able persons as the employees of the Company and to provide a means whereby those
employees upon whom the responsibilities of the successful administration and management of the Company rest, and whose present and potential contributions to the welfare of the Company are of
importance, can acquire and maintain stock ownership, thereby strengthening their concern for the welfare of the Company and their desire to remain in its employ. A further purpose of the Plan is to
provide such employees with additional incentive and reward opportunities designed to enhance the profitable growth of the Company. Accordingly, the Plan provides for granting Incentive Stock Options
and options which do not constitute Incentive Stock Options, as is best suited to the circumstances of the particular employee as provided herein. 

    2.  Definitions.  For purposes of the Plan, the following terms shall be defined as set forth below, in
addition to such terms defined in Section 1 hereof: 

        (a)  "Acquiring
Person" means Acquiring Person as defined in Section 9 of the Plan. 

        (b)  "Beneficiary"
means one or more persons, trusts or other entities which have been designated by a Participant in his or her most recent written
beneficiary designation filed with the Committee to receive the benefits specified under the Plan upon such Participant's death or to which Options or other rights are transferred if and to the extent
permitted under Section 10(b) hereof. If, upon a Participant's death, there is no designated Beneficiary or surviving designated Beneficiary, then the term Beneficiary means the persons, trusts or
entities entitled by will or the laws of descent and distribution to receive such benefits. 

        (c)  "Beneficial
Owner" shall have the meaning ascribed to such term in Rule 13d-3 under the Exchange Act and any successor to such Rule. 

        (d)  "Board"
means the Company's Board of Directors. 

        (e)  "Change
in Control" means Change in Control as defined in Section 9 of the Plan. 

        (f)  "Change
in Control Price" means the amount calculated in accordance with Section 9 of the Plan. 

        (g)  "Code"
means the Internal Revenue Code of 1986, as amended from time to time, including regulations thereunder and successor provisions and
regulations thereto. 

        (h)  "Committee"
means a committee of two or more directors designated by the Board to administer the Plan; provided, however, that, unless otherwise
determined by the Board, the Committee shall consist solely of two or more directors, each of whom shall be (i) a "nonemployee director" within the meaning of Rule 16b-3 under the
Exchange Act, unless administration of the Plan by "non-employee directors" is not then required in order for exemptions under Rule 16b-3 to apply to transactions under the Plan, and (ii) an
"outside director" as defined under Code Section 162(m), unless administration of the Plan by "outside directors" is not then required in order to qualify for tax deductibility under Code Section
162(m). 

        (i)  "Covered
Employee" means an Eligible Person who is a Covered Employee as specified in Section 8(d) of the Plan. 

        (j)  "Effective
Date" means July 1, 2000. 

        (k)  "Eligible
Person" means each Executive Officer and other officers and employees of the Company or of any subsidiary, and other persons who provide
services to the Company or any of its 

subsidiaries including directors of the Company. An employee on leave of absence may be considered as still in the employ of the Company or a subsidiary for purposes of eligibility for participation
in the Plan. 

        (l)  "Exchange
Act" means the Securities Exchange Act of 1934, as amended from time to time, including rules thereunder and successor provisions
and rules thereto. 

        (m)  "Executive
Officer" means an executive officer of the Company as defined under the Exchange Act. 

        (n)  "Fair
Market Value" of a share of Stock on a given day means, if the Stock is listed on an established exchange or exchanges, the closing sales
price of a share of Stock as reported on such stock exchange or exchanges if such date is a business day and if such date is not a business day the preceding business day; or if not so reported, the
average of the bid and asked prices, as reported on the National Association of Securities Dealers Automated Quotation System if such date is a business day and if such date is not a business day the
preceding business day. If the price of a share of Stock is not so quoted, the Fair Market Value shall be determined by the Committee taking into account all relevant facts and circumstances. 

        (o)  "Incentive
Stock Option" or "ISO" means any Option intended to be and designated as an incentive stock option within the meaning of Code Section
422 or any successor provision thereto. 

        (p)  "Option"
means a right, granted to a Participant under Section 6(b) hereof, to purchase Stock at a specified price during specified time
periods. 

        (q)  "Participant"
means a person who has been granted an Option under the Plan which remains outstanding, including a person who is no longer an
Eligible Person. 

        (r)  "Performance
Award" means a right, granted to a Participant under Section 8 hereof, to receive Options based upon performance criteria specified
by the Committee. 

        (s)  "Person"
shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and
14(d) thereof, and shall include a "group" as defined in Section 13(d) thereof. 

        (t)  "Qualified
Member" means a member of the Committee who is a "Non-Employee Director" within the meaning of Rule 16b-3(b)(3) and an
"outside director" within the meaning of Regulation 1.162-27 under Code Section 162(m). 

        (u)  "Rule 16-3"
means Rule 16-3, as from time to time in effect and applicable to the Plan and Participants, promulgated by the
Securities and Exchange Commission under Section 16 of the Exchange Act. 

        (v)  "Stock"
means the Company's Common Stock, par value $.01 per share, and such other securities as may be substituted (or resubstituted) for Stock
pursuant to Section 9. 

    3.  Administration.  

        (a)  Authority of the Committee.  The Plan shall be administered by the Committee except
to the extent the Board elects to administer the Plan, in which case references herein to the "Committee" shall be deemed to include references to the "Board." The Committee shall have full and final
authority, in each case subject to and consistent with the provisions of the Plan, to select Eligible Persons to become Participants, grant Options, determine the type, number and other terms and
conditions of, and all other matters relating to, Options, prescribe Option agreements (which need not be identical for each Participant) and rules and regulations for the administration of the
Plan, construe and interpret the Plan and Option agreements and correct defects, supply omissions or reconcile inconsistencies therein, and to make all other decisions and determinations as the
Committee may deem necessary or advisable for the administration of the Plan. 

2

        (b)  Manner of Exercise of Committee Authority.  At any time that a member of the
Committee is not a Qualified Member, any action of the Committee relating to an Option granted or to be granted to a Participant who is then subject to Section 16 of the Exchange Act in respect of the
Company, or relating to an Option intended by the Committee to qualify as "performance-based compensation" within the meaning of Code Section 162(m) and regulations thereunder, may be taken either
(i) by a subcommittee, designated by the Committee, composed solely of two or more Qualified Members, or (ii) by the Committee but with each such member who is not a Qualified Member
abstaining or recusing himself or herself from such action; provided, however, that, upon such abstention or recusal, the Committee remains composed solely of two or more Qualified Members. Such
action, authorized by such a subcommittee or by the Committee upon the abstention or recusal of such non-Qualified
Member(s), shall be the action of the Committee for purposes of the Plan. Any action of the Committee shall be final, conclusive and binding on all persons, including the Company, its subsidiaries,
Participants, Beneficiaries, transferees under Section 10(b) hereof or other persons claiming rights from or through a Participant and shareholders. The express grant of any specific power to
the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee. The Committee may delegate to officers or managers of the
Company or any subsidiary, or committees thereof, the authority, subject to such terms as the Committee shall determine, to perform such functions, including administrative functions, as the Committee
may determine, to the extent that such delegation will not result in the loss of an exemption under Rule 16b-3(d)(1) for Options granted to Participants subject to Section 16 of the
Exchange Act in respect of the Company and will not cause Options intended to qualify as "performance-based compensation" under Code Section 162(m) to fail to so qualify. The Committee may appoint
agents to assist it in administering the Plan. 

        (c)  Limitation of Liability.  The Committee and each member thereof shall be entitled
to, in good faith, rely or act upon any report or other information furnished to him or her by any executive officer, other officer or employee of the Company or a subsidiary, the Company's
independent auditors, consultants or any other agents assisting in the administration of the Plan. Members of the Committee and any officer or employee of the Company or a subsidiary acting at the
direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the fullest extent permitted
by law, be indemnified and held harmless by the Company with respect to any such action or determination. 

    4.  Stock Subject to Plan.  

        (a)  Overall Number of Shares Available for Delivery.  Subject to adjustment in a manner
consistent with any adjustment made pursuant to Section 9, the total number of shares of Stock reserved and available for delivery in connection with Options under the Plan shall not exceed 250,000
shares. Notwithstanding the foregoing, the total number of shares available for delivery in connection with Options under the Plan in any given 12-month period shall not exceed the limitations set
forth in SEC Reg. §230.701 if applicable. 

        (b)  Application of Limitation to Grants of Options.  No Option may be granted if the
number of shares of Stock to be delivered in connection with such Option exceeds the number of shares of Stock remaining available under the Plan minus the number of shares of Stock issuable in
settlement of then-outstanding Options. The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting and make adjustments if the number of shares of
Stock actually delivered differs from the number of shares previously counted in connection with an Option. 

        (c)  Availability of Shares Not Delivered under Options.  Shares of Stock subject to an
Option under the Plan that expires or is canceled, forfeited, settled in cash or otherwise terminated without a delivery of shares to the Participant, including (i) the number of shares
withheld in payment of any exercise or purchase price of an Option or taxes relating to Options and (ii) the number of shares surrendered in payment of any exercise or purchase price of an
Option or taxes relating to any Option will again be 

3

available for Options under the Plan, except that if any such shares could not again be available for Options to a particular Participant under any applicable law or regulation, such shares shall be
available exclusively for Options to Participants who are not subject to such limitation. 

        (d)  Stock Offered.  The Stock to be offered pursuant to the grant of an Option may be
authorized but unissued Stock or Stock previously issued and outstanding and reacquired by the Company. The Stock to be offered and sold pursuant to the grant of an Option may, if determined by the
Committee to be required pursuant to applicable securities laws, bear the following legend: 

"THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM AND DELIVERY TO THE CORPORATION OF AN OPINION OF COUNSEL SATISFACTORY IN FORM AND
SUBSTANCE TO IT THAT SUCH TRANSFER WILL NOT VIOLATE THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS." 

    5.  Eligibility; Per Person Option Limitations.  Options may be granted under the Plan only to Eligible
Persons. In each fiscal year or 12 month period, as applicable during any part of which the Plan is in effect, an Eligible Person who is also a Covered Employee may not be granted Options relating to
more than the lesser of (a) 100,000 shares of Stock or (b) the number of shares of Stock determined applying the limitations set forth in SEC Reg. §230.701, as applicable,
subject to adjustment in a manner consistent with any adjustment made pursuant to Section 9, under each of Sections 6(b) and 8(b). 

    6.  Specific Terms of Options.  

        (a)  General.  Options may be granted on the terms and conditions set forth in this
Section 6. In addition, the Committee may impose on any Option or the exercise thereof, at the date of grant or thereafter (subject to Section 10(d)), such additional terms and conditions, not
inconsistent with the provisions of the Plan, as the Committee shall determine, including terms requiring forfeiture of Options in the event of termination of employment by the Participant and terms
permitting a Participant to make elections relating to his or her Option. The Committee shall retain full power and discretion to accelerate, waive or modify, at any time, any term or condition of an
Option that is not mandatory under the Plan; provided, however, that the Committee shall not have any discretion to accelerate, waive or modify any term or condition of an Option that is intended to
qualify as "performance-based compensation" for purposes of Code Section 162(m) if such discretion would cause the Option not to so qualify. Except in cases in which the Committee is authorized to
require other forms of consideration under the Plan, or to the extent other forms of consideration must be paid to satisfy the requirements of the Delaware General Corporation Law, no consideration
other than services may be required for the grant (but not the exercise) of any Option. 

        (b)  Options.  The Committee is authorized to grant Options to Participants on the
following terms and conditions: 

            (i)  Exercise Price.  The exercise price per share of Stock purchasable under an Option
shall be determined by the Committee. 

            (ii)  Time and Method of Exercise.  The Committee shall determine the time or times at
which or the circumstances under which an Option may be exercised in whole or in part (including based on achievement of performance goals and/or future service requirements), the methods by which
such exercise price may be paid or deemed to be paid, the form of such payment, including, without limitation, cash, Stock, other Options or awards granted under other plans of the Company or any
subsidiary, or other property (including notes or other contractual obligations of Participants to make payment on a deferred 

4

basis), and the methods by or forms in which Stock will be delivered or deemed to be delivered to Participants. 

            (iii)  ISOs.  The terms of any ISO granted under the Plan shall comply in all respects
with the provisions of Code Section 422. Anything in the Plan to the contrary notwithstanding, no term of the Plan relating to ISOs shall be interpreted, amended or altered, nor shall any discretion
or authority granted under
the Plan be exercised, so as to disqualify either the Plan or any ISO under Code Section 422, unless the Participant has first requested the change that will result in such disqualification. ISOs
shall not be granted more than ten years after the earlier of the adoption of the Plan or the approval of the Plan by the Company's shareholders. Notwithstanding the foregoing, the Fair Market Value
of shares of Stock subject to an ISO and the aggregate Fair Market Value of shares of stock of any parent or subsidiary corporation within the meaning of Code Section 424(e) and
(f) subject to any other incentive stock option (within the meaning of Code Section 422) of the Company or a parent or subsidiary corporation within the meaning of Code Section
424(e) and (f) that first becomes purchasable by a Participant in any calendar year may not (with respect to that Participant) exceed $100,000, or such other amount as may be prescribed
under Code Section 422 or applicable regulations or rulings from time to time. As used in the previous sentence, Fair Market Value shall be determined as of the date the incentive stock option is
granted. Failure to comply with this provision shall not impair the enforceability or exercisability of any Option, but shall cause the excess amount of shares to be reclassified in accordance with
the Code. 

    7.  Certain Provisions Applicable to Options.  

        (a)  Stand-Alone, Additional and Substitute Options.  Options granted under the Plan
may, in the discretion of the Committee, be granted either alone or in addition to, or in substitution or exchange for, any other Option or any award granted under another plan of the Company, any
subsidiary, or any business entity to be acquired by the Company or a subsidiary, or any other right of a Participant to receive payment from the Company or any subsidiary. Such additional and
substitute or exchange Options may be granted at any time. If an Option is granted in substitution or exchange for another Option or award, the Committee shall require the surrender of such other
award in consideration for the grant of the new Option. 

        (b)  Term of Options.  The term of each Option shall be for such period as may be
determined by the Committee; provided that in no event shall the term of any Option exceed a period of ten years (or such shorter term as may be required in respect of an ISO under Code Section 422). 

        (c)  Form and Timing of Payment under Options; Deferrals.  Subject to the terms of the
Plan and any applicable Option agreement, payments to be made by the Company or a subsidiary upon the exercise of an Option may be made in such forms as the Committee shall determine, including,
without limitation, cash, Stock, other Options or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis. The settlement of any Option may be
accelerated, and cash paid in lieu of Stock in connection with such settlement, in the discretion of the Committee or upon occurrence of one or more specified events (in addition to a Change in
Control). Installment or deferred payments may be required by the Committee (subject to Section 10(d) of the Plan, including the consent provisions thereof in the case of any deferral of an
outstanding Option not provided for in the
original Option agreement) or permitted at the election of the Participant on terms and conditions established by the Committee. Payments may include, without limitation, provisions for the payment or
crediting of reasonable interest on installment or deferred payments. Any deferral shall only be allowed as is provided in a separate deferred compensation plan adopted by the Company. The Plan shall
not constitute an "employee benefit plan" for purposes of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended. 

        (d)  Exemptions from Section 16(b) Liability.  It is the intent of the Company that the
grant of any Options to or other transaction by a Participant who is subject to Section 16 of the Exchange Act shall be exempt from Section 16 pursuant to an applicable exemption (except for
transactions acknowledged in 

5

writing to be non-exempt by such Participant). Accordingly, if any provision of this Plan or any Option agreement does not comply with the requirements of Rule 16b-3 as then applicable to any
such transaction, such provision shall be construed or deemed amended to the extent necessary to conform to the applicable requirements of Rule 16b-3 so that such Participant shall avoid
liability under Section 16(b). 

        (e)  Non-Competition Agreement.  Each Participant to whom an Option is granted under the
Plan, who has not already done so at the time of such grant, may be required to agree in writing as a condition to the granting of such Option not to engage in conduct in direct competition with the
Company or any of its subsidiaries for a period after the termination of such Participant's employment with the Company and its subsidiaries. 

    8.  Performance Awards.  

        (a)  Performance Conditions.  The right of a Participant to exercise or receive a grant
of any Option, and the timing thereof, may be subject to such performance conditions as may be specified by the Committee. The Committee may use such business criteria and other measures of
performance as it may deem appropriate in establishing any performance conditions, and may exercise its discretion to reduce or increase the amounts payable under any Option subject to performance
conditions, except as limited under Section 8(b) hereof in the case of a Performance Award intended to qualify under Code Section 162(m). 

        (b)  Performance Awards Granted to Designated Covered Employees.  If the Committee
determines that a Performance Award to be granted to an Eligible Person who is designated by the Committee as likely
to be a Covered Employee should qualify as "performance-based compensation" for purposes of Code Section 162(m), the grant, exercise and/or settlement of such Performance Award may be contingent upon
achievement of preestablished performance goals and other terms set forth in this Section 8(b). 

            (i)  Performance Goals Generally.  The performance goals for such Performance Awards
shall consist of one or more business criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee consistent with this Section 8(b).
Performance goals shall be objective and shall otherwise meet the requirements of Code Section 162(m) and regulations thereunder (including Regulation 1.162-27 and successor regulations thereto),
including the requirement that the level or levels of performance targeted by the Committee result in the achievement of performance goals being "substantially uncertain." The Committee may determine
that such Performance Awards shall be granted, exercised, and/or settled upon achievement of any one performance goal or that two or more of the performance goals must be achieved as a condition to
grant or exercise of such Performance Awards. Performance goals may differ for Performance Awards granted to any one Participant or to different Participants. 

            (ii)  Business Criteria.  One or more of the following business criteria for the
Company, on a consolidated basis, and/or for specified subsidiaries or business or geographical units of the Company (except with respect to the total shareholder return and earnings per share
criteria), shall be used by the Committee in establishing performance goals for such Performance Options: (A) earnings per share; (B) increase in revenues or margin; (C) increase
in cash flow; (D) increase in cash flow return; (E) revenue; (F) return on net assets; return on assets; return on investment; return on capital; or return on equity;
(G) operating profits in excess of cost of capital employed; (H) direct contribution; (I) net income; pretax earnings; pretax earnings before interest, depreciation and
amortization (EBITDA); pretax earnings after interest expense and before incentives, service fees, and extraordinary or special items; operating income; or income before interest income or expense,
unusual items and income taxes (local, state or federal) and excluding budgeted and actual bonuses which might be paid under any ongoing bonus plans of the Company; (J) working capital;
(K) management of fixed costs or variable costs; (L) identification and/or consummation of investment opportunities or completion of specified projects in accordance with corporate
business plans, including strategic mergers, acquisitions or divestures; (M) total shareholder return; (N) debt reduction; and (O) any of the above goals determined on an absolute
or relative basis or as compared to the performance of a published or special index deemed applicable by the 

6

Committee including, but not limited to, the Standard & Poor's 500 Stock Index or a group of comparable companies. 

        (iii)  Performance Period; Timing for Establishing Performance Goals.  Achievement of
performance goals in respect of such Performance Awards shall be measured over a performance period of up to ten years,
as specified by the Committee. Performance goals shall be established not later than 90 days after the beginning of any performance period applicable to such Performance Awards, or at such other date
as may be required or permitted for "performance-based compensation" under Code Section 162(m). 

        (iv)  Performance Award Pool.  The Committee may establish a Performance Award pool,
which shall be an unfunded pool, for purposes of measuring performance of the Company in connection with Performance Awards. The amount of such Performance Award pool shall be based upon the
achievement of a performance goal or goals based on one or more of the business criteria set forth in Section 8(b)(ii) hereof during the given performance period, as specified by the Committee
in accordance with Section 8(b)(iii) hereof. The Committee may specify the amount of the Performance Award pool as a percentage of any of such business criteria, a percentage thereof in excess
of a threshold amount, or as another amount which need not bear a strictly mathematical relationship to such business criteria. 

        (v)  Settlement of Performance Awards; Other Terms.  After the end of each performance
period, the Committee shall determine the amount, if any, of (A) the Performance Award pool, and the maximum amount of potential Performance Award payable to each Participant in the Performance
Award pool, or (B) the amount of potential Performance Award otherwise payable to each Participant. Settlement of such Performance Awards shall be in cash, Stock, other Options or other
property, in the discretion of the Committee. The Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in connection with such Performance Awards, but may not
exercise discretion to increase any such amount payable to a Covered Employee in respect of a Performance Award subject to this Section 8(b). The Committee shall specify the circumstances in which
such Performance Awards shall be paid or forfeited in the event of termination of employment by the Participant prior to the end of a performance period or settlement of Performance Awards. 

        (c)  Written Determinations.  All determinations by the Committee as to the
establishment of performance goals, the amount of any Performance Award pool or potential individual Performance Awards and as to the achievement of performance goals relating to Performance Awards
under Section 8(b) shall be made in writing in the case of any Option intended to qualify under Code Section 162(m). The Committee may not delegate any responsibility relating to such
Performance Awards. 

        (d)  Status of Section 8(b) Performance Awards under Code Section 162(m).  It is
the intent of the Company that Performance Awards under Section 8(b) hereof granted to persons who are designated by the Committee as likely to be Covered Employees within the meaning of Code
Section 162(m) and regulations thereunder (including Regulation 1.162-27 and successor regulations thereto) shall, if so designated by the Committee, constitute "performance-based compensation" within
the meaning of Code Section 162(m) and regulations thereunder. Accordingly, the terms of Sections 8(a), (b) and (c), including the definitions of Covered Employee and other terms used therein,
shall be interpreted in a
manner consistent with Code Section 162(m) and regulations thereunder. The foregoing notwithstanding, because the Committee cannot determine with certainty whether a given Participant will be a
Covered Employee with respect to a fiscal year that has not yet been completed, the term Covered Employee as used herein shall mean only a person designated by the Committee, at the time of grant of
Performance Awards, who is likely to be a Covered Employee with respect to that fiscal year. If any provision of the Plan as in effect on the date of adoption or of any agreements relating to
Performance Awards that are designated as intended to comply with Code Section 162(m) does not comply or is inconsistent with the requirements of Code Section 162(m) or regulations thereunder, such
provision shall be construed or deemed amended to the extent necessary to conform to such requirements. 

7

    9.  Recapitalization or Reorganization.  

        (a)  Existence of Plans and Options.  The existence of the Plan and the Options granted
hereunder shall not affect in any way the right or power of the Board or the shareholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the
Company's capital structure or its business, any merger or consolidation of the Company, any issue of debt or equity securities ahead of or affecting Stock or the rights thereof, the dissolution or
liquidation of the Company or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding. 

        (b)  Subdivision of Consolidation of Shares.  The shares with respect to which Options
may be granted are shares of Stock as presently constituted, but if, and whenever, prior to the expiration of an Option theretofore granted, the Company shall effect a subdivision or consolidation of
shares of Stock or the payment of a stock dividend on Stock without receipt of consideration by the Company, the number of shares of Stock with respect to which such Option may thereafter be exercised
(i) in the event of an increase in the number of outstanding shares shall be proportionately increased, and the purchase price per share shall be proportionately reduced, and (ii) in the
event of a reduction in the number of outstanding shares shall be proportionately reduced, and the purchase price per share shall be proportionately increased. 

        (c)  Corporate Restructuring.  If the Company recapitalizes, reclassifies its capital
stock, or otherwise changes its capital structure (a "recapitalization"), the number and class of shares of Stock covered by an Option theretofore granted shall be adjusted so that such Option shall
thereafter cover the number and class of shares of stock and securities to which the holder would have been entitled pursuant to the terms of the recapitalization if, immediately prior to the
recapitalization, the holder had been the holder of record of the number of shares of Stock then covered by such Option. If (i) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act, hereinafter an "Acquiring Person") becomes the Beneficial Owner, directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the Company's then outstanding securities; (ii) an Acquiring Person becomes the Beneficial Owner, directly or indirectly, of securities
of the Company representing 10% or more of the combined voting power of the Company's then outstanding securities and, during the two-year period commencing at the time such Acquiring Person becomes
the Beneficial Owner of such securities, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof; (iii) the Company's
stockholders approve an agreement to merge or consolidate the Company with another corporation (other than a corporation 50% or more of which is controlled by, or is under common control with, the
Company) and, during the period commencing six months before such approval and ending two years after such approval, individuals who at the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof; or (iv) during any two year period, individuals who at the date on which the period commences constitute a majority of the Board cease to constitute a
majority thereof as a result of one or more contested elections for positions on such Board (each such event is referred to herein as a "Change in Control"), then, unless otherwise provided in the
Option agreement, (x) any Option granted under the Plan and outstanding at such time will become fully and immediately exercisable and will remain exercisable until its expiration or termination as
provided in the Plan, and (y) all performance conditions will be deemed met if and to the extent so provided in the Option agreement relating to such Option. 

        (d)  Additional Issuances.  Except as hereinbefore expressly provided, the issuance by
the Company of shares of stock of any class or securities convertible into shares of stock of any class, for cash, property, labor or services, upon direct sale, upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, and in any case whether or not for fair value, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Stock subject to Options theretofore granted or the purchase price per share, if applicable. 

8

    10.  General Provisions.  

        (a)  Restricted Securities.  The Stock to be issued under the Plan, which is issued in
reliance on the exemption from registration set forth in SEC Reg. §230.701, shall be deemed to be "restricted securities" as defined in SEC Reg. §230.144 and shall bear the
legend identified in Section 4. Resales of such Stock by the holder thereof shall be in compliance with the Securities Act of 1933 or an exemption therefrom. 

        (b)  Limits on Transferability; Beneficiaries.  No Option or other right or interest of
a Participant under the Plan shall be pledged, hypothecated or otherwise encumbered or subject to any lien, obligation or liability of such Participant to any party (other than the Company or a
subsidiary), or assigned or transferred by such Participant otherwise than by will or the laws of descent and distribution or to a Beneficiary upon the death of a Participant, and such Options or
rights that may be exercisable shall be exercised during the lifetime of the Participant only by the Participant or his or her guardian or legal representative, except that Options and other rights
(other than ISOs) may be transferred to one or more Beneficiaries or other transferees during the lifetime of the Participant, and may be exercised by such transferees in accordance with the terms of
such Option, but only if and to the extent such transfers are permitted by the Committee pursuant to the express terms of an Option agreement (subject to any terms and conditions which the Committee
may impose thereon). A Beneficiary, transferee, or other person claiming any rights under the Plan from or through any Participant shall be subject to all terms and conditions of the Plan and any
Option agreement applicable to such Participant, except as otherwise determined by the Committee, and to any additional terms and conditions deemed necessary or appropriate by the Committee. 

        (c)  Taxes.  The Company and any subsidiary is authorized to withhold from any Option
granted, any payment relating to an Option under the Plan, including from a distribution of Stock, or any payroll or other payment to a Participant, amounts of withholding and other taxes due or
potentially payable in connection with any transaction involving an Option and to take such other action as the Committee may deem advisable to enable the Company and Participants to satisfy
obligations for the payment of withholding taxes and other tax obligations relating to any Option. This authority shall include authority to withhold or receive Stock or other property and to make
cash payments in respect thereof in satisfaction of a Participant's tax obligations, either on a mandatory or elective basis in the discretion of the Committee. 

        (d)  Changes to the Plan and Options.  The Board may amend, alter, suspend, discontinue
or terminate the Plan or the Committee's authority to grant Options under the Plan without the consent of shareholders or Participants, except that any amendment or alteration to the Plan shall be
subject to the approval of the Company's shareholders not later than the annual meeting next following such Board action if such shareholder approval is required by any federal or state law or
regulation or the rules of any stock exchange or automated quotation system on which the Stock may then be listed or quoted, and the Board may otherwise, in its discretion, determine to submit
other such changes to the Plan to shareholders for approval; provided that, without the consent of an affected Participant, no such Board action may materially and adversely affect the rights of such
Participant under any previously granted and outstanding Option. The Committee may waive any conditions or rights under, or amend, alter, suspend, discontinue or terminate any Option theretofore
granted and any Option agreement relating thereto, except as otherwise provided in the Plan; provided that, without the consent of an affected Participant, no such Committee action may materially and
adversely affect the rights of such Participant under such Option. 

        (e)  Limitation on Rights Conferred under Plan.  Neither the Plan nor any action taken
hereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of the Company or a
subsidiary, (ii) interfering in any way with the right of the Company or a subsidiary to terminate any Eligible Person's or Participant's employment or service at any time, (iii) giving
an Eligible Person or Participant any claim to be granted any 

9

Option under the Plan or to be treated uniformly with other Participants and employees, or (iv) conferring on a Participant any of the rights of a shareholder of the Company unless and until
the Participant is duly issued or transferred shares of Stock in accordance with the terms of an Option. 

        (f)  Unfunded Status of Options.  The Plan is intended to constitute an "unfunded" plan. 

        (g)  Nonexclusivity of the Plan.  Neither the adoption of the Plan by the Board nor its
submission to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements as
it may deem desirable including incentive arrangements and awards which do not qualify under Code Section 162(m). Nothing contained in the Plan shall be construed to prevent the Company or any
subsidiary from taking any corporate action which is deemed by the Company or such subsidiary to be appropriate or in its best interest, whether or not such action would have an adverse effect on the
Plan or any Option made under the Plan. No employee, beneficiary or other person shall have any claim against the Company or any subsidiary as a result of any such action. 

        (h)  Fractional Shares.  No fractional shares of Stock shall be issued or delivered
pursuant to the Plan or any Option. The Committee shall determine whether cash, other Options or other property shall be issued or paid in lieu of such fractional shares or whether such fractional
shares or any rights thereto shall be forfeited or otherwise eliminated. 

        (i)  Governing Law.  The validity, construction and effect of the Plan, any
rules and regulations under the Plan, and any Option agreement shall be determined in accordance with the laws of the State of Delaware. 

        (j)  Other Laws.  The Company shall not be obligated to issue any Stock pursuant to any
Option granted under the Plan at any time when the shares covered by such Option have not been registered under the Securities Act of 1933 and such other state and federal laws, rules or
regulations as the Company or the
Committee deems applicable and, in the opinion of legal counsel for the Company, there is no exemption from the registration requirements of such laws, rules or regulations available for the
issuance and sale of such shares. In this connection, until such time as the Company is subject to the reporting requirements of Section 13 and 15(d) of Exchange Act, the Company is and intends
to rely on the exemption from registration provided in SEC Reg. §230.701. 

        (k)  Plan Effective Date and Shareholder Approval.  The Plan has been adopted by the
Board effective July 1, 2000, subject to approval by the shareholders of the Company. 

    EXECUTED
this            day of              , 2000. 

	 	 	HORIZON PHARMACIES, INC.
	 

 	 
 	 

By: 

	 

 	 
 	 

Name: 

	 

 	 
 	 

Title: 

10

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HORIZON PHARMACIES, INC. 2000 STOCK OPTION PLAN EFFECTIVE JULY 1, 2000

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HORIZON PHARMACIES, INC. 2000 STOCK OPTION PLAN EFFECTIVE JULY 1, 2000

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