Document:

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                                                                   EXHIBIT 10.32

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

                  CELL CYCLE CHECKPOINT OPTIMIZATION AGREEMENT

                                     BETWEEN

                           ARRAY BIOPHARMA CORPORATION

                                       AND

                                ICOS CORPORATION

                                  APRIL 6, 1999

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                  CELL CYCLE CHECKPOINT OPTIMIZATION AGREEMENT

                  THIS CELL CYCLE CHECKPOINT OPTIMIZATION AGREEMENT (the "C3
Agreement") is entered into and made effective as of April ____, 1999 (the
"Effective Date"), by and between ARRAY BIOPHARMA INC, a Delaware corporation
having its principal offices located at 1885 33rd Street, Boulder, CO 80301
("Array") and ICOS CORPORATION, a Delaware corporation having its principal
offices located at 22021 20th Avenue S.E., Bothell, Washington 98021 ("ICOS").

                  WHEREAS, Array has skills, expertise and experience in
multi-parallel synthesis and purification methods, developing and preparing
chemical libraries suitable for high throughput biological screening assays and
medicinal chemistry;

                  WHEREAS, as of the Effective Date, ICOS and its Affiliates
have developed and own, among other things, certain know how and intellectual
property rights, assays, methods and lead compounds that may be potential drug
candidates directed to the C3 Optimization Targets, (collectively "ICOS
Technology");

                  WHEREAS, ICOS desires to utilize Array skills, expertise and
experience to assist ICOS in optimizing such lead compounds for the C3
Optimization Targets;

                  WHEREAS, the parties wish to collaborate in an optimization
program in this regard against C3 Optimization Targets;

                  WHEREAS, the C3 Optimization Program will focus on an initial
C3 Optimization Target as set forth below, and the Parties intend to work on
multiple C3 Optimization targets in a serial and parallel manner as set forth
herein below;

                  NOW, THEREFORE, the Parties agree as follows:

                  1. DEFINITIONS

                  1.1 "Active Target" means a C3 Optimization Target for which
ICOS has provided reasonable written notice to Array as described in Section 3.1
of this C3 Agreement, that such C3 Optimization Target shall be included in the
C3 Optimization Program and for which a C3 Optimization Plan shall be produced.
For the purpose of this definition reasonable notice shall be thirty (30) days
unless the party's have agreed to a shorter period of notice either by written
C3 Agreement or by the Parties performance.

                  1.2 "Affiliate" of a Party means any corporation or other
business entity controlled by, controlling or under common control with, such
Party. For this purpose "control" shall mean direct or indirect beneficial
ownership of more than fifty percent (50%) of the voting

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securities or income interest in such corporation or other business, or if not
meeting the preceding requirements, any company owned or controlled by or owning
or controlling such Party at the maximum control or ownership right permitted in
the country where such company exists.

                  1.3 "Array Compound" means a chemical compound that is
proprietary to Array, or whose use or manufacture is proprietary to Array.

                  1.4 "Array Patents" means all Patents which claim any Array
Technology and that are Controlled by Array during the Exclusivity Period, but
shall exclude any claims of a C3 Optimization Patent. For purposes of this
definition, "controlled" shall mean the ability to grant a license or sublicense
as provided for in Section 7.1 below.

                  1.5 "Array Technology" means certain know-how, intellectual
property or patents (i) developed, licensed and/or owned by Array, prior to the
Effective Date or (ii) developed licensed and/or owned by Array outside of the
C3 Optimization Program and used by Array in the C3 Optimization Program, or
(iii) developed during the C3 Optimization Program and not having solely
specific or novel application to the C3 Optimization Program (i.e. such
know-how, intellectual property, or patents having application outside of the
development, manufacture, use, sale, or importation of C3 Optimization Compounds
or Products). Array Technology shall not include [ * ] or [ * ].

                  1.6 "C3 Optimization Compound(s)" means a compound (or
compounds) which is synthesized by Array following the Effective Date in the
course of performing the C3 Optimization Program for the purpose of screening
against an Active Target.

                  1.7 "C3 Optimization Patent" means a Patent claiming and
disclosing the composition of a C3 Optimization Compound or the manufacture
thereof, for which Array has made an inventive contribution to the subject
invention in the course of performing the C3 Optimization Program, as determined
under U.S. Patent law. Notwithstanding the foregoing, C3 Optimization Patents
shall only include Patents to the extent the same (i) is entitled to a first
effective filing date for priority purposes (i.e., for priority purposes under
35 USC, or the corresponding laws of the country in which such Patent is filed)
after the Effective Date and (ii) claims subject matter reduced to practice
(either actual or constructive) prior to the date six (6) months after the end
of the C3 Optimization Period.

                  1.8 "C3 Optimization Period" means the term of the C3
Optimization Program as provided in Section 8 of this C3 Agreement.

                  1.9 "C3 Optimization Plan" means the C3 Optimization Plan to
be prepared by Array approved and accepted by ICOS , which describes in agreed
detail the research activities to be performed by Array for each Active Target.

                  1.10 "C3 Optimization Program" means the research and
activities to be conducted under this C3 Agreement as described in the C3
Optimization Plan and as set forth in Sections 2.1 and 2.2 of this C3 Agreement.

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

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                  1.11 "C3 Optimization Target" means any one of the [ * ]
described in Appendix B, at execution of this C3 Agreement, or as substituted by
mutual written C3 Agreement of the Parties, and unless otherwise specified may
include Active Targets, and shall in each case be selected from Appendix B.

                  1.12 "C3 Project Team" shall have the meaning set forth in
Section 2.1(c).

                  1.13 "Confidential Information" shall mean:

                           (a)      all information and materials received by
                                    either Party from the other Party pursuant
                                    to this C3 Agreement which is confidential
                                    under Section 9;

                           (b)      all information and materials received by
                                    either Party from the other Party in
                                    connection with the C3 Optimization Program
                                    during the C3 Optimization Period,
                                    including, without limitation, structures of
                                    lead compounds provided by ICOS to Array, to
                                    the extent the same is confidential under
                                    Section 9; and

                           (c)      the financial terms of this C3 Agreement and
                                    the identity of the C3 Optimization Targets,
                                    to the extent the same are confidential
                                    under Section 9.

                  1.14 "Daughter Libraries" shall mean the compound libraries
which are designed and synthesized as a part of the C3 Optimization Program by
Array.

                  1.15 "Derivative" shall mean a compound (or compounds) which
has resulted from [ * ].

                  1.16 "Exclusivity Period" means [ * ].

                  1.17 "Field" means [ * ] for any C3 Optimization Target
against which a C3 Optimization Compound or Products may be directed.

                  1.18 "FTE" shall mean a full-time equivalent employee of Array
having the skills, support, services and resources to fulfill Array's
obligations under this C3 Agreement. For purposes of this C3 Agreement, the FTEs
shall include [ * ].

                  1.19 "Milestone Compound" shall have the meaning set forth in
Section 6.2.

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

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                  1.20 "Party" means Array or ICOS, as the case may be,
including their respective permitted assigns of this C3 Agreement under Section
12 below.

                  1.21 "Patent" means (a) valid and enforceable U.S. or non U.S.
Patent, and any non-U.S. equivalent, including any extension (including
Supplemental Protection Certificates), registration, confirmation, reissue,
continuation, divisionals, continuation-in-part, reexamination or renewal
thereof, or (b) pending applications for any of the foregoing .

                  1.22 "Product(s)" means any product containing a C3
Optimization Compound or Derivative with such compound as the active ingredient
or one of the active ingredients, which is the subject of one or more claims
under a C3 Optimization Patent and which is granted regulatory approval by the
governing health regulatory authority of the applicable country for marketing in
the Field.

                  1.23 "Restored Active Target" means an Active Target which has
ceased to be an Active Target either by C3 Agreement of the Parties or by
operation of the C3 Optimization Program, and which, by reasonable written
notice has been again designated as an Active Target. For the purposes of this
definition reasonable notice shall be [ * ] unless the Party's have agreed to a
shorter period of notice either by written C3 Agreement or by parties
performance.

                  1.24 "Territory" means the entire world.

                  1.25 "Third Party" means an entity other than Array or ICOS or
their respective Affiliates.

                  2. C3 OPTIMIZATION PROGRAM

                  2.1 Array Responsibilities. Array shall with due diligence
provide the following services and resources to ICOS and conduct the following
activities in accordance with the C3 Optimization Plan:

                           (a)      During the C3 Optimization Period, Array
                                    shall (i) review data and information
                                    regarding the Active Target and lead
                                    compounds provided by ICOS; (ii) based on
                                    such data and information design Daughter
                                    Libraries and optimize the lead compounds
                                    supplied by ICOS; (iii) synthesize compounds
                                    as provided in Section 5.3 below; (iv)
                                    develop and optimize high throughput primary
                                    and secondary (selectivity) kinase screens
                                    and (v) and initiate pre-clinical predictive
                                    metabolism and toxicology profiling of C3
                                    Optimization Compounds and Optimization
                                    Compounds (as per the Lead Optimization
                                    Agreement between Array and ICOS, dated
                                    December 22, 1999).

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                           (b)      During the C3 Optimization Period, Array
                                    shall keep ICOS regularly informed of its
                                    activities performed in connection with the
                                    C3 Optimization Program, including, without
                                    limitation, providing ICOS with data and
                                    information (and, upon ICOS's written
                                    request, reasonable quantities of samples
                                    pursuant to Section 5.3) regarding the
                                    status of Array's work on C3 Optimization
                                    Compounds under the C3 Optimization Plan.

                           (c)      Subject to Sections 2.3, 3 and 6, and at all
                                    times during the C3 Optimization Period,
                                    Array shall [ * ].

                  2.2 ICOS Responsibilities. ICOS shall provide the following
resources to Array and conduct the following activities under the C3
Optimization Program as more fully described in the C3 Optimization Plan:

                           (a)      ICOS shall make payment to Array under the
                                    C3 Optimization Program as set forth in
                                    Section 6, provide screening, biological and
                                    structural data and information including
                                    leads and/or screening hits and assay
                                    methods relating to C3 Optimization
                                    Compounds to Array necessary for Array to
                                    perform its duties under this C3 Agreement,
                                    and will assume scientific, financial and
                                    administrative responsibility for screening
                                    and biological support activities, drug
                                    development and regulatory filings during
                                    and after the term of the C3 Optimization
                                    Program on the terms set forth below.

                           (b)      During the C3 Optimization Period, ICOS
                                    shall provide Array with: (i) lead compounds
                                    and/or structures of such lead compounds for
                                    the Active Target, and (ii) data and
                                    information regarding C3 Optimization
                                    Compounds and the Active Target assays
                                    developed by ICOS under the C3 Optimization
                                    Program.

                  2.3 Conduct of C3 Optimization Program. The Parties hereby
agree that the C3 Optimization Program shall be carried out in accordance with
the C3 Optimization Plan and this C3 Agreement, as amended from time to time.
ICOS shall review the C3 Optimization Plan on a regular and an ongoing basis and
may make written changes to the C3 Optimization Plan so long as such changes are
mutually agreed to in writing by Array.

                  2.4 Third Party Licenses. Each Party shall be solely
responsible for any Third Party license fees required to perform its obligations
under this C3 Agreement.

                  2.5 Further, the Parties wish to establish that upon express
written agreement between the Parties, an identified FTE (or all expressly
identified FTEs) may be allocated to perform work arising out of another
agreement between the Parties while remaining an FTE under this C3 Optimization
Agreement and consideration being continued under Section 6 herein.

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

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                  3. TARGETS

                  3.1 Active Target. The initial Active Targets shall be as
specified in Appendix B or as specified by reasonable written notice from ICOS
to Array. There shall be no more than [ * ] at any one time unless Array and
ICOS mutually agree in writing to having more than [ * ] simultaneously
designated as Active Targets together with additional terms and conditions, if
any.

                  3.2 Restored Active Target. Any C3 Optimization Target which
has ceased to be an Active Target due to the later designation of another C3
Optimization Target as an Active Target, may always be restored to the status of
an additional Active Target at ICOS's request provided that no more than [ * ]
may be designated as active targets at any one time, as described in 3.1 above.

                  3.3 Disclosure of Active Target Information. ICOS agrees not
to disclose to Array any Confidential Information relating to any C3
Optimization Targets, or lead compounds therefor until such C3 Optimization
Targets are designated as the Active Targets in accordance with Section 3.1
above.

                  4. EXCLUSIVITY

                  4.1 Active Target Exclusivity. During the C3 Optimization
Period, Array shall not knowingly work on or provide information regarding any
C3 Optimization Target with or to any Third Parties, thereafter during the
Exclusivity Period, Array shall not knowingly work on or provide information
regarding any C3 Optimization Target which has been designated as an Active
Target during the C3 Optimization Period with or to any Third Parties, in each
case except (a) as provided for in Section 10.2 with regard to any Public
Statements, and (b) with respect to any Third Parties who are collaborators or
proposed collaborators of Array, Array shall have the right, consistent with its
corporate policy (but without identifying any C3 Optimization Target), to notify
any such Third Party of its decision and/or inability to work on such C3
Optimization Target with that Third Party. For the purposes of this Section 4.1,
"knowingly" shall mean actual knowledge or imputed knowledge that the corporate
entity or its directors and officers knew or should have known.

                  4.2 C3 Optimization Compounds. C3 Optimization Compounds,
their structures and best methods of synthesis and manufacture developed during
the C3 Optimization Program shall be made available only to ICOS for research or
application to any C3 Optimization Target, within or outside the Collaboration,
during the C3 Optimization Period, and Array shall not work on or provide
information regarding such C3 Optimization Compound to any Third Party, except
to take any steps necessary to protect ICOS's exclusivity hereunder.

                  4.3 Duration of Exclusivity for C3 Optimization Targets.
Notwithstanding any other provision of this C3 Agreement, it is understood and
agreed that once a C3 Optimization Program has been initiated for any Active
target Array's obligations under Section 4.1 shall

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

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continue until ICOS has released Array from the effect of this Section 4.3 by
written notice or the end of the Exclusivity Period, whichever occurs first.

                  5. C3 OPTIMIZATION COMPOUNDS

                  5.1 Intellectual Property Rights; Vesting and Transfer to
ICOS. Subject to Section 7.2, and except as set forth in this Section 5.1, ICOS
shall have exclusive rights in all C3 Optimization Patents and the subject
matter contained therein and all intellectual property and know-how (whether or
not patentable) embodied in C3 Optimization Compounds and Products and methods
specifically directed to the manufacture of C3 Optimization Compounds and
methods of use of Products, in each case resulting from the C3 Optimization
Program; to the extent possible such exclusive rights shall be achieved by Array
assigning its interest, if any, in such Patents and intellectual property and
know-how to ICOS and where such assignment is not legally possible ICOS shall
receive an exclusive license or sublicense to the maximum extent of Array's
rights. ICOS shall file, maintain and prosecute all Patents arising out of, or
comprising, the rights and interests granted in this Section 5.1 and Array shall
do everything reasonably necessary to assist ICOS in filing such Patents. Prior
to the filing of any such Patent applications or during the pendency of such
applications, Array shall assign to ICOS or its designee all intellectual
property rights it may have, to the extent granted in this Section 5.1, in the
C3 Optimization Patents and the subject matter disclosed and claimed therein
which are necessary for the development and commercialization of such C3
Optimization Compounds by ICOS or its designee. Notwithstanding anything in this
Section 5.1 to the contrary, nothing in this Section 5.1, or the operation
thereof, shall be deemed to grant to ICOS any rights in or to any Array
Technology.

                  5.2 Structural Information. Array shall not disclose the
structure of any C3 Optimization Compound, Derivative or Product ( to the extent
such structure is not publicly available) to any Third Party nor identify such
structure, if publicly available, with its collaboration with ICOS without
ICOS's written permission, unless required to do so by law, in which case Array
shall promptly notify ICOS of such required disclosure and will use its
reasonable efforts to assist ICOS to secure confidential treatment of such
structure prior to any disclosure.

                  5.3 Supply of C3 Optimization Compounds. Aliquots of at [ * ]
of any C3 Optimization Compound that has been synthesized will be prepared and
given to ICOS together with their structures and all known and developed best
methods of synthesis and manufacture. Array shall replenish once during the
Exclusivity Period that amount upon ICOS's reasonable request, and ICOS shall
reimburse Array for any cost thereof not otherwise reimbursed under Section 6
below for any reasonably requested replenishment in excess of a total [ * ]. To
the extent that C3 Optimization Compounds are not available in a timely and
sufficient quantity to allow the earliest start of necessary large scale
preclinical or other studies such unavailability of C3 Optimization Compounds
shall not be cited as a lack of due diligence provided that the Parties have
made commercially reasonable attempts, and continue such attempts, during the
Exclusivity Period to provide such unavailable C3 Optimization Compounds in
required quantities in an expedient manner.

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

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                  6. CONSIDERATION

                  6.1 C3 Optimization Program Funding.

                           (a)      Research Support for C3 Project Team. At all
                                    times during the C3 Optimization Period,
                                    ICOS shall make payments to Array for direct
                                    research support for its C3 Project Team,
                                    which shall initially consist of [ * ] of
                                    Array, unless determined otherwise under
                                    Section 6.1(b). The total amount payable per
                                    FTE shall be [ * ] per FTE per annum. All
                                    payments for direct research support shall
                                    be paid by ICOS to Array, quarterly in
                                    advance, and adjusted as necessary in
                                    subsequent quarters, of such amounts as are
                                    equal to the product of (i) the number of
                                    [ * ] unless determined otherwise under
                                    Section 6.1(b)) allocated to the C3
                                    Optimization Program for the calendar
                                    quarter to which each such payment applies,
                                    multiplied by (ii) [ * ] (i.e., the
                                    quarterly amount per FTE on the basis of
                                    [ * ]).

                           (b)      Expansion or Contraction of C3 Project Team.
                                    ICOS may request that Array expand or
                                    contract its C3 Project Team during the C3
                                    Optimization Period in order to match the
                                    work on Active Targets; provided that the C3
                                    Project Team shall not be less than [ * ]
                                    FTEs except by agreement of Array. In such
                                    event, the Parties shall promptly confer as
                                    to the appropriate number of FTEs to
                                    constitute the C3 Project Team, as mutually
                                    agreed, at a cost to ICOS of [ * ], to be
                                    paid as specified in Section 6.1(a).
                                    Initially, the C3 Project Team will consist
                                    of [ * ]. Notwithstanding the foregoing, the
                                    Project Team may be expanded or contracted
                                    in any quarter by the addition or
                                    subtraction of a [ * ] is given by ICOS
                                    prior to the start of such quarter in which
                                    the addition or subtraction of the [ * ]
                                    will occur.

                  6.2 Milestone Payments. Within [ * ] of the occurrence of a
development milestone triggered by the activities of ICOS or its Affiliates, or
Third Parties acting under authority from ICOS or its Affiliates, ICOS shall pay
Array the related milestone payment in U.S. dollars as set forth in Appendix A.
Such payments shall apply once only to each milestone reached by any C3
Optimization Compound or Derivative for each C3 Optimization Target. Such
milestone payments shall be due with respect to each C3 Optimization Compound or
Derivative to meet such milestone (each a "Milestone Compound"); [ * ].

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

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                  6.3 Taxes. All income and other taxes levied or accruing to
Array under this C3 Agreement shall be paid by Array, including taxes levied
thereon as income to Array. If provision is made in law or regulation for
withholding, such tax shall be deducted from the payment made by ICOS to the
proper taxing authority and a receipt of payment of the tax secured and promptly
delivered to Array. Each Party agrees to assist the other Party reasonably in
claiming exemption from such deductions or withholdings under any double
taxation or similar agreement or treaty from time to time in force.

                  6.4 Title to, and ownership of, tangible property. Without
limiting ICOS' rights under Sections 5.1 and 7 of this C3 Agreement, it is
understood and agreed that each Party retains title to any tangible property
delivered to the other Party under this C3 Agreement.

                  7. LICENSE GRANTS; OUTLICENSE

                  7.1 Array License Grant to ICOS. Subject to the terms and
conditions of this C3 Agreement, Array hereby grants to ICOS a non-exclusive,
royalty-free, fully paid up except as to payment of respective milestones under
Section 6.2, worldwide license, with the right to sublicense to use Array
Technology and under the Array Patents, in each case solely to make, have made,
use, have used, sell, have sold, import and export C3 Optimization Compounds or
Products in the Field.

                  7.2 ICOS Sublicense. ICOS shall have the right to transfer,
assign or sublicense to a Third Party ICOS's rights under Sections 5.1 and 7.1
above or C3 Optimization Patents covering the Products.

                  7.3 No Other Licenses. No right or license is granted to ICOS
hereunder under technology or intellectual property of Array, by implication,
estoppel or otherwise, except as specifically and expressly granted under
Sections 5.1, 5.2 and 7.1 of this C3 Agreement. No right or license is granted
to ARRAY hereunder in any C3 Optimization Compound or Derivative, including
compounds in Daughter Libraries.

                  8. TERM AND TERMINATION OF THE C3 AGREEMENT

                  8.1 Term, Renewals and Extensions. The term of this C3
Agreement and C3 Optimization Program shall commence upon the Effective Date of
this C3 Agreement, and unless earlier terminated as provided in this C3
Agreement, shall expire on the second anniversary thereafter provided, however,
that the term shall be automatically extended for a further one (1) year unless
either party provides written notice sixty (60) days or more prior to such
second anniversary canceling such extension. Unless terminated early pursuant to
Section 8.2 below, the

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C3 Optimization Period may be renewed for additional periods upon mutual
agreement of the Parties; provided that neither Party shall be obligated to
approve any such renewal.

                  8.2 Termination by ICOS. ICOS may terminate this C3 Agreement
effective at any time after the first anniversary of the Effective Date, in its
sole discretion, upon [ * ] days prior written notice.

                  8.3 Termination by ICOS or Array. If either Party materially
breaches this C3 Agreement and fails to remedy that breach within [ * ] of
receiving written notice thereof from the other Party, or makes an assignment of
substantially all of its assets for the benefit of its creditors or goes into
liquidation, insolvency, bankruptcy, receivership or reorganization proceedings,
whether voluntarily or compulsorily which is not dismissed by a court of
competent jurisdiction within [ * ], then the other Party may at any time, by
notice in writing or by telefax, terminate this C3 Agreement and the C3
Optimization Program. Within [ * ] following termination for the C3 Optimization
Program and/or research related to any C3 Optimization Target under this C3
Agreement, Array shall prepare a detailed, final written report to ICOS, and
provide any remaining supply of C3 Optimization Compounds in synthesis to date,
for each Target or part of the C3 Optimization Program being terminated.

                  8.4 Effect of Termination on Licensees. In the event of any
termination of this C3 Agreement pursuant to Section 8.3 where such termination
shall not have been caused by the action or inaction on the part of any
respective licensee of ICOS or Array, or by any breach by such licensee of its
obligations under its license from ICOS or Array, as appropriate, such
termination of this C3 Agreement shall be without prejudice to the rights of
each non-breaching licensee and such licensee shall be deemed to be a direct
licensee hereunder; provided that such licensee agrees in writing to be bound by
the applicable provisions of this C3 Agreement, including, without limitation,
the payment of milestone payments pursuant to Section 6.2.

                  9. CONFIDENTIAL INFORMATION

                  9.1 Nondisclosure. During the term of this C3 Agreement and
for a period of [ * ] after termination or expiration thereof, each Party (the
"Receiving Party") will maintain all Confidential Information received from the
other Party (the "Disclosing Party") in trust and confidence and will not
disclose any such Confidential Information to any Third Party or use any such
Confidential Information for any purpose except (i) as expressly authorized by
this C3 Agreement, (ii) as required by law or court order, after as much advance
notice as is practical to the Disclosing Party, (iii) to its consultants,
subcontractors, agents or financing sources who need to know and who are bound
by equivalent written confidentiality obligations. The Receiving Party will use
at least the same standard of care as it uses to protect proprietary or
confidential information of its own to ensure that its Affiliates, employees,
agents, consultants and other representatives do not disclose or make any
unauthorized use of the Confidential Information of the Disclosing Party. The
Receiving Party will promptly notify the Disclosing Party upon discovery of any
unauthorized use or disclosure of the Disclosing Party's Confidential
Information.

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

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                  9.2 Exceptions. Confidential Information shall not include any
information which the Receiving Party can prove by competent evidence: (a) is
now, or hereafter becomes, through no act or failure to act on the part of the
Receiving Party, generally known or available; (b) is known by the Receiving
Party at the time of receiving such information, as evidenced by its written
records; (c) is hereafter disclosed to the Receiving Party by a Third Party, as
a matter of right and without restriction on disclosure; (d) is independently
developed by the Receiving Party without the aid, application or use of
Confidential Information of the Disclosing Party; or (e) is the subject of a
written permission to disclose provided by the Disclosing Party.

                  10. PUBLICATIONS AND PUBLIC STATEMENTS

                  10.1 Publications. ICOS and Array will treat matters of
authorship of scientific abstracts, manuscripts or publications in a proper
collaborative spirit, giving credit where it is due. Without affecting
obligations under Section 9 above, Array shall not publish any information with
respect to C3 Optimization Compounds or Derivatives during the Exclusivity
Period without the prior written permission of ICOS. ICOS agrees to provide to
Array, on a Confidential Basis, any publication, except patent prosecution
documents with respect to C3 Optimization Compounds at least two (2) weeks prior
to submission for publication during the Exclusivity Period.

                  10.2 Public Statements. Neither Party shall use the name of
the other Party in any public statement, prospectus, annual report or press
release or other public communication (collectively "Public Statements") (except
to the extent that use of the name is required for disclosure by the SEC rules
or other government rules or regulations) without the prior written approval of
the other Party, which may not be unreasonably withheld or delayed; provided,
however, that both Parties shall endeavor in good faith to give the other Party
a minimum of two (2) business days to review such Public Statements; provided,
further, that, upon approval of any such Public Statement, both Parties may
disclose to Third Parties the information contained in such Public Statement
without the further approval of the other; and provided, further, that if a
Party does not approve such Public Statement, either Party may still use the
name of the other Party in any Public Statement without the prior written
approval of the other Party, if such Party is advised by counsel that such
disclosure is required to comply with applicable law.

                  11. INDEMNIFICATION

                  11.1 Product Liability. ICOS hereby agrees to save, defend and
hold Array and its officers, directors, employees, consultants, and agents
harmless from and against any and all suits, claims, actions, demands,
liabilities, expenses and losses, including reasonable legal expenses and
attorneys' fees ("Losses") resulting directly or indirectly from any claim
alleging physical injury or death or otherwise arising out of the
administration, utilization and/or ingestion of C3 Optimization Compounds or
Products manufactured, used or sold by or under the authority of ICOS, its
Affiliates or licensees except to the extent such Losses result from the
negligence (whether active, passive or imputed), breach of this C3 Agreement or
willful misconduct of Array.

                  11.2 Procedures. If Array (the "Indemnified Party") seeks
indemnification under this Section 11, it shall inform ICOS (the "Indemnifying
Party") of a claim as soon as reasonably

                                       12
<PAGE>   13

practicable after it receives notice of the claim, shall permit the Indemnifying
Party to assume direction and control of the defense of the claim (including the
right to settle any claim brought against the Indemnified Party upon prior
written consent, which shall not be unreasonably withheld), and shall give
reasonable cooperation (at the expense of the Indemnifying Party) in the defense
of such claim.

                  12. ASSIGNABILITY

                  12.1 Generally. This C3 Agreement may not be assigned by
either Party without the prior written consent of the other Party, and which
shall not to be unreasonably withheld; provided, however, that either Party may
assign this C3 Agreement, in whole or in part, to an Affiliate or to a successor
of a Party in connection with the merger, consolidation or sale of all or
substantially all of such Party's assets or that portion of its business
pertaining to the subject matter of this C3 Agreement (and upon doing so will
promptly notify the other Party in writing) (each such transaction being
referred to as an "Acquisition"); provided that the assigning Party remains
fully liable as obligated hereunder.

                  12.2 Technology of Acquirer. In the event of an Acquisition,
it is understood and agreed that no intellectual property rights or technology
of the acquirer shall be included within the subject matter licensed hereunder,
to the extent that such intellectual property or technology was owned or
controlled by the acquirer as of the date of the Acquisition, or was created or
obtained after the date of the Acquisition other than by employees of Array in
the course of performing the C3 Optimization Program.

                  13. DISPUTE RESOLUTION PROCEDURES

                  13.1 Senior Executives Discussions. If a dispute arises
between Array and ICOS or with respect to matters other than the management of
the C3 Optimization Program, either during or after the C3 Optimization Period,
such dispute will be referred to the appropriate senior management in the area
of the dispute. If such senior management are unable to resolve such dispute,
such dispute will be referred to the Executive Vice President of Operations of
ICOS and the Chief Operating Officer of Array

                  13.2 Injunctive Relief. Nothing contained in this Section 13
or any other provisions of this C3 Agreement shall be construed to limit or
preclude a Party from bringing any action in any court of competent jurisdiction
for injunctive or other relief or to compel the other Party to comply with its
obligations hereunder.

                                       13
<PAGE>   14

                  14. NOTICES

                  Any notice required or permitted to be given hereunder shall
be deemed sufficient if sent by facsimile letter or overnight courier, or
delivered by hand to ICOS or Array at the respective addresses and facsimile
numbers as set forth below or at such other address and facsimile number as
either Party hereto may designate. If sent by facsimile letter, notice shall be
deemed given when the transmission is completed if the sender has a confirmed
transmission report. If a confirmed transmission report does not exist, then the
notice will be deemed given when the notice is actually received by the person
to whom it is sent. If delivered by overnight courier, notice shall be deemed
given when it has been signed for. If delivered by hand, notice shall be deemed
given when received.

         if to Array, to:              Array BioPharma Corporation
                                       1885 33rd Street
                                       Boulder, Colorado  80301

         if to ICOS, to:               ICOS Corporation
                                       22021 20th Avenue, S.E.
                                       Bothell, Washington  98021
                                       Attention: Legal Department
                                       Fax number:  (425) 398-8950

                  15. SURVIVAL

                  The provisions of Sections 4.1, 4.3, 5.1, 5.2, 5.3, 6.2, 6.4,
7.1, 7.2, 7.3 8.4 9, 10, 11, 12, and 15 shall survive the expiration and any
termination of this C3 Agreement. In addition, Section1 shall survive the
expiration or any termination of this C3 Agreement to the extent necessary to
define terms in any other surviving Section. Notwithstanding the foregoing if
Array terminates this C3 Agreement under Section 8.3 then Section 7.1 shall not
survive such termination by Array.

                  16. ADDITIONAL TERMS

                  16.1 Entire Agreement. This C3 Agreement constitutes the
entire understanding between the Parties with respect to the subject matter
hereto and supersedes and replaces all previous negotiations, understandings,
representations, writings and contract provisions and rights relating hereof.

                  16.2 Amendment; No Waiver. No provision of this C3 Agreement
may be amended except to the extent expressly allowed herein, revoked or waived
except by a writing signed and delivered by an authorized officer of each Party.
Any waiver on the part of either Party of any breach or any right or interest
hereunder shall not imply the waiver of any subsequent breach or waiver of any
other right or interest.

                                       14
<PAGE>   15

                  16.3 Validity. The invalidity or unenforceability of any
provision of this C3 Agreement shall not affect the validity or enforceability
of any other provision of this C3 Agreement, each of which shall remain in full
force and effect.

                  16.4 Headings. The descriptive headings and numberings are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning of or interpretation of this C3 Agreement.

                  16.5 Counterparts. This C3 Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.

                  16.6 Governing Law. This C3 Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Washington,
without regard to conflicts of laws and principles.

                  16.7 Further Assurances. At any time and from time to time
after the Effective Date, the Parties shall each do, execute, acknowledge and
deliver, and cause to be done, executed, acknowledged or delivered, all such
further acts, transfers, conveyances, or assignments as may be reasonably
required to carry out the transactions contemplated by this C3 Agreement.

                  17. REPRESENTATIONS AND WARRANTIES

                  17.1 Authorization. All action on the part of each of Array,
ICOS and their respective officers, and directors necessary for the
authorization, execution and delivery of this C3 Agreement and the performance
of all obligations of Array and ICOS, respectively, hereunder has been taken.

                  17.2 Rights to Intellectual Property. Each Party warrants that
it has the power to grant all of the rights granted and make such required
assignments, and to assume all of the obligations required, under this C3
Agreement.

                  17.3 Disclaimer of Warranties. EXCEPT AS OTHERWISE EXPLICITLY
PROVIDED IN THIS SECTION 17, ARRAY AND ICOS EXPRESSLY DISCLAIM ANY WARRANTIES OR
CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE C3
OPTIMIZATION PROGRAM, C3 OPTIMIZATION COMPOUNDS, DERIVATIVES, PRODUCTS, ARRAY
TECHNOLOGY, ARRAY PATENTS OR C3 OPTIMIZATION PATENTS, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY, NON-INFRINGEMENT, OR FITNESS FOR A
PARTICULAR PURPOSE.

                                       15
<PAGE>   16

         IN WITNESS WHEREOF, the parties have executed this C3 Agreement to be
effective as of the Effective Date.

ARRAY BIOPHARMA, INC.                   ICOS CORPORATION

By: /s/ David Snitman, Ph.D.            By: /s/ W. Michael Gallatin, Ph.D.
    ---------------------------             --------------------------------
    David  Snitman, Ph.D.                   W. Michael Gallatin, Ph.D.
    V. P. of Business Development           Vice President, Scientific Director
    and Chief Operating Officer

                                       16

<PAGE>   17

                                   APPENDIX A

                             Milestones and Payments
                                (in U.S. Dollars)

[ * ]

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

                                       17
<PAGE>   18

                                   APPENDIX B

                             C3 Optimization Targets

[ * ]

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

                                       18<PAGE>   1

                                                                   EXHIBIT 10.33

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

                     DRUG DISCOVERY COLLABORATION AGREEMENT

                                     BETWEEN

                           ARRAY BIOPHARMA CORPORATION

                                       AND

                                ICOS CORPORATION

                                  JULY 31, 2000

<PAGE>   2

                  THIS DRUG DISCOVERY COLLABORATION AGREEMENT (the "Agreement")
is entered into and made effective as of July 31, 2000 (the "Effective Date"),
by and between ARRAY BIOPHARMA INC, a Delaware corporation having its principal
offices located at 1885 33rd Street, Boulder, CO 80301 ("Array") and ICOS
CORPORATION, a Delaware corporation having its principal offices located at
22021 20th Avenue S.E., Bothell, Washington 98021 ("ICOS").

                  WHEREAS, Array has skills, expertise and experience in
multi-parallel synthesis and purification methods, developing and preparing
chemical libraries suitable for high throughput biological screening assays and
medicinal chemistry;

                  WHEREAS, as of the Effective Date, ICOS and its Affiliates
have developed and own, among other things, certain know how and intellectual
property rights, assays, methods and lead compounds that may be potential drug
candidates directed to [ * ] and the Optimization Targets, (as defined below)
(collectively "ICOS Technology");

                  WHEREAS, ARRAY and ICOS have entered that certain Lead
Optimization Agreement ("LO Agreement") dated December 22, 1998, for the
optimization of, among other things, such lead compounds directed against [ * ];

                  WHEREAS, ARRAY and ICOS have entered into that certain Cell
Cycle Checkpoint Optimization Agreement ("C3 Agreement) dated April 6, 1999, for
the optimization of, among other things, such lead compounds directed against
[ * ];

                  WHEREAS, ARRAY and ICOS desire to consolidate the optimization
programs initiated pursuant to the LO and C3 Agreements with an optimization
program against the Optimization Targets;

                  WHEREAS, ARRAY and ICOS have mutually agreed to cancel and
terminate the LO Agreement and the C3 Agreement in their entirety and to release
each other from all obligations, accrued or outstanding, under the LO Agreement
and the C3 Agreement, all under the terms and conditions as set forth herein
below;

                  NOW, THEREFORE, the Parties agree as follows:

                  1. DEFINITIONS

                  1.1 "Active Target" means an Optimization Target for which
ICOS has provided reasonable written notice to Array as described in Section
3.1 of this Agreement, that such Optimization Target shall be included in the
Optimization Program and for which an Optimization Plan shall be produced. For
the purpose of this definition reasonable notice shall be [ * ]

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

                                       2

<PAGE>   3

days unless the parties have agreed to a shorter period of notice either by
written agreement or by the Parties' performance.

                  1.2 "Affiliate" of a Party means any corporation or other
business entity controlled by, controlling or under common control with, such
Party. For this purpose "control" shall mean direct or indirect beneficial
ownership of more than fifty percent (50%) of the voting securities or income
interest in such corporation or other business, or if not meeting the preceding
requirements, any company owned or controlled by or owning or controlling such
Party at the maximum control or ownership right permitted in the country where
such company exists.

                  1.3 "Array Compound" means a chemical compound that is
proprietary to Array, or whose use or manufacture is proprietary to Array.

                  1.4 "Array Patents" means all Patents which claim any Array
Technology and that are Controlled by Array during the Exclusivity Period, but
shall exclude any claims of an Optimization Patent. For purposes of this
definition, "controlled" shall mean the ability to grant a license or
sublicense as provided for in Section 8.1 below.

                  1.5 "Array Technology" means certain know-how, intellectual
property or patents (i) developed, licensed and/or owned by Array, prior to the
Effective Date or (ii) developed licensed and/or owned by Array outside of the
Optimization Program and used by Array in the Optimization Program, or (iii)
developed during the Optimization Program and not having solely specific or
novel application to the Optimization Program (i.e. such know-how, intellectual
property, or patents having application outside of the development,
manufacture, use, sale, or importation of Optimization Compounds or Products).
Array Technology shall not include [ * ].

                  1.6 "Confidential Information" shall mean:

                           (a)      all information and materials received by
                                    either Party from the other Party pursuant
                                    to this Agreement which is confidential
                                    under Section 10;

                           (b)      all information and materials received by
                                    either Party from the other Party in
                                    connection with the Optimization Program
                                    during the Optimization Period, including,
                                    without limitation, structures of lead
                                    compounds provided by ICOS to Array, to the
                                    extent the same is confidential under
                                    Section 10; and

                           (c)      the financial terms of this Agreement and
                                    the identity of the Optimization Targets,
                                    to the extent the same are confidential
                                    under Section 10.

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

                                       3

<PAGE>   4

                  1.7 "Daughter Libraries" shall mean the compound libraries
which are designed and synthesized as a part of the Optimization Program by
Array.

                  1.8 "Derivative" shall mean a compound (or compounds) which
has resulted from [ * ].

                  1.9 "Exclusivity Period" means the [ * ].

                  1.10 "Field" means [ * ] for any Optimization Target against
which an Optimization Compound or Products may be directed.

                  1.11 "FTE" shall mean a full-time equivalent employee of Array
having the skills, support, services and resources to fulfill Array's
obligations under this Agreement. For purposes of this Agreement, the FTEs shall
include [ * ] and upon approval by ICOS may also include Array employees with
the skills required to [ * ].

                  1.12 "Milestone Compound" shall have the meaning set forth in
Section 7.2.

                  1.13 "Optimization Compound(s)" means a compound (or
compounds) which is (i) synthesized by Array following the Effective Date in
the course of performing the Optimization Program for the purpose of screening
against an Active Target, (ii) was synthesized by Array, for the purpose of
screening against an Active Target, in the course of performing lead compound
optimization under the LO agreement, or (iii) was synthesized by Array, for the
purpose of screening against an Active Target, in the course of performing lead
compound optimization under the C3 Agreement.

                  1.14 "Optimization Patent" means a Patent claiming and
disclosing the composition of an Optimization Compound or the manufacture
thereof, for which Array has made an inventive contribution to the subject
invention in the course of performing the Optimization Program, as determined
under U.S. Patent law. Notwithstanding the foregoing, Optimization Patents
shall only include Patents to the extent the same (i) is entitled to a first
effective filing date for priority purposes (i.e., for priority purposes under
35 USC, or the corresponding laws of the country in which such Patent is filed)
after the Effective Date and (ii) claims subject matter reduced to practice
(either actual or constructive) prior to the [ * ] after the end of the
Optimization Period.

                  1.15 "Optimization Period" means the term of the Optimization
Program as provided in Section 9 of this Agreement.

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

                                       4

<PAGE>   5

                  1.16 "Optimization Plan" means the Optimization Plan for each
Optimization Target to be prepared by Array approved and accepted by ICOS,
which describes in agreed detail the research activities to be performed by
Array for each Active Target.

                  1.17 "Optimization Program" means the research and activities
for each Optimization Target to be conducted under this Agreement as described
in the Optimization Plan and as set forth in Sections 3.1 and 3.2 of this
Agreement.

                  1.18 "Optimization Target" means any [ * ] biomolecular
entities described in Appendix B, at execution of this Agreement, or as
substituted by mutual written agreement of the Parties, and unless otherwise
specified may include Active Targets, and shall in each case be selected from
Appendix B.

                  1.19 "Project Team" shall have the meaning set forth in
Section 3.1(c).

                  1.20 "Party" means Array or ICOS, as the case may be,
including their respective permitted assigns of this Agreement under Section 13
below.

                  1.21 "Patent" means (a) valid and enforceable U.S. or non
U.S. Patent, and any non-U.S. equivalent, including any extension (including
Supplemental Protection Certificates), registration, confirmation, reissue,
continuation, divisionals, continuation-in-part, reexamination or renewal
thereof, or (b) pending applications for any of the foregoing.

                  1.22 "Product(s)" means any product containing an
Optimization Compound or Derivative with such compound as the active ingredient
or one of the active ingredients, which is the subject of one or more claims
under an Optimization Patent and which is granted regulatory approval by the
governing health regulatory authority of the applicable country for marketing
in the Field.

                  1.23 "Restored Active Target" means an Active Target which
has ceased to be an Active Target either by Agreement of the Parties or by
operation of the Optimization Program, and which, by reasonable written notice
has been again designated as an Active Target. For the purposes of this
definition reasonable notice shall be [ * ] unless the Parties have agreed to a
shorter period of notice either by written Agreement or by parties performance.

                  1.24 "Territory" means the entire world.

                  1.25 "Third Party" means an entity other than Array or ICOS
or their respective Affiliates.

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

                                       5

<PAGE>   6

                  2. CANCELLATION AND TERMINATION

                  2.1 Cancellation and Termination. As of the Effective Date of
this Agreement, Array and ICOS hereby irrevocably cancel and terminate the LO
Agreement in its entirety. Array and ICOS also hereby irrevocably cancel and
terminate the C3 Agreement in its entirety Except as expressly set forth
herein, (i) all rights and obligations of Array and ICOS under the LO Agreement
and under the C3 Agreement are hereby canceled and terminated, (ii) all rights
and licenses granted under the LO Agreement or the C3 Agreement shall revert to
the party granting such right or license, and (iii) no terms and conditions of
the LO Agreement or the C3 Agreement shall survive. For the avoidance of doubt,
it is however intended by the parties that this consolidated Agreement shall
give the same rights, obligations and duties to the parties for [ * ] and [ * ]
as under the Lead Optimization Agreement and C3 Agreement respectively.

                  2.2 Settlement and Release. Each party hereto agrees that
this Agreement represents settlement in full of all outstanding obligations
owed to the other party under the LO Agreement and the C3 Agreement. Array and
ICOS, on behalf of themselves, and their respective heirs, executors, officers,
directors, employees, investors, shareholders, administrators, predecessor and
successor corporations, and assigns, hereby fully and forever release each
other and their respective heirs, executors, officers, directors, employees,
investors, shareholders, administrators, predecessor and successor
corporations, and assigns, of and from any claim, duty, obligation or cause of
action relating to any matters of any kind, whether presently known or unknown,
suspected or unsuspected, that any of them may possess arising from any
omissions, acts or facts that have occurred up until and including the
Effective Date of this Agreement.

                  3. OPTIMIZATION PROGRAM

                  3.1 Array Responsibilities. Array shall with due diligence
provide the following services and resources to ICOS and conduct the following
activities in accordance with the Optimization Plan:

                           (a)      During the Optimization Period, Array shall
                                    (i) review data and information regarding
                                    Active Targets and lead compounds provided
                                    by ICOS; (ii) based on such data and
                                    information design Daughter Libraries and
                                    optimize the lead compounds supplied by
                                    ICOS and (iii) synthesize compounds as
                                    provided in Section 6.3 below;

                           (b)      During the Optimization Period, Array shall
                                    keep ICOS regularly informed of its
                                    activities performed in connection with the
                                    Optimization Program, including, without
                                    limitation, providing ICOS with data and
                                    information (and, upon ICOS's written
                                    request, reasonable quantities of samples
                                    pursuant to Section 6.3) regarding the
                                    status of Array's work on Optimization
                                    Compounds under the Optimization Plan;

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

                                       6

<PAGE>   7

                           (c)      Subject to Sections 3.3, 4 and 7, and at
                                    all times during the Optimization Period,
                                    Array shall [ * ].

                  3.2 ICOS Responsibilities. ICOS shall provide the following
resources to Array and conduct the following activities under the Optimization
Program as more fully described in the Optimization Plan:

                           (a)      ICOS shall make payment to Array under the
                                    Optimization Program as set forth in
                                    Section 7, provide screening, biological
                                    and structural data and information
                                    including leads and/or screening hits and
                                    assay methods relating to Optimization
                                    Compounds to Array necessary for Array to
                                    perform its duties under this Agreement,
                                    and will assume scientific, financial and
                                    administrative responsibility for screening
                                    and biological support activities, drug
                                    development and regulatory filings during
                                    and after the term of the Optimization
                                    Program on the terms set forth below.

                           (b)      During the Optimization Period, ICOS shall
                                    provide Array with: (i) lead compounds
                                    and/or structures of such lead compounds
                                    for Active Targets, and (ii) data and
                                    information regarding Optimization
                                    Compounds and Active Target assays
                                    developed by ICOS under the Optimization
                                    Program.

                  3.3 Conduct of Optimization Program. The Parties hereby agree
that the Optimization Program shall be carried out in accordance with the
Optimization Plan and this Agreement, as amended from time to time. ICOS shall
review the Optimization Plan on a regular and an ongoing basis and may make
written changes to the Optimization Plan so long as such changes are mutually
agreed to in writing by Array.

                  3.4 Third Party Licenses. Each Party shall be solely
responsible for any Third Party license fees required to perform its
obligations under this Agreement.

                  4. TARGETS

                  4.1 Active Target. The initial Active Targets shall be as
specified in Appendix B or as specified by reasonable written notice from ICOS
to Array. There shall be no more than [ * ] Active Targets at any one time
unless Array and ICOS mutually agree in writing to having more than [ * ]
Optimization Targets simultaneously designated as Active Targets together with
additional terms and conditions, if any.

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

                                       7

<PAGE>   8

                  4.2 Restored Active Target. Any Optimization Target which has
ceased to be an Active Target due to the later designation of another
Optimization Target as an Active Target, may always be restored to the status
of an additional Active Target at ICOS's request provided that no more than
[ * ] targets may be designated as active targets at any one time, as described
in 4.1 above.

                  4.3 Disclosure of Active Target Information. ICOS agrees not
to disclose to Array any Confidential Information relating to any Optimization
Targets, or lead compounds therefor until such Optimization Targets are
designated as the Active Targets in accordance with Section 4.1 above.

                  5. EXCLUSIVITY

                  5.1 Active Target Exclusivity. During the Optimization
Period, Array shall not knowingly work on or provide information regarding any
Optimization Target with or to any Third Parties; thereafter during the
Exclusivity Period, Array shall not knowingly work on or provide information
regarding any Optimization Target which has been designated as an Active Target
during the Optimization Period with or to any Third Parties, in each case
except (a) as provided for in Section 11.2 with regard to any Public
Statements, and (b) with respect to any Third Parties who are collaborators or
proposed collaborators of Array, Array shall have the right, consistent with
its corporate policy (but without identifying any Optimization Target), to
notify any such Third Party of its decision and/or inability to work on such
Optimization Target with that Third Party. For the purposes of this Section
5.1, "knowingly" shall mean actual knowledge or imputed knowledge that the
corporate entity or its directors and officers knew or should have known.

                  5.2 Optimization Compounds. Optimization Compounds, their
structures and best methods of synthesis and manufacture developed during the
Optimization Program shall be made available only to ICOS for research or
application to any Optimization Target, within or outside the Collaboration,
during the Optimization Period, and Array shall not work on or provide
information regarding such Optimization Compound to any Third Party, except to
take any steps necessary to protect ICOS's exclusivity hereunder.

                  5.3 Duration of Exclusivity for Optimization Targets.
Notwithstanding any other provision of this Agreement, it is understood and
agreed that once an Optimization Program has been initiated for any Active
Target Array's obligations under Section 5.1 shall continue until ICOS has
released Array from the effect of this Section 5.3 by written notice or the end
of the Exclusivity Period, whichever occurs first.

                  6. OPTIMIZATION COMPOUNDS

                  6.1 Intellectual Property Rights; Vesting and Transfer to
ICOS. Subject to Section 6.2, and except as set forth in this Section 6.1, ICOS
shall have exclusive rights in all

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

                                       8

<PAGE>   9

Optimization Patents and the subject matter contained therein and all
intellectual property and know-how (whether or not patentable) embodied in
Optimization Compounds and Products and methods specifically directed to the
manufacture of Optimization Compounds and methods of use of Products, in each
case resulting from the Optimization Program; to the extent possible such
exclusive rights shall be achieved by Array assigning its interest, if any, in
such Patents and intellectual property and know-how to ICOS and where such
assignment is not legally possible ICOS shall receive an exclusive license or
sublicense to the maximum extent of Array's rights. ICOS shall file, maintain
and prosecute all Patents arising out of, or comprising, the rights and
interests granted in this Section 6.1 and Array shall do everything reasonably
necessary to assist ICOS in filing such Patents. Prior to the filing of any
such Patent applications or during the pendency of such applications, Array
shall assign to ICOS or its designee all intellectual property rights it may
have, to the extent granted in this Section 6.1, in the Optimization Patents
and the subject matter disclosed and claimed therein which are necessary for
the development and commercialization of such Optimization Compounds by ICOS or
its designee. Notwithstanding anything in this Section 6.1 to the contrary,
nothing in this Section 6.1, or the operation thereof, shall be deemed to grant
to ICOS any rights in or to any Array Technology.

                  6.2 Structural Information. Array shall not disclose the
structure of any Optimization Compound, Derivative or Product (to the extent
such structure is not publicly available) to any Third Party nor identify such
structure, if publicly available, with its collaboration with ICOS without
ICOS's written permission, unless required to do so by law, in which case Array
shall promptly notify ICOS of such required disclosure and will use its
reasonable efforts to assist ICOS to secure confidential treatment of such
structure prior to any disclosure.

                  6.3 Supply of Optimization Compounds. Aliquots of at least
[ * ] of any Optimization Compound that has been synthesized will be prepared
and given to ICOS together with their structures and all known and developed
best methods of synthesis and manufacture. Array shall replenish once during the
Exclusivity Period that amount upon ICOS's reasonable request, and ICOS shall
reimburse Array for any cost thereof not otherwise reimbursed under Section 6
below for any reasonably requested replenishment in excess of a total of [ * ]
milligrams. To the extent that Optimization Compounds are not available in a
timely and sufficient quantity to allow the earliest start of necessary large
scale preclinical or other studies such unavailability of Optimization Compounds
shall not be cited as a lack of due diligence provided that the Parties have
made commercially reasonable attempts, and continue such attempts, during the
Exclusivity Period to provide such unavailable Optimization Compounds in
required quantities in an expedient manner.

                  7. CONSIDERATION

                  7.1 Optimization Program Funding.

                           (a)      Research Support for Project Team. At all
                                    times during the Optimization Period, ICOS
                                    shall make payments to Array for direct

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

                                       9

<PAGE>   10

                                    research support for its Project Team,
                                    which shall initially consist of [ * ] of
                                    Array, unless determined otherwise under
                                    Section 7.1(b). The total amount payable
                                    per FTE shall be U.S. [ * ] per FTE per
                                    annum ("FTE Rate"). The FTE Rate for any
                                    Calendar Year after [ * ] shall be adjusted
                                    annually at each anniversary of this
                                    Agreement by ICOS in accordance with the
                                    annual percentage change in Consumer Price
                                    Index for all Urban Consumers as published
                                    by the United States Department of Labor,
                                    Bureau of Labor Statistics. All payments
                                    for direct research support shall be paid
                                    by ICOS to Array, quarterly in advance, and
                                    adjusted as necessary in subsequent
                                    quarters, of such amounts as are equal to
                                    the product of (i) the number of FTEs [ * ]
                                    FTEs unless determined otherwise under
                                    Section 7.1(b)) allocated to the
                                    Optimization Program for the calendar
                                    quarter to which each such payment applies,
                                    multiplied by (ii) U.S. [ * ] (i.e., the
                                    quarterly amount per FTE on the basis of
                                    U.S. [ * ] per annum).

                           (b)      Expansion of Project Team. ICOS may request
                                    that Array expand its Project Team during
                                    the Optimization Period in order to match
                                    the work on Active Targets. In such event,
                                    the Parties shall promptly confer as to the
                                    appropriate number of FTEs to constitute
                                    the Project Team, as mutually agreed, to be
                                    paid as specified in Section 7.1(a).

                  7.2 Milestone Payments. Within [ * ] of the occurrence of a
development milestone triggered by the activities of ICOS or its Affiliates, or
Third Parties acting under authority from ICOS or its Affiliates, ICOS shall
pay Array the related milestone payment in U.S. dollars as set forth in
Appendix A. Such payments shall apply once only to each milestone reached by
any Optimization Compound or Derivative for each Optimization Target. Such
milestone payments shall be due with respect to each Optimization Compound or
Derivative to meet such milestone (each a "Milestone Compound"); [ * ].

                  7.3 Taxes. All income and other taxes levied or accruing to
Array under this Agreement shall be paid by Array, including taxes levied
thereon as income to Array. If provision is made in law or regulation for
withholding, such tax shall be deducted from the payment made by

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

                                       10

<PAGE>   11

ICOS to the proper taxing authority and a receipt of payment of the tax secured
and promptly delivered to Array. Each Party agrees to assist the other Party
reasonably in claiming exemption from such deductions or withholdings under any
double taxation or similar agreement or treaty from time to time in force.

                  7.4 Title to, and ownership of, tangible property. Without
limiting ICOS' rights under Sections 6.1 and 8 of this Agreement, it is
understood and agreed that each Party retains title to any tangible property
delivered to the other Party under this Agreement.

                  8. LICENSE GRANTS; OUTLICENSE

                  8.1 Array License Grant to ICOS. Subject to the terms and
conditions of this Agreement, Array hereby grants to ICOS a non-exclusive,
royalty-free, fully paid up except as to payment of respective milestones under
Section 7.2, worldwide license, with the right to sublicense to use Array
Technology and under the Array Patents, in each case solely to make, have made,
use, have used, sell, have sold, import and export Optimization Compounds or
Products in the Field.

                  8.2 ICOS Sublicense. ICOS shall have the right to transfer,
assign or sublicense to a Third Party ICOS's rights under Sections 6.1 and 8.1
above or Optimization Patents covering the Products.

                  8.3 No Other Licenses. No right or license is granted to ICOS
hereunder under technology or intellectual property of Array, by implication,
estoppel or otherwise, except as specifically and expressly granted under
Sections 6.1, 6.2 and 8.1 of this Agreement. No right or license is granted to
ARRAY hereunder in any Optimization Compound or Derivative, including compounds
in Daughter Libraries.

                  9. TERM AND TERMINATION OF THE AGREEMENT

                  9.1 Term, Renewals and Extensions. The term of this Agreement
and Optimization Program shall commence upon the Effective Date of this
Agreement, and unless earlier terminated as provided in this Agreement, shall
expire on the second anniversary thereafter provided, however, that the term
shall be automatically extended for a further [ * ] unless either party
provides written notice [ * ] or more prior to such second anniversary
canceling such extension. Unless terminated early pursuant to Section 9.2
below, the Optimization Periods may be individually renewed for additional
periods upon mutual agreement of the Parties; provided that neither Party shall
be obligated to approve any such renewal.

                  9.2 Termination by ICOS. ICOS may terminate this Agreement
effective at any time after the first anniversary of the Effective Date, in its
sole discretion, upon [ * ] days prior written notice.

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

                                       11

<PAGE>   12

                  9.3 Termination by ICOS or Array. If either Party materially
breaches this Agreement and fails to remedy that breach within [ * ] of
receiving written notice thereof from the other Party, or makes an assignment
of substantially all of its assets for the benefit of its creditors or goes
into liquidation, insolvency, bankruptcy, receivership or reorganization
proceedings, whether voluntarily or compulsorily which is not dismissed by a
court of competent jurisdiction within [ * ], then the other Party may at any
time, by notice in writing or by telefax, terminate this Agreement and/or any
and/or all of the Optimization Programs. Within [ * ] following termination for
the Optimization Program and/or research related to any Optimization Target
under this Agreement, Array shall prepare a detailed, final written report to
ICOS, and provide any remaining supply of Optimization Compounds in synthesis
to date, for each Target or part of the Optimization Program being terminated.

                  9.4 Effect of Termination on Licensees. In the event of any
termination of this Agreement pursuant to Section 9.2 where such termination
shall not have been caused by the action or inaction on the part of any
respective licensee of ICOS or Array, or by any breach by such licensee of its
obligations under its license from ICOS or Array, as appropriate, such
termination of this Agreement shall be without prejudice to the rights of each
non-breaching licensee and such licensee shall be deemed to be a direct
licensee hereunder; provided that such licensee agrees in writing to be bound
by the applicable provisions of this Agreement, including, without limitation,
the payment of milestone payments pursuant to Section 7.2.

                  10. CONFIDENTIAL INFORMATION

                  10.1 Nondisclosure. During the term of this Agreement and for
a period of [ * ] after termination or expiration thereof, each Party (the
"Receiving Party") will maintain all Confidential Information received from the
other Party (the "Disclosing Party") in trust and confidence and will not
disclose any such Confidential Information to any Third Party or use any such
Confidential Information for any purpose except (i) as expressly authorized by
this Agreement, (ii) as required by law or court order, after as much advance
notice as is practical to the Disclosing Party, (iii) to its consultants,
subcontractors, agents or financing sources who need to know and who are bound
by equivalent written confidentiality obligations. The Receiving Party will use
at least the same standard of care as it uses to protect proprietary or
confidential information of its own to ensure that its Affiliates, employees,
agents, consultants and other representatives do not disclose or make any
unauthorized use of the Confidential Information of the Disclosing Party. The
Receiving Party will promptly notify the Disclosing Party upon discovery of any
unauthorized use or disclosure of the Disclosing Party's Confidential
Information

                  10.2 Exceptions. Confidential Information shall not include
any information which the Receiving Party can prove by competent evidence: (a)
is now, or hereafter becomes, through no act or failure to act on the part of
the Receiving Party, generally known or available; (b) is known by the
Receiving Party at the time of receiving such information, as evidenced by its
written records; (c) is hereafter disclosed to the Receiving Party by a Third
Party, as a matter of right and without restriction on disclosure; (d) is
independently developed by the Receiving Party

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

                                      12

<PAGE>   13

without the aid, application or use of Confidential Information of the
Disclosing Party; or (e) is the subject of a written permission to disclose
provided by the Disclosing Party.

                  11. PUBLICATIONS AND PUBLIC STATEMENTS

                  11.1 Publications. ICOS and Array will treat matters of
authorship of scientific abstracts, manuscripts or publications in a proper
collaborative spirit, giving credit where it is due. Without affecting
obligations under Section 10 above, Array shall not publish any information
with respect to Optimization Compounds or Derivatives during the Exclusivity
Period without the prior written permission of ICOS. ICOS agrees to provide to
Array, on a Confidential Basis, any publication, except patent prosecution
documents with respect to Optimization Compounds at least [ * ] prior to
submission for publication during the Exclusivity Period.

                  11.2 Public Statements. Except as the Parties otherwise agree
in writing, neither Array nor ICOS shall release any information to any Third
Party with respect to the existence of this Agreement. Once the Parties issue a
press release, which has been agreed to in writing before release by both
Parties, each Party may use the substance of such press release without prior
notice.

                  12. INDEMNIFICATION

                  12.1 Product Liability. ICOS hereby agrees to save, defend
and hold Array and its officers, directors, employees, consultants, and agents
harmless from and against any and all suits, claims, actions, demands,
liabilities, expenses and losses, including reasonable legal expenses and
attorneys' fees ("Losses") resulting directly or indirectly from any claim
alleging physical injury or death or otherwise arising out of the
administration, utilization and/or ingestion of Optimization Compounds or
Products manufactured, used or sold by or under the authority of ICOS, its
Affiliates or licensees except to the extent such Losses result from the
negligence (whether active, passive or imputed), breach of this Agreement or
willful misconduct of Array.

                  12.2 Procedures. If Array (the "Indemnified Party") seeks
indemnification under this Section 12, it shall inform ICOS (the "Indemnifying
Party") of a claim as soon as reasonably practicable after it receives notice
of the claim, shall permit the Indemnifying Party to assume direction and
control of the defense of the claim (including the right to settle any claim
brought against the Indemnified Party upon prior written consent, which shall
not be unreasonably withheld), and shall give reasonable cooperation (at the
expense of the Indemnifying Party) in the defense of such claim.

                  13. ASSIGNABILITY

                  13.1 Generally. This Agreement may not be assigned by either
Party without the prior written consent of the other Party, and which shall not
to be unreasonably withheld; provided, however, that either Party may assign
this Agreement, in whole or in part, to an Affiliate or to a

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

                                      13

<PAGE>   14

successor of a Party in connection with the merger, consolidation or sale of all
or substantially all of such Party's assets or that portion of its business
pertaining to the subject matter of this Agreement (and upon doing so will
promptly notify the other Party in writing) (each such transaction being
referred to as an "Acquisition"); provided that the assigning Party remains
fully liable as obligated hereunder.

                  13.2 Technology of Acquirer. In the event of an Acquisition,
it is understood and agreed that no intellectual property rights or technology
of the acquirer shall be included within the subject matter licensed hereunder,
to the extent that such intellectual property or technology was owned or
controlled by the acquirer as of the date of the Acquisition, or was created or
obtained after the date of the Acquisition other than by employees of Array in
the course of performing the Optimization Program.

                  14. DISPUTE RESOLUTION PROCEDURES

                  14.1 Senior Executives Discussions. If a dispute arises
between Array and ICOS or with respect to matters other than the management of
the Optimization Program, either during or after the Optimization Period, such
dispute will be referred to the appropriate senior management in the area of
the dispute. If such senior management are unable to resolve such dispute, such
dispute will be referred to the Executive Vice President of Operations of ICOS
and the Chief Operating Officer of Array.

                  14.2 Injunctive Relief. Nothing contained in this Section 14
or any other provisions of this Agreement shall be construed to limit or
preclude a Party from bringing any action in any court of competent
jurisdiction for injunctive or other relief or to compel the other Party to
comply with its obligations hereunder.

                  15. NOTICES

                  Any notice required or permitted to be given hereunder shall
be deemed sufficient if sent by facsimile letter or overnight courier, or
delivered by hand to ICOS or Array at the respective addresses and facsimile
numbers as set forth below or at such other address and facsimile number as
either Party hereto may designate. If sent by facsimile letter, notice shall be
deemed given when the transmission is completed if the sender has a confirmed
transmission report. If a confirmed transmission report does not exist, then
the notice will be deemed given when the notice is actually received by the
person to whom it is sent. If delivered by overnight courier, notice shall be
deemed given when it has been signed for. If delivered by hand, notice shall be
deemed given when received.

                  if to Array, to:     Array BioPharma Corporation
                                       1885 33rd Street
                                       Boulder, Colorado  80301
                                       Fax number:  (303) 381-6697

                                      14

<PAGE>   15

                  if to ICOS, to:      ICOS Corporation
                                       22021 20th Avenue, S.E.
                                       Bothell, Washington  98021
                                       Attention: Legal Department
                                       Fax number:  (425) 398-8950

                  16. SURVIVAL

                  The provisions of Sections 5.1, 5.3, 6.1, 6.2, 6.3, 7.2, 7.4,
8.1, 8.2, 8.3, 9.4, 10, 11, 12, 13, and 16 shall survive the expiration and any
termination of this Agreement. In addition, Section 1 shall survive the
expiration or any termination of this Agreement to the extent necessary to
define terms in any other surviving Section. Notwithstanding the foregoing if
Array terminates this Agreement under Section 9.3 then Section 8.1 shall not
survive such termination by Array.

                  17. ADDITIONAL TERMS

                  17.1 Entire Agreement. This Agreement constitutes the entire
understanding between the Parties with respect to the subject matter hereto and
supersedes and replaces all previous negotiations, understandings,
representations, writings and contract provisions and rights relating hereof.

                  17.2 Amendment; No Waiver. No provision of this Agreement may
be amended except to the extent expressly allowed herein, revoked or waived
except by a writing signed and delivered by an authorized officer of each
Party. Any waiver on the part of either Party of any breach or any right or
interest hereunder shall not imply the waiver of any subsequent breach or
waiver of any other right or interest.

                  17.3 Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, each of which shall remain in full force
and effect.

                  17.4 Headings. The descriptive headings and numberings are
inserted for convenience of reference only and are not intended to be part of
or to affect the meaning of or interpretation of this Agreement.

                  17.5 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.

                  17.6 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Washington,
without regard to conflicts of laws and principles.

                                      15

<PAGE>   16

                  17.7 Further Assurances. At any time and from time to time
after the Effective Date, the Parties shall each do, execute, acknowledge and
deliver, and cause to be done, executed, acknowledged or delivered, all such
further acts, transfers, conveyances, or assignments as may be reasonably
required to carry out the transactions contemplated by this Agreement.

                  18. REPRESENTATIONS AND WARRANTIES

                  18.1 Authorization. All action on the part of each of Array,
ICOS and their respective officers, and directors necessary for the
authorization, execution and delivery of this Agreement and the performance of
all obligations of Array and ICOS, respectively, hereunder has been taken.

                  18.2 Rights to Intellectual Property. Each Party warrants
that it has the power to grant all of the rights granted and make such required
assignments, and to assume all of the obligations required, under this
Agreement.

                  18.3 Disclaimer of Warranties. EXCEPT AS OTHERWISE EXPLICITLY
PROVIDED IN THIS SECTION 18, ARRAY AND ICOS EXPRESSLY DISCLAIM ANY WARRANTIES
OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE
OPTIMIZATION PROGRAM, OPTIMIZATION COMPOUNDS, DERIVATIVES, PRODUCTS, ARRAY
TECHNOLOGY, ARRAY PATENTS OR OPTIMIZATION PATENTS, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY, NON-INFRINGEMENT, OR FITNESS FOR A
PARTICULAR PURPOSE.

IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as
of the Effective Date.

By:  /s/ David Snitman                  By:  /s/ W. Michael Gallatin, Ph.D.
    ------------------                       ------------------------------
David Snitman, Ph.D.                    W. Michael Gallatin, Ph.D.
V. P. of Business Development           Vice President and Scientific Director
and Chief Operating Officer

                                      16

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