Document:

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                                                                   Exhibit 10.02

                           EXCLUSIVE LICENSE AGREEMENT

                                     between

                   THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

                                       and

                                ATHEROGENICS INC.

                                       for

                                       [*]

[*]  Certain confidential information contained in this document, marked by an
     asterisk within brackets, has been omitted and filed separately with the
     Securities and Exchange Commission pursuant to a request for confidential
     treatment under Rule 406 of the Securities Act of 1933, as amended.
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                                TABLE OF CONTENTS

ARTICLE NO.                                                                PAGE
-----------                                                                ----

1.       DEFINITIONS

2.       PERIOD OF PATENT EXCLUSIVE GRANT

3.       SUBLICENSES

4.       PAYMENT TERMS

5.       LICENSE-ISSUE FEE

6.       MILESTONE PAYMENTS

7.       EARNED ROYALTIES AND MINIMUM ANNUAL ROYALTIES

8.       DUE DILIGENCE

9.       PROGRESS AND ROYALTY REPORTS

10.      BOOKS AND RECORDS

11.      LIFE OF THE AGREEMENT

12.      TERMINATION BY THE REGENTS

13.      TERMINATION BY LICENSEE

14.      DISPOSITION OF LICENSED PRODUCTS ON HAND UPON TERMINATION

15.      USE OF NAMES AND TRADEMARKS

16.      LIMITED WARRANTY

17.      PATENT PROSECUTION AND MAINTENANCE

18.      PATENT MARKING

19.      PATENT INFRINGEMENT

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20.      INDEMNIFICATION

21.      NOTICES

22.      ASSIGNABILITY

23.      NO WAIVER

24.      FAILURE TO PERFORM

25.      GOVERNING LAWS

26.      PREFERENCE FOR UNITED STATES INDUSTRY

27.      GOVERNMENTAL APPROVAL OR REGISTRATION

28.      EXPERT CONTROL LAWS

29.      SECRECY

30.      MISCELLANEOUS

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                           EXCLUSIVE LICENSE AGREEMENT

         This License Agreement (the "Agreement") is made effective this 17th
day of July, 1998 (the "Effective Date") between THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA, a California corporation having its statewide administrative
offices at 300 Lakeside Drive, 22nd Floor, Oakland, California 94612-3550, ("The
Regents") represented by the University of California, San Diego campus having
its offices at 9500 Gilman Drive, La Jolla, CA 92093-0910, and AtheroGenics
Inc. ("Licensee"), a Georgia corporation having offices at 3065 Northwoods
Circle, Norcross, GA 30071.

                                     WHEREAS

         1. Certain inventions, generally characterized as [*] and officially
recorded in[*] (collectively the "Invention"), were made in the course of
research at the University of California, San Diego by Dr. Joseph Witztum and
others and are covered by Regents' Patent Rights as defined herein;

         2. The development of the Invention was sponsored in part by the
National Institutes of Health and as a consequence this license is subject to
overriding obligations to the Federal Government under 35 U.S.C. 200-212 and
applicable regulations;

         3. Dr. Witztum and the other inventors are employees of The Regents.
The Regents have asked Dr. Witztum and his co-inventors to assign their rights
to The Regents;

         4. Licensee has evaluated the Invention under a Secrecy Agreement with
The Regents [*], and has communicated its evaluation to The Regents;

         5. Licensee and The Regents have executed a Letter of Intent dated June
27, 1997, that was amended on December 24, 1997 to extend the "Negotiation
Period," as defined therein, to March 1, 1998;

         6. Licensee wishes to obtain rights from The Regents for the commercial
development, use, and sale of products from the Invention, and The Regents is
willing to grant those rights so that the Invention may be developed to its
fullest and the benefits enjoyed by the general public; and

         7. Licensee is currently a "small business firm" as defined in 15
U.S.C. 632;

         8. The parties recognize and agree that royalties due under this
Agreement will be paid on both pending patent applications and issued patents;

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         In view of the foregoing, the parties agree:

1.       DEFINITIONS

         1.1 "Regents' Patent Rights" means any subject matter claimed in or
covered by any of the following: Issued or Pending U.S. Patent Applications,
Provisional Applications and applications in preparation related to inventions
and as disclosed to Licensee as entitled [*] and assigned to The Regents; and
continuing applications thereof including divisions and substitutions but
excluding continuation-in-part applications (except continuations-in-part
applications supported by the original application); and patents issuing on said
applications including reissues, reexaminations and extensions; and any
corresponding foreign applications or patents.

         1.2 "Licensed Product" means any material that is either covered by
Regents' Patent Rights, that is produced by the Licensed Method, or that the use
of which would constitute, but for the license granted to Licensee under this
Agreement, an infringement of any pending or issued claim within Regents' Patent
Rights, including disease indications other than those set forth in the
Invention.

         1.3 "Licensed Method" means any method that is covered by Regents'
Patent Rights, the use of which would constitute, but for the license granted to
Licensee under this Agreement, an infringement of any pending or issued claim
within Regents' Patent Rights.

         1.4 "Net Sales" means the total of the gross invoice prices of Licensed
Products sold by Licensee, an affiliate, or a sublicensee, less the sum of the
following actual and customary deductions where applicable: cash, trade, or
quantity discounts; sales, use, tariff, import/export duties or other excise
taxes imposed on particular sales; transportation charges and allowances; or
credits to customers because of rejections or returns. For purposes of
calculating Net Sales, transfers to an affiliate or sublicensee for end use by
the affiliate or sublicensee will be treated as sales at list price.

         1.5 "Affiliate" means any corporation or other business entity in which
Licensee owns or controls, directly or indirectly, at least fifty percent (50%)
of the outstanding stock or other voting rights entitled to elect directors, or
in which Licensee is owned or controlled directly or indirectly by at least 50%
of the outstanding stock or other voting rights entitled to elect directors, but
in any country where the local law does not permit foreign equity participation
of at least 50%, then an "Affiliate" includes any company in which Licensee owns
or controls or is owned or controlled by, directly or indirectly, the maximum
percentage of outstanding stock or voting rights permitted by local law.

         1.6 "Field of Use" means all diagnostic and therapeutic use of the
Invention for human or veterinary application, including, but not limited to,
use in atherosclerosis and other cardiovascular and antiinflammatory diseases.

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         1.7 "Know How" means all technical information and know-how, whether or
not patented, which is invented, developed, acquired and owned or licensed by
The Regents (other than from Licensee or its Affiliates or sublicensees) prior
to and during the term of this Agreement and which relate to the Invention;
excluding, however, any such item, information and data licensed by The Regents
with respect to which The Regents do not have a right to sublicense to third
parties.

2.       PERIOD OF PATENT EXCLUSIVE GRANT

         2.1 Subject to the limitations set forth in this Agreement, The Regents
grant to Licensee a world-wide license under Regents' Patent Rights and Know How
to make, have made, use, import and sell Licensed Products and to practice
Licensed Methods for the life of the longest-lived patent covering the Invention
described herein.

         2.2 Except as otherwise provided in this Agreement, the license granted
in Paragraph 2.1 is exclusive for the life of the Agreement.

         2.3 The license granted in Paragraphs 2.1 and 2.2 is subject to all the
applicable provisions of any license to the United States Government executed by
The Regents and is subject to the overriding obligations to the U.S. Government
under 35 U.S.C. 200-212 and applicable governmental implementing regulations.

         2.4 The licenses granted in Paragraphs 2.1 and 2.2 are limited to
methods and products within the Field of Use. Licensee has no license under this
Agreement for other methods and products not described in Regents Patent Rights,
and know-how pertaining to the Invention.

         2.5 The Regents reserves the right to use the Invention, know-how and
associated technology for educational and research purposes.

3.       SUBLICENSES

         3.1 The Regents also grant to Licensee the right to issue sublicenses
to third parties to make, have made, use, import and sell Licensed Products and
to practice Licensed Method, as long as Licensee has current exclusive rights
thereto under this Agreement. To the extent applicable, sublicenses must include
all of the rights of and obligations due to The Regents (and, if applicable, the
United States Government) and contained in this Agreement.

         3.2 Licensee shall promptly provide The Regents with a copy of each
sublicense issued; use diligent efforts to collect and guarantee payment of all
payments due The Regents from sublicensees; and summarize and deliver all
reports due The Regents from sublicensees.

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         3.3 Upon termination of this Agreement for any reason, The Regents, at
its sole discretion, shall determine whether Licensee shall cancel or assign to
The Regents any and all sublicenses.

         3.4 Licensee shall pay The Regents [*] of each non-royalty payment
received by Licensee from each sublicensee of the Licensed Products, unless the
Licensed Product contains (i) any know-how added by Licensee, in which case the
foregoing percentage for non-royalty payments shall be [*] or (ii) any antibody
or a material component in addition to know-how added by Licensee, in which case
the foregoing percentage for non-royalty payment shall be [*] or (iii) more than
one antibody or material component in addition to know-how added by Licensee, in
which case the foregoing percentage for non-royalty payments shall be [*]
(collectively, Licensed Products meeting the conditions of (i) (ii) or (iii) are
referred to hereafter as a "Value Added Licensed Product").

         3.5 Licensee shall pay The Regents [*] of each earned royalty payment
received by Licensee, unless the Licensed Product is determined to be a "Value
Added Licensed Product" as defined in this Section 3.4, in which case,
Licensee's royalty payment to The Regents shall be [*] of each royalty payment
received from each sublicensee. Licensee may at its sole discretion select the
alternative royalty payment schedule described in Section 7.5.

         3.6 In the event that circumstances relating to the sublicensing of the
Licensed Products arise that make the sublicensing of the Licensed Product
unfeasible or otherwise require consultations between the parties, the parties
agree to discuss these circumstances and negotiate in good faith any amendments
to this Agreement that may be mutually agreeable to the parties hereto.

4.       PAYMENT TERMS

         4.1 Paragraphs 1.1, 1.2, and 1.3 define Regents' Patent Rights,
Licensed Products and Licensed Methods so that royalties are payable on products
and methods covered by both pending patent applications and issued patents.
Royalties will accrue in each country for the duration of Regents' Rights in
that country and are payable to The Regents when Licensee receives payment from
a third party.

         4.2 Licensee shall pay earned royalties quarterly within ninety (90)
days after the end of the applicable quarter of each calendar year in which such
royalties are earned.

         4.3 All monies due The Regents are payable in United States dollars.
When Licensed Products are sold for monies other than United States dollars,
Licensee shall first determine the earned royalty in the currency of the country
in which Licensed Products were sold and then convert the amount into equivalent
United States funds, using the exchange rate quoted in the Wall Street Journal
on the date payment was received by the licensee.

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         4.4 Royalties earned on sales occurring in any country outside the
United States may not be reduced by any taxes, fees, or other charges imposed by
the government of such country on the payment of royalty income. Licensee is
also responsible for all bank transfer charges. Notwithstanding this, all
payments made by Licensee in fulfillment of The Regents' tax liability in any
particular country will be credited against earned royalties or fees due The
Regents for that county.

         4.5 If at any time legal restrictions prevent the remittance of
royalties within 180 days by Licensee from any country where a Licensed Product
is, sold, Licensee shall convert the amount owed to The Regents into United
States funds and shall pay The Regents directly from its U.S. source of funds
for as long as the legal restrictions apply.

         4.6 If any patent or patent claim conferring exclusive marketing or
manufacturing rights to License under this Agreement within The Regents' Patent
Rights is held invalid in a decision by any court of competent jurisdiction, all
royalty payments will be held in an interest-bearing escrow account established
by the parties until a final decision is made by a court of competent
jurisdiction and last resort and from which no appeal has or can be taken, all
obligation to pay royalties based on that patent or claim or any claim patently
indistinct therefrom will cease as of the date of final decision. Licensee will
not, however, be relieved from paying any royalties that accrued and where
received before the final decision or that are based on another patent or claim
not involved in the final decision, or that are based on The Regents' property
rights.

         4.7 No royalties may be collected or paid on Licensed Products sold to
the account of the U.S. Government, any agency thereof, state or domestic
municipal government as provided for in the License to the Government.

         4.8 In the event payments, rebilling or fees are not received by The
Regents when due, Licensee shall pay to The Regents interest charges at a rate
of [*] per annum. Interest is calculated from the date payment was due until
actually received by The Regents.

5.       LICENSE-ISSUE FEE

         5.1 Licensee shall pay to The Regents a license-issue fee equal to the
higher of [*] of the patent costs reimbursable to The Regents under the Letter
of Intent, said license-issue fee to be paid on the first anniversary of the
execution of this License Agreement. Patent costs reimbursed to The Regents
within 30 days after the signing of this License Agreement shall not be used in
the license-issue fee calculation. This fee is [*].

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6.       MILESTONE PAYMENTS

Licensee shall pay to The Regents a one-time royalty in the form of milestone
payments in the following amounts within thirty (30) days following the
achievement of the specified events for therapeutic applications only:

Filing of the 1st IND (one time, any indication): [*]
Completing 1st Phase II, including Final Report submission (one time, any
  indication): [*]
Filing of a PLA document (all indications each time): [*]

Licensee shall pay to The Regents a one-time royalty in the form of a milestone
payment in the following amount within thirty (30) days following the
achievement of the specified event for diagnostic applications only:

Filing of a 510(k) (or similar): [*] (each time)

All Milestone Payments made to The Regents prior to First Market Introduction
shall be charged against royalties on sales paid to The Regents. Thereafter,
milestone payments shall not be reimbursed to Licensee by The Regents.

7.       EARNED ROYALTIES AND MINIMUM ANNUAL ROYALTIES

         7.1 Unless provided to the contrary in Section 7.2 and 7.3, Licensee
shall pay to The Regents a royalty on worldwide Net Sales according to the
following schedule for therapeutic applications only:

[*] on sales of less than [*]
[*] on sales greater than [*], but less than [*]
[*] on sales greater than [*], but less than [*]
[*] on sales greater than [*], but less than [*]
[*] on sales greater than [*], but less than [*]
[*] on sales greater than [*], but less than [*]
[*] on sales greater than [*].

         Unless provided to the contrary in Sections 7.2, Licensee shall pay to
The Regents a royalty of on worldwide Net Sales according to the following
schedule for diagnostic applications only:

- [*] on sales of Licensed Product in which the Licensed Method is supplemented
by monoclonal antibodies which are not included in The Regents Patent Rights;
- [*] on sales of Licensed Product in which the monoclonal antibodies of
Licensed Method are utilized without modification or supplementation by
Licensee;

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- [*] on all other sales of Licensed Product.

         7.2 If Licensee determines after consultation with The Regents that it
is required to pay royalties or other fees to any third party because the
manufacture, use, offer for sale, importation, or sale of a Licensed Method or a
Licensed Product would otherwise be likely to infringe any patent or other
intellectual property rights of such third party in a given country ("Third
Party Royalties"), Licensee may deduct from royalties thereafter due to The
Regents pursuant to this Agreement with respect to the Net Sales of such
Licensed Method or Licensed Product in such country up to [*] of the Third Party
Royalties. If the sum of the royalties paid hereunder and Third Party Royalties
for a given Licensed Product or a Licensed Method in a given country exceeds, at
any time, more than [*] on a therapeutic product or [*] on a diagnostic product
of the Net Sales, then upon Licensee's request, The Regents and Licensee agree
to negotiate in good faith in an effort to agree on a reduction in the royalties
payable hereunder to The Regents for such Licensed Product or Licensed Method in
such country. In the event the parties are unable to agree to such reduction
after a reasonable period of time, not to exceed thirty (30) days, either party
may request that the issue be arbitrated and the issue will be submitted to
final and binding arbitration in accordance with the rules of the American
Arbitration Association.

         7.3 Licensee may credit solely against all payments to The Regents,
including, without limitation, the royalties, accruing under this Agreement all
reasonable costs incurred by Licensee after the date hereof in connection with
any litigation, interference, opposition, or other action pertaining to the
validity, enforceability, allowability or subsistence of the Regents' Patent
Rights or whether Licensee's practice of the Regents' Patent Rights infringes a
third party patent.

         7.4 Licensee shall pay to The Regents a minimum annual royalty of [*]
for the life of Regents' Patent Rights, beginning with the year of the first
commercial sale of Licensed Product, but no later than the fifth-year
anniversary of the Effective Date. For the first year of commercial sales,
Licensee's obligation to pay the minimum annual royalty will be pro-rated for
the number of months remaining in that calendar year when commercial sales
commence and will be due the following March 31, to allow for crediting of the
pro-rated year's earned royalties. For subsequent years, the minimum annual
royalty will be paid to The Regents by March 31 of each year and will be
credited against the earned royalty due for the calendar year in which the
minimum payment was made.

         7.5 Licensee shall have the right to diligently sublicense the
Invention, the Licensed Products and the Licensed Method, including alternate
indications thereof, without restriction. In the case of a sublicense, Licensee
shall pay The Regents either of the following sublicense schedule as determined
by Licensee at its sole discretion:

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         i) [*] of each payment received from the sublicensee for Licensed
Products that are not Value Added Licensed Products and [*] of each payment
received from the sublicensee for Value Added Licensed Products, or
         ii) Royalties on worldwide net sales in the amount set forth in
Sections 7.1.

In either schedule, payment shall be made to The Regents within ninety (90) days
of sublicense payment being received by Licensee, except as provided for in
Sections 3.1, 3.2 and 3.3.

8.       DUE DILIGENCE

         8.1 Licensee, on execution of this Agreement, shall diligently proceed
with the development, manufacture and sale of Licensed Products and shall
earnestly and diligently endeavor to market the same within a reasonable time
after execution of this Agreement and in quantities sufficient to meet market
demands. The Regents expect that the first sale of Licensed Products shall occur
within twelve (12) years of the execution date of this Agreement, or within
eleven (11) years of the payment of the License Issue Fee, whichever is the
sooner, unless the first sale of Licensed Products is delayed by the process of
regulatory approval by federal, state or foreign national agencies.

         8.2 Licensee shall endeavor to obtain all necessary governmental
approvals for the manufacture, use and sale of Licensed Products, or shall
certify to The Regents in writing that none are needed.

         8.3 Licensee shall:

         8.3.1    submit a PMA (or 510(k)) covering Licensed Products to the
                  United States FDA within ten (10) years from the Effective
                  Date of this Agreement.

         8.3.2    market Licensed Products in the United States within one year
                  of receiving approval of the PLA for such Licensed Products
                  from the FDA; and

         8.3.4    reasonably fill the market demand for Licensed Products
                  following commencement of marketing at any time during the
                  exclusive period of this Agreement.

         8.4 If the Licensee is unable to perform any of the above provisions,
then The Regents has the right and option to either terminate this Agreement or
reduce Licensee's exclusive license to a nonexclusive license. This right, if
exercised by The Regents, supersedes the rights granted in Article 2 (GRANT).

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         8.5 In addition to the obligations set forth above, Licensee shall
spend directly or through partners an aggregate of not less than [*] for the
development of Licensed Products during the first [*] years of this Agreement.

9.       PROGRESS AND ROYALTY REPORTS

          9.1 Beginning December 31, 1998 and semi-annually thereafter, Licensee
shall submit to The Regents a progress report covering Licensee's (and any
Affiliate or sublicensee's) activities related to the development and testing of
all Licensed Products and the obtaining of the governmental approvals necessary
for marketing. Progress reports are required for each Licensed Product until the
first commercial sale of that Licensed Product occurs in the United States.

          9.2 Progress reports submitted under section 9.1 should include, but
are not limited to, the following topics related to the Licensed Product and
Licensed Method:

         -        summary of work completed
         -        key scientific discoveries
         -        summary of work in progress
         -        current schedule of anticipated events or milestones
         -        market plans for introduction of Licensed Products, and
         -        a Summary of resources (dollar value) spent in the reporting
                  period.

         9.3 Licensee has a continuing responsibility to keep The Regents
informed of the small business entity status (as defined by the United States
Patent and Trademark Office) of itself and its sublicensees and Affiliates.

         9.4 Licensee shall report to The Regents in its immediately subsequent
progress and royalty report the date of first commercial sale of a Licensed
Product in each country.

         9.5 After the first commercial sale of a Licensed Product anywhere in
the world, Licensee shall make quarterly royalty reports to The Regents on or
before the end of each calendar quarter of each calendar year for the preceding
calendar quarter. Each royalty report will cover Licensee's preceding calendar
quarter and will show (a) the gross sales and Net Annual Sales of Licensed
Products sold during the most recently completed calendar quarter; (b) the
number of each type of Licensed Product sold; (c) the royalties, in U.S.
dollars, payable with respect to sales of Licensed Products; (d) the method used
to calculate the royalty; and (e) the exchange rates used.

         9.6 If no sales of Licensed Products have been made during any
reporting period occurring after the first commercial sale of a Licensed Product
anywhere in the world by Licensee, a statement to this effect is required.

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10.      BOOKS AND RECORDS

         10.1 Licensee shall keep accurate books and records showing all
Licensed Products manufactured, used, and/or sold under the terms of this
Agreement. Books and records must be preserved for at least five (5) years from
the date of the royalty payment to which they pertain.

         10.2 Books and records must be open to inspection by representatives or
agents of The Regents at reasonable times. The Regents shall bear the fees and
expenses of examination but if an error in royalties of more than [*] of the
total royalties due for any year is discovered in any examination then Licensee
shall bear the fees and expenses of that examination.

11.      LIFE OF THE AGREEMENT

         11.1 Unless otherwise terminated by operation of law or by acts of the
parties in accordance with the terms of this Agreement, this Agreement will be
in force from the Effective Date until the last-to-expire patent licensed under
this Agreement; or for twenty (20) years from the date of this Agreement if no
patent issues; or until the last patent application licensed under this
Agreement is abandoned and no patent in Regent's Patent Rights ever issues,
whichever occurs first. By mutual agreement, the Agreement can be extended until
the expiration date of the last-to-expire patent licensed under this Agreement;
or until the last patent application licensed under this Agreement is abandoned
and no patent in Regents' Patent Rights ever issues. Upon expiration of this
Agreement, Licensee shall have a perpetual royalty free license to use Regents'
Patent Rights and Know How to make, have made, use, import and sell Licensed
Products and to practice Licensed Methods.

         11.2 Any termination of this Agreement will not affect the rights and
obligations set forth in the following Articles:

             Article 10  Books and Records
             Article 14  Disposition of Licensed Products on Hand on Termination
             Article 15  Use of Names and Trademarks
             Article 20  Indemnification
             Article 24  Failure to Perform
             Article 29  Secrecy

12.      TERMINATION BY THE REGENTS

         If Licensee fails to perform or violates any material term of this
Agreement, then The Regents may give written notice of default (Notice of
Default) to Licensee. If Licensee fails to repair the default within sixty (60)
days of the effective date of Notice of Default, The Regents may terminate this
Agreement and its licenses by a second written notice (Notice of Termination).
If a Notice of Termination is sent to Licensee, this Agreement will
automatically terminate on the effective date of that notice. Termination will
not relieve Licensee of its

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obligation to pay any fees owing at the time of termination and will not impair
any accrued right of The Regents. These notices are subject to Article 19
(Notices).

13.      TERMINATION BY LICENSEE

         13.1 Licensee has the right at any time to terminate this Agreement in
whole or as to any portion of Regents' Patent Rights by given notice in writing
to The Regents. Notice of termination will be subject to Article 19 (Notices)
and termination of this Agreement will be effective sixty (60) days from the
effective date of notice.

         13.2 Any termination under the above paragraph does not relieve
Licensee of any obligation or liability accrued under this Agreement prior to
termination or rescind any payment made to The Regents or anything done by
Licensee prior to the time termination becomes effective. Termination does not
affect in any manner any rights of The Regents arising under this Agreement
prior to termination.

14.      DISPOSITION OF LICENSED PRODUCTS ON HAND UPON TERMINATION

15.      USE OF NAMES AND TRADEMARKS

         Nothing contained in this Agreement confers any right use in
advertising, publicity, or other promotional activities any name, trade name,
trademark, or other designation of either party hereto (including contraction,
abbreviation or simulation of any of the foregoing). Unless required by law, the
use by Licensee of the name, "The Regents" or the name of any campus of the
University of California is prohibited.

16.      LIMITED WARRANTY

         16.1 The Regents warrants to Licensee that it has the lawful right to
grant this license.

         16.2 This license and the associated Invention are provided WITHOUT
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER
WARRANTY, EXPRESS OR IMPLIED. THE REGENTS MAKES NO REPRESENTATION OR WARRANTY
THAT THE LICENSED PRODUCTS OR LICENSED METHODS WILL NOT INFRINGE ANY PATENT OR
OTHER PROPRIETARY RIGHT.

         16.3 IN NO EVENT MAY THE REGENTS BE LIABLE FOR ANY INCIDENTAL SPECIAL
OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR THE USE OF
THE INVENTION OR LICENSED PRODUCTS.

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         16.4 Nothing in this agreement:

         16.4.1   is a warranty or representation by The Regents as to the
                  validity or scope of any Regents' Patent Rights;

         16.4.2   is a warranty or representation that anything made, used, sold
                  or otherwise disposed of under any license granted in this
                  Agreement is or will be free from infringement of patents of
                  third parties;

         16.4.3   is an obligation to bring or prosecute actions or suits
                  against third parties for patent infringement except as
                  provided in Article 19;

         16.4.4   confers by implication, estoppel or otherwise any license or
                  rights under any patents of The Regents other than Regents'
                  Patent Rights as defined in this Agreement, regardless of
                  whether those patents are dominant or subordinate to Regent's
                  Patent Rights; or

         16.4.5   is an obligation to furnish any know-how not provided in
                  Regents' Patent Rights.

17.      PATENT PROSECUTION AND MAINTENANCE

         17.1 As long as Licensee has paid patent costs as provided for in
Paragraph 17.5, The Regents shall diligently endeavor to prosecute and maintain
the United States and foreign patents comprising Regents' Patent Rights using
counsel of its choice selected from those approved by Licensee from the list
approved by The Regents. The Regents agrees to keep Licensee fully informed of
any and all patent prosecution and other actions with respect to Regents' Patent
Rights including sending to Licensee copies of all correspondence with patent
offices and local associates, submitting to Licensee copies of all draft
responses to Office Actions and other substantive filings in sufficient time
prior to filing to provide Licensee with adequate time to review and comment on
such matters; provided, however, that Licensee shall be responsible for any of
its expenses including attorney's fees that Licensee incurs in reviewing and
commenting on the information received from The Regents. The Regents shall
consult with Licensee regarding any material actions concerning the Patent
Rights and shall use all reasonable efforts to take such actions requested by
Licensee. If The Regents decide to abandon or allow to lapse any patent or
patent application within the Patent Rights in any country, The Regents will
inform Licensee in a timely manner and Licensee shall have the right to
prosecute or maintain any such patent or patent application at its expense. The
Regents shall provide Licensee with copies of all relevant documentation so that
Licensee may be informed of the continuing prosecution and Licensee agrees to
keep this documentation confidential. The Regents' counsel will take
instructions only from The Regents, or from Licensee after these instructions
have been approved by The Regents, and all patents and patent applications under
this Agreement will be assigned solely to The Regents.

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         17.2 The Regents shall use all reasonable efforts to amend any patent
application to include claims reasonably requested by Licensee to protect the
products contemplated to be sold under this Agreement.

         17.3 Licensee shall apply for an extension of the term of any patent
related to the species of Fields of Use included within Regents' Patent Rights
if appropriate. Licensee shall prepare all documents, and The Regents agree to
execute the documents and to take additional action as Licensee reasonably
request in connection therewith.

         17.4 If either party receives notice pertaining to infringement or
potential infringement of any issued Licensed patents or plant-specific patent
included within Regents' Patent Rights, that party shall notify the other party
within ten (10) days after receipt of notice of infringement, and the terms of
Section 19 of this agreement shall apply.

         17.5 Licensee shall reimburse The Regents for all the costs of
preparing, filing, prosecuting and maintaining all United States and foreign
patent applications contemplated by this Agreement and requested by Licensee.
Relevant costs billed by The Regents' counsel will be rebilled to Licensee and
are due within 30 days of rebilling by The Regents. These costs include patent
prosecution costs for the Invention incurred by The Regents prior to the
execution of this Agreement and any patent prosecution costs that may be
incurred for patentability opinions, re-examination, re-issue, interferences, or
inventorship determinations. Prior costs relating to the filing of patents
requested by Licensee will be due on execution of this Agreement and billing by
The Regents.

         17.6 The Regents will notify Licensee of any actions with respect to
obtaining patents or other protection on the Invention as it relates to the
Field of Use in foreign countries. Licensee may request The Regents to obtain
patent or other patent protection on the Invention as it relates to the Field of
Use in foreign countries, if available. The Regents shall notify Licensee of any
action required to obtain or maintain foreign patents not less than ninety (90)
days prior to the deadline for any payment, filing, or action to be taken in
connection therewith. This notice concerning foreign filing must be in writing
and must identify the countries desired. The absence of a response by Licensee
to such a notice from The Regents to Licensee within forty five days of such
notice will be considered an election not to obtain or maintain foreign rights.

         17.7 Licensee's obligation to underwrite and to pay patent prosecution
costs will continue for so long as this Agreement remains in effect, but
Licensee may terminate its obligations with respect to any given patent
application or patent upon sixty (60) days written notice to The Regents. The
Regents will use its best efforts to curtail patent costs when a notice of
termination is received from Licensee. The Regents may prosecute and maintain
such application(s) or patent(s) at its sole discretion and expense, but
Licensee will have no further right or licenses thereunder. Non-payment of
patent costs may be deemed by The Regents as an election by Licensee not to
maintain application(s) or patent(s).

                                       13
<PAGE>   17

         17.8 The Regents may, after notification of Licensee, file, prosecute
or maintain patent applications at its own expense in any country in which
Licensee has not elected to have patent applications filed, prosecuted, or
maintained in accordance with this Article, and those applications and resultant
patents will not be subject to this Agreement.

18.      PATENT MARKING

         Licensee shall mark all Licensed Products made, used or sold under the
terms of this Agreement, or their containers, in accordance with the applicable
patent marking laws.

19.      PATENT INFRINGEMENT

         19.1 If Licensee learns of the substantial infringement of any patent
licensed under this Agreement, Licensee shall call The Regents' attention
thereto in writing and provide The Regents with reasonable evidence of
infringement. Neither party will notify a third party of the infringement of any
of Regents' Patent Rights without first obtaining consent of the other party,
which consent will not be unreasonably denied. Both parties shall use their best
efforts, including but not limited to arbitration, in cooperation with each
other to terminate infringement without litigation.

         19.2 Licensee may request that The Regents take legal action against
the infringement of Regents' Patent Rights. Request must be in writing and must
include reasonable evidence of infringement and damages to Licensee. If the
infringing activity has not abated within ninety (90) days following the
effective date of request, The Regents then has the right to:

         19.2.1   commence suit on its own account; or

         19.2.2   refuse to participate in the suit,

and The Regents shall give notice of its election in writing to Licensee by the
end of the one-hundredth (100th) day after receiving notice of written request
from Licensee. Licensee may thereafter bring suit for patent infringement, at
its own expense, if an only if The Regents elects not to commence suit and if
the infringement occurred during the period and in a jurisdiction where Licensee
had exclusive rights under this Agreement. If, however, Licensee elects to bring
suit in accordance with this paragraph, The Regents may thereafter join that
suit at its own expense.

         19.3 Legal action as is decided on will be at the expense or the party
bringing suit and all recoveries recovered thereby will belong to the party
bringing suit, but legal action brought jointly by The Regents and Licensee and
fully participated in by both will be at the joint expense of the parties and
all recoveries will be shared jointly by them in proportion to the share of
expense paid by each party.

                                       14
<PAGE>   18

         19.4 Each party shall cooperate with the other in litigation
proceedings instituted hereunder but at the expense of the party bringing suit.
Litigation will be controlled by the party bringing the suit, except that The
Regents may be represented by counsel of its choice and at its expense in any
suit brought by Licensee.

20.      INDEMNIFICATION

         20.1 Licensee shall indemnify, hold harmless and defend The Regents,
its officers, employees, and agents; the sponsors of the research that led to
the Invention; and the inventors of the parents and patent applications in
Regent's Patent Rights and their employers against any and all claims, suits
losses, damage, costs, fees, and expenses resulting from or arising out of
exercise of this license or any sublicense. This indemnification includes, but
is not limited to, any product liability.

         20.2 Licensee at its sole cost and expense, shall insure its activities
in connection with the work under this Agreement and obtain, keep in force and
maintain insurance as follows, or an equivalent program of self insurance:

         Comprehensive or commercial form general liability insurance
(contractual liability included) with limits as follows:

         -        Each occurrence [*]
         -        Products/Completed Operations Aggregate [*]
         -        Personal and Advertising injury [*]
         -        General Aggregate (commercial form only) [*]

         The coverage and limits referred to under the above do not in any way
limit the liability of Licensee. Licensee shall furnish The Regents with
certificates of insurance showing compliance with all requirements. Certificates
must:

         -        Provide for thirty (30) day advance written notice to The
                  Regents of any modification.
         -        Indicate that The Regents has been endorsed as an additional
                  Insured under the coverage referred to under the above.
         -        Include a provision that the coverage will be primary and will
                  not participate with nor will be excess over any valid and
                  collectable insurance or program of self-insurance carried or
                  maintained by The Regents.

         20.3 The Regents shall notify Licensee in writing of any claim or suit
brought against The Regents in respect of which The Regents intends to invoke
the provisions of this Article. Licensee shall keep The Regents informed on a
current basis of its defense of any claims under this Article.

                                       15
<PAGE>   19

21.      NOTICES

         Any notice or payment required to be given to either party is properly
given and effective (a) on the date of delivery if delivered in person or (b)
five (5) days after mailing if mailed by first-class certified mail, postage
paid, to the respective addresses given below, or to another address as is
designated by written notice given to the party.

In the case of Licensee:

                           Licensee INC.
                           3065 Northwoods Circle
                           Norcross, GA 30071
                           Attention: Dr. Russell Medford, President and CEO

With a copy to:

                           Sherry M. Knowles
                           King & Spalding
                           191 Peachtree Street, N.E.
                           Atlanta, Georgia 30303-1763

In the case of The Regents:

                           THE UNIVERSITY OF CALIFORNIA, SAN DIEGO
                           Technology Transfer Office
                           9500 Gilman Drive
                           La Jolla, California 92093-0910

                           Attention: Director

                           Referring to: [*]

22.      ASSIGNABILITY

         This Agreement may be assigned by The Regents, but is personal to
Licensee and assignable by Licensee only with the written consent of The
Regents, which consent will not be unreasonably withheld.

23.      NO WAIVER

         No Waiver by either party or any default of this Agreement may be
deemed a waiver of any subsequent or similar default.

                                       16
<PAGE>   20

24.      FAILURE TO PERFORM

         If either party finds it necessary to undertake legal action against
the other on account of failure of performance due under this Agreement, then
the prevailing party is entitled to reasonable attorney's fees in addition to
costs and necessary disbursements.

25.      GOVERNING LAWS

         THIS AGREEMENT WILL BE INTERPRETED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, UNITED STATES
OF AMERICA, WITH JURISDICTION IN COURTS OF THE STATE OF CALIFORNIA, but
the scope and validity of any patent or patent application will be governed by
the applicable laws of the country of the patent or patent application.

26.      PREFERENCE FOR UNITED STATES INDUSTRY

         Because this Agreement grants the exclusive right to use or sell the
Invention in the United States, Licensee agrees that any products sold in the
U.S. embodying this Invention or produced through the use thereof will be
manufactured substantially in the United States.

27.      GOVERNMENT APPROVAL OR REGISTRATION

         If this Agreement or any associated transaction is required by law of
any nation to be either approved or registered with any governmental agency,
Licensee shall assume all legal obligations to do so.

28.      EXPORT CONTROL LAW

         Licensee shall observe all applicable United States and foreign laws
with respect to the transfer of Licensed Products and related technical data to
foreign countries, including, without limitation, the International Traffic in
Arms Regulations (ITAR) and the Export Administration Regulations. This may
include a requirement that Licensee manufacture in the United States Licensed
Products that are to be sold in the United States.

29.      SECRECY

         29.1 With regard to confidential information ("Data"), with can be oral
or written or both, received from The Regents regarding this Invention, Licensee
agrees:

         29.1.1   not to use the Data except for the sole purpose of performing
                  under the terms of this Agreement;

                                       17

<PAGE>   21

         29.1.2   to safeguard Data against disclosure to others with the same
                  degree of care as it exercises with its own data of a similar
                  nature;

         29.1.3   not to disclose Data to others (except to its employees,
                  agents or consultants who are bound to Licensee by a like
                  obligation of confidentiality) without the express written
                  permission of The Regents, except that Licensee is not
                  prevented from using or disclosing any of the Data that:

                  29.1.3.1 Licensee can demonstrate by written records was
                           previously known to it;

                  29.1.3.2 is now, or becomes in the future, public knowledge
                           other than through acts or omissions of Licensee; or

                  29.1.3.3 is lawfully obtained by Licensee from sources
                           independent of The Regents; and

         29.1.4   that the secrecy obligations of Licensee with respect to Data
                  will continue for a period ending five (5) years from the
                  termination date of this Agreement.

         29.2 With regard to biological material received by Licensee from The
Regents, if any, including any cell lines, vectors, genetic material,
derivatives, products, progeny or material derived therefrom ("Biological
Material"), Licensee agrees:

         29.2.1   not to use Biological Material except for the sole purpose of
                  performing under the terms of this Agreement;

         29.2.2.  not to transfer Biological Material to others (except to its
                  employees, agents or consultants who are bound to Licensee by
                  like obligations conditioning and restricting access, use and
                  continued use of Biological Material) without the express
                  written permission of The Regents, except that Licensee is not
                  prevented from transferring Biological Material that:

                  29.2.2.1 becomes publicly available other than through acts or
                           omissions of Licensee, or

                  29.2.2.2 is lawfully obtained by Licensee from sources
                           independent of The Regents;

         29.2.3   to safeguard Biological Material against disclosure and
                  transmission to others with the same degree of care as it
                  exercises with its own biological materials of a similar
                  nature;

         29.2.4   to destroy all copies of Biological Material at the
                  termination of this Agreement.

                                       18
<PAGE>   22

30.      MISCELLANEOUS

         30.1 The headings of the several sections are inserted for convenience
of reference only and are not intended to be a part of or to affect the meaning
or interpretation of this Agreement.

         30.2 This Agreement is not binding on the parties until it has been
signed below on behalf of each party. It is then effective as of the Effective
Date.

         30.3 No amendment or modification of this Agreement is valid or binding
on the parties unless made in writing and signed on behalf of each party.

         30.4 This Agreement embodies the entire understanding of the parties
and supersedes all previous communications, representations or understandings,
either oral or written, between the parties relating to the subject matter
hereof. The Secrecy Agreement between The Regents and Licensee dated June 27,
1997 is hereby terminated.

         30.5 In case of any of the provisions contained in this Agreement is
held to be invalid, illegal, or unenforceable in any respect, that invalidity,
illegality or unenforceability will not affect any other provisions of this
Agreement and this Agreement will be construed as if the invalid, illegal, or
unenforceable provisions had never been contained in it.

         IN WITNESS WHEREOF, both The Regents and Licensee have executed this
Agreement, in duplicate originals, by their respective and duly authorized
officers on the day and year written.

ATHEROGENICS, INC.                       THE REGENTS OF THE UNIVERSITY
                                         OF CALIFORNIA

By: Russell M. Meford                    By: Alan Paau
  ------------------------------            ------------------------------
           (Signature)                            (Signature) 2/21/98

Name: Russell M. Medford MD PhD          Name: Alan Paau, Ph.D
     ---------------------------              ------------------------------
          (Please Print)

Title: President and CEO                 Title: Director, Technology Transfer
      ------------------------------           ------------------------------

                                       19<PAGE>   1
                                                                   Exhibit 10.03

                           EXCLUSIVE LICENSE AGREEMENT

         This Exclusive License Agreement (the "Agreement") is made effective as
of the 20th day of November, 1997 (the "Effective Date"), by and between the
UNIVERSITY OF ROCHESTER (the "University"), a New York nonprofit corporation,
having its principal place of business at 518 Hylan Building, Rochester, New
York 14627, and ATHEROGENICS, Inc. a for profit corporation organized under the
laws of Georgia and having a principal place of business at 3065 Northwoods
Circle, Norcross, Georgia 30071, and its Affiliates (collectively referred to as
"Licensee.")

                                   WITNESSETH:

         WHEREAS, the University is the owner of the Subject Technology, as
defined below; and

         WHEREAS, the University is willing to grant a royalty bearing,
worldwide, exclusive license to the Subject Technology to Licensee on the terms
set forth herein; and

         WHEREAS, Licensee desires to obtain said exclusive license to the
Subject Technology.

         NOW, THEREFORE, for and in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereto expressly agree as follows:

         1. CERTAIN DEFINITIONS

         1.1 AFFILIATES. The term "Affiliates" shall mean any corporation,
partnership, joint venture or other entity of which the common stock or other
equity ownership thereof is twenty five percent (25%) or more owned by Licensee.

         1.2 FIELD. The term "Field" shall mean all fields of use desired by
Licensee.

         1.3 LICENSED PRODUCTS. The term "Licensed Products" shall mean all
products and methods that incorporate, utilize or are made with the use of the
Subject Technology.

         1.4 NET SALES. The term "Net Sales" shall mean the gross amount of
monies or cash equivalent of other consideration which is paid by unrelated
third parties to Licensee for the Licensed Products by sale or other mode of
transfer, less all trade, quantity and cash discounts actually allowed, credits,
and allowances actually granted on account of rejections, returns or billing
errors, duties, transportation and insurance, taxes and other governmental
charges actually paid.

         1.5 PARTIES. The term "Parties" or individually, a "Party," shall mean
the parties to this Agreement, namely, the University and Licensee.

[ * ]    Certain confidential information contained in this document, marked by
         an asterisk within brackets, has been omitted and filed separately with
         the Securities and Exchange Commission pursuant to a request for
         confidential treatment under Rule 406 of the Securities Act of 1933, as
         amended.

<PAGE>   2

         1.6 SUBJECT TECHNOLOGY. The term "Subject Technology" shall mean all
technology, methods, compounds, compositions, cell lines, biological materials,
know-how, documents, materials, tests, laboratory notebooks, computer data, all
improvements thereto, and all confidential information related to the subject
matter disclosed or claimed in the patents and patent applications listed in
Exhibit A, which were developed as of the Effective Date by Richard F. Borch and
Therese K. Schmalbach. The term "Subject Technology" shall also include all
patent filings listed in Exhibit A hereto, together with all applications for
patent or like protection on said inventions and all patents or like protection
that may in the future be granted on said inventions whether in the United
States of America or any other country and all substitutions for and divisions,
continuations, continuations in part, renewals, reissues, reexaminations,
extensions and the like on said applications and patents (collectively, the
"Patent Rights").

         1.7 STRAIGHT SUBLICENSING REVENUE. The term "Straight Sublicensing
Revenue" shall mean all cash, sublicensing fees, royalties and all other
payments paid to Licensee by sublicensees of Licensee's rights hereunder if such
sublicense of the rights does not include the sublicense or other transfer of
any other technologies or rights owned or licensed by Licensee.

         1.8 VALUE ADDED SUBLICENSING REVENUE. The term "Value Added
Sublicensing Revenue" shall mean all cash, sublicensing fees, royalties, and all
other payments paid to Licensee by sublicensees of Licensee's rights hereunder
if such sublicense of the rights includes the sublicense or other transfer of
any other technologies, know how, data, or rights owned or licensed by Licensee.

         2. GRANT OF LICENSE

         2.1 EXCLUSIVE LICENSE. Subject to Section 2.2, the University hereby
grants to Licensee an exclusive, worldwide, right and license, with the right to
sublicense, under the Subject Technology to make, have made, use, market,
import, export, sell and offer for sale Licensed Products in the Field.

         2.2 RESERVED RIGHTS. The grant in Section 2.1 shall be further subject
to, restricted by and non-exclusive with respect to:

                  (i) the use of the Subject Technology by the University for
non-commercial research, patient care, teaching and other educationally related
purposes;

                  (ii) the use of the Subject Technology by the inventors
thereof for non-commercial research purposes at academic or research
institutions; and

                                       2
<PAGE>   3

                  (iii) any non-exclusive license of the Subject Technology that
the University is required by law or regulation to grant to the United States of
America or to a foreign state pursuant to an existing or future treaty with the
United States of America.

         3. PAYMENTS AND REPORTS

         3.1 ANNUAL FEE. As partial consideration for the rights conveyed by the
University under this Agreement, Licensee shall pay the University a minimum
annual license fee of [*] upon January 31 of each year that this Agreement is in
effect, beginning on January 31, 1998.

         3.2 LICENSED PRODUCTS ROYALTY. As partial consideration for the rights
conveyed by the University under this Agreement, Licensee shall pay the
University a running royalty of (i) [*] of Net Sales made in countries in which
a Licensed Product sold falls within the claims of a patent listed in Exhibit A,
and (ii) [*] of Net Sales made in countries if the Product is approved in the
country for the indication described in the patent claims. Such running
royalties shall be payable as provided in Paragraph 3.6. For the purposes of
this Section, a Licensed Product is considered to fall within the claims of the
patent if a dithiocarbamate which is included in a claim is sold for use in
combination with an antineoplastic or antibiotic agent that is included in the
claim.

         3.3 MILESTONE PAYMENTS. Licensee shall also pay the University the
following milestone payments: (a) [*] upon the submission of the first
Investigational New Drug Application for a Licensed Product to the FDA; and (b)
[*] upon the approval of the first New Drug Application for a Licensed Product
from the FDA.

         3.4 VALUE ADDED SUBLICENSING ROYALTY. In place of the royalty provision
set out in Section 3.2, if the Subject Technology or any aspect of it is
sublicensed to a third party, Licensee agrees to pay to the University as
royalties hereunder, [*] of all Value Added Sublicensing Revenue arising from
sublicenses of the Subject Technology in countries in which the Subject
Technology is protected by patents owned by the University. If, however,
Licensee or Sublicensee is required to obtain third party rights to sell
Licensed Products which result in an actual reduction in the sublicense royalty
paid to Licensee, the [*] royalty to the University can be renegotiated to
reflect the required extra payments. If agreement cannot be reached on a
reasonable royalty under the circumstances, the parties agree to resolve the
dispute through arbitration conducted under the auspices of the American
Arbitration Association pursuant to the organization's rules for commercial
arbitration.

         3.5 STRAIGHT SUBLICENSING ROYALTY. In place of the royalty provision
set out in Section 3.2, if the Subject Technology or any aspect of it is
sublicensed to a third party, Licensee agrees to pay to University as royalties
hereunder, [*] of all Straight Sublicensing Revenue arising from sublicenses of
the Subject Technology in countries in which the Subject Technology is protected
by patents listed in Exhibit A. If, however, Licensee or Sublicensee is required
to obtain third

                                       3
<PAGE>   4

party rights to sell Licensed Products which result in an actual reduction in
the sublicense royalty paid to Licensee, the [*] royalty to the University can
be renegotiated to reflect the required extra payments. If agreement cannot be
reached on a reasonable royalty under the circumstances, the parties agree to
resolve the dispute through arbitration conducted under the auspices of the
American Arbitration Association pursuant to the organization's rules for
commercial arbitration.

         3.6 QUARTERLY PAYMENTS. Payment of the royalties specified in Paragraph
3.2 shall be made by Licensee to the University within forty-five (45) days
after March 31, June 30, September 30 and December 31 of each year during the
term of this Agreement covering the quantity of Licensed Products sold by
Licensee during the preceding calendar quarter. Payment of the royalties
specified in Paragraphs 3.4 and 3.5 shall be made by Licensee to the University
within forty-five (45) days after receipt of payment from the sublicensee. After
termination or expiration of this Agreement, a final payment shall be made by
Licensee covering the whole or partial calendar quarter. Each quarterly payment
shall be accompanied by a written statement of Net Sales of Licensed Products by
Licensee during such calendar quarter. Such written statements shall be duly
signed by an authorized signatory of Licensee on behalf of Licensee and shall
show the Net Sales of Licensed Products by Licensee during such calendar quarter
and the amount of royalties payable under this Agreement based thereon.

         3.7 PAYMENTS IN DOLLARS. All payments due hereunder are expressed in
and shall be paid by check payable in United States of America currency, without
deduction of exchange, collection or other charges, to the University, or to the
account of the University at such other bank as the University may from time to
time designate by notice to Licensee. All currency conversion rates will be
calculated at the reported conversion rate in The Wall Street Journal on the
first day of the month in which the payment is due.

         3.8 INTEREST ON LATE PAYMENTS. In the event that any payment due
hereunder is not made when due, the payment shall accrue interest beginning on
the tenth day following the due date thereof, calculated at the annual rate of
[*], the interest being compounded on the last day of each calendar quarter,
provided, however, that in no event shall said annual interest rate exceed the
maximum legal interest rate. Each such royalty payment when made shall be
accompanied by all interest so accrued. Said interest and the payment and
acceptance thereof shall not negate or waive the right of the University to seek
any other remedy, legal or equitable, to which it may be entitled because of the
delinquency of any payment.

         4. RECORDS AND INSPECTION

         Licensee shall maintain or cause to be maintained a true and correct
set of records pertaining to the Net Sales of Licensed Products by Licensee
under this Agreement. During the term of this Agreement and for a period of one
(1) year thereafter, Licensee agrees to permit, upon reasonable advance notice,
an accountant selected by the University and reasonably

                                       4
<PAGE>   5

acceptable to Licensee to have access during ordinary business hours to such
records as are maintained by Licensee as may be necessary, in the opinion of
such accountant, to determine the correctness of any report and/or payment made
under this Agreement. In the event that the audit reveals an underpayment of
royalty by more than [*], the cost of the audit shall be paid by Licensee. If
the underpayment is less than [*] but more than [*], Licensee and the University
shall each pay [*] of the cost of the independent audit. If the underpayment is
less than [*], the University shall bear the cost of the independent audit. Such
accountant shall maintain in confidence, and shall not disclose to the
University, any information concerning Licensee or its operations or properties
other than information directly relating to the correctness of such reports and
payments and such accountant shall be required to sign a confidentiality
agreement to effect the foregoing in such form as Licensee shall reasonably
require.

         5. SUBLICENSES

         All sublicenses granted by Licensee of its rights hereunder shall be
subject to the terms of this License Agreement and shall provide for the payment
of royalties hereunder at least to the levels specified for payments by Licensee
to the University in Section 3 hereof. Sublicense royalty fees to the University
shall not include development funds, equity investment in Licensee, payments for
past research expenditures, or the like. Sublicense fees will be paid to the
University for upfront payments and milestone payments received by Licensee in
an amount of [*] if at the time the payment is made, the product or anticipated
product falls under the terms of 3.2(i) and [*] if at the time the payment is
made, the product or anticipated product falls under the terms of 3.2(ii).
Licensee shall be responsible for its sublicensees and shall not grant any
rights which are inconsistent with the rights granted to and obligations of
Licensee hereunder. Licensee shall give the University prompt notification of
the identity and address of each sublicensee with whom it concludes a sublicense
agreement.

         6. PATENTS AND INFRINGEMENT

         6.1 PATENT COSTS. After the Effective Date, Licensee agrees, with
respect to the Subject Technology, to pay all costs incurred by the University,
incident to the United States and foreign applications, patents and like
protection, including all costs incurred for filing, prosecution, issuance and
maintenance fees as well as any costs incurred in filing continuations,
continuations-in-part, divisionals or related applications and any reexamination
or reissue proceedings. Licensee shall have no obligation for any costs related
to the protection of the Subject Technology that were incurred prior to the
Effective Date.

         6.2 MAINTENANCE OF PATENTS. In the event that Licensee decides not to
continue any payments for prosecution of a patent application to issuance or
maintain any United States or foreign patent application or patent on the
Subject Technology, Licensee shall timely notify the University in writing in
order that the University may pay for such United States and said foreign

                                       5
<PAGE>   6

applications and continue said prosecution or maintenance of such patent
applications at its own expense, and the license rights as to such Subject
Technology covered by such patent application shall terminate with respect to
such country or countries as of the date of Licensee's notice.

         6.3 PATENT PROSECUTIONS. The University agrees to keep Licensee fully
informed of any and all patent prosecution and other actions with respect to the
Subject Technology including sending to Licensee copies of all correspondence
with patent offices and local associates, submitting to Licensee copies of all
draft responses to Office Actions and other substantive filings in sufficient
time prior to filing to provide Licensee with adequate time to review and
comment on, however, Licensee shall be responsible for any of its expenses
including attorney's fees that Licensee incurs in reviewing and commenting on
the information received from the University. The University shall consult with
Licensee regarding any material actions concerning the Patent Rights. The
University will use patent counsel acceptable to Licensee.

         6.4 COOPERATION. The University agrees to reasonably cooperate with
Licensee to whatever extent is reasonably necessary to procure and defend the
patent protection of any rights in the Subject Technology, including presenting
or amending any claims desired by Licensee, filing reissue or reexamination
applications or other documents desired by Licensee, and agreeing to execute any
and all documents to provide Licensee the full benefit of the licenses granted
herein.

         6.5 INFRINGEMENTS. Each Party shall promptly inform the other of any
suspected infringement of any claims in the Patent Rights or misuse,
misappropriation, theft or breach of confidence of other proprietary rights in
the Subject Technology by a third party, and with respect to such activities as
are suspected, Licensee shall have the right, but not the obligation, to
institute an action for infringement, misuse, misappropriation, theft or breach
of confidence of the proprietary rights against such third party. If Licensee
fails to bring such an action or proceeding within a period of three (3) months
after receiving notice or otherwise having knowledge of such infringement, then
the University shall have the right, but not the obligation, to prosecute at its
own expense any such claim. Should either the University or Licensee commence
suit under the provisions of this Paragraph 6.5 and thereafter elect to abandon
the same, it shall give at least thirty days written notice to the other Party
who may, if it so desires, continue prosecution of such action or proceeding.
All recoveries, whether by judgment, award, decree or settlement, from
infringement or misuse of Subject Technology shall be apportioned as follows:
the Party bringing the action or proceeding shall first recover an amount equal
to two times the cost and expenses incurred by such Party directly related to
the prosecution of such action or proceeding and the remainder shall be
distributed pursuant to the terms of this agreement.

                                       6
<PAGE>   7

         6.6 SETTLEMENTS. Neither the University nor Licensee shall settle any
action covered by Paragraph 6.5 without first obtaining the consent of the other
Party, which consent will not be unreasonably withheld.

         7. TERM AND TERMINATION

         7.1 TERM OF AGREEMENT. Unless earlier terminated as hereinafter
provided, this Agreement shall extend for the life of the last to expire patent
issued on the Subject Technology and shall then expire automatically. After such
expiration, Licensee shall have a perpetual, royalty-free license to make, use,
sell, offer to sell, and sublicense the Subject Technology.

         7.2 BREACH OF AGREEMENT. In the event of default or failure by either
Party to perform any of the terms, covenants or provisions of this Agreement,
such Party shall have thirty (30) days after the giving of written notice of
such default by the other Party to correct such default. If such default is not
corrected within the said thirty (30) day period, the other Party shall have the
right, at its option, to cancel and terminate this Agreement. The failure of the
other Party to exercise such right of termination for non-payment of royalties
or otherwise shall not be deemed to be a waiver of any right the other Party
might have, nor shall such failure preclude the other Party from exercising or
enforcing said right upon any subsequent default.

         7.3 BANKRUPTCY. The University shall have the right, at its option, to
cancel and terminate this Agreement in the event that Licensee shall (i) become
involved in insolvency, dissolution, bankruptcy or receivership proceedings
affecting the operation of its business or (ii) make an assignment of all or
substantially all of its assets for the benefit of creditors, or in the event
that (iii) a receiver or trustee is appointed for Licensee and Licensee, after
the expiration of thirty (30) days following any of the events enumerated above,
has been unable to secure a dismissal, stay or other suspension of such
proceedings.

         7.4 EFFECT OF TERMINATION. At the date of any termination of this
Agreement pursuant to Paragraph 7.2 hereof for breach by Licensee, or pursuant
to Paragraph 7.3 hereof, as of the receipt by Licensee of notice of such
termination, all rights to the Subject Technology shall revert to the University
and Licensee shall immediately cease using any of the Subject Technology and
return all copies of the same to the University; provided, however, that
Licensee may dispose of any Licensed Products actually in the possession of
Licensee or its agents prior to the date of termination, subject to Licensee's
paying to the University running royalties in accordance with Paragraph 3.2 with
respect thereto and otherwise complying with the terms of this Agreement.

         7.5 NO WAIVER. No termination of this Agreement shall constitute a
termination or a waiver of any rights of either Party against the other Party
accruing at or prior to the time of such termination. The University's waiver of
a single breach of any provision shall not be a waiver as to subsequent breaches
of the same provision.

                                       7
<PAGE>   8

         8. ASSIGNABILITY

         This Agreement shall be binding upon and shall inure to the benefit of
the University and its assigns and successors in interest, and shall be binding
upon and, shall inure to the benefit of Licensee and any successor to all or
substantially all of its assets or business to which this Agreement relates, but
shall not otherwise be assignable or assigned by Licensee without prior written
approval by the University being first obtained, which approval shall not be
unreasonably withheld.

         9. GOVERNMENTAL COMPLIANCE

         Licensee shall at all times during the term of this Agreement and for
so long as it shall sell Licensed Products comply and cause its sublicensees to
comply with all laws that may control the import, export, manufacture, use,
sale, marketing, distribution and other commercial exploitation of Licensed
Products or any other activity undertaken pursuant to this Agreement.

         10. GOVERNING LAW

         This Agreement is expressly acknowledged to be subject to all
applicable federal laws of the United States of America.

         11. NOTICES

         Any payment, notice or other communication pursuant to this Agreement
shall be considered given on the date of receipt by the other party, addressed
to it at its address below or as it shall designate by written notice given to
the other Party:

         In the case of the University with a copy to:

         Attn:
              ------------------------------
         University of Rochester
         518 Hylan Building
         Rochester, New York 14627

         In the case of Licensee with a copy to:

         Attn: Russell M. Medford, M.D. Ph.D.
         President and CEO
         AtheroGenics, Inc.
         3065 Northwoods Circle
         Norcross, Georgia 30071

                                       8
<PAGE>   9

         If written notice is given via facsimile, the original signed document
must be delivered promptly thereafter.

         12. MISCELLANEOUS PROVISIONS

         12.1 INDEPENDENT CONTRACTORS. The Parties hereby acknowledge and agree
that each is an independent contractor and that neither Party shall be
considered to be the agent, representative, master or servant of the other Party
for any purpose whatsoever, and that neither Party has any authority to enter
into a contract, to assume any obligation or to give warranties or
representations on behalf of the other Party. Nothing in this relationship shall
be construed to create a relationship of joint venture, partnership, fiduciary
or other similar relationship between the Parties.

         12.2 THE UNIVERSITY'S DISCLAIMERS. Neither the University, nor any of
its faculty members, researchers, trustees, officers, employees, directors, or
agents assume any responsibility for the manufacture, product specifications,
sale or use of the Subject Technology or the Licensed Products which are
manufactured by or sold by Licensee.

         12.3 DISCLAIMER OF WARRANTY. THE UNIVERSITY MAKES NO WARRANTIES OR
REPRESENTATIONS, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES
OF FITNESS OR MERCHANTABILITY, REGARDING OR WITH RESPECT TO THE SUBJECT
TECHNOLOGY OR LICENSED PRODUCTS AND THE UNIVERSITY MAKES NO WARRANTIES OR
REPRESENTATIONS, EXPRESSED OR IMPLIED, OF THE PATENTABILITY OF THE SUBJECT
TECHNOLOGY OR LICENSED PRODUCTS OR OF THE ENFORCEABILITY OF ANY PATENTS ISSUING
THEREUPON, IF ANY, OR THAT THE SUBJECT TECHNOLOGY OR LICENSED PRODUCTS ARE OR
SHALL BE FREE FROM INFRINGEMENT OF ANY PATENT OR OTHER RIGHT'S OF THIRD PARTIES.

         Licensee shall at all times during the term of this Agreement and
thereafter, indemnify, defend and hold University, its trustees, directors,
officers, employees and affiliates, harmless against all claims, proceedings,
demands and liabilities of any kind whatsoever, including legal expenses and
reasonable attorney fees, arising out of the death of or injury to any person or
persons or out of any damage to property, or resulting from the production,
manufacture, sale, use, lease, consumption or advertisement of the Licensed
Product(s) arising from an act or omission of Licensee, or arising from any
obligation of Licensee hereunder.

         Prior to the sale of a Licensed Product, Licensee shall obtain and
carry in full force and effect commercial, general liability insurance which
shall protect Licensee and University with respect to events covered by
Paragraph 12 herein. Such insurance shall be written by a reputable insurance
company authorized to do business in the State of New York, shall list
University as an

                                       9
<PAGE>   10

additional named insured thereunder, shall be endorsed to include product
liability coverage and shall require thirty (30) days written notice to be given
to University prior to any cancellation or material change thereof. The limits
of such insurance shall not be less than [*] per occurrence with an aggregate of
[*] for personal injury or death, and [*] per occurrence with an aggregate of
[*] for property damage. Licensee shall provide University with Certificates of
Insurance evidencing the same.

         12.4 REFORMATION. All Parties hereby agree that neither Party intends
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; that if any word, sentence, paragraph or
clause or combination thereof of this Agreement is found, by a court or
executive body with judicial powers having jurisdiction over this Agreement or
any of its Parties hereto, in a final unappealed order to be in violation of any
such provision in any country or community or association of countries, such
words, sentences, paragraphs or clauses or combination shall be inoperative in
such country or community or association of countries, and the remainder of this
Agreement shall remain binding upon the Parties hereto.

         12.5 FORCE MAJEURE. No liability hereunder shall result to a Party by
reason of delay in performance caused by force majeure, that is circumstances
beyond the reasonable control of the Party, including, without limitation, acts
of God, fire, flood, war, civil unrest, labor unrest, or shortage of or
inability to obtain material as equipment.

         12.6 ENTIRE AGREEMENT. The terms and conditions herein constitute the
entire agreement between the Parties and shall supersede all previous
agreements, either oral or written, between the Parties hereto with respect to
the subject matter hereof. No agreement of understanding bearing on this
Agreement shall be binding upon either Party hereto unless it shall be in
writing and signed by the duly authorized officer or representative of each of
the Parties and shall expressly refer to this Agreement.

                                       10
<PAGE>   11

         IN WITNESS WHEREOF, the Parties hereto have executed and delivered this
Agreement in multiple originals by their duly authorized officers and
representatives on the respective dates shown below, but effective as of the
Effective Date.

ATHEROGENICS, INC.                        UNIVERSITY OF ROCHESTER
Russell M. Medford                        Robert Goodwin
-------------------------------------     -------------------------------------
Name: Russell M. Medford                  Name:
     --------------------------------          --------------------------------
Title: President and CEO                  Title:
     --------------------------------          --------------------------------
Date: December 8, 1997                    Date: December 3, 1997
     --------------------------------          --------------------------------

                                       11
<PAGE>   12

                                    EXHIBIT A

PATENTS AND PATENT APPLICATIONS

TREATMENT OF DAMAGED BONE MARROW AND DOSAGE UNITS THEREFOR
Country: U.S.
Inventors:        Richard F. Borch
                  Therese K. Schmalbach
Patent No. 4,938,949
Issued: 07/03/90
Appl. No. 243,405
Filed: 9/12/88

TREATMENT OF DAMAGED BONE MARROWLAND DOSAGE UNITS THEREFOR
Country: Australia
Inventors:        Richard F. Borch
                  Therese K. Schmalbach
Patent No. 243,405
Issued. 9/12/88
Appl. No. WO 90/02550

METHOD FOR STIMULATING TRANSPLANTED BONE MARROW CELLS
Country: U.S.
Inventors:        Richard F. Borch
                  Therese K. Schmalbach
Patent No. 5,187,193
Issued: 2/16/93
Appl. No. 673,089
Filed: 3/21/91

METHOD FOR STIMULATING PRODUCTION OF BONE MARROW CELL GROWTH FACTORS USING
DITHIOCARBAMATES
Country: U.S.
Inventors:        Richard F. Borch
                  Therese K. Schmalbach
Patent No. 5,169,765
Issued: 12/8/92
Appl. No. 586,304
Filed: 9/21/90

USE OF DITHIOCARBAMATES TO TREAT MYELOSUPRESSION
Country: U.S.

                                        1
<PAGE>   13

Inventors:        Richard F. Borch
                  Therese K. Schmalbach
Patent No. 5,294,430
Issued: 3/15/94
Appl. No. 922,688
Filed: 7/30/92

USE OF DITHIOCARBAMATES TO COUNTERACT MYELOSUPRESSION
Country: U.S.
Inventors:        Richard F. Borch
                  Therese K. Schmalbach
Patent No. 5,035,878
Issued: 7/30/91
Appl. No. 418,549
Filed: 10/10/89

                                       2

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