Document:

Exhibit 10(n)

                               Pharmos Corporation
                         99 Wood Avenue South, Suite 301
                                Iselin, NJ 08830

Elkan R. Gamzu, Ph.D.
33 Nobscot Road
Newton, MA 02459

Re: Consulting Agreement

Dear Dr. Gamzu:

This letter  confirms the agreement of Pharmos  Corporation  (the  "Company") to
retain you as of  January  21,  2000 as a  non-exclusive  consultant  to provide
assistance and consulting  services to the company on matters generally relating
to the development of Pharmos' drug candidates, and specifically to dexanabinol.

In  consideration  for your  services,  the  Company  will pay you on a per diem
basis, as and when needed,  at the rate of $3,000 per day. In addition,  we will
request the Compensation  Committee of the Board of Directors to agree that your
upcoming grant of Director's options be issued as of the date of this agreement.

The Company agrees to reimburse you for your out-of-pocket  expenses incurred on
its behalf upon the submission of reasonably detailed statements of all fees and
expenses for which payment is requested,  with explanations,  within thirty (30)
days of  receipt  of such  requests.  All  requests  for  reimbursement  must be
submitted  within  six  months  after  the  conclusion  or  termination  of this
Agreement.

This  Agreement  will  terminate  on January 21,  2001,  subject to extension by
written agreement of the parties hereto.  Notices related to this Agreement will
be deemed to be duly given when received, if delivered by hand, or when sent, if
delivered Federal Express or other recognized  overnight courier or by certified
mail, return receipt requested.

You acknowledge  that in the course of your engagement by the Company,  you will
have  access  to  Proprietary   Information  about  the  Company's  affairs  and
prospects.  The treatment of  Proprietary  Information  shall be governed by the
Confidentiality  and  Non-Use  Agreement  between  Pharmos  and you  dated as of
November 1, 1999.

This  Agreement  and the  Confidentiality  and Non-Use  Agreement  represent the
entire agreement between the Company and you and supersede all prior agreements,
whether  written or oral.  This  agreement may only be modified by a letter duly
signed by each of the  parties  hereto and shall be  governed by the laws of the
State of New Jersey.

                                                      Very truly yours,

                                                      Pharmos Corporation

                                                      /s/ Gad Riesenfeld
                                                      ------------------
                                                      By: Gad Riesenfeld
                                                            President & COO

/s/ Elkan R. Gamzu
------------------
 Elkan R. Gamzu, Ph.D.
 33 Nobscot Road
 Newton, MA 02459Exhibit 10(o)

                               Pharmos Corporation
                         99 Wood Avenue South, Suite 301
                                Iselin, NJ 08830

                                                             As of April 7, 2000

Dr. Stephen C. Knight
Epix Medical, Inc.
71 Rogers Street
Cambridge, MA 02142

         Re:      Pharmos Corporation (the ACompany@)

Dear Stephen:

     I am  writing  to  confirm  our  agreements  relating  to your  outstanding
warrants and options. You currently have 3,750 unvested ten-year warrants, which
were granted in 1997 at an exercise price of $1.59 per share. These warrants are
scheduled to vest on February 12, 2001.

     In addition,  you have 11,250  ten-year  stock  options  which were granted
under the Company=s  1997 Stock Option Plan (the "Plan") in September 1998 at an
exercise  price of $1.75 per share,  of which 3,750 shares each are scheduled to
vest on September 17, 2000,  2001 and 2002. You also have 10,000  ten-year stock
options  granted under the Plan in April 1999 at an exercise  price of $1.25 per
share, of which 2,500 shares each are scheduled to vest on April 15, 2000, 2001,
2002 and 2003. The shares underlying both the warrants and options granted under
the Plan are currently registered.

     As we  discussed,  you have  informed  us that due to your  increased  time
commitments  at Epix and as a member  of other  boards,  you will be  unable  to
continue serving as a director of the Company. However, you have agreed to serve
as an unpaid  consultant  on financial  and  strategic  matters  following  your
resignation  through December 31, 2000. In connection  therewith,  you will make
yourself  available  by  telephone  to  Haim  Aviv  and to me and  other  senior
management.  If we request you to appear  periodically for meetings or the like,
we will  reimburse  you for  your  time  at a  mutually  agreed  upon  level  of
compensation.  In  consideration  for your  services,  all of your  warrants and
options,  as listed above,  will become fully vested as of the date hereof,  and
consistent  with their existing  terms,  will not expire until 90 days after the
termination  of your  status  as  consultant  with the  Company.  Further,  your
warrants  and  options  will  expire  one year  after the end of your  tenure as
director  regardless  of any death or  termination  provisions  provided  for in
either the warrant or option  agreements.  This letter  shall be deemed to amend
your Warrant  Agreement and Option Grants,  and except as provided herein,  such
Warrant Agreement and Option Grants remain in full force and effect.

     Please  acknowledge  your  acceptance  of  the  foregoing  by  signing  and
returning a copy of this letter to me.

                                          PHARMOS CORPORATION

AGREED AND ACCEPTED:
                                          /s/ Gad Riesenfeld
                                          ------------------
                                          By: Gad Riesenfeld
/s/ Stephen C. Knight                     President and Chief Operating Officer
---------------------
Stephen C. KnightExhibit 10(p)

                               Pharmos Corporation
                         99 Wood Avenue South, Suite 301
                                Iselin, NJ 08830

                                                            As of April 14, 2000

Mr. Marvin P. Loeb
Trimedyne, Inc.
2801 Barranca Parkway
Irvine, CA 92714-5114

         Re:      Pharmos Corporation (the ACompany@)

Dear Marvin:

     I am writing to confirm our agreement relating to your outstanding warrants
and options.  You currently have 5,000 unvested  ten-year  warrants,  which were
granted in 1997 at an  exercise  price of $1.59 per share.  These  warrants  are
scheduled to vest on February 12, 2001.

     In addition,  you have 11,250  ten-year  stock  options  which were granted
under the Company=s  1997 Stock Option Plan (the "Plan") in September 1998 at an
exercise  price of $1.75 per share,  of which 3,750 shares each are scheduled to
vest on September 17, 2000,  2001 and 2002. You also have 10,000  ten-year stock
options  granted under the Plan in April 1999 at an exercise  price of $1.25 per
share, of which 2,500 shares each are scheduled to vest on April 15, 2000, 2001,
2002 and 2003. The shares underlying both the warrants and options granted under
the Plan are currently registered.

     As we  discussed,  although  you  have  informed  us that  you  will not be
standing for re-election as director at the next annual meeting, you have agreed
to serve as an unpaid  consultant  on financial and  strategic  matters  through
March 31, 2001. In  connection  therewith,  you will make yourself  available by
telephone to Haim Aviv and to me and other senior management.  If we request you
to appear  periodically for meetings or the like, we will reimburse you for your
time at a mutually agreed upon level of compensation.  In consideration for your
services,  all of your  warrants and options,  as listed above (an  aggregate of
26,250  warrants/options),  will become fully vested on your last day of service
as a director,  and consistent with their existing terms,  will not expire until
90 days after the  termination  of your status as  consultant  with the Company.
This letter shall be deemed to amend your Warrant  Agreement and Option  Grants,
and except as provided herein,  such Warrant  Agreement and Option Grants remain
in full force and effect.

     Please  acknowledge  your  acceptance  of  the  foregoing  by  signing  and
returning a copy of this letter to me.

                                          PHARMOS CORPORATION

AGREED AND ACCEPTED:
                                          /s/ Gad Riesenfeld
                                          ------------------
                                          By: Gad Riesenfeld
/s/ Marvin P. Loeb                        President and Chief Operating Officer
------------------
Marvin P. LoebExhibit 10.44

	

Exhibit 10.44

ALLIANCE
AGREEMENT — NATRECOR® (NESIRITIDE)

This Agreement (the
“Agreement”) is made as of January 10, 2001 by and between Scios Inc.,
a Delaware corporation whose headquarters is located at 820 W. Maude Avenue,
Sunnyvale, CA 94085 (“Scios”), Innovex L.P., a limited partnership
whose address is 10 Waterview Blvd., Parsippany, NJ 07054
(“Innovex”), and PharmaBio Development, Inc., a North Carolina
corporation whose address is 4709 Creekstone Drive, Durham, NC 27703
(“PharmaBio”). 

Background
and Overview of the Alliance

	A.		
Scios and Innovex have agreed that as set forth herein Innovex will provide
exclusive sales and marketing services in the United States (including Puerto
Rico) for Scios’ product Natrecor® (nesiritide), as set forth herein. 

	B.		
Scios and PharmaBio have agreed as set forth herein that PharmaBio will invest
funds in Scios and issue a loan commitment to Scios in exchange for royalty
payments tied to certain future sales of the Product and the issuance to
PharmaBio of certain warrants to purchase Scios’ common stock. 

	C. 		Scios
has agreed as set forth herein to grant to Quintiles, Inc. (“Quintiles CDS”) a preferred
provider relationship with respect to certain future clinical development activities of
Scios. 

	

The parties agree as
follows:

	1.0 		Definitions 

	1.1 		“Affiliate”
shall mean any corporation or business entity controlled by, controlling, or under common
control with a party to this Agreement. For this purpose, “control” shall mean direct or
indirect beneficial ownership of at least fifty percent (50%) of the voting stock or
income interest in such corporation or other business entity, or such other relationship
as, in fact, constitutes actual control. 

	1.2 		“Approval
Date“shall mean the date on which the FDA first grants final approval to Scios to
sell the Product in the United States.  

	1.3 		“FDA”
shall mean the US Food and Drug Administration. 

	1.4 		“Natrecor”
means Scios’ product Natrecor(R)(nesiritide) which is pending approval before the FDA. 

	

1 

	

	1.5 		“Net
Sales” means the amount billed by Scios or an Affiliate for sales of Product to an
unrelated Third Party in the United States and Canada less: (i) discounts, including cash
and quantity discounts, charge-back payments and rebates granted to managed health care
organizations or to federal, state and local governments, their agencies, and purchasers
and reimbursers or to trade customers, including but not limited to, wholesalers and
chain and pharmacy buying groups, (ii) credits or allowances actually granted upon
claims, damaged goods, rejections or returns of such Products, including recalls,
regardless of the Party requesting such, (iii) freight, postage, shipping and insurance
charges actually allowed or paid for delivery of Product, to the extent billed, (iv)
taxes, duties or other governmental charges levied on, absorbed or otherwise imposed on
sale of such Product, including without limitation value-added taxes, or other
governmental charges otherwise measured by the billing, when included in billing, as
adjusted for rebates and refunds, and (v) bad debts related to Product sales (defined as
any bills unpaid for 365 days after due). Provided, however, in no event shall Net Sales
be less than [*****] of gross sales for the Product. 

	1.6 		“Fees”
shall mean the fair market value compensation payable to Innovex in return for Services
determined as provided in Exhibit A. Fees shall not include Pass-Through Expenses. 

	1.7 		“Launch
Date” shall mean the date upon which Product is first shipped in the United States
for commercial sale after FDA approval.  

	1.8 		“Product”
shall mean Natrecor (nesiritide) in any formulation and for any and all indications. 

	1.9 		“Pass-Through
Expenses” shall mean the reasonable and necessary out-of-pocket costs and expenses
actually incurred by Innovex in providing Services, in accordance with a mutually agreed
written budget. 

	1.10 		“Quintiles
Group” shall mean collectively Innovex, PharmaBio and Quintiles CDS. 

	1.11 		“Services” shall
mean the responsibilities, obligations and activities which are to be performed by
Innovex, respecting the Product as they are summarized in Exhibit A.  

	1.12 		“SF
Commencement Date” shall mean the first date upon which Innovex provides Sales
Representatives hereunder.  

	2.  		Agreement
between Scios and Innovex Regarding Sales and Marketing  

	2.1		
Innovex agrees to perform the Services for Scios through the SF End Date (as
defined in Exhibit A), and Scios agrees to engage Innovex to provide the
Services during such period, unless the Services are terminated earlier as
provided herein or in Exhibit A attached hereto. 

	

[*****] A CONFIDENTIAL PORTION OF
THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. 

2 

	

	2.2 		Scios
agrees to pay for the Services provided by Innovex as described in Exhibit A. 

	2.3		
Performance of the Services will be overseen by a joint steering committee,
which shall meet quarterly and consist of representatives of each of Scios on
the one hand and Innovex on the other (the “JSC”). The JSC shall have
overall strategic responsibility for managing the commercialization of the
Product, including, without limitation: (i) oversee planning, marketing and
sales of Product, including adopting a marketing plan; (ii) monitoring the
pricing of the Product and review and approve any proposed changes to such
pricing; (iii) coordinating training activities for the Innovex sales
force; (iv) monitoring the delivery of promotional materials and samples to
the Innovex sales force; (v) receiving and supplying the parties’
sales, pricing, and financial reports pertaining to the sales and marketing
efforts; and (vi) facilitating the flow of information among the parties,
including coordinating sales activity with manufacturing schedules and
distribution. Scios and Innovex may organize sub-committees of the JSC as
mutually agreed. Each party will pay the incidental and out-of-pocket costs
associated with participation of its employees in the JSC. In the event the JSC
is unable to agree on any matter, Scios will make the final determination after
due consideration of input from Innovex. The JSC will not have the authority to
alter or amend any term of this Agreement or of the Exhibits hereto. 

	 	
Prior
to the Launch Date, Scios will perform a formulary SWOT analysis, pricing study, study to
identify and develop opinion leaders, and awareness tracking study for the Product. These
studies will be discussed in the JSC and the Quintiles Group will be given the first and
preferred opportunity to negotiate with Scios to perform such studies; provided that: (i)
the applicable services fall with the areas of recognized expertise of a member of the
Quintiles Group (or an Affiliate), (ii) the Quintiles Group is prepared to provide such
services at competitive rates and makes its proposal on a competitive time schedule,
(iii) the Quintiles Group is capable of providing such services in a professional and
timely manner to meet Scios’ timeline, and (iv) there is not a conflict of interest.

	2.4. 		Scios
will retain all intellectual property rights in the Product. 

	2.5		
Scios will be responsible for all regulatory affairs related to the Product,
including: (i) regulatory filings and compliance, (ii) communicating with the
FDA, (iii) managing product recalls, and (iv) reporting adverse events. Scios
will also be responsible for all further development activities for the Product,
including the development of additional indications and further clinical trials. 

	2.6		
Scios will be responsible for all manufacturing, labeling, distribution, patent,
copyright trade secret and trademark rights relating to Product. Scios shall be
responsible for booking sales, fulfilling orders, and shall warehouse and
distribute the Product and perform all related services. Scios shall maintain an
adequate inventory of the Product to support the Innovex sales force’s
achievement of sales at a level at least equal to the forecasted sales. 

	

3 

	

	2.7		
Scios shall develop and
own all rights in all written sales, promotion and advertising materials for the
Product and all trademarks related to the Product. 

	2.8		
The JSC will oversee development of the initial and all ongoing training
programs for the Innovex sales force. The Innovex sales force shall be required
to complete such training programs, at the expense of Scios as set forth in
Exhibit A. 

	2.9		
If in any calendar month that begins more than 90 days after the later of the
Approval Date or the SF Commencement Date, the average number of field sales
representatives actually working is less than [*****]% of the number specified by
Scios to be working (the “Staffing Target”), then the daily rate paid
by Scios for each Innovex Sales Representative and Field Coordinators as
described in Exhibit A shall be reduced by [*****]% for the period for which
Innovex has failed to meet the Staffing Target. Scios may not specify an
increase of sales representatives by [*****]% or more without 60 days advance
notice to Innovex. 

	2.10		
By 90 days notice to Innovex, which shall not be effective earlier than the end
of Year Three (as defined in Exhibit A), Scios may at its election take
over all or any portion of the sales force upon the payment to Innovex [*****]
per Innovex Sales Representative actually hired by Scios. In addition by notice
from Scios given at the time of Scios gives notice that it is terminating its
relationship with Innovex for the sales force due to Innovex’s breach in
providing the Services at the time of the actual termination of Services, Scios
may at its election take over all or any portion of the sales force upon the
payment to Innovex [*****] per Innovex Sales Representative actually hired by
Scios. Following any such election by Scios, Innovex shall take all actions
necessary to transfer the Innovex employees in the Innovex sales force to Scios,
together with their existing support equipment such as computers and supplies,
all such equipment and supplies to be transferred in its “as is”
condition and under the terms and conditions any relationship that Innovex may
have with a vendor. In addition, Innovex shall provide all reasonable assistance
to effect such transfer of employment and equipment and supplies. Exercise of
this right shall not affect payments due to PharmaBio under Section 3 below or
the rights of Quintiles CDS under Section 4. Within 60 days prior to the actual
hiring by Scios, Scios shall provide Innovex with a complete list of all the
sales force personnel Scios desires to hire. 

	2.11		
No provision of this Agreement shall be deemed to create or imply any contract
of employment between Scios and any employee of Innovex. All persons performing
Services shall be employees of Innovex, or subcontractors engaged by Innovex
with prior consent of Scios, and shall not be entitled to any benefits
applicable to employees of Scios. 

	

[*****] A CONFIDENTIAL PORTION OF
THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. 

4 

	

	2.12		
Innovex will (i) maintain all necessary personnel and payroll records for
Innovex employees; (ii) compute wages and withhold applicable Federal, State and
local taxes and Federal FICA payments for Innovex employees; (iii) remit Innovex
employee withholdings to the proper governmental authorities and make employer
contributions for Federal FICA and Federal and State unemployment insurance
payments; (iv) pay net wages and fringe benefits, if any, directly to Innovex
employees; and (v) provide for employer’s liability and Workers’
Compensation insurance coverage. 

	2.13		
Innovex shall be responsible for management of all employer obligations in
connection with Innovex employees who perform the Services. Innovex employees
shall remain exclusively under the direct authority and control of Innovex.
Scios may be involved in providing training, direction or equipment to an
Innovex employee only in the manner and to the extent specifically described in
a Work Order. The employer obligations of Innovex shall include: (i) human
resource issues, including establishment of employee policies, and
administration of health and benefits plans, 401(k) plan, and other employee
benefit plans; (ii) work performance and work behavior issues, including
probationary period, periodic and annual appraisals, employee discipline and
termination; (iii) administration of systems for time-keeping, payroll and
employee expense reimbursement; (iv) day to day management of employment issues
in connection with performance of the Services. 

	3.  		Agreement
Between Scios and PharmaBio on Funding and Royalty.  

	3.1		
PharmaBio will support the commercialization of the Product by funding $30
million of the sales and marketing expenses incurred by Scios (including the
costs of developing additional data to use for marketing purposes through
clinical trials or market research). Of this total, [*****] will be
paid by PharmaBio to Scios within 10 days of the Approval Date and [*****]
will be paid to Scios in quarterly installments as set forth in Schedule 3.1 on
the last day of the eight calendar quarters following the later of the Approval
Date or the SF Commencement Date. In addition, PharmaBio shall loan up to $5
Million to Scios on the following terms and other commercially reasonable terms
as agreed by the parties, including, without limitation, events of default: 

		•		The
loan may not be drawn down by Scios earlier than 12 months after the Approval Date and
may not be drawn down more than 42 months after the Approval Date.  

		•		The
loan will bear simple interest at the greater of [*****]  

		•		The
loan is repayable by Scios not later than 48 months after the Approval Date.  

	

[*****] A CONFIDENTIAL PORTION OF
THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. 

5 

	

	3.2		
In exchange for PharmaBio’s funding commitments set forth in Section 3.1,
Scios will pay PharmaBio a royalty on Net Sales of the Product occurring in the
United States (including Puerto Rico) and Canada during the relevant Royalty
Periods (as defined below). When used herein, the different “Royalty
Periods” shall be defined as follows: (i) Royalty Period 1 shall mean the
six-month period beginning on the Launch Date; (ii) Royalty Period 2 shall mean
the twelve-month period following Royalty Period 1; (iii) Royalty Period 3 shall
mean the twelve-month period following Royalty Period 2; (iv) Royalty Period 4
shall mean the twelve-month period following Royalty Period 3; (v) Royalty
Period 5 shall mean the twelve-month period following Royalty Period 4; (vi)
Royalty Period 6 shall mean the twelve-month period following Royalty Period 5;
and (vii) Royalty Period 7 shall mean the twelve-month period following Royalty
Period 6. The royalty payments payable by Scios to PharmaBio with respect to
Royalty Periods 3 through 7 are as follows: 

	Royalty Period
	Royalty on Net Sales

	3	 	[*****]	 
	4	 	[*****]	 
	5	 	[*****]	 
	6	 	[*****]	 
	7	 	[*****]	 

	 	
In
addition, with respect to Royalty Periods 1 and 2, Scios will pay PharmaBio a [*****]
royalty on incremental Net Sales of the Product over the following target levels: (i)
target of [*****] Million for Royalty Period 1; and (ii) target of [*****] Million for
Royalty Period 2

	 	
The
royalty payments under this Section 3.2 shall be paid not later than thirty (30) days
following the end of each quarter during the Royalty Period. 

	 	
The
parties acknowledge that PharmaBio’s agreement to the royalty structure described in this
Section 3.2 is based upon the assumption that Scios will provide a sales force of not
less than a monthly average of [*****] people detailing the Product on an exclusive, full
time basis during the first thirty-six months following the later of the SF Commencement
Date and the Approval Date (the “Minimum Sales Force Level”). If, at any time during such
36 month period, Scios reduces the Product sales force below the Minimum Sales Force
Level for a period of more than 30 days, then Scios and PharmaBio will negotiate in good
faith to restructure PharmaBio’s commitments under Section 3.1 and the corresponding
royalty payments under this Section 3.2. If the parties are unable to mutually agree to
such restructuring, then PharmaBio may, at its sole discretion, elect to (i) terminate by
notice to Scios any future funding obligations under Section 3.1; (ii) terminate by
notice to Scios the Line of Credit and demand full repayment of all outstanding amounts
within 60 days; and (iii) receive a royalty on Net Sales payable by Scios to Innovex
equal to [*****] of Net Sales (in lieu of the rate provided above) during the portion of
the 36 month period following the later of the SF Commencement Date and the Approval Date
that Scios is not electing to maintain the Minimum Sales Force Level and the then
operating Royalty Period shall be suspended for such time period and restarted when Scios
increases the sales force to the Minimum Sales Force Level. For the avoidance of doubt,
with respect to sub-item (iii) in the preceding sentence, (i) the Royalty Period shall
restart at the same time point in the Royalty Period it was suspended such that PharmaBio
enjoys the full length of the seven Royalty Periods described in Section 3.1 (plus any
suspension period), and (ii) regardless of the size of the sales force at the date 36
months following the later of the SF Commencement Date and the Approval Date, the Royalty
Period will restart at the time point it was suspended period. The rights set forth in
the preceding sentence shall be in addition to any rights available to Innovex. The
suspension referenced in this paragraph shall not apply to the extent the sales force
reduction is caused by Innovex’s failure to staff the sales force at the Minimum Sales
Force Level.

	

[*****] A CONFIDENTIAL PORTION OF
THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. 

6 

	

	3.3		
Each Party shall keep or cause to be kept such records as are required to
determine, in a manner consistent with generally accepted accounting principles
in the United States, the sums or credits due under this Agreement. Upon the
written request (and expense) of either party, the other party shall permit an
independent certified public accountant appointed by such party and reasonably
acceptable to the other party, accompanied by representatives of the financial
department of such party at reasonable times and upon reasonable notice, to
examine only those records as may be necessary to determine the correctness or
completeness of any report or payment made under this Agreement. Results of any
such examination shall be (i) limited to information relating to the Product,
(ii) made available to both parties and (iii) subject to the confidentiality
protections set forth herein. The party requesting the audit shall bear the full
cost of the performance of any such audit, unless such audit discloses a
variance of more than [*****] from the amount of the original report,
royalty or payment calculation. In such case, the party being audited shall bear
the full cost of the performance of such audit. 

	3.4		
As further consideration for PharmaBio’s funding commitments, Scios grants
PharmaBio warrants to purchase 700,000 shares of Scios Common Stock at a $20
price per share. The terms and form of the warrants shall be substantially in
the form attached as Exhibit B. 

	3.5		
PharmaBio’s future funding commitments shall terminate in the event of:
(i) withdrawal of the Product from the U.S. market for any reason; or
(ii) Net Sales in any two consecutive calendar quarters are lower than the
Net Sales in the immediately preceding two consecutive calendar quarters due to
factors not reasonably within the control of the Quintiles Group, including, but
not limited to, manufacturing and inventory problems or shortfalls, material
pricing changes in the Product, or significant unforeseen new information
regarding the safety or efficacy of the Product. Scios has made available to a
member of the Quintiles Group all material information known to the executive
officers of Scios covering forecasted sales of the Product. 

	

[*****] A CONFIDENTIAL PORTION OF
THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. 

7 

	

	4. 		Grant
of Preferred Provider Relationship by Scios to Quintiles CDS.  

	4.1		
Scios hereby grants to Quintiles CDS a preferred provider relationship, whereby
Quintiles shall have the first and preferred opportunity to negotiate with Scios
to provide clinical development services in the United States regarding the
Product that Scios has, in its sole discretion, determined to outsource for
performance period ending three years following the Approval Date; provided
that: (i) the applicable services fall with the areas of recognized expertise of
Quintiles CDS (or its affiliates), (ii) Quintiles CDS provides such services at
competitive rates and makes its proposal on a competitive time schedule, and
(iii) Quintiles CDS is capable of providing such services in a professional and
timely manner to meet Scios’ timeline. Examples of the types of clinical
development services subject to the preferred provider relationship include:
(i) Phase IIIb/iv large simple trial to support the continued growth and
success of the Product, and (ii) trial of the Product for intermittent
outpatient infusion indication. 

	5.  		Confidentiality
and Ownership of Information.  

	5.1		
Scios on the one part and members of the Quintiles Group on the other part each
acknowledges that, in the course of performing its obligations hereunder, it may
receive information from the other party which is proprietary to the disclosing
party and which the disclosing party wishes to protect from public disclosure
(“Confidential Information”). Each receiving party agrees to retain in
confidence, during the term of any of the Agreements, and any subsequent
renewals thereof, and thereafter for a period of [*****], all
Confidential Information disclosed to it by or on behalf of the other party, and
that it will not, without the written consent of such other party, use
Confidential Information for any purpose other than the purposes indicated
herein. These restrictions shall not apply to Confidential Information which:
(i) is or becomes public knowledge (through no fault of the receiving party);
(ii) is made lawfully available to the receiving party by an independent third
party; (iii) is already in the receiving party’s possession at the time of
receipt from the disclosing party (and such prior possession can be properly
demonstrated by the receiving party); (iv) is independently developed by the
receiving party and/or Affiliates (and such independent development can be
properly demonstrated by the receiving party); or (v) is required by law,
regulation, rule, act or order of any governmental authority or agency to be
disclosed by the receiving party, provided, however, if reasonably possible,
such receiving party gives the disclosing party sufficient advance written
notice to permit it to seek a protective order or other similar order with
respect to such Confidential Information and, thereafter, the receiving party
discloses only the minimum Confidential Information required to be disclosed in
order to comply. 

	5.2		
Members of the Quintiles Group on the one hand and Scios on the other hand shall
limit disclosure of the other party’s Confidential Information to only
those of their respective officers, representatives, agents and employees
(collectively “Agents”) who are directly concerned with the
performance of this Agreement and have a legitimate need to know such
Confidential Information. Upon receipt of notice of termination by Scios,
Innovex shall return all Scios Confidential Information to Scios. 

	

[*****] A CONFIDENTIAL PORTION OF
THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. 

8 

	

	5.3		
All Scios patents, trade secrets, copyrights, trade names, trademarks, service
marks, marketing materials, proprietary materials or intellectual property and
all improvements to any of the foregoing (collectively “Scios
Property”) disclosed, used, improved, modified or developed in connection
with the Services provided pursuant to this Agreement shall remain the sole and
exclusive property of Scios, and Innovex’s rights to use such Scios
Property shall be limited to those permitted by this Agreement. 

	5.4		
Scios acknowledges that Innovex possesses certain inventions, processes,
know-how, trade secrets, improvements, other intellectual properties and other
assets, including but not limited to analytical methods, procedures and
techniques, computer technical expertise and software, and business practices,
including, but not limited to the Innovex Territory Management System (ITMS),
which have been independently developed by Innovex (collectively “Innovex
Property”). Any Innovex Property or improvements thereto which are
disclosed, used, improved, modified or developed by Innovex under or during the
term of this Agreement shall remain the sole and exclusive property of Innovex. 

	6. 		Independent
Contractor Relationship. 

	 	
For
the purposes of this Agreement, Scios on the one part and members of the Quintiles Group
on the other part are independent contractors and nothing contained in this Agreement
shall be construed to place them in the relationship of partners, principal and agent,
employer and employee or joint venturers. Neither Scios nor any member of the Quintiles
Group shall have the power or right to bind or obligate the other party, nor shall either
party hold itself out as having such authority.

	7. 		Regulatory
Compliance. 

	7.1		
In carrying out the Services, Innovex and Scios agree to comply, to the extent
applicable, with all laws, rules and regulations, including, but not limited to
the Federal Equal Employment Opportunity Act, Title VII of the Civil Rights Act
of 1964, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, the Fair Labor Standards Act, the Immigration Reform and
Control Act of 1986, the Food, Drug and Cosmetic Act, Section 1128B(b) of the
Social Security Act (42 U.S.C. §1320a-7b(b)), and the Prescription Drug
Marketing Act. 

	

9 

	

	7.2		
If in performing the Services Innovex or its employees become aware of adverse
drug experience reports involving the use of the Product, while performing any
Services in connection with the Product, they shall immediately notify Scios in
accordance with Scios procedures. Scios shall deliver to Innovex a written copy
of such Scios notification procedures. 

	7.3		
Scios shall be solely responsible for responding to any government or regulatory
agency concerning use or marketing of Scios Products, except where (i) such
responsibility is expressly transferred to Innovex; or (ii) to the extent any
notice or reporting requirement is by law made directly applicable to Innovex.
Innovex shall promptly notify Scios of any information Innovex receives
regarding any threatened or pending action by a government or regulatory agency
that may affect the Scios Products. Innovex shall, at the request of Scios,
cooperate with Scios in order to respond, or in formulating a procedure for
taking appropriate action. In no event shall Innovex respond to any agency
without the prior consent of Scios, unless compelled to do so by law. 

	8. 		Return
of Scios Materials. 

	 	
Within
sixty (60) days after the completion of Services by Innovex, or upon termination of the
Agreement, Confidential Information, Scios Property and other data owned by Scios,
regardless of the method of storage or retrieval, shall at Scios’s request either be
delivered to Scios in such form as is then currently in the possession of any member of
the Quintiles Group, or disposed of, at the direction and written request of Scios,
unless such materials are otherwise required to be stored or maintained by Innovex as a
matter of law or regulation. Scios shall pay the costs associated with any of the above
options. Each company in the Quintiles Group reserves the right to retain, at its own
expense and subject to the confidentiality provisions herein, one copy of all materials
provided in connection with performance of this Agreement, to be used to satisfy
regulatory requirements or to resolve disputes regarding this Agreement. 

	9. 		Indemnification
and Liability Limits. 

	9.1		
Members of the Quintiles Group, jointly and severally, shall indemnify, defend
and hold harmless Scios, its Affiliates and its and their respective directors,
officers, employees and agents from and against any and all losses, claims,
actions, damages, liabilities, penalties, costs and expenses (including
reasonable attorneys’ fees and court costs) (collectively,
“Losses”), resulting from any (i) breach by Innovex or PharmaBio (or
either of their employees) of its obligations hereunder; (ii) willful misconduct
or negligent acts or omissions of Innovex or its employees; and (iii) violation
by Innovex or its employees of any municipal, county, state or federal laws,
rules or regulations applicable to the performance of Innovex’s obligations
under this Agreement except to the extent such Losses are determined to have
resulted from the negligence or willful misconduct of Scios or its employees. 

	

10 

	

	9.2		
Scios shall indemnify, defend and hold harmless members of the Quintiles Group
and their respective directors, officers, employees and agents from and against
any and all Losses resulting from (i) any third party claim arising from the
manufacture, storage, packaging, production, transportation, distribution, use,
sale or other disposition of the Products by Scios or its agents; (ii) breach by
Scios or its employees of its obligations hereunder; (iii) willful misconduct or
negligent acts or omissions of Scios or its employees; and (iv) violation by
Scios or its employees of any municipal, county, state or federal laws, rules or
regulations applicable to the performance of Scios’s obligations under this
Agreement, except to the extent such Losses are determined to have resulted from
the negligence or willful misconduct of any member of the Quintiles Group or any
of their employees. 

	9.3		
The party seeking indemnification hereunder (the “Indemnified Party”)
shall: (a) give the party obligated to indemnify (the “Indemnifying
Party”) prompt written notice of any such claim or law suit (including a
copy thereof); (b) Indemnified Party and its employees shall fully cooperate
with Indemnifying Party and its legal representatives in the investigation and
defense of any matter the subject of indemnification, which defense shall be
managed by the Indemnifying Party; and (c) Indemnified Party shall not
unreasonably withhold its approval of the settlement of any such claim,
liability, or action by Indemnifying Party covered by this indemnification
provision. 

	9.4		
Neither Innovex, PharmaBio, or Scios, nor any of such party’s Affiliates,
directors, officers, employees, subcontractors or agents shall have, under any
legal theory (including, but not limited to, contract, negligence and tort
liability), any liability to any other party hereto for any loss of profits,
opportunity or goodwill, or any type of special, incidental, indirect or
consequential damage or loss, in connection with or arising out of this
Agreement or the Services performed by Innovex hereunder or the funding
commitments of PharmaBio or the activities of Scios hereunder. 

	9.5		
Innovex shall not be liable to Scios for claims or losses arising out of the
statements or representations of Innovex employees with respect to the Product
to the extent the statements or representations conform to the written or
printed statements or representations made to Innovex or Innovex employees by
Scios with respect to the Product. 

	10. 		Insurance. 

	 	
Innovex
and Scios shall each, at its own cost and expense, obtain and maintain in full force and
effect, the following insurance during the Term (and any subsequent renewals thereof)
sufficient insurance to insure its obligations under this Agreement, including, but not
limited to: (i) worker’s compensation insurance in accordance with the statutory
requirements of each state in which the Services are to be performed (not required for
Scios); (ii) employer’s liability insurance with a minimum limit of [*****];
(iii) comprehensive general liability insurance, including contractual liability, with a
minimum limit of [*****], combined single limit per occurrence; and (iv)
comprehensive auto liability, covering bodily injury and property damage, for owned,
hired or non-owned automobiles with a minimum limit of [*****], combined
single limit per occurrence (not required for Scios); and (v) professional errors and
omissions, with a minimum limit of [*****] per occurrence (not required by
Scios). In addition, Scios will make provision for product liability insurance in a
comparable amount to its current clinical trial insurance prior to the Launch Date. Upon
request, each of Innovex and Scios shall provide the other with an original signed
certificate of insurance evidencing all coverage herein required and showing the other as
an additional insured under such insurance, within thirty (30) days after such request.
The certificate must provide that thirty (30) days prior written notice of cancellation
or material change in insurance coverage will be provided.

	

[*****] A CONFIDENTIAL PORTION OF
THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. 

11 

	

	11. 		Review
of Work; Audit. 

	 	
During
the term of this Agreement, Innovex will permit Scios’s representative(s) (unless such
representatives are competitors of Innovex), at reasonable times and in a reasonable
manner, and at Scios’s expense, to (i) examine the work performed hereunder to determine
that the Services are being conducted in accordance with the agreed terms, or (ii) audit
the financial records related to Innovex’s performance of the Services.

	12. 		Notices. 

	 	
Any
notice required or permitted to be given by either party shall be in writing. All notices
shall be to the parties and addresses listed below, and shall be sufficiently given (i)
when received, if delivered personally or sent by facsimile transmission, or (ii) one
business day after the date mailed or sent by an internationally recognized overnight
delivery service.

	  	If to Innovex:	Innovex LP
c/o President, Innovex America Holding Company
10 Waterview Blvd.
Parsippany, NJ 07054
Attention: President
Fax: 973-257-4581
	 
	 	With a copy to:	General Counsel
Innovex America Holding Company
10 Waterview Blvd.
Parsippany, NJ 07054
Fax: 973-257-4581

	

12 

	

	  	If to PharmaBio:	PharmaBio Development Inc.
4709 Creekstone Drive
Durham, NC 27703
Attention: President
Fax: 919-998-2090
	 
	 	With a copy to:	General Counsel
PharmaBio Development Inc.
4709 Creekstone Dr8ive
Durham, NC 27703
Fax: 919-998-2090
	 
	 	If to Scios:	Scios Inc.
820 West Maude Ave.
Sunnyvale, CA 94085
Attention: President
Fax: 408-616-8312
	 
	 	With a copy to:	General Counsel
Scios Inc.
749 N. Mary Avenue
Sunnyvale, CA 94085
Fax: 408-616-8319

	13. 		Assignment. 

	 	
No
party may assign any of its rights or obligations under this Agreement to any third party
without the written consent of the other party, except that a party may assign its rights
and obligations as part of a merger in which it is not the surviving entity.

	14. 		General
Provisions 

	14.1		
This Agreement shall be construed, governed, interpreted, and applied in
accordance with the laws of the State of New York, without giving effect to the
principles of conflict of laws. 

	14.2		
The rights and obligations of any party under this Agreement, which by intent or
meaning have validity beyond such termination (including, but not limited to,
rights with respect to confidentiality, mutual indemnification and liability
limitations) shall survive the termination of this Agreement. 

	14.3		
This Agreement contains the entire understandings of the parties with respect to
the subject matter herein, and cancels all previous agreements (oral and
written), negotiations and discussions, dealing with the same subject matter.
The parties, from time to time during the term of this Agreement, may modify any
of the provisions hereof only by an instrument in writing duly executed by the
parties. 

	

13 

	

	14.4		
No failure or delay on the part of a party in either exercising or enforcing any
right under this Agreement will operate as a waiver of, or impair, any such
right. No single or partial exercise or enforcement of any such right will
preclude any other or further exercise or enforcement thereof or the exercise or
enforcement of any other right. No waiver of any such right will have effect
unless given in a signed writing. No waiver of any such right will be deemed a
waiver of any other right. 

	14.5		
If any part or parts of this Agreement are held to be illegal, void or
ineffective, the remaining portions of this Agreement shall remain in full force
and effect. If any of the terms or provisions are in conflict with any
applicable statute or rule of law, then such term(s) or provision(s) shall be
deemed inoperative to the extent that they may conflict therewith, and shall be
deemed to be modified or conformed with such statute or rule of law. In the
event of any ambiguity respecting any term or terms hereof, the parties agree to
construe and interpret such ambiguity in good faith in such a way as is
appropriate to ensure its enforceability and viability. 

	14.6		
The headings contained in this Agreement are used only as a matter of
convenience, and in no way define, limit, construe or describe the scope or
intent of any section of this Agreement. 

	14.7		
The parties intend to negotiate and execute documents providing additional
detail as to certain of the arrangements and responsibilities of the parties
that is customary in the industry for arrangements of the type included herein.
However, this Agreement is intended to be binding upon and fully enforceable by
any party as to its rights hereunder. In the event that the relevant parties are
not able to agree on such additional terms, and such failure creates ambiguities
in the operation of the relationship contemplated herein, then the parties shall
use the Dispute resolution mechanism described below to establish such terms,
provided that no Dispute resolution can mandate terms in conflict with the
express provisions of this Agreement. The individuals signing below are
authorized and empowered to bind the parties to the terms of this Agreement. 

	15 		Dispute
Resolution: 

	15.1 		Internal
Review. In the event that a dispute, difference or question arises pertaining to any
matters which are the subject of this Alliance Agreement, including but not limited to, a
dispute in connection with finalizing the definitive Alliance documentation (“Dispute”),
and either party so requests in writing, prior to the initiation of any formal legal
action, the Dispute will be submitted to the JSC, which will use its good faith efforts
to resolve the Dispute within ten (10) days. If the JSC is unable to resolve the Dispute
in such period, the JSC will refer the Dispute to the Chief Executive Officers of Scios
and Quintiles Transnational Corp. For all Disputes referred to the Chief Executive
Officers, the Chief Executive Officers shall use their good faith efforts to resolve the
Dispute within ten (10) days after such referral. 

	

14 

	

	15.2		
Arbitration. If the parties are unable to resolve disputes under 15.1, then
either party can seek binding arbitration to be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, sitting in
New York City, New York, as in effect at the time of the arbitration hearing,
such arbitration to be completed in a sixty (60) day period. The arbitration
panel will be composed of three arbitrators, one of whom will be chosen by
Scios, one by the Quintiles Group (as a unit), and the third by the two so
chosen. If both or either of Scios or the Quintiles Group fails to choose an
arbitrator or arbitrators within fourteen (14) days after receiving notice of
commencement of arbitration, or if the two arbitrators fail to choose a third
arbitrator within fourteen (14) days after their appointment, the American
Arbitration Association shall, upon the request of both or either of the parties
to the arbitration, appoint the arbitrator or arbitrators required to complete
the panel. The decision of the arbitrators shall be final and binding on the
parties, and specific performance may be ordered by any court of competent
jurisdiction. 

	15.3		
Costs The parties shall bear their own costs in preparing for and participating
in the resolution of any dispute under this Article, and the costs of
mediator(s) and arbitrator(s) shall be equally divided between the parties. 

	

15 

	

	 	
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto through their
duly authorized officers on the date(s) set forth below. 

	INNOVEX LP
by: Innovex America Holding
Company, its General Partner	SCIOS INC.,
a Delaware corporation
	 
	By:      /s/ John E. Monahan
                ——————
—————————	By:      /s/ John H. Newman
            ———————
————————
	 
	Name: John E. Monahan
            —————————————
——	Name: John H. Newman
            —————————————
——
	 
	Title:   President 
            ———————————
————	Title:   Senior Vice President
            —————————
——————
	 
	PHARMABIO DEVELOPMENT, INC.	
	 
	By:      /s/ Ronald J. Wooten
            ——————
—————————	
	 
	Name: Ronald J. Wooten
            —————————————
——	
	 
	Title:   President
            ———————————
————	

	

Attachments:

     Exhibit A —Description of Services

     Exhibit B —Warrant Agreement

     Schedule 3.1 —PharmaBio Funding Schedule 

16 

	

Schedule 3.1

	Quarter following Approval Date
or SF Commencement Date:	Funding Amount:
	1	[*****]
	1	[*****]
	2	[*****]
	3	[*****]
	4	[*****]
	5	[*****]
	6	[*****]
	7	[*****]

	

[*****] A CONFIDENTIAL PORTION OF
THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. 

17 

	

EXHIBIT A

Description of Services

1. Definitions

In this Exhibit, “Year One“shall
mean the 12 month period beginning on the SF Commencement Date; “Year Two“shall
mean the 12 month period following Year One; and “Year Three“shall mean the 12
month period following Year Two. The “SF End Date“shall mean the later of the
end of Year Three or December 31, 2004. All other defined terms shall have the meaning
ascribed to them in the Alliance Agreement.  

2. Sales Force Personnel

To support the Scios Product, at
least 30 days prior to the SF Commencement Date, or at such greater time prior to the SF
Commencement Date as the JSC may determine, and until the SF End Date, Innovex will
provide at least 9 Field Coordinators at a daily rate of [*****]. Additionally, from the SF
Commencement Date until the SF End Date, Innovex will provide a sales force of at least
180 Sales Representatives at a daily rate of [*****]. Sales Representatives
and Field Coordinators shall be supported by a fully dedicated
National Sales Manager* (collectively, the “Sales Force”). These daily rates
shall be due for each day worked, whether in the field selling, performing necessary
administrative functions, home study, or live training attendance. The JSC shall
determine the appropriate division of days worked between field sales days and non-field
training/administrative days giving due consideration to the amount of training and
administration time the Sales Force requires to effectively promote the Product in
compliance with all applicable laws and regulations.  

*There is no daily rate associated
with the National Sales Manager as his or her services are included in the daily rates
for Sales Representatives and Field Coordinators. However, Scios is responsible for the
expenses of the National Sales Manager as set forth in paragraph 6 below. 

3. Incentive
Compensation

The terms and conditions of
a variable incentive compensation plan (“Incentive Plan”) shall be
mutually determined by the JSC, including eligibility criteria and performance
targets. The plan may also include incentive awards such as trips and prizes.
Innovex shall administer the Incentive Plan, determine eligibility and pay the
incentive compensation and awards, in accordance with the Incentive Plan. 

Scios shall pay Innovex an
amount equal to (i) the amount of all incentive compensation earned by Sales
Representatives and Field Coordinators in accordance with the terms of the
Incentive Plan; and (ii) an amount equal to [*****] of the incentive
compensation for Innovex’s employer costs (payroll taxes, etc.). 

[*****] A CONFIDENTIAL PORTION OF
THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. 

1 

	

4. Innovex
Territory Management System

Innovex shall provide the Innovex
Territory Management System (“ITMS”), including automated call reporting functions.
Innovex shall equip the Sales Force with computer hardware and software, and shall bear
the cost of database and system administration, licenses, access to data/replication
lines, help desk support, and training of the Sales Force in proper use of the computers
and software. 

     As
a fee for ITMS services, Scios shall pay Innovex [*****] until the end of
Year Three and thereafter [*****] until the SF End Date. 

5. Total
Estimated Cost of the Sales Force

The total estimated cost to Scios of
Sales Force and ITMS services is shown in the chart below. Although Scios will pay the
actual travel and entertainment expenses of the Sales Force as a Pass-Through Expense,
this chart also shows Innovex’s estimation of the travel and entertainment expenses that
Scios will incur in support of the Sales Force. Incentive compensation is not shown on
this chart. 

[TABLE DELETED]

6. Expenses of
the Sales Force

The parties shall divide the
expenses of the Sales Force. Some expenses will be “Innovex Direct” meaning that Innovex
will pay for such expenses from the money earned through the daily rate and other fees
paid by Scios for the Sales Force and related services; “Billable Pass-Through Expenses”
which are paid for initially by Innovex and reimbursed by Scios to Innovex without
mark-up; and “Scios Direct” expenses which are paid for directly by Scios. The following
chart contains a breakdown of required Sales Force expenses, together with the
identification of the parties’ respective responsibility with regard to those expenses. 

[*****] A CONFIDENTIAL PORTION OF
THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. 

2 

	

	Category	Innovex
Direct	Billable
(Passthrough)	Scios
Direct
	

	Representatives’ base salary
Representative bonus (avg. [*****]% of total salary)

Payroll taxes, insurance and benefits package (401(k), ESOP, holidays, etc.), ESPP, medical, dental, prescription coverage, vacation

Salaries, bonuses and benefits for FCs
Salaries, bonuses and benefits for NSM and AA
Auto Costs (allowance, mileage reimbursement, parking and tolls)

Basic business expenses (phone, supplies, postage, manager Training and voice mail)
Recruitment and re-recruitment (includes advertisement and Travel time for the FCs and NSM)

Drug Screens and reference checks
Infrastructure support (operations, human resources, legal and finance)
Training materials and delivery

Overnight Travel Expenses for Reps, FCs & NSM
Training & meetings  (includes travel, hotel and meals)
FCs and NSM equipment, including laptop and software

Representative equipment (sales force automation (ITMS), Which includes laptop and software).
Forms, promotional literature, detail bags, business cards & aids

Promotional marketing expenses (including sales data)	 		 

	

* These cost are paid through the
ITMS monthly fee as set forth above.  

7. Payment
Terms

	 	
Innovex
will invoice Scios one month in advance for Innovex’s estimated Fees and Pass-Through
Expenses for each calendar month (each an “Invoice”), beginning with an Invoice for the
month of the SF Commencement Date (the first Invoice will include fees earned and
Pass-Through Expenses incurred by the National Sales Manager and the Field Coordinators
providing Services prior to the SF Commencement Date). On or before the first day of the
month being estimated, Scios will wire transfer to Innovex an amount equal to the amount
of the Invoice, after which time interest shall be due and payable on the unpaid balance
at the rate of 1.5% per month. Quarterly, Innovex will provide Scios an accounting and
reconciliation between the amounts billed to and paid by Scios and the actual Fees earned
and Pass-Through Expenses incurred for the previous quarter (the “Expense Statement”).
Each Expense Statement shall be supported by a detailed expense report, and supporting
documentation will be made available to Scios upon request. Any difference will be
deducted or added to the next month’s Invoice. The parties will promptly review and
resolve any disputed portions of the accounting and reconciliation. Upon termination or
expiration of the Services any difference remaining after the reconciliation described
above will be repaid to Scios or invoiced to Scios, as the case may be.

	

[*****] A CONFIDENTIAL PORTION OF
THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. 

3 

	

	 	
Innovex
will make a significant investment in recruiting, training, and equipment at the
beginning of the Services with the intention of recovering that investment over the
project term. If the Services are terminated for any reason other than for Innovex’s
breach, an early termination fee will be due from Scios to Innovex in the amount of
[*****]remaining in the Year One plus [*****] remaining in Years Two and
Three to cover these unrecovered expenditures. 

8. Termination
of Services

	 	
In
the event of default by the other party of its material obligations under this Agreement,
either party may terminate the Services pursuant to the terms of this paragraph. In the
event of such default, the party declaring the default shall provide the defaulting party
with written notice setting forth the nature of the default, and the defaulting party
shall have thirty (30) days to cure the default. Provided, however, that if the nature of
the default is such that it cannot reasonably be cured within thirty (30) days, the
defaulting party may cure such default by commencing in good faith to cure such default
promptly after its receipt of such written notice and prosecuting the cure of such
default to completion with diligence and continuity within a reasonable time thereafter.
If the defaulting party fails to cure the default within the foregoing time periods, the
other party may terminate the Services by written notice to the defaulting party, which
notice shall be effective upon receipt.

	 	
Either
party may terminate the Services by written notice to the other party, effective upon
receipt with no right to cure the default, if the other party files a petition for
bankruptcy, reorganization or arrangement under any state statute, or makes an assignment
for the benefit of creditors or takes advantage of any insolvency statute or similar
statute, or if a receiver or trustee is appointed for the property and assets of the
party and the receivership proceedings are not dismissed within sixty (60) days of such
appointment.

	 	
In
the event the Services are terminated, Scios shall (a) pay to Innovex all fees for
services rendered which are due and owing to Innovex because of any completed performance
of Innovex’s obligations prior to the effective date of termination; (b) pay all
pass-through expenses actually incurred by Innovex prior to the effective date of
termination; and (c) pay any other costs which have been expressly identified as being
due upon termination.

	

[*****] A CONFIDENTIAL PORTION OF
THE MATERIAL HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. 

4 

	

Exhibit B

WARRANT AGREEMENT

     This
WARRANT AGREEMENT is entered into as of this ______ day of January, 2001, by and
between SCIOS INC., a Delaware corporation with its principal place of business
at 820 W. Maude Avenue, Sunnyvale, CA 94085 (“Scios”) and PHARMABIO
DEVELOPMENT, INC., a corporation with its principal place of business at 4709
Creekstone Drive, Durham, NC 27703 (“PharmaBio”). 

     WHEREAS,
Scios and PharmaBio have entered into an Alliance Agreement, dated as of the
date hereof (the “Alliance Agreement”), pursuant to which PharmaBio
has agreed to make certain payments to Scios in connection with Scios’
product Natrecor® (nesiritide); and 

     WHEREAS,
Scios desires to grant to PharmaBio the rights set forth in this Warrant
Agreement as part of the consideration for PharmaBio entering into the Alliance
Agreement; 

     NOW,
THEREFORE, in consideration of the mutual agreements, undertakings and covenants
set forth in this Warrant Agreement, and for other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows: 

     1.
The Warrant. Scios hereby agrees to issue and sell to PharmaBio seven
hundred thousand (700,000) shares (the “Warrant Shares”), of the
Scios’ common stock, par value $.001 per share (“Common Stock”),
at an exercise price of Twenty U.S. dollars ($20.00) per share (the
“Exercise Price”), subject to the vesting schedule described in
Section 2 and the other provisions of this Warrant Agreement and upon the terms
and conditions herein set forth. The Exercise Price and the number of Warrant
Shares purchasable upon exercise of this Warrant Agreement are subject to
adjustment from time to time as provided in Section 8 of this Warrant Agreement. 

     2.
Vesting Schedule. PharmaBio’s right to exercise this Warrant
Agreement will vest in 12 equal quantity quarterly installments of 58,333.33
shares each (the “Increments”) at the end of each of the next 12
calendar quarters that commence after Natrecor® is approved by the United
States FDA. Notwithstanding the foregoing, the maximum number of Warrant Shares
purchasable under this Warrant Agreement shall be equal to 700,000 multiplied by
a fraction, the denominator of which is $30,000,000 and the numerator of which
is the aggregate amount of funding provided by PharmaBio to Scios pursuant to
the Alliance Agreement. 

     3.
Expiration Date. This Warrant Agreement, and PharmaBio’s right to purchase any of the
Warrant Shares, will expire and cease to be of force and effect at 5:00 p.m. Eastern
Standard Time on January 10, 2011 (the “Expiration Date”). 

1 

	

     4.
Exercise of this Warrant Agreement. (a) PharmaBio may exercise this
Warrant Agreement, to the extent of any then unexercised portion of the vested
Increments, at any time prior to the Expiration Date, in whole or in part, (i)
for amounts not less than fifty thousand (50,000) Warrant Shares subject to this
Warrant Agreement, as adjusted from time to time as provided in Section 8 of
this Warrant Agreement, or (ii) as a one-time exercise under this Warrant
Agreement, for any unexercised portion of the vested Increments, by: (a) the
surrender of this Warrant Agreement, with the Exercise Form attached hereto as
Annex A properly completed and executed, at the principal office of the Scios at
820 W. Maude Avenue, Sunnyvale, CA 94085 or at such other office of the Scios as
the Scios may designate by notice in writing to the holder of this Warrant
Agreement, and (b) the delivery of a certified check, bank draft or wire
transfer of immediately available funds, payable to the order of Scios Inc., in
an amount equal to the then aggregate purchase price for the Warrant Shares
being purchased upon such exercise. Upon receipt thereof by the Scios on a
business day, PharmaBio will be deemed to be the holder of record of the Warrant
Shares issuable upon such exercise as of the close of business on the date of
such receipt by the Scios, and the Scios will promptly execute or cause to be
executed and delivered to PharmaBio, a certificate or certificates representing
the aggregate number of Warrant Shares specified in the Exercise Form. If this
Warrant Agreement is exercised only in part and has not expired, the Scios will,
at the time of delivery of said stock certificate or certificates, deliver to
PharmaBio a new Warrant Agreement of like tenor evidencing the right of
PharmaBio to purchase the remaining Warrant Shares then covered by this Warrant
Agreement. 

     (b) In
lieu of exercising this Warrant Agreement, PharmaBio may elect to receive shares equal to
the value of this Warrant Agreement (or the portion of the Warrant Shares thereunder
being exercised) by sending written notice of such election to Scios, in which event
Scios shall deliver to PharmaBio a stock certificate representing a number of shares of
Scios’Common Stock computed using the following formula:  

X=Y(A-B)
      ———
      A 

Where: 

	 	
X = the number of shares of Common Stock to be issued to PharmaBio

	 	
Y = the number of shares of Common Stock purchasable under this Warrant Agreement as to
which PharmBio is then exercising this Warrant Agreement 

	 	
A = the fair market value of one share of Common Stock

	 	
B = the Exercise Price (as adjusted to the date of such calculations)

	

     (c)
For purposes of this Section, “fair market value” of one share of Common Stock shall mean
the average of the closing price quoted on the Nasdaq National Market or the principal
exchange on which the Common Stock is listed, or the closing bid and asked prices of the
Common Stock quoted in the Over-The-Counter Market Summary, whichever is applicable, as
published in the Eastern Edition of The Wall Street Journal, for the ten trading days
prior to the date of determination of fair market value. If the Common Stock is not
traded Over-The-Counter or on such market or exchange, the fair market value of the
Common Stock will be the price per share which Scios could obtain from a willing buyer
for shares sold by Scios from authorized but unissued shares, as agreed upon by Scios and
PharmaBio in good faith or, absent such agreement, as shall be determined by arbitration
instituted by either party under the rules of the American Arbitration Association. 

2 

	

     5.
Representations of the Scios. The Scios hereby represents and warrants to PharmaBio as
follows: 

	 	     (a)
Scios is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. 

	 	     (b)
This Warrant Agreement has been duly authorized by all necessary corporate action on the
part of Scios, has been duly executed by a duly authorized officer of the Scios, and
constitutes a valid and binding obligation of Scios. 

	 	     (c)
Neither the execution and delivery of this Warrant Agreement nor the consummation of the
transactions contemplated hereby will violate or result in any violation of or be in
conflict with or constitute a default under any term of the charter or bylaws of Scios or
of any agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to Scios. 

	 	     (d)
Upon exercise of this Warrant Agreement and payment of the then aggregate purchase price
by PharmaBio, the Warrant Shares deliverable hereunder will be duly issued, fully paid
and nonassessable shares and free from all taxes, liens and charges with respect to the
issuance thereof. 

	

     6.
Representations of PharmaBio. PharmaBio hereby represents and warrants to Scios as
follows: 

	 	     (a)
PharmaBio is a corporation duly organized, validly existing and in good standing under
the laws of North Carolina.

	 	     (b)
PharmaBio is acquiring this Warrant Agreement, and will acquire the Warrant Shares
issuable upon exercise of this Warrant Agreement, for investment for its own account and
not with a view to, or for resale in connection with, any distribution of this Warrant
Agreement or the Warrant Shares issuable upon exercise of this Warrant Agreement.
PharmaBio understands that neither this Warrant Agreement nor the Warrant Shares issuable
upon exercise of this Warrant Agreement have been registered under the Securities Act of
1933, as amended (the “Securities Act”), or under any state securities laws, and, as a
result thereof, are subject to substantial restrictions on transfer. PharmaBio
acknowledges that this Warrant Agreement and the shares issuable upon exercise of this
Warrant Agreement must be held indefinitely, unless subsequently registered under the
Securities Act and any applicable state securities laws or unless exemptions from
registration under the Securities Act and such laws are available.

	

3 

	

	 	     (c)
PharmaBio is an “accredited investor,” as that term is defined in Rule 501 under the
Securities Act.

	 	     (d)
PharmaBio is either (i) not an “Investment Company,” as that term is defined in the
Investment Scios Act of 1940, or (ii) excluded from the definition of an Investment Scios
under Section 3(c)(1) of the Investment Scios Act of 1940. 

	

     7.
Survival of Representations. The representations and warranties made in
Sections 5 and 6 of this Warrant Agreement will survive the date of this Warrant
Agreement and will expire upon the earliest of (a) the Expiration Date, (b) if
the Alliance Agreement terminates before any Increment vests, the date of the
termination of the Alliance Agreement, (c) if the Alliance Agreement terminates
after any Increment vests, the exercise of the entire unexercised portion of the
vested Increments, or (d) the exercise of this Warrant Agreement for all of the
remaining Warrant Shares purchasable upon exercise of this Warrant Agreement. 

     8.
Certain Adjustments. The Exercise Price at which Warrant Shares may be purchased and the
number of Warrant Shares to be purchased upon exercise of this Warrant Agreement are
subject to change or adjustment as follows: 

	 	     (a)
Stock Dividends, Distributions, Subdivisions, Combinations or Reclassifications. In case
the Scios (i) pays a dividend in shares of Common Stock or makes a distribution in shares
of Common Stock, (ii) subdivides its outstanding shares of Common Stock, (iii) combines
its outstanding shares of Common Stock into a smaller number of shares of Common Stock or
(iv) issues, by reclassification of its shares of Common Stock, other securities of Scios
(including any such reclassification in connection with a consolidation or merger in
which the Scios is the surviving corporation), the number of Warrant Shares purchasable
upon exercise of this Warrant Agreement will be adjusted so that PharmaBio will be
entitled to receive the kind and number of Warrant Shares or other securities of Scios
which it would have owned or have been entitled to receive after the happening of any of
the events described above, if this Warrant Agreement had been exercised immediately
prior to the happening of such event or any record date with respect thereto. Whenever
the number of Warrant Shares purchasable upon the exercise of this Warrant Agreement is
adjusted, as herein provided, the Exercise Price payable upon the exercise of this
Warrant Agreement will be adjusted by multiplying such Exercise Price immediately prior
to such adjustment by a fraction, of which the numerator will be the number of Warrant
Shares purchasable upon the exercise of this Warrant Agreement immediately prior to such
adjustment, and of which the denominator will be the number of Warrant Shares purchasable
immediately thereafter. An adjustment made pursuant to this Subsection 8(a) will become
effective immediately after the effective date of such event retroactive to the record
date, if any, for such event. No adjustment in the number of Warrant Shares purchasable
hereunder will be required unless such adjustment would require an increase or decrease
of at least one percent (1%) in the number of Warrant Shares purchasable upon the
exercise of this Warrant Agreement; provided, however, that any adjustments which by
reason of this restriction are not required to be made will be carried forward and taken
into account in any subsequent adjustment. All calculations will be made to the nearest
one-thousandth of a share. 

	

4 

	

	 	     (b)
Preservation of Purchase Rights Upon Merger, Consolidation, etc. In case of any
consolidation of Scios with or merger of Scios into another corporation or other entity
or in case of any sale, transfer or lease to another corporation or other entity of all
or substantially all the property of Scios, Scios or such successor or purchasing
corporation or other entity, as the case may be, will, at its option, (i) if any
Increment has vested, pay PharmaBio an amount in cash equal to the number of Warrant
Shares then exercisable pursuant to this Warrant Agreement multiplied by the difference
between (A) the value of the aggregate consideration in the consolidation, merger, sale,
transfer or lease divided by the number of fully-diluted shares of Common Stock then
outstanding and (B) the then current Exercise Price, (ii) execute with PharmaBio an
agreement that PharmaBio will have the right thereafter, upon vesting of any Increment
and payment of the Exercise Price in effect immediately prior to such action, to purchase
upon exercise of this Warrant Agreement the kind and amount of shares and other
securities and property which PharmaBio would have owned or have been entitled to receive
after the happening of such consolidation, merger, sale, transfer or lease had this
Warrant Agreement been exercised immediately prior to such action, or (iii) combine its
options under (i) and (ii) of this Subsection 8(b); provided, however, that no adjustment
in respect of cash dividends, interest or other income on or from such shares or other
securities and property will be made during the term of this Warrant Agreement or upon
the exercise of this Warrant Agreement. Any agreement executed under Subsection 8(b)(ii)
or (iii) will provide for adjustments, which will be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 8. The provisions of this
Subsection 8(b) will similarly apply to successive consolidations, mergers, sales,
transfers or leases. 

	 	     (c)
No Adjustment for Cash Dividends. No adjustment in respect of any cash dividends will be
made during the term of this Warrant Agreement or upon the exercise of this Warrant
Agreement.

	

     9.
Fractional Shares. Fractional shares will not be issued upon the exercise
of this Warrant Agreement, but in any case where PharmaBio would, except for the
provisions of this Section, be entitled under the terms of this Warrant
Agreement to receive a fractional share upon the exercise of this Warrant
Agreement, the Scios will, upon the exercise of this Warrant Agreement for the
largest number of whole shares then called for, pay a sum in cash equal to the
excess of the market value of such fractional share (determined in such
reasonable manner as may be prescribed by the Board of Directors of the Scios in
its discretion) over the proportional part of the per share purchase price
represented by such fractional share. 

5 

	

     10.
Notice of Certain Events. In case at any time Scios: 

	 	     (a)
terminates the Alliance Agreement prior to the vesting in full of this Warrant Agreement;

	 	     (b)
proposes, by resolution of its Board of Directors, a stock dividend, distribution,
subdivision, combination or reclassification of the shares of capital stock of the Scios
for which this Warrant Agreement is exercisable; or

	 	     (c)
proposes, by resolution of its Board of Directors, any capital reorganization or any
reclassification or change of capital stock that affects the Warrant Shares of the Scios
or any consolidation, merger or sale of properties and assets of the type described in
Section 8 of this Warrant Agreement; 

	

then, and in each of said
cases, the Scios will cause notice thereof to be delivered promptly to
PharmaBio; provided, however, that the Scios need not deliver any
separate notice pursuant to Subsection 11(a) if such notice is provided in
accordance with the Alliance Agreement and need not deliver any notice pursuant
to Subsection 10(b) until after any Increment has vested and unless there exists
a then unexercised portion of the vested Increments; provided
further, that Scios will deliver any notice pursuant to Subsection 10(c)
at least ten (10) business days prior to the effective date of the proposed
event. 

     11.
Reservation of Shares. Scios will at all times reserve and keep available
out of its authorized but unissued stock, for the purpose of effecting the
exercise of this Warrant Agreement, such number of its duly authorized shares of
capital stock for which this Warrant Agreement is exercisable, and the
appropriate number of shares of any stock into which such stock is convertible,
as will from time to time be sufficient to effect the exercise of this Warrant
Agreement. 

     12.
No Rights as Shareholder; Limitation of Liability. This Warrant
Agreement, as distinct from the shares for which this Warrant Agreement is
exercisable, will not entitle PharmaBio to any of the rights of a shareholder of
Scios. No provision of this Warrant Agreement, in the absence of affirmative
action by PharmaBio to purchase the Warrant Shares, and no mere enumeration
herein of the rights or privileges of PharmaBio, will give rise to any liability
of PharmaBio for the purchase price or as a shareholder of Scios, whether such
liability is asserted by the Scios or by creditors of Scios. 

     13.
Transfer Restrictions. 

	 	     (a)
Securities Laws. NEITHER THIS WARRANT AGREEMENT NOR THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE. NEITHER THIS WARRANT AGREEMENT NOR THE SECURITIES ISSUABLE
UPON EXERCISE HEREOF NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED OR
DISPOSED OF EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, THE
SECURITIES LAWS OF EACH RELEVANT STATE, AND THE TERMS AND CONDITIONS HEREOF. EACH OF THE
HOLDER OF THIS WARRANT AGREEMENT AND THE HOLDER OF THE SECURITIES ISSUABLE UPON EXERCISE
HEREOF IS SUBJECT TO THE RESTRICTIONS HEREIN SET FORTH. 

	

6 

	

	 	     (b)
Stock Certificate Legend. Each certificate for shares issued upon exercise of this
Warrant Agreement will bear the following legend:

	 	
“The
shares represented by this certificate have been acquired for investment and have not
been registered under the Securities Act of 1933, as amended, or the securities laws of
any State. Neither the shares nor any interest or participation in the shares may be
sold, assigned, pledged, hypothecated, encumbered or in any other manner transferred or
disposed of in the absence of such registration or exemption therefrom under such Act or
such laws and an opinion (which will be in form and substance satisfactory to the Scios)
of counsel satisfactory to the Scios that such registration is not required.”

	 	     (c)
General Restrictions. PharmaBio may not transfer or assign this Warrant Agreement unless
it is transferred or assigned to the purchaser of all of the outstanding capital stock or
all or substantially all of the assets of PharmaBio or to an affiliate of PharmaBio.
Scios may deem and treat the person in whose name this Warrant Agreement is registered as
the holder and owner hereof (notwithstanding any notations of ownership or writing hereon
made by anyone other than Scios) for all purposes and will not be affected by any notice
to the contrary, until presentation of this Warrant Agreement to Scios for registration
of transfer consistent with this Section. The holder of this Warrant Agreement further
agrees that prior to any transfer of this Warrant Agreement, consistent with this
Section, or any transfer of the shares issued upon exercise hereof, such holder will give
written notice to the Scios, together with a copy of the opinion of such holder’s
counsel, if reasonably requested by Scios, as to the availability of exemption from
registration under all applicable securities laws in connection with any such transfer
(which opinion will be reasonably satisfactory to counsel for Scios). 

	

     14.
Lock-Up. In connection with any public offering of shares of Common
Stock, PharmaBio agrees to enter into a written agreement with the managing
underwriters, if the managing underwriters require such an agreement from
PharmaBio and from all holders (the “Other Holders”) of more shares of
Common Stock, or of shares of preferred stock convertible into more shares of
Common Stock, than the number of shares of Common Stock owned by PharmaBio, in
such form and containing such provisions as are required by the managing
underwriters (except that such provisions will not be less favorable to
PharmaBio than the provisions of any agreements entered into by the managing
underwriters with the Other Holders) to preclude PharmaBio from directly or
indirectly offering to sell, contracting to sell or otherwise disposing of any
shares of Common Stock, any options or warrants to purchase shares of Common
Stock, or any securities convertible into or exchangeable for shares of Common
Stock for a period of time not to exceed one hundred eighty (180) days after the
effective date of the registration statement for the public offering. 

7 

	

     15.
Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the SEC that may permit the sale of securities
to the public without registration, Scios agrees to use its reasonable efforts
to make and keep public information regarding Scios available as those terms are
understood and defined in Rule 144 under the Securities Act and file with the
SEC in a timely manner all reports and other documents required by Scios under
the Securities Act and the Securities Exchange Act of 1934, and furnish to the
holder upon written request as to Scios’ compliance with the reporting
requirements of Rule 144 and of the Securities Act and the Securities Exchange
Act of 1934. 

     16.
Registration Rights. 

	 	     (a)
Piggyback Registration Rights.

	 	(i)
If Scios plans at any time after June 30, 2001 to file a registration statement under the
Securities Act on a Form S-3 to register any shares of Common Stock for sale by it or any
of its stockholders (the “Piggyback Registration Statement”) (except in
connection with any stock option plan, stock purchase plan, savings or similar plan), the
Scios shall provide PharmaBio with the right to include Warrant Shares on the Piggyback
Registration Statement (the “Piggyback Right”), if PharmaBio is the stockholder
of record of any Warrant Shares at such time or has the vested right to acquire any
Warrant Shares pursuant to this Warrant Agreement at such time, by providing PharmaBio
with at least thirty (30) days prior written notice thereof. At the written request of
PharmaBio, given within twenty (20) days after the receipt of such notice, Scios will use
its best efforts to cause all of the Warrant Shares for which registration shall have
been requested to be included in the Piggyback Registration Statement. Scios shall
provide PharmaBio with two Piggyback Rights to register Warrant Shares under this
provision. 

	 	(ii)
In the event that the proposed offering is an offering by Scios that is, in whole or in
part, an underwritten public offering of shares of Common Stock, and the managing
underwriters determine and advise in writing that the inclusion of the Warrant Shares
proposed to be included in the underwritten public offering and any other issued and
outstanding shares of Common Stock or other securities proposed to be included therein by
the security holders of the Scios (the “Other Shares”) would interfere with the
successful marketing (including pricing) of the shares, the number of PharmaBio’s
Warrant Shares and the Other Shares to be included in such underwritten public offering
shall be reduced pro rata among PharmaBio and the holders of Other Shares. Scios shall
not limit the number of Warrant Shares to be included in a registration statement in
order to include stockholders of Scios with no pre-existing registration rights. 

	

8 

	

	 	     (b)
Demand Registration Right. Beginning after January 1, 2002, PharmaBio shall have the
right to demand, by providing written notice to Scios (the “Demand Registration Right”),
that Scios file a registration statement on Form S-3 to register Warrant Shares for
resale by PharmaBio in an offering that is not underwritten (the “Registration
Statement”) provided, however, that Scios shall not be obligated to effect such a
registration more than once in any rolling twelve-month period or after two such
registrations have been effected. Scios agrees to use its best efforts (i) to file the
Registration Statement with the Securities and Exchange Commission (“SEC”)
within 30 days of receipt of PharmaBio’s notice of its exercise of the Demand
Registration Right and (ii) to obtain the effectiveness of the Registration Statement
within 90 days of receipt of such notice, and to keep such Registration Statement
continuously effective under the Securities Act until such time as the earlier to occur
of 180 days, or until the holder’s have completed the distribution described in such
Registration Statement. PharmaBio agrees that it will cease making offers and sales under
the Registration Statement upon the giving of any notice (the “Notice”) by
Scios that the Registration Statement must be amended or supplemented. 

	 	     (c)
Whenever Scios is required to register any of PharmaBio’s Warrant Shares pursuant to any
of the provisions of this Section 15, Scios shall also be obligated to do the following:

	 	     (i)
Furnish to PharmaBio such copies of preliminary and final prospectuses and such other
documents as PharmaBio may reasonably request to facilitate the public offering of
PharmaBio’s Warrant Shares;

	 	     (ii)
Use its best efforts to register or qualify the Warrant Shares covered by said
registration statement under the securities or Blue Sky laws of such jurisdictions as
PharmaBio may reasonably request; provided, however, that Scios shall not be required to
qualify generally to do business in any jurisdiction where it is not then so qualified,
take any action that would subject it to general service of process in any such
jurisdiction where it is not then so subject or subject Scios to any tax in any such
jurisdiction where it is not then so subject; 

	 	     (iii)
Permit PharmaBio or its counsel or other representatives, at PharmaBio’s expense, to
inspect and copy such corporate documents and records as may reasonably be requested by
them; and

	 	     (iv)
Furnish to PharmaBio a copy of all documents filed and all correspondence to or from the
Securities and Exchange Commission in connection with any such offering.

	 	     (v)
Prepare and file with the SEC such amendments and supplements to such Registration
Statement or such Piggyback Registration Statement, as the case may be, and the
prospectus used in connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement. 

	

9 

	

	 	     (vi)
Notify each seller of securities covered by such a Registration Statement, at any time
when a prospectus relating thereto is required to be delivered under the Securities Act,
of the happening of any event as a result of which the prospectus included in such
Registration Statement, as then in effect, includes an untrue statement of a material
fact remits to a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing and, at the
request of any such seller, repair and furnish to such seller a reasonable number of
copies of a supplement to or amendment of such prospectus as need be necessary so that
such prospectus shall not contain such an untrue statement or admission. 

	 	     (d)
PharmaBio shall bear all of the fees and expenses of its counsel and all other customary
“selling expenses” in connection with the registration statement and the offering.
PharmaBio shall also bear all other expenses (including customary “registration
expenses”) in connection with the preparation and filing of any Registration
Statement or any Piggyback Registration Statement under this Section 15, any registration
or qualification under the securities or Blue Sky laws of states in which the offering
will be made under either such registration statement and any filing fee of the National
Association of Securities Dealers, Inc. relating to such offering. 

	 	     (e)
In connection with any public underwritten offering, the Scios and PharmaBio shall enter
into a written agreement with the managing underwriters in such form and containing such
provisions as are customary in the securities business for such an arrangement between
such managing underwriters and companies of the Scios’size and investment stature,
including indemnification. 

	

     16.
Miscellaneous. 

	 	     (a)
Amendments and Waivers. This Warrant Agreement and any provision hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the party (or
any predecessor in interest thereof) against which enforcement of the same is sought. 

	 	     (b)
Successors and Assigns. This Warrant Agreement will be binding upon and inure to the
benefit of the successors and assigns of Scios and the heirs and permitted registered
assigns and transferees of PharmaBio.

	 	     (c)
Loss, Theft, Destruction or Mutilation. Upon receipt by Scios of evidence reasonably
satisfactory to it that this Warrant Agreement has been lost, stolen, destroyed or
mutilated, and in the case of any lost, stolen or destroyed Warrant Agreement, a bond of
indemnity reasonably satisfactory to Scios, or in the case of a mutilated Warrant
Agreement, upon surrender and cancellation hereof, Scios will execute and deliver in the
name of the registered holder of this Warrant Agreement, in exchange and substitution for
the Warrant Agreement so lost, stolen, destroyed or mutilated, a new Warrant Agreement of
like tenor with appropriate insertions and variations. 

	

10 

	

	 	     (d)
Law Governing. This Warrant Agreement will be governed by, and construed and enforced in
accordance with, the internal laws of the State of Delaware.

	 	     (e)
Entire Agreement. This Warrant Agreement and the attached annex constitute the full and
entire understanding and agreement among the parties with regard to the subject of this
Warrant Agreement and the attached annex, and supersede all prior agreements,
understandings, inducements or conditions, express or implied, oral or written, with
respect to the subject of this Warrant Agreement and the attached annex. 

	 	     (f)
Notices. Unless otherwise provided, all notices, requests, demands and other
communications required or permitted under this Warrant Agreement will be in writing and
will be deemed to have been duly made and received: (i) upon personal delivery or
confirmed facsimile to the party to be notified; (ii) three (3) business days after
deposit with the United States Post Office, by registered or certified mail or by first
class mail, postage prepaid, addressed as set forth below; or (iii) one (1) business day
after deposit with Federal Express or another reputable overnight courier (for next
business day delivery), shipping prepaid, addressed as set forth below: 

					(i)  		If
to Scios, then to: 

	 	Scios
Inc.
820 W. Maude Avenue
Sunnyvale, CA 94085
Attn: Chief Financial Officer

with a copy
to:
General Counsel
Scios Inc.
749 N. Mary Avenue
Sunnyvale, CA 94085

					(ii)  		If
to PharmaBio, then to: 

	 	PharmaBio
Development, Inc..
4709 Creekstone Drive
Durham, NC 27703
Attn: President

with a copy to:

General Counsel
PharmaBio Development Inc.
4709 Creekstone Drive
Durham, NC 27703

	

12 

	

	 	
Either
party may change the address to which communications are to be sent by giving five (5)
business days’advance notice of such change of address to the other party in
conformity with the provisions of this Section. 

	 	     (g)
Headings. The headings in this Warrant Agreement are for purposes of reference only and
will not affect the meaning or construction or any of the provisions hereof.

	 	     (h)
Execution; Counterparts. This Warrant Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original as against any party whose
signature appears on such counterpart, and all of which will together constitute one and
the same instrument. This Warrant Agreement will become binding when one or more
counterparts of this Warrant Agreement, individually or taken together, bear the
signatures of all of the parties to this Warrant Agreement and the seal of the Scios. 

     IN
WITNESS WHEREOF, the parties have caused this Warrant Agreement to be duly
executed and delivered as of the day and year first written above. 

	SCIOS INC.	
	 
	By:
            ———————————————	
	Name: Richard B. Brewer	
	Title:   President and Ceo	
	 
	PHARMABIO DEVELOPMENT, INC..	
	 
	By:
            ———————————————	
	Name:
            ———————————————	
	Title:
            ———————————————	

	

Attachments:Annex A- Exercise Form 

12 

	

ANNEX A 

EXERCISE FORM 

TO BE EXECUTED BY THE
REGISTERED HOLDER 

TO EXERCISE THE
ATTACHED WARRANT AGREEMENT OF 

SCIOS INC. 

     The
undersigned, the record holder of the attached original, executed Warrant
Agreement (the “Warrant Agreement”), pursuant to the provisions of the
Warrant Agreement, hereby irrevocably elects to exercise the right, represented
by the Warrant Agreement, to purchase _____ Warrant Shares (as defined in
the Warrant Agreement) covered by the Warrant Agreement, and herewith tenders
payment in full therefor at the price per share provided by the Warrant
Agreement. 

	By:
                 —————————————
——	
	Name:
                 ————————————
———	
	Title:
                 ————————————
———	
	
 
	Address:
                 ————————————
———	
	
                 —————————————
——	
	
                 —————————————
——	
	
 
	Dated:
                 ———————————, 
   ———	

	

13

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