Document:

<PAGE>

                         *** CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS
                          DOCUMENT (INDICATED BY ASTERISKS) HAS BEEN OMITTED AND
                               FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
                               COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
                             TREATMENT UNDER 17 C.F.R. SECTIONS 200.80(B)(4) AND
                                                                      240.24B-2.

                                                                   EXHIBIT 10.34

                     JOINT DEVELOPMENT AND LICENSE AGREEMENT

                                 BY AND BETWEEN

                             LG LIFE SCIENCES, LTD.

                                       AND

                          ANADYS PHARMACEUTICALS, INC.

                                 April 18, 2004

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                               <C>
ARTICLE 1
Definitions.....................................................................   1

ARTICLE 2
Joint Development Program.......................................................   8
         2.1   General..........................................................   8
         2.2   Joint Development Committee......................................   8
         2.3   Global Development Plan..........................................  10
         2.4   Conduct of the Joint Development Program.........................  10
         2.5   Global Development Costs and Budget..............................  12
         2.6   Discontinued Development.........................................  13

ARTICLE 3
Licenses........................................................................  14
         3.1   Scope............................................................  14
         3.2   Sublicenses......................................................  15
         3.3   Retained Rights..................................................  15

ARTICLE 4
Regulatory Matters..............................................................  15
         4.1   Lead Regulatory Parties..........................................  15
         4.2   Ownership of Regulatory Approvals................................  16
         4.3   Regulatory Coordination..........................................  16

ARTICLE 5
Commercialization Program.......................................................  18
         5.1   Commercialization Rights.........................................  18
         5.2   Milestone Payments...............................................  18
         5.3   Royalties........................................................  19
         5.4   Commercial Supply................................................  21
         5.5   Commercialization of Program Products............................  21
         5.6   Joint Steering Committee.........................................  21

ARTICLE 6
Intellectual Property Protection and Related Matters............................  22
         6.1   Prosecution of Applications and Maintenance Administration.......  22
         6.2   Enforcement......................................................  24
         6.3   Defense..........................................................  25
         6.4   Cooperation......................................................  25
         6.5   Marks for Program Products.......................................  25

ARTICLE 7
Representations, Warranties and Covenants.......................................  26
         7.1   Corporate Power..................................................  26
         7.2   Due Authorization................................................  26
         7.3   Binding Agreement................................................  26
         7.4   No Conflict......................................................  26
         7.5   Ownership of Patent Rights.......................................  26
         7.6   Patent Proceedings...............................................  26
         7.7   Disclaimer of Warranties.........................................  26
         7.8   Limitation of Liability..........................................  26
</TABLE>

                                        i
<PAGE>

<TABLE>
<S>                                                                               <C>
ARTICLE 8
Indemnification.................................................................  27
         8.1   Indemnification By Anadys........................................  27
         8.2   Indemnification By LGLS..........................................  27

ARTICLE 9
Confidentiality.................................................................  28
         9.1   General Rule.....................................................  28
         9.2   Exclusions.......................................................  28
         9.3   Survival.........................................................  28
         9.4   Governmental Filings.............................................  28
         9.5   Publications; Public Announcements...............................  29
         9.6   Replacement of Prior Agreement...................................  29

ARTICLE 10
Term: Termination...............................................................  29
         10.1  Term.............................................................  29
         10.2  Termination......................................................  29

ARTICLE 11
Miscellaneous...................................................................  31
         11.1  Assignment.......................................................  31
         11.2  Severability.....................................................  31
         11.3  Notices..........................................................  32
         11.4  Governing Law....................................................  32
         11.5  Entire Agreement; Amendment......................................  32
         11.6  Headings; References.............................................  32
         11.7  Independent Contractors..........................................  32
         11.8  Waiver...........................................................  33
         11.9  Compliance with Export Regulations...............................  33
         11.10 Counterparts.....................................................  33
         11.11 Force Majeure....................................................  33
         11.12 No Strict Construction...........................................  33
         11.13 No Third Party Beneficiaries.....................................  33
</TABLE>

<TABLE>
<CAPTION>
EXHIBITS                      DESCRIPTION
--------------------------------------------------------------------------------
<S>                           <C>
--------------------------------------------------------------------------------
Exhibit A                     LGLS Patent Rights
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
</TABLE>

                                       ii
<PAGE>

                     JOINT DEVELOPMENT AND LICENSE AGREEMENT

This Joint Development and License Agreement (the "Agreement"), dated the 18th
day of April, 2004 (the "Effective Date"), is by and between LG Life Sciences,
Ltd., a corporation organized and existing under the laws of the Republic of
Korea ("LGLS"), and Anadys Pharmaceuticals Inc., a corporation organized and
existing under the laws of the State of Delaware, United States ("Anadys").

                                    RECITALS

WHEREAS, LGLS and Anadys are each in the business of discovering, developing and
commercializing pharmaceutical products;

WHEREAS, pursuant to that certain Amended and Restated Exclusive Option
Agreement, entered into as of February 24, 2004 with an effective date of
February 17, 2004 and as amended on March 22, 2004 (the "Option Agreement"),
between LGLS and Anadys, LGLS granted Anadys an option (the "Option") to enter
into a definitive agreement whereby, among other things, (1) LGLS and Anadys
would enter into a co-development program (as defined herein, the "Joint
Development Program") focused on the global clinical development and
registration of the compound known as LB80380 for treating chronic Hepatitis B
Virus (defined herein as "HBV") infection in humans and (2) LGLS would grant to
Anadys the exclusive right to develop, register and commercialize in the Anadys
Territory (as defined herein) said compound for so treating chronic HBV
infection in humans;

WHEREAS, Anadys has advised LGLS that it has exercised the Option; and

WHEREAS, LGLS and Anadys desire to enter into this Agreement in accordance with
the exercise by Anadys of the Option;

NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

1.1 When used in this Agreement, each of the following terms shall have the
meanings set forth in this Article I:

"AFFILIATE" means any corporation or other entity which controls, is controlled
by, or is under common control with, a party. A corporation or other entity
shall be regarded as in control of another corporation or entity if it owns or
directly or indirectly controls more than 50% of the voting securities or other
ownership interest of the other corporation or entity, or if it possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of the corporation or other entity.

"ANADYS INVENTIONS" means Inventions conceived of and reduced to practice in the
course of the Joint Development Program solely by employees and agents of
Anadys.

"ANADYS TERRITORY" means all countries in the world except the LGLS Territory.

"ANNUAL PLAN" means that part of the Global Development Plan for any Contract
Year, to be updated as necessary and as agreed to by the parties hereto in
accordance with the provisions of this Agreement during such Contract Year.

"ANTI-HBV FIELD" means the field of treating chronic Hepatitis B Virus ("HBV")
infection in humans.

"[...***...] STUDY" means the [...***...] Study that is the subject of that
certain document entitled "The [...***...] Clinical Study".

                                             ***Confidential Treatment Requested

                                        1
<PAGE>

"BUSINESS DAY" means a day on which banking institutions in Seoul, Korea and San
Diego, California are open for business.

"CHINA" means The Peoples Republic of China.

"CLINICAL SUPPLY COSTS" means the fully burdened cost of the Compounds and
Program Products utilized in the clinical trials in furtherance of the Joint
Development Program.

"COMMERCIALIZATION" OR "COMMERCIALIZE" means any and all activities directed to
marketing, promoting, distributing, offering for sale and selling a product,
importing a product for sale, and manufacturing for commercial sale. When used
as a verb, "Commercialize" means to engage in Commercialization.

"COMPOUNDS" means (i) the compound designated LB80380, which has the following
structure:

                  [...***...];

                  (ii) [...***...], which has the following structure:,

                                                                           ;

                                                       [...***...]

                  (iii)[...***...], which has the following structure,

                  [...***...]

                  (iv) [...***...];

                  (v)  [...***...]; and

                  (vi) [...***...].

"CONFIDENTIAL INFORMATION" means all proprietary materials, know-how or other
information (whether or not patentable) related to: (1) the Compounds and the
Program Products, (2) the Global Development Plan and Joint Development Program,
(3) the contents of this Agreement (including the exhibit attached hereto), the
Option Agreement (including the exhibit attached thereto), and the terms and
conditions of the transactions contemplated hereby and thereby and (4) such
other information of a confidential and proprietary nature disclosed by one
party to the other party during the term of this Agreement.

"CONTRACT QUARTER" means each full or partial calendar quarter during the Joint
Development Program Term.

                                             ***Confidential Treatment Requested

                                       2
<PAGE>

"CONTRACT YEAR" means (a) with respect to the first Contract Year, the period
beginning on the Effective Date and ending on December 31, 2004 (the "First
Contract Year"), and (b) with respect to each subsequent Contract Year, the
twelve (12) month period beginning on the day following the end of the First
Contract Year and each succeeding twelve (12) month period thereafter during the
Term (except that the last Contract Year shall end on the last day of the Joint
Development Program Term).

"CONTROL" means in relation to intellectual property rights possession of the
ability to grant a license or sublicense under such intellectual property rights
as provided for herein without violating the terms of any agreement or other
arrangement with any Third Party. For the removal of doubt, the capitalized term
"Control" as used in this Agreement is different from the uncapitalized term
"control" as used in the definition of Affiliate in this Section 1.1.

"COVERING", "COVER", or "COVERED" means, with respect to a Patent Right, that,
but for a license granted to a party under a Valid Claim included in such Patent
Right, the practice by such party of an invention claimed in such Patent Right
would infringe such Valid Claim or in the case of a Patent Right that is a
patent application, would infringe a Valid Claim in such patent application if
it were to issue as a patent.

"CRO" means a contract research organization engaged by LGLS or Anadys to manage
clinical or pre-clinical studies of or other Development activities relating to
any Compound or Program Product.

"DEVELOPMENT" or "DEVELOP" means, with respect to a drug candidate preclinical
and clinical drug development activities, including, among other things: test
method development and stability testing, toxicology, formulation, process
development, manufacturing scale-up, development-stage manufacturing, quality
assurance/quality control development, statistical analysis and report writing,
clinical studies and regulatory affairs, product approval and registration. When
used as a verb, "Develop" means to engage in Development.

"DROPPED PROGRAM PRODUCT" has the meaning given to that term in Section
2.6.1(b).

"EFFECTIVE DATE" means the date of this Agreement.

"EMEA" means the European Agency for the Evaluation of Medicinal Products, or
any successor thereto.

"EUROPE" means, as of the Effective Date, the countries that are members of the
European Union and the countries that have entered into agreements with the
European Union to be admitted as members to the European Union.

"EXECUTIVE OFFICERS" means the Chief Executive Officer of Anadys (or an
executive of Anadys designated by such Chief Executive Officer) and the Chief
Executive Officer of LGLS (or an executive of LGLS designated by such Chief
Executive Officer).

"FDA" means the United States Food and Drug Administration, or any successor
agency thereto.

"FIRST COMMERCIAL SALE" means, for each Royalty-Bearing Product, on a
country-by-country basis, the first shipment of Royalty-Bearing Product to a
Third Party by the Royalty-Paying Party, its Affiliates or sublicensees in a
country in the Anadys Territory or in China, as applicable, after Regulatory
Approval has been achieved for such Royalty-Bearing Product in such country.
Sales for test marketing, sampling and promotional uses, clinical trial purposes
or compassionate or similar use shall not be considered to constitute a First
Commercial Sale.

"FTE" means a full time equivalent person year of scientific, technical or
managerial work on or directly related to the Joint Development Program.

"FTE COSTS" means the cost attributed to an FTE, as shall be mutually agreed by
the Joint Development Committee.

"GENERIC PRODUCT" means a product that has been approved for marketing (i) in
the United States by the FDA pursuant to an Abbreviated New Drug Application in
accordance with the Hatch-Waxman Act of 1984, as amended, as a "new drug" (as
defined in said Act) in respect of which the conditions of use prescribed,
recommended, or

                                        3
<PAGE>

suggested in the labeling proposed for such new drug have been previously
approved by the FDA for the Product or (ii) in any other country by the
counterpart agency of the FDA in that country pursuant to any similar statute,
regulation or other legal authority in that country.

"GLOBAL DEVELOPMENT BUDGET" means the budget containing the planned Global
Development Costs, in form and substance initially determined and approved by
the Joint Development Committee and as amended and revised from time to time
during the Joint Development Program Term in accordance with the provisions of
this Agreement.

"GLOBAL DEVELOPMENT COSTS" means the costs incurred for or associated with any
[...***...] and [...***...] or other [...***...] which are necessary for
[...***...] contemplated by the Global Development Plan, in each case that are
directly related to [...***...] for treatment of chronic HBV infection in
humans. In addition, Global Development Costs shall include [...***...] for
those activities that [...***...] of the Development of any Compound, including,
[...***...] provided, that such allocations are mutually determined and agreed
by the Joint Development Committee prior to such allocation in accordance with
Section 2.2.4 of this Agreement. Global Development Costs shall not include
costs related to [...***...], including [...***...] of any [...***...]. Global
Development Costs include [...***...] including [...***...] and the [...***...]
Study, and, in respect of studies or Development activities initiated prior to
the Option Period, all the costs incurred by the conduct of such studies or
Development activities after the date Anadys exercises the Option.

"GLOBAL DEVELOPMENT PLAN" means the global clinical development and regulatory
strategy and plan for conducting, coordinating, and allocating resources for the
clinical study and registration of the Program Products in the Anti-HBV Field,
as may be amended from time to time in accordance with the terms of this
Agreement.

"HBV" means Hepatitis B Virus.

"IND" means (a) (i) an Investigational New Drug Application, as defined in the
U.S. Federal Food, Drug, and Cosmetic Act, as amended, and the regulations
promulgated thereunder, that is required to be filed with the FDA before
beginning clinical testing of a Program Product in human subjects, or any
successor application or procedure and (ii) any foreign counterpart of a U.S.
Investigational New Drug Application, and (b) all supplements and amendments
that may be filed with respect to the foregoing.

"INITIATION" means with respect to a clinical study the administration of a
Compound or Program Product to the first subject dosed in such clinical study.

"INTERNAL FTE" means with respect to each Party an FTE that performs scientific,
technical or managerial work on or directly related to the Joint Development
Program, which such work is necessary or advisable to be performed by an
employee of such Party; provided, however, that the term Internal FTE shall not
include any FTE included in the calculation of FTE Costs included in Global
Development Cost.

"INVENTIONS" means any processes, methods, techniques, formulas, equipment
designs, know-how, show-how and trade secrets, discoveries, practices,
technology, designs, works of authorship, instructions, and other intellectual
property, patentable or otherwise, tangible or intangible, including, without
limitation, as described in Section 101 of the United States Patent Law, any new
and useful process, machine, manufacture, or composition of matter, or any new
and useful improvement thereof.

"JOINT DEVELOPMENT COMMITTEE" means the committee formed pursuant to Section
3.1.

                                             ***Confidential Treatment Requested

                                        4
<PAGE>

"JOINT DEVELOPMENT PROGRAM" means the joint development program to be conducted
by the Parties in accordance with the Global Development Plan and this
Agreement.

"JOINT DEVELOPMENT PROGRAM TERM" means the term of the Joint Development Program
set forth in Section 2.1.2.

"JOINT STEERING COMMITTEE" means the committee formed pursuant to Section 5.6.

"JOINT INVENTIONS" has the meaning given to that term in Section 6.1.4.

"JOINT PATENT RIGHTS" has the meaning given to that term in Section 6.1.4.

"LAWS" means all laws, statutes, rules, regulations, ordinances and other
pronouncements having the effect of law of any federal, national, multinational,
state, provincial, county, city or other political subdivision, domestic or
foreign.

"LGLS INVENTIONS" means Inventions conceived of and reduced to practice in the
course of the Joint Development Program solely by employees and agents of LGLS.

"LGLS KNOW-HOW" means any know-how, trade secret, experimental data, formula,
expert opinion, experimental procedure, pre-clinical and clinical data,
regulatory data and filings and other confidential and/or proprietary
information concerning any Compound or Program Product or its manufacture or use
(including, but not limited to the Global Development Plan, all results of any
experiment or study undertaken prior to the Effective Date, LGLS Inventions,
Joint Inventions assigned to LGLS under Section 6.1.4 and any intellectual
property created as a result of performing the Global Development Plan) that is
Controlled by LGLS and that is necessary or useful for either (i) the
formulation, manufacture, development, use, and/or application of any Compound
or Program Product, or (ii) establishing clinical trials and obtaining
registration of any Compound or Program Product.

"LGLS PATENT RIGHTS" means (i) the patents and the patent applications referred
to in Exhibit A and any other patents and patent applications [...***...] that
are [...***...], or [...***...] that are [...***...] or [...***...] including,
without limitation, such claims [...***...] or [...***...] to [...***...] (ii)
all foreign counterparts of any of the patents and patent applications specified
in clause (i) of this definition; and (iii) [...***...] that provide [...***...]
to the [...***...] in the applicable [...***...] the [...***...] or [...***...]
of [...***...] to any of the foregoing.

"LGLS TERRITORY" means the following countries and territories: Korea, China,
Taiwan, Hong Kong, Macao, Bangladesh, Bhutan, Nepal, India, Sri Lanka, Pakistan,
Thailand, Laos, Myanmar, Philippines, Vietnam, Indonesia, Singapore, Malaysia,
Brunei, and Cambodia.

"MARKET EXCLUSIVITY" means, with respect to a Program Product in a country, any
law, regulation, decree or other right that prohibits a third party from
manufacturing, using, selling, promoting, marketing, distributing or importing
such Product in that country in the absence of the license granted under this
License Agreement.

"NDA" means (a) (i) a New Drug Application pursuant to 21 U.S.C. Section
505(b)(1) submitted to the FDA or any successor application or procedure and
(ii) any non-U.S. counterpart of a U.S. New Drug Application, and (b) all
supplements and amendments, including supplemental New Drug Applications (and
any foreign counterparts), that may be filed with respect to the foregoing.

"NET SALES" means, with respect to a Program Product, the gross receipts
representing sales of such Program Product to Third Parties by a Party and its
Affiliates and sub-licensees in the that Party's Territory, less deductions for
the following items:

                                        5
<PAGE>

      (i)   reasonable transportation and insurance charges borne by the selling
            party,

      (ii)  sales and excise taxes or customs duties paid by the selling party
            and any other governmental charges imposed upon the sale of the
            Product,

      (iii) rebates or allowances actually granted or allowed, including
            government and managed care rebates,

      (iv)  quantity discounts, cash discounts or chargebacks actually granted,
            allowed or incurred in the ordinary course of business in connection
            with the sale of the Product, and

      (v)   allowances or credits to customers, not in excess of the selling
            price of the Product, on account of governmental requirements,
            rejection, outdating, recalls or return of the Product.

Sales between a Party and its Affiliates and sub-licensees shall be excluded
from the computation of Net Sales and no royalties shall be payable on such
sales.

"OPTION" has the meaning given to that term in the Recitals to this Agreement.

"OPTION AGREEMENT" has the meaning given to that term in the Recitals to this
Agreement.

"OPTION PERIOD" means the period of time commencing on February 17, 2004 and
ending on the Effective Date.

"PARTY" means Anadys or LGLS; "PARTIES" means Anadys and LGLS.

"PATENT RIGHTS" means all existing patents and patent applications and all
patent applications hereafter filed, including any continuations,
continuations-in-part, divisions, provisionals or any substitute applications,
any patent issued with respect to any such patent applications, any reissue,
reexamination, renewal or extension (including any supplemental patent
certificate) of any such patent, and any confirmation patent or registration
patent or patent of addition based on any such patent, and all foreign
counterparts of any of the foregoing.

"PHASE 2B STUDY" means a dose ranging clinical trial, including, without
limitation, the [...***...] Study, to evaluate further the efficacy and safety
of a candidate drug in the targeted patient population and to define the optimal
dosing regimen.

"PHASE 3 STUDY" means a clinical trial to confirm with statistical significance
the efficacy and safety of the drug in larger, targeted patient populations,
performed to obtain approval of a product application.

"PROGRAM PRODUCT" means any pharmaceutical formulation containing a Compound for
administration to humans to treat chronic HBV infection.

"PROGRAM MATERIAL" means any Program Products, Compounds and any material first
identified or discovered in the conduct of the Joint Development Program,
including, without limitation, biological materials such as tissue samples,
receptors, reagents and screens.

"PROGRAM TECHNOLOGY" means any Invention, information, data, results from any
experiment or study, including, without limitation, clinical trial results, that
(a) is Controlled by a Party or jointly by the Parties and, (b) (i) relates to
the Anti-HBV Field, is utilized in the Joint Development Program (but only to
the extent so utilized), and is discovered or acquired by a Party and/or any of
its Affiliates during the Joint Development Program Term but outside of the
conduct of the Joint Development Program, or (ii) is first invented or
discovered in the conduct of the Joint Development Program or in the course of
the Development or Commercialization of any Program Product. For clarity,
Program Technology excludes Program Materials, LGLS Know-how, LGLS Patent
Rights, LGLS Inventions, and Anadys Inventions.

                                             ***Confidential Treatment Requested

                                       6
<PAGE>

"REGULATORY APPROVAL" means in any country or political subdivision thereof in a
Territory any and all approvals (including any applicable governmental price and
reimbursement approvals), licenses, registrations, permits, authorizations or
the like of any Regulatory Authority in such country or political subdivision
thereof that is necessary or advisable to have been issued or granted in order
to Develop and/or Commercialize pharmaceutical compounds or drug products in
that country or political subdivision thereof.

"REGULATORY AUTHORITY" in any country or political subdivision thereof in a
Territory the federal, national, multinational, state, provincial or local
regulatory agency, department, bureau or other governmental entity or like
authority in such country or political subdivision with jurisdiction over the
Development and/or Commercialization of pharmaceutical compounds and drug
products in that country or political subdivision thereof.

"ROYALTY-BEARING PRODUCT" means a Program Product.

"ROYALTY-PAYING PARTY" means, with respect to a Royalty-Bearing Product, the
Party obligated to pay royalties to the other Party under any of the provisions
of Article 5.

"TERRITORY" means the Anadys Territory or the LGLS Territory, as applicable.

THIRD PARTY" means any entity other than Anadys or LGLS or an Affiliate of
Anadys or LGLS.

"UNILATERAL PRODUCT" has the meaning given to that term in Section 2.6.1(b).

"VALID CLAIM" means a claim (a) of any issued, unexpired patent [...***...] or
[...***...] by a [...***...] of a [...***...] of [...***...] from which
[...***...] to which [...***...] is [...***...] the [...***...] for [...***...]
and which [...***...] or [...***...] or [...***...] through [...***...] or (b)
of any patent application which shall not have been [...***...] nor been
[...***...] for [...***...] [...***...] [...***...][...***...] for such
[...***...].

                                   ARTICLE 2
                            JOINT DEVELOPMENT PROGRAM

2.1   GENERAL.

      2.1.1 COLLABORATION. During the Joint Development Program Term, the
            Parties shall collaborate with each other in carrying out the Joint
            Development Program as set forth in the then current Global
            Development Plan.

      2.1.2 TERM. The term of the Joint Development Program (the "Joint
            Development Program Term") shall commence on the Effective Date and
            end on the earlier to occur of the termination or expiration of this
            Agreement as specified in Article 10.

      2.1.3 EXCLUSIVITY. During the Joint Development Program Term, [...***...],
            shall not [...***...] in [...***...] [...***...] the [...***...] of
            which is the [...***...] and [...***...] of any [...***...] for
            [...***...] in [...***...] other than [...***...] in accordance with
            the [...***...]; provided, however, that this [...***...] shall not
            apply to the [...***...] as [...***...] or [...***...] of the
            [...***...] of [...***...], including, without limitation,
            [...***...] and the like, as long as [...***...] containing such
            [...***...] or [...***...] of [...***...] of [...***...] shall
            [...***...] affect [...***...].

2.2   JOINT DEVELOPMENT COMMITTEE.

      2.2.1 FORMATION AND MEMBERSHIP. Promptly after the Effective Date, but not
            later than [...***...] ([...***...]) days after Effective Date,
            Anadys and LGLS shall establish a Joint Development Committee (the
            "Joint Development Committee") comprised of three (3)
            representatives designated by Anadys and three (3) representatives
            designated by LGLS, with the right of each party to designate
            successive

                                             ***Confidential Treatment Requested

                                        7
<PAGE>

            substitutes for its representatives; provided that such equal number
            of representatives shall be increased or decreased as may be
            determined by the Joint Development Committee. The Joint Development
            Committee shall be chaired by one representative of LGLS to be
            designated by LGLS and one representative of Anadys to be designated
            by Anadys, with the right of each party to designate successive
            substitutes for its designee.

      2.2.2 RESPONSIBILITIES. The Joint Development Committee shall have overall
            responsibility for managing, directing, overseeing and implementing
            the Global Development Plan, but shall not have any power to amend,
            modify or waive compliance with the terms of this Agreement. The
            Joint Development Committee shall be responsible for, among other
            things:

            (a)   Preparing the content of the Global Development Plan and
                  Global Development Plan Budget as provided in Sections 2.3 and
                  2.5 hereof for review and approval by the Joint Steering
                  Committee in accordance with Section 5.6.4;

            (b)   providing a forum for consensual decision making relating to
                  the initial Global Development Plan and its amendment from
                  time to time during the Joint Development Project Term;

            (c)   monitoring the Parties' compliance with their respective
                  obligations under the Global Development Plan.

      2.2.3 ADMINISTRATIVE MATTERS. The chairs of the Joint Development
            Committee shall be responsible for calling meetings of the Joint
            Development Committee to be held in accordance with Section 2.2.5,
            for distributing a proposed agenda in advance of each meeting called
            by such chairs, and for leading such meetings. At each meeting of
            the Joint Development Committee, a Joint Development Committee
            member of the Party appointed by the Chairs of the Joint Development
            Committee shall serve as secretary of that meeting and shall record
            the minutes of such meeting. Such minutes shall provide a
            description in reasonable detail of the discussions had at the
            meeting and a list of any actions, decisions or determinations
            approved by the Joint Development Committee. The secretary of each
            meeting shall distribute to all members of the Joint Development
            Committee such minutes within [...***...] ([...***...]) weeks after
            such meeting At such next meeting, the Joint Development Committee
            shall approve or disapprove of such minutes, and such minutes shall
            be revised as necessary for further review and approval or
            disapproval by the Joint Development Committee. Final minutes of
            each meeting shall be distributed to the members of the Joint
            Development Committee by the member of the Joint Development
            Committee who served as secretary at such meeting or such member's
            replacement, if any.

      2.2.4 DECISION MAKING. The Joint Development Committee will attempt in
            good faith to make decisions by consensus with respect to any
            matters that properly come before it. If the Joint Development
            Committee cannot reach consensus on a matter within [...***...]
            ([...***...]) days from the day the matter is so submitted to them,
            the Joint Development Committee shall refer such matter to the Joint
            Steering Committee to attempt in good faith to reach a mutually
            agreeable decision in accordance with Section 5.6.4. If the Joint
            Steering Committee cannot reach consensus on the matter within
            [...***...] ([...***...]) days from the day the matter is so
            submitted to them, the Joint Steering Committee shall refer such
            matter to the Chief Executive Officers ("CEOs") of LGLS and Anadys
            to attempt in good faith to reach a mutually agreeable decision. If
            the CEOs cannot reach consensus on the matter within [...***...]
            ([...***...]) days from the day the matter is so submitted to them,
            then the matter shall be [...***...] in accordance with
            [...***...];[...***...],[...***...], that for the [...***...] of
            [...***...] from the [...***...] until the [...***...] of the
            [...***...], if the [...***...] cannot [...***...] any such
            [...***...] so [...***...] to them for [...***...] within
            [...***...] from the [...***...] the [...***...]is so [...***...] to
            them, then [...***...] shall have the [...***...]; provided that
            [...***...] in the then [...***...] that is [...***...] of the then
            [...***...] contained therein [...***...].

      2.2.5 MEETINGS.

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            (a)   The Joint Development Committee shall meet at least
                  [...***...] ([...***...]) times per year following its
                  formation during the term of the License Agreement. Such
                  meetings shall be held at such times and places as are
                  mutually agreed upon by the Joint Development Committee, with
                  at least [...***...] ([...***...]) such meetings per year to
                  be [...***...]; and at meetings not designated as being
                  [...***...], the representatives may participate by means of
                  conference telephone or similar communications equipment by
                  means of which all persons participating in the meeting can
                  hear each other.

            (b)   Each Party shall use commercially reasonable efforts to cause
                  its representatives to attend the meetings of the Joint
                  Development Committee in person. If a representative of a
                  Party is unable to attend a meeting, such Party may designate
                  an alternate representative to attend such meeting in place of
                  the absent representative. In addition, each Party may, at its
                  discretion, invite additional employees, and, with the consent
                  of the other Party, consultants or scientific advisors, to
                  attend the meetings of the Joint Development Committee.

            (c)   Either Party may also convene a special meeting of the Joint
                  Development Committee for the purpose of resolving disputes or
                  for the purpose of reviewing (or making) a decision pertaining
                  to the Global Development Plan by providing at least
                  [...***...] ([...***...]) Business Days written notice to the
                  other Party.

2.3   GLOBAL DEVELOPMENT PLAN.

      2.3.1 CONTENTS. The Global Development Plan shall contain a chronology of
            the specific objectives and milestones comprising the Joint
            Development Program, a chronology of the actions to be undertaken by
            each Party to achieve such objectives and milestones in a timely
            manner, and the Global Development Budget. The Global Development
            Plan shall be consistent with the other terms and conditions of this
            Agreement.

      2.3.2 INITIAL ADOPTION. The Joint Development Committee shall prepare and
            approve and the Joint Steering Committee shall approve in accordance
            with Section 5.6.4 the initial version of the Global Development
            Plan (including the details of the [...***...] Study and the details
            of the [...***...] required for Regulatory Approval) within
            [...***...] ([...***...]) [...***...] following the Effective Date;
            provided, however, that to the extent the manufacturing and
            chemistry manufacturing and controls audits are not complete due to
            the lack of cooperation by LGLS, and the data listings are not
            provided by LGLS to Anadys within [...***...] ([...***...])
            [...***...] following the Effective Date, then the timeline for
            finalization of the Global Development Plan may be extended beyond
            such [...***...] ([...***...]) [...***...] period by the number of
            days of such delay.

      2.3.3 AMENDMENT. The Joint Development Committee shall, in accordance with
            Section 2.2.4, update and amend, as necessary or advisable, the then
            current Global Development Plan from time to time during the Joint
            Development Program Term; provided that no less than annually during
            the last calendar quarter of each calendar year during the Joint
            Development Project Term, the Joint Development Committee shall
            review the Global Development Plan and shall either (a) amend or
            revise the Global Development Plan as the Joint Development
            Committee deems necessary or advisable or (b) expressly confirm that
            such amendment or revision is not then necessary or advisable. All
            such amendments of the Global Development Plan shall be subject to
            the approval of the Joint Steering Committee pursuant to Section
            5.6.4.

2.4   CONDUCT OF THE JOINT DEVELOPMENT PROGRAM.

      2.4.1 OBJECTIVE. The Parties shall conduct the Joint Development Program
            in a manner reasonably likely to result in the achievement of the
            objectives and milestones in accordance with such program
            progression guidelines. Each Party shall use commercially reasonable
            efforts to conduct the activities of the Joint Development Program
            which are assigned to it in the Global Development Plan. The Parties
            acknowledge

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            and agree that neither Party guarantees the success of the tasks to
            be undertaken by it in accordance with the Global Development Plan.

      2.4.2 COMPLIANCE WITH LAW. Each Party agrees to conduct such Development
            activities in compliance with all Laws that are applicable to the
            particular stage of Development of each Compound or Program Product,
            including without limitation, Good Laboratory Practices, Good
            Clinical Practices and Good Manufacturing Practices.

      2.4.3 PROGRAM DIRECTORS. Each Party shall identify one of its
            representatives to serve as a program director with responsibility
            for overseeing that Party's day-to-day activities relating to the
            Joint Development Program and to serve as a contact person for
            coordinating Joint Development Program activities between the
            Parties.

      2.4.4 ALLOCATIONS OF FTES.

            (a)   In addition to sharing the Global Development Costs in
                  accordance with Section 2.5.1, [...***...] to the Joint
                  Development Program activities over the course of the Joint
                  Development Program. All FTE utilization shall be expressly
                  provided for in the Global Development Plan or otherwise
                  approved by the Joint Development Committee. The Joint
                  Development Committee may, in accordance with Section 2.2.4,
                  amend the Global Development Plan as [...***...] and
                  participation by the Parties over the course of the Joint
                  Development Program, and any such amendment shall be subject
                  to the approval of the Joint Steering Committee in accordance
                  with Section 5.6.4.

            (b)   If either Party [...***...] in [...***...] to, or [...***...]
                  by the Parties in, the Joint Development Program, such Party
                  may submit the matter to the Joint Development Committee.
                  Taking into account [...***...] and [...***...] in and to the
                  Joint Development Program by the Parties, the Joint
                  Development Committee shall [...***...] [...***...]
                  [...***...] by the Parties in the Joint Development Program.
                  At the request of a Party, the other Party shall [...***...]
                  Party, at reasonable times and upon reasonable notice but
                  [...***...] to [...***...] at [...***...] of [...***...] of
                  the [...***...] the [...***...] the other Party to the Joint
                  Development Committee regarding [...***...] Joint Development
                  Program by such Party.

      2.4.5 JOINT DEVELOPMENT PROGRAM RECORDS.

            (a)   In order to protect the Patent Rights under any applicable Law
                  in any inventions conceived or reduced to practice during or
                  as a result of the Joint Development Program, each Party
                  agrees to maintain a policy which requires its employees to
                  record and maintain all data and information developed during
                  the Joint Development Program in such a manner as to enable
                  the Parties to use such records to establish the earliest date
                  of invention and/or diligence to reduction to practice.

      2.4.6 LIABILITY. In connection with conduct of the Joint Development
            Program, each Party shall be responsible for, and hereby assumes,
            any and all risks of personal injury or property damage attributable
            to the negligent acts or omissions of that Party or its Affiliates,
            and their respective directors, officers, employees and agents.

      2.4.7 SUBCONTRACTORS. Either Party may perform some of its obligations
            under the Joint Development Program through one or more
            subcontractors; provided that (a) none of the rights of the other
            Party hereunder are diminished or otherwise adversely affected as a
            result of such subcontracting, (b) such Party obtains the written
            approval of the other Party prior to engaging any subcontractor,
            which approval shall not be unreasonably withheld or delayed, and
            (c) the subcontractor undertakes in writing obligations relating to
            the ownership and protection of Patent Rights in the Program
            Technology set forth in this Agreement and

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            confidentiality and non-use regarding the other Party's Confidential
            Information which are substantially the same as those undertaken by
            Anadys and LGLS pursuant to Article 9 hereof. In the event a Party
            performs one or more of its obligations under the Joint Development
            Program through a subcontractor, then such Party shall at all times
            be responsible for the performance of such subcontractor. For the
            avoidance of doubt, it is understood that an Affiliate of a Party
            shall not be deemed to be a subcontractor of such Party

      2.4.8 CLINICAL SUPPLIES OF COMPOUNDS.

            (a)   LGLS will supply sufficient quantities of the Compounds as
                  bulk drug substance to support on a global basis the conduct
                  of the human clinical trials through completion of Phase 2b
                  Studies contemplated by the Global Development Plan. In
                  addition, LGLS shall have the option to provide finished
                  Program Product formulated from such quantities of the
                  Compounds to support such clinical trials.

            (b)   Clinical Supply Costs incurred by the Parties shall be deemed
                  to be Global Development Costs.

            (c)   All Compounds or Program Product, as applicable, provided by
                  LGLS to Anadys shall (i) be used only in furtherance of the
                  Joint Development Program and in accordance with the Global
                  Development Plan, (ii) be used solely under the control of
                  Anadys and its Affiliates, (iii) not be used or delivered to
                  or for the benefit of any Third Party without the prior
                  written consent of LGLS, and (iv) not be used in research or
                  testing involving human subjects except as set forth in an IND
                  or similar approval from the Regulatory Authority having
                  jurisdiction over such research or testing effective for human
                  clinical trials of such Compounds or Program Product, as
                  applicable, and with the requisite degree of care, prudence
                  and appropriate caution for conducting clinical trials in
                  humans experimental work dictated by applicable Laws and
                  custom.

            (d)   All quantities of Compounds or Program Products, as
                  applicable, supplied by LGLS to Anadys under this Section
                  2.4.8 shall be of GMP quality and shall comply with the
                  specifications for such Compounds or Program Products, as
                  applicable, set forth in the Global Development Plan and in
                  the international dossier relating thereto. EXCEPT FOR THIS
                  REPRESENTATION AND WARRANTY AS TO SUCH GMP QUALITY AND
                  COMPLIANCE WITH SUCH SPECIFICATIONS, THE COMPOUNDS OR PROGRAM
                  PRODUCTS, AS APPLICABLE, ARE PROVIDED "AS IS" AND WITHOUT ANY
                  REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, INCLUDING
                  WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
                  OF FITNESS FOR ANY PARTICULAR PURPOSE OR ANY WARRANTY THAT THE
                  USE OF SUCH COMPOUNDS OR PROGRAM PRODUCTS, AS APPLICABLE, WILL
                  SUCCESSFULLY TREAT THE INDICATION IN RESPECT OF WHICH SUCH
                  COMPOUNDS OR PROGRAM PRODUCTS, AS APPLICABLE, ARE BEING
                  PROVIDED FOR CLINICAL STUDIES THEREOF.

      2.4.9 NON-SOLICITATION. During the Joint Development Program Term, and for
            a period of [...***...] ([...***...])[...***...] thereafter, neither
            Party shall either directly or indirectly solicit, recruit, induce,
            encourage or attempt to induce or encourage any employee of the
            other Party or any independent contractor primarily dedicated to the
            Joint Development Program or in Commercialization activities to
            terminate his or her employment with such other Party and become
            employed by or consult for such other Party whether or not such
            employee is a full-time employee of such other Party, whether or not
            such employment is pursuant to a written agreement or is at-will.

2.5   GLOBAL DEVELOPMENT COSTS AND BUDGET.

      2.5.1 ALLOCATION OF GLOBAL DEVELOPMENT COSTS. Anadys and LGLS will each
            bear fifty percent (50%) of the Global Development Costs.

      2.5.2 GLOBAL DEVELOPMENT BUDGET.

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            (a)   The Global Development Budget shall be included, among other
                  things, in the Global Development Plan. The Global Development
                  Budget shall include reasonable estimates of total Global
                  Development Costs and allocation of Internal FTEs on a
                  year-by-year basis and specify in reasonable detail on a
                  study-by-study and activity-by-activity basis the Global
                  Development Costs expected to be incurred for the current and
                  next succeeding calendar years.

            (b)   The Global Development Budget shall be approved by the Joint
                  Development Committee in accordance with the provisions of
                  Sections 2.2.4 and 2.3 hereof, and further approved by the
                  Joint Steering Committee in accordance with Section 5.6.4 and
                  during the last quarterly meeting of each calendar year, the
                  Joint Development Committee shall review and propose
                  modifications for the Joint Steering Committee to approve in
                  accordance with Section 5.6.4, as necessary or advisable, the
                  Global Development Budget, and shall in connection therewith
                  specify in reasonable detail on a study-by-study and
                  activity-by-activity basis the Global Development Costs
                  expected to be incurred for the next succeeding calendar year.
                  Subject to the provisions of Sections 2.2.4 and 2.3 hereof,
                  any such amendment shall be by written agreement signed by a
                  representative from each Party and the Global Development
                  Budget as so amended and agreed by the Parties will thereupon
                  become effective.

            (c)   The Joint Development Committee shall review on a quarterly
                  basis any variance between actual Global Development Costs and
                  budgeted Global Development Costs for the immediately
                  preceding quarter, shall determine the reasons for any such
                  variances, assess whether such variances are likely to
                  continue, and, if necessary or advisable, agree on a revised
                  Global Development Budget or otherwise request that one or
                  both Parties take such actions as are required to address or
                  remedy the continuation of such variance.

      2.5.3 REIMBURSEMENT OF GLOBAL DEVELOPMENT COSTS.

            (a)   Upon execution of this Agreement, [...***...] in [...***...]
                  representing [...***...].

            (b)   At each quarterly meeting of the Joint Development Committee,
                  the Joint Development Committee shall determine if the Global
                  Development Costs and allocation of Internal FTEs incurred by
                  the Parties during the preceding calendar quarter have been
                  borne by the Parties in accordance with Section 2.5.1 hereof.
                  To the extent that one Party has paid more than its allocable
                  share pursuant to Section 2.5.1 and the other Party has paid
                  less than its allocable share pursuant to Section 2.5.1, the
                  Party that has so underpaid shall within [...***...]
                  ([...***...]) days following such determination pay to the
                  Party that has so overpaid the amount by which such Party has
                  so overpaid, as determined by the Joint Development Committee.

2.6   DISCONTINUED DEVELOPMENT.

      2.6.1 UNILATERAL DECISION.

            (a)   In the event that either Party elects not to continue its
                  participation in Development of a Program Product, such Party
                  (as the "First Party") shall provide written notice to the
                  other Party (as the "Second Party") of such election (a
                  "Notice of Discontinuance"). Upon providing a Notice of
                  Discontinuance, such First Party's obligations with respect to
                  such discontinued Program Product shall cease, subject to
                  acting in good faith with respect to the winding down or
                  transition of studies that may be necessary so as not to
                  adversely affect the Development of such Program Product by
                  the other Party.

            (b)   Upon receipt of a Notice of Discontinuance, the Second Party,
                  by providing written notice to the First Party within
                  [...***...] ([...***...]) days of receipt of the Notice of
                  Discontinuance, may elect

                  (i)   to also discontinue Development of such Program Product,
                        and such Program Product shall thereupon be deemed a
                        "Dropped Program Product", or

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                  (ii)  to continue Development of the Program Product, and such
                        Program Product shall thereupon become a "Unilateral
                        Product" and cease being a Program Product.

            (c)   In the case of any Unilateral Product,

                  (i)   if the Party electing to continue Development thereof is
                        LGLS, then (A) LGLS shall pursue such Development in
                        accordance with its retention of ownership of all LGLS
                        Patent Rights and its rights to or under the Program
                        Technology, Program Materials, the Global Development
                        Plan, the Joint Patent Rights assigned to Anadys under
                        Section 6.1.4 and licensed to LGLS under Section 3.1.2,
                        and Anadys's Patent Rights to the Anadys Inventions
                        licensed to LGLS under Section 3.1.2 and (B) in the case
                        of such Joint Patent Rights and such Patent Rights in
                        the Anadys Inventions, LGLS and Anadys shall negotiate
                        in good faith the terms and conditions under which LGLS
                        may so continue to use such Joint Patent Rights and such
                        Patent Rights for continued Development and
                        Commercialization of such Unilateral Product, or

                  (ii)  if the Party electing to continue Development thereof is
                        Anadys, then (A) Anadys shall pursue such Development in
                        accordance with its license to the LGLS Patent Rights
                        and LGLS Know-How and its rights to or under the Program
                        Technology, Program Materials (excluding any right to be
                        supplied by LGLS with clinical supplies of such
                        Unilateral Product or the Compound comprising such
                        Unilateral Product), the Global Development Plan, and
                        (B) in the case of the LGLS Patent Rights and LGLS
                        Know-how, if Anadys desires to renegotiate the terms and
                        conditions of this Agreement, then LGLS and Anadys shall
                        negotiate in good faith the terms and conditions under
                        which Anadys may so continue to use the LGLS Patent
                        Rights and LGLS Know-How for continued Development and
                        Commercialization of such Unilateral Product.

      2.6.2 JOINT DECISION. In the event that both Parties mutually elect not to
            continue their participation in the Development of a Program
            Product, by exchange of mutual Notices of Discontinuance or mutual
            written agreement, then such Program Product shall thereupon be
            deemed a Dropped Program Product. Any mutual election of the Parties
            to not continue their participation in Development of a Program
            Product shall have no effect on (i) LGLS's continued ownership of
            all LGLS Patent Rights and LGLS Know-how, its rights in the Program
            Technology, Program Materials and the Global Development Plan, and
            the license granted by Anadys to LGLS under Section 3.1.2 to the
            extent such license relates to other Program Products, and (ii)
            Anadys's continued ownership of all its Patent Rights in the Anadys
            Inventions, its rights in the Program Technology, Program Materials
            and the Global Development Plan, and the license granted by LGLS to
            Anadys under Section 3.1.1 to the extent such license relates to
            other Program Products.

      2.6.3 EFFECT ON GLOBAL DEVELOPMENT PLAN. If a Program Product becomes a
            Dropped Program Product pursuant to Sections 2.6.1(b)(i) or 2.6.2 or
            becomes a Unilateral Product pursuant to Section 2.6.1(b)(ii), then
            the Joint Development Committee shall promptly revise the Global
            Development Plan as necessary or advisable to reflect such change in
            the status of such Program Product.

                                    ARTICLE 3
                                    LICENSES

3.1   SCOPE.

      3.1.1 LGLS GRANT TO ANADYS. Subject to the terms and conditions of this
            Agreement, LGLS hereby grants to Anadys an exclusive royalty-bearing
            license, with the right to sublicense, under all LGLS Patent Rights
            and LGLS Know-How, including, without limitation, LGLS's rights in
            LGLS Inventions, to develop, make, have made, use, register, offer
            to sell, sell, export and import the Compounds and Program Products
            in the Anadys Territory in the Anti-HBV Field.

      3.1.2 ANADYS GRANT TO LGLS. Subject to the terms and conditions of this
            Agreement, Anadys hereby grants to LGLS an exclusive license,
            non-royalty-bearing except with respect to Net Sales of Program
            Products in China, with the right to sublicense, under all Patent
            Rights in the Anadys Inventions and Joint Patent

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            Rights assigned to Anadys under Section 6.1.4 of this Agreement, and
            know-how of Anadys relating to such Anadys Inventions and such Joint
            Patent Rights, to develop, make, have made, use, register, offer to
            sell, sell, export and import the Compounds and Program Products in
            the LGLS Territory in the Anti-HBV Field.

      3.1.3 PROGRAM TECHNOLOGY AND PROGRAM MATERIALS. Subject to the terms and
            conditions of this Agreement, LGLS hereby grants to Anadys
            [...***...] license during the term of this Agreement under
            [...***...] in the [...***...] and the [...***...] [...***...] for
            the purpose of [...***...]. Subject to the terms and conditions of
            this Agreement, Anadys hereby grants to LGLS a [...***...] license
            during the term of this Agreement under Anadys's interest in the
            [...***...] and the [...***...] for the purpose of [...***...]
            [...***...] to [...***...] the [...***...]; provided, however, that
            [...***...] shall not be required for [...***...] by either Party
            [...***...] contemplated by the Global Development Plan, by LGLS to
            [...***...] for Development and Commercialization of Compounds and
            Program Products [...***...] or by Anadys to [...***...] within the
            [...***...] for Development and Commercialization of Compounds and
            Program Products [...***...]

3.2   SUBLICENSES.

      3.2.1 The right granted to Anadys in Section 3.1.1 to sublicense the
            rights granted in said Section 3.1 is subject to the following
            conditions:

            (a)   any such sublicense (each a "Sublicense") to any sublicensee
                  (each an "Anadys Sublicensee") will be consistent with and not
                  contravene in any way the rights of LGLS under this Agreement
                  and will be set forth in a written agreement containing terms
                  and conditions substantially similar to those contained in
                  this Agreement, provided that the scope of the rights granted
                  in any Sublicense may not exceed, but may be the same or less
                  than, the scope of the rights granted to Anadys in said
                  Section 3.1, and further provided [...***...];

            (b)   [...***...] will [...***...] the [...***...] of [...***...]
                  with [...***...] on the [...***...] of [...***...], and the
                  [...***...] of any such [...***...] to any [...***...] is
                  [...***...] to the [...***...] in [...***...], and [...***...]
                  under [...***...] that is [...***...] in [...***...] with
                  [...***...] be [...***...].

      3.2.2 If this Agreement is terminated for any reason, [...***...] to
            [...***...] the [...***...] to [...***...] the [...***...] of
            [...***...] as [...***...] by [...***...], and [...***...] shall
            [...***...] such [...***...] as may be [...***...] by [...***...] to
            [...***...] the [...***...] to [...***...] of all of [...***...],
            including, without limitation, the [...***...] any [...***...] due
            [...***...] under such [...***...].

      3.2.3 [...***...].

      3.2.4 The terms and conditions of Sections 3.2.1, 3.2.2 and 3.2.3 shall
            apply mutatis mutandis to the right granted to LGLS in Section 3.1.2
            to sublicense the rights granted in said Section 3.1.2.

3.3   RETAINED RIGHTS.

      3.3.1 GENERALLY. With respect to this Agreement, [...***...] to
            [...***...] under the [...***...], including, without limitation,
            [...***...] and [...***...] the [...***...].

      3.3.2 GLOBAL DEVELOPMENT PLAN. Subject to the rights granted to Anadys
            under this Agreement, the [...***...],[...***...]of [...***...].

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      3.3.3 [...***...]

                                    ARTICLE 4
                               REGULATORY MATTERS

4.1   LEAD REGULATORY PARTIES.

      4.1.1 APPOINTMENTS. [...***...] will be the [...***...] in the
            [...***...], and [...***...] will be the [...***...] in the
            [...***...].

      4.1.2 RESPONSIBILITY OF LEAD REGULATORY PARTY. Unless otherwise determined
            by the Joint Development Committee, the Lead Regulatory Party in
            each Territory shall (a) be responsible for obtaining the Regulatory
            Approvals for the Compounds and Program Products contemplated by the
            Global Development Plan in each country or political subdivision
            thereof in such Territory and (b) shall take all actions, including,
            without limitation, corresponding, meeting, communicating,
            interfacing and making filings with and submissions to the
            Regulatory Authorities in such countries or political subdivisions
            thereof in such Territory as are necessary or advisable to obtain in
            the name of such Lead Regulatory Party all such Regulatory
            Approvals.

4.2   OWNERSHIP OF REGULATORY APPROVALS.

      4.2.1 ANADYS TERRITORY. Anadys shall hold all Regulatory Approvals for
            Program Products for all countries in the Anadys Territory, unless
            otherwise determined by the Joint Development Committee.

      4.2.2 LGLS TERRITORY. LGLS shall hold all Regulatory Approvals for Program
            Products for all countries in the LGLS Territory, unless otherwise
            determined by the Joint Development Committee.

      4.2.3 TRANSFERS FOR DEVELOPMENT AND COMMERCIALIZATION.

            (a)   The Lead Regulatory Party in each Territory shall license,
                  transfer, provide a letter of reference with respect to, or
                  take other action necessary to make available such INDs or
                  NDAs as are filed in each country in such Territory to the
                  other Party as may be reasonably necessary to enable such
                  other Party to fulfill its obligations under the Global
                  Development Plan with respect to the Development of such
                  Compounds and Program Products and under the Global
                  Commercialization Plan with respect to the Commercialization
                  of such Program Product.

            (b)   If the license granted to Anadys in Section 3.1 hereof with
                  respect to any Compound or Program Product terminates prior to
                  the License Termination Date in respect of such Compound or
                  Program Product or such Compound or Program Product becomes a
                  Unilateral Product of LGLS, Anadys shall transfer and take all
                  such other action as is necessary or advisable to transfer to
                  LGLS the full right, title and interest to any Regulatory
                  Approvals in respect of such Compound or Program Product then
                  held by Anadys.

4.3   REGULATORY COORDINATION.

      4.3.1 INFORMATION EXCHANGE. The Parties shall establish procedures to
            ensure that the Parties exchange on a timely basis all necessary
            information to enable compliance with all regulatory obligations on
            a global basis, including without limitation filing updates, adverse
            event reports, and investigator notifications.

      4.3.2 REGULATORY MEETINGS AND CORRESPONDENCE. To the extent practicable,
            the Party that is not the Lead Regulatory Party in a Territory shall
            have the right to have a representative participate in all material
            meetings and telephone discussions between representatives of the
            Lead Regulatory Party in such Territory and the Regulatory Authority
            in any country in such Territory with respect to any Compound or
            Program Product.

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      4.3.3 REVIEW OF CORRESPONDENCE AND PROPOSED SUBMISSIONS.

            (a)   To the extent practicable, the Lead Regulatory Party in each
                  Territory shall provide the other Party with drafts of any
                  documents or other correspondence to be submitted to the
                  Regulatory Authorities in the countries comprising such
                  Territory pertaining to the Compounds or Program Products for
                  which Regulatory Approval is being sought in such country in
                  accordance with the Global Development Plan, sufficiently in
                  advance of submission so that the other Party may review and
                  comment on such documents and other correspondence and have a
                  reasonable opportunity to influence the substance of such
                  submissions. Each Lead Regulatory Party agrees to consider all
                  such comments from the other Party in good faith, taking into
                  account the best interest of the Compound or Program Product,
                  as applicable, on a global basis. If after considering in good
                  faith such comments regarding the content of a proposed
                  submission to a Regulatory Authority, the Lead Regulatory
                  Party disagrees with the other Party's view, such Lead
                  Regulatory Party shall notify the other Party in writing (a
                  "Notice of Disagreement").

            (b)   If a Party receiving a Notice of Disagreement believes that
                  the proposed submission of the other Party in such other
                  Party's capacity as a Lead Regulatory Party is likely to have
                  a material adverse effect on the Development of the applicable
                  Compound or Program Product on a global basis, such Party
                  shall so notify such Lead Regulatory Party within [...***...]
                  ([...***...]) business days following receipt of the Notice of
                  Disagreement and thereupon have the right to request that the
                  Joint Development Committee immediately convene, either in
                  person or by telephone, in order to discuss the matter. Any
                  such meeting shall occur within [...***...] ([...***...])
                  business days following such request for such meeting. The
                  resolution of such matter shall thereupon be decided in
                  accordance with the provisions set forth in Section 2.2.4.

            (c)   The Lead Regulatory Party in each Territory shall promptly
                  provide to the other Party copies of any documents or other
                  correspondence received from the Regulatory Authorities in
                  such Territory pertaining to the relevant Compound or Program
                  Product (including without limitation any meeting minutes),
                  which such documents or other correspondence shall be in the
                  language of the originals of documents or correspondence.

      4.3.4 REGULATORY ASSISTANCE.

            (a)   Each Party shall cooperate with the other Party to provide all
                  reasonable assistance and take all actions reasonably
                  requested by the other Party that are necessary or desirable
                  to enable the other Party to comply with any Law applicable to
                  any Compound or Program Product, including, but not limited
                  to, report adverse drug experience reports (and serious
                  adverse drug experience reports) to the relevant Regulatory
                  Authority and submit or file promotional materials with the
                  relevant Regulatory Authority. The Parties will work in good
                  faith together to develop a global safety data base containing
                  such information relating to the Global Development Plan and
                  the safety of the Compounds and the Program Products as the
                  Parties may require to comply with applicable Law and
                  otherwise monitor the safety of the Compounds and the Program
                  Products. Each Party has the right to review any documents
                  relating to the Global Development Plan in the possession of
                  the other Party to ensure compliance with global regulatory
                  standards, upon reasonable prior written notice to the other
                  party.

            (b)   Such assistance and actions shall include, among other things,
                  keeping the other Party informed, within an appropriate period
                  of time relevant to any Regulatory Authority requirements
                  applicable to such other Party or otherwise reasonable period
                  of time, of notification of any action by, or notification or
                  other information which it receives (directly or indirectly)
                  from, any Regulatory Authority, which (a) raises any material
                  concerns regarding the safety or efficacy of any Program
                  Product, (b) which indicates or suggests a potential material
                  liability for either Party to Third Parties arising in
                  connection with any Program Product, or (c) which is
                  reasonably likely to lead to a recall or market withdrawal of
                  any Program Product, provided that neither Party shall be
                  obliged to disclose information in breach of any contractual
                  restriction which it could not reasonably have avoided.
                  Information that shall be disclosed pursuant to this Section
                  4.3.4 shall include, but not be limited to:

                                             ***Confidential Treatment Requested

                                       16
<PAGE>

                  (i)   governmental or regulatory inspections of manufacturing,
                        distribution or other related facilities used for
                        Compounds or Program Products;

                  (ii)  inquiries by governmental or regulatory authorities
                        concerning clinical investigation activities (including
                        inquiries of investigators, clinical monitoring
                        organizations and other related parties) relating to
                        Compounds or Program Products;

                  (iii) any communication from governmental or regulatory
                        authorities pertaining to the manufacture, sale,
                        promotion or distribution of Compounds or Program
                        Products;

                  (iv)  any other governmental or regulatory authority reviews
                        or inquiries relating to Compounds or Program Products;

                  (v)   receipt of a warning letter relating to any of the
                        Compounds or Program Products; and

                  (vi)  an initiation of any governmental or regulatory
                        authority investigation, detention, seizure or
                        injunction concerning any Compound or Program Product.

                                    ARTICLE 5
                            COMMERCIALIZATION PROGRAM

5.1   COMMERCIALIZATION RIGHTS.

      5.1.1 Anadys will have exclusive commercialization rights in the Anadys
            Territory.

      5.1.2 LGLS will have exclusive commercialization rights in the LGLS
            Territory.

5.2   MILESTONE PAYMENTS.

      5.2.1 As partial consideration for the exclusive rights granted, Anadys
            will make non-refundable milestone payments to LGLS as set forth
            below. The milestone payments will be [...***...].

<TABLE>
<CAPTION>
MILESTONES                                               PAYMENTS [US$]
----------                                               --------------
<S>                                                      <C>
Within 30 days of execution of License Agreement          $4,000,000
[...***...]                                               [...***...]
[...***...]                                               [...***...]
[...***...]                                               [...***...]
[...***...]                                               [...***...]
[...***...]                                               [...***...]
[...***...]                                               [...***...]
[...***...]                                               [...***...]

[...***...]
                                                          [...***...]

[...***...]
                                                          [...***...]

[...***...]
                                                          [...***...]
</TABLE>

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                                       17
<PAGE>
<TABLE>
<S>                                                       <C>
Total Milestone payments:                                 $29,500,000
</TABLE>

      5.2.2 Anadys agrees to use commercially reasonable best efforts to achieve
            the milestones set forth in Section 5.2.1 hereof in [...***...] and
            to [...***...] sufficient for such purposes.

      5.2.3 In addition to the quarterly reporting requirements set forth in
            Section 5.3.4 hereof, until such time as all of the milestones based
            on cumulative Net Sales of Program Products in the Anadys Territory
            set forth in Section 5.2.1 hereof are satisfied, with such quarterly
            reports after the First Commercial Sale of a Program Product in the
            Anadys Territory, Anadys shall submit to LGLS a report providing the
            cumulative Net Sales of Program Products in the Anadys Territory as
            of such quarter end, which such report shall be accompanied or
            preceded by payment of any such milestone payment then due but
            unpaid.

5.3   ROYALTIES.

      5.3.1 ON PROGRAM PRODUCTS SOLD IN ANADYS TERRITORY.

            (a)   Anadys shall pay to LGLS royalties on Net Sales of each
                  Program Product by Anadys or its sublicensees in countries in
                  the Anadys Territory as follows and except as otherwise
                  provided in Section 5.3.3 hereof:

<TABLE>
<CAPTION>
ANNUAL NET SALES THRESHOLDS IN THE ANADYS TERRITORY         ROYALTY
                                                            -------
<S>                     <C>                              <C>
                        ([...***...])

[...***...]                                              [...***...]%
[...***...]                                              [...***...]%
</TABLE>

                  Royalties on Net Sales of each Program Product in a calendar
                  year shall be paid at the rate applicable to the portion of
                  Net Sales within each of the Net Sales levels set forth in the
                  table above during such calendar year and without regard to
                  the country in which Net Sales occur. For example, if Net
                  Sales of Program Product in a given calendar year in all
                  countries in the Anadys Territory are [...***...] then the
                  royalty rate for the first [...***...] of such Net Sales would
                  be [...***...] million under this example), and the royalty
                  rate for such Net Sales in excess of [...***...] would be
                  [...***...] under this example), for a total royalty payment
                  under this example of [...***...].

      5.3.2 ON PROGRAM PRODUCTS SOLD IN CHINA.

            (a)   LGLS shall pay to Anadys royalties on Net Sales of each
                  Program Product by LGLS or its sublicensees in China equal to
                  [...***...]% of such Net Sales, and except as otherwise
                  provided in Section 5.3.3 hereof.

      5.3.3 BASIS FOR PAYING ROYALTIES.

            (a)   The [...***...] upon [...***...] of [...***...] to the other
                  [...***...] this [...***...] shall be [...***...] on a
                  [...***...] and [...***...] for a [...***...] beginning upon
                  the [...***...] of each [...***...] in the [...***...] and
                  [...***...] on the [...***...] of [...***...] of this
                  [...***...] with [...***...] to such [...***...] in such
                  [...***...] in [...***...] with [...***...] of this
                  [...***...]. During the [...***...] for a [...***...] for a
                  [...***...], the [...***...] on [...***...] of such
                  [...***...] in such [...***...] of the [...***...] under
                  [...***...] or [...***...], as applicable, for so long as
                  there is a [...***...] of an [...***...] within the
                  [...***...] claiming the manufacture, use or sale of the
                  [...***...] in such [...***...] or [...***...] in such
                  [...***...] of the [...***...] under [...***...] or
                  [...***...], as applicable, for any [...***...] that
                  [...***...] applies, or [...***...], as applicable, for any
                  [...***...] that [...***...] and [...***...] are [...***...]
                  in [...***...].

                                             ***Confidential Treatment Requested

                                       18
<PAGE>

            (b)   To the extent that any withholding tax is required to be
                  deducted from the payment of any milestone payment by Anadys
                  to LGLS under Section 5.2.1 or any royalty payment by one
                  Party to the other Party under Section 5.3.1 or 5.3.2, as
                  applicable, then such party will (a) deduct such taxes from
                  the remitting payment, (b) timely pay the taxes to the proper
                  taxing authority, and (c) send proof of payment to the other
                  party and certify its receipt by the taxing authority;
                  provided, however, that no such deduction shall be made in
                  respect of any portion of any royalty payment attributable to
                  Net Sales of Program Products by any sublicencee of a Party.

      5.3.4 ROYALTY REPORTS; PAYMENTS. Within [...***...] ([...***...]) days
            after the end of each calendar quarter in which a Party is the
            Royalty-Paying Party with respect to Net Sales subject to any of the
            provisions of Section 5.3.1, 5.3.2 or 5.3.3, as applicable, such
            Party shall submit to the other Party a report, on the basis of each
            product and country, providing in reasonable detail an accounting of
            all Net Sales made during such calendar quarter and the calculation
            of the applicable royalty under Section 5.3.1, 5.3.2 or 5.3.3, as
            applicable. Concurrently with such report, the Royalty-Paying Party
            submitting the report shall pay to the other Party all royalties
            payable by it under Section 5.3.1, 5.3.2 or 5.3.3, as applicable, as
            indicated in the report.

      5.3.5 AUDITS. Each Party shall keep complete and accurate records of the
            underlying revenue and expense data relating to the reports and
            payments required by Sections 5.3.1, 5.3.2 or 5.3.3, as applicable,
            and Section 5.3.4. Each Party will have the right once annually at
            its own expense to have an independent, certified public accountant,
            selected by such Party and reasonably acceptable to the other Party,
            review any such records of the other Party in the location(s) where
            such records are maintained by the other Party upon reasonable
            notice and during regular business hours and under obligations of
            strict confidence, for the sole purpose of verifying the basis and
            accuracy of such payments, in each case within [...***...]
            ([...***...])[...***...] period. If the review of such records
            reveals that the other Party has failed to accurately report
            information pursuant to Section 5.3.4, then the other Party shall
            promptly pay to the auditing Party any resulting amounts due under
            Sections 5.3.1, 5.3.2 or 5.3.3, as applicable, and Section 5.3.4,
            together with interest calculated in the manner provided in Section
            5.3.7. If any amounts due under Section 5.3.1, Section 5.3.2 or
            5.3.3, as applicable, as a result of such audit are greater than
            [...***...] ([...***...]) of the amounts actually due for a calendar
            year under Section 5.3.1, Section 5.3.2 or 5.3.3., as applicable,
            the other Party shall pay all of the costs of such review. If a
            Party in good faith disputes any conclusion of the accounting firm
            under this Section 5.3.5, including that such Party owes additional
            amounts, then such Party shall inform the other Party by written
            notice within [...***...] ([...***...]) days of receipt of a copy of
            the audit in question, specifying in detail such dispute. The
            Parties shall promptly thereafter meet and negotiate in good faith a
            resolution to such dispute. In the event that the Parties are unable
            to resolve such dispute within [...***...] ([...***...]) days after
            notice by the disputing Party, the matter shall be resolved in a
            manner consistent with the procedures set forth in Section 5.6.4
            (provided, that, in the case that the matter has not been resolved
            by the CEOs of the Parties in accordance therewith, such matter
            shall be referred to an internationally recognized independent
            accounting firm acceptable to both Parties which shall arbitrate
            such matter and interest shall be payable on any additional amounts
            determined to be due in the same manner as provided for in Section
            5.3.7.

      5.3.6 CURRENCY EXCHANGE. With respect to Net Sales invoiced or expenses
            incurred in U.S. dollars, the Net Sales or expense amounts and the
            amounts due to the receiving Party hereunder shall be expressed in
            U.S. dollars. With respect to Net Sales invoiced or expenses
            incurred in a currency other than U.S. dollars, the Net Sales or
            expense shall be expressed in the domestic currency of the entity
            making the sale or incurring the expense, together with the U.S.
            dollar equivalent, calculated using the arithmetic average of the
            spot rates on the last business day of each month of the calendar
            quarter in which the Net Sales were made or the expense was
            incurred. The "closing mid-point rates" found in the "dollar spot
            forward against the dollar" table published by THE FINANCIAL TIMES
            or any other publication as agreed to by the Parties shall be used
            as the source of spot rates to calculate the average as defined in
            the preceding sentence. All payments shall be made in U.S. dollars.
            If at any time legal restrictions in any country in any Territory
            prevent the prompt remittance of any payments with respect to sales
            in that country, the paying Party shall have the right and option to
            make such payments by depositing the amount thereof in local
            currency to the receiving Party's account in a bank or depository in
            such country.

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<PAGE>

      5.3.7 LATE PAYMENTS. The paying Party shall pay interest in the nature of
            a penalty to the receiving Party on the aggregate amount of any
            payments that are not paid on or before the date such payments are
            due under this Agreement at a rate per annum equal to the lesser of
            the prime rate of interest plus [...***...] ([...***...]%), as
            reported by THE WALL STREET JOURNAL, or the highest rate permitted
            by applicable law, calculated on the number of days such payments
            are paid after the date such payments are due.

5.4   COMMERCIAL SUPPLY.

      5.4.1 [...***...], at its election, has the right [...***...] and
            [...***...] to [...***...] for [...***...] at a [...***...] a
            [...***...] to be [...***...], and, upon such election by
            [...***...], the Parties shall negotiate a definitive commercial
            supply agreement containing customary and reasonable terms and
            conditions relating to such manufacture and supply.

5.5   COMMERCIALIZATION OF PROGRAM PRODUCTS.

      5.5.1 Anadys will have the exclusive right to Commercialize Program
            Products in the Anadys Territory.

      5.5.2 LGLS will have the exclusive right to Commercialize Program Products
            in the LGLS Territory.

5.6   JOINT STEERING COMMITTEE.

      5.6.1 FORMATION AND MEMBERSHIP. Promptly after the Effective Date, but not
            later than [...***...] ([...***...]) days after the Effective Date,
            Anadys and LGLS shall establish a Joint Steering Committee (the
            "Joint Steering Committee") comprised of [...***...] ([...***...])
            representatives designated by Anadys and [...***...] ([...***...])
            representatives designated by LGLS, with the right of each party to
            designate successive substitutes for its representatives. The Joint
            Steering Committee shall be chaired by [...***...].

      5.6.2 RESPONSIBILITY. The Joint Steering Committee shall have overall
            responsibility for managing, directing, overseeing and implementing
            the collaboration between the Parties contemplated by this
            Agreement, but shall not have any power to amend, modify or waive
            compliance with the terms of this Agreement. The Joint Steering
            Committee shall be responsible for, among other things:

            (a)   Approving the Global Development Plan Budget and any
                  amendments to the Global Development Plan or Global
                  Development Plan Budget following approval thereof by the
                  Joint Development Committee in accordance with Section 2.2.4;

            (b)   providing a forum for consensual decision making relating to
                  the collaboration of the Parties contemplated by this
                  Agreement; and

            (c)   monitoring the Parties' compliance with their respective
                  obligations under this Agreement.

      5.6.3 ADMINISTRATIVE MATTERS. The chairs of the Joint Steering Committee
            shall be responsible for calling meetings of the Joint Steering
            Committee to be held in accordance with Section 5.6.5 hereof, for
            distributing a proposed agenda in advance of each meeting called by
            such chairs, and for leading such meetings. At each meeting of the
            Joint Steering Committee, a Joint Steering Committee member
            appointed by the chairs shall serve as secretary of that meeting and
            shall record the minutes of such meeting. Such minutes shall provide
            a description in reasonable detail of the discussions had at the
            meeting and a list of any actions, decisions or determinations
            approved by the Joint Steering Committee. The secretary of each
            meeting shall distribute to all members of the Joint Steering
            Committee such minutes within [...***...] ([...***...]) weeks after
            such meeting At such next meeting, the Joint Steering Committee
            shall approve or disapprove of such minutes, and such minutes shall
            be revised as necessary for further review and approval or
            disapproval by the Joint Steering Committee. Final minutes of each
            meeting shall be distributed to the

                                             ***Confidential Treatment Requested

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<PAGE>

            members of the Joint Steering Committee by the member of the Joint
            Steering Committee who served as secretary at such meeting or such
            member's replacement, if any.

      5.6.4 DECISION MAKING. The Joint Steering Committee will attempt in good
            faith to make decisions by [...***...] with respect to any matters
            that properly come before it. If the Joint Steering Committee cannot
            [...***...], the Joint Steering Committee shall refer such matter to
            the CEOs of LGLS and Anadys to attempt in good faith to reach a
            mutually agreeable decision. If the CEOs cannot reach consensus on
            the matter within [...***...] ([...***...]) days from the day the
            matter is so submitted to them, then the [...***...] in accordance
            with [...***...].

      5.6.5 MEETINGS.

            (a)   The Joint Steering Committee shall meet at least [...***...]
                  ([...***...]) times per year following its formation during
                  the term of the License Agreement. Such meetings shall be held
                  at such times and places as are mutually agreed upon by the
                  Joint Steering Committee, with at least [...***...]
                  ([...***...]) [...***...] per year to be conducted in person;
                  and at meetings not designated as being conducted in person,
                  the representatives may participate by means of conference
                  telephone or similar communications equipment by means of
                  which all persons participating in the meeting can hear each
                  other.

            (b)   Each Party shall use commercially reasonable efforts to cause
                  its representatives to attend the meetings of the Joint
                  Steering Committee in person. If a representative of a Party
                  is unable to attend a meeting, such Party may designate an
                  alternate representative to attend such meeting in place of
                  the absent representative. In addition, each Party may, at its
                  discretion, invite additional employees, and, with the consent
                  of the other Party, consultants or scientific advisors, to
                  attend the meetings of the Joint Steering Committee.

            (c)   Either Party may also convene a special meeting of the Joint
                  Steering Committee for the purpose of resolving disputes or
                  for the purpose of reviewing (or making) a decision pertaining
                  to the Global Development Plan by providing [...***...]
                  ([...***...]) Business Days written notice to the other Party.

                                    ARTICLE 6
              INTELLECTUAL PROPERTY PROTECTION AND RELATED MATTERS

6.1   PROSECUTION OF APPLICATIONS AND MAINTENANCE ADMINISTRATION

      6.1.1 ADMINISTRATIVE RESPONSIBILITY. [...***...] for [...***...] and
            [...***...] of all [...***...] in the [...***...] the [...***...].
            [...***...] of this [...***...] the [...***...] includes [...***...]
            without limitation [...***...] includes, without limitation, the
            [...***...].

      6.1.2 CONSULTATION; ABANDONMENT. Regarding the [...***...] and [...***...]
            of the [...***...] in [...***...] within the [...***...], including,
            [...***...] the [...***...] of [...***...] and [...***...] and
            [...***...], [...***...] and [...***...],[...***...] and [...***...]
            to, [...***...] or in the [...***...] in [...***...],[...***...]
            will [...***...] with [...***...] and [...***...] in [...***...],
            will [...***...] the [...***...] to [...***...] in [...***...] on
            [...***...] of [...***...], and will [...***...] from any
            [...***...]. Any such [...***...] on which [...***...] and
            [...***...],[...***...] be [...***...] to the [...***...] of
            [...***...] and [...***...]. [...***...] the [...***...] any
            [...***...] on [...***...] are [...***...] a [...***...].
            [...***...] to [...***...] any [...***...] or [...***...] in the
            [...***...],[...***...] in the [...***...] of [...***...] to be
            [...***...] or are [...***...]or [...***...] the
            [...***...],[...***...] thereof to [...***...], and, [...***...],
            [...***...] and/or [...***...] of [...***...] all [...***...] and/or
            [...***...] and [...***...] that the [...***...]. Upon [...***...]
            to so [...***...] of the [...***...], may [...***...] all of
            [...***...].

      6.1.3 INVENTIONS. Except as provided in Section 6.1.4, ownership of
            Inventions conceived of or reduced to practice in the course of the
            Joint Development Program shall be determined in accordance with the
            rules

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                                       21
<PAGE>

            of inventorship under United States patent laws. Anadys shall own
            all Anadys Inventions and all patent applications and patents
            claiming Anadys Inventions. LGLS shall own all LGLS Inventions and
            all patent applications and patents claiming LGLS Inventions.

      6.1.4 JOINT INVENTIONS. The Parties acknowledge that during the term of
            the Option Agreement and the License Agreement one or more
            employees, agents or contractors of one party jointly with one or
            more employees, agents or contractors of the other party may have
            conceived and/or reduced to practice or may conceive and/or reduce
            to practice one or more inventions that are necessary or useful for
            the Development or Commercialization of any Compound or Product
            (such inventions being "Joint Inventions"). [...***...]; provided,
            however, that to the extent that in [...***...] in order to preserve
            the patentability of any other [...***...], the Joint Development
            Committee in accordance with the provisions of Section 2.2.4,
            subject to the approval of the Joint Steering Committee in
            accordance with the provisions of Section 5.6.4, shall determine
            which Party shall thereafter have ownership of such Joint Patent
            Rights and primary responsibility for preparing any patent
            applications in respect of such Joint Inventions, prosecuting such
            applications, and maintaining any Patents issued in respect of such
            applications. To the extent that the Joint Development Committee
            determines that [...***...] thereupon and thereafter be responsible
            for the prosecution and maintenance of all patents and patent
            application included in such assigned Joint Patent Rights to the
            same extent as [...***...] is responsible under Section 6.1.1 for
            patents and patent applications included in the [...***...]. The
            provisions of Sections 6.2, 6.3 and 6.4 shall apply to such assigned
            Joint Patent Rights, and the license granted by [...***...] Section
            [...***...] of this Agreement shall include such assigned Joint
            Patent Rights in order for [...***...] to exploit such assigned
            Joint Patent Rights in the [...***...], and in respect of Program
            Products that are Covered by such assigned Joint Patent Rights,
            [...***...] shall pay royalties to [...***...] for Net Sales by
            [...***...] or its sublicensees in [...***...] at the [...***...] in
            Section [...***...], and otherwise such license to [...***...] of
            such assigned Joint Patent Rights shall be royalty-free. For the
            avoidance of doubt, the royalty on Net Sales of any Program Product
            in [...***...] that is Covered by any such assigned Joint Patent
            Rights and/or [...***...] shall be [...***...].

      6.1.5 PROSECUTION AND MAINTENANCE EXPENSES.

            (a)   [...***...] to prosecution and maintenance of patents and
                  patent applications comprising the LGLS Patent Rights and
                  patents and patent applications claiming any joint inventions
                  or such other inventions referred to in Section 6.1.3 in
                  nations [...***...], provided that LGLS shall to the extent
                  practical prior to taking any such actions relating to such
                  prosecution or maintenance consult in good faith with Anadys's
                  patent counsel; and further provided, however, that
                  [...***...] in respect of such portion of the patents and
                  patent applications that do not or are not likely to contain
                  claims that Cover any Program Products. For purposes of this
                  Section 6.1.5, the parties agree to consult with each other in
                  good faith to determine an agreed upon patent strategy and
                  allocation of costs under the LGLS Patent Rights

          (b)     [...***...]relating to prosecution and maintenance of patents
                  and patent applications comprising the LGLS Patent Rights and
                  patents and patent applications claiming any joint inventions
                  or such other inventions referred to in Section 6.1.3 in
                  nations [...***...]

6.2   ENFORCEMENT

      6.2.1 NOTICES. Each party will be responsible for promptly notifying the
            other party of any information that comes to its attention relating
            to infringing or possibly infringing activities by third parties
            with respect to the LGLS Patent Rights or Joint Patent Rights upon
            learning of such information, without regard to whether the nation
            in which such activities have occurred is in that party's territory
            or not.

      6.2.2 IN ANADYS TERRITORY. In nations within the Anadys Territory
            [...***...]

            (a)   if [...***...], except that if [...***...] in such [...***...]
                  in accordance with Section [...***...], then [...***...] will
                  [...***...] the [...***...] and [...***...] as a [...***...]
                  of such [...***...] as [...***...] of a [...***...], and

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<PAGE>

            (b)   if [...***...], then

                  (i)   [...***...] may bring the action, [...***...]; and

                  (ii)  [...***...] shall bear the expense of such action and
                        shall be entitled to the full amount of any recovery. If
                        after receipt of any recovery, [...***...], and the
                        result of the action is a declaration of validity or
                        other confirmation of the scope of the patent asserted
                        by LGLS, [...***...]

      6.2.3 PRIMARY RESPONSIBILITY. The Party in whose Territory the infringing
            activities are or allegedly are occurring shall have primary
            responsibility for bringing an action for infringement of the LGLS
            Patent Rights or Joint Patent Rights (and any related interference
            proceeding or opposition proceeding with respect to the LGLS Patent
            Rights or Joint Patent Rights), but shall not be obligated to do so.
            If the party with such primary responsibility is Anadys, LGLS may
            join the action. If one Party elects to take action against such
            infringement or alleged infringement or if the Parties agree to take
            such action together, each Party will provide all reasonable
            assistance to the enforcing Party in connection with any such
            action, including being named as a Party to such action or
            furnishing of a power of attorney to the enforcing Party, if
            necessary to bring such action.

      6.2.4 SETTLEMENTS. Neither Party shall have the right to settle any
            infringement action with respect to the LGLS Patent Rights or Joint
            Patent Rights in the Anadys Territory in a manner that would
            diminish the rights or interests of the other party or obligate the
            other party to make any payment or take any action without the prior
            written consent of such other Party.

6.3   DEFENSE.

      6.3.1 NOTICES. Each Party will be responsible for notifying the other
            Party of any claim or threatened claim by a Third Party alleging
            infringement by a Program Product, or of any declaratory judgment
            action or opposition asserting the invalidity or unenforceability of
            a licensed LGLS Patent Right, or that a licensed LGLS Patent Right
            is subject to an interference, inter parte reexamination or an
            opposition proceeding instituted by a Third Party without regard to
            whether the nation in which such activities have occurred is in that
            Party's Territory or not.

      6.3.2 IN ANADYS TERRITORY. In nations within the Anadys Territory,

            (a)   the [...***...] against such claim or threatened claim, action
                  or proceeding;

            (b)   if named as a defendant in any action alleging any such claim,
                  each Party shall have the right to defend against such claim
                  at its own expense, subject to any indemnity from the other
                  Party provided under the indemnity provisions set forth in
                  Article 8 of this Agreement. If the claim is brought within
                  the Anadys Territory and LGLS is not named as a defendant,
                  LGLS may join in the defense of such claim [...***...]; and

            (c)   any awards resulting from counterclaims shall be shared by
                  Anadys and LGLS in proportion to the expenses borne by each
                  Party.

      6.3.3 SETTLEMENTS. Neither Party shall have the right to settle any action
            described in this Section 6.3 in the Anadys Territory in a manner
            that would diminish the rights or interests of the other party or
            obligate the other Party to make any payment or take any action
            without the prior written consent of such other Party.

6.4   COOPERATION.

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      6.4.1 EMPLOYEES. Each Party hereby agrees to make its employees, agents
            and consultants reasonably available to the other Party (or to the
            other Party's authorized attorneys, agents or representatives), to
            the extent reasonably necessary to give effect to Sections 6.1, 6.2
            and 6.3 of this Agreement.

      6.4.2 MATERIALS. Each Party hereby agrees to provide the other Party with
            copies of all material correspondence pertaining to the LGLS Patent
            Rights and Joint Patent Rights to the extent reasonably necessary to
            give effect to Sections 6.1, 6.2 and 6.3 of this Agreement.

      6.4.3 OTHER COOPERATION. Each Party hereby agrees to cooperate to the
            extent reasonably necessary to give effect to Sections 6.1, 6.2 and
            6.3 of this Agreement and, where necessary or advisable, to obtain
            patent term extensions of the LGLS Patent Rights and patent rights
            in Joint Inventions.

      6.4.4 COORDINATION. Each Party hereby agrees to endeavor in good faith to
            coordinate its efforts with the other Party to give effect to
            Sections 6.1, 6.2, 6.3 and other sections of this Section 6.4.

6.5   MARKS FOR PROGRAM PRODUCTS.

      6.5.1 PATENT MARKS. Each Party shall mark all Program Products or their
            containers in accordance with all applicable patent-marking laws.

      6.5.2 TRADE MARKS AND THE LIKE. The Joint Steering Committee shall
            mutually agree upon trade mark, trade names, service marks and the
            like for any Program Product reasonably prior to Commercialization
            of such Program Product.

                                    ARTICLE 7
                    REPRESENTATIONS, WARRANTIES AND COVENANTS

7.1   CORPORATE POWER. Each Party hereby represents and warrants that it is duly
organized, validly existing and in good standing under the laws of the state or
country of its incorporation and has full corporate power and authority to enter
into this Agreement and to carry out the provisions hereof.

7.2   DUE AUTHORIZATION. Each Party hereby represents and warrants that such
Party is duly authorized to execute and deliver this Agreement and to perform
its obligations hereunder.

7.3   BINDING AGREEMENT. Each Party hereby represents and warrants that this
Agreement is a legal and valid obligation binding upon it and is enforceable in
accordance with its terms. The execution, delivery and performance of this
Agreement by such Party does not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or by which it may be
bound, nor violate any law or regulation of any court, governmental body or
administrative or other agency having authority over it.

7.4   NO CONFLICT. Each Party represents and warrants that it is not presently
bound by any agreement with any Third Party materially limiting such Party's
performance of any of the obligations or activities provided for under this
Agreement, and that such Party is not aware of any patents, patent applications
and/or know-how that such Party does not Control (in the case of Anadys, after
giving effect to this Agreement) that is necessary for the Development or the
Commercialization of the Compounds as contemplated by this Agreement. Each party
covenants that it will not take any action or fail to take any action that will
materially limit its performance under this Agreement. In particular, but
without limiting the foregoing, each Party covenants that it will not take any
action or fail to take any action that may limit or interfere with the rights
granted by such Party to the other Party under this Agreement.

7.5   OWNERSHIP OF PATENT RIGHTS. LGLS represents and warrants that (a) it is
the sole owner of all right, title and interest in and to the LGLS Patent Rights
and it Controls the LGLS Know-How, (b) it has not granted any license under the
LGLS Patent Rights to any Third Party and is under no obligation to grant any
such license, except to Anadys, and (c) there are no outstanding liens,
encumbrances, agreements or understandings of any kind, either written, oral or
implied, regarding the LGLS Patent Rights or the LGLS Know-How which are
materially inconsistent or are materially in conflict with this Agreement.

                                       24
<PAGE>

7.6   [...***...]

7.7   DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY TO THE OTHER PARTY OF ANY
KIND, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

7.8   LIMITATION OF LIABILITY. EXCEPT FOR [...***...], AND LIABILITY FOR
[...***...] OR FOR [...***...], NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM
THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN
CONNECTION WITH THE [...***...] HEREUNDER.

                                    ARTICLE 8
                                 INDEMNIFICATION

8.1   INDEMNIFICATION BY ANADYS.

      8.1.1 GENERALLY. Anadys hereby agrees to save, defend, indemnify and hold
            harmless LGLS and its directors, officers, employees and agents
            (each an "LGLS Indemnitee" and collectively, the "LGLS Indemnitees")
            from and against any and all liabilities, expenses and losses,
            including reasonable legal expense and attorneys' fees ("Losses"),
            as incurred, arising directly or indirectly out of the breach of any
            representation, warranty or covenant made by Anadys hereunder,
            except to the extent such Losses result from the negligence or
            willful misconduct of LGLS (provided that if such [...***...] in
            part by the [...***...] or [...***...] of [...***...], or (ii) any
            claims brought by any Third Party as a holder of securities issued
            by Anadys in their capacity as such.

      8.1.2 NOTICES; DEFENSE. In the event any LGLS Indemnitee seeks
            indemnification under this Section 8.1, such LGLS Indemnitee shall
            inform Anadys of a claim as soon as reasonably practicable after
            such LGLS Indemnitee receives notice of the claim, shall permit
            Anadys to assume direction and control of the defense of the claim
            (including the right to settle the claim solely for monetary
            consideration), and shall cooperate as requested (at the expense of
            Anadys) in the defense of the claim; provided that such LGLS
            Indemnitee shall have the right to employ separate legal counsel in
            any such action and participate in the defense thereof, but the fees
            and expenses of such legal counsel shall be at the expense of such
            LGLS Indemnitee unless (i) the employment of such legal counsel
            shall have been specifically authorized in writing by Anadys, (ii)
            Anadys shall have failed to assume the defense and employ legal
            counsel or (iii) the named persons to any such action (including any
            third persons to the action) include both Anadys and such LGLS
            Indemnitee and such LGLS Indemnitee shall have been advised that
            there may be one or more legal defenses available to such LGLS
            Indemnitee that are different from or additional to those available
            to Anadys (in which case Anadys shall not have the right to assume
            the defense on behalf of such LGLS Indemnitee). Anadys shall not
            bear the fees and expenses of more than one (1) legal counsel for
            LGLS Indemnitees pursuant to the immediately preceding sentence.

      8.1.3 SETTLEMENTS. Anadys shall not be liable for any settlement of any
            such action effected by any LGLS Indemnitee without Anadys's written
            consent but, if settled with the written consent of Anadys, Anydys
            agrees to indemnify and hold harmless such LGLS Indemnitee from and
            against any loss or liability by reason of such settlement. With
            respect to any pending or threatened proceeding in respect of which
            any LGLS Indemnitee is or could have been a party and indemnity
            could have been sought hereunder by such LGLS Indemnitee, Anadys
            shall not effect any settlement of such proceeding without the prior
            written consent of such LGLS Indemnitee, unless such settlement
            includes an unconditional release of such LGLS Indemnitee from all
            liability on claims that are the subject matter of such proceeding.

8.2   INDEMNIFICATION BY LGLS.

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<PAGE>

      8.2.1 GENERALLY. LGLS hereby agrees to save, defend, indemnify and hold
            harmless Anadys and its directors, officers, employees and agents
            (each an "Anadys Indemnitee" and collectively, the "Anadys
            Indemnitees") from and against any and all Losses arising directly
            or indirectly out of the breach of any representation, warranty or
            covenant made by LGLS hereunder, except to the extent such
            [...***...] from the [...***...] or [...***...] of [...***...], then
            this [...***...] to that [...***...] [...***...].

      8.2.2 NOTICES; DEFENSE. In the event any Anadys Indemnitee seeks
            indemnification under this Section 8.2, such Anadys Indemnitee shall
            inform LGLS of a claim as soon as reasonably practicable after such
            Anadys Indemnitee receives notice of the claim, shall permit LGLS to
            assume direction and control of the defense of the claim (including
            the right to settle the claim solely for monetary consideration),
            and shall cooperate as requested (at the expense of LGLS) in the
            defense of the claim; provided that such Anadys Indemnitee shall
            have the right to employ separate legal counsel in any such action
            and participate in the defense thereof, but the fees and expenses of
            such legal counsel shall be at the expense of such Anadys Indemnitee
            unless (i) the employment of such legal counsel shall have been
            specifically authorized in writing by LGLS, (ii) LGLS shall have
            failed to assume the defense and employ legal counsel or (iii) the
            named persons to any such action (including any third persons to the
            action) include both LGLS and such Anadys Indemnitee and such Anadys
            Indemnitee shall have been advised that there may be one or more
            legal defenses available to such Anadys Indemnitee that are
            different from or additional to those available to LGLS (in which
            case LGLS shall not have the right to assume the defense on behalf
            of such Anadys Indemnitee). LGLS shall not bear the fees and
            expenses of more than one (1) legal counsel for Anadys Indemnitees
            pursuant to the immediately preceding sentence.

      8.2.3 SETTLEMENTS. LGLS shall not be liable for any settlement of any such
            action effected by any Anadys Indemnitee without LGLS's written
            consent but, if settled with the written consent of LGLS, LGLS
            agrees to indemnify and hold harmless the Anadys Indemnitee from and
            against any loss or liability by reason of such settlement. With
            respect to any pending or threatened proceeding in respect of which
            any Anadys Indemnitee is or could have been a party and indemnity
            could have been sought hereunder by such Anadys Indemnitee, LGLS
            shall not effect any settlement of such proceeding without the prior
            written consent of such Anadys Indemnitee, unless such settlement
            includes an unconditional release of such Anadys Indemnitee from all
            liability on claims that are the subject matter of such proceeding.

                                    ARTICLE 9
                                 CONFIDENTIALITY

9.1   GENERAL RULE. Each Party agrees that during the period specified in
Section 9.3 of this Agreement such Party will hold in confidence and not
disclose Confidential Information to any Third Party, except as approved in
writing by the original disclosing Party and provided that such Third Party is
under at least as stringent conditions of confidentiality and limitations on use
as set forth in this Agreement. The receiving Party further agrees that it shall
limit dissemination of and access to the Confidential Information to those
employees and consultants of the receiving Party who have a need to know the
Confidential Information for the Joint Development Program and who are under at
least as stringent conditions of confidentiality and limitations on use as set
forth in this Agreement.

9.2   EXCLUSIONS. Each Party's obligations under this Agreement with respect to
any portion of the Confidential Information shall terminate with respect to such
portion of the Confidential Information when the receiving party can document
that: (a) it was in the public domain at the time it was communicated to the
receiving Party; (b) it entered the public domain subsequent to the time it was
communicated to the receiving Party through no fault of the receiving Party; (c)
it was in the receiving Party's possession free of any obligation of confidence
at the time it was communicated to the receiving Party; (d) it was rightfully
communicated to the receiving Party by a Third Party free of any obligation of
confidence subsequent to the time it was communicated to the receiving Party by
the disclosing Party; or (e) it is required by law, regulation rule, act or
order of any governmental authority to be disclosed, provided that the original
receiving Party gives the original disclosing Party timely, prior notification
in order to give

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<PAGE>

the original disclosing Party an opportunity to take appropriate action to limit
or prevent disclosure of such Confidential Information.

9.3   SURVIVAL. The provisions of this Article 9 shall survive until the later
of (a) the termination of this Agreement pursuant to Section 10.1 of this
Agreement and (b) [...***...] ([...***...]) years following the termination of
this Agreement pursuant to Section 10.2 of this Agreement.

9.4   GOVERNMENTAL FILINGS. To the extent that this Agreement (including the
exhibit attached hereto), the Option Agreement (including the exhibit attached
thereto), or any other Confidential Information of LGLS must be described in, or
attached to or filed with any governmental agency as an exhibit to or part of,
any registration statement, prospectus, private placement memorandum, securities
purchase agreement, term sheet, application or like instrument relating to the
sale of securities by Anadys or for any other purpose, then the content of such
description and any amendment or revision thereof shall be subject to the prior
written approval of LGLS which shall not be unreasonably withheld or delayed,
and, to the extent that Anadys has the right to apply to any governmental agency
for confidential, non-public treatment of the contents of this Agreement
(including the exhibit attached hereto), the Option Agreement (including the
exhibit attached thereto), or any other Confidential Information of LGLS shall
have the right to reasonably request of Anadys those portions thereof for which
Anadys shall seek such confidential, non-public treatment, to promptly review
any such submission, application, memorandum, correspondence or the like to such
governmental agency seeking, or in support of, such confidential, non-public
treatment prior to the transmission thereof to such government agency, and
Anadys shall not agree to forego such confidential, non-public treatment of such
content so specified by LGLS without the prior written consent of LGLS, which
shall not be unreasonably withheld or delayed, unless Anadys is required by law
or regulation or by the requirements of such governmental agency, including,
without limitation, the United States Securities and Exchange Commission, to do
so, provided that LGLS shall be given reasonably prompt prior notice of any such
requirement so that LGLS shall have a reasonable opportunity to limit or
otherwise challenge such disclosure.

9.5   PUBLICATIONS; PUBLIC ANNOUNCEMENTS.

      9.5.1 PUBLICATIONS. Neither Party nor any CRO, investigator the like under
            contract with or the direction of such Party shall submit for
            publication, publish or otherwise present any results of the Joint
            Development Program or clinical studies on any Compound or Program
            Product ("Program Results") except in accordance with this Section
            9.5.1. Each Party shall provide to the other Party the opportunity
            to review any such proposed abstracts, manuscripts or summaries of
            presentations that cover Program Results, and such other Party shall
            respond in writing to the requesting Party within [...***...]
            ([...***...]) days after receipt of the proposed material with
            either approval of the submission, publication or other presentation
            of the proposed material or approval of the submission, publication
            or other presentation of the proposed material only after
            satisfaction of certain specified conditions.

      9.5.2 PUBLIC ANNOUNCEMENTS. Each Party agrees not to issue any press
            releases or like announcement relating to this Agreement or
            otherwise containing or relating to Confidential Information without
            the express written consent of the other Party; provided that
            announcements in the nature of government filings shall be subject
            to Section 9.4 of this Agreement. Each Party seeking to issue any
            such press release or like announcement shall provide the other
            Party with an advance copy of any such press release or like
            announcement at least [...***...] ([...***...]) business days prior
            to the scheduled disclosure thereof, and such other Party shall have
            the right to review and recommend changes to such press release or
            like announcement. Except as otherwise required by law, the Party
            seeking to issue any such press release or like announcement shall
            remove any information that the other Party reasonably deems to be
            inappropriate for disclosure. Notwithstanding the foregoing, the
            parties hereby agree to issue a joint press release upon the
            execution of this Agreement, the content of which shall be mutually
            agreeable to the parties.

9.6   REPLACEMENT OF PRIOR AGREEMENT. The parties hereby agree that this Article
9 and related provisions of this Agreement replace and supercede in their
entirety that certain Confidentiality Agreement, dated February 17, 2004, by and
between LGLS and Anadys.

                                   ARTICLE 10

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                                TERM; TERMINATION

10.1  TERM. This Agreement shall commence as of the Effective Date and shall
continue on a country-by-country and Program Product-by-Program Product basis in
each country in the Anadys Territory until the [...***...] of (i) the last to
expire of [...***...] in [...***...] and (ii) [...***...] ([...***...]) years
after the date of [...***...] of such Program Product in such country.

10.2  TERMINATION.

      10.2.1 PRIOR TO EXPIRATION. Either party may terminate this Agreement
             prior to the expiration of the term of this Agreement upon the
             occurrence of any of the following:

            (a)   Upon or after the bankruptcy, insolvency, dissolution or
                  winding up of the other party (other than dissolution or
                  winding up for the purposes of reconstruction or
                  amalgamation); or

            (b)   Upon or after the breach of any material provision of this
                  Agreement by the other party if the breaching party has not
                  cured such breach within [...***...] [...***...] after written
                  notice thereof by the non-breaching party; provided, however,
                  that with respect to any such breach, if (A) the breaching
                  party has commenced actions to cure such breach prior to such
                  [...***...] [...***...] and is continuing in good faith to
                  pursue such cure at such [...***...][...***...] and (B)
                  [...***...] in the [...***...] of the non-breaching party that
                  such actions of the breaching party will [...***...] such
                  breach on or before the [...***...][...***...] after such
                  written notice, then this agreement [...***...] as a
                  consequence of such breach if such breach shall be [...***...]
                  on or before such [...***...][...***...] such written notice;
                  provided, however, the [...***...] of [...***...] to
                  [...***...] any [...***...] required [...***...] to
                  [...***...] under this Agreement shall constitute a material
                  breach of this Agreement that must be cured no later than
                  [...***...] ([...***...]) days following the due date of
                  such payment. For purposes of this clause (b), a Party shall
                  be deemed to have breached a material provision of this
                  Agreement if [...***...] such Party: fails to [...***...] and
                  [...***...] in the [...***...]; causes [...***...] in the
                  [...***...] fails to [...***...] in a [...***...]; or fails to
                  [...***...] for which such Party is responsible under the
                  Global Development Plan.

            (c)   For purposes of the last sentence of clause (b) of this
                  Section 10.2.1, there shall be deemed to be a [...***...] and
                  [...***...] in [...***...] with [...***...] to any [...***...]
                  and a [...***...] the [...***...] for which [...***...] is
                  responsible under the Global Development Plan with respect to
                  any [...***...] in the [...***...] in respect of which any of
                  the following events occurs, and in respect of [...***...] in
                  respect of which any of the following events occurs, this
                  Agreement shall thereupon [...***...]:

                  (i)   with respect to each of the [...***...], [...***...] in
                        [...***...], and [...***...], there [...***...] of a
                        Program Product by the [...***...], as applicable,
                        [...***...] the [...***...] set forth in the Global
                        Development Plan for such [...***...], subject to any
                        [...***...] of [...***...] for [...***...] occurrences
                        [...***...] in [...***...] of [...***...] or
                        [...***...], provided however, [...***...] for which
                        [...***...] has not been set forth in the Global
                        Development Plan, the provision (iii) of this subsection
                        (c) shall apply to [...***...];

                  (ii)  with respect to each of the [...***...] in [...***...],
                        and [...***...], there [...***...] of a Program Product
                        [...***...] following the occurrence of a [...***...]
                        for [...***...] for that [...***...]; [...***...]

                  (iii) with respect to [...***...] than the [...***...], any
                        [...***...] in [...***...] which the [...***...] has
                        [...***...] in the Global

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<PAGE>
                        Development Plan, there [...***...] occurred [...***...]
                        and a [...***...] Program Product in such [...***...] by
                        the [...***...] of [...***...] of a Program Product
                        [...***...] any of the [...***...], the [...***...], the
                        [...***...] or [...***...] of the [...***...].

            (d)   The Parties agree that in the event of an [...***...] under
                  the License Agreement by [...***...] shall in [...***...] an
                  [...***...] of [...***...], in connection with which such
                  [...***...] the [...***...] may, [...***...] are not
                  [...***...], and if the [...***...] are [...***...] to
                  [...***...] upon any [...***...] of this Agreement, the
                  [...***...] be [...***...] in accordance with Section
                  [...***...].

            (e)   The Parties agree that any event [...***...] and [...***...]
                  to make [...***...] under this Agreement as to which there is
                  [...***...] as to such [...***...] and [...***...] of this
                  [...***...] pursuant to [...***...] Section [...***...] shall
                  be [...***...] and not subject to [...***...] in accordance
                  with Section [...***...] of this Agreement. For the sake of
                  clarity, any [...***...] in accordance with Section
                  [...***...].

      10.2.2 EFFECT OF TERMINATION.

            (a)   Upon termination of this Agreement, all rights and obligations
                  of the parties hereunder shall terminate, except as provided
                  in this Section 10.2.2.

            (b)   Upon expiration of this Agreement or termination for any
                  reason whatsoever, [...***...] all [...***...] in the
                  [...***...] and [...***...] pursuant to this Agreement and
                  [...***...] the Global Development Plan, the Program
                  Technology, and the Program Materials, and any and [...***...]
                  to [...***...] under this Agreement [...***...], and
                  [...***...] in the [...***...] and [...***...] shall
                  [...***...]; provided, however, that in the case of expiration
                  of this Agreement under Section 10.1 of this Agreement, if
                  [...***...] to [...***...] any [...***...] in the [...***...],
                  Anadys, upon written notice to LGLS within [...***...]
                  ([...***...]) days prior to such expiration, may after such
                  expiration continue to [...***...] and [...***...] to the
                  [...***...], [...***...] and [...***...], [...***...] shall
                  not otherwise have any obligations under this Agreement
                  with respect thereto.

            (c)   Expiration or termination of this Agreement shall not relieve
                  the parties of any obligation accruing prior to such
                  expiration or termination. The following provisions of this
                  Agreement shall survive termination or expiration of this
                  Agreement: Section [...***...]; Section [...***...]; Sections
                  [...***...]; Sections [...***...]; Section [...***...];
                  Section [...***...]; Article 9 (Confidential Information);
                  [...***...] Section [...***...]; and Sections [...***...],
                  [...***...], [...***...], [...***...], [...***...], 11.6
                  (headings, references), [...***...].

                                   ARTICLE 11
                                  MISCELLANEOUS

11.1  ASSIGNMENT. [...***...]. [...***...] this Agreement and its rights and
obligations hereunder [...***...] (a) [...***...] with the [...***...] or
[...***...] of [...***...] or [...***...] all of [...***...] relating to the
[...***...] of this [...***...] to [...***...], (b) in the event of [...***...]
or [...***...] of [...***...] with or into [...***...], or

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(c) to any [...***...] of [...***...]. Except as provided above, [...***...] may
not [...***...] or [...***...] this [...***...] or any [...***...] or
[...***...] hereunder without the [...***...] of [...***...],[...***...]. 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 [...***...].

11.2  SEVERABILITY. In case any provisions of this Agreement shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby unless the invalid, illegal or unenforceable provisions are of
such essential importance to this Agreement that it is to be reasonably assumed
that the Parties would not have entered into this Agreement without such
invalid, illegal or unenforceable provisions, and in respect of such invalid,
illegal or unenforceable provisions the Parties shall substitute, by mutual
consent, valid provisions for such invalid, illegal or unenforceable provisions
which valid, legal and enforceable provisions in their economic effect are
sufficiently similar to the invalid, illegal or unenforceable provisions that it
can be reasonably assumed that the Parties would have entered into this
Agreement with such valid provisions.

11.3  NOTICES. Any notices or communications provided for in this Agreement to
be made by either of the parties to the other shall be in English in writing and
delivered personally or sent by registered or certified mail, postage paid, by
overnight delivery service such as FedEx or UPS or by facsimile, with
confirmation of receipt, addressed as follows:

                   IF TO ANADYS: Anadys Pharmaceuticals, Inc.
                                 9050 Camino Santa Fe
                                 San Diego, CA 92121
                                 Attn: [...***...]
                                 Fax No. [...***...]

                   IF TO LGLS:   LG Life Sciences
                                 [...***...]
                                 20, Yoido-dong, Youngdungpo-gu,
                                 Seoul 150-721, Korea
                                 Attn:  [...***...]
                                 Fax No. [...***...]

Either party may by like notice specify or change an address to which notices
and communications shall thereafter be sent. Notices sent by facsimile shall be
effective upon confirmation of receipt, notices sent by mail or overnight
delivery service shall be effective upon receipt, and notices given personally
shall be effective when delivered.

11.4  GOVERNING LAW. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the [...***...], without regard to its
choice of law provisions, and any applicable laws of the [...***...], except
matters of intellectual property law, which shall be determined in accordance
with the intellectual property laws relevant to the intellectual property in
question. Any disputes (except injunctive relief allowed by a court) arising out
of or in connection with this Agreement shall be finally resolved by Arbitration
in accordance with [...***...] by [...***...] selected in accordance with such
rules. [...***...]. [...***...],[...***...].

11.5  ENTIRE AGREEMENT; AMENDMENT. This Agreement (including the exhibit
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 understanding between the parties with respect to the
subject matter hereof. There are no covenants, promises, agreements, warranties,
representations conditions or understandings with respect to the subject matter
hereof, 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.

11.6  HEADINGS; REFERENCES. The captions or headings of the sections or other
subdivisions contained in this Agreement are not a part of this Agreement, but
are merely guides or labels to assist in locating and reading the

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<PAGE>

several Articles hereof and shall have no effect on the meaning of the
provisions hereof. Unless otherwise specified to the contrary, references to
articles and sections in this Agreement shall be to the articles and sections
comprising this Agreement.

11.7  INDEPENDENT CONTRACTORS. It is expressly agreed that LGLS and Anadys shall
be independent contractors and that the relationship between the two parties
shall not constitute a partnership, joint venture or agency of any kind. Neither
party shall have the authority to make any statements, representations or
commitments of any kind, or to take any action, which shall be binding on the
other, without the prior written consent of the other party. Members of the
Joint Development Committee, the Joint Steering Committee, and any subcommittees
thereof shall be, and shall remain, employees or other representatives of LGLS
or Anadys, as the case may be. No Party shall incur any liability for any act or
failure to act by members of the Joint Development Committee, any Joint
Development Project Team, and any subcommittees thereof who are employees or
other representatives of the other Party.

11.8  WAIVER. Except as specifically provided for herein, the waiver from time
to time by either of the parties of any of their rights or their failure or
delay to exercise any remedy, right, power or privilege under this Agreement or
provided by statute or at law or in equity or otherwise shall not operate or be
construed as a continuing waiver of the same remedies, rights, powers or
privileges or of any other of such party's remedies, rights, powers or
privileges provided in this Agreement, nor shall any single or partial exercise
of any such right, power, remedy or privilege preclude any other or further
exercise thereof or the exercise of any other right, power, remedy or privilege.

11.9  COMPLIANCE WITH EXPORT REGULATIONS. Neither Party shall export any
technology licensed to it by the other Party under this Agreement except in
compliance with applicable export laws and regulations.

11.10 COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which when so executed and delivered shall be deemed an original, but
all of which together shall constitute one and the same instrument.

11.11 FORCE MAJEURE. No failure or omission by either Party in the performance
of any obligation of this Agreement shall be deemed a breach of this Agreement
or create any liability if the same shall arise from any cause or causes beyond
the control of such Party, including, but not limited to, the following:
[...***...].

11.12 NO STRICT CONSTRUCTION. This Agreement has been prepared jointly and
shall not be strictly construed against either Party.

11.13 NO THIRD PARTY BENEFICIARIES. No person or entity other than Anadys, LGLS
and their respective Affiliates and permitted assignees hereunder shall be
deemed an intended beneficiary hereunder or have any right to enforce any
obligation of this Agreement.

                                             ***Confidential Treatment Requested

                                       31
<PAGE>

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

ANADYS PHARMACEUTICALS, INC.                LG LIFE SCIENCES, LTD.

By:   ________________________________      By:   ______________________________
Name:                                       Name:
Title: _______________________________      Title: _____________________________

                                       32
<PAGE>

                                    EXHIBIT A
                                  PATENT RIGHTS

<TABLE>
<CAPTION>
                             Appl. No.      Appl. date      Grant No.     Grant date       Status
<S>           <C>           <C>            <C>              <C>           <C>            <C>
[...***...]   [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]     [...***...]    [...***...]    Enter
                                                                                         designated
                                                                                         state
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]                  [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
              [...***...]   [...***...]    [...***...]
</TABLE>

<TABLE>
<CAPTION>
Title           country      Appl. No.     Appl. date     Grant No.     Grant date     Status
<S>           <C>           <C>           <C>             <C>           <C>            <C>
[...***...]   [...***...]   [...***...]   [...***...]
              [...***...]   [...***...]   [...***...]
              [...***...]   [...***...]   [...***...]
              [...***...]   [...***...]   [...***...]
              [...***...]   [...***...]   [...***...]
              [...***...]   [...***...]   [...***...]
              [...***...]   [...***...]   [...***...]
              [...***...]   [...***...]   [...***...]
</TABLE>

                                             ***Confidential Treatment Requested

                                       33
<PAGE>

                                  AMENDMENT #1
                   TO JOINT DEVELOPMENT AND LICENSE AGREEMENT
                      BY AND BETWEEN LG LIFE SCIENCES, LTD.
                        AND ANADYS PHARMACEUTICALS, INC.
                              DATED APRIL 18, 2004

      Effective as of June 16, 2004 (the "Amendment #1 Effective Date"), Anadys
Pharmaceuticals, Inc., a Delaware Corporation ("Anadys") and LG Life Sciences,
Ltd., a Korean corporation ("LGLS") enter into this Amendment #1 to the Joint
Development and License Agreement dated April 18, 2004 by and between Anadys and
LGLS (the "Joint Development Agreement").

1.    Terms used herein with capital initial letters (or whole in capital
      letters) and not otherwise defined herein shall have the same meanings as
      set forth in the Joint Development Agreement.

2.    The Joint Development Agreement is amended as set forth hereinafter:

      a.    Section 2.3.2 of the Joint Development Agreement is hereby amended
      and restated in its entirety to read as follows:

            "INITIAL ADOPTION. The Joint Development Committee shall prepare and
            approve and the Joint Steering Committee shall approve in accordance
            with Section 5.6.4 the initial version of the Global Development
            Plan (including the details of the [...***...] Study and the details
            of the [...***...] required for Regulatory Approval) within
            [...***...] ([...***...])[...***...] following the Effective Date."

      b.    Section 3.3.3 of the Joint Development Agreement is hereby amended
      and restated in its entirety to read as follows:

            "[...***...]."

3.    All other provisions of the Joint Development Agreement shall remain
      unchanged and the Joint Development Agreement shall remain in full force
      and effect.

      IN WITNESS WHEREOF, the parties hereto have executed this Amendment #1 to
the Joint Development Agreement as of the Amendment #1 Effective Date.

ANADYS PHARMACEUTICALS, INC.               LG LIFE SCIENCES LTD.

By:___________________________________     By:_________________________________

Name: ________________________________     Name:_______________________________

Title:________________________________     Title:______________________________

Address: 3115 Merryfield Row               Address: 16th Floor of East Tower
         San Diego, CA USA                          LG Twin Tower
                                                    20 Yoidodong, Youngdungpo-gu
                                                    Seoul 150-721, Korea

                                             ***Confidential Treatment Requested

                                       34<PAGE>

                                                                     EXHIBIT 4.1

                          REGISTRATION RIGHTS AGREEMENT

            This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered
into as of June 2, 2004 by and among Stratagene Corporation, a Delaware
corporation formerly known as Stratagene Holding Corporation ("Stratagene"), and
Joseph A. Sorge ("Sorge"), the J. A. Sorge Trust I, the J. A. Sorge Trust II,
the J. A. Sorge Trust III, the J. A. Sorge Trust IV, Biosense Partners, L.P. and
the Joseph A. Sorge Charitable Remainder Trust dated December 26, 2002
(collectively, the "Sorge Entities").

                                    RECITALS

            WHEREAS, Stratagene, SHC Acquisition Sub, Inc., a Delaware
corporation and a wholly owned subsidiary of Stratagene ("Merger Sub"), and
Hycor Biomedical Inc., a Delaware corporation ("Hycor"), previously entered into
that certain Agreement and Plan of Reorganization dated as of July 24, 2003, as
amended by that certain Amendment No. 1 to Agreement and Plan of Reorganization
dated as of December 29, 2003 by and among Stratagene, Merger Sub and Hycor and
as further amended by that certain Amendment No. 2 to Agreement and Plan of
Reorganization dated as of February 25, 2004 by and among Stratagene, Merger Sub
and Hycor (as so amended, the "Merger Agreement"); and

            WHEREAS, in consideration of the Sorge Entities agreeing to vote in
favor of the Merger Agreement and recognizing the limited ability of the Sorge
Entities to sell their shares of Stratagene common stock, par value $0.0001 per
share (the "Common Stock"), following the merger contemplated by the Merger
Agreement, Stratagene agreed to enter into this Agreement to grant the Sorge
Entities certain registration and other rights with respect to the Registrable
Securities (as defined below).

                                    AGREEMENT

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

                                   ARTICLE I.
                                   DEFINITIONS

      1.1 Definitions. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings:

            "Affiliate" means, with respect to any Person, any Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities
or by contract or otherwise.
<PAGE>
            "Certificate of Incorporation" means the Certificate of
Incorporation of Stratagene, as it may be amended or restated hereafter from
time to time.

            "Common Stock" shall have the meaning set forth in the recitals of
this Agreement.

            "Effective Time" shall have the meaning set forth in the Merger
Agreement.

            "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar or successor Federal statute, and the rules and
regulations of the SEC thereunder, all as the same shall be in effect at the
relevant time.

            "Merger Agreement" shall have the meaning set forth in the recitals
of this Agreement.

            "Permitted Transferee" means, with respect to any Sorge Entity, any
sale or other transfer to an Affiliate of such Sorge Entity and with respect to
Sorge, shall also mean any family member or trust for the benefit of Sorge or
any such family member.

            "Person" means and includes an individual, a corporation, a limited
liability company, an association, a partnership, a trust or estate, a
government or any department or agency thereof.

            "Principal Market" means either the Nasdaq National Market or the
Nasdaq SmallCap Market, or if the Common Stock is not then listed on either of
such markets, the principal market or exchange on which the Common Stock is then
listed or traded.

            "Sorge Entities" shall have the meaning set forth in the preamble of
this Agreement.

            "Registrable Securities" means (a) all shares of Common Stock held
by any Sorge Entity on the date hereof and (b) any other shares of Common Stock
issued by way of a stock dividend, stock split or reverse stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or similar event, with respect to or in exchange for or in replacement of the
shares listed in clause (a). As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when (i) a registration
statement covering such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (ii) Rule 144 (or any successor provision)
under the Securities Act is available for the sale of all of the Registrable
Securities held by a Sorge Entity during any three (3)-month period without
registration (taking into account the holdings of all Sorge Entities) or (iii)
such securities shall have ceased to be outstanding.

            "Registration Expenses" means all expenses incident to the
registration and disposition of the Registrable Securities pursuant to Section 2
hereof, including, without limitation, all registration, filing and applicable
national securities exchange fees, all fees and expenses of complying with state
securities or blue sky laws (including fees and disbursements of counsel to the
Sorge Entities in connection with "blue sky" qualification of the Registrable

                                       2
<PAGE>
Securities and determination of their eligibility for investment under the laws
of the various jurisdictions), all word processing, duplicating and printing
expenses, all messenger and delivery expenses, the fees and disbursements of
counsel for Stratagene and of its independent public accountants, including the
expenses of "cold comfort" letters or any special audits required by, or
incident to, such registration, all fees and disbursements of underwriters
(other than underwriting discounts and commissions), and all reasonable fees and
expenses of a single counsel to the Sorge Entities and all holders of
Registrable Securities. The Registration Expenses shall not include the Selling
Expenses.

            "SEC" means the Securities and Exchange Commission or any other
governmental authority at the time administering the Securities Act or the
Exchange Act.

            "Securities Act" means the Securities Act of 1933, as amended, or
any similar or successor Federal statute, and the rules and regulations of the
SEC thereunder, all as the same shall be in effect at the relevant time.

            "Selling Expenses" means underwriting discounts, selling fees and
commissions and stock transfer taxes applicable to the Registrable Securities,
which shall be paid by the Sorge Entities.

            "Sorge" shall have the meaning set forth in the preamble of this
Agreement.

            "Sorge Entities" shall have the meaning set forth in the preamble of
this Agreement.

            "Stratagene" shall have the meaning set forth in the preamble of
this Agreement.

                                   ARTICLE II.
                               REGISTRATION RIGHTS

      2.1 Filing of Registration Statement.

            (a) Registration. Within thirty (30) days following its receipt of a
written request from Sorge after the Effective Time, Stratagene shall (i) use
commercially reasonable efforts to file a registration statement under the
Securities Act on Form S-3, or on Form S-1 if Stratagene does not qualify for
Form S-3, covering 2,000,000 shares of Registrable Securities and (ii) if
requested by Sorge, use commercially reasonable efforts to obtain acceleration
of the effective date of the registration statement relating to such
registration.

            (b) Registration Statement Form. Subject to clause (a)(i) above, the
registration under this Section 2.1 shall be on such appropriate registration
form of the SEC as shall be selected by Stratagene and as shall be reasonably
acceptable to Sorge. Stratagene agrees to include in any such registration
statement all information which, in the opinion of counsel to Sorge and counsel
to Stratagene, is necessary or desirable to be included therein. If such counsel
disagree, the opinion of counsel to Stratagene shall be followed.

            (c) Expenses. Stratagene shall pay all Registration Expenses in
connection with the registration of Registrable Securities under this Section
2.1.

                                       3
<PAGE>
      2.2 Incidental Registration.

            (a) Right to Include Registrable Securities. If Stratagene at any
time proposes to register any Common Stock for its own account or for the
account of any other stockholder under the Securities Act by registration on
Form S-1, S-2 or S-3 or any successor or similar form(s) (except registrations
on any such Form or similar form(s) solely for registration of securities in
connection with an employee benefit plan, stock incentive or dividend
reinvestment plan or a merger, acquisition or consolidation or incidental to an
issuance of securities under Rule 144A under the Securities Act), Stratagene
will give prompt written notice to Sorge of its intention to do so and of each
Sorge Entities' rights under this Section 2.2 in connection with each such
proposed registration. At any time or from time to time after the Effective
Time, upon the written request of Sorge (which request shall specify the maximum
number of Registrable Securities intended to be disposed of by the Sorge
Entities), made as promptly as practicable and in any event within ten (10) days
after the receipt of any such notice, Stratagene shall use commercially
reasonable efforts to effect the registration under the Securities Act of all
Registrable Securities which Stratagene has been so requested to register by the
Sorge Entities; provided, however, that if at any time after giving written
notice of their intention to register any securities and prior to the effective
date of the registration statement filed in connection with such registration,
Stratagene shall determine for any reason not to register or to delay
registration of such securities, Stratagene shall give written notice of such
determination and its reasons therefor to Sorge and (i) in the case of a
determination not to register, shall be relieved of its obligation to register
any Registrable Securities in connection with such registration (but not from
any obligation of Stratagene to pay the Registration Expenses in connection
therewith) and (ii) in the case of a determination to delay registering, shall
be permitted to delay registering any Registrable Securities, for such period of
time as the Board of Directors of Stratagene determines. No registration
effected under this Section 2.2 shall relieve Stratagene of its obligation to
effect the registration under Section 2.1.

            (b) Expenses. Stratagene shall pay all Registration Expenses in
connection with any registration requested pursuant to this Section 2.2.

            (c) Right to Withdraw. The Sorge Entities shall have the right to
withdraw their request for inclusion of their Registrable Securities in any
registration statement pursuant to this Section 2.2 at any time by giving
written notice to Stratagene of their request to withdraw.

            (d) Priority in Incidental Registrations. If the managing
underwriter of any underwritten offering shall inform Stratagene by writing of
its belief that the number of Registrable Securities requested to be included in
such registration, when added to the number of other securities to be offered in
such registration, would jeopardize such offering, then Stratagene shall include
in such registration, only that number of such securities, including Registrable
Securities, which the underwriter determines in its sole discretion will not
jeopardize the success of the offering (such securities to be included in the
following priority: (i) first, the securities proposed to be included by
Stratagene, (ii) second, the Registrable Securities requested by the Sorge
Entities to be included in such registration and (iii) third, any other
securities of Stratagene requested to be included in such registration by any
other holders having the right to include securities on a pro rata basis in
accordance with the number of securities proposed to be included by such other
holders). The Sorge Entities agree to reasonably modify this priority to

                                       4
<PAGE>
facilitate private placements by Stratagene or to facilitate the conversion of
Stratagene Notes (as defined in the Merger Agreement).

      2.3 Registration Procedures. When Stratagene effects the registration of
Registrable Securities under the Securities Act required by Section 2.1 and if
and whenever Stratagene is required to effect the registration of any additional
Registrable Securities under the Securities Act as provided in Section 2.2
hereof, Stratagene shall as expeditiously as possible:

            (a) prepare and file with the SEC as soon as practicable the
requisite registration statement to effect such registration (and shall include
all financial statements required by the SEC to be filed therewith) and
thereafter use commercially reasonable efforts to cause such registration
statement to become effective; provided, however, that before filing such
registration statement (including all exhibits) or any amendment or supplement
thereto or comparable statements under securities or blue sky laws of any
jurisdiction, Stratagene shall as promptly as practicable furnish such documents
to Sorge and each underwriter, if any, participating in the offering of the
Registrable Securities and their respective counsel, which documents will be
subject to the review and comments of the Sorge Entities, each underwriter and
their respective counsel;

            (b) notify Sorge of the SEC's requests for amending or supplementing
the registration statement and the prospectus; and prepare and file with the SEC
such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities
covered by such registration statement for a period of at least twenty four (24)
months or such shorter period as shall be required for the disposition of all of
such Registrable Securities in accordance with the intended method of
distribution thereof;

            (c) furnish, without charge, to Sorge and each underwriter, if any,
such number of conformed copies of such registration statement and of each such
amendment and supplement thereto (in each case including all exhibits), such
number of copies of the prospectus contained in such registration statement
(including each preliminary prospectus and any summary prospectus) and any other
prospectus filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, as Sorge and such
underwriters may reasonably request;

            (d) use commercially reasonable efforts (i) to register or qualify
all Registrable Securities and other securities covered by such registration
statement under such securities or blue sky laws of such states of the United
States of America where an exemption is not available and as Sorge or any
managing underwriter shall reasonably request, (ii) to keep such registration or
qualification in effect for so long as such registration statement remains in
effect and (iii) to take any other action which may be reasonably necessary or
advisable to enable Sorge to consummate the disposition in such jurisdictions of
the securities to be sold by the Sorge Entities, except that Stratagene shall
not for any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not but for the
requirements of this subsection (d) be obligated to be so qualified or to
consent to general service of process or subject itself to taxation in any such
jurisdiction;

                                       5
<PAGE>
            (e) use commercially reasonable efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other federal or state governmental agencies or authorities as
may be necessary in the opinion of counsel to Stratagene and counsel to Sorge by
virtue of the business and operations of Stratagene to consummate the
disposition of such Registrable Securities;

            (f) in the case of any underwritten offering under Section 2.2,
cause to be furnished to Sorge and each underwriter, if any, participating in
the offering of the securities covered by such registration statement, a signed
counterpart of (i) an opinion of counsel for Stratagene and (ii) a "comfort"
letter signed by the independent public accountants who have certified
Stratagene's or any other entity's financial statements included or incorporated
by reference in such registration statement, covering substantially the same
matters with respect to such registration statement (and the prospectus included
therein) and, in the case of the accountants' comfort letter, with respect to
events subsequent to the date of such financial statements, as is customarily
covered in opinions of issuer's counsel and in accountants' comfort letters
delivered to the underwriters in underwritten public offerings of securities
(and dated the dates such opinions and comfort letters are customarily dated)
and, in the case of the legal opinion, such other legal matters;

            (g) promptly notify the Sorge Entities and each managing
underwriter, if any, participating in the offering of the securities covered by
such registration statement (i) when such registration statement, any
pre-effective amendment, the prospectus or any prospectus supplement related
thereto or post-effective amendment to such registration statement has been
filed, and, with respect to such registration statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the SEC
for amendments or supplements to such registration statement or the prospectus
related thereto or for additional information, (iii) of the issuance by the SEC
of any stop order suspending the effectiveness of such registration statement or
the initiation of any proceedings for that purpose, (iv) of the receipt by
Stratagene of any notification with respect to the suspension of the
qualification of any of the Registrable Securities for sale under the securities
or blue sky laws of any jurisdiction or the initiation of any proceeding for
such purpose, (v) at any time when a prospectus relating thereto is required to
be delivered under the Securities Act, upon discovery that, or upon the
happening of any event as a result of which, the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, in the light of the
circumstances under which they were made, and in the case of this clause (v), at
the request of Sorge, promptly prepare and furnish to Sorge and each managing
underwriter, if any, participating in the offering of the Registrable
Securities, a reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary so that, as thereafter delivered to Sorge,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made and (vi) in the case of an underwritten offering, at any time
when the representations and warranties of Stratagene contemplated by Section
2.4 hereof cease to be true and correct;

            (h) use commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably

                                       6
<PAGE>
practicable, an earnings statement covering a period of at least twelve months
beginning with the first full calendar month after the effective date of such
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;

            (i) provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration;

            (j) use commercially reasonable efforts to cause all Registrable
Securities covered by such registration statement to be listed on the Principal
Market;

            (k) deliver promptly to counsel to Sorge and each underwriter, if
any, participating in the offering of the Registrable Securities, copies of all
correspondence between the SEC and Stratagene, its counsel or auditors and all
memoranda relating to discussions with the SEC or its staff with respect to such
registration statement;

            (l) use commercially reasonable efforts to obtain the withdrawal of
any order suspending the effectiveness of the registration statement; and

            (m) provide a CUSIP number for all Registrable Securities, no later
than the effective date of the registration statement.

            Stratagene may require Sorge to furnish Stratagene such information
regarding the Sorge Entities and the distribution of the Registrable Securities
as Stratagene may from time to time reasonably request in writing.

            The Sorge Entities agree that upon receipt of any notice from
Stratagene of the happening of any event of the kind described in paragraph
(g)(iii) or (v) of this Section 2.3, the Sorge Entities will, to the extent
appropriate, discontinue their disposition of Registrable Securities pursuant to
the registration statement relating to such Registrable Securities until, in the
case of paragraph (g)(v) of this Section 2.3, their receipt of the copies of the
supplemented or amended prospectus contemplated by paragraph (g)(v) of this
Section 2.3 and, if so directed by Stratagene, will deliver to Stratagene (at
Stratagene's expense) all copies, other than permanent file copies, then in
their possession, of the prospectus relating to such Registrable Securities
current at the time of receipt of such notice. If the disposition by the Sorge
Entities of their securities is discontinued pursuant to the foregoing sentence,
Stratagene shall extend the period of effectiveness of the registration
statement by the number of days during the period from and including the date of
the giving of notice to and including the date when the Sorge Entities shall
have received copies of the supplemented or amended prospectus contemplated by
paragraph (g)(v) of this Section 2.3.

      2.4 Underwritten Offerings. In the case of a registration pursuant to
Section 2.2 hereof, if Stratagene shall have determined to enter into any
underwriting agreement in connection therewith, all of the Registrable
Securities to be included in such registration shall be subject to such
underwriting agreement. In such case, the Sorge Entities shall be party to such
underwriting agreement.

                                       7
<PAGE>
      2.5 Indemnification.

            (a) Indemnification by Stratagene. Stratagene agrees that in the
event of any registration of any of the Registrable Securities under the
Securities Act, Stratagene shall, and hereby does, indemnify and hold harmless
the Sorge Entities, their respective directors, officers, employees, members,
partners, agents and affiliates and each other Person who participates as an
underwriter in the offering or sale of such securities and each other Person, if
any, who controls any Sorge Entity or any such underwriter within the meaning of
the Securities Act, against any losses, claims, damages, or liabilities, joint
or several, to which the Sorge Entities or any such director, officer, employee,
member, partner, agent or affiliate or underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities, joint or several (or actions or proceedings,
whether commenced or threatened, in respect thereof), arise out of or are based
upon (i) any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such securities were
registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, (ii) any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein in light of the circumstances in which they were made not misleading or
(iii) any violation by Stratagene of any Federal, state or common law rule or
regulation applicable to Stratagene and relating to action required of or
inaction by Stratagene in connection with any such registration, and Stratagene
shall reimburse the Sorge Entities and each such director, officer, employee,
member, partner, agent or affiliate, underwriter or controlling Person for any
reasonable legal or any other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, liability, action or
proceeding; provided, that Stratagene shall not be liable in any such case to
the Sorge Entities or any such director, officer, employee, member, partner,
agent or affiliate, underwriter or controlling Person to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
any such preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance upon and in conformity with written information
furnished to Stratagene by or on behalf of the Sorge Entities, specifically
stating that it is for use in the preparation thereof. Such indemnity shall
remain in full force regardless of any investigation made by or on behalf of the
Sorge Entities or any such director, officer, employee, member, partner, agent
or affiliate, underwriter or controlling Person and shall survive the transfer
of such securities by the Sorge Entities. Such indemnity shall not extend to any
liability imposed on Sorge as an officer or director of Stratagene, which shall
be made only as permitted by law and by Stratagene's corporate policy.

            (b) Indemnification by the Sorge Entities. The Sorge Entities agree
that in the event of any registration of the Registrable Securities under the
Securities Act, the Sorge Entities shall, and hereby do, indemnify and hold
harmless (in the same manner and to the same extent as set forth in paragraph
(a) of this Section 2.5) Stratagene, and each director of Stratagene, each
officer, employee, agent and affiliate of Stratagene and each other Person, if
any, who controls Stratagene within the meaning of the Securities Act, with
respect to any statement or alleged statement in or omission or alleged omission
from such registration statement, any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment or supplement thereto,
but only to the extent such statement or alleged statement or omission or

                                       8
<PAGE>
alleged omission was made in reliance upon and in conformity with written
information furnished to Stratagene by or on behalf of the Sorge Entities
specifically stating that it is for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement; provided, however, that the liability of the Sorge
Entities under this Section 2.5(b) shall be limited to the amount of proceeds
(net of expenses and underwriting discounts and commissions) received by the
Sorge Entities in the offering giving rise to such liability. Such indemnity
shall remain in full force and effect, regardless of any investigation made by
or on behalf of Stratagene or any such director, officer or controlling Person
and shall survive the transfer of such securities by the Sorge Entities.

            (c) Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding subsections of this Section 2.5, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action or proceeding; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under the preceding subsections of this
Section 2.5, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice, and shall not relieve the
indemnifying party from any liability which it may have to the indemnified party
otherwise than under this Section 2.5. In case any such action or proceeding is
brought against an indemnified party, the indemnifying party shall be entitled
to participate therein and, unless in the opinion of outside counsel to the
indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist in respect of such claim, to assume the defense
thereof, jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to such
indemnified party; provided, however, that if the defendants in any such action
or proceeding include both the indemnified party and the indemnifying party and
if in the opinion of outside counsel to the indemnified party there may be legal
defenses available to such indemnified party and/or other indemnified parties
which are different from or in addition to those available to the indemnifying
party, the indemnified party or parties shall have the right to select separate
counsel to defend such action or proceeding on behalf of such indemnified party
or parties, provided, further, that the indemnifying party shall be obligated to
pay for only one counsel and one local counsel for all indemnified parties.
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by the indemnified party
of such counsel, the indemnifying party shall not be liable to such indemnified
party for any legal expenses subsequently incurred by the latter in connection
with the defense thereof other than reasonable costs of investigation (unless
the first proviso in the preceding sentence shall be applicable). No
indemnifying party shall be liable for any settlement of any action or
proceeding effected without its written consent. No indemnifying party shall,
without the consent of the indemnified party (which consent shall not be
unreasonably withheld or delayed), consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect of such claim or litigation.

            (d) Contribution. If the indemnification provided for in this
Section 2.5 shall for any reason be held by a court to be unavailable to an
indemnified party under subsection (a) or (b) hereof in respect of any loss,
claim, damage or liability, or any action in respect thereof, then, in lieu of
the amount paid or payable under subsection (a) or (b) hereof, the indemnified

                                       9
<PAGE>
party and the indemnifying party under subsection (a) or (b) hereof shall
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating the
same), (i) in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand, and the indemnified party on the other,
which resulted in such loss, claim, damage or liability, or action in respect
thereof, with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law or if the allocation
provided in this clause (ii) provides a greater amount to the indemnified party
than clause (i) above, in such proportion as shall be appropriate to reflect not
only the relative fault but also the relative benefits received by the
indemnifying party and the indemnified party from the offering of the securities
covered by such registration statement as well as any other relevant equitable
considerations. The parties hereto agree that it would not be just and equitable
if contributions pursuant to this Section 2.5(d) were to be determined by pro
rata allocation or by any other method of allocation which does not take into
account the equitable considerations referred to in the preceding sentence of
this Section 2.5(d). No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. In addition, no Person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action or claim
effected without such Person's consent, which consent shall not be unreasonably
withheld or delayed. Notwithstanding anything in this subsection (d) to the
contrary, no indemnifying party (other than Stratagene) shall be required to
contribute any amount in excess of the proceeds (net of expenses and
underwriting discounts and commissions) received by such party from the sale of
the Registrable Securities in the offering to which the losses, claims, damages
or liabilities of the indemnified parties relate.

            (e) Other Indemnification. Indemnification and contribution similar
to that specified in the preceding subsections of this Section 2.5 (with
appropriate modifications) shall be given by Stratagene and the Sorge Entities
with respect to any required registration or other qualification of securities
under any Federal, state or blue sky law or regulation of any governmental
authority. The indemnification agreements contained in this Section 2.5 shall be
in addition to any other rights to indemnification or contribution which any
indemnified party may have pursuant to law or contract and shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any indemnified party and shall survive the transfer of any of
the Registrable Securities by the Sorge Entities.

            (f) Indemnification Payments. The indemnification and contribution
required by this Section 2.5 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred.

      2.6 Unlegended Certificates. In connection with the offering of any
Registrable Securities registered pursuant to this Section 2, Stratagene shall
(a) facilitate the timely preparation and delivery to Sorge and the
underwriters, if any, participating in such offering, of unlegended certificates
representing ownership of such Registrable Securities being sold in such
denominations and registered in such names as requested by Sorge or such
underwriters and (b) instruct any transfer agent and registrar of such
Registrable Securities to release any stop

                                       10
<PAGE>
transfer orders with respect to any such Registrable Securities, effective upon
the closing of a sale pursuant to the registered offering.

      2.7 No Required Sale. Nothing in this Agreement shall be deemed to create
an independent obligation on the part of the Sorge Entities to sell any
Registrable Securities pursuant to any effective registration statement.

      2.8 Rule 144. Stratagene shall use commercially reasonable efforts to
enable holders of Registrable Securities to sell such securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 of the Securities Act or (b) any similar rule or
regulation hereafter adopted by the SEC, including, without limiting the
generality of the foregoing, filing on a timely basis all reports required to be
filed by the Exchange Act. Upon the request of Sorge, Stratagene will deliver to
the Sorge Entities a written statement as to whether it has complied with such
requirements.

                                  ARTICLE III.
                                  MISCELLANEOUS

      3.1 Notice. All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or sent by telecopy, nationally
recognized overnight courier or first class registered or certified mail, return
receipt requested, postage prepaid, addressed to such party at such address as
set forth below or as may hereafter be designated in writing by such party to
the other party:

            Address for Stratagene:

                 11011 North Torrey Pines Road
                 La Jolla, California  92037
                 Attention:  Chief Financial Officer

            Address for the Sorge Entities:

                 c/o Joseph A. Sorge
                 144 10th Street
                 Del Mar, California  92014

      3.2 Assignment; Third Party Beneficiaries. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the parties hereto and
their respective successors and permitted assigns. This Agreement may not be
assigned by Stratagene, without the prior written consent of Sorge. Each of the
Sorge Entities may, at their election, at any time or from time to time, assign
their rights under this Agreement, in whole or in part, but only to a Permitted
Transferee; provided that the Permitted Transferee shall be bound by all
provisions of this Agreement as if the Permitted Transferee were an original
party to this Agreement.

      3.3 Termination. This Agreement shall terminate and be of no further force
and effect on the earlier of (a) ten (10) years from the date of this Agreement
or (b) such time as no Registrable Securities are outstanding. The Sorge
Entities each represent and warrant to and

                                       11
<PAGE>
covenant with Stratagene that the Sorge Entities and their Affiliates will not
engage, directly or indirectly, in any short sales of the Common Stock prior to
the termination of this Agreement.

      3.4 Remedies. The parties hereto agree that money damages or any other
remedy at law would not be sufficient or adequate remedy for any breach or
violation of, or a default under, this Agreement by them and that, in addition
to all other remedies available to them, each of them shall be entitled to an
injunction restraining such breach, violation or default or threatened breach,
violation or default and to any other equitable relief, including, without
limitation, specific performance, without bond or other security being required.
In any action or proceeding brought to enforce any provision of this Agreement
(including the indemnification provisions thereof), the successful party shall
be entitled to recover reasonable attorneys' fees in addition to its costs and
expenses and any other available remedy.

      3.5 No Inconsistent Agreements. Stratagene will not, on or after the date
of this Agreement, enter into any agreement with respect to its securities which
is inconsistent with the rights granted to the Sorge Entities in this Agreement
or otherwise conflicts with the provisions hereof. Stratagene further represents
and warrants that the rights granted to the Sorge Entities hereunder do not in
any way conflict with and are not inconsistent with any other agreements to
which Stratagene is a party or by which it is bound.

      3.6 Amendments. The terms and provisions of this Agreement may be modified
or amended, or any of the provisions hereof waived, temporarily or permanently,
in a writing executed and delivered by Stratagene and Sorge.

      3.7 Waiver. No waiver of any of the provisions of this Agreement shall be
deemed to or shall constitute a waiver of any other provision hereof (whether or
not similar). No delay on the part of any party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof.

      3.8 Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.

      3.9 Nouns and Pronouns. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of names and pronouns shall include the plural and vice
versa.

      3.10 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT GIVING EFFECT TO THE
PRINCIPLES OF CONFLICTS OF LAW.

      3.11 Submission to Jurisdiction. The parties hereto hereby irrevocably and
unconditionally consent to submit to the exclusive jurisdiction of the courts of
the State of California and of the United States of America, in each case
located in the County of San Diego, for any action or proceeding arising out of
or relating to this Agreement and the transactions contemplated hereby (and
agree not to commence any litigation relating hereto except in such courts), and
further agree that service of any process, summons, notice or document by U.S.
registered mail to its respective address shall be effective service of process
for any action or proceeding brought against it in any such court. The parties
hereto hereby irrevocably and unconditionally (a) waive any objection to the
laying of venue of any action or

                                       12
<PAGE>
proceeding arising out of this Agreement or the transactions contemplated hereby
in the courts of the State of California or the United States of America, in
each case located in the County of San Diego, and (b) waive and agree not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.

      3.12 Waiver of Jury Trial. STRATAGENE AND THE SORGE ENTITIES HEREBY WAIVE
ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION OR
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT.

      3.13 Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.

      3.14 Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid, but if any
provision of this Agreement is held to be invalid or unenforceable in any
respect, such invalidity or unenforceability shall not render invalid or
unenforceable any other provision of this Agreement.

      3.15 Further Assurances. At any time or from time to time after the date
of this Agreement, Stratagene, on the one hand, and Sorge, on the other hand,
agree to cooperate with each other, and at the request of the other party, to
execute and deliver any further instruments or documents and to take all such
further action as the other party may reasonably request in order to evidence or
effectuate the consummation of the transactions contemplated hereby and to
otherwise carry out the intent of the parties hereunder.

      3.16 Entire Agreement; Effectiveness. This Agreement and the Merger
Agreement contain the entire agreement between the parties with respect to the
subject matter hereof and supersede all prior and contemporaneous arrangements
or understandings with respect thereto.

                            [Signature Page Follows]

                                       13
<PAGE>
            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the day
and year first above written.

                                         STRATAGENE:

                                         STRATAGENE CORPORATION,
                                         a Delaware corporation

                                         By: /s/ RONNI L. SHERMAN
                                             -----------------------------------
                                                 Ronni L. Sherman
                                                 Executive Vice President and
                                                 General Counsel

                                         SORGE ENTITIES:

                                         JOSEPH A. SORGE

                                         By: /s/ JOSEPH A. SORGE
                                             -----------------------------------
                                                 Joseph A. Sorge

                                         J. A. SORGE TRUST I

                                         By: /s/ JOSEPH A. SORGE
                                             -----------------------------------
                                                 Joseph A. Sorge, Trustee

                                         J. A. SORGE TRUST II

                                         By: /s/ JOSEPH A. SORGE
                                             -----------------------------------
                                                 Joseph A. Sorge, Trustee

                [SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
<PAGE>
                                         J. A. SORGE TRUST III

                                         By: /s/ JOSEPH A. SORGE
                                             -----------------------------------
                                                 Joseph A. Sorge, Trustee

                                         J. A. SORGE TRUST IV

                                         By: /s/ JOSEPH A. SORGE
                                             -----------------------------------
                                                 Joseph A. Sorge, Trustee

                                         THE JOSEPH A. SORGE CHARITABLE
                                         REMAINDER TRUST DATED 12/26/02

                                         By: /s/ JOSEPH A. SORGE
                                             -----------------------------------
                                                 Joseph A. Sorge, Trustee

                                         BIOSENSE PARTNERS, L.P.

                                         By:   BIOSENSE MANAGEMENT, L.L.C.
                                         Its:  General Partner

                                               By: /s/ JOSEPH A. SORGE
                                                   -----------------------------
                                                       Joseph A. Sorge
                                                       Manager

                [SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

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