Document:

<PAGE>
                                                                    Exhibit 10.4

                      FORMATION AND PERFORMANCE AGREEMENT

     THIS FORMATION AND PERFORMANCE AGREEMENT (this "Formation Agreement") is
made and entered into effective as of June 6, 2000 by and between ICOS
CORPORATION, a Delaware corporation ("ICOS"), and TEXAS BIOTECHNOLOGY
CORPORATION, a Delaware corporation ("TBC") (separately, a "Party," and
collectively, the "Parties").

                                    RECITALS

     A.  ICOS-ET-LP LLC, a Washington limited liability company ("ICOS-LP"), and
TBC, both as limited partners, and ICOS-ET-GP LLC, a Washington limited
liability company ("ICOS-GP"), and TBC-ET, Inc., a Delaware corporation ("TBC-
GP"), both as general partners, will form ICOS-Texas Biotechnology L.P., a
Delaware limited partnership (the "Partnership"), and will execute the Agreement
of Limited Partnership of the Partnership, to be dated effective as of the date
hereof (the "Partnership Agreement").  Capitalized terms used but not otherwise
defined in this Formation Agreement shall have the meanings set forth in the
Partnership Agreement.

     B.  ICOS-LP and ICOS-GP are wholly owned by ICOS.  TBC-GP is wholly owned
by TBC.

     C.  ICOS-LP, ICOS-GP, TBC-GP and any Affiliate of a Party who acquires a
Partnership Interest are hereafter referred to collectively as the
"Subsidiaries" and individually as a "Subsidiary."  ICOS and TBC are hereafter
referred to collectively as the "Parent Companies" and individually as a "Parent
Company."

     D.  TBC intends to transfer to the Partnership the Endothelin License
Agreement, pursuant to which the Partnership (as licensee) will receive a
license to the Background Technology, in return for a forty-nine and nine-tenths
percent (49.9%) Partnership Interest.

     E.  TBC further intends to contribute certain assets to TBC-GP and then
cause TBC-GP to contribute all such assets to the Partnership within [ * ] of
the effective date of its formation.

     F.  ICOS intends to contribute certain assets to ICOS-LP and ICOS-GP and
then cause each of them to contribute all such assets to the Partnership within
[ * ] of the effective date of its formation.

     G.  Each of TBC and ICOS intends to provide assurances to the other that it
will cause its respective Subsidiaries to perform all obligations and duties as
a Partner of the

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.
<PAGE>

Partnership as provided in the Partnership Agreement and that it will cause its
respective Subsidiaries or Affiliates who are providing services to the
Partnership to perform all of their obligations and duties under any contracts
with the Partnership, upon the terms set forth herein.

     NOW, THEREFORE, in consideration of the mutual covenants of the Parties,
each to the other, and of good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

                                   AGREEMENT

1.   Performance by the Subsidiaries

     For so long as a Parent Company's Subsidiary owns a Partnership Interest in
the Partnership, and thereafter for so long as a Subsidiary has an accrued but
unperformed obligation to the Partnership pursuant to the Partnership Agreement,
such Parent Company [ * ], to cause the Subsidiary to perform all of the
Subsidiary's agreements, covenants and obligations under the Partnership
Agreement, subject to the terms and conditions thereof.  Each Parent Company [ *
] agreements with the Partnership to which the Subsidiaries or Affiliates are
parties or become parties, regardless of when such agreements are created.
Without limiting the generality of the foregoing, each Parent Company [ * ].
The Parties acknowledge and agree that each Parent Company [ * ] pursuant to the
Partnership Agreement, and such other agreements to which the Subsidiary, or any
of its Affiliates, and the Partnership are parties, and not with respect to the
performance of the Subsidiary or Affiliate of any obligations or duties owed to
any other party, whether person or entity.

2.   Further Assurances

     In addition to executing this Formation Agreement, causing its respective
Subsidiaries to execute the Partnership Agreement [ * ] Subsidiaries thereunder,
each Parent Company agrees to [ * ].

3.   Representations and Warranties

     Each Parent Company represents and warrants to the other Parent Company as
follows:

     (a) The Parent Company shall provide its Subsidiaries with full power and
authority to execute the Partnership Agreement and to perform all functions as a
Partner of the Partnership contemplated therein, and take all reasonable
additional steps as shall be necessary to cause each Subsidiary to perform all
obligations, duties and transactions as provided in the Partnership Agreement.

     (b) The Parent Company shall maintain each of its Subsidiaries as a duly
organized and validly existing Entity under the laws of the jurisdiction in
which it was organized.

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -2-
<PAGE>

4.   [Intentionally left blank.]

5.   Breach

     If any Party breaches or fails to perform any obligation required to be
performed by it pursuant to this Formation Agreement and does not cure such
breach or failure within thirty (30) days after it has received written notice
thereof from the other Party or the Management Committee (the "Defaulting
Party"), the non-Defaulting Party shall have all remedies available to it at law
or in equity against the Defaulting Party as a result of its breach or failure
to perform its obligations under this Formation Agreement.

6.   Dispute Resolution

     In the event a dispute arises between the Parties regarding the application
or interpretation of any provision of this Formation Agreement (a "Dispute"),
then upon the written request of any Party that includes a summary of the
Dispute, [ * ].

     Any Dispute that the Parties are unable to resolve [ * ].  The Parties will
mutually determine the mediator from a list of mediators obtained from the
American Arbitration Association office located in the city in which the
proceeding will take place.  If the Parties are unable to agree on the mediator,
the mediator will be selected by the American Arbitration Association with a
preference for selecting a retired federal judge or state supreme court judge as
the mediator.

     If any Dispute goes unresolved following the foregoing procedures, [ * ].

7.   Notices

     Any notice, request, instruction or other document required or permitted
under this Formation Agreement shall be given either in writing, delivered in
person, or mailed by certified or registered mail, return receipt requested, or
transmitted by facsimile transmission with electronic confirmation of receipt to
the Parties' last known addresses.  Notices shall be deemed to have been given
(a) on the date of service, if served personally on the Party to whom notice is
to be given, (b) on the first day after transmission by facsimile transmission,
if transmitted as set forth above, or (c) on the third day after mailing, if
mailed as set forth above.

8.   Disclaimer of Agency

     This Formation Agreement does not create any entity or relationship beyond
the scope set forth herein and, except as otherwise expressly provided herein,
this Formation Agreement shall not constitute any Party the legal representative
or agent of the other, nor shall any Party have the right or authority to
assume, create or incur any liability or obligation, express or implied,
against, in the name of or on behalf of any other Party, another Party's
Subsidiary, the Partnership or its Affiliates.

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -3-
<PAGE>

9.   Waivers

     No waiver of any breach of the terms of this Formation Agreement shall be
effective unless such waiver is in writing and signed by the Party against whom
such waiver is claimed.  No waiver of any breach shall be deemed to be a waiver
of any other or subsequent breach.

10.  Amendments

     This Agreement may be amended only in a writing signed by both Parties.

11.  Severability

     If any provision of this Formation Agreement shall be held to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

12.  Successors and Assigns

     This Agreement shall be binding on and inure to the benefit of the Parties
and their respective successors and permitted assigns.

13.  Third Parties

     This Agreement is entered into between the Parties for the exclusive
benefit of themselves and their successors and permitted assigns.  This
Agreement is not intended for the benefit of, and shall not be enforceable by,
any creditor of a Party, Subsidiary or the Partnership or any other third party,
whether person or entity.  Except to the extent provided by applicable statute,
and then only to that extent, no third party shall have any rights under this
Formation Agreement or under any other agreement between the Parties,
Subsidiaries and/or the Partnership.

14.  Counterparts

     This Formation Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and all of which shall constitute one
and the same instrument.

15.  Attorneys' Fees

     In the event of a dispute between the Parties regarding the enforcement or
interpretation of this Formation Agreement that is arbitrated or litigated, the
nonprevailing Party or Parties shall pay the reasonable costs and attorneys'
fees of the prevailing Party or Parties, including the reasonable costs and
attorneys' fees incurred in the appeal of any final or interlocutory judgment.

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -4-
<PAGE>

16.  Rights and Remedies

     The rights and remedies provided by this Formation Agreement are
cumulative, and the use of any one right or remedy shall not preclude or waive
the right to use any or all other remedies.  These rights and remedies are given
in addition to any other rights the Parties may have by law, statute, ordinance
or otherwise.

17.  Governing Law; Jurisdiction

     This Formation Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to the choice of law
provisions of the State of Delaware or any other jurisdiction.

                              ICOS CORPORATION

                              By: /s/ Paul Clark
                                  ------------------------

                              Name: Paul Clark
                                  -----------------------

                              Title: Chairman & CEO
                                  -----------------------

                              TEXAS BIOTECHNOLOGY CORPORATION

                              By: /s/ David B. McWilliams
                                 ------------------------

                              Name: David B. McWilliams
                                   ------------------------

                              Title: President/CEO
                                   ------------------------

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -5-<PAGE>
                                                                    Exhibit 10.5

                                    RESTATED

                      R & D COLLABORATION/LICENSE AGREEMENT

                                     BETWEEN

                                ICOS CORPORATION

                                      AND

                              ABBOTT LABORATORIES

                          Restated as of May 31, 2000

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.
<PAGE>

                                    CONTENTS

     1.   Definitions                                               2
     2.   Collaboration                                             8
     3.   Transition - Extracellular Field                          9
     4.   Licenses                                                 10
     5.   Commercialization                                        11
     6.   Royalty [ * ] Payments                                   11
     7.   Confidentiality; Publicity; Publications                 12
     8.   Patent Prosecution                                       14
     9.   Patent Enforcement                                       16
     10.  Patent Infringement..................                    17
     11.  Representation and Warranties........                    18
     12.  Indemnification; Insurance...........                    20
     13.  Dispute Resolution...................                    22
     14.  Term; Termination....................                    24
     15.  Supply of Compounds by Abbott to ICOS                    25
     16.  Miscellaneous........................                    27

Exhibits

     Exhibit A...   -   Product Patent Rights
     Exhibit B...   -   Abbott Program Activities
     Exhibit C...   -   Transfer of Information and Materials by Abbott

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.
<PAGE>

                                    RESTATED

                      R & D COLLABORATION/LICENSE AGREEMENT

     This Restated Agreement is entered into as of may 31, 2000 by and between
ICOS Corporation, a Delaware corporation ("ICOS"), and Abbott Laboratories, an
Illinois corporation ("Abbott").

                                    RECITALS

     A.  ICOS and Abbott entered into an R & D Collaboration/License Agreement
as of April 1, 1995, which was amended by a First Amendment entered into as of
June 27, 1997 (together, the "Original Agreement").

     B.  The Research Term for the Research Program ended April 1, 1999,
including the funding provided by Abbott to ICOS pursuant to Section 2.2 of the
Original Agreement.  Abbott continued research and development after the
Research Term in the Extracellular Field.

     C.  ICOS desires to receive, and Abbott desires to grant to ICOS, [ * ]
license to all of work and rights with respect to the Extracellular Field and
the class of compounds that have been the subject of Abbott's continued research
and development.

     D.  The parties desire to grant [ * ] licenses to each other with respect
to the Intracellular Field.

     E.  Abbott has provided to ICOS [ * ] as required by Section 15 of the
Original Agreement.

     F.  The parties desire to amend and restate the Original Agreement, upon
the terms and conditions set forth herein.

                                   AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties agree to amend and restate the entire Original
Agreement as follows:

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -1-
<PAGE>

1.   Definitions

     As used in this Agreement:

     1.1  "Abbott Product Know How" means all proprietary rights, other than the
           -----------------------
Abbott Product Patent Rights, that Abbott or its Related Parties own or control
as of the Effective Date or during the Research Term or Abbott Program Term that
cover the composition, use or method of making Research Compounds for Excluded
Products, Extracellular Products or Intracellular Products, except those
proprietary rights that became owned or controlled during the Abbott Program
Term (but not before) with respect to Intracellular Products.  Such proprietary
rights may include:

          (a) trade secrets, inventions, medical uses and computer software;

          (b) manufacturing information, specifications, processes and
techniques;

          (c) data, including, without limitation, chemical data, clinical data,
toxicological and pharmaceutical data, in vivo and in vitro study data and other
                                       -------     --------
information relating to the safety or efficacy of Research Compounds; and

          (d) other information relating to Research Compounds or to
formulations, methods of administration or delivery systems involving Research
Compounds.

     1.2  "Abbott Product Patent Rights" means the rights of Abbott and its
           ----------------------------
Related Parties in all patents, inventors' certificates and applications
therefor (including, but not limited to, Joint Patent Rights) [ * ], including
any renewal, division, continuation or continuation-in-part of any such
applications and any patents issuing thereon, and any reissues, extensions,
substitutions, confirmations, registrations, revalidations, revisions and
additions of or to any such patents, that Abbott or its Related Parties own or
control as of the Effective Date or hereafter (with respect to entities becoming
Related Parties after the date hereof, only rights that such Related Parties may
license to others immediately prior to becoming Related Parties or that such
Related Parties acquire after becoming Related Parties), to the extent that such
patents, inventors' certificates and applications cover the composition, use or
method of making Research Compounds for Excluded Products, Extracellular
Products or Intracellular Products and arose or resulted from work done prior to
or during the Research Term, whether or not in the Research Program, or with
respect to

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -2-
<PAGE>

Extracellular  Products or Excluded  Products,  during the Abbott  Program Term,
whether or not in the Abbott Program.

     1.3  "Abbott Program" means the program conducted by Abbott or any of its
           --------------
Related Parties to discover or develop small molecules in the Extracellular
Field, as further described in Section 2 and 3.

     1.4  "Abbott Program Term" means the term of the Abbott Program from April
           -------------------
1, 1999 to March 31, 2000.

     1.5  "Abbott Technology" means the Abbott Product Know How and Abbott
           -----------------
Product Patent Rights.

     1.6  "Affiliate" means, with respect to a party, any other business entity
           ---------
which directly or indirectly controls, is controlled by, or is under common
control with, the party.  The direct or indirect ownership of at [ * ] or, if
smaller, the maximum allowed by applicable law, of the voting securities of a
business entity or of an interest in the assets, profits or earnings of a
business entity shall be deemed to constitute control of the business entity.

     1.7  "Commercial Launch" means the time after Regulatory Approval of a
           -----------------
Product in a given country when the Product is first sold to an independent
third party in such country.

     1.8  "Confidential Information" means the information, data and materials
           ------------------------
described in Section 7.1.

     1.9  "Effective Date" means April 1, 1995.
           --------------

     1.10  "Excluded Field" means [ * ].
            --------------

     1.11  "Excluded Product" means, any commercial product in final dosage or
            ----------------
unit form containing a Research Compound, the primary biochemical or physiologic
activity of the Research Compound in such product being in the Excluded Field.

     1.12  "Extracellular Field" means [ * ].
            -------------------

     1.13  "Extracellular Product" means any commercial product in final dosage
            ---------------------
or unit form containing a Research Compound, the primary biochemical or
physiologic activity of the Research Compound in such product being in the

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -3-
<PAGE>

Extracellular Field or any other commercial products containing a compound from
the class of compounds covered by any claims in any patent applications or
patents included in the Link Patent Rights.

     1.14  "FDA" means the United States Food and Drug Administration or any
            ---
successor entity thereto.

     1.15  "ICAM" means an intercellular adhesion molecule.
            ----

     1.16  "ICOS Product Know How" means all proprietary rights, other than the
            ---------------------
ICOS Product Patent Rights, that ICOS or its Related Parties own or control as
of the Effective Date or during the Research Term that cover the composition,
use or method of making Research Compounds for Extracellular Products or
Intracellular Products.  Such proprietary rights may include:

          (a) trade secrets, inventions, medical uses and computer software;

          (b) manufacturing information, specifications, processes and
techniques;

          (c) data, including, without limitation, chemical data, clinical data,
toxicological and pharmaceutical data, in vivo and in vitro study data and other
                                       -------     --------
information relating to the safety or efficacy of Research Compounds; and

          (d) other information relating to Research Compounds or to
formulations, methods of administration or delivery systems involving Research
Compounds.

     1.17  "ICOS Product Patent Rights" means the rights of ICOS and its Related
            --------------------------
Parties in all patents, inventors' certificates and applications therefor
(including, but not limited to, Joint Patent Rights) throughout the world,
including any renewal, division, continuation or continuation-in-part of any
such applications and any patents issuing thereon, and any reissues, extensions,
substitutions, confirmations, registrations, revalidations, revisions and
additions of or to any such patents, that ICOS or its Related Parties own or
control as of the date hereof or hereafter (with respect to entities becoming
Related Parties after the date hereof, only rights that such Related Parties may
license to others immediately prior to becoming Related Parties or that such
Related Parties acquire after becoming Related Parties), to the extent that such
patents, inventors' certificates and applications cover the composition, use or
method of making Research Compounds for Extracellular Products or Intracellular

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -4-
<PAGE>

Products and arose or resulted from work done prior to or during the Research
Term, whether or not in the Research Program.

     1.18  "ICOS Technology" means the ICOS Product Know How and ICOS Product
            ---------------
Patent Rights.

     1.19  "Intracellular Field" means [ * ].
            -------------------

     1.20  "Intracellular Product" means any commercial product in final dosage
            ---------------------
or unit form containing a Research Compound, the primary biochemical or
physiologic activity of the Research Compound in such product being in the
Intracellular Field.

     1.21  "Joint Patent Rights" means all patents, inventors' certificates and
            -------------------
applications therefor throughout the world, including any renewal, division,
continuation or continuation-in-part of any such applications and any patents
issuing thereon, and any reissues, extensions, substitutions, confirmations,
registrations, revalidations, revisions and additions of or to any such patents,
to the extent that such patents, inventors' certificates and applications (a)
cover a Research Compound or (b) arose or resulted from inventive work in the
Research Program by one or more employees from both parties (or their Related
Parties), whether or not relating to the Extracellular Field or Intracellular
Field, and as to which the employees would be inventors under the patent laws of
the United States.  Pursuant to Section 8.2, the parties have [ * ] in Joint
Patent Rights.

     1.22  "Link Patent Rights" means the U.S. patent applications set forth in
            ------------------
items 2(a) and (b) of Exhibit A attached hereto, and any foreign counterparts
throughout the world, including any renewal, division, continuation or
continuation-in-part of any such applications and any patents issuing thereon,
and any reissues, extensions, substitutions, confirmations, registrations,
revalidations, revisions and additions of or to any such patents.

     1.23  "Major European Country" means [ * ].
            ----------------------

     1.24  "Major Market Country" means [ * ].
            --------------------

     1.25  "NDA Approval" means approval of an NDA Filing to sell a Product in
            ------------
the United States.

     1.26  "NDA Filing" means a completed new drug application filed with the
            ----------
FDA.

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -5-
<PAGE>

     1.27  "Net Sales" means:
            ---------

          (a) With respect to an Extracellular Product containing a Research
Compound as its sole, independently active pharmaceutical ingredient, the gross
amount invoiced for the sale or other disposition of such Extracellular Product
by a party, its Affiliates and its sublicensees to unrelated third parties, less
the following deductions related to the sale or other disposition:

              (i) discounts, credits, rebates, allowances and adjustments for
rejections, recalls or returns;

              (ii) retroactive price reductions imposed by governmental
authorities (including, but not limited to, any statutory or contractual
discounts or rebates mandated by governmental authorities, such as rebates
provided for under 42 U.S.C. (S) 1396);

              (iii) sales, excise, value-added and similar taxes or duties
imposed on the sale and included in the invoiced amount;

              (iv) transportation, insurance and other handling expenses
directly chargeable to the sale and separately shown on the invoice; and

              (v) [ * ]

          (b) With respect to an Extracellular Product containing a Research
Compound and one or more other independently active pharmaceutical ingredients
which are not Research Compounds, the gross amount invoiced for a sale or other
disposition of such Extracellular Product in a particular country by a party,
its Affiliates and its sublicensees to unrelated third parties, less the
deductions set forth in (a)(i) through (v) above, shall be multiplied by a
fraction:  (i) [ * ].

          (c) With respect to an Extracellular Product for [ * ] containing a
Research Compound as its sole, independently active pharmaceutical ingredient,
which Extracellular Product is sold in Premium Delivery Systems, an amount
calculated by multiplying (i) [ * ].

          (d) Any Extracellular Product sold or otherwise disposed of in other
than an arm's-length transaction or for other property (e.g., barter) shall be
deemed invoiced at its fair market value in the country of sale or disposition.

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -6-
<PAGE>

     1.28  "Phase III Clinical Trial" means one or a series of pivotal clinical
            ------------------------
trials normally performed, which, if successful, would provide sufficient data
to allow the preparation and filing of a Regulatory Filing in a Major Market
Country.

     1.29  "Product" means (a) with respect to Abbott, Intracellular Products
            -------
and (b) with respect to ICOS, Excluded Products, Extracellular Products and
Intracellular Products.

     1.30  "Regulatory Approval" means approval of a Regulatory Filing to sell a
            -------------------
Product in a country and, to the extent required, governmental marketing
approval for the Product in the country.

     1.31  "Regulatory Filing" means an application for medical or scientific
            -----------------
approval to sell an Extracellular Product in a country.

     1.32  "Related Party" means, with respect to a party, any other business
            -------------
entity which directly or indirectly is controlled by the party.  The direct or
indirect ownership of at least [ * ] of the voting securities of a business
entity or of an interest in the assets, profits or earnings of a business entity
shall be deemed to constitute control of the business entity.  TAP
Pharmaceutical Products Inc., a Delaware corporation, shall not be deemed to be
a Related Party of Abbott unless and until Abbott directly or indirectly owns
greater than [ * ] of the voting securities of TAP Pharmaceutical Products Inc.

     1.33  "Research Compound" means any small molecule (or a refinement of it)
            -----------------
from any class of small molecules identified by either party or its Related
Parties (a) prior to or during the Research Term as having or likely to have
activity in the Extracellular Field or Intracellular Field, whether or not
identified from work performed in the Research Program, (b) in the Research
Program as having any heretofore undefined and unanticipated biological
activity, whether or not in the Extracellular Field or Intracellular Field, (c)
during the Abbott Program Term as having or likely to have activity in the
Extracellular Field, whether or not identified from work performed in the Abbott
Program, or (d) covered by the claims of any patent applications or patents
included in the Link Patent Rights.

     1.34  "Research Program" means the collaborative program the parties
            ----------------
conducted during the Research Term to discover small molecules in the
Extracellular Field and Intracellular Field pursuant to Section 2 of the
Original Agreement.

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -7-
<PAGE>

     1.35  "Research Term" means the term of the Research Program from the
            -------------
Effective Date to April 1, 1999.

     1.36  "Royalty Period" means [ * ].
            --------------

     1.37  "Sole Patent Rights" means, with the exclusion of the Joint Patent
            ------------------
Rights (a) the Abbott Product Patent Rights with respect to Abbott and (b) the
ICOS Product Patent Rights with respect to ICOS.

     1.38  "United States" means the United States of America and its
            -------------
possessions and territories.

     1.39  "Valid Claim" means a claim of an issued, unexpired patent which has
            -----------
not been (a) held invalid or unenforceable by a final decision of a court or
governmental agency of competent jurisdiction, which decision is unappealable or
was not appealed within the time allowed therefor, or (b) admitted in writing to
be invalid or unenforceable by the holder(s) by reissue, disclaimer or
otherwise.

2.   Collaboration

     2.1  Research.  The purpose of the Research Program was to identify and
          --------
optimize as therapeutic agents small molecules in the [ * ].  The purpose of the
Abbott Program conducted by Abbott was and is to identify and optimize as
therapeutic agents small molecules in the [ * ].

     2.2  Research Records and Reports.
          ----------------------------

          (a) Records.  ICOS and Abbott each shall maintain or cause to be
              -------
maintained records in sufficient detail and in good scientific manner
appropriate for patenting purposes, which shall be complete and accurate and
shall fully and properly reflect all work done and results achieved by them and
their Related Parties in the performance of the Research Program or Abbott
Program (including all data in the form required to be maintained pursuant to
any applicable laws and regulations).  Such records shall include books,
records, reports, research notes, charts, graphs, comments, computations,
analyses, recordings, photographs, computer programs and documentation thereof,
computer information storage means, samples of materials and other graphic or
written data generated in connection with the Research Program or Abbott
Program, including any data required to be maintained pursuant to any applicable
laws and regulations.

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -8-
<PAGE>

          (b) Inspection.  ICOS and Abbott each shall have the right, during
              ----------
normal business hours and upon reasonable notice, to inspect and copy any such
records of the other party and its Related Parties to the extent reasonably
related to this Agreement.  Each party shall maintain such records and the
information of the other party contained therein in confidence in accordance
with Section 7 and shall not use such records or information except to the
extent otherwise permitted by this Agreement.

          (c) Research Report.  Abbott shall keep ICOS fully and promptly
              ---------------
informed as to all of its discoveries and technical developments under the
Abbott Program.  Within [ * ] after the end of the Abbott Program Term, Abbott
shall prepare and distribute to ICOS a reasonably detailed written summary
report regarding the conduct and results achieved in the Abbott Program.

     2.3  Availability of Employees.  Each party shall make its employees who
          -------------------------
were engaged in the Research Program or Abbott Program, and relevant reports of
nonemployee consultants, available upon reasonable notice during normal business
hours, at their respective places of employment to consult with the other party
on issues arising during or within [ * ] after the end of the Abbott Program
Term and in connection with any request from any regulatory agency, including
regulatory, scientific, technical and clinical testing issues.

     2.4  Visit of Facilities.  Representatives of ICOS may, upon reasonable
          -------------------
notice during normal business hours, (a) visit the facilities where the Abbott
Program is being conducted, (b) consult informally, during such visits and by
telephone, with personnel of the other party performing work on the Abbott
Program and (c) with Abbott's prior approval, which approval shall not be
unreasonably withheld, visit the sites of any experiments being conducted  in
connection with the Abbott Program, but only to the extent in each case such
experiments relate to Research Compounds or Extracellular Products.  On such
visits, an employee of Abbott shall accompany the employee(s) of ICOS.  If
requested by ICOS, Abbott shall cause appropriate individuals working on the
Abbott Program, to be available for meetings at the location of the facilities
where such individuals are employed at times reasonably convenient to the party
responding to such request.

3.   Transition - Extracellular Field

     3.1  Abbott Program.  Abbott has been conducting the Abbott Program and
          ---------------
shall continue to conduct the Abbott Program through the end of the Abbott
Program

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -9-
<PAGE>

Term.  Abbott shall continue using reasonably diligent efforts to
perform the Abbott Program through the end of the Abbott Program Term in
accordance with [ * ] attached hereto.

     3.2  Project Leaders.  ICOS and Abbott each shall appoint a person to
          ----------------
coordinate and be the primary contacts between the parties with respect to the
Abbott Program.  Each party may replace its project leader at any time after
conferring with the other party.

     3.3  Transfer of Information.  In addition to the provisions of Section 2,
          -----------------------
Abbott shall provide ICOS information and materials related to the Research
Program or Abbott Program in accordance with the provisions of Exhibit C
attached hereto.

     3.4  Restriction on Use/Transfer.  [ * ]
          ---------------------------

4.   Licenses

     4.1  License for Intracellular Products.
          ----------------------------------

          (a) Abbott.  ICOS hereby grants to Abbott a [ * ] license under the
              ------
ICOS Product Know How and ICOS Product Patent Rights to make, have made, use,
sell, offer to sell and import [ * ].

          (b) ICOS.  Abbott hereby grants to ICOS a [ * ] license under the
              ----
Abbott Product Know How and Abbott Product Patent Rights to make, have made,
use, sell, offer to sell and import Intracellular Products.

     4.2  License for Extracellular Products.  Abbott hereby grants to ICOS a [
          ----------------------------------
* ] license, which license shall be [ * ], under the Abbott Product Know How and
Abbott Product Patent Rights to make, have made, use, sell, offer to sell and
import [ * ].

     4.3  License for Excluded Products.
          -----------------------------

          (a) Abbott.  ICOS hereby grants to Abbott [ * ] license under the ICOS
              ------
Product Know How and ICOS Product Patent Rights to make, have made, use, sell,
offer to sell and import [ * ].

          (b) ICOS.  Abbott hereby grants to ICOS a [ * ] license under the
              ----
Abbott Product Know How and Abbott Product Patent Rights to make, have made,
use, sell, offer to sell and import [ * ].

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -10-
<PAGE>

     4.4  Prohibition.  Except as licensed hereunder and except to the extent a
          -----------
party's rights in the Joint Patent Rights are [ * ] licensed hereunder to the
other party, ICOS shall not use, and shall not allow its Affiliates to use, the
Abbott Technology for any other purpose, and Abbott shall not use, and shall not
allow its Affiliates to use, the ICOS Technology for any other purpose.

     4.5  Sublicensing.  Each of the parties may sublicense (including for
          ------------
copromotion or comarketing) its license rights under Sections 4.1, 4.2 and 4.3;
provided, however, that the party granting the sublicense shall notify the other
party of the scope of the sublicense and the sublicensee's identity and shall
remain responsible for the sublicensee's compliance with the terms of this
Agreement.

5.   Commercialization

     The party with the license rights hereunder to Excluded Products,
Extracellular Products and Intracellular Products shall have sole discretion as
to the selection of Research Compounds to be included therein, the development
or non-development of such products, the marketing or non-marketing of such
products and the delay or suspension in the development or marketing of such
products due to any adverse conditions as determined solely by them relating to
the safety, efficacy or commercial feasibility of such products.  [ * ]

6.   Royalty [ * ] Payments

     [ * ]

     [ * ]

     [ * ]

     6.4  Books and Records
          -----------------

          (a) Retention and Inspection.  ICOS shall keep, and shall cause its
              ------------------------
Affiliates and sublicensees to keep, accurate books and records in sufficient
detail to verify the calculation of Net Sales and royalties and the accuracy of
the royalty reports hereunder, such books and records being retained at a
principal place of business for at [ * ] after the end of the year to which they
pertain.  Upon the written request of Abbott and not more than [ * ] in each
calendar year, ICOS shall permit an independent certified public accounting firm
of nationally recognized standing,

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -11-
<PAGE>

selected by Abbott and reasonably acceptable to ICOS, at Abbott's expense, to
have access during normal business hours to such of the records as may be
reasonably necessary to verify the calculation of Net Sales and royalties and
the accuracy of the royalty reports hereunder for any year ending not more than
[ * ] prior to the date of such request. The accounting firm shall disclose to
Abbott only whether the royalties paid and reports are correct and, if
applicable, the specific details concerning any discrepancies. No other
information shall be shared unless the dispute resolution proceedings of Section
13 are invoked.

          (b) Results of Audit.  If the accounting firm concludes that
              ----------------
additional royalties were owed during the audited period, ICOS shall have the
option to invoke the proceedings of Section 13 or pay the additional royalties
within [ * ] of the date Abbott delivers to ICOS such accounting firm's written
report so concluding.  The fees charged by such accounting firm shall be paid by
Abbott; provided, however, if the audit discloses that the royalties payable by
ICOS for the audited period are more than [ * ] of the royalties actually paid
for such period, then ICOS shall pay the reasonable fees and expenses charged by
the accounting firm.

          (c) Sublicensees.  ICOS shall include in each permitted sublicense
              ------------
granted by it pursuant to this Agreement with respect to Extracellular Products
a provision requiring the sublicensee to make reports to ICOS, to keep and
maintain books and records and to grant access to such books and records by
Abbott's accounting firm to the same extent required of ICOS under this
Agreement.

          (d) Confidential Financial Information.  Abbott shall treat all
              ----------------------------------
financial information subject to review under this Section 6.4 or under any
sublicense agreement as confidential and shall cause its accounting firm to
retain all such financial information in confidence.

     6.5  Value of Collaboration and Know How.  [ * ]
          -----------------------------------

7.   Confidentiality; Publicity; Publications

     7.1  Nondisclosure Obligations.  Except as otherwise provided in this
          -------------------------
Section 7, during the term of this Agreement and for a period of [ * ]
thereafter (a) both parties shall maintain in confidence information, data and
materials (including reagents and biological materials) resulting from the
Research Program, Abbott Program or related to the development of Research
Compounds or Products, and (b) both parties shall also maintain in confidence
and use only for purposes of this Agreement all information, data and materials
(including reagents and biological materials) provided by the other party under
this

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -12-
<PAGE>

Agreement, which if disclosed in writing are marked "Confidential" or if
disclosed orally or in physical form (e.g. reagents) are promptly thereafter
confirmed in writing to be confidential.  The information, data and materials
described in (a) and (b) are referred to herein as "Confidential Information."

     The obligation not to disclose or use Confidential Information shall not
apply to any part of the Confidential Information that (i) is or becomes
patented, published or otherwise part of the public domain other than by acts of
the party obligated not to disclose such Confidential Information or its
Affiliates or sublicensees in contravention of this Agreement, (ii) is disclosed
to the receiving party or its Affiliates or sublicensees by a third party
without an obligation of confidentiality, provided such Confidential Information
was not obtained by the third party directly or indirectly from the other party
or its Affiliates or sublicensees on a confidential basis, (iii) prior to
disclosure under this Agreement, was already in the possession of the receiving
party or any of its Affiliates or sublicensees as evidenced by written records,
provided such Confidential Information was not obtained directly or indirectly
from the other party, (iv) is independently developed by the receiving party or
its Affiliates or sublicensees as evidenced by written records or (v) is
disclosed in a press release approved by both parties under Section 7.3.

     7.2  Permitted Disclosures.  To the extent it is reasonably necessary or
          ---------------------
appropriate to fulfill its obligations or exercise its rights under this
Agreement (a) a party may disclose Confidential Information that it is otherwise
obligated under this Section 7 not to disclose to its Affiliates, sublicensees,
consultants, outside contractors and clinical investigators, on a need-to-know
basis on condition that such persons or entities agree to keep the Confidential
Information confidential for the same time periods and to the same extent as
such party is required to keep the Confidential Information confidential, (b) a
party or its Affiliates or sublicensees may disclose Confidential Information to
governmental or other regulatory authorities to the extent that such disclosure
is reasonably necessary to obtain patents or authorizations to conduct clinical
trials with, and to commercially market, the Product, provided that the
disclosing party shall request confidential treatment thereof, (c) a party may
disclose Confidential Information as required by applicable law, regulation or
judicial process, provided that such party shall give the other party prior
written notice thereof and adequate opportunity to object to any such disclosure
or to request confidential

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -13-
<PAGE>

treatment thereof, and (d) a party may disclose Confidential Information as
permitted under Sections 7.4 and 7.5.

     7.3  Publicity.  Unless mutually agreed upon by the parties, neither party
          ---------
shall originate any publicity, news release or other public announcement,
written or oral, whether to the public, press, stockholders or otherwise,
relating to this Agreement, any amendment hereto or performance hereunder,
except as is required by law in the opinion of legal counsel to the originating
party (notice of such opinion being promptly given to the other party) or to the
extent the substance thereof has been previously reviewed and released by the
parties or is in the public domain through no fault of the originating party.
Abbott acknowledges and agrees that ICOS may file this Agreement with the
Securities and Exchange Commission pursuant to applicable regulations (with
appropriate requests for confidential treatment of certain matters after
consultation with Abbott).

     7.4  Notice of Publication.  Each party acknowledges the other party's
          ---------------------
interest in publishing certain of its results to obtain recognition within the
scientific community and to advance the state of scientific knowledge.  Each
party also recognizes the mutual interest in obtaining valid patent protection
and protecting business interests.  Consequently, either party, its employees or
consultants wishing to make a publication (including any oral disclosure made
without an obligation of confidentiality) relating to work performed by the
party as part of the Research Program or Abbott Program (the "Publishing Party")
shall transmit to the other party (the "Reviewing Party") a copy of the proposed
written publication or an outline of such oral disclosure at least [ * ] prior
to submission for publication or oral disclosure.  The Reviewing Party shall
have the right (a) to propose modifications to the publication for patent, trade
secret or commercial reasons and (b) to request a reasonable delay in or
avoidance of publication in order to protect patentable information and trade
secrets, the disclosure of which would materially affect the interests of the
Reviewing Party under this Agreement; provided, however, that with respect to
the Extracellular Field, ICOS shall have the absolute right to publish or
withhold a publication.

     7.5  Timing of Publication.  If the Reviewing Party requests a delay or
          ---------------------
avoidance pursuant to Section 7.4, the Publishing Party shall delay submission
or presentation of the publication for a period of up to [ * ] from the date of
receipt by the Reviewing Party to enable modification as provided in Section 7.4
or patent applications protecting each party's rights in such information to be
filed in accordance with Section 8.  Upon the expiry of [ * ] from transmission
to the

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -14-
<PAGE>

Reviewing Party, the Publishing Party shall be free to proceed with the
written publication or presentation unless the Reviewing Party has requested the
delay or avoidance described above.

8.   Patent Prosecution

     8.1  Sole Patent Rights.  Each party shall, at its own cost, diligently and
          ------------------
in good faith file, prosecute, issue and maintain its Sole Patent Rights
according to its own internal standards using patent counsel and other
professional advisors of its own choosing.  Each party shall confer with the
other party regarding the filing, prosecution, issuance and maintenance of its
Sole Patent Rights licensed hereunder and shall provide to the other party
copies of any official action or submission with respect to such Sole Patent
Rights within [ * ] of receipt or preparation by the party or its patent
counsel.  Each party shall promptly disclose to the other party the conception
or reduction to practice under the Research Program or Abbott Program of any
inventions for which Sole Patent Rights may be sought.

     8.2  Joint Patent Rights.  It is the intent of the parties that each party
          -------------------
shall have an [ * ] in all Joint Patent Rights and all inventions for which
Joint Patent Rights may be sought, subject to the licenses granted herein.  Each
party shall promptly disclose to the other party the conception or reduction to
practice of inventions for which Joint Patent Rights may be sought.  ICOS shall
be the party designated to have control of the filing, prosecution, issuance and
maintenance of the Link Patent Rights and any other patent applications or
patents covering the composition, use or method of making Research Compounds for
Extracellular Products (collectively, "Extracellular Patent Rights").  Unless
the parties determine otherwise, Abbott shall be the party designated to have
control of the filing, prosecution, issuance and maintenance of all other Joint
Patent Rights, except the Extracellular Patent Rights.  The designated party may
retain patent counsel reasonably acceptable to the other party to assist in the
filing, prosecution, issuance and maintenance of Joint Patent Rights and shall
cause to be provided to the other party the text of any patent applications
before filing and consider in good faith and incorporate the reasonable requests
of the other party.  In all other matters related to the filing, prosecution,
issuance and maintenance of Joint Patent Rights, the designated party shall
provide to the other party copies of any official action or submission and shall
confer with the other party giving due consideration to the reasonable requests
of the other party.  The costs of filing, prosecuting, issuing and maintaining
the Joint Patent Rights shall be borne by the designated party or the party
assuming responsibility under Section 8.4.

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -15-
<PAGE>

     8.3  Cooperation.  Each party shall cooperate and assist the other party in
          -----------
connection with its filing, prosecution, issuance and maintenance of Sole Patent
Rights and Joint Patent Rights.  Each party shall keep the other party informed
at regular intervals, or upon request, of the status of all patent applications
and patents with respect to its Sole Patent Rights licensed hereunder and with
respect to Joint Patent Rights for which it has responsibility.  Where
appropriate, each party shall sign or cause to have signed all documents
relating to the patent applications or patents for the Joint Patent Rights and
shall cause such patent applications and patents to be assigned to Abbott and
ICOS jointly.

     8.4  Abandonment.  In the event that Abbott or ICOS elect not to file,
          -----------
prosecute, issue or maintain a Sole Patent Right licensed hereunder or a Joint
Patent Right, it shall promptly provide adequate notice to the other party and
allow the other party, at its expense, the opportunity to proceed with such Sole
Patent Right or Joint Patent Right.

     8.5  Patent Term Restoration.  The party that has responsibility under this
          -----------------------
Section 8 for prosecuting a patent that is licensed under this Agreement for
making, having made, using or selling an Extracellular Product, Intracellular
Product or Excluded Product shall promptly notify the other party of (a) the
issuance of a patent in the United States or foreign country, including its
issue date and patent number, where extension of the term of the patent is
possible under the Drug Price Competition and Patent Term Restoration Act of
1984 or any similar foreign law (the "Patent Term Restoration Act") and (b) any
notice it receives under the Patent Term Restoration Act, including notices from
persons who have filed in the United States an abbreviated new drug application.
The notice to be provided to the other party shall be given within [ * ] after
issuance of the patent or receipt of the notice pursuant to the Patent Term
Restoration Act, as the case may be.  After such notice, the parties shall
discuss relevant issues, possible courses of action, any third-party allegations
of failure to show due diligence and any extensions of the patent term under the
Patent Term Restoration Act.

9.   Patent Enforcement

     Upon learning of the infringement of the Sole Patent Rights to the extent
exclusively licensed hereunder or the Joint Patent Rights by a third party, a
party shall promptly provide notice to the other party in writing of the fact
and shall supply the other party with all evidence possessed by it pertaining to
and establishing such infringement.  The party whose exclusive license rights
hereunder to the Sole Patent

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -16-
<PAGE>

Rights allegedly are being infringed shall have [ * ] from the date of learning
of the infringement or receipt of notice of infringement, or such lesser period
of time if a further delay could result in material harm to, or loss of a
material right of, the other party, to abate the infringement or to file suit
against at least one of the infringers, at its sole expense, following
consultation with the other party. The party who has a right to bring an
infringement suit shall not be obligated to bring or maintain more than one such
suit at any time with respect to claims directed to any one method of
manufacture, use or composition of matter.

     If the party who has the right to bring the infringement suit does not
bring the suit within the time set forth in the preceding paragraph, the other
party shall have the right to take whatever action it deems appropriate in its
own name or, if required by law, in the name of the party whose exclusive
license rights in the Sole Patent Rights or interest in the Joint Patent Rights
are being infringed, to enforce such Sole Patent Rights or Joint Patent Rights.
All monies recovered upon the final judgment or settlement of any infringement
suit shall, after reimbursement of the expenses of the party bringing such suit,
be shared by the parties [ * ].  The parties shall fully cooperate with each
other in the planning and execution of any suit to enforce their Sole Patent
Rights in the Extracellular Field, Intracellular Field or Excluded Field or
Joint Patent Rights.

     The parties shall confer with respect to enforcement of the Joint Patent
Rights.  In the absence of any other agreement as to the enforcement of the
Joint Patent Rights, each party shall have the right to enforce the Joint Patent
Rights at its expense and retain any award of damages or expenses, except that
the party whose exclusive license rights in the Joint Patent Rights are being
infringed shall have [ * ] from the date of learning of the infringement or
receipt of notice of infringement (or such lesser period of time if a further
delay could result in material harm to, or loss of a material right of, the
other party) to abate the infringement or to file suit against at least one of
the infringers, at its sole expense following consultation with the other party
and the provisions of the second paragraph of this Section 9 shall apply (i.e.,
right of the other party to subsequently bring an infringement suit, sharing of
any final judgment or settlement and cooperation).

     The party bringing the infringement suit shall not settle the suit or
otherwise consent to an adverse judgment in such suit in a manner that
diminishes the rights or interests of the other party without the other party's
consent.  The other party shall have the right to participate, at its expense
and with counsel of its choosing, in an

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -17-
<PAGE>

infringement suit brought by the other party to the extent its Sole Patent
Rights, Joint Patent Rights or other proprietary rights are being challenged.

10.  Patent Infringement

     If a party, or to its knowledge any of its Affiliates, sublicensees or
customers, shall be sued by a third party for infringement of a patent because
of the performance of the Research Program, Abbott Program or the development,
manufacture, use or sale of Research Compounds, Extracellular Products,
Intracellular Products or Excluded Products, such party shall promptly notify
the other party in writing of the institution of such suit.  The party sued
shall have the right, in its sole discretion, to control the defense of such
suit at its own expense, in which event the other party shall cooperate fully in
the defense of such suit and furnish to the party sued all evidence and
assistance in its control.  The party sued shall not settle the suit or
otherwise consent to an adverse judgment in such suit in a manner that
diminishes the rights or interests of the other party without the other party's
consent.  The other party shall have the right to participate, at its expense
and with counsel of its choosing, in such suit to the extent its Sole Patent
Rights or other proprietary rights are being challenged.  Any judgments,
settlements or damages payable with respect to the suit shall be paid by the
party that controls the defense of the suit, subject to any claims against the
other party for breach of or indemnification under this Agreement or that are
otherwise available at law or in equity.  Any third-party royalty payments
required to be paid as a result of a judgment or settlement under this Section
10 shall be paid by the party controlling the suit, subject to any claims
against the other party for breach of or indemnification under this Agreement or
that are otherwise available at law or in equity and subject to offset against
royalties for a third-party license as set forth in Section 6.2.

11.  Representation and Warranties

     11.1  Both Parties.  Each party hereby represents and warrants to the other
           ------------
party that as of the date hereof:

          (a) Corporate Existence and Power.  It (i) is a corporation duly
              -----------------------------
organized, validly existing and in good standing under the laws of the state in
which it is incorporated, (ii) has the corporate power and authority and the
legal right to own and operate its property and assets, to lease the property
and assets it operates under lease, and to carry on its business as it is now
being conducted, and (iii) is in compliance with all requirements of applicable
law, except to the extent that any

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -18-
<PAGE>

noncompliance would not have a material adverse effect on its properties,
business, financial or other condition or ability to perform its obligations
under this Agreement.

          (b) Authorization and Enforcement of Obligations.  It (i) has the
              --------------------------------------------
corporate power and authority and the legal right to enter into this Agreement
and to perform its obligations hereunder and (ii) has taken all necessary
corporate action on its part to authorize the execution and delivery of this
Agreement and the performance of its obligations hereunder.  This Agreement has
been duly executed and delivered on its behalf and constitutes a legal, valid
and binding obligation, enforceable against it in accordance with its terms.

          (c) Consents.  All necessary consents, approvals and authorizations of
              --------
all governmental authorities and other persons required to be obtained in
connection with its execution, delivery and performance of this Agreement have
been obtained.

          (d) No Conflict.  Notwithstanding anything to the contrary in this
              -----------
Agreement, its execution, delivery and performance of this Agreement (i) will
not conflict with or violate any requirement of applicable laws or regulations
and (ii) will not conflict with, violate or breach or constitute a default or
require any consent under any of its contractual obligations.

          (e) Technology.  It has disclosed to the other party all information
              -----------
required to be disclosed pursuant to Section 2 of the Original Agreement,
including but not limited to all classes of Research Compounds identified by it
or its Related Parties, all patentable inventions resulting from the Research
Program, or resulting from the Abbott Program through the date of this
Agreement, for which it would be reasonable to file patent applications.
Exhibit A contains a true and complete list of all patent applications that have
been filed by it with respect to any Joint Patent Rights or Sole Patent Rights,
which include, as the case may be, Abbott Product Patent Rights or ICOS Product
Patent Rights.  All the inventors named in the patent applications have
assigned, or are under an obligation to assign, to the parties in accordance
with this Agreement all of their right, title and interest in and to the
inventions claimed in the patent applications.  In accordance with Section 8.2
and promptly after execution of this Agreement, the parties shall cause any
Joint Patent Rights identified in Exhibit A to be assigned to both parties if
they have not been previously assigned.

     11.2  ICOS.
           ----

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -19-
<PAGE>

          (a) Third-Party Grants and Agreements.  ICOS has not granted rights
              ---------------------------------
under the ICOS Technology in the [ * ] to any third party.  ICOS does not have
any agreements with a third party, including the U.S. government, that give the
third party, including the U.S. government, any right to acquire, own or possess
in the Field any right or interest in any patents or other proprietary rights
arising or resulting from its work in the Research Program.

          (b) Infringement/Misappropriation Claims.  ICOS has not received any
              ------------------------------------
notice of a claim of infringement or misappropriation of any alleged rights
asserted by any third party in relation to any technology used by it in
connection with the Research Program.

          (c) Third-Party Technology.  ICOS is not aware of any patents or other
              ----------------------
proprietary rights of any third party which would materially the exercise of the
license rights granted hereunder to Abbott.

     11.3 Abbott.
          ------

          (a) Third-Party Grants and Agreements.  Abbott has not granted rights
              ---------------------------------
under the Abbott Technology in the [ * ] to any third party.  Abbott does not
have any agreements with a third party, including the U.S. government, that give
the third party, including the U.S. government, any right to acquire, own or
possess in the [ * ] any right or interest in any patents or other proprietary
rights arising or resulting from its work in the Research Program or Abbott
Program.

          (b) Infringement/Misappropriation Claims.  Abbott has not received any
              ------------------------------------
notice of a claim of infringement or misappropriation of any alleged rights
asserted by any third party in relation to any technology to be used by it in
connection with the Research Program or Abbott Program.

          (c) Third-Party Technology.  Abbott is not aware of any patents or
              ----------------------
other proprietary rights of any third party which would materially affect the
exercise of the license rights granted hereunder to ICOS.

          (d) Ownership.  Abbott owns or is the licensee in good standing of all
              ---------
intellectual property to be used or used by it in connection with the Abbott
Program.

          (e) TAP Pharmaceutical Products.  [ * ]
              ----------------------------

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -20-

<PAGE>

     11.4  Disclaimer.
           ----------

     EXCEPT AS SET FORTH IN THIS AGREEMENT, ABBOTT MAKES NO OTHER
REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ABBOTT TECHNOLOGY, AND ICOS
MAKES NO OTHER REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ICOS
TECHNOLOGY, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, PATENTABILITY AND NONINFRINGEMENT.

12.  Indemnification; Insurance

     12.1  Direct Indemnity.  Each party shall indemnify and hold the other
           ----------------
party, its Affiliates and sublicensees harmless, and hereby forever releases and
discharges the other party, its Affiliates and sublicensees, from and against
all claims, demands, liabilities, damages and expenses, including attorneys'
fees and costs (collectively, "Liabilities"), related to any claim of a third
party (not an Affiliate or sublicensee) arising out of the negligence,
recklessness or intentional misconduct of the indemnifying party, its Affiliates
or sublicensees in connection with the work performed by such party in the
Research Program, Abbott Program or the development, marketing or sale of
Research Compounds or Products hereunder; except in each case to the extent such
Liabilities resulted from the negligence, recklessness or intentional misconduct
of the other party.

     12.2  Other Indemnity.  Each party shall indemnify and hold the other
           ---------------
party, its Affiliates and sublicensees harmless from and against all Liabilities
suffered or incurred in connection with third-party claims for personal injuries
or any product recall to the extent caused by (a) any failure to test for or
provide adequate warnings of adverse side effects to the extent such failure
arises out of the negligence, recklessness or intentional misconduct in
connection with the indemnifying party's preclinical or clinical testing
obligations hereunder, (b) any manufacturing defect in any Product or any other
material manufactured by the indemnifying party, its Affiliates or its
sublicensees or (c) any other act or omission (without regard to culpable
conduct) of the indemnifying party, its Affiliates or its sublicensees in
connection with the activities contemplated under this Agreement; except in each
case to the extent such Liabilities resulted from the negligence, recklessness
or intentional misconduct of the other party.

     12.3  Procedure.  A party that intends to claim indemnification under this
           ---------
Section 12 (the "Indemnitee") shall promptly notify the other party (the
"Indemnitor")

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -21-

<PAGE>

of any Liability or action in respect of which the Indemnitee or any of its
Affiliates or sublicensees intend to claim such indemnification, and the
Indemnitor shall have the right to participate in, and, to the extent the
Indemnitor so desires, jointly with any other Indemnitor similarly noticed, to
assume the defense hereof with counsel selected by the Indemnitor; provided,
however, that an Indemnitee shall have the right to retain its own counsel, with
the fees and expenses of such counsel to be paid by the Indemnitee, if
representation of such Indemnitee by the counsel retained by the Indemnitor
would be inappropriate due to actual or potential differing interests between
such Indemnitee and any other party represented by such counsel in such
proceedings. The indemnity agreement in this Section 12 shall not apply to
amounts paid in settlement of any loss, claim, damage, liability or action if
such settlement is effected without the consent of the Indemnitor, which consent
shall not be withheld unreasonably. The failure to deliver notice to the
Indemnitor within a reasonable time after the commencement of any such action,
if prejudicial to its ability to defend such action, shall relieve such
Indemnitor of any liability to the Indemnitee under this Section 12, but the
omission so to deliver notice to the Indemnitor will not relieve it of any
liability that it may have to any Indemnitee otherwise than under this Section
12. The Indemnitee under this Section 12, its employees and agents shall
cooperate fully with the Indemnitor and its legal representatives in the
investigation of any action, claim or Liabilities covered by this
indemnification.

     12.4  Insurance.  Abbott shall maintain, through self-insurance or
           ---------
otherwise, product liability insurance with respect to its development,
manufacture and sale of Products in such amount as Abbott customarily maintains
with respect to its other products.  Abbott shall maintain such insurance for so
long as it continues to develop, manufacture or sell any Products, and
thereafter for so long as Abbott maintains insurance for itself covering such
manufacture or sales.  The requirement to maintain insurance shall apply mutatis
                                                                         -------
mutandis to ICOS with respect to its development, manufacture and sale of
--------
Products.

13.  Dispute Resolution

     13.1  Good Faith Discussions.  The parties shall attempt to resolve through
           ----------------------
good faith discussions any dispute which arises under this Agreement.  Any
dispute may, at the election of either party, be referred to the chief executive
officers of each party.  If they are unable to resolve the dispute, except one
having to do with the scope, enforceability, infringement or validity of a
patent or trade secret, within [ * ] after delivery of written notice of the
dispute from one party to the other, either party may seek to resolve it by
initiating an Alternative Dispute Resolution ("ADR") in

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -22-

<PAGE>

which the Center for Public Resources ("CPR"), New York, New York, shall select
the neutral ("Neutral") as provided herein.

     13.2  Selection of Neutral.  An ADR shall be initiated by a party by
           --------------------
sending written notice thereof to the other party and the CPR, which notice
shall state the issues to be resolved.  Within [ * ] after receipt of such
notice, the other party may, by sending written notice to the initiating party
and the CPR, add issues to be resolved.  Within [ * ] after the date of the
original ADR notice, the CPR shall nominate to the parties at least five (5)
qualified nominees for the CPR's Panel of Distinguished Neutrals.  The parties
shall have five (5) business days after the receipt of such nominations to agree
on a Neutral or, failing to agree, to rank-order their preferences with the most
preferred being given the lowest number, and mail the rank-order to the CPR.
The CPR shall notify the parties of their selection.  If all nominees are
unacceptable to a party, the procedure shall be repeated and, if the parties
cannot select a Neutral the second time, the CPR shall select the Neutral.

     13.3  Neutral With Special Expertise.  In the event of a dispute between
           ------------------------------
the parties relating to the calculation of any royalties or the amount of other
consideration payable under this Agreement (including, without limitation, the
results of any audit conducted on behalf of a party pursuant to Section 6.4),
then, in addition to the procedure set forth in Section 13.2, the Neutral shall
be a partner or full member of an internationally recognized certified public
accounting firm which is not an auditing firm for either party and has not
provided material services to either party during the last [ * ] period prior to
the date of ADR initiation.

     13.4  ADR Hearing.  The Neutral shall hold a hearing to resolve the issues
           -----------
within [ * ] after selection.  The location of the hearing shall be mutually
agreed upon or, if the parties are unable to agree, at Denver, Colorado.  Each
party may be represented by counsel.  Prior to the hearing, the parties shall be
entitled to engage in discovery under procedures of the Federal Rules of Civil
Procedure; provided, however, that a party may not submit more than [ * ]
written interrogatories or take more than [ * ] depositions.  There shall not
be, and the Neutral shall not permit, any discovery within thirty (30) days of
the hearing.  The Neutral shall have sole discretion regarding the admissibility
of evidence and conduct of the hearing.  At least five (5) business days prior
to the hearing, each party shall submit to the other party and the Neutral a
copy of all exhibits on which such party intends to rely at the hearing, a pre-
hearing brief (up to 20 pages) and a proposed disposition of the dispute (up to
5 pages).  The proposed disposition shall be limited to proposed rulings and
remedies on each issue, and shall contain no argument on or analysis of the
facts or

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -23-

<PAGE>

issues; provided, however, that the parties will not present proposed monetary
remedies. Within five (5) business days after close of the hearing, each party
may submit a post-hearing brief (up to 5 pages) to the Neutral.

     13.5  ADR Ruling; Fees and Expenses.  The Neutral shall render a
           -----------------------------
disposition on the proposed rulings as expeditiously as possible after the
hearing, but not later than fifteen (15) business days after the conclusion of
the hearing.  The Neutral shall rule on each issue and shall adopt in its
entirety the proposed ruling of one of the parties on each issue.  In the
circumstances where the Neutral rules for a party on a claim in the form of a
claim for monetary damages, the parties will then submit a proposed remedy
within ten (10) days of notice of the ruling.  The proposed remedy may be
accompanied by a brief in support of the remedy not to exceed five (5) pages.
The Neutral will rule on and adopt one of the proposed remedies within ten (10)
days of their submission.  The Neutral's disposition shall be final and not
appealable, except that either party shall have the right to appeal such
disposition on the basis it was affected by fraud or bad faith in connection
with the ADR proceedings.  A judgment on the Neutral's disposition may be
entered in any court having jurisdiction over the parties.  The reasonable fees
and expenses of the Neutral, as well as the standard charges of the CPR for its
assistance, shall be borne equally by the parties or as they may otherwise
agree.

     13.6  CPR Rules.  Except as otherwise provided in this Section 13, the
           ---------
Rules for Non-Administered Arbitration of Business Disputes of the CPR shall be
used in connection with the ADR.

     13.7  Waiver.  A party shall not be prohibited from bringing a claim for
           ------
resolution under this Section 13 on the ground that the claim could have been
brought during an earlier proceeding under this Section 13.

14.  Term; Termination

     14.1  Expiration.  Unless terminated earlier by agreement of the parties or
           ----------
pursuant to Section 14.4, this Agreement shall expire on the last to expire of
any Royalty Periods (i.e., when neither party has an obligation to pay royalties
under this Agreement).

     14.2  Earlier Termination.  Except as provided in this Section 14.2, a
           -------------------
party shall not have the right to terminate this Agreement or the license rights
hereunder for

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -24-

<PAGE>

breach by the other party, but shall have the right to seek remedies, both
equitable and legal, for breach using the procedures of Section 13. If

          (a) the Neutral, in accordance with the procedures set forth in
Section 13 renders a ruling (an "Adverse Ruling") that a party has breached this
Agreement by (i) [ * ] (ii) failing to make a royalty payment with respect to [
* ] as and when due;

          (b) the breaching party has failed to comply with the terms of the
Adverse Ruling within the time period specified therein for compliance or, if no
time period is stated, within [ * ] after the Adverse Ruling; and

          (c) the other party has served notice upon the breaching party to
undertake the actions required by the Adverse Ruling and the breaching party has
failed, within [ * ] of such notice, to undertake such action, then the other
party shall have the right to terminate the breaching party's license rights
under Section 4.2 or 4.3 as to all Extracellular Products or Excluded Products,
as the case may be, and the other party shall be granted the breaching party's
rights thereunder without any obligations under Sections 5 and 6.

     14.3  Effect of Expiration or Termination.  Expiration or termination of
           -----------------------------------
this Agreement shall not relieve the parties of any obligation accruing prior to
such expiration or termination.  Any accrued obligation and the provisions of
Sections 6.4, 7, 12, 13, 14.5 and 16.4 shall survive the expiration or
termination of this Agreement.  Any license hereunder that has become a fully
paid-up license shall survive expiration or termination of this Agreement.  In
the event of termination of this Agreement or termination of a license right
under Section 4.2 or 4.3, a party, its Affiliates and its sublicensees shall
have the right over the next [ * ] to sell any inventory of the Extracellular
Products or Excluded Products affected by such termination, providing royalties
are paid to the other party which would otherwise be payable during the term of
this Agreement.

     14.4  Bankruptcy.  Either party shall have the right to terminate this
           ----------
Agreement by delivering [ * ] prior written notice to the other party in the
event of the other party's bankruptcy or insolvency, provided that applicable
federal bankruptcy laws shall apply.

     14.5  Return of Materials.  Upon termination of this Agreement (or
           -------------------
termination of a license as provided in Section 14.2), each party shall promptly
return

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -25-

<PAGE>

all forms of the Confidential Information received from the other party (or the
Confidential Information pertaining to the terminated license), retaining only
one copy of written or electronic Confidential Information for archival
purposes. If the parties have not already done so, each party shall promptly
return all forms of the Confidential Information pertaining to the licenses in
Section 4.1 of the Original Agreement (but not pertaining to a continuing
license in Section 4.1, 4.2 or 4.3 of this Agreement) , retaining only one copy
of written or electronic Confidential Information for archival purposes.

15.  Supply of Compounds by Abbott to ICOS

     15.1  Delivery of Compounds.  In accordance with Section 15 of the Original
           ---------------------
Agreement, Abbott has delivered to ICOS [ * ] compounds (the "Supplied
Compounds") and related information.

     15.2  Use.  ICOS shall have a [ * ] right to use any Supplied Compounds and
           ---
information provided to it hereunder, in any lawful manner it so chooses
(including providing it to others).  All results of ICOS's use shall be owned
solely by ICOS.

     15.3  Warranty; Disclaimer.  Abbott represents and warrants that the
           --------------------
composition of each Supplied Compound conforms to the composition of such
Supplied Compound as maintained at Abbott, that the information related to each
Supplied Compound conforms to the information received from the third-party
source, that it has the right and authority to transfer the Supplied Compounds
and related information to ICOS, that it has no knowledge (without
investigation) of any claim of right to, or any patent application or patent
covering, any Supplied Compound or the use thereof and that Abbott has provided
to ICOS true and complete copies (redacted as to commercial terms) of the third-
party agreements related to the procurement of the first [ * ] Supplied
Compounds.  OTHER THAN AS SPECIFICALLY SET FORTH IN THIS SECTION 15, ABBOTT
MAKES NO REPRESENTATIONS OR WARRANTIES RESPECTING ITS PROVISION OF SUPPLIED
COMPOUNDS AND RELATED INFORMATION TO ICOS, AND ITS OTHER ACTIVITIES UNDER THIS
SECTION 15, AND SPECIFICALLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
RELATING THERETO, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR OR SPECIAL PURPOSE, PATENTABILITY AND NONINFRINGEMENT.
IN NO EVENT SHALL ABBOTT SUFFER OR INCUR ANY DAMAGES OR LIABILITIES OF ANY KIND
WHATSOEVER IN CONNECTION WITH ICOS'S USE OF SUPPLIED COMPOUNDS AND

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -26-

<PAGE>

RELATED INFORMATION, INCLUDING, BUT NOT LIMITED TO, ANY INCIDENTAL,
CONSEQUENTIAL OR CONTINGENT DAMAGES, NOR SHALL ABBOTT BE LIABLE TO ICOS FOR ANY
OF ITS LOST PROFITS ARISING FROM ABBOTT'S FAILURE TO SUPPLY THE SUPPLIED
COMPOUNDS OR ANY OTHER BREACH OF THIS SECTION 15.

     15.4  Hazards; Indemnification.  ICOS has the responsibility to verify any
           ------------------------
hazard, and take all appropriate precautions relating thereto, that may be
associated with Supplied Compounds.  ICOS shall comply with all applicable laws
and regulations in its ownership, use, storage and handling of Supplied
Compounds, and Abbott shall comply with all applicable laws and regulations in
its handling and preparation for shipment of the Supplied Compounds.  To the
extent it warns its own staff, Abbott shall warn ICOS of any known risks in
handling or storing any Supplied Compound.  ICOS shall indemnify Abbott,
Abbott's Affiliates, and their respective officers, employees and agents from
and against any and all losses, damages and expenses (including attorneys' fees)
that such parties may sustain or incur as a result of any claim, suit or other
action that may be brought in connection with ICOS's use of the Supplied
Compounds or by reason of ICOS's failure to comply with the terms and conditions
in this Section 15.  The procedure and insurance provisions set forth in
Sections 12.3 and 12.4 shall likewise cover ICOS's indemnity obligations under
this Section 15.

     15.5.  Confidentiality; Publications.  The provisions of Section 7 shall
            -----------------------------
not apply to the Supplied Compounds and related information, except that ICOS
shall not publicize the names of the third-party sources as being the source
generally of the Supplied Compounds provided or to be provided hereunder, but
ICOS may disclose to interested third parties the source of particular Supplied
Compounds.

16.  Miscellaneous

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

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -27-

<PAGE>

     16.2  Assignment.  This Agreement may not be assigned or otherwise
           ----------
transferred, nor, except as expressly provided hereunder, may any right or
obligations hereunder be assigned or transferred by either party without the
consent of the other party; provided, however, that either ICOS or Abbott may,
without such consent, assign this Agreement and its rights and obligations
hereunder in connection with the transfer or sale of all or substantially all of
its assets, its merger or consolidation or any similar transaction.  Any
permitted assignee shall assume all obligations of its assignor under this
Agreement.

     16.3  Severability.  Each party intends not to violate any public policy,
           ------------
statutory or common law, rule, regulation, treaty or decision of any government
agency or executive body thereof of any country or community or association of
countries.  If any term or provision of this Agreement is held to be invalid,
illegal or unenforceable by a court or other governmental authority of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other term or provision of this Agreement, which shall remain in full force
and effect.  The holding of a term or provision to be invalid, illegal or
unenforceable in a jurisdiction shall not have any effect on the application of
the term or provision in any other jurisdiction.

     16.4  Interest.  Any past due payments under this Agreement shall accrue
           --------
interest [ * ].

     16.5  Review of Agreement.  This Agreement has been submitted to the
           -------------------
scrutiny of both parties and their counsel and shall be given a fair and
reasonable interpretation in accordance with the words hereof, without
consideration or weight being given to its being drafted, in whole or in part,
by or for one of the parties.

     16.6  Notices.  Any consent or notice required or permitted to be given or
           -------
made under this Agreement by one of the parties hereto to the other shall be in
writing, delivered personally or by facsimile (and promptly confirmed by
personal delivery, first-class mail U.S. or courier), first-class mail U.S. or
courier, postage prepaid (where applicable), addressed to such other party at
its address indicated below, or to such other address as the addressee shall
have last furnished in writing to the addressor and (except as otherwise
provided in this Agreement) shall be effective upon receipt by the addressee.

     If to ICOS:   ICOS Corporation
                   22021 20th Avenue S.E.

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -28-

<PAGE>

                   Bothell, WA 98021
                   Attention: President
                   Fax:  206/485-1911

     If to Abbott: Abbott Laboratories
                   200 Abbott Park Road
                   Abbott Park, IL 60064
                   Attention: President Pharmaceutical
                   Products Division
                   Fax:  708/938-5383

     Copy to:      Abbott Laboratories
                   100 Abbott Park Road
                   Abbott Park, IL 60064
                   Attention:  General Counsel
                   Fax:  708/938-6277

     16.7  Applicable Law.  This Agreement shall be governed by and construed in
           --------------
accordance with the laws of the State of Illinois, except as set forth in the
immediately following sentence, and shall not be governed by the United Nations
Convention on Contracts for the International Sale of Goods.  The status of
information claimed as a trade secret shall be governed by the law of the
jurisdiction in which the party claiming the information as a trade secret has
its principal place of business.

     16.8  Entire Agreement.  This Agreement contains the entire understanding
           ----------------
of the parties with respect to the subject matter hereof.  All express or
implied agreements and understandings, either oral or written, heretofore made
are expressly merged in and made a part of this Agreement.  This Agreement may
be amended, or any term hereof modified, only by a written instrument duly
executed by both parties hereto.

     16.9  Headings.  The captions to the Sections hereof are not a part of this
           --------
Agreement, but are merely guides or labels to assist in locating and reading the
Sections hereof.

     16.10  Independent Contractors.  It is expressly understood and agreed that
            -----------------------
ICOS and Abbott are and shall be independent contractors and that the
relationship between the two parties shall not constitute a partnership, joint
venture or agency.

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -29-

<PAGE>

Neither ICOS nor Abbott 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 party to do
so.

     16.11  U.S. Export Laws and Regulations.  Each party represents and
            --------------------------------
warrants to the other that it does not intend to, nor will it, export from the
United States or reexport from any foreign country, or permit a third party to
export or reexport, technology or technical information of the other party to a
country where such export or reexport would be in violation of U.S. Export
Administration Regulations.

     16.12  Waiver.  The waiver by either party hereto of any right hereunder or
            ------
of a failure to perform or breach by the other party shall not be deemed a
waiver of any other right hereunder or of any other failure or breach whether of
a similar nature or otherwise.

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

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -30-

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                              ICOS Corporation

                              By: /s/ W. Michael Gallatin
                                  --------------------------------------

                              Its: Vice President & Scientific Director
                                   -------------------------------------

                              Abbott Laboratories

                              By: /s/ Arthur J. Higgins
                                  --------------------------------------

                              Its: /s/ President Pharmaceutical Division
                                   -------------------------------------

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -31-

<PAGE>

                                   EXHIBIT A

                             PRODUCT PATENT RIGHTS

     The following is a list of all U.S. patent applications presently filed
that would constitute either Joint Patent Rights or Sole Patent Rights.  There
are no currently issued patents that would constitute either Joint Patent Rights
or Sole Patent Rights.
<TABLE>
<CAPTION>
                                       Filing
    U.S. Patent Application No.      Date-U.S.      Title
    ---------------------------      ---------      -----
<S>                               <C>            <C>

Joint Patent Rights
-------------------
1.  Intracellular Products
    ----------------------
[ * ]
2.  Extracellular Products
    ----------------------
    [ * ]
Sole Patent Rights
------------------
[ * ]
</TABLE>

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -1-

<PAGE>

                                   EXHIBIT B

                           ABBOTT PROGRAM ACTIVITIES

     [ * ]

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -2-

<PAGE>

                                   EXHIBIT C

                TRANSFER OF INFORMATION AND MATERIALS BY ABBOTT

     [ * ]

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -3-

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