Document:

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                                                                     Exhibit 4.2

                                 FIBERCHEM, INC.

                         1999 EMPLOYEE STOCK OPTION PLAN

1.   Purposes.

     The FIBERCHEM, INC. 1999 EMPLOYEE STOCK OPTION PLAN (the "Plan") is
intended to provide the employees, directors, independent contractors and
consultants of FiberChem, Inc. (the "Company") and/or any subsidiary or parent
thereof with an added incentive to commence and/or continue their services to
the Company and to induce them to exert their maximum efforts toward the
Company's success. By thus encouraging employees, directors, independent
contractors and consultants and promoting their continued association with the
Company, the Plan may be expected to benefit the Company and its stockholders.
The Plan allows the Company to grant Incentive Stock Options ("ISOs") (as
defined in Section 422(b) of the Internal Revenue Code of 1986, as amended (the
"Code"), Non-Qualified Stock Options ("NQSOs") not intended to qualify under
Section 422(b) of the Code and Stock Appreciation Rights ("SARs") (collectively
the "Options"). The vesting of one or more Options granted hereunder may be
based on the attainment of specified performance goals of the participant or the
performance of the Company, one or more subsidiaries, parent and/or division of
one or more of the above.

2.   Shares Subject to the Plan.

     The total number of shares of Common Stock of the Company, $.0001 par value
per share, that may be subject to Options granted under the Plan shall be five
million (5,000,000) in the aggregate, subject to adjustment as provided in
Paragraph 8 of the Plan; however, the grant of an ISO to an employee together
with a tandem SAR or any NQSO to an employee together with a tandem SAR shall
only require one share of Common Stock available subject to the Plan to satisfy
such joint Option. The Company shall at all times while the Plan is in force
reserve such number of shares of Common Stock as will be sufficient to satisfy
the requirement of outstanding Options granted under the Plan. In the event any
Option granted under the Plan shall expire or terminate for any reason without
having been exercised in full or shall cease for any reason to be exercisable in
whole or in part, the unpurchased shares subject thereto shall again be
available for granting of Options under the Plan.

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3.   Eligibility.

     ISO's or ISO's in tandem with SAR's (provided the SAR meets the
requirements set forth in Temp. Reg. Section 14a.422A-1, A-39 (a) through (e)
inclusive) may be granted from time to time under the Plan to one or more
employees of the Company or of a "subsidiary" or "parent" of the Company, as the
quoted terms are defined within Section 424 of the Code. An Officer is an
employee for the above purposes. However, a director of the Company who is not
otherwise an employee is not deemed an employee for such purposes. NQSOs and
SARs may be granted from time to time under the Plan to one or more employees of
the Company, Officers, members of the Board of Directors, independent
contractors, consultants and other individuals who are not employees of, but are
involved in the continuing development and success of the Company and/or of a
subsidiary of the Company, including persons who have previously been granted
Options under the Plan.

     4.   Administration of the Plan.

          (a)  The Plan shall be administered by the Board of Directors of the
Company as such Board of Directors may be composed from time to time and/or by a
Stock Option Committee or Compensation Committee (the "Committee") which shall
be comprised of solely of at least two Outside Directors (as such term is
defined in regulations promulgated from time to time with respect to Section
162(m)(4)(C)(i) of the Code) appointed by such Board of Directors of the
Company. As and to the extent authorized by the Board of Directors of the
Company, the Committee may exercise the power and authority vested in the Board
of Directors under the Plan. Within the limits of the express provisions of the
Plan, the Board of Directors or Committee shall have the authority, in its
discretion, to determine the individuals to whom, and the time or times at
which, Options shall be granted, the character of such Options (whether ISOs,
NQSOs, and/or SARs in tandem with NQSOs, and/or SARs in tandem with ISOs) and
the number of shares of Common Stock to be subject to each Option, the manner
and form in which the optionee can tender payment upon the exercise of his
Option, and to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to the Plan, to determine the terms and provisions of
Option agreements that may be entered into in connection with Options (which
need not be identical), subject to the limitation that agreements granting ISOs
must be consistent with the requirements for the ISOs being qualified as
"incentive stock options" as provided in Section 422 of the Code, and to make
all other determinations and take all other actions necessary or advisable

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for the administration of the Plan. In making such determinations, the Board of
Directors and/or the Committee may take into account the nature of the services
rendered by such individuals, their present and potential contributions to the
Company's success, and such other factors as the Board of Directors and/or the
Committee, in its discretion, shall deem relevant. The Board of Directors'
and/or the Committee's determinations on the matters referred to in this
Paragraph shall be conclusive.

          (b)  Notwithstanding anything contained herein to the contrary, at
anytime during the period the Company's Common Stock is registered pursuant to
Section 12(g) of the Securities Exchange Act of 1934 (the "1934 Act), the
Committee, if one has been appointed to administer all or part of the Plan,
shall have the exclusive right to grant Options to Covered Employees as defined
under Section 162(m)(3) of the Code (generally executive officers subject to
Section 16 of the 1934 Act) and set forth the terms and conditions thereof. With
respect to persons subject to Section 16 of the 1934 Act, transactions under the
Plan are intended, to the extent possible, to comply with all applicable
conditions of Rule 16b-3, as amended from time to time, (and its successor
provisions, if any) under the 1934 Act and Section 162(m)(4)(C) of the Code of
1986, as amended. To the extent any provision of the Plan or action by the Board
of Directors or Committee fails to so comply, it shall be deemed null and void,
to the extent permitted by law and deemed advisable by the Board of Directors
and/or such Committee.

5.   Terms of Options.

     Within the limits of the express provisions of the Plan, the Board of
Directors or the Committee may grant either ISOs or NQSOs or SARs in tandem with
NQSOs or SARs in tandem with ISOs. An ISO or an NQSO enables the optionee to
purchase from the Company, at any time during a specified exercise period, a
specified number of shares of Common Stock at a specified price (the "Option
Price"). The optionee, if granted a SAR in tandem with a NQSO or ISO, may
receive from the Company, in lieu of exercising his option to purchase shares
pursuant to his NQSO or ISO, at one of the certain specified times during the
exercise period of the NQSO or ISO as set by the Board of Directors or the
Committee, the excess of the fair market value upon such exercise (as determined
in accordance with subparagraph (b) of this Paragraph 5) of one share of Common
Stock over the Option Price per share specified upon grant of the NQSO or
ISO/SAR multiplied by the number of shares of Common Stock covered by the SAR so
exercised. The character and terms of each Option granted under

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the Plan shall be determined by the Board of Directors and/or the Committee
consistent with the provisions of the Plan, including the following:

     (a)  An Option granted under the Plan must be granted within 10 years from
the date the Plan is adopted, or the date the Plan is approved by the
stockholders of the Company, whichever is earlier.

     (b)  The Option Price of the shares of Common Stock subject to each ISO and
each SAR issued in tandem with an ISO shall not be less than the fair market
value of such shares of Common Stock at the time such ISO is granted. Such fair
market value shall be determined by the Board of Directors and, if the shares of
Common Stock are listed on a national securities exchange or traded on the
over-the-counter market, the fair market value shall be the closing price on
such exchange, or the mean of the closing bid and asked prices of the shares of
Common Stock on the over-the-counter market, as reported by the Nasdaq Stock
Market, the National Association of Securities Dealers OTC Bulletin Board or the
National Quotation Bureau, Inc., as the case may be, on the day on which the
Option is granted or, if there is no closing price or bid or asked price on that
day, the closing price or mean of the closing bid and asked prices on the most
recent day preceding the day on which the Option is granted for which such
prices are available. If an ISO or SAR in tandem with an ISO is granted to any
individual who, immediately before the ISO is to be granted, owns (directly or
through attribution) more than 10% of the total combined voting power of all
classes of capital stock of the Company or a subsidiary or parent of the
Company, the Option Price of the shares of Common Stock subject to such ISO
shall not be less than 110% of the fair market value per share of the shares of
Common Stock at the time such ISO is granted.

     (c)  The Option Price of the shares of Common Stock subject to an NQSO or
an SAR in tandem with a NQSO granted pursuant to the Plan shall be determined by
the Board of Directors or the Committee, in its sole discretion, but in no event
less than 85% of the fair market value per share of the shares of Common Stock
at the time of grant.

     (d)  In no event shall any Option granted under the Plan have an expiration
date later than 10 years from the date of its grant, and all Options granted
under the Plan shall be subject to earlier termination as expressly provided in
Paragraph 6 hereof. If an ISO or an SAR in tandem with an ISO is granted to any
individual who, immediately before the ISO is granted, owns

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(directly or through attribution) more that 10% of the total combined voting
power of all classes of capital stock of the Company or of a subsidiary or
parent of the Company, such ISO shall by its terms expire and shall not be
exercisable after the expiration of five (5) years from the date of its grant.

     (e)  An SAR may be exercised at any time during the exercise period of the
ISO or NQSO with which it is granted in tandem and prior to the exercise of such
ISO or NQSO. Notwithstanding the foregoing, the Board of Directors and/or the
Committee shall in their discretion determine from time to time the terms and
conditions of SAR's to be granted, which terms may vary from the afore-described
conditions, and which terms shall be set forth in a written stock option
agreement evidencing the SAR granted in tandem with the ISO or NQSO. The
exercise of an SAR granted in tandem with an ISO or NQSO shall be deemed to
cancel such number of shares subject to the unexercised Option as were subject
to the exercised SAR. The Board of Directors or the Committee has the discretion
to alter the terms of the SARS if necessary to comply with Federal or state
securities law. Amounts to be paid by the Company in connection with an SAR may,
in the Board of Director's or the Committee's discretion, be made in cash,
Common Stock or a combination thereof.

     (f)  An Option granted under the Plan shall become exercisable, in whole at
any time or in part from time to time, but in no event may an Option (i) be
exercised as to less than one hundred (100) shares of Common Stock at any one
time, or the remaining shares of Common Stock covered by the Option if less than
one hundred (100), and (ii) except with respect to performance based Options,
become fully exercisable more than five years from the date of its grant nor
shall less than 20% of the Option become exercisable in any of the first five
years of the Option, if not terminated as provided in Section 6 hereof. The
Board of Directors or the Committee, if applicable, shall, in the event it so
elects in its sole discretion, set one or more performance standards with
respect to one or more Options upon which vesting is conditioned (which
performance standards may vary among the Options).

     (g)  An Option granted under the Plan shall be exercised by the delivery by
the holder thereof to the Company at its principal office (to the attention of
the Secretary) of written notice of the number of full shares of Common Stock
with respect to which the Option is being exercised, accompanied by payment in
full, which payment at the option of the optionee shall be in the form of (i)
cash or certified or bank check payable to the order of the Company, of the
Option Price of such shares of Common

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Stock, or, (ii) if permitted by the Committee or the Board of Directors, as
determined by the Committee or the Board of Directors in its sole discretion at
the time of the grant of the Option with respect to an ISO and at or prior to
the time of exercise with respect to a NQSO, by the delivery of shares of Common
Stock having a fair market value equal to the Option Price or the delivery of an
interest-bearing promissory note having an original principal balance equal to
the Option Price and an interest rate not below the rate which would result in
imputed interest under the Code (provided, in order to qualify as an ISO, more
than one year shall have passed since the date of grant and one year from the
date of exercise), or (iii) at the option of the Committee or the Board of
Directors, determined by the Committee or the Board of Directors in its sole
discretion at the time of the grant of the Option with respect to an ISO and at
or prior to the time of exercise with respect to a NQSO, by a combination of
cash, promissory note and/or such shares of Common Stock (subject to the
restriction above) held by the employee that have a fair market value together
with such cash and principal amount of any promissory note that shall equal the
Option Price, and, in the case of a NQSO, at the discretion of the Committee or
Board of Directors by having the Company withhold from the shares of Common
Stock to be issued upon exercise of the Option that number of shares having a
fair market value equal to the exercise price and/or the tax withholding amount
due, or otherwise provide for withholding as set forth in Paragraph 9(c) hereof,
or in the event an employee is granted an ISO or NQSO in tandem with an SAR and
desires to exercise such SAR, such written notice shall so state such intention.
To the extent allowed by applicable Federal and state securities laws, the
Option Price may also be paid in full by a broker-dealer to whom the optionee
has submitted an exercise notice consisting of a fully endorsed Option, or
through any other medium of payment as the Board of Directors and/or the
Committee, in its discretion, shall authorize.

     (h)  The holder of an Option shall have none of the rights of a stockholder
with respect to the shares of Common Stock covered by such holder's Option until
such shares of Common Stock shall be issued to such holder upon the exercise of
the Option.

     (i)  All ISOs or SARs in tandem with ISOs granted under the Plan shall not
be transferable otherwise than by will or the laws of descent and distribution
and may be exercised during the lifetime of the holder thereof only by the
holder. The Board or the Committee, in its sole discretion, shall determine
whether an Option other than an ISO or SAR in tandem

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with an ISO shall be transferable. No Option granted under the Plan shall be
subject to execution, attachment or other process.

     (j)  The aggregate fair market value, determined as of the time any ISO or
SAR in tandem with an ISO is granted and in the manner provided for by
Subparagraph (b) of this Paragraph 5, of the shares of Common Stock with respect
to which ISOs granted under the Plan are exercisable for the first time during
any calendar year and under incentive stock options qualifying as such in
accordance with Section 422 of the Code granted under any other incentive stock
option plan maintained by the Company or its parent or subsidiary corporations,
shall not exceed $100,000. Any grant of Options in excess of such amount shall
be deemed a grant of a NQSO.

     (k)  Notwithstanding anything contained herein to the contrary, an SAR
which was granted in tandem with an ISO shall (i) expire no later than the
expiration of the underlying ISO; (ii) be for no more than 100% of the spread at
the time the SAR is exercised; (iii) shall only be transferable when the
underlying ISO is transferable; (iv) only be exercised when the underlying ISO
is eligible to be exercised; and (v) only be exercisable when there is a
positive spread.

6.   Death or Termination of Employment/Consulting Relationship.

     (a)  Except as provided herein, or otherwise determined by the Board of
Directors or the Committee in its sole discretion, upon termination of
employment with the Company voluntarily by the employee or termination of a
consulting relationship with the Company prior to the termination of the term
thereof, a holder of an Option under the Plan may exercise such Options to the
extent such Options were exercisable as of the date of termination at any time
within thirty (30) days after termination, subject to the provisions of
Subparagraph (d) of this Paragraph 6. Except as provided herein, or otherwise
determined by the Board of Directors or the Committee in its sole discretion, if
such employment or consulting relationship shall terminate for any reason other
than death, voluntary termination by the employee or for cause, then such
Options may be exercised at anytime within three (3) months after such
termination. Notwithstanding anything contained herein to the contrary, unless
otherwise determined by the Board of Directors or the Committee in its sole
discretion, any options granted hereunder to an Optionee and then outstanding
shall immediately terminate in the event the Optionee is terminated for cause,
and the other

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provisions of this Section 6 shall not be applicable thereto. For
purposes of this Section 6, termination for cause shall be deemed the decision
of the Company, in its sole discretion, that Optionee has not adequately
performed the services for which he/she/it was hired.

     (b)  If the holder of an Option granted under the Plan dies (i) while
employed by the Company or a subsidiary or parent corporation or while providing
consulting services to the Company or a subsidiary or parent corporation or (ii)
within three (3) months after the termination of such holder's
employment/consulting, such Options may, subject to the provisions of
subparagraph (d) of this Paragraph 6, be exercised by a legatee or legatees of
such Option under such individual's last will or by such individual's personal
representatives or distributees at any time within such time as determined by
the Board of Directors or the Committee in its sole discretion, but in no event
less than six months after the individual's death, to the extent such Options
were exercisable as of the date of death or date of termination of employment,
whichever date is earlier.

     (c)  If the holder of an Option under the Plan becomes disabled within the
definition of section 22(e)(3) of the Code while employed by the Company or a
subsidiary or parent corporation, such Option may, subject to the provisions of
subparagraph (d) of this Paragraph 6, be exercised at any time within six months
less one day after such holder's termination of employment due to the
disability.

     (d)  Except as otherwise determined by the Board of Directors or the
Committee in its sole discretion, an Option may not be exercised pursuant to
this Paragraph 6 except to the extent that the holder was entitled to exercise
the Option at the time of termination of employment, consulting relationship or
death, and in any event may not be exercised after the original expiration date
of the Option. Notwithstanding anything contained herein which may be to the
contrary, such termination or death prior to vesting shall, unless otherwise
determined by the Board of Directors or Committee, in its sole discretion, be
deemed to occur at a time the holder was not entitled to exercise the Option.

     (e)  The Board of Directors or the Committee, in its sole discretion, may
at such time or times as it deems appropriate, if ever, accelerate all or part
of the vesting provisions with respect to one or more outstanding options. The
acceleration of one Option shall not infer that any Option is or to be
accelerated.

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7.   Leave of Absence.

     For the purposes of the Plan, an individual who is on military or sick
leave or other bona fide leave of absence (such as temporary employment by the
Government) shall be considered as remaining in the employ of the Company or of
a subsidiary or parent corporation for ninety (90) days or such longer period as
such individual's right to reemployment is guaranteed either by statute or by
contract.

8.   Adjustment Upon Changes in Capitalization.

     (a)  In the event that the outstanding shares of Common Stock are hereafter
changed by reason of recapitalization, reclassification, stock split-up,
combination or exchange of shares of Common Stock or the like, or by the
issuance of dividends payable in shares of Common Stock, an appropriate
adjustment shall be made by the Board of Directors, as determined by the Board
of Directors and/or the Committee, in the aggregate number of shares of Common
Stock available under the Plan, in the number of shares of Common Stock issuable
upon exercise of outstanding Options, and the Option Price per share. In the
event of any consolidation or merger of the Company with or into another
company, where the Company is not the surviving entity, or the conveyance of all
or substantially all of the assets of the Company to another company for solely
stock and/or securities, each then outstanding Option shall upon exercise
thereafter entitle the holder thereof to such number of shares of Common Stock
or other securities or property to which a holder of shares of Common Stock of
the Company would have been entitled to upon such consolidation, merger or
conveyance; and in any such case appropriate adjustment, as determined by the
Board of Directors of the Company (or successor entity) shall be made as set
forth above with respect to any future changes in the capitalization of the
Company or its successor entity. In the event of the proposed dissolution or
liquidation of the Company, or, except as provided in (b) below, the sale of
substantially all the assets of the Company for other than stock and/or
securities, all outstanding Options under the Plan will automatically terminate,
unless otherwise provided by the Board of Directors of the Company or any
authorized committee thereof.

     (b)  Any Option granted under the Plan, may, at the discretion of the Board
of Directors of the Company and said other corporation, be exchanged for options
to purchase shares of capital stock of another corporation which the Company,
and/or a

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subsidiary thereof is merged into, consolidated with, or all or a
substantial portion of the property or stock of which is acquired by said other
corporation or separated or reorganized into. The terms, provisions and benefits
to the optionee of such substitute option(s) shall in all respects be identical
to the terms, provisions and benefits of optionee under his Option(s) prior to
said substitution. To the extent the above may be inconsistent with Sections
424(a)(1) and (2) of the Code, the above shall be deemed interpreted so as to
comply therewith.

     (c)  Any adjustment in the number of shares of Common Stock shall apply
proportionately to only the unexercised portion of the Options granted
hereunder. If fractions of shares of Common Stock would result from any such
adjustment, the adjustment shall be revised to the next higher whole number of
shares of Common Stock.

9.   Further Conditions of Exercise.

     (a)  Unless the shares of Common Stock issuable upon the exercise of an
Option have been registered with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended, prior to the exercise of the Option,
an optionee must represent in writing to the Company that such shares of Common
Stock are being acquired for investment purposes only and not with a view
towards the further resale or distribution thereof, and must supply to the
Company such other documentation as may be required by the Company, unless in
the opinion of counsel to the Company such representation, agreement or
documentation is not necessary to comply with said Act.

     (b)  The Company shall not be obligated to deliver any shares of Common
Stock until they have been listed on each securities exchange on which the
shares of Common Stock may then be listed or until there has been qualification
under or compliance with such state or federal laws, rules or regulations as the
Company may deem applicable.

     (c)  The Board of Directors or Committee may make such provisions and take
such steps as it may deem necessary or appropriate for the withholding of any
taxes that the Company is required by any law or regulation of any governmental
authority, whether federal, state or local, domestic or foreign, to withhold in
connection with the exercise of any Option, including, but not limited to, (i)
the withholding of payment of all or any portion of such Option and/or SAR until
the holder reimburses the Company for the amount the Company is required to
withhold with respect to such taxes, or (ii) the cancelling of any number of
shares of

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Common Stock issuable upon exercise of such Option and/or SAR in an amount
sufficient to reimburse the Company for the amount it is required to so
withhold, (iii) the selling of any property contingently credited by the Company
for the purpose of exercising such Option, in order to withhold or reimburse the
Company for the amount it is required to so withhold, or (iv) withholding the
amount due from such employee's wages if the employee is employed by the Company
or any subsidiary thereof.

10.  Termination, Modification and Amendment.

     (a)  The Plan (but not Options previously granted under the Plan) shall
terminate ten (10) years from the earliest of the date of its adoption by the
Board of Directors, or the date the Plan is approved by the stockholders of the
Company, or such date of termination, as hereinafter provided, and no Option
shall be granted after termination of the Plan.

     (b)  The Plan may from time to time be terminated, modified or amended by
the affirmative vote of the holders of a majority of the outstanding shares of
capital stock of the Company entitled to vote thereon.

     (c)  The Board of Directors of the Company may at any time, prior to ten
(10) years from the earlier of the date of the adoption of the Plan by such
Board of Directors or the date the Plan is approved by the stockholders,
terminate the Plan or from time to time make such modifications or amendments of
the Plan as it may deem advisable; provided, however, that the Board of
Directors shall not, without approval by the affirmative vote of the holders of
a majority of the outstanding shares of capital stock of the Company entitled to
vote thereon, increase (except as provided by Paragraph 8) the maximum number of
shares of Common Stock as to which Options or shares may be granted under the
Plan, or materially change the standards of eligibility under the Plan. Any
amendment to the Plan which, in the opinion of counsel to the Company, will be
deemed to result in the adoption of a new Plan, will not be effective until
approved by the affirmative vote of the holders of a majority of the outstanding
shares of capital stock of the Company entitled to vote thereon.

     (d)  No termination, modification or amendment of the Plan may adversely
affect the rights under any outstanding Option without the consent of the
individual to whom such Option shall have been previously granted.

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11.  Effective Date of the Plan.

     The Plan shall become effective upon adoption by the Board of Directors of
the Company. The Plan shall be subject to approval by the affirmative vote of
the holders of a majority of the outstanding shares of capital stock of the
Company entitled to vote thereon within one year before or after adoption of the
Plan by the Board of Directors.

12.  Not a Contract of Employment.

     Nothing contained in the Plan or in any option agreement executed pursuant
hereto shall be deemed to confer upon any individual to whom an Option is or may
be granted hereunder any right to remain in the employ of the Company or of a
subsidiary or parent of the Company or in any way limit the right of the
Company, or of any parent or subsidiary thereof, to terminate the employment of
any employee.

13.  Other Compensation Plans.

     The adoption of the Plan shall not affect any other stock option plan,
incentive plan or any other compensation plan in effect for the Company, nor
shall the Plan preclude the Company from establishing any other form of stock
option plan, incentive plan or any other compensation plan.

fci

                                       12<PAGE>

                                                                   EXHIBIT 10.26

                             COLLABORATION AGREEMENT

                                     BETWEEN

                           ONYX PHARMACEUTICALS, INC.

                                       AND

                             WARNER-LAMBERT COMPANY

                                OCTOBER 13, 1999

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                             PAGE
<S>           <C>                                                                               <C>
ARTICLE 1       DEFINITIONS.....................................................................1

     1.1      "Affiliate".......................................................................1

     1.2      "Allowable Expenses"..............................................................2

     1.3      "Collaboration"...................................................................2

     1.4      "Commercialization"...............................................................2

     1.5      "Commencement of Phase II Notice".................................................2

     1.6      "Commencement of Phase III Clinical Trials".......................................2

     1.7      "Confidential Information"........................................................2

     1.8      "Control", "Controls" and "Controlled"............................................2

     1.9      "Cost of Goods Sold"..............................................................2

     1.10     "Cost of Manufacture".............................................................2

     1.11     "Development".....................................................................3

     1.12     "Development Costs"...............................................................3

     1.13     "Development Plan and Budget".....................................................3

     1.14     "Development Team"................................................................4

     1.15     "Disclosing Party"................................................................4

     1.16     "Drug Approval Application".......................................................4

     1.17     "Effective Date"..................................................................4

     1.18     "End of Phase II Clinical Trials".................................................4

     1.19     "End of Phase II Clinical Trials Notice"..........................................4

     1.20     "Enforcing Party".................................................................4

     1.21     "FDA".............................................................................4

     1.22     "First Commercial Sale"...........................................................4

     1.23     "FTE".............................................................................4

     1.24     "Gene Product"....................................................................4

     1.25     "IND".............................................................................4

     1.26     "Independent Product".............................................................4

     1.27     "Invention".......................................................................5
</TABLE>

[*] = CERTAIN CONFIDENTIAL INFORMATION       i
CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

<PAGE>

<TABLE>
<CAPTION>
                                                                                             PAGE
<S>           <C>                                                                               <C>
      1.28     "Inventor".......................................................................5

      1.29     "Joint Marketing Committee"......................................................5

      1.30     "Joint Invention"................................................................5

      1.31     "Joint Patent"...................................................................5

      1.32     "Know-How".......................................................................5

      1.33     "Licensed Product"...............................................................5

      1.34     "Local/Regional ONYX-015"........................................................5

      1.35     "Major Markets"..................................................................5

      1.36     "Manufacturing Party"............................................................5

      1.37     "Marketing Plan and Budget"......................................................5

      1.38     "Net Sales"......................................................................5

      1.39     "Onyx Know-How"..................................................................6

      1.40     "ONYX-015".......................................................................6

      1.41     "Onyx Patent"....................................................................6

      1.42     "Other Territory"................................................................6

      1.43     "Patent".........................................................................6

      1.44     "Patent Expenses"................................................................6

      1.45     "Phase I Clinical Trials"........................................................6

      1.46     "Phase II Clinical Trials".......................................................6

      1.47     "Phase II Results"...............................................................7

      1.48     "Phase II/III Clinical Trials"...................................................7

      1.49     "Phase III Clinical Trials"......................................................7

      1.50     "Phase IIIB Clinical Trials".....................................................7

      1.51     "Phase IV Clinical Trials".......................................................7

      1.52     "Pre-Marketing"..................................................................7

      1.53     "Pre-Marketing Expenses".........................................................7

      1.54     "Pro-Drug Product"...............................................................7

      1.55     "Product Profit".................................................................7
</TABLE>

[*] = CERTAIN CONFIDENTIAL INFORMATION       ii
CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

<PAGE>
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      1.56     "Quarterly Financial Statement"..................................................8

      1.57     "Regulatory Approval"............................................................8

      1.58     "Research Management Committee"..................................................8

      1.59     "Research Plan"..................................................................8

      1.60     "Research Program"...............................................................8

      1.61     "Research Term"..................................................................8

      1.62     "Royalty Term"...................................................................8

      1.63     "Sales Effort"...................................................................8

      1.64     "Selected Drug"..................................................................8

      1.65     "Selected Drug System"...........................................................8

      1.66     "Selected Gene"..................................................................8

      1.67     "Shared Territory"...............................................................8

      1.68     "Steering Committee".............................................................8

      1.69     "Systemic ONYX-015"..............................................................8

      1.70     "Terminated Product".............................................................8

      1.71     "Third Party"....................................................................8

      1.72     "Third Party Royalty"............................................................9

      1.73     "Total Sales Effort".............................................................9

      1.74     "Valid Claim"....................................................................9

      1.75     "Warner Know-How"................................................................9

      1.76     "Warner Patent"..................................................................9

ARTICLE 2       MANAGEMENT OF THE COLLABORATION.................................................9

      2.1      Steering Committee...............................................................9

               (a)      Formation and Function..................................................9

               (b)      Meetings...............................................................10

      2.2      Research Management Committee...................................................10

      2.3      Development Teams...............................................................10

      2.4      Joint Marketing Committee.......................................................11
</TABLE>

[*] = CERTAIN CONFIDENTIAL INFORMATION       iii
CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

<PAGE>

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<S>           <C>                                                                               <C>
      2.5      Meetings........................................................................11

      2.6      Dispute Resolution..............................................................11

      2.7      Limitations of Powers of the Steering Committee.................................12

ARTICLE 3       RESEARCH PROGRAM...............................................................12

      3.1      Undertaking and Scope...........................................................12

      3.2      Personnel and Resources.........................................................12

      3.3      Term of the Research Collaboration..............................................12

      3.4      Collaboration Expenses; Right to Engage Third Parties...........................13

               (a)   Collaboration Expenses....................................................13

               (b)   Right to Engage Third Parties.............................................13

      3.5      Research on Additional Licensed Products........................................13

               (a)   Systemic ONYX-015.........................................................13

               (b)   Pro-Drug Product..........................................................13

               (c)   Gene Product..............................................................14

               (d)   Process Technology Research...............................................14

               (e)   Termination of Certain Research...........................................14

               (f)   No Designation for Development of a Licensed Product......................15

      3.6      Designation of Licensed Products for Development................................15

      3.7      Exclusivity Regarding Licensed Products.........................................15

               (a)   General...................................................................15

               (b)   Pro-Drug Product..........................................................15

               (c)   Gene Product..............................................................16

      3.8      Onyx Independent Activities.....................................................16

ARTICLE 4       DEVELOPMENT....................................................................17

      4.1      Development Teams...............................................................17

      4.2      Development Plans and Budgets...................................................17

      4.3      Allocation of Development Activities............................................17

      4.4      Diligence for Licensed Products.................................................17
</TABLE>

[*] = CERTAIN CONFIDENTIAL INFORMATION       iv
CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

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               (a)   General...................................................................17

               (b)   Local/Regional ONYX-015...................................................17

               (c)   Other Licensed Products...................................................18

               (d)   Onyx Remedies In The Event Of Lack Of Diligence...........................18

      4.5      Onyx Independent Product Development............................................19

               (a)   Notice of Onyx Independent Development....................................19

               (b)   Warner Obligations as to Independent Products.............................19

               (c)   Onyx Activities...........................................................19

      4.6      Warner Buy-Back Option..........................................................20

               (a)   Buy-Back Price Until [*] After Notice Of Commencement Of
                     Phase II..................................................................20

               (b)   Buy-Back Price Until [*] After Receipt of Results After
                     Completion of Phase II Clinical Trials....................................20

               (c)   Product Transition Following Warner Exercise..............................21

               (d)   Onyx Rights In The Absence Of Warner Exercise.............................21

      4.7      Onyx Development of Terminated Products; Warner Obligations.....................21

      4.8      Right to Engage Third Parties...................................................22

      4.9      INDs and Drug Approval Applications.............................................22

      4.10     Termination by Onyx of Co-Development...........................................22

      4.11     Termination by Warner of Co-Development.........................................22

ARTICLE 5       COMMERCIALIZATION..............................................................22

      5.1      Commercialization of Licensed Products..........................................22

      5.2      Onyx Right To Co-Promote And Share Profits In The Shared Territory..............23

      5.3      Co-Promotion Activities.........................................................23

               (a)   Marketing Plans and Budget................................................23

               (b)   Allocation Of Sales Effort................................................23

               (c)   Failure by Onyx to Provide Minimum Sales Effort...........................23

               (d)   Failure by a Party to Provide Sales Effort................................24
</TABLE>

[*] = CERTAIN CONFIDENTIAL INFORMATION       v
CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

<PAGE>
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               (e)   Promotional and Advertising Materials.....................................24

               (f)   Orders; Sales.............................................................24

               (g)   Trademarks; Product Presentation..........................................24

               (h)   Training..................................................................24

               (i)   Onyx Right to Use Certain Warner Information..............................24

      5.4      Termination of Co-Promotion.....................................................25

      5.5      Termination Of Co-Promotion Upon Certain Changes of Control.....................25

      5.6      Launch Budgets and Pre-Marketing Expenses.......................................25

               (a)   Launch Plans And Budgets..................................................25

               (b)   Pre-Marketing Expenses....................................................25

      5.7      Promotional Materials In The Other Territory....................................26

      5.8      Complaints......................................................................26

      5.9      Tax Considerations..............................................................26

ARTICLE 6       LICENSES.......................................................................26

      6.1      Patent Licenses to Warner for Licensed Products.................................26

      6.2      Patent License to Onyx for Commercialization and Development....................26

      6.3      Nonexclusive Know-How License to Warner.........................................26

      6.4      Nonexclusive Know-How License to Onyx...........................................27

      6.5      Sublicensing....................................................................27

      6.6      Third-Party Technology..........................................................27

      6.7      License to Onyx for Terminated Products and Independent Products................27

ARTICLE 7       PAYMENT PROVISIONS.............................................................27

      7.1      Licensing Fee...................................................................27

      7.2      Research Program Payments.......................................................28

               (a)   FTE Rate..................................................................28

               (b)   Payment Schedule..........................................................28

      7.3      Payment of Development Costs....................................................28

               (a)   Allocation of Development Costs...........................................28
</TABLE>

[*] = CERTAIN CONFIDENTIAL INFORMATION       vi
CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

<PAGE>
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               (b)   Partial Deferral Of Development Costs By Onyx.............................28

               (c)   Maintenance of Records of Development Costs...............................29

      7.4      Milestone Payments..............................................................29

               (a)   Milestone Amounts.........................................................29

               (b)   One Milestone Per Product.................................................31

               (c)   Backup Licensed Products..................................................31

               (d)   Special [ * ] Milestone...................................................31

      7.5      Royalty Payments on Licensed Products (Other Territory).........................32

               (a)   Royalty Amount and Term...................................................32

               (b)   Royalties Owed to [ * ]...................................................33

               (c)   [ * ].....................................................................33

               (d)   Know-How Royalty..........................................................33

               (e)   Royalty on Independent Products...........................................33

               (f)   Royalty Payments on Licensed Products on Termination of Co-
                     Promotion (United States and Canada)......................................34

      7.6      Profit Sharing (Shared Territory)...............................................34

               (a)   Share of Profits.........................................34

               (b)   Determination of Allowable Expenses and Product Profit....................34

               (c)   Payments..................................................................35

               (d)   Recovery of Warner Advances...............................................36

               (e)   Duration..................................................................36

      7.7      Currency of Payment.............................................................36

      7.8      Payment and Reporting...........................................................36

      7.9      Records.........................................................................36

      7.10     Taxes Withheld..................................................................37

      7.11     Computation of Royalties........................................................37

      7.12     Licenses to Affiliates..........................................................37

      7.13     Prohibition of Royalty Payments.................................................37
</TABLE>

[*] = CERTAIN CONFIDENTIAL INFORMATION       vii
CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

<PAGE>
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      7.14     Accounting......................................................................37

ARTICLE 8       MANUFACTURE AND SUPPLY.........................................................38

      8.1      Allocation of Responsibility and Control........................................38

               (a)   Warner as Manufacturing Party.............................................38

               (b)   Onyx' Continued Obligation to Manufacture.................................38

      8.2      Third Party Manufacturers.......................................................39

      8.3      Process Development.............................................................39

      8.4      Specifications..................................................................39

      8.5      Transfer Price..................................................................39

ARTICLE 9       CONFIDENTIALITY................................................................39

      9.1      Confidentiality.................................................................39

      9.2      Publicity.......................................................................40

      9.3      Publication.....................................................................40

ARTICLE 10      OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT
                RIGHTS.........................................................................41

      10.1     Ownership of Inventions.........................................................41

      10.2     Patent Prosecution..............................................................41

               (a)   Solely-Owned Inventions...................................................41

               (b)   Joint Inventions..........................................................41

      10.3     Protection of Patent Rights.....................................................42

      10.4     Third-Party Patent Rights.......................................................43

      10.5     Infringement by Third Parties...................................................43

               (a)   Field Infringement........................................................43

               (b)   Agreement of Enforcing Party..............................................44

               (c)   Other Infringing Activity.................................................44

      10.6     Defense and Settlement of Third-Party Claims Against Licensed Products..........44

               (a)   Control...................................................................44

               (b)   Allocation of Expenses....................................................45
</TABLE>

[*] = CERTAIN CONFIDENTIAL INFORMATION       viii
CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

<PAGE>
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               (c)   [ * ].....................................................................45

      10.7     Jointly Owned Patents...........................................................45

      10.8     Trademarks......................................................................45

               (a)   Product Trademarks........................................................46

               (b)   Infringement of Trademarks................................................46

               (c)   Third Party Trademark.....................................................46

               (d)   Costs of Defense..........................................................46

ARTICLE 11      REPRESENTATIONS AND WARRANTIES.................................................46

      11.1     Representations and Warranties..................................................46

               (a)   Party Representations and Warranties......................................47

               (b)   Onyx Representations and Warranties.......................................47

               (c)   Further Representations and Warranties....................................48

               (d)   Performance by Affiliates.................................................48

ARTICLE 12      TERM AND TERMINATION...........................................................48

      12.1     Right Of Warner to Terminate Development........................................48

      12.2     Term............................................................................48

      12.3     Termination for Material Breach.................................................48

               (a)   Breach; Cure..............................................................48

               (b)   Termination by Non-Breaching Party........................................49

               (c)   Transfer of Rights........................................................49

               (d)   Provisions for Continued Manufacturing....................................50

      12.4     Surviving Rights................................................................50

      12.5     Accrued Rights, Surviving Obligations...........................................51

ARTICLE 13      INDEMNIFICATION................................................................51

      13.1     Indemnification for Licensed Products in the Other Territory....................51

               (a)   Warner Indemnification....................................................51

               (b)   Onyx Indemnification......................................................51

      13.2     Indemnification for Licensed Products in the Shared Territory...................51
</TABLE>

[*] = CERTAIN CONFIDENTIAL INFORMATION       ix
CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

<PAGE>
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      13.3     Indemnification for Independent Products and Terminated Products................51

      13.4     Indemnification for Research and Development....................................52

      13.5     Notice of Claim.................................................................52

ARTICLE 14      MISCELLANEOUS..................................................................52

      14.1     Dispute Resolution..............................................................52

               (a)   Informal Resolution Procedure.............................................52

               (b)   Senior Executive Discussion...............................................52

               (c)   Warner Resolution of Certain Matters......................................53

               (d)   Formal Resolution.........................................................53

      14.2     Assignment......................................................................53

               (a)   Affiliates................................................................53

               (b)   Merger, Acquisition or Sale of Assets.....................................53

               (c)   Binding Upon Successors and Assigns.......................................53

      14.3     Force Majeure...................................................................53

      14.4     Further Actions.................................................................53

      14.5     No Trademark Rights.............................................................53

      14.6     Notices.........................................................................54

      14.7     Tangible Property...............................................................54

      14.8     Limitation of Liability.........................................................55

      14.9     Waiver..........................................................................55

      14.10    Severability....................................................................55

      14.11    Ambiguities.....................................................................55

      14.12    Governing Law...................................................................55

      14.13    Headings........................................................................55

      14.14    Counterparts....................................................................55

      14.15    Entire Agreement................................................................55

      14.16    Independent Contractors.........................................................56

      14.17    Use of Names....................................................................56
</TABLE>

[*] = CERTAIN CONFIDENTIAL INFORMATION       x
CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE
24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.

<PAGE>

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                             COLLABORATION AGREEMENT
                                     BETWEEN
              ONYX PHARMACEUTICALS, INC. AND WARNER-LAMBERT COMPANY

     THIS COLLABORATION AGREEMENT (the "AGREEMENT") is made and entered into on
October 13, 1999, to be effective as of September 1, 1999 (the "EFFECTIVE
DATE"), by and between ONYX PHARMACEUTICALS, INC., a Delaware corporation having
its principal place of business at 3031 Research Drive, Richmond, California
94806 ("ONYX"), and WARNER-LAMBERT COMPANY, a Delaware corporation having its
principal place of business at 201 Tabor Road, Morris Plains, New Jersey 07950
("WARNER"). Onyx and Warner may be referred to herein individually as a "Party"
and collectively as the "Parties".

                                    RECITALS

     A. Warner is a global company devoted, among other businesses, to
discovering, developing, manufacturing and marketing human pharmaceutical
products.

     B. Onyx is a biotechnology company engaged in the discovery and development
of novel pharmaceuticals for cancer indications. In particular, Onyx has
developed a novel replicating virus, ONYX-015, for the treatment of human
cancer. Onyx has conducted Phase I and II clinical trials of ONYX-015 in
patients with head and neck cancer, and is conducting early stage clinical
trials of ONYX-015 in patients with other types of cancer, including pancreatic
cancer, ovarian cancer, and gastrointestinal metastases to the liver and in
patients with preneoplastic disease, including leukoplakia and Barrett's
esophagus.

     C. Onyx believes that adenoviruses such as ONYX-015 may also be modified to
encode the production of other desirable therapeutic gene products.

     D. Warner and Onyx desire to establish a broad collaboration for the
further development and commercialization of ONYX-015, and the research,
development, and commercialization of two (2) additional products consisting of
adenoviruses that (i) have been engineered to selectively replicate in cancer
cells based on the abnormal p53 pathway function in such cells and (ii) are
further modified to encode the production of selected gene products.

                                   ARTICLE 1

                                   DEFINITIONS

     The following terms shall have the following meanings as used in this
Agreement:

     1.1 "AFFILIATE" means, with respect to a particular Party, an entity that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with such Party. As used in this
Section 1.1, the term "controls" (with correlative

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       1
<PAGE>

meanings for the terms "controlled by" or "under common control with") means (a)
that an entity or company owns, directly or indirectly, more than fifty percent
(50%) of the voting stock of another entity, or (b) that an entity, person or
group otherwise has the actual ability to control and direct the management of
the entity, whether by contract or otherwise.

     1.2 "ALLOWABLE EXPENSES" means the following expenses to the extent
incurred with respect to a particular Licensed Product that is sold in the
Shared Territory: (i) [ * ]. Allowable Expenses shall be determined separately
for each of Local/Regional ONYX-015, Systemic ONYX-015, the Pro-Drug Product and
the Gene Product, in order to permit a separate profit and loss calculation for
each such Licensed Product. Allowable Expenses shall exclude [ * ], even if
incurred after the first commercial launch of the Licensed Product to which such
costs relate.

     1.3 "COLLABORATION" means the collaborative efforts of the Parties
conducted pursuant to the terms of this Agreement.

     1.4 "COMMERCIALIZATION" means the manufacturing, marketing, promotion,
sale, supply, import, export and distribution of Licensed Products.

     1.5 "COMMENCEMENT OF PHASE II NOTICE" shall have the meaning assigned in
Section 4.6(a).

     1.6 "COMMENCEMENT OF PHASE III CLINICAL TRIALS" means the first dosing of
the first patient in a Phase III Clinical Trial or, in the event a Phase II
Clinical Trial is converted into a Phase II/III Clinical Trial, the date on
which the FDA approves the continuation of such original Phase II Clinical Trial
as a pivotal trial.

     1.7 "CONFIDENTIAL INFORMATION" shall have the meaning assigned in Section
9.1(a).

     1.8 "CONTROL", "CONTROLS" AND "CONTROLLED" mean, with respect to a
particular item of information or intellectual property right, that the
applicable Party owns or has a license to such item or right and has the ability
to grant to the other Party access to and a license or sublicense (as
applicable) under such item or rights as provided for herein without violating
the terms of any agreement or other arrangement with any Third Party.

     1.9 "COST OF GOODS SOLD" means the actual cost of bulk products or
finished products sold (or utilized in Development), determined in accordance
with U.S. generally accepted accounting principles applied consistently
throughout the organization of the Party determining such costs. "Cost of
Goods Sold" shall include: (i) in the case of [ * ] provided by a Party or
its Affiliate, its [ * ] of such bulk products or finished products, (ii) the
[ * ] and (iii) in the case of finished products or bulk products acquired by
a Party from Third Parties, payments made to such [ * ] by the purchaser in
respect of such acquisition of such finished products or bulk products.

     1.10 "COST OF MANUFACTURE" means, with respect to any bulk product or
finished product, but subject to the last sentence of this Section 1.10, the
actual fully allocated cost of manufacturing such product (in accordance with
Good Manufacturing Practices) determined in accordance with U.S. generally
accepted accounting principles applied consistently throughout the organization
of the Party determining such costs, which includes the [ * ], in accordance
with

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       2
<PAGE>

the normal accounting practices for all other products manufactured in the
applicable facility. "Cost of Manufacture" shall exclude [ * ].

     1.11 "DEVELOPMENT" means those activities undertaken with respect to a
Licensed Product or an Independent Product, (i) after (A) appropriate
designation of such Licensed Product for commencement of GLP toxicology studies
or (B) Onyx has obtained the right to develop such Independent Product pursuant
to Section 4.4 and has given notice of its intent to do so, and (ii) that are
specifically directed toward obtaining Regulatory Approval of such Licensed
Product or Independent Product, such as required pre-clinical testing and
toxicology studies, human clinical trials, formulation, bulk production,
fill/finish, manufacturing process development, manufacturing scale-up costs and
validation, qualification and certification costs and preparation of regulatory
filings.

     1.12 "DEVELOPMENT COSTS" means all costs and expenses actually incurred in
conducting the Development of a Licensed Product or an Independent Product,
calculated in accordance with U.S. generally accepted accounting principles.
Development Costs may include the following, if incurred with respect to the
Development of a particular Licensed Product or Independent Product:

                  (i) the [ * ] of the Licensed Product or Independent Product
used in conducting such Development;

                  (ii) [ * ]);

                  (iii) [ * ] for [ * ] with respect to such Licensed Product or
Independent Product [ * ], all to the extent supported by invoices and actual
payments; and

                  (iv) [ * ] for [ * ] in conducting such Development [ * ]
(I.E., [ * ] times [ * ]), BUT ONLY to the extent such costs are not
otherwise included in the costs described in this definition (such as [ * ]).

     General [ * ] under this Agreement shall be excluded from Development
Costs.

     1.13 "DEVELOPMENT PLAN AND BUDGET" shall have the meaning assigned in
Section 4.2.

     1.14 "DEVELOPMENT TEAM" means, with respect to a particular Licensed
Product, the committee established by Warner as provided in Section 2.3.

     1.15 "DISCLOSING PARTY" shall have the meaning assigned in Section 9.1(a).

     1.16 "DRUG APPROVAL APPLICATION" means an application for Regulatory
Approval required before commercial sale of a Licensed Product as a
pharmaceutical product in a regulatory jurisdiction.

     1.17 "EFFECTIVE DATE" shall mean the effective date of this Agreement as
set forth in the first paragraph hereof.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                       3
<PAGE>

     1.18 "END OF PHASE II CLINICAL TRIALS" means with respect to a given
Licensed Product or Independent Product, the time when the Party sponsoring the
Phase II Clinical Trials ("Sponsoring Party") has given written notice to the
other Party that: (i) the Sponsoring Party has completed that number of Phase II
Trials which the Sponsoring Party believes, in good faith, are sufficient to
permit commencement of a Phase III Clinical Trial; (ii) the Sponsoring Party has
prepared a Phase III Clinical Trial protocol; and (iii) the Sponsoring Party has
held an "end of Phase II" meeting with FDA and has reviewed the Phase III
Clinical Trial protocol with the FDA and has a good faith belief that the FDA
will permit commencement of the Phase III Clinical Trials (or has been advised
by the FDA that no such meeting or review is required).

     1.19 "END OF PHASE II CLINICAL TRIALS NOTICE" shall have the meaning
assigned in Section 4.6(b).

     1.20 "ENFORCING PARTY" shall have the meaning assigned in Section 10.5(a).

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

     1.22 "FIRST COMMERCIAL SALE" shall mean the first sale of a Licensed
Product to a Third Party in a country after Regulatory Approval has been
obtained for such Licensed Product in such country.

     1.23 "FTE" shall mean a full-time employee or equivalent, working no less
than [ * ] man hours per year.

     1.24 "GENE PRODUCT" means the adenovirus product selected by Warner under
Section 3.5(c).

     1.25 "IND" means an Investigational New Drug Application as defined in the
United States Food, Drug and Cosmetic Act and applicable regulations promulgated
thereunder by the FDA or the equivalent application to the equivalent agency in
any other regulatory jurisdiction, the filing of which is necessary to commence
clinical testing of pharmaceutical products in humans.

     1.26 "INDEPENDENT PRODUCT" shall have the meaning assigned in Section
4.4(d).

     1.27 "INVENTION" shall have the meaning assigned in Section 10.1.

     1.28 "INVENTOR" shall have the meaning assigned in Section 10.1.

     1.29 "JOINT MARKETING COMMITTEE" means the committee established pursuant
to Section 2.4.

     1.30 "JOINT INVENTION" means any Invention that is jointly invented by at
least one employee, contractor or consultant of each Party.

     1.31 "JOINT PATENT" means a Patent that claims a Joint Invention.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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     1.32 "KNOW-HOW" means Onyx Know-How and/or Warner Know-How.

     1.33 "LICENSED PRODUCT" means Local/Regional ONYX-015, Systemic ONYX-015,
the Pro-Drug Product (upon selection of the Selected Drug System pursuant to
Section 3.5(b)) or the Gene Product (upon selection of the Selected Gene
pursuant to Section 3.5(c)), BUT EXCLUDING those of the foregoing that become
Independent Products unless and until such time as Warner exercises its buy-back
rights under Section 4.6 or that become Terminated Products.

     1.34 "LOCAL/REGIONAL ONYX-015" means the unmodified ONYX-015 currently in
clinical trials sponsored by Onyx, and including any formulation thereof, such
as, but without limitation, lyophilized formulations, mouthwash formulations,
and formulations that stabilize ONYX-015 for storage at refrigerated or room
temperature, BUT EXCLUDING modified formulations that comprise Systemic
ONYX-015.

     1.35 "MAJOR MARKETS" means the countries of France, Germany, Italy, Japan,
the United Kingdom and the United States.

     1.36 "MANUFACTURING PARTY" means, at any particular point in time, the
Party then responsible hereunder for the manufacture and supply of particular
Licensed Products for use in Development and/or for commercial sale.

     1.37 "MARKETING PLAN AND BUDGET" shall have the meaning assigned in Section
5.3(a).

     1.38 "NET SALES" means the gross amount invoiced to Third Parties (other
than a sublicensee hereunder) by a Party, its Affiliates and (in the Other
Territory) its permitted non-Affiliate sublicensees for the sale of Licensed
Products to such Third Parties, after deduction for the following items to the
extent actually incurred or allowed with respect to such sales of Licensed
Products or Independent Products: (i) [ * ].

     1.39 "ONYX KNOW-HOW" means all know-how that (A) is Controlled by Onyx and
(B) is related to or is reasonably useful to the Collaboration, but excluding
the Onyx Patents. For clarity, the following are also excluded from "Onyx
Know-How": compounds and information relating to compounds (other than ONYX-015)
that have been identified by Onyx as candidates for cGLP/cGMP studies on or
before the Effective Date, or are hereafter so identified independent of the
Collaboration and without material application of any information provided by
Warner or developed by either Party pursuant to the Collaboration.

     1.40 "ONYX-015" means any and all formulations of the genetically
engineered adenovirus DL1520 described in US Patent Numbers 5,677,178 and
5,846,945 that selectively replicates in and kills cancer cells based on
abnormal p53 pathway function and is currently in clinical trials sponsored by
Onyx.

     1.41 "ONYX PATENT" means a Patent that (A) is Controlled by Onyx, and (B)
claims any Invention, or the composition of matter, manufacture, and/or use of
ONYX-015 or a Licensed Product (or any part or aspect of a Licensed Product), or
any technology necessary to research, develop or commercialize Licensed
Products, and including Onyx' interest in any Joint Patents.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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At the request of Warner, Onyx shall from time to time provide Warner a list of
the Onyx Patents. The existing Onyx Patents as of the Effective Date (to Onyx'
knowledge) are listed on Exhibit B attached hereto.

     1.42 "OTHER TERRITORY" means all countries and territories of the world
excluding the Shared Territory.

     1.43 "PATENT" means (A) an issued patent, including re-examinations,
reissues, renewals, extensions, supplementary protection certificates and term
restorations thereof, and/or (B) an application for a patent, including
continuations, continuations-in-part, divisional and substitute applications,
and/or inventors' certificates relating thereto.

     1.44 "PATENT EXPENSES" means the actual fees and expenses of outside
counsel and payments to Third Parties incurred after the Effective Date in
connection with the preparation, filing, prosecution and maintenance of Onyx
Patents and/or Warner Patents claiming the composition of matter, manufacture or
use of a Licensed Product, including the costs of patent interference and
opposition proceedings relating thereto.

     1.45 "PHASE I CLINICAL TRIALS" means those trials on sufficient numbers of
normal volunteers and patients that are designed to establish that a
pharmaceutical product is safe for its intended use, and to support its
continued testing in Phase II Clinical Trials.

     1.46 "PHASE II CLINICAL TRIALS" means those trials on sufficient numbers of
patients that are designed to establish the safety and biological activity of a
pharmaceutical product for its intended use, and to define warnings, precautions
and adverse reactions that are associated with the pharmaceutical product in the
dosage range to be prescribed.

     1.47 "PHASE II RESULTS" shall have the meaning assigned in Section 4.6.

     1.48 "PHASE II/III CLINICAL TRIALS" means a clinical trial (or set of
clinical trials) that began as a Phase II Clinical Trial, after such date as the
FDA (or equivalent regulatory authority) has indicated that the applicable Party
may reasonably continue such trials with the intention to establish that a
pharmaceutical product is safe and efficacious for its intended use, and to
define warnings, precautions and adverse reactions that are associated with the
pharmaceutical product in the dosage range to be prescribed, and to support
Regulatory Approval of such pharmaceutical product or label expansion of such
pharmaceutical product.

     1.49 "PHASE III CLINICAL TRIALS" means those trials on sufficient numbers
of patients that are designed to establish that a pharmaceutical product is safe
and efficacious for its intended use, and to define warnings, precautions and
adverse reactions that are associated with the pharmaceutical product in the
dosage range to be prescribed, and to support Regulatory Approval of such
pharmaceutical product or label expansion of such pharmaceutical product.

     1.50 "PHASE IIIB CLINICAL TRIALS" means product support clinical trials of
a Licensed Product (i.e., a clinical trial which is not required for receipt of
Regulatory Approval but which may be useful in providing additional drug profile
data) commenced before receipt of Regulatory Approval.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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     1.51 "PHASE IV CLINICAL TRIALS" means product support clinical trials of a
Licensed Product commenced for the purpose of marketing the applicable product
and not for the purpose of obtaining Regulatory Approval, which are commenced
after receipt of Regulatory Approval of such Licensed Product.

     1.52 "PRE-MARKETING" means the following activities undertaken prior to and
in preparation for the launch of a particular Licensed Product: advertising,
education, product-related public relations, health care economic studies,
governmental affairs activities for reimbursement and formulary acceptance,
sales force training, Phase IIIB Clinical Trials, selection, filing, prosecution
and enforcement of trademarks, and similar activities to the extent included in
the Marketing Plan and Budget.

     1.53 "PRE-MARKETING EXPENSES" means the actual costs (but excluding, for
clarity, all Development Costs) incurred specifically for the Pre-Marketing of a
Licensed Product in the Shared Territory. Pre-Marketing Expenses shall exclude
administrative expenses.

     1.54 "PRO-DRUG PRODUCT" means the adenovirus product selected by Warner
under Section 3.5(b).

     1.55 "PRODUCT PROFIT" means, with respect to a particular Licensed Product
sold (or otherwise commercialized) in the Shared Territory, the Net Sales for
such Licensed Product sold (or otherwise commercialized) in the Shared
Territory, less the Allowable Expenses incurred with respect to such sales of
Licensed Product.

     1.56 "QUARTERLY FINANCIAL STATEMENT" shall have the meaning assigned in
Section 7.6(b).

     1.57 "REGULATORY APPROVAL" means all approvals (including pricing and
reimbursement approvals), product and/or establishment licenses, registrations
or authorizations of all regional, federal, state or local regulatory agencies,
departments, bureaus and other governmental entities, necessary for the
manufacture, use, storage, import, export, transport and sale of a
pharmaceutical product in a jurisdiction.

     1.58 "RESEARCH MANAGEMENT COMMITTEE" or "RMC" shall mean the committee
established pursuant to Section 2.2 below.

     1.59 "RESEARCH PLAN" means the plan of research with respect to Licensed
Products, and the related budget, established by the Research Management
Committee.

     1.60 "RESEARCH PROGRAM" means that program of collaborative research
conducted by the Parties pursuant to the Research Plan.

     1.61 "RESEARCH TERM" shall have the meaning assigned in Section 3.3.

     1.62 "ROYALTY TERM" shall have the meaning assigned in Section 7.5(a).

     1.63 "SALES EFFORT" shall have the meaning assigned in Section 5.3(b).

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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     1.64 "SELECTED DRUG" shall have the meaning assigned in Section 3.5(b).

     1.65 "SELECTED DRUG SYSTEM" shall have the meaning assigned in Section
3.5(b).

     1.66 "SELECTED GENE" shall have the meaning assigned in Section 3.5(c).

     1.67 "SHARED TERRITORY" means the United States and Canada (but excluding
their territories or possessions), except, with respect to a particular Licensed
Product, as otherwise provided in Sections 4.10, 5.2, 5.3(c) or 5.4.

     1.68 "STEERING COMMITTEE" shall mean the committee established pursuant to
Section 2.1(a) below to oversee and manage the Collaboration.

     1.69 "SYSTEMIC ONYX-015" means ONYX-015 modified by [ * ] or [ * ]
technologies, or genetic or other modifications limited to changes in [ * ],
that have the objective of enhancing the [ * ] of, [ * ] of, or [ * ] by,
ONYX-015 in an infection process for the purpose of systemic administration.

     1.70 "TERMINATED PRODUCT" shall mean Systemic ONYX-015, the Pro-Drug
Product and/or the Gene Product for which Warner has granted to Onyx the license
rights set forth in Section 6.7, as more specifically set forth in Sections
3.5(e), 3.5(f) and 4.7.

     1.71 "THIRD PARTY" means any entity other than Onyx or Warner or their
Affiliates.

     1.72 "THIRD PARTY ROYALTY" means any royalty paid by a Party or an
Affiliate to a Third Party in respect of the manufacture, use or sale of a
Licensed Product.

     1.73 "TOTAL SALES EFFORT" shall have the meaning assigned in Section
5.3(b).

     1.74 "VALID CLAIM" shall mean any claim in an issued, unexpired patent that
has not been held unenforceable, unpatentable or invalid by a decision of a
court or other governmental agency of competent jurisdiction following
exhaustion (or expiration) of all possible appeal processes, and that has not
been admitted to be invalid or unenforceable through reissue, reexamination or
disclaimer or has not been made unenforceable due to a failure to pay
maintenance fees.

     1.75 "WARNER KNOW-HOW" means all know-how that (a) Warner Controls and (b)
is related to or is reasonably useful for the Collaboration, but excluding the
Warner Patents or any know-how or information relating to other Warner products
(even if also relating to Licensed Products) or Warner's business practices
(including research, development and commercialization) relevant to other
pharmaceutical products. For clarity, the following are also excluded from
"Warner Know-How": (i) Warner's high-volume screening technology, and (ii)
compounds and Information relating to compounds that have been identified by
Warner as candidates for cGLP/cGMP studies on or before the Effective Date, or
are hereafter so identified independent of the Collaboration and without
material application of any Information provided by Onyx or developed by either
Party pursuant to the Collaboration.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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<PAGE>

     1.76 "WARNER PATENT" means a Patent that (a) is Controlled by Warner, and
(b) claims the composition of matter, manufacture, and/or use of a Licensed
Product, Independent Product or Terminated Product (or any part or aspect of a
Licensed Product, Independent Product or Terminated Product), or any aspect of
Onyx' activities under the Research Program, and including Warner's interest in
any Joint Patents. At the request of Onyx, Warner shall from time to time
provide Onyx a list of the Warner Patents.

                                   ARTICLE 2

                         MANAGEMENT OF THE COLLABORATION

     2.1 STEERING COMMITTEE.

         (a) FORMATION AND FUNCTION. Promptly after the Effective Date, Warner
and Onyx will each appoint 3 representatives to a management committee (the
"STEERING COMMITTEE") that shall have overall management responsibility for the
Collaboration, subject to the terms of this Agreement. Warner will select an
individual to serve as chairman of the Steering Committee for the initial 12
months. Thereafter, chairmanship will rotate between an Onyx member and a Warner
member every 12 months. The Steering Committee will be charged with overseeing
and managing the entire Collaboration, including oversight of the activities and
decisions of the Research Management Committee. In addition, the role of the
Steering Committee will be to: (1) coordinate the Parties' activities hereunder;
(2) resolve problems or settle disagreements that are unresolved by the Research
Management Committee, the Development Team and the Joint Marketing Committee
unless otherwise indicated in this Agreement; (3) approve allocations of tasks
and resources required to carry out the goals of the Collaboration; (4) review
and approve the Research Plan, the Development Plan and Budget for each Licensed
Product, and the Marketing Plan and Budget for each Licensed Product that has
achieved Regulatory Approval in the Shared Territory; (5) designate Licensed
Products for Development as provided in Section 3.6; (6) encourage and
facilitate ongoing cooperation between the parties; (7) coordinate and monitor
the payments and repayments to be made by and between the parties; and (8)
perform such other functions as appropriate to further the purposes of this
Agreement as determined by the parties. All decisions of the Steering Committee
shall be by unanimous consent of its members. Any disputes or disagreements
within the Steering Committee shall be resolved pursuant to Section 2.6.

         (b) MEETINGS. The Steering Committee will meet every 6 months and at
such other times as a Party may request, alternating between Ann Arbor, Michigan
and Richmond, California and will otherwise communicate regularly by telephone,
facsimile and video conference. Each Party recognizes the importance of the
Steering Committee in the success of the Collaboration and will use diligent
efforts to cause all of its representatives to such committee to attend all
meetings of such committee. A Party may change any of its appointments to the
Steering Committee at any time upon giving written notice to the other Party.

     2.2 RESEARCH MANAGEMENT COMMITTEE. Promptly after the Effective Date,
Warner and Onyx will each appoint 3 representatives to a research management
committee (the "RESEARCH MANAGEMENT COMMITTEE" or "RMC"). Onyx shall appoint an
individual who will

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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serve as chairman of the Research Management Committee for the initial 12
months. Thereafter, chairmanship will rotate between a Warner member and an Onyx
member every 12 months. The Research Management Committee will review, direct
and supervise all operational and scientific aspects of the Research Program.
The duties of the Research Management Committee shall include: (a) preparing the
Research Plan and amendments thereto, as appropriate based on the results of the
Research Program; (b) supervising and overseeing the conduct of the work under
the Research Program; (c) reviewing all results of the Research Program; and (d)
proposing Licensed Products to the Steering Committee for designation for
Development under the terms of Section 3.6. The Research Management Committee
will meet quarterly, or more frequently if mutually agreed, and will alternate
sites of meetings between Richmond, California and Ann Arbor, Michigan and will
otherwise communicate regularly by telephone, facsimile and video conference.
Each Party recognizes the importance of the Research Management Committee in the
success of the Collaboration and will use diligent efforts to cause all of its
representatives to such committee to attend all meetings of such committee. A
Party may change any of its appointments to the Research Management Committee at
any time upon giving written notice to the other Party. All decisions of the RMC
shall be by unanimous consent of its members. Any disputes or disagreements
within the Research Management Committee shall be resolved pursuant to Section
2.6.

     2.3 DEVELOPMENT TEAMS. Within 30 days of the Effective Date, Warner shall
form a Development Team to conduct the further Development of Local/Regional
ONYX-015, which will include individuals with expertise and responsibilities in
the areas of pre-clinical development, clinical development or regulatory
affairs as applicable to the Development of such product. In addition, within 30
days of the date any other Licensed Product is designated for Development,
Warner shall form a Development Team for such Licensed Product, which will
include individuals with expertise and responsibilities in the areas of
pre-clinical development, clinical development or regulatory affairs as
applicable to the Development of such Licensed Product. Onyx may appoint two
representatives to each Development Team provided that such individuals shall
not be entitled to vote. The Development Team shall submit, for review and
approval by the Steering Committee, the Development Plans and Budgets. Warner
shall have control over all issues relating to Development of Licensed Products.
The applicable Development Team shall oversee all aspects of Development of a
particular Licensed Product through Regulatory Approval of each such Licensed
Product.

     2.4 JOINT MARKETING COMMITTEE. At such time as registration and marketing
of one or more Licensed Products in the Shared Territory is anticipated, the
Parties shall each appoint 3 representatives to a marketing committee (the
"JOINT MARKETING COMMITTEE"). Such representatives will include individuals with
expertise in sales, marketing, clinical trials, manufacturing or regulatory
affairs. The Joint Marketing Committee shall develop the Marketing Plan and
Budget for each Licensed Product in the Shared Territory, shall submit such
plans and budgets to the Steering Committee for review and approval, and shall
oversee operational aspects of marketing and sales in the Shared Territory
following launch of each such Licensed Product. The members of the Joint
Marketing Committee shall seek to achieve consensus as to all matters and
decisions before the committee and/or requiring its decisions. However, in the
absence of reaching such consensus as to a particular matter or decision, Warner
shall have final control over making such decisions by the Joint Marketing
Committee, subject,

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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however, to the provisions of Article 5 of this Agreement. The Joint Marketing
Committee will meet on a quarterly basis, alternating between Morris Plains, New
Jersey and Richmond, California and will otherwise communicate regularly by
telephone, facsimile and video conference. Each Party recognizes the importance
of the Joint Marketing Committee in the success of the Collaboration and will
use diligent efforts to cause all of its representatives to such committee to
attend all meetings of such committee. A Party may change any of its
appointments to the Joint Marketing Committee at any time upon giving written
notice to the other Party.

     2.5 MEETINGS. All committees created hereunder may meet by telephone or
videoconference or in person at such times as are agreeable to the members of
each such committee. Attendance at meetings shall be at the respective expense
of the participating Parties. Each committee created hereunder shall assure that
agendas and minutes are prepared for each of its meetings. If personal
attendance is not possible for valid reasons, voting by proxy is permissible.

     2.6 DISPUTE RESOLUTION. Any disputes or disagreements arising in the
Research Management Committee that such committee is unable to resolve within 30
days will be referred to the Steering Committee for resolution or decision.
Subject to the specific allocation of decision making authority set forth in
this Agreement, any other disputes or disagreements between the Parties arising
under the Agreement will be referred to the Steering Committee as the initial
forum for resolution. If at any regularly scheduled or special meetings, the
Steering Committee is unable to resolve a dispute regarding any issue presented
to it, or arising within the Steering Committee, such dispute will be referred
to the Chief Executive Officer of Onyx and a senior office of Warner's
pharmaceutical business for good faith resolution, for a period of 30 days,
pursuant to Section 14.1(b). If such dispute is not resolved by the end of such
30-day period, then (i) as to any dispute in respect of designation for
Development, Development or Commercialization of Licensed Products, Warner shall
have the right to make a final determination thereof (subject to the terms and
conditions of this Agreement), and (ii) as to any other dispute, either Party
shall be free to pursue any legal or equitable remedy available to it, in
accordance with Section 14.1(d).

     2.7 LIMITATIONS OF POWERS OF THE STEERING COMMITTEE. The Steering Committee
shall have only such powers as are specifically delegated to it hereunder, and
shall not have the power to amend this Agreement. The Steering Committee is not
a substitute for the rights of the Parties and is intended only for coordination
of the research, Development and Commercialization of Licensed Products during
the term of this Agreement and as the forum for resolution of disputes as
provided in Section 2.6. Except as set forth in Section 2.1, the Steering
Committee shall not be involved with the day-to-day management under this
Collaboration.

                                   ARTICLE 3

                                RESEARCH PROGRAM

     3.1 UNDERTAKING AND SCOPE. The initial Research Plan covering the 16-month
period from September 1, 1999 through December 31, 2000 has been separately
agreed to by the Parties. The Research Plan shall be updated annually beginning
in the year 2000 and presented

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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to the Steering Committee for approval prior to August 31 of each year preceding
the year covered by such budget. Each Party agrees to perform the activities
detailed in the Research Plan in a professional and timely manner. The Research
Plan shall have the following objectives: (i) to investigate the possibilities
for Systemic ONYX-015, and (ii) to investigate two potential therapeutic
products - the Pro-Drug Product and the Gene Product - as additional Licensed
Products based on incorporation of genes into ONYX-015 or another adenovirus
that selectively replicates in and kills cancer cells based on abnormal p53
pathway function.

     3.2 PERSONNEL AND RESOURCES. Each Party agrees to commit the personnel,
facilities, expertise and other resources needed to perform this Agreement in
accordance with its terms; provided, however, that neither Party warrants that
the Collaboration shall achieve any of the research objectives contemplated by
them. During the Research Term, Warner and Onyx will in the aggregate maintain
at Warner's cost a minimum of [ * ] FTEs devoted to cooperative work under the
Research Plan who shall be persons holding at least a bachelor's degree in a
scientific discipline (except for technicians working in a Party's animal
facility, who need not hold such a degree). During the Research Term, the number
of Onyx FTEs engaged in the Research and supported under this Agreement shall
not be less than [ * ], and any changes in the number of Onyx FTEs supported
under this Agreement shall not be made on less than 90 days notice to Onyx,
except with the consent of Onyx. The scientific priorities and direction of such
staff of both Parties, and the size of such staff within the limits set forth in
this Section 3.2, shall be determined from time to time by the Research
Management Committee.

     3.3 TERM OF THE RESEARCH COLLABORATION. Work under the Research Plan will
commence as of the Effective Date and, unless terminated earlier by either Party
pursuant to the terms of this Agreement or extended by mutual agreement of the
Parties, will expire on the fourth anniversary thereof (as terminated, expired
or extended, the "RESEARCH TERM").

     3.4 COLLABORATION EXPENSES; RIGHT TO ENGAGE THIRD PARTIES.

         (a) COLLABORATION EXPENSES. Except as otherwise set forth herein, each
Party shall bear the costs and expenses of work done pursuant to the
Collaboration at its laboratories and its affiliated laboratories.

         (b) RIGHT TO ENGAGE THIRD PARTIES. Subject to approval by the RMC,
either Party may elect to use Third Parties to perform portions of its
obligations under the Research Plan. Each Party agrees to provide, in any
material agreement with Third Parties involving the Research Program, for
allocations of intellectual property rights and for obligations of
confidentiality of information, record-keeping, access and rights to data that
are consistent with the terms of this Agreement. Each Party remains responsible
for the performance of its obligations hereunder which it delegates to Third
Parties.

     3.5 RESEARCH ON ADDITIONAL LICENSED PRODUCTS.

         (a) SYSTEMIC ONYX-015. Pursuant to the applicable provisions of the
Research Plan, the Parties shall research and investigate different [ * ]
formulations (such as [ * ]) of ONYX-015 intended to enhance the [ * ] of, [ * ]
of, or [ * ] by, ONYX-015 in an infection process for the purpose of systemic
administration thereof, in order to develop candidates for

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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designation for Development by the Steering Committee (if appropriate) as
Systemic ONYX-015. If the RMC determines that any such modifications show
sufficient activity and other characteristics, the RMC shall recommend same to
the Steering Committee, promptly after such determination, as a candidate for
Systemic ONYX-015 and shall provide all relevant research results and data as
requested by the Steering Committee to assist its review of such candidate.

         (b) PRO-DRUG PRODUCT. The Parties shall collaborate, under the Research
Program, to identify a Pro-Drug Product based on incorporation of a gene for a
prodrug activating enzyme into ONYX-015, or another adenovirus agreed to by the
Parties that selectively replicates in and kills cancer cells based on abnormal
p53 pathway function, for the purpose of activating a prodrug into a specific
active drug form. The Research Plan shall identify the work to be done by the
Parties in order to select such gene and drug. During this selection phase, the
Parties shall collaborate to select, and Warner shall select on or before [ * ],
the specific anti-cancer drug (the "SELECTED DRUG") and the specific gene for a
prodrug activating enzyme (which can convert a prodrug form of such Selected
Drug into the active Selected Drug) to be incorporated into the appropriate
adenovirus genome (whether ONYX-015 or such other adenovirus) (the "SELECTED
DRUG SYSTEM") for research as a potential Pro-Drug Product. In conducting such
research on the Selected Drug System, it is expected that Onyx shall be
primarily responsible for constructing viruses, developing new host cell lines
related to the production of such potential Pro-Drug Product, producing viruses
at laboratory scale, and in collaboration with Warner testing them in both IN
VITRO and IN VIVO assay systems.

         (c) GENE PRODUCT. The Parties shall collaborate, under the Research
Program, to identify a Gene Product based on incorporation of a specific gene,
selected by Warner and encoding a specific member of one of three classes of
proteins, into ONYX-015, or another adenovirus agreed to by the Parties that
selectively replicates in and kills cancer cells based on abnormal p53 pathway
function, for the purpose of expressing in cancer cells a particular protein
with useful anti-cancer activity. The three classes of proteins are (1) [ * ],
(2) [ * ], and (3) [ * ]. The Research Plan shall identify the work to be done
by the Parties in order to select such gene. During this selection phase, the
Parties shall collaborate to investigate genes within such three classes, and
Warner shall select on or before [ * ], one of such three classes to focus
further research work under the Research Program relating to identifying
candidates for the Gene Product. After Warner has selected the one class for
such further work, the Parties shall collaborate to investigate genes within
such one class to select, and Warner will attempt to select on or before [ * ],
the specific gene (the "SELECTED GENE") to be incorporated into the appropriate
adenovirus genome (whether ONYX-015 or such other adenovirus) for research as a
potential Gene Product. The Selected Gene may be in any of the three classes,
but Onyx shall not be obligated to accept the gene selected by Warner if Onyx
then has an agreement with a Third Party permitted by Section 3.7(c) that would
restrict Onyx from the development or commercialization of such a Licensed
Product. In conducting such research on potential candidates for the Gene
Product, it is expected that Onyx shall be primarily responsible for
constructing viruses, developing new host cell lines related to the production
of such potential Gene Product, producing viruses at laboratory scale, and in
collaboration with Warner testing them in both IN VITRO and IN VIVO assay
systems.

         (d) PROCESS TECHNOLOGY RESEARCH. Onyx shall conduct initial
investigations relating to the research and development of process technology
and reagents required for

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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Licensed Products, as set forth in the Research Plan. Upon designation of a
Licensed Product for Development under Section 3.6, further development of
process technology shall be conducted under the Development Plan and Budget for
such Licensed Product.

         (e) TERMINATION OF CERTAIN RESEARCH. Warner may at any time, by giving
[ * ] days advance written notice to Onyx, terminate the Research Program with
respect to either one or more of the Systemic ONYX-015, the Pro-Drug Product, or
the Gene Product, provided that the applicable Licensed Product has not been
designated for Development as provided in Section 3.6. In such event, (1) such
Systemic ONYX-015, Pro-Drug Product, or Gene Product, as the case may be, shall
be deleted from the definition of "Licensed Product" and shall be deemed to be a
"TERMINATED PRODUCT"; (2) Warner shall be deemed automatically to have granted
to Onyx a license pursuant to Section 6.7 with respect to such Terminated
Product; (3) Onyx shall have the right to develop and commercialize such
Terminated Product at Onyx's sole expense and shall provide Warner with written
notice of its intent to do so; and (4) Warner shall deliver to Onyx copies of
all information, documents, reports, samples of biological and chemical
materials and other technology in its Control relating to the research of the
applicable Terminated Product and shall promptly assign to Onyx all contracts
requested by Onyx relating solely to such Termination Product (to the extent
Warner is able to do so). Onyx may proceed with such development and
commercialization on its own or with Third Parties.

         (f) NO DESIGNATION FOR DEVELOPMENT OF A LICENSED PRODUCT. If, for a
particular Licensed Product, the Steering Committee (or Warner, pursuant to
Section 2.6) has not designated any of Systemic ONYX-015, the Pro-Drug or the
Gene Product as a candidate for Development within [ * ] after the end of the
Research Term, then (1) such Systemic ONYX-015, Pro-Drug Product, or Gene
Product, as the case may be, shall be deleted from the definition of "Licensed
Product" and shall be deemed to be a "TERMINATED PRODUCT"; (2) Warner shall be
deemed automatically to have granted to Onyx a license pursuant to Section 6.7
with respect to such Terminated Product; (3) Onyx shall have the right to
develop and commercialize such Terminated Product at Onyx's sole expense and
shall provide Warner with written notice of its intent to do so; and (4) Warner
shall deliver to Onyx copies of all information, documents, reports, samples of
biological and chemical materials and other technology in its Control relating
to the research of the applicable Terminated Product and shall promptly assign
to Onyx all contracts requested by Onyx relating solely to such Termination
Product (to the extent Warner is able to do so). Onyx may proceed with such
development and commercialization on its own or with Third Parties.

     3.6 DESIGNATION OF LICENSED PRODUCTS FOR DEVELOPMENT. Upon identification
of a candidate Licensed Product for designation for Development, the Research
Management Committee will recommend such candidate to the Steering Committee,
which shall determine whether to designate any such candidate as a Licensed
Product for Development. Upon such designation, the Parties shall commence
Development of such Licensed Product under the terms of Article 4, pursuant to
the applicable Development Plan.

     3.7 EXCLUSIVITY REGARDING LICENSED PRODUCTS .

         (a) GENERAL. Each Party covenants to the other Party that, until the
earlier of (i) the [ * ] anniversary of the Effective Date or (ii) [ * ] after
the termination of the Research

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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Term if no Licensed Product is then in Development or being Commercialized, such
Party shall not, except under this Agreement, commence any clinical development
or commercialization activity, and Onyx shall not license any Third Party under
the Onyx Know-How or Onyx Patents to conduct any activity, with respect to any
adenovirus that selectively replicates in and kills cancer cells based on
abnormal p53 pathway function, BUT EXCLUDING from the foregoing covenant
activities that are permitted in Section 3.8.

         (b) PRO-DRUG PRODUCT. Prior to [ * ], Onyx shall not grant any license
to any Third Party regarding the development or commercialization of a product
which incorporates a gene for a prodrug activating enzyme into ONYX-015 or any
other adenovirus that selectively replicates in cancer cells based on abnormal
p53 pathway function in such cells. Between [ * ], and [ * ], Onyx shall not
grant any license to any Third Party regarding the development or
commercialization of a product which incorporates any of the following genes
encoding prodrug activating enzymes into ONYX-015 or any other adenovirus that
selectively replicates in cancer cells based on abnormal p53 pathway function in
such cells: [ * ]. From the time of selection of the Selected Drug System
pursuant to Section 3.5(b), Onyx shall not grant any license to any Third Party
for, and shall not proceed on its own or with a Third Party in, the development
or commercialization of either: (i) the Selected Drug System, or (ii) any
adenovirus that selectively replicates in cancer cells based on the abnormal p53
pathway function in such cells that is also engineered to express any gene for a
prodrug activating enzyme which activates any prodrug into the Selected Drug,
unless and until Warner terminates or loses its rights to the Pro-Drug Product,
as discussed in Sections 3.5(e), 3.5(f), 4.4(d), 4.6(d) or 4.7. However, nothing
in this Section 3.7(b) shall prevent Onyx from proceeding on its own or with
Third Parties to develop and commercialize products based on the incorporation
of any gene into any virus (including without limitation any adenovirus),
including prodrug converting enzyme genes, except as expressly provided in this
Section 3.7(b).

         (c) GENE PRODUCT. Prior to [ * ], Onyx shall not grant any license to
any Third Party for the development or commercialization of an adenovirus that
selectively replicates in cancer cells based on abnormal p53 pathway function in
such cells and that is further engineered to express any gene coding for a
protein within the three protein classes set forth in Section 3.5(c). After [ *
] and prior to [ * ], Onyx shall (i) not grant any license to any Third Party
for the development or commercialization of ONYX-015 or any other adenovirus
that selectively replicates in cancer cells based on abnormal p53 pathway
function in such cells and that is further engineered to express a gene coding
for any protein within the single protein class selected pursuant to Section
3.5(c) to be the focus of the Research Program around identifying a Gene Product
and (ii) shall notify Warner in the event it grants such a license to a Third
Party with regard to any gene coding for a protein within either of the two
protein classes not selected pursuant to Section 3.5(c). From the time of
selection under Section 3.5(c) of the Selected Gene, Onyx shall not grant any
license to any Third Party for the development or commercialization of an
adenovirus that selectively replicates in cancer cells based on the abnormal p53
pathway function in such cells that is also engineered to express such Selected
Gene, unless and until Warner terminates or loses its rights to the Gene
Product, as discussed in Sections 3.5(e), 3.5(f), 4.4(d), 4.6(d) or 4.7.
However, except as expressly set forth in the foregoing, nothing in this Section
3.7(c) shall prevent Onyx from proceeding on its own or with Third Parties to
develop

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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and commercialize products based on the incorporation of genes, other than such
Selected Gene, into any virus (including without limitation any adenovirus).

     3.8 ONYX INDEPENDENT ACTIVITIES. The Parties recognize that the genome of
adenoviruses, including ONYX-015, may be modified to enhance or modify the
therapeutic effect of viruses, for example by inserting one or more transgenes,
and/or by conferring selective replication and oncolytic activity based on
abnormal pathway functions other than, or in addition to, p53 that are present
in human cancers. Notwithstanding the Collaboration established by this
Agreement, and the covenant in Section 3.7(a) above, Onyx shall have the right,
either on its own or in collaboration with Third Parties, subject to the
provisions of Sections 3.7(b) and (c), to make modifications to the ONYX-015
genome or other adenoviruses either: (i) to incorporate one or more genes that
enhance or modify the therapeutic effect of such viruses; or (ii) to confer
selective replication and oncolytic activity based on abnormal pathway functions
other than p53 that are present in human cancers, and Onyx may develop and
commercialize such modified viruses as pharmaceutical products, alone or in
conjunction with Third Parties, without obligation to Warner or restrictions
arising under this Agreement (but subject to the restrictions in Sections 3.7(b)
and (c)). Notwithstanding the confidentiality provisions of Article 9, it is
understood that Onyx shall not be prevented from using information about
candidates for Licensed Products rejected by Warner that Onyx receives from
Warner, including without limitation Warner's reasons for such rejection, BUT
EXCLUDING information claimed in Warner Patents or specific Warner Know-How
relating to Licensed Product such as formulation or manufacturing know-how.

                                   ARTICLE 4

                                   DEVELOPMENT

     4.1 DEVELOPMENT TEAMS. The Development of each Licensed Product shall be
managed by the Development Team for such Product. Subject to the provisions of
Article 2 of this Agreement, all decisions relating to the Development of each
Licensed Product shall be made by the Development Team for such product, with
Warner to resolve any disputes related to such decisions.

     4.2 DEVELOPMENT PLANS AND BUDGETS. For each Licensed Product in
Development, the Development Team shall, on an annual basis, prepare a
development plan and budget (the "DEVELOPMENT PLAN AND BUDGET"). Each
Development Plan and Budget shall describe the overall program of Development
for the Licensed Product in question, and a budget for related Development
activities in the forthcoming calendar year. For Local/Regional ONYX-015, an
initial Development Plan and Budget covering the period from September 1, 1999
through December 31, 1999 has been separately agreed to by the Parties.

     4.3 ALLOCATION OF DEVELOPMENT ACTIVITIES. The Development Team shall
determine the allocation of responsibility for Development activities between
Warner and Onyx personnel, PROVIDED, HOWEVER, that, as determined in good faith
by the Development Team, Onyx clinical staff shall be permitted to assist in the
management of the clinical trials of all Licensed Products in the Shared
Territory. Onyx shall assist in the Development of Licensed Products in any
manner reasonably requested by the Development Team.

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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     4.4 DILIGENCE FOR LICENSED PRODUCTS.

         (a) GENERAL. Each Party shall carry out the Development of each
Licensed Product in accordance with the Development Plan and Budget then in
effect.

         (b) LOCAL/REGIONAL ONYX-015. The Parties agree that, except by mutual
written consent, the Development of Local/Regional ONYX-015 shall include the
prompt commencement of a Phase III Clinical Trial for head and neck cancer under
the protocol reviewed by Onyx with the FDA at its meeting in August, 1999,
consistent with the protocol summary which was delivered to Warner by Onyx by
letter dated September 1, 1999, and the completion of such trial as soon as
reasonably practicable. The Parties further agree that if warranted by [ * ],
and subject to approval by the Steering Committee, [ * ] may be [ * ].
Additional Development efforts related to Local/Regional ONYX-015 shall be
determined in accordance with the customary procedures of the Development Team.
Following completion of the first Phase III Clinical Trial for Local/Regional
ONYX-015, Warner shall be deemed to be diligent with respect to the Development
of such Licensed Product if either (i) Warner proceeds with the filing and
pursuit of a Drug Approval Application for such Licensed Product, or (ii) the
Development Costs incurred by Onyx and Warner for such Licensed Product equals
or exceeds [ * ] in each succeeding consecutive 12-month period and if, upon
written notice from Onyx that Warner has failed to incur Development Costs at
the above levels, Warner shall be deemed to be diligent if it covers such
shortfall within 30 days of such written notice from Onyx. Notwithstanding
anything herein to the contrary, Warner shall not be deemed to not be diligent
if any clinical trial, any Drug Approval Application or other aspect of the
Development of Local/Regional ONYX-015 is suspended or delayed due to the safety
or efficacy of Local/Regional ONYX-015 or because the FDA or any other
governmental authority or obligation of law requires such suspension or delay or
if the Steering Committee agrees on a different standard of diligence. If such
suspension or delay is due to the efficacy of Local/Regional ONYX-015, then
within 6 months, Warner shall notify Onyx whether it intends to proceed with
Development of Local/Regional ONYX-015. If Warner does intend to so proceed, it
shall provide with such notice a plan to resume Development of Local/Regional
ONYX-015 before or upon the end of an additional 6 month period, and Warner's
diligence obligations with respect to Local/Regional ONYX-015 under this Section
4.4(b) shall resume at the end of such additional 6 month period.

         (c) OTHER LICENSED PRODUCTS. Warner shall be deemed to be diligent in
the Development of each Licensed Product other than Local/Regional ONYX-015 so
long as aggregate Development Costs incurred by Onyx or Warner for such product
equals or exceeds (i) [ * ] in the first [ * ] period following designation of
such Licensed Product for Development and an IND therefor is filed within such
period and (ii) [ * ] in each subsequent consecutive 12-month period after
allowance of an IND therefor and if, upon written notice from Onyx that Warner
has failed to incur Development Costs at the above levels, Warner shall be
deemed to be diligent if it covers such shortfall within 30 days of such written
notice from Onyx. Warner shall be deemed to be diligent in the research of each
Licensed Product other than Local/Regional ONYX-015 so long as research on these
Products continues under the Research Program in a manner consistent with
Warner's efforts for research on potential products with similar commercial
potential. Notwithstanding anything herein to the contrary, Warner shall not be
deemed to not be diligent if any clinical trial, any Drug Approval Application
or other aspect of

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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the Development of a Licensed Product, including, without limitation,
Local/Regional ONYX-015, is suspended or delayed after filing of an IND therefor
due to the safety or efficacy of a Licensed Product or because the FDA or any
other governmental authority or obligation of law requires such suspension or
delay or if the Steering Committee agrees on a different standard of diligence.
If such suspension or delay is due to the efficacy of a Licensed Product, then
within 6 months, Warner shall notify Onyx whether it intends to proceed with
Development of such Licensed Product. If Warner does intend to so proceed, it
shall provide with such notice a plan to resume Development of such Licensed
Product before or upon the end of an additional 6 month period, and Warner's
diligence obligations with respect to such Licensed Product under this Section
4.4(c) shall resume at the end of such additional 6 month period.

         (d) ONYX REMEDIES IN THE EVENT OF LACK OF DILIGENCE. If, Warner either
(A) is not deemed to be diligent under Sections 4.4(b) or (c) or terminates
Development as to a Licensed Product, in each case after the filing of an IND
therefor and prior to the End of Phase II Clinical Trials for such Licensed
Product, or (B) fails to fulfill its obligations with respect to diligent
Development of a Licensed Product after the End of Phase II Clinical Trials,
then such Licensed Product shall be deemed to be an "INDEPENDENT PRODUCT". Onyx
shall have a right of independent Development with respect to each Independent
Product, in accordance with Section 4.5, but in the case of Independent Products
designated as such pursuant to clause (A) above, subject to the buy-back rights
of Warner set forth in Section 4.6. With respect to any Licensed Product that
becomes an Independent Product, (i) the licenses granted to Warner pursuant to
Article 6 shall terminate with respect to the Licensed Product on a worldwide
basis; (ii) Warner shall be deemed automatically to have granted to Onyx a
license pursuant to Section 6.7, with respect to such Licensed Product and (iii)
Warner shall comply with the procedures identified in Section 4.5(b) with
respect to such Independent Product. Any such non-diligence, termination or
failure by Warner shall not be deemed a breach of this Agreement.

     4.5 ONYX INDEPENDENT PRODUCT DEVELOPMENT.

         (a) NOTICE OF ONYX INDEPENDENT DEVELOPMENT. In the event Onyx obtains
the right to develop an Independent Product independently of Warner, pursuant to
Section 4.4(d), Onyx may proceed with such Development at Onyx's sole expense
and shall provide Warner with written notice of its intent to do so. Any such
independent Development under this Section 4.5 by Onyx of an Independent Product
designated as such pursuant to Section 4.4(d) clause (A) above shall be subject
to the buy-back rights of Warner set forth in Section 4.6.

         (b) WARNER OBLIGATIONS AS TO INDEPENDENT PRODUCTS. Warner shall (i)
promptly, and in no event later than 30 days after receiving written notice from
Onyx pursuant to Section 4.5(a), deliver to Onyx copies of all information,
documents, reports, samples of biological and chemical materials and other
technology in its Control relating to the research, Development and
Commercialization of the applicable Independent Product, (ii) promptly assign to
Onyx all contracts requested by Onyx relating solely to such Independent Product
(to the extent Warner is able to do so), (iii) cooperate with Onyx in notifying
the FDA, clinical investigators, and other Third Parties involved in the
Development of such Independent Product that such Development is now being
carried out by Onyx with the consent of Warner, (iv) transfer to Onyx, at Onyx's
request, all regulatory documents, filings and approvals relating to such
Independent Product and (v) take such other actions and execute such other
instruments,

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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assignments and documents as may be reasonably necessary to effect the transfer
of rights relating to such Independent Product under this Agreement to Onyx.

         (c) ONYX ACTIVITIES. Onyx may also elect to prepare and file an IND and
to proceed with clinical trials on an Independent Product. Onyx shall deliver to
Warner a copy of any IND packages and shall provide Warner regular reports on
the progress of the Development of any Independent Product for which Warner has
a buy-back option under Section 4.6, including all clinical trial results,
together with a quarterly accounting of the Development Costs incurred to that
date by Onyx in its research and Development of the Independent Product. Onyx
shall have the right, in its own discretion, to engage Third Parties in the
Development of any Independent Product, but shall not grant any rights with
respect to the manufacture, sale or other commercialization of such an
Independent Product which are inconsistent with the rights of Warner in the
event Warner exercises its buy back option under Section 4.6.

     4.6 WARNER BUY-BACK OPTION. Subject to the terms of this Section 4.6,
Warner shall have an option to reestablish the collaboration with Onyx in
Development of any Independent Product unless Onyx's Development of such
Independent Product commenced after the End of Phase II Clinical Trials by
Warner. Such buy-back option may be exercised by delivery of written notice to
Onyx by Warner at any time until [ * ] days following the receipt by Warner of
the End of Phase II Clinical Trials Notice and the results of the Phase II
Clinical Trials conducted by Onyx or the available reports and records of the
ongoing Phase II/III Clinical Trials upon which Onyx intends to file a Drug
Approval Application, after the End of Phase II Clinical Trials by Onyx. Such
results shall include a complete description of the protocols for such Phase II
or Phase II/III Clinical Trials, all serious adverse event reports, summaries of
the safety and efficacy data and any other reports and publications prepared by
Onyx or its subcontractors describing such Phase II or Phase II/III Clinical
Trials, (the "PHASE II RESULTS").

         (a) BUY-BACK PRICE UNTIL [ * ] AFTER NOTICE OF COMMENCEMENT OF PHASE
II. Onyx shall provide Warner written notice in the event Onyx determines that
it is prepared to commence a Phase II Clinical Trial of an Independent Product
which has not previously progressed into Phase II (the "COMMENCEMENT OF PHASE II
NOTICE"). Such notice shall include all available results from Phase I Clinical
Trials conducted to that point by Onyx, together with a copy of the protocol for
the Phase II Clinical Trials that Onyx intends to conduct, and any other
material information related to the Development of such Independent Product (to
the extent any such data package has not previously been received by Warner, it
shall accompany such written notice). Such written notice shall also include an
accounting of Onyx's Development Costs incurred with respect to such Independent
Product since such Licensed Product became an Independent Product. If Warner
exercises its buy-back option within [ * ] days after Onyx delivers the
Commencement of Phase II Notice, Warner shall pay Onyx, within [ * ] days
following such exercise by Warner, an amount equal to [ * ] of the Development
Costs incurred by Onyx from the date such Licensed Product became an Independent
Product until the date Warner exercises its buy-back option. Warner may also
exercise its buy-back option prior to receipt of the Commencement of Phase II
Notice, in which case within [ * ] days of such exercise Warner shall pay [ * ]
of Onyx's Development Expenses incurred with respect to such Independent Product
to the date of such exercise.

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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         (b) BUY-BACK PRICE UNTIL [ * ] AFTER RECEIPT OF RESULTS AFTER
COMPLETION OF PHASE II CLINICAL TRIALS. If Warner does not exercise its
buy-back option within [ * ] days after Onyx has delivered to Warner the
Commencement Of Phase II Notice, then Onyx shall provide Warner a further
written notice in the event Onyx determines that it is prepared to commence a
Phase III Clinical Trial of the Independent Product or that it intends to
file a Drug Approval Application based on an ongoing Phase II/III Clinical
Trial (the "END OF PHASE II CLINICAL TRIALS NOTICE"). Such notice shall
include the Phase II Results together with a copy of the protocol for the
Phase III Clinical Trial that Onyx intends to conduct, and any other material
information related to the Development of such Independent Product (to the
extent that Warner has not previously received any such data, it shall
accompany such written notice). Such written notice shall also include an
accounting of Onyx's Development Costs incurred with respect to such
Independent Product since such Licensed Product became an Independent
Product. If Warner exercises its buy-back option within [ * ] days after Onyx
delivers the End of Phase II Clinical Trials Notice and the Phase II Results
and all other data described above, Warner shall pay Onyx, within [ * ] days
following such exercise by Warner, an amount equal to [ * ] of the
Development Costs incurred by Onyx from the date such Licensed Product
becomes an Independent Product until the date Warner exercises its buy-back
option. Warner may also exercise its buy-back option at any time after
expiration of the [ * ] time period set forth in Section 4.6(a) above and
prior to its receipt of the End of Phase II Clinical Trials Notice, in which
case Warner shall pay Onyx [ * ] of Onyx's Development Expenses incurred with
respect to such Independent Product to the date of such exercise.

         (c) PRODUCT TRANSITION FOLLOWING WARNER EXERCISE. In the event Warner
exercises its option under this Section 4.6, Warner's license rights to the
applicable Licensed Product shall be reinstated, and the license to the
applicable Licensed Product granted to Onyx pursuant to Section 6.7 shall
terminate. Warner shall pay Onyx all milestone payments described in Section 7.4
for achievement of milestones during Onyx' Development of the Licensed Product
within [ * ] days of exercising the option, and shall be obligated to pay those
milestones still pending pursuant to Section 7.4, as well as all other payment
obligations under Article 7 arising after the date of such option exercise. Onyx
shall promptly, and in no event later than [ * ] days after the date of Warner's
exercise of its option, deliver to Warner copies of all information, documents,
reports, biological and chemical materials and other technology in its Control
relating to the Development of the applicable Licensed Product and shall
promptly assign to Warner all contracts requested by Warner solely relating to
such Development (to the extent Onyx is able to do so), shall cooperate with
Warner in notifying the FDA, clinical investigators, and other Third Parties
involved in the Development of such Licensed Product that such Development is
now being carried out by Warner with the consent of Onyx and shall transfer to
Warner, at Warner's request, all regulatory documents, filings and approvals
relating to such Development.

         (d) ONYX RIGHTS IN THE ABSENCE OF WARNER EXERCISE. If Warner does not
exercise its buy-back option with respect to an Independent Product within [ * ]
days following delivery by Onyx of the End of Phase II Clinical Trials Notice
and the Phase II Results and all other data described above, Onyx shall have the
exclusive right to develop and commercialize such Independent Product, subject,
however, to the royalty obligations set forth in Section 7.5(e), without a
buy-back right on the part of Warner.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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     4.7 ONYX DEVELOPMENT OF TERMINATED PRODUCTS; WARNER OBLIGATIONS. In the
event that Warner terminates Development of a Licensed Product before the filing
of an IND therefor and Warner does not agree to or participate in further
research to identify other replacement candidate Licensed Products for
designation for Development, then (1) such Systemic ONYX-015, Pro-Drug Product,
or Gene Product, as the case may be, shall be deleted from the definition of
"Licensed Product" and shall be deemed to be a "TERMINATED PRODUCT"; (2) Warner
shall be deemed automatically to have granted to Onyx a license pursuant to
Section 6.7 with respect to such Terminated Product; (3) Onyx shall have the
right to Develop and Commercialize such Terminated Product at Onyx's sole
expense and shall provide Warner with written notice of its intent to do so; and
(4) Warner shall promptly take all such actions with respect to such Terminated
Product as are required of it under Section 4.5(b) with respect to an
Independent Product.

     4.8 RIGHT TO ENGAGE THIRD PARTIES. Onyx may use Third Parties to perform
portions of its obligations relating to the Development of a Licensed Product,
subject to the approval of the Development Team. Warner may contract with Third
Parties to perform Development activities in Warner's discretion. Payments to
such Third Parties for expenses relating to such Third Party Development shall
be included in Development Costs. Each Party agrees to provide in any material
agreement with Third Parties relating to the Development of Licensed Products
for allocations of intellectual property rights and for obligations of
confidentiality of information, record-keeping, access and rights to data and
compliance with current, applicable GCP, GMP and other legal requirements that
are consistent with the terms of this Agreement. Each Party shall remain liable
for the performance of its obligations hereunder which it delegates to Third
Parties.

     4.9 INDS AND DRUG APPROVAL APPLICATIONS. Warner shall be responsible for
the preparation and filing of, and shall own all regulatory submissions relating
to Licensed Products filed in any regulatory jurisdiction. Notwithstanding the
foregoing, Onyx shall continue to own the INDs for Local/Regional ONYX-015,
provided that within 30 days of Warner's written request, Onyx shall transfer
all INDs and provide copies of all related documentation and information, to
Warner. Warner shall keep Onyx informed on an ongoing basis regarding the
schedule and process for the preparation of Drug Approval Applications. Warner
shall provide a copy of the initial Drug Approval Application for each Licensed
Product to be filed in the Shared Territory to Onyx for review prior to its
submission to the appropriate regulatory authority provided Onyx shall be
required to promptly review such submission and in any event shall only have 15
days to comment on such Drug Approval Application. Warner shall deliver to Onyx
copies of amendments to such initial application, and of subsequent Drug
Approval Applications in the Shared Territory concurrent with their filing with
such regulatory authority.

     4.10 TERMINATION BY ONYX OF CO-DEVELOPMENT. Onyx shall have the right upon
[ * ] prior written notice to Warner to terminate its rights and obligations in
the Development of a Licensed Product in the Shared Territory, and with respect
to such Licensed Product, each country in the Shared Territory shall be deemed
to be a country in the Other Territory. With respect to any Licensed Product as
to which Onyx has terminated co-Development, Onyx shall not have any rights
pursuant to Section 5.2 to co-promote such Licensed Product or to receive a
share of Product Profit with respect to such Licensed Product but instead shall
receive royalties

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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on Net Sales of such Licensed Product pursuant to Section 7.5(g). Onyx shall not
be refunded or repaid any amounts it has paid for the Development of such
Licensed Product.

     4.11 TERMINATION BY WARNER OF CO-DEVELOPMENT. Warner shall have the right
upon [ * ] prior written notice to Onyx to terminate its rights and obligations
in the Development of a Licensed Product.

                                   ARTICLE 5

                                COMMERCIALIZATION

     5.1 COMMERCIALIZATION OF LICENSED PRODUCTS. Warner shall have the right to
sell and promote, and Onyx shall have the right to co-promote, all Licensed
Products in the Shared Territory in accordance with the terms of this Article 5.
Warner shall have the sole right to commercialize each Licensed Product in the
Other Territory.

     5.2 ONYX RIGHT TO CO-PROMOTE AND SHARE PROFITS IN THE SHARED TERRITORY.
Within [ * ] after receiving the data from Phase II/III or Phase III Clinical
Trials intended to support a Drug Approval Application for a Licensed Product in
each of the United States and Canada, Onyx shall notify Warner whether or not it
elects to co-promote such Licensed Product in such country. For each Licensed
Product, if Onyx co-promotes such product with Warner in the United States or
Canada, Onyx shall share in Product Profit as provided in Section 7.6. If Onyx
does not co-promote such product in the United States and/or Canada, it shall
not participate in Product Profit with respect to such product in such country;
such country shall be deemed to be excluded from the Shared Territory (and thus
part of the "Other Territory") with respect to such Licensed Product; and Onyx
shall instead receive a royalty for sales of the Licensed Product in such
country as provided in Section 7.5(f). Onyx may make its election to exercise
its promotion rights on a country-by-country and Licensed Product by Licensed
Product basis.

     5.3 CO-PROMOTION ACTIVITIES.

         (a) MARKETING PLANS AND BUDGETS. The co-promotion of each Licensed
Product will be governed by a marketing plan and budget approved by the Joint
Marketing Committee (the "MARKETING PLAN AND BUDGET"). The Marketing Plan and
Budget will describe fully, to the extent practicable, the proposed plan for
commercialization of the Licensed Product in each country within the Shared
Territory, including overall marketing strategy, anticipated marketing, sales
and promotion efforts by each Party, market and sales forecasts, pricing, and
estimated launch date, as well as advertising and other promotional materials to
be used in the co-promotion. The Marketing Plan and Budget will be prepared
taking into consideration factors such as market conditions, regulatory factors
and competition, and the Marketing Plan and Budget will include all projected
co-promotion expenses for the Licensed Product

         (b) ALLOCATION OF SALES EFFORT. Unless otherwise agreed by the Parties,
each Party shall supply [ * ] of the total promotional and marketing effort for
each Licensed Product being co-promoted by the Parties in the Shared Territory,
as reasonably determined by the Joint Marketing Committee. Such total promotion
and marketing effort is referred to as the "TOTAL

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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SALES EFFORT" and each Party's assigned portion of the Total Sales Effort is
referred to as its "SALES EFFORT". Each Party shall only use a sales force
consisting of qualified, experienced personnel. The method of measuring Total
Sales Effort shall be consistent with industry standards and shall be approved
by the Steering Committee. If a Party experiences or anticipates a shortfall in
meeting its Sales Effort, it shall promptly notify the other Party.

         (c) FAILURE BY ONYX TO PROVIDE MINIMUM SALES EFFORT. If Onyx is unable
to supply at least [ * ] of the Total Sales Effort in a country within the
Shared Territory with respect to a Licensed Product for two consecutive calendar
quarters, then Onyx's right to co-promote the applicable Licensed Product
hereunder shall terminate in the applicable country within the Shared Territory
and such country shall become part of the Other Territory with respect to such
Licensed Product, Onyx shall no longer share in Product Profit from such
Licensed Product in such country, and Onyx shall thereafter receive royalties
for such Licensed Product in such country in accordance with Section 7.5(f). Any
such failure by Onyx shall not be deemed to be a breach of this Agreement.

         (d) FAILURE BY A PARTY TO PROVIDE SALES EFFORT. In the event a Party
fails to provide its Sales Effort for a Licensed Product in a country of the
Shared Territory in a single year, (i) such Party's share of Product Profit in
that year shall be reduced by an amount equal to [ * ] of the estimated cost of
providing the portion of such Party's Sales Effort which it did not provide in
such year, and (ii) such Party shall submit a remedial plan to assure that such
shortfall of sales effort does not reoccur. Any such failure by a Party shall
not be deemed a breach of this Agreement.

         (e) PROMOTIONAL AND ADVERTISING MATERIALS. The Parties shall
disseminate in the Shared Territory only those promotional and advertising
materials which have been provided or approved for use by the Joint Marketing
Committee and neither Party shall make any claims or representations in respect
of the Licensed Products that have not been approved by the Joint Marketing
Committee.

         (f) ORDERS; SALES. All customer orders for Licensed Products shall be
received and executed by Warner. All sales of Licensed Products will be billed,
booked and filled by Warner.

         (g) TRADEMARKS; PRODUCT PRESENTATION. The Marketing Committee shall
approve all trade dress, logos, slogans, designs and copyrights used on and in
connection with all Licensed Products in the Shared Territory. Warner shall own
the trade dress, logos, slogans, designs and copyrights specifically developed
for and used on and in connection with all Licensed Products. Warner and Onyx
shall each retain sole and exclusive ownership of their own respective and
independently developed and pre-existing trademarks, names, trade dress, logos,
slogans, designs and copyrights regardless of whether such trademarks, names,
trade dress, logos, slogans, designs or copyrights are used on or in connection
with any Licensed Product. Subject to applicable laws, rules and regulations,
any written or visual promotional or educational materials intended for use in
conjunction with Licensed Products in the Shared Territory shall refer to both
of the Parties with substantially equal prominence, and all product labeling,
promotional material and oral presentations (where practical) regarding the
detailing

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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and promoting of Licensed Products in the Shared Territory shall display the
names and logos of Warner and Onyx with substantially equal prominence.

         (h) TRAINING. Each Party shall be responsible for the training of its
sales force in general pharmaceutical sales practices. Unless otherwise agreed
by the Parties, Warner shall develop and provide for both sales forces
product-specific training (the cost of which shall be shared equally by the
parties other than costs relating to travel of a Party's personnel) regarding
the product profile and sales practices with respect to the Licensed Products.
Each Party shall bear its own costs in connection with such training.

         (i) ONYX RIGHT TO USE CERTAIN WARNER INFORMATION. Onyx shall have the
right to use any know-how or information that is disclosed by Warner to Onyx but
that is outside of the definition of Warner Know-How for the sole purpose of
co-promoting the applicable Licensed Product in the Shared Territory under this
Agreement.

     5.4 TERMINATION OF CO-PROMOTION. Either Party shall have the right upon
[ * ] prior written notice to terminate its participation in the co-promotion
of a Licensed Product in any country in the Shared Territory. If Onyx is the
terminating Party, then with respect to such Licensed Product, such country
of the Shared Territory shall be deemed to be a country in the Other
Territory. Once a Party terminates its participation in the co-promotion of a
Licensed Product, it shall grant to the non-terminating Party licenses in
such Know-How of the terminating Party and the Onyx Patents (where Onyx is
the terminating Party) or the Warner Patents (where Warner is the terminating
Party) and trademarks (other than trademarks bearing the terminating Party's
name or used by the terminating Party in the commercialization of other
products or services) as were used by the terminating Party in the
co-promotion of such Licensed Product in the applicable country within the
Shared Territory, but only to the extent such licenses are necessary for the
non-terminating Party to commercialize such Licensed Product in such country
in the Shared Territory. If Warner is the terminating Party, the applicable
Licensed Product shall be deemed to be an Independent Product.

     5.5 TERMINATION OF CO-PROMOTION UPON CERTAIN CHANGES OF CONTROL. In the
event (i) [ * ] or more of Onyx's outstanding shares of stock entitled to vote
for the election of directors are acquired by a Major Pharmaceutical Company (by
purchase, merger or other business combination or if control of the management
of Onyx is otherwise acquired by a Major Pharmaceutical Company); or (ii) this
Agreement is assigned to a Major Pharmaceutical Company upon a sale of all or
substantially all of the assets of Onyx; then in any such case Warner may
terminate Onyx's right to co-promote Licensed Products in the Shared Territory
pursuant to this Agreement upon written notice to Onyx (and the Shared Territory
shall thereafter be within the Other Territory) provided that such notice is
given within thirty (30) days after the earlier of (x) the date Onyx gives
Warner written notice of an event described in (i) or (ii), including the
identity of the Major Pharmaceutical Company or (y) the date Onyx gives Warner
notice that it has entered into an agreement obligating Onyx to complete a
transaction described in (i) or (ii), including the identity of the Major
Pharmaceutical Company. As used in this Section 5.5, a "MAJOR PHARMACEUTICAL
COMPANY" shall mean a company which at the time of the event described in clause
(i) or (ii) of the previous sentence is one of the ten largest pharmaceutical
companies in the United States, measured on the basis of the most recently
available pharmaceutical sales data then available. If Warner terminates Onyx's
co-promotion

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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rights under this Section 5.5, Onyx or the applicable Major Pharmaceutical
Company shall be entitled to receive royalties from Net Sales in the Shared
Territory pursuant to Section 7.5(f).

     5.6 LAUNCH BUDGETS AND PRE-MARKETING EXPENSES.

         (a) LAUNCH PLANS AND BUDGETS. Approximately 12 months prior to the
anticipated launch of each Licensed Product in each country of the Shared
Territory, the Joint Marketing Committee shall adopt an initial Marketing Plan
and Budget.

         (b) PRE-MARKETING EXPENSES. [ * ] shall bear [ * ] of all payments to
Third Parties required in connection with Pre-Marketing Expenses up to an
aggregate of [ * ] per calendar year. All such payments in excess of [ * ] shall
be paid by Warner, and [ * ] of this excess amount shall be deemed to be "WARNER
PRE-MARKETING ADVANCES". Warner may recover Warner Pre-Marketing Advances in
accordance with Section 7.6(d). Each Party shall bear its own costs of hiring,
training, and compensating its sales representatives and other employees in
anticipation of the launch of each Licensed Product in the Shared Territory.

     5.7 PROMOTIONAL MATERIALS IN THE OTHER TERRITORY. Any written or visual
promotion or education materials intended for use in conjunction with the
Licensed Products in the Other Territory shall identify Onyx as the licensor of
such product with reasonable prominence, unless such identification is
prohibited by law.

     5.8 COMPLAINTS. Each Party shall maintain a record of all complaints it
receives with respect to any Licensed Product. In the case of complaints coming
to the attention of a Party as to a Licensed Product for which the other Party
has exclusive or co-exclusive Commercialization rights, the first Party shall
notify the other Party in sufficient detail and within five (5) business days
after the event, and in any event in sufficient time to allow the responsible
Party or Parties to comply with any and all regulatory requirements imposed upon
it in any country; provided, however, that notice of any complaint involving a
field alert report shall be transmitted within one (1) business day.

     5.9 TAX CONSIDERATIONS. Either Party may take advantage of tax
considerations which benefit it and not the other Party, provided such action is
not detrimental to the interests of the other Party. In the event that a Party
takes advantage of a tax consideration which benefits it, no compensation to the
other Party is required unless such affects the other Party's Product Profit
negatively, in which case compensation shall be provided to the other Party to
make it whole.

                                   ARTICLE 6

                                   LICENSES

     6.1 PATENT LICENSES TO WARNER FOR LICENSED PRODUCTS. Subject to the terms
of this Agreement, Onyx hereby grants to Warner a license under the Onyx Patents
to the extent necessary to conduct research and development of, and to make,
have made, use, offer for sale, sell, have sold and import all Licensed Products
throughout the world during the term of this Agreement, which license shall be
exclusive (except as to Onyx) in the Shared Territory and shall be exclusive
(even as to Onyx) outside of the Shared Territory except that Onyx shall retain

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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such rights in Onyx Patents as shall be necessary to perform its obligations
under this Agreement.

     6.2 PATENT LICENSE TO ONYX FOR COMMERCIALIZATION AND DEVELOPMENT. Subject
to the terms of this Agreement, Warner grants to Onyx an exclusive (except as to
Warner) license under the Warner Patents to the extent necessary to conduct
research and development of, and to make, have made, use, offer for sale, sell,
have sold and import Licensed Products in the Shared Territory during the term
of this Agreement.

     6.3 NONEXCLUSIVE KNOW-HOW LICENSE TO WARNER. Subject to the terms of this
Agreement, Onyx hereby grants Warner a paid-up, non-exclusive, worldwide license
to use Onyx Know-How to the extent necessary to research, develop and
Commercialize the Licensed Products.

     6.4 NONEXCLUSIVE KNOW-HOW LICENSE TO ONYX. Subject to the terms of this
Agreement, Warner hereby grants Onyx a paid-up non-exclusive license to use
Warner Know-How in the Shared Territory to the extent necessary to research,
develop and Commercialize the Licensed Products during the Research Term and
while Onyx is co-promoting the applicable Licensed Product in the Shared
Territory.

     6.5 SUBLICENSING. Neither Party may grant sublicenses under licenses
granted to it under Sections 6.1 through 6.4 except with the express prior
written approval of the licensor; provided, however, that: (i) subject to the
terms of this Agreement, Onyx may grant sublicenses to Third Party manufacturers
solely for the purpose of performing its manufacturing obligations hereunder;
(ii) either Party may grant a sublicense to its Affiliates, provided that the
Party guarantees the performance by such Affiliate; (iii) in the Other
Territory, Warner shall have an unrestricted right to grant sublicenses to
Affiliates and non-Affiliates, except that in the Major Markets, Warner shall
not grant exclusive rights to sell any Licensed Product to non-Affiliates
without the prior written consent of Onyx (which consent shall not be
unreasonably withheld); and (iv) with respect to Terminated Products and
Independent Products, Onyx may grant sublicenses which are not inconsistent with
the rights of Warner under Section 4.6. Any sublicense granted under this
Agreement shall be subject to the terms and conditions of the license itself,
and the Party granting the sublicense shall be responsible for and shall
guarantee the performance by the sublicensee of such obligations.
Notwithstanding the foregoing, neither Party shall grant sublicenses under any
license granted under this Agreement to sell Licensed Products in the Shared
Territory except by mutual consent of both Parties.

     6.6 THIRD-PARTY TECHNOLOGY. The licenses granted under Sections 6.1 through
6.4, to the extent they include sublicenses of Third Party technology, shall be
subject to the terms and conditions of the license agreement pursuant to which
the sublicense is granted.

     6.7 LICENSE TO ONYX FOR TERMINATED PRODUCTS AND INDEPENDENT PRODUCTS.
Effective immediately upon a Licensed Product becoming a Terminated Product
pursuant to Sections 3.5(e), 3.5(f) or 4.7 or an Independent Product pursuant to
Section 4.4(d), Warner shall be deemed automatically to have granted an
exclusive (even as to Warner), fully paid-up license worldwide to Onyx under
those Warner Patents claiming Inventions arising out of Warner's performance
under this Agreement and Warner Know-How developed as a result of its

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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performance under this Agreement, solely to the extent necessary for continued
Development and Commercialization of such Terminated Product or Independent
Product, as the case may be. Such license shall include the right to grant
sublicenses, but only to the extent consistent with the rights of Warner under
Section 4.6.

                                   ARTICLE 7

                               PAYMENT PROVISIONS

     7.1 LICENSING FEE. As partial payment for the licenses granted by Onyx
pursuant to Article 6 of this Agreement, Warner shall pay to Onyx a license fee
equal to five million dollars ($5,000,000) within ten (10) days after the
Effective Date. This fee shall be nonrefundable, and shall be noncreditable
against any future obligations of Warner under this Agreement.

     7.2 RESEARCH PROGRAM PAYMENTS.

         (a) FTE RATE. Warner agrees to pay Onyx research funding during the
term of the Research Program based on the number of FTEs at Onyx involved in
carrying out the Research Plan commencing January 1, 2000, as determined under
Section 3.2. For each such FTE, Warner shall pay Onyx at an annualized rate of
[ * ] per FTE per year. Such rate shall be adjusted each January 1 during the
Research Term, commencing January 1, 2001, to reflect adjustment in the Bureau
of Labor Statistics Consumer Price Index for Urban Consumers in the United
States, based on changes in such index from July 1999 to the most recent monthly
index available at the time of each adjustment.

         (b) PAYMENT SCHEDULE. The amounts to be paid Onyx under Section 7.2(a)
shall be paid quarterly in advance. All such quarterly payments shall be made on
or before the first day of January, April, July and October during the Research
Term.

     7.3 PAYMENT OF DEVELOPMENT COSTS.

         (a) ALLOCATION OF DEVELOPMENT COSTS.

                  (i) Warner shall pay the first $40,000,000 of the aggregate of
the Development Costs for Local/Regional ONYX-015 and Systemic ONYX-015 incurred
after the Effective Date pursuant to the applicable Development Plan and Budget
for such Licensed Product. From the Effective Date and so long as Warner is
responsible for all such Development Costs, Warner shall pay all such
Development Costs paid to Third Parties, and Onyx shall invoice Warner for
Onyx's internal Development Costs for Local/Regional ONYX-015 and Systemic
ONYX-015 in arrears, to be paid by Warner within [ * ] days of the date of such
invoice.

                  (ii) After Warner has satisfied its obligations under the
previous paragraph, Warner shall bear 75% and Onyx shall bear 25% of all
subsequent Development Costs for Local/Regional ONYX-015 and Systemic ONYX-015,
subject to Section 7.3(b). In the case of the Pro-Drug Product and the Gene
Product, Warner shall bear 75% and Onyx shall bear 25% of all Development Costs
incurred after the time of designation of such Licensed Products for Development
under Section 3.6. Notwithstanding the foregoing, Warner shall be responsible

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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<PAGE>

for all Development Costs incurred with respect to Development activities
undertaken solely to comply with the regulatory requirements of one or more
jurisdictions outside the Shared Territory and which are not used to establish
the efficacy of a Licensed Product as part of a Drug Approval Application in the
Shared Territory. The submission of data to regulatory authorities in the Shared
Territory of data generated for the sole purpose of jurisdictions outside of the
Shared Territory, for the purpose of demonstrating the safety of the Licensed
Products rather than obtaining efficacy approvals in the Shared Territory, shall
not cause the costs of generating such data to become Development Costs.

         (b) PARTIAL DEFERRAL OF DEVELOPMENT COSTS BY ONYX. Onyx shall not be
required to pay Development Costs under Section 7.3(a) in excess of [ * ] per
calendar year, unless such higher costs are required to be incurred to comply
with applicable laws, rules or regulations or to conduct activities specifically
required by the FDA or its foreign equivalent in the Shared Territory in order
to obtain Regulatory Approval and are in excess of the currently approved
Development Plan and Budget (or, if such costs are to be incurred in the
calendar year following the date on which the need for such costs was
determined, the Development Plan and Budget in effect when such need was
determined), in which case Onyx shall be required to pay its share of such
higher costs. If Onyx's share of Development Costs under Section 7.3(a) would
exceed [ * ] in a particular calendar year, and Onyx is not obligated to pay
such excess amount pursuant to the first sentence of this Section 7.3(b), then
Onyx shall either (i) pay such excess amount on a current basis, or (ii) give
Warner notice that it is electing to defer a portion or all of such excess
amount pursuant to this Section 7.3(b). If Onyx defers payment of any
Development Costs pursuant to this Section 7.3(b), Warner may recover [ * ] of
such deferred amounts pursuant to the terms of Section 7.6(d).

         (c) MAINTENANCE OF RECORDS OF DEVELOPMENT COSTS. Each Party shall
calculate and maintain records of Development Costs incurred by it. Each Party
shall report quarterly to the Development Team, with copies provided to the
other Party, on all of its Development Costs incurred to obtain Regulatory
Approval in the Shared Territory (including, without limitation, all information
required for Onyx to monitor Development Costs that are applicable toward
minimum diligence levels pursuant to Sections 4.4(b) and (c)), with such reports
to be submitted within 45 days after the end of each calendar quarter. On a
quarterly basis, the Development Team shall determine if either Party incurred
more than its required allocation of Development Costs (taking into account any
limitations on such allocation pursuant to Section 7.3(b)). If the Development
Team determines that such an overage has occurred, the other Party shall
reimburse such Party for the overage, within 30 days of receipt of the
Development Team's determination.

     7.4 MILESTONE PAYMENTS.

         (a) MILESTONE AMOUNTS. Warner shall make the following milestone
payments to Onyx within 30 days after the first achievement of each of the
following milestones.

                       MILESTONES                                PAYMENT

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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(i)      LOCAL/REGIONAL ONYX-015

           (1) Regulatory Approval for Local/Regional ONYX-                [ * ]
               015 in [ * ].

           (2) Regulatory Approval for Local/Regional ONYX-                [ * ]
               015 in [ * ].

(ii)       SYSTEMIC ONYX-015

           (1) [ * ] of the first [ * ] in a [ * ] of Systemic ONYX-015.   [ * ]

           (2) The [ * ] by the relevant [ * ] or [ * ] of a [ * ] for     [ * ]
               Systemic ONYX-015 in a [ * ].

           (3) [ * ] for Systemic ONYX-015 in [ * ].                       [ * ]

           (4) [ * ] for Systemic ONYX-015 in [ * ].                       [ * ]

(iii)      RESEARCH PROGRAM AND [ * ] MATTERS

           (1) Demonstration of the [ * ] of delivering a [ * ] or         [ * ]
               any other [ * ] in ONYX-015 or another [ * ] to [ * ],
               including generation of data demonstrating that [ * ],
               demonstration that [ * ], and [ * ] model.

           (2) Resolution of special [ * ] matter, as described in [ * ],
           subject to Section 7.4(d) Section 7.4(d).

(iv)       EACH PRO-DRUG PRODUCT AND GENE PRODUCT

           (1)    [ * ] of the first [ * ] in the first [ * ] for each     [ * ]
                  Pro-Drug Product and Gene Product.

           (2)    [ * ] of first [ * ] in the [ * ] Pro-Drug Product and   [ * ]
                  Gene Product.

           (3)    Commencement  of [ * ] Pro-Drug Product and Gene         [ * ]
                  Product in [ * ].

           (4)    The [ * ] Pro-Drug Product and Gene Product in [ * ].    [ * ]

           (5)    [ * ] Pro-Drug Product and Gene Product in [ * ].        [ * ]

           (6)    [ * ] Pro-Drug Product and Gene Product in [ * ].        [ * ]

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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<PAGE>

           (7)    [ * ] Pro-Drug Product and Gene Product in [ * ].        [ * ]

For convenience of reference, each of the events listed in Section 7.4 shall be
referred to as a "TRIGGER EVENT".

         (b) ONE MILESTONE PER PRODUCT. The milestone payments received by Onyx
under this Section 7.4 shall be non-refundable and noncreditable. Each milestone
payment referred to in Section 7.4 shall be made only once with respect to a
particular Licensed Product, regardless of whether additional formulations of
such Licensed Product are developed or commercialized. Notwithstanding the
foregoing, in the event the Steering Committee determines to develop
Local/Regional ONYX-015 for systemic utility, Warner shall pay the milestones
set forth in Sections 7.4 (a)(ii)(2) through (a)(ii)(4) in the event that the
Development of a systemic indication for Local/Regional ONYX-015 achieves the
applicable Trigger Event described in Section 7.4(a)(ii)(2) through (a)(ii)(4).
Thereafter, Warner shall have no obligation to make such milestone payment again
even if a separate Licensed Product is developed as Systemic ONYX-015. In the
case of milestones set forth in Section 7.4(a)(iv), Warner shall make a separate
milestone payment for each of the two Licensed Products but not for separate
formulations of a single Licensed Product.

         (c) BACKUP LICENSED PRODUCTS. Warner shall not have to make milestone
payments under this Section 7.4 for any Licensed Products that the Steering
Committee designates to be a backup product (the "BACKUP PRODUCT") to a more
developmentally advanced Licensed Product for which it is obligated to make
milestone payments under this Section 7.4. If Development of the more advanced
Licensed Product is abandoned prior to occurrence of the applicable milestone,
Warner will only have to make milestone payments for Trigger Events achieved by
the Backup Product that were not achieved by the abandoned Licensed Product. If
the Backup Product reaches a Trigger Event before the Licensed Product for which
it is a backup, Warner will make the milestone payment for that and each
subsequent Trigger Event reached by the Backup Product. Examples of such Backup
Products are, in the case of the Gene Product, any product containing the
Selected Gene, or, in the case of the Pro-Drug Product, alternate pro-drugs that
convert to the Selected Drug.

         (d) SPECIAL [ * ] MILESTONE. As described in the [ * ], the Parties
[ * ] that includes [ * ] which, [ * ], would [ * ]. [ * ]. To provide for
payments to Onyx which will be made only in the event of [ * ], the Parties have
agreed to a special milestone of [ * ], subject to adjustments as provided
herein, as follows.

                  (i) If [ * ] from the [ * ] (collectively in (iii) below, a
"[ * ]"), and [ * ] which has then [ * ] under this Agreement and is then [ * ]
hereunder, Warner shall pay a milestone in the amount of [ * ] plus interest at
the rate of [ * ] which accrues from [ * ] within [ * ] after the date of such
[ * ].

                  (ii) If [ * ] from [ * ] which [ * ] then [ * ] hereunder, the
[ * ] shall be [ * ] as set forth in [ * ]. If such [ * ] is [ * ], or a Party
[ * ] thereunder or other [ * ] in this Agreement [ * ], Warner shall pay Onyx a
milestone in the amount of $[ * ], plus interest at the rate of [ * ] from
[ * ], less any amounts expended by Warner under [ * ], but in no event shall
such milestone amount be less than zero. Such payment shall be made within 30
days following

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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the date on which the [ * ] or [ * ] with respect to [ * ] can [ * ], or that
date on which such [ * ] or other [ * ].

                  (iii) If none of the events described in clauses (i) and (ii)
has occurred by the [ * ] anniversary of the Effective Date, Warner shall pay
Onyx a milestone of [ * ] on such anniversary, and [ * ] on each of the next
three anniversaries, in each case plus interest on the amount of such milestone
payment then being made, at the rate of [ * ] accruing from [ * ]. If an event
described in clause (i) and (ii) occurs after one or more payments has been made
under this clause (iii), each reference to "[ * ]" in clauses (i) and (ii) shall
be treated as a reference to [ * ] less payments actually made under this clause
(iii), excluding any portion of such payments attributable to interest.

     7.5 ROYALTY PAYMENTS ON LICENSED PRODUCTS (OTHER TERRITORY).

         (a) ROYALTY AMOUNT AND TERM. Warner shall pay Onyx, on a
country-by-country basis, a royalty payment on Net Sales of each Licensed
Product sold in each country in the Other Territory by Warner and its Affiliates
and permitted sublicensees according to the following rates, during the "Royalty
Term" applicable to the particular Licensed Product:

                  (i)   [ * ] of Net Sales of Local/Regional ONYX-015;

                  (ii)  [ * ] of Net Sales of Systemic ONYX-015;

                  (iii) [ * ] of Net Sales of each Pro-Drug Product and Gene
Product.

         The "Royalty Term" shall mean, with respect to a particular Licensed
Product in any country, the period of time commencing on the First Commercial
Sale of such Licensed Product in such country and ending upon the later of (a)
[ * ] from such date of the First Commercial Sale in such country, subject to
Section 7.5(d), or (b) the expiration of the last to expire of the Onyx Patents
(including Joint Patents) containing a Valid Claim which would be infringed by
the manufacture, use or sale of such Licensed Product in such country.

         (b) ROYALTIES OWED [ * ]. Subject to the provisions of Section 7.5(c),
Warner will pay [ * ] in respect of the manufacture, use or sale of Licensed
Products sold in the Other Territory, [ * ].

         (c) [ * ]. The royalties calculated under Sections 7.5(a)(i) through
(iii) in respect of sales in the Other Territory shall be due and payable to
Onyx [ * ]:

                  (i)  [ * ] of Net Sales; and

                  (ii) [ * ].

         (d) KNOW-HOW ROYALTY. In any country in the Other Territory where the
Licensed Product in question is not covered by an Onyx Patent containing a Valid
Claim which would be infringed by the manufacture, use or sale of such Licensed
Product, Warner shall pay Onyx a royalty equal to [ * ] of the royalty which
would otherwise have been due on the sale of such Licensed Product if it had
been covered by any such Valid Claim, but only until the earlier

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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of (a) the [ * ] anniversary of the First Commercial Sale of such Licensed
Product or (b) the date that a Third Party sells a product in such country that
(i) is an adenovirus that selectively replicates in and kills cancer cells based
on abnormal p53 pathway function, and (ii) with respect to the Gene Product,
incorporates the Selected Gene, and (iii) with respect to the Pro-Drug Product,
converts the same pro-drug to the Selected Drug.

         (e) ROYALTY ON INDEPENDENT PRODUCTS. Onyx shall pay to Warner a royalty
on the Net Sales of all Independent Products (other than Local/Regional
ONYX-015) equal to: (i) [ * ] of Net Sales if Warner has completed at least one
Phase II Clinical Trial of such product prior to its becoming an Independent
Product, and (ii) [ * ] of Net Sales if the standard set forth in clause (i) is
not satisfied but Warner had completed a least one Phase I Clinical Trial of
such product prior to its becoming an Independent Product. Such royalty shall be
paid to Warner without offset for any royalties payable to Third Parties, and
shall be paid on a country-by-country basis until the later of (x) [ * ] years
from the date of First Commercial Sale in such country or (y) the expiration of
the last to expire of the Warner Patents (including Joint Patents) containing a
Valid Claim which would be infringed by the manufacture, use or sale of such
Independent Product in such country. The provisions of Sections 7.7 through 7.13
shall apply to any payments of royalties by Onyx on Independent Products.

         (f) ROYALTY PAYMENTS ON LICENSED PRODUCTS ON TERMINATION OF
CO-PROMOTION (UNITED STATES AND CANADA). In the event Onyx does not exercise its
rights to co-promote a Licensed Product in one or more countries of the Shared
Territory, or for any reason loses its right to co-promote such Licensed Product
(whether pursuant to Section 5.3(c), 5.4 or otherwise, other than pursuant to
Section 4.10), Onyx shall be entitled to receive a royalty payment on Net Sales
of such Licensed Product in the country of the originally defined Shared
Territory (i.e., the United States and Canada) in which it does not share in
Product Profit pursuant to Section 7.6 equal to [ * ] of Net Sales. Such royalty
shall be paid for the duration specified in Section 7.5(a), and the provisions
of Sections 7.5(b) through 7.5(d) shall apply to such royalties payable with
respect to Net Sales of Licensed Products in the United States and Canada.

         (g) ROYALTY PAYMENTS ON LICENSED PRODUCTS ON TERMINATION OF
CO-DEVELOPMENT (UNITED STATES AND CANADA). In the event that Onyx forfeits its
co-Development of a Licensed Product in the Shared Territory pursuant to Section
4.10, Onyx shall be entitled to receive a royalty on Warner's Net Sales of such
Licensed Product in each country formerly in the Shared Territory (i.e., the
United States and Canada). The applicable royalty rate shall equal the royalty
rate set forth in Section 7.5(a), increased by [ * ] if Onyx terminates its
co-Development after completion of at least one Phase I Clinical Trial of such
Licensed Product, and by [ * ] if Onyx terminates its co-Development after
completion of at least one Phase II Clinical Trial of such Licensed Product.
Such royalty shall be paid for the duration specified in Section 7.5(a), and the
provisions of Sections 7.5(b) through 7.5(d) shall apply to such royalties
payable with respect to Net Sales of Licensed Products in the United States and
Canada. Onyx shall be deemed to have forfeited its right to co-promote such
Licensed Product in the Shared Territory.

     7.6 PROFIT SHARING (SHARED TERRITORY)

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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         (a) SHARE OF PROFITS. So long as Onyx has exercised its co-promotion
option under Section 5.2 with respect to a particular Licensed Product and has
not terminated or lost its rights to co-promote such Licensed Product in the
Shared Territory, [ * ] shall be entitled to [ * ] of Product Profit from the
sale of such Licensed Product in the Shared Territory. If Onyx's right to
co-promote a Licensed Product in any one country of the Shared Territory is
terminated, then Onyx shall receive a royalty under Section 7.5(f) on Net Sales
of such Licensed Product in the country where Onyx terminated its rights, and
shall continue to share Product Profit from Net Sales of such Licensed Product
in the country where Onyx is co-promoting such sales.

         (b) DETERMINATION OF ALLOWABLE EXPENSES AND PRODUCT PROFIT. Within
[ * ] days after the end of each calendar quarter and [ * ] after the end of the
fourth calendar quarter following the launch of each Licensed Product in the
Shared Territory, each Party shall report to the other Party its Net Sales and
its Allowable Expenses incurred in the previous calendar quarter with respect to
each Licensed Product in the Shared Territory. Such reports shall be accompanied
by appropriate supporting information. The Parties shall determine and report
Marketing Expenses for their respective sales forces using a mutually agreed
mechanism. Within 20 days after receipt of such reports, Warner shall prepare
and deliver to Onyx an accounting of aggregate Allowable Expenses and Product
Profit for such calendar quarter (the "QUARTERLY FINANCIAL STATEMENT").

         (c) PAYMENTS. Warner shall accompany the Quarterly Financial Statement
with a payment to Onyx in an amount calculated as follows:

                  (i) If the Product Profit for such calendar quarter was
negative, then Net Sales in the Shared Territory shall be allocated in the
following order:

                        (1) to reimburse each Party for its [ * ] incurred in
respect of such [ * ]; and

                        (2) to reimburse the Party with the [ * ]; and

                        (3) to reimburse any Party with the [ * ]; and

                        (4) to reimburse [ * ].

Any remaining [ * ] shall be deemed [ * ].

                  (ii) If the Product Profit for such calendar quarter was
positive, then Net Sales in the Shared Territory shall be allocated in the
following order:

                        (1) to reimburse all [ * ];

                        (2) to reimburse the Party with the [ * ];

                        (3) to reimburse each Party [ * ]; and

                        (4) to each Party [ * ].

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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<PAGE>

                  (iii) Warner shall include, with each Quarterly Financial
Statement, a reconciliation of each Party's then current Unreimbursed Expenses,
if any.

         (d) RECOVERY OF WARNER ADVANCES. Warner shall be entitled to retain
Onyx's [ * ] share of Product Profit, without distribution of any portion of
Product Profit to Onyx pursuant to Section 7.6(c)(ii)(4), until Warner has
recovered (i) Warner Pre-Marketing Advances pursuant to Section 5.6(b), plus
interest accrued at the [ * ] on all amounts up to [ * ] of Warner's
Pre-Marketing Advances and, in the event that Warner Pre-Marketing Advances
exceed [ * ] in the aggregate for a Licensed Product an additional amount equal
to [ * ] of the excess of Warner Pre-Marketing Advances over [ * ] for such
Licensed Product, and (ii) [ * ] of any Development Costs deferred by Onyx
pursuant to Section 7.3(b). Warner shall include, with each Quarterly Financial
Statement, an accounting and reconciliation of any amounts it remains entitled
to recover under this Section 7.6(d).

         (e) DURATION. The profit sharing and payment provisions of this Section
7.6 shall continue in effect for each Licensed Product so long as Warner or an
Affiliate or permitted licensee is marketing such Licensed Product in the Shared
Territory, unless Onyx is no longer co-promoting such Licensed Product.

     7.7 CURRENCY OF PAYMENT. All payments to be made under this Agreement shall
be made in United States dollars in the United States to a bank account
designated by the party to be paid. Royalties earned shall first be determined
in the currency of the country in which they are earned and then converted to
its equivalent in United States currency. Such conversion shall be based on the
average buying rates of exchange for the currencies involved into the currency
of the United States quoted by Citibank (or its successor in interest) in New
York, New York at the close of business on each business day of the quarterly
period in which the royalties were earned.

     7.8 PAYMENT AND REPORTING. Any royalties due under this Article 7 shall be
paid quarterly, within [ * ] days after the end of the fourth calendar quarter
and [ * ] days after the end of each other calendar quarter, or earlier if
practical. With each such quarterly payment, the payor shall furnish the payee a
royalty statement, setting forth on a country-by-country basis the total number
of units and Net Sales of each royalty-bearing Licensed Product made, used
and/or sold hereunder for the quarterly period for which the royalties are due.
In addition, the payor shall furnish such a royalty statement on a
country-by-country basis for the first quarter during which payor makes sales of
Licensed Product for which no royalty payment in respect of such country is due
hereunder, and shall state the basis for such sales then being free of royalty
obligations hereunder. The payor shall thereafter have no further obligation to
report the number of units or Net Sales of such Licensed Product made, used
and/or sold in such country.

     7.9 RECORDS. Each Party shall keep accurate books and accounts of record in
connection with the manufacture, use and/or sale by or for it of the Licensed
Products hereunder in sufficient detail to permit accurate determination of all
figures necessary for verification of payment obligations set forth in this
Article 7. Such records shall be maintained for a period of 3 years from the end
of each year in which sales occurred or expenses were incurred. The other Party,
at its expense, through a certified public accountant, shall have the right to
access such books and records for the sole purpose of verifying the reports
regarding amounts due; such access shall be conducted after reasonable prior
notice by the Party requesting such audit during

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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the other Party's ordinary business hours and shall not be more frequent
than once during each calendar year. Said accountant shall not disclose to
the payee or any other party any information except that which should
properly be contained in a royalty report required under this Agreement. If
such accounting determines that a Party's error resulted in the other Party
receiving at least 10% less than properly due in respect of any quarter, then
the Party in error will reimburse such amount and reimburse the other Party
for the costs of such accounting (including the fees and expenses of the
certified public accountant).

     7.10 TAXES WITHHELD. Any income or other tax that one Party hereunder, its
Affiliates or sublicensees is required to withhold (the "WITHHOLDING PARTY") and
pay on behalf of the other Party hereunder (the "WITHHELD PARTY") with respect
to the royalties payable under this Agreement shall be deducted from and offset
against said royalties prior to remittance to the Withheld Party; provided,
however, that in regard to any tax so deducted, the Withholding Party shall give
or cause to be given to the Withheld Party such assistance as may reasonably be
necessary to enable the Withheld Party to claim exemption therefrom or credit
therefor, and in each case shall furnish the Withheld Party proper evidence of
the taxes paid on its behalf. The Withholding Party shall comply with reasonable
requests of the Withheld Party to take any proper actions that may minimize such
withholding obligation.

     7.11 COMPUTATION OF ROYALTIES. All sales of Licensed Products between any
Party and any of its Affiliates and sublicensees shall be disregarded for
purposes of computing royalties under this Article 7, but in such instances
royalties shall be payable only upon sales to unlicensed Third Parties. Nothing
herein contained shall obligate any Party to pay the other Party more than one
royalty on any unit of any Licensed Product.

     7.12 LICENSES TO AFFILIATES. Each Party shall, at the other Party's
request, sign license and/or royalty agreements directly with the other Party's
Affiliates and sublicensees in those situations where such agreements would not
decrease the amount of royalties which would be paid hereunder, net of
withholding obligations. Such agreements shall contain the same language as
contained herein with appropriate changes in parties and territory. No such
license and/or royalty agreement will relieve Warner or Onyx, as the case may
be, of its obligations hereunder, and such Party will guarantee the obligations
of its Affiliate or sublicensee in any such agreement. Royalties received
directly from one Party's Affiliates and sublicensees shall be credited towards
such Party's royalty obligations hereunder.

     7.13 PROHIBITION OF ROYALTY PAYMENTS. The obligation to pay royalties under
this Agreement shall be waived and excused to the extent that statutes, laws,
codes or government regulations in a particular country prevent such royalty
payments by the seller of Licensed Products; provided, however, that if legally
permissible, the seller of Licensed Products shall pay the royalties owed to the
other party hereto by depositing such amounts in a bank account in such country
that has been designated by the party owed such royalties.

     7.14 ACCOUNTING.

         (a) Each Party agrees to determine Net Sales, Allowable Expenses,
Development Costs, Pre-Marketing Expenses, and all other costs and expenses
hereunder using its standard accounting policies and procedures applied
consistently throughout such Party's

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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organization, and consistent with United States Generally Accepted Accounting
Principles to the extent practical, as if such Products were solely owned
products of such Party, except as otherwise specifically provided in this
Agreement.

         (b) In the event of the payment or receipt of non-cash consideration in
connection with the performance of activities under this Agreement, the Party
engaging in such non-cash transaction shall advise the Steering Committee of
such transaction, including such Party's assessment of the fair market value of
such non-cash consideration and the basis therefor. Such transaction shall be
accounted for on a cash equivalent basis, as mutually agreed by the Parties in
good faith.

         (c) If a Party engages in a transaction with a non-Affiliate in which
such Party has an economic interest, and such transaction affects payments due
to or from the other Party under this Agreement, then if such transaction is not
truly an "arm's-length transaction," such Party shall be obligated to make
equitable adjustments to amounts payable under this Agreement to offset such
effects.

                                   ARTICLE 8

                             MANUFACTURE AND SUPPLY

     8.1 ALLOCATION OF RESPONSIBILITY AND CONTROL.

         (a) WARNER AS MANUFACTURING PARTY. Warner shall control all issues
relating to, and shall have the sole right and responsibility, to manufacture or
have manufactured all supplies of Licensed Products for all commercial sales,
worldwide, and, after Warner elects to undertake such manufacture pursuant to
Section 8.1(b), supplies of Licensed Products for all clinical trials of
Licensed Products in accordance with its election.

         (b) ONYX' CONTINUED OBLIGATION TO MANUFACTURE. Notwithstanding Section
8.1(a), Onyx shall (i) continue its program for scale-up of the manufacture of
the current formulation of Local/Regional ONYX-015 and transfer of such
manufacture process to [ * ] (only to the extent pursuant to an agreement
approved by the Steering Committee) for the purpose of manufacturing supplies of
Local/Regional ONYX-015 for the initial Phase III Clinical Trial and (ii)
subject to a decision by the Development Team, manufacture supplies of Licensed
Products for Phase I and Phase II Clinical Trials until such time as Warner
elects to conduct or have conducted, such manufacture. On a quarterly basis,
Onyx shall provide Warner with copies of all information, records, reports,
data, supply agreements relating to its performance of its manufacturing
obligations. At Warner's request and upon [ * ] written notice from Warner of
Warner's desire to assume manufacturing of clinical or commercial supplies of
Licensed Products Onyx shall (a) transfer to Warner all written and electronic
records relating to such manufacture, (b) transfer to Warner all inventory, work
in process, samples and materials used in such manufacture and (c) assign to
Warner all agreements relating to such manufacture. The Parties shall work
together to effect an orderly transition of manufacturing responsibilities so as
to minimize the impact on Development of Licensed Products.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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     8.2 THIRD PARTY MANUFACTURERS. Onyx may conduct its manufacturing
responsibilities of Licensed Products under Section 8.1(b) through a Third Party
contract manufacturer, subject to review and approval by the Development Team of
any such proposed contract manufacturer. Warner shall have the unrestricted
right to use Third Parties to manufacture Licensed Products.

     8.3 PROCESS DEVELOPMENT. Subject to a decision by the Development Team,
Onyx will use commercially reasonable and diligent efforts to develop a process
for the manufacture of the current formulation of Local/Regional ONYX-015 to a
scale sufficient to manufacture and supply the anticipated demand for such
Local/Regional ONYX-015. The Development Team will oversee such development
efforts of Onyx, and all material issues incident to the development of
processes for the production of supplies of Licensed Products, in sufficient
quantity and in a timely manner for Development and Commercialization
activities. From the time Warner assumes responsibility for manufacturing of any
other Licensed Product, Warner shall conduct process development for such
Product.

     8.4 SPECIFICATIONS. The Parties agree that the manufacture of Licensed
Products must be in full compliance with all aspects of then current GMPs. The
Development Team shall establish the specifications, including any necessary
documentation, certificates of analysis and test results, for Licensed Products.

     8.5 TRANSFER PRICE. The costs of manufacturing a particular Licensed
Product for use or sale in a particular country shall be treated as:

                  (i) Development Costs of the manufacturing party where such
costs are incurred to manufacture supplies used in Development of the Licensed
Product, and

                  (ii) Allowable Expenses of the manufacturing party where such
costs are incurred to manufacture supplies used for commercial sale of the
Licensed Product.

                                   ARTICLE 9

                                 CONFIDENTIALITY

     9.1 CONFIDENTIALITY.

         (a) Except as specifically permitted hereunder, each Party hereby
agrees to hold in confidence and not use on behalf of itself or others all data,
samples, technical and economic information (including the economic terms
hereof), commercialization, clinical and research strategies and know-how
provided by the other party (the "DISCLOSING PARTY") for a period of ten years
from the date of disclosure and all data, results and information developed
pursuant to the Collaboration and solely owned by the other party (collectively
the "CONFIDENTIAL INFORMATION"), except that the term "Confidential Information"
shall not include:

                  (i) information that is or becomes part of the public domain
through no fault of the non-Disclosing Party or its Affiliates;

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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                  (ii) information that is obtained after the date hereof by the
non-Disclosing Party or one of its Affiliates from any Third Party which is
lawfully in possession of such Confidential Information and not in violation of
any contractual or legal obligation to the Disclosing Party with respect to such
Confidential Information;

                  (iii) information that is known to the non-Disclosing Party or
one or more of its Affiliates prior to disclosure by the Disclosing Party, as
evidenced by the non-Disclosing Party's written records; and

                  (iv) information that is necessary to be disclosed to any
governmental authorities or pursuant to any regulatory filings, provided that in
such case the non-Disclosing Party notifies the Disclosing Party reasonably in
advance of such disclosure and cooperates with the Disclosing Party to minimize
the scope or content of such disclosure.

         (b) The obligations of this Section 9.1 shall survive the expiration or
termination of this Agreement.

     9.2 PUBLICITY. All publicity, press releases and other announcements
relating to this Agreement or the transactions contemplated hereby shall be
reviewed in advance by, and subject to the approval of, both Parties; provided,
however, that either Party may (i) publicize the existence and general subject
matter of this Agreement without the other Party's approval and (ii) disclose
the terms of this Agreement insofar as required to comply with applicable
securities laws, provided that in the case of such securities disclosures the
disclosing party notifies the other Party reasonably in advance of such
disclosure and cooperates to minimize the scope and content of such disclosure.

     9.3 PUBLICATION. The Parties shall cooperate in appropriate publication of
the results of research and development work performed pursuant to this
Agreement, but subject to the predominating interest to obtain patent protection
for any patentable subject matter. To this end, it is agreed that prior to any
public disclosure, the Party proposing disclosure shall send the other Party a
copy of the information to be disclosed, and shall allow the other Party 30 days
from the date of receipt in which to determine whether the information to be
disclosed contains subject matter for which patent protection should be sought
prior to disclosure. If notification is not received during the 30 day period,
the Party proposing disclosure shall be free to proceed with the disclosure. If
due to a valid business reason or a belief by the nondisclosing Party that the
disclosure contains subject matter for which a patentable invention should be
sought, then prior to the expiration of the 30 day period, the nondisclosing
Party shall so notify the disclosing Party, who shall then delay public
disclosure of the information for an additional period of up to 60 days to
permit the preparation and filing of a patent application on the subject matter
to be disclosed or other action to be taken. The Party proposing disclosure
shall thereafter be free to publish or disclose the information. the
determination of authorship for any paper shall be in accordance with accepted
scientific practice. In no event may any publication or other disclosure contain
a Party's Confidential Information without such party's prior written consent.

                                   ARTICLE 10

              OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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     10.1 OWNERSHIP OF INVENTIONS. Inventorship of any invention that is
developed, discovered or made by a Party or the Parties jointly (as applicable,
the "INVENTOR") pursuant to work conducted under this Agreement (an "INVENTION")
shall be determined in accordance with United States laws of inventorship.
Subject only to the license rights granted under this agreement, each Party
shall own the entire right, title and interest in and to any Invention made
solely by such Party's employees or agents, and all intellectual property rights
therein and shall own an undivided one-half interest in and to any Invention
made jointly solely by the employees or agents of both Parties, and all
intellectual property rights therein. Each Party shall promptly notify the other
Party if it determines that an Invention has been made, including any such
jointly owned Invention.

     10.2 PATENT PROSECUTION.

         (a) SOLELY-OWNED INVENTIONS. With respect to any Patent that only
claims Inventions that are solely-owned by one Party hereunder, the Inventor
shall have the right, at its option and expense, to prepare, file and prosecute
in its own name any Patents with respect to any such Invention and to maintain
any Patents issued thereon. In connection with any such prosecution efforts, the
other Party agrees to cooperate reasonably with the Inventor at the Inventor's
expense in the preparation and prosecution of all such Patents and in the
maintenance of any Patents issued. This obligation shall survive the expiration
or termination of this Agreement.

         (b) JOINT INVENTIONS.

                  (i) With respect to all Joint Inventions that related
specifically to the composition of matter, manufacture and/or use of a Licensed
Product (and not to Onyx adenovirus technology generally) and are potentially
patentable (the "PRODUCT-SPECIFIC INVENTIONS"), Warner will have first right to
control the preparation, filing and prosecution of Joint Patents only claiming
such Product-Specific Inventions and of maintenance of Patents issuing thereon
(but subject to Section 10.3(b)), and Onyx shall cooperate reasonably with
Warner in such prosecution efforts. Warner shall pay all expenses in connection
with its preparation, filing and prosecution of such Patents that claim
Product-Specific Inventions. Warner shall from time to time (no more often than
once per calendar quarter) notify Onyx of the actual amount of out-of-pocket
expenses incurred in such efforts, and Onyx shall promptly thereafter pay Warner
[ * ] of such out-of-pocket expenses.

                  (ii) With respect to all Joint Inventions that relate
specifically to Onyx adenovirus technology and are potentially patentable (the
"TECHNOLOGY INVENTIONS"), Onyx will have first right to control the preparation,
filing and prosecution of Joint Patents only claiming such Technology Inventions
and of maintenance of Patents issuing thereon (but subject to Section 10.3(b))
below), and Warner shall cooperate reasonably with Onyx in such prosecution
efforts. Onyx shall pay all expenses in connection with its preparation, filing
and prosecution of such Patents that claim Technology Inventions. Onyx shall
from time to time (no more often than once per calendar quarter) notify Warner
of the actual amount of out-of-pocket expenses incurred in such efforts, and
Warner shall promptly thereafter pay Onyx [ * ] of such out-of-pocket expenses.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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                  (iii) With respect to all other Patents claiming Joint
Inventions, unless the Parties otherwise agree, the Steering Committee shall
determine which Party shall have the first right to control the preparation,
filing and prosecution of such Patents and the other Party shall reasonably
cooperate with such efforts of such Party. The Parties shall equally share the
cost of the preparation, filing, prosecution and maintenance of such Patents.

                  (iv) Onyx may elect in writing to disclaim all interest in any
particular Patents claiming jointly invented Inventions, or with respect to
interests therein only in particular countries, in which case: (1) such
Invention will be solely owned by Warner (in the applicable countries), and Onyx
will co-operate to assure Warner's sole ownership thereof, (2) Onyx will have no
further interest in such Patent, by ownership, license or otherwise, in the
applicable countries, and (3) Warner may assume control over prosecution of such
Patent claiming such Invention (in the applicable countries), and Onyx will not
be responsible for reimbursing Warner for any expenses incurred by Warner from
and after the date that Warner receives Onyx's written disclaimer as to such
prosecution and maintenance. Warner may elect in writing to disclaim all
interest in any particular Patent claiming jointly invented Inventions, or with
respect to interests therein only in particular countries, in which case: (1)
such Invention will be solely owned by Onyx (in the applicable countries), and
Warner will co-operate to assure Onyx's sole ownership thereof, (2) Warner will
have no further interest in such Patent by ownership, license or otherwise, in
the applicable countries, and (3) Onyx may assume control over prosecution of
such Patent claiming such Invention (in the applicable countries), and Warner
will not be responsible for reimbursing Onyx for any expenses incurred by Onyx
from and after the date that Onyx receives Warner's written disclaimer as to
such prosecution and maintenance.

                  (v) As used in this Section 10.2(b), "out-of-pocket expenses"
shall mean direct costs, excluding internal labor costs (and any indirect costs
associated therewith).

     10.3     PROTECTION OF PATENT RIGHTS.

         (a) The Inventor shall notify the other Party when it determines that
an Invention has been made. With respect to any Inventions reasonably useful in
the field, the Party responsible for preparation, filing, prosecution and
maintenance of Patents hereunder shall keep the other Party reasonably informed
of all steps taken in the preparation, prosecution and maintenance of all of its
Patents which claim such Invention, including furnishing the other Party with
copies of Patents and other related correspondence relating to the prosecution
of such Patents to and from patent offices. Such Party will permit the other
Party to offer its comments on such applications and prosecution efforts
relating to Inventions, before such Party makes a submission to a patent office
which could materially affect the scope or validity of the patent coverage that
may result. The other Party shall offer its comments, if any, promptly after
receipt of the applicable document for review.

         (b) With respect to Inventions that are potentially patentable, the
Party that does not have the right to control the prosecution of Patents
claiming such Invention may request in writing that the other Party take
specific, reasonable actions to (i) prepare, file or prosecute Patents with
respect to an Invention, in a particular country, (ii) maintain any Patents
issued with respect to an Invention, and/or (iii) protect against abandonment of
a Patent which claims an Invention. If such actions are not undertaken within
sixty (60) days of the controlling Party's

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receipt of such written request (or if soon, such time as applicable patent
rights would be lost due to passage of time) and timely pursued thereafter, the
controlling Party shall permit, and the requesting Party at its option and
expense may undertake, such actions, and the applicable Patent shall thereafter
be deemed to be owned by such Party that undertakes such actions, except as
otherwise provided below. The Party not undertaking such actions shall fully
cooperate with the other Party and shall provide to the other Party whatever
assignments and other documents that may be needed in connection therewith. The
Party not undertaking such actions may require a suitable indemnity against all
damages, costs and expenses and impose such other reasonable conditions as such
Party's advisor may require. The Party not undertaking such actions may later
reassume control (and ownership, if applicable) of such Patent by paying the
other Party [ * ] of its actual out-of-pocket expenses in conducting such
actions.

         (c) If either Party commences any actions or proceedings (legal or
otherwise) pursuant to this Section 10.3, it shall prosecute the same vigorously
at its expense and shall not abandon or compromise them or fail to exercise any
rights of appeal without giving the other Party the right to take over their
conduct at its own expense.

     10.4 THIRD-PARTY PATENT RIGHTS. Except as otherwise provided in Section
11.1 below, neither Party makes any warranty with respect to the validity,
perfection or dominance of any Patent or other proprietary right or with respect
to the absence of rights in Third Parties which may be infringed by the
research, Development, manufacture, use or sale of any Licensed Product. Each
Party agrees to bring to the attention of the other Party any Patent it
discovers, or has discovered, and which relates to the subject matter of this
Agreement.

     10.5 INFRINGEMENT BY THIRD PARTIES. Each Party shall each promptly notify
the other of any infringement and/or other unauthorized use by a Third Party of
an Invention or any Onyx Patent, Warner Patent or Joint Patent that comes to
such Party's attention. The notice shall set forth the facts of that
infringement in reasonable detail. Enforcement of such Patent and other
intellectual property rights shall be according to the following provisions.

         (a) FIELD INFRINGEMENT. Any such infringement (or alleged infringement)
or unauthorized use that occurs based upon the development, manufacture, import,
use, sale or offer for sale of a product that is, or reasonably could be,
competitive with one or more Licensed Products (whether for sale or in
Development anywhere in the world) shall be referred to herein as a "Field
Infringement". With respect to any such Field Infringement, Onyx shall have the
primary right, but not the obligation, to institute, prosecute and control, at
its expense, any action or proceeding against the Third Party infringer of an
Onyx Patent or any Patent for which Onyx has responsibility or control, with
respect to such Field Infringement, and Warner shall have the primary right, but
not the obligation, to institute, prosecute and control, at its expense, any
action or proceeding against the Third Party infringer of a Warner Patent, Joint
Patent or any Patent for which Warner has responsibility or control, with
respect to such Field Infringement (with the Party having such primary right
referred to herein as the "ENFORCING PARTY"). If the applicable Enforcing Party
institutes an action against such infringer, the other Party agrees to be joined
as a party plaintiff and to give the Enforcing Party reasonable assistance and
authority to control, file and prosecute the suit as necessary, and such other
Party shall have the right to participate in any such action brought and to be
represented by counsel of its own choice. If the Enforcing Party fails to bring
an action or proceeding against the infringer in a Field Infringement within a
period

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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of ninety (90) days after it has actual notice of such infringement (including
by written notice from the other Party), then the other Party shall have the
right to bring and control any such action against such infringer by counsel of
its own choice, and the Enforcing Party shall have the right to participate in
such action and be represented by counsel of its own choice. Any damages or
other monetary awards recovered by a Party in pursuing any action under this
Section 10.5 (a) shall first be applied to reimburse the actual costs and
expenses of the Party that brought the suit (including the internal costs and
expenses specifically attributable to prosecuting such suit) and then to
reimburse the other Party for its costs in cooperation with such suit. Any
remaining damages or other recovery shall be allocated to the Party that was
finally responsible for prosecuting such suit. No settlement or consent judgment
or other voluntary final disposition of a suit under this Section 10.5(a) may be
entered into by a Party prosecuting such suit without the consent of the other
Party if such disposition would materially adversely affect the rights of such
Party under this Agreement.

         (b) AGREEMENT OF ENFORCING PARTY. Notwithstanding the provisions of
Section 10.5(a), a Party shall not file or prosecute any action for a Field
Infringement of a Patent for which the other Party is the Enforcing Party, and
pursuant to which that Enforcing Party has commenced and is prosecuting at least
one such action against a Field Infringement of said Patent, without the
agreement of the Enforcing Party, which agreement shall not be unreasonably
withheld.

         (c) OTHER INFRINGING ACTIVITY. For any such infringement (or alleged
infringement) or unauthorized use based on an activity other than a Field
Infringement, Onyx shall have the sole and exclusive right, but not the
obligation, to institute, prosecute and control, at its expense, any action or
proceeding against the Third Party infringer of an Onyx Patent or any Patent for
which Onyx has responsibility or control, and Warner shall have the sole and
exclusive right, but not the obligation, to institute, prosecute and control, at
its expense, any action or proceeding against the Third Party infringer of a
Warner Patent or any Patent for which Warner has responsibility or control. For
any such action, the Party enforcing its rights shall retain any and all damages
or other recoveries from such action. With respect to any infringement or
unauthorized use of a Joint Patent or Joint Invention, the Parties shall discuss
and agree in good faith on the appropriate Party to take action against such
infringer and the appropriate sharing of any recovery from such action (PROVIDED
THAT if the Parties cannot reach such agreement within sixty (60) days of notice
of the infringement, then either Party may take action on its own to enforce its
rights in such Joint Patent or Joint Invention).

     10.6 DEFENSE AND SETTLEMENT OF THIRD-PARTY CLAIMS AGAINST LICENSED
PRODUCTS.

         (a) CONTROL. If a Third Party asserts that a Patent or other right
owned by it is infringed by the Development, manufacture, import, use, sale or
offer for sale of any Licensed Product, the Party first obtaining knowledge of
such a claim shall immediately provide the other Party notice of such claim and
the related facts in reasonable detail. The Party that shall be primarily
responsible for controlling the defense of such infringement claim (the
"DEFENDING PARTY") shall be: (i) Warner with respect to claims of infringement
alleged to be caused by the manufacture, import, use, sale or offer for sale of
a Licensed Product within the Other Territory, and (ii) with respect to claims
of infringement alleged to be caused by the manufacture, import, use, sale or
offer for sale of a Licensed Product within the Shared Territory, the Party (or
the

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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Parties jointly) as designated by the Steering Committee after good faith
consultation with the Parties, provided that if the Steering Committee fails to
make such a designation, each Party may act to protect their own interest. The
non-Defending Party shall have the right to participate in such defense and to
be represented in any such action by counsel of its selection at its sole
discretion. The Defending Party shall also have the right to control settlement
of such claim; provided, however, that no settlement which has a material
adverse effect on the other Party (except to the extent of a royalty reduction
provided for in Sections 7.5(b) or (c)) shall be entered into without the
written consent of the other Party, which consent shall not be withheld
unreasonably.

         (b) ALLOCATION OF EXPENSES. Subject to Section 10.6(c), the costs and
expenses of patent defense, settlement and judgments pursuant to Section
10.6(a), to the extent directly applicable to manufacture and sale of Licensed
Products in the Shared Territory, shall be shared expenses of the Parties as
follows: Such costs and expenses that are incurred as to a particular Licensed
Product prior to its Regulatory Approval shall be borne by the Parties in the
same manner as if such costs were Development Costs, and such costs and expenses
that are incurred following launch of the subject Licensed Product in the Shared
Territory shall be Allowable Expenses, reimbursed to the Party incurring such
expense according to the provisions of Section 7.6. Any actual costs and
expenses of patent defense, settlement and judgments pursuant to Section 10.5
with respect to the manufacture and sale of Licensed Products in the Other
Territory shall be deducted from Net Sales of such Licensed Product in the
jurisdiction where such action or proceeding arises. In the case where the
infringement was alleged to occur in both the Shared Territory and the Other
Territory, such costs and expenses will be fairly allocated between such
territories on the basis of extent of alleged or actual infringement in each
such territory.

         (c) [ * ]. In the event a patent issues [ * ] which would appear to
cover ONYX-015 or a Licensed Product or potential Licensed Product, the control
of actions taken to oppose or otherwise address such patent shall be allocated
as set forth in Section 10.6(a). The Patent Expenses incurred in the course of
opposing such patent or payments made to obtain a license, plus interest from [
* ] at the rate of [ * ], shall first be paid by Warner out of any [ * ], and
the amount of such payments shall be offset against such [ * ]. Any Patent
Expenses incurred in excess of such amount initially payable by Warner shall be
borne equally by the Parties, unless they are incurred after the first launch of
a subject Licensed Product in the Shared Territory, in which case such excess
Patent Expenses shall be an Allowable Expense.

     10.7 JOINTLY OWNED PATENTS. Subject to the licenses granted in this
Agreement, each Party shall have the right to use, license and assign its
interest in Joint Patents without a duty to account to the other Party.

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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     10.8 TRADEMARKS.

         (a) PRODUCT TRADEMARKS. Warner shall have sole control over all matters
relating to the use of, and shall own, all trademarks used in the sale of
Licensed Products in the Other Territory, including, without limitation, the
selection, filing and enforcement thereof. All Licensed Products shall be sold
in the Shared Territory under trademarks selected by the JMC. Under the
supervision of the JMC, the Parties shall work together and seek to agree on the
selection of trademarks for a Licensed Product for use in the Shared Territory.
The JMC shall review all uses in the Shared Territory of trademark(s) to
identify a Licensed Product, which uses shall comply with all applicable laws
and regulations, including without limitation those laws and regulations
particularly applying to the proper use and designation of trademarks in the
Shared Territory. Trademark(s) under which Licensed Products are sold in the
Shared Territory (other than Onyx or Warner corporate trademarks or trade names)
shall be used only pursuant to the terms of this Agreement to identify Licensed
Products, and shall not be used by either Party to identify any other products.
All trademarks relating to Licensed Products shall be registered by Warner in
its name as owner in all countries.

         (b) INFRINGEMENT OF TRADEMARKS. The responsibility to take all
reasonable and appropriate steps to protect, defend and maintain each trademark
for use in the Shared Territory in connection with all Licensed Products and all
registrations therefor shall be with Warner for all trademarks. Each Party shall
notify the other Party promptly upon learning of any actual, alleged or
threatened infringement of such a trademark or of any unfair trade practices,
trade dress imitation, passing off of counterfeit goods, or like offenses
relating to Licensed Products. Upon learning of such offenses the Party with
responsibility for such trademark shall have the obligation to, in consultation
with the other Party, institute and control an appropriate action or proceeding
to halt the offense, unless the Parties otherwise mutually agree. The other
Party shall have the right to participate fully in all such actions or
proceedings and shall reimburse the responsible Party for [ * ] of the out of
pocket costs incurred by the responsible Party in instituting such action or
proceeding.

         (c) THIRD PARTY TRADEMARK. In the event a Licensed Product incorporates
technology licensed by Onyx from [ * ] pursuant to the license agreement between
the two parties dated [ * ], the packaging of such Licensed Product shall comply
with any and all trademark requirements set forth in the excerpts of such
license agreement which were previously transmitted to Warner.

         (d) COSTS OF DEFENSE. All of the unrecovered costs, expenses and legal
fees (including internal costs, expenses and legal fees) in bringing,
maintaining and prosecuting any action to maintain, protect or defend a
trademark (or registration therefor) covering a Licensed Product in the Shared
Territory shall be an Allowable Expense, and any recovery in that territory
shall be Net Sales. All such trademark-related costs, expenses and legal fees in
connection with a Licensed Product in the Other Territory shall be borne by, and
any recovery from such action shall be retained by, Warner.

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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                                   ARTICLE 11

                         REPRESENTATIONS AND WARRANTIES

     11.1 REPRESENTATIONS AND WARRANTIES.

         (U) PARTY REPRESENTATIONS AND WARRANTIES. Each of the Parties hereby
represents and warrants to the other Party as follows:

                  (i) This Agreement is a legal and valid obligation binding
upon such Party and enforceable in accordance with its terms. The execution,
delivery and performance of the Agreement by such Party does not conflict with
any agreement, instrument or understanding, oral or written, to which it is a
Party or by which it is bound, nor violate any law or regulation of any court,
governmental body or administrative or other agency having jurisdiction over it.

                  (ii) Such Party has not granted, and during the term of the
Agreement will not grant, any right to any Third Party relating to its
respective Patents and Know-How which would conflict with the rights granted to
the other Party hereunder.

                  (iii) In the course of the Development of Licensed
Products, such Party has not used, and during the term of this Agreement will
not use, any employee or consultant that is debarred by the FDA or, to the
best of such Party's knowledge, is the subject of debarment proceedings by
the FDA.

         (b) ONYX REPRESENTATIONS AND WARRANTIES. Onyx hereby represents and
warrants to Warner as follows:

                  (i) As of the Effective Date, it is not aware that the
practice of the Onyx Patents and Onyx Know-How as contemplated by this Agreement
will involve any infringement or constitute an unauthorized use of any Patent,
copyright, trade secret, proprietary information, license or right therein
belonging to any Third Party, but excluding from the foregoing warranty (1) the
patent matters referred to in Onyx's Form 10-K filed with the U.S. Securities
and Exchange Commission on March 31, 1999, and (2) Third Party technology that
may be necessary with respect to particular Licensed Products as designated in
the future, excluding Local/Regional ONYX-015.

                  (ii) There are no interferences or oppositions or other
matters pending or, to Onyx's knowledge, threatened against Onyx before any
court or administrative office or agency which affect the Onyx Patents.

                  (III) Each of the patent applications included in the Onyx
Patents is currently pending and in good standing, and has not been abandoned.
As of the Effective Date, Onyx is not aware of any prior art or any fact which
causes it to conclude that any Onyx Patent is invalid or unenforceable.

                  (iv) Onyx is not aware of any results or adverse events in its
ongoing Clinical Trials of Local/Regional ONYX-015 which would lead Onyx to
conclude that such

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Licensed Product is not a viable pharmaceutical product or that such Clinical
Trials should be terminated because such Licensed Product is unsafe or not
efficacious.

                  (v) The materials that Onyx has provided Warner relating to
the current status of the research, development and Commercialization of the
Licensed Products are not, to the knowledge of Onyx, materially misleading
(either as to the information contained therein, or because of failure by Onyx
to disclose other relevant materials that, by such failure, make such disclosed
materials misleading), and Onyx has not omitted to disclose to Warner any
materials relating to such research, development or Commercialization work that
are material to a decision to enter into this Agreement. Onyx has complied with
all applicable laws, rules and regulations in conducting the development of the
Licensed Products (including Local/Regional ONYX-015).

         (c) FURTHER REPRESENTATIONS AND WARRANTIES. Each Party hereby
represents and warrants to the other that the terms Onyx or Warner Patents and
Onyx or Warner Know-How, as the case may be, encompass the Patents and Know-how,
as defined, of all Affiliates of such Party and that the licenses under such
technology set forth in this Agreement are valid and binding.

         (d) PERFORMANCE BY AFFILIATES. The Parties recognize that each may
perform som6e or all of its obligations under this Agreement through Affiliates.
Each Party shall remain responsible for, and hereby guarantees, the performance
by its Affiliates and shall cause its Affiliates to comply with the provisions
of this Agreement in connection with such performance. In the event of any
dispute arising from the performance by an Affiliate under this Agreement, the
Party having such a dispute may proceed directly against the other Party,
without any obligation to first proceed against the Affiliate.

                                   ARTICLE 12

                              TERM AND TERMINATION

     12.1 RIGHT OF WARNER TO TERMINATE DEVELOPMENT. As described in Sections
3.5(e), 3.5(f), 4.4(d) and 4.7, Warner may at any time terminate its
participation in the research or Development of any one or more of the Licensed
Products. The rights set forth in this Section 12.1 to terminate participation
in research or Development shall be separate from, and in addition to, the
rights of Warner to terminate this Agreement or terminate participation in
Development pursuant to any other Section of this Agreement.

     12.2 TERM. This Agreement shall commence as of the Effective Date and,
unless sooner terminated as provided herein, shall continue in effect until the
earlier of: (a) the date on which the Parties are no longer researching,
developing, marketing or selling at least one Licensed Product in any country in
the world, (b) the expiration of all Royalty Terms as to all Licensed Products
and Independent Products, or (c) the date this Agreement is terminated pursuant
to the terms hereof. If Warner terminates research, Development and
Commercialization of all Licensed Products under this Agreement, this Agreement
shall be deemed to have terminated under clause (a) of this Section 12.2.

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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     12.3 TERMINATION FOR MATERIAL BREACH.

         (a) BREACH; CURE. Subject to the provisions of this Section 12.3, if
either Party (the "Breaching Party") shall have committed a material breach of
the terms of this Agreement, and such material breach shall remain uncured and
shall be continuing for a period of ninety (90) days following receipt of notice
thereof by the other Party specifying such breach (the "Non-Breaching Party"),
then, in addition to any and all other rights and remedies that may be
available, the Non-Breaching Party shall have the right to terminate this
Agreement effective upon the expiration of such ninety (90) day period;
PROVIDED, HOWEVER that if the material breach is capable of being cured but
cannot be reasonably cured in such ninety (90) day period, then the right to
terminate this Agreement shall not arise if the allegedly Breaching Party has
(i) during such period of time submitted a plan which, if successfully carried
out, would be effective in curing such breach, and has commenced its execution
of such plan, and (ii) diligently pursues such plan thereafter to a successful
conclusion. Any such notice of alleged material breach by the Non-Breaching
Party shall include a reasonably detailed description of all relevant facts and
circumstances demonstrating, supporting and/or relating to each such alleged
material breach by the Breaching Party. Actual termination of this Agreement
pursuant to this Section 12.3(a) shall only occur upon a separate written notice
by the Non-Breaching Party after the end of the cure period. Notwithstanding the
foregoing, if any such breach relates solely to one or more Licensed Products,
then the Non-Breaching Party may only terminate this Agreement only to the
extent it applies to such Licensed Product or Licensed Products and this
Agreement shall remain in effect as it applies to all other Licensed Products.

         (b) TERMINATION BY NON-BREACHING PARTY. If the Non-Breaching Party
terminates this Agreement pursuant to the provisions of Section 12.3(a), then
the Non-Breaching Party shall receive an exclusive (even as to the Breaching
Party but subject to rights of Third Parties that are not Affiliates of the
Breaching Party that pre-existed or accrued prior to such termination) worldwide
right and license, with the right to grant sublicenses, to all Onyx Patents (if
Onyx is the breaching Party) or the Warner Patents (if Warner is the breaching
party) of the Breaching Party and all of the Breaching Party's interest in Joint
Patents and in Licensed Product trademarks (excluding any trademarks or trade
names including the name of the Breaching Party or otherwise used by the
Breaching Party with respect to other products or services), only to the extent
the inventions claimed in such Patents were necessary for and used in the
research, development, manufacture, use or sale of Licensed Products (which are
the subject of the applicable breach), and shall have the exclusive right (but
not the obligation) to enforce the Patents against infringement by products or
activities competitive with the commercialization of the Licensed Products and
the exclusive right (but not the obligation) to enforce the trademark rights
against infringers. If Onyx is the Breaching Party, Warner shall,
notwithstanding such termination, pay to Onyx royalties of (i) the product of
Net Sales of Local/Regional ONYX-015 by Warner, its Affiliates or sublicensees,
multiplied by the royalty rate that would apply absent such termination, and
(ii) [ * ] of the Net Sales of Systemic ONYX-015 by Warner, its Affiliates or
sublicensees (which royalty shall not be reduced by any amounts otherwise
provided for in Article 7), and (iii) [ * ] of the Net Sales of Pro-Drug Product
and Gene Product by Warner, its Affiliates or sublicensees (which royalty shall
not be reduced by any amounts otherwise provided for in Article 7). Such
royalties shall be payable until expiration of all Patents covering the sale of
the relevant Licensed Products. The provisions of Sections 7.7 through 7.13
shall

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survive termination and continue to apply with respect to any such royalties
payable under this Section 12.3(b).

         (c) TRANSFER OF RIGHTS. In the event of termination of this Agreement
pursuant to this Section 12.3, the Breaching Party shall cooperate in the
transfer of all INDs, Regulatory Approvals and other regulatory filings related
to the Licensed Products which are the subject of the applicable breach, to the
Non-Breaching Party, deliver to the Non-Breaching Party copies of all
information, records and data in its Control that are necessary for the
continued research, development and commercialization of such Licensed Products,
forward to the Non-Breaching Party samples of all other chemical (excluding any
compounds in Warner's or its Affiliate's chemical compound libraries) and
biological materials acquired, made, cloned, synthesized, first discovered or
collected as a result of the Research Program or Development of the applicable
Licensed Product and are necessary for such continued research, development and
commercialization and take such other actions and execute such other
instruments, assignments and documents as may be necessary to effect the
transfer of rights hereunder to the Non-Breaching Party.

         (d) PROVISIONS FOR CONTINUED MANUFACTURING. In the event of termination
of this Agreement pursuant to this Section 12.3 where the Breaching Party is the
Manufacturing Party with respect to one (1) or more Licensed Products which are
the subject of the applicable breach hereunder, or in the event Warner elects to
terminate its rights with respect to one or more Licensed Products at a time
when it is the Manufacturing Party, the Manufacturing Party shall continue to
provide for manufacture of such Licensed Products to the extent provided prior
to notice of such termination, from the effective date of such termination until
such time as the non-Manufacturing Party is able to secure an equivalent
alternative commercial manufacturing source, as requested by the
non-Manufacturing Party or until [ * ] months from the effective date of
termination, whichever is earlier. To this end, as of the effective date of such
termination at the option of the Non-Breaching Party, all Third-Party
manufacturing contracts shall be assigned to the non-Manufacturing Party, and
the cost charged to the non-Manufacturing Party by the Manufacturing Party for
any of the internal manufacturing activities to be continued by the
Manufacturing Party pursuant to this Section 12.3 for the production of Licensed
Products shall be the same as the Manufacturing Party's cost was while the
Agreement was in effect. Further, upon the non-Manufacturing Party's request,
the Manufacturing Party shall provide such technical assistance and Know-How
licenses on a royalty free basis as may reasonably be requested to transfer such
technology as is needed by the non-Manufacturing Party to commence or continue
commercial manufacture of Licensed Products which are the subject of the
applicable breach. In the event that any technology is needed by the
non-Manufacturing Party to commence or continue commercial manufacture of
Licensed Products is covered by one or more Patents of the Manufacturing Party,
the non-Manufacturing Party shall receive a fully paid-up, royalty-free,
non-exclusive worldwide license to practice any and all such Patents for the
purposes contemplated in this Section 12.3 with the right to grant sublicenses
for the sole purpose of conduct such manufacturing activities.

     12.4 SURVIVING RIGHTS. The rights and obligations set forth in this
Agreement shall extend beyond the term or termination of the Agreement only to
the extent expressly provided for herein, or the extent that the survival of
such rights or obligations are necessary to permit

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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their complete fulfillment or discharge. Without limiting the foregoing, the
Parties have identified various rights and obligations which are understood to
survive, as follows: Sections 5.8, 5.9, 7.5(b), 7.5(c), 7.5(e), 7.7 through
7.14, 10.1 through 10.7, 10.8(b), 12.3 (in the case of termination pursuant to
Section 12.3), 12.4, 12.5, 14.5, 14.6, 14.8, 14.9 through 14.12, and 14.17, and
Articles 1 (to the extent required for interpretation of other surviving
provisions), 9 and 13. In the event this Agreement terminates pursuant to
Section 12.2(a), the following Sections shall also survive: 3.5(e) and (f),
4.4(d) (excluding references to Section 4.6), 4.7, 6.7, and 12.3(d).

     12.5 ACCRUED RIGHTS, SURVIVING OBLIGATIONS. Termination, relinquishment or
expiration of the Agreement for any reason shall be without prejudice to any
rights which shall have accrued to the benefit of either Party prior to such
termination, relinquishment or expiration, including damages arising from any
breach hereunder. Such termination, relinquishment or expiration shall not
relieve either Party from obligations which are expressly indicated to survive
termination or expiration of the Agreement.

                                   ARTICLE 13

                                 INDEMNIFICATION

     13.1 INDEMNIFICATION FOR LICENSED PRODUCTS IN THE OTHER TERRITORY. Subject
to Section 10.5, with respect to Licensed Products in the Other Territory:

         (a) WARNER INDEMNIFICATION. Warner hereby agrees to save, defend and
hold Onyx and its agents and employees harmless from and against any and all
suits, claims, actions, or demands by a Third Party for damages, liabilities,
expenses and/or loss, including reasonable legal expense and attorneys' fees
(collectively, "Losses"), resulting directly from (i) the failure of Licensed
Products supplied by Warner, its agents or contractors to Onyx pursuant to
Article 8 to meet the approved specifications for such Licensed Products, or
(ii) the manufacture, use, handling, storage, sale or other disposition of
Licensed Products in the Other Territory by Warner, its agents or sublicensees,
except to the extent such Losses result from the negligence or willful
misconduct of Onyx, or as provided in Section 13.1(b).

         (b) ONYX INDEMNIFICATION. Onyx hereby agrees to save, defend and hold
Warner and its agents and employees harmless from and against any and all Losses
resulting directly from the failure of Licensed Products supplied by Onyx, its
agents or contractors to Warner pursuant to Article 8 to meet the approved
specifications for Licensed Products, except to the extent such Losses result
from the negligence or willful misconduct of Warner or as provided in Section
13.1(a).

     13.2 INDEMNIFICATION FOR LICENSED PRODUCTS IN THE SHARED TERRITORY. With
respect to Licensed Products in the Shared Territory, each Party hereby agrees
to save, defend and hold the other Party and its agents and employees harmless
from and against any and all Losses resulting directly or indirectly from the
manufacture, use, handling, storage, sale or other disposition of Licensed
Products by the indemnifying Party, its agents or sublicensees, but only to the
extent such Losses result from the negligence or willful misconduct of the such
Party or its employees and agents and do not also result from the negligence or
willful misconduct of the Party seeking indemnification. Any other Losses from
claims resulting directly or indirectly

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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from the manufacture, use, handling, storage, sale or other disposition of
Licensed Products shall be included as an Allowable Expense of either Party at
the time such Loss is required to be paid.

     13.3 INDEMNIFICATION FOR INDEPENDENT PRODUCTS AND TERMINATED PRODUCTS. With
respect to Independent Products and Terminated Products, Onyx hereby agrees to
save, defend and hold Warner and its agents and employees harmless from and
against any and all Losses resulting directly or indirectly from the
manufacture, use, handling, storage, sale or other disposition of Independent
Products and Terminated Products by Onyx, its agents or sublicensees, but only
to the extent such Losses do not result from the negligence or willful
misconduct of Warner.

     13.4 INDEMNIFICATION FOR RESEARCH AND DEVELOPMENT. With respect to research
and development of Licensed Products, each Party hereby agrees to save, defend
and hold the other Party and its agents and employees harmless from and against
any and all Losses resulting directly or indirectly from the research and
development conducted by the indemnifying Party, its agents or sublicensees, but
only to the extent such Losses result from the negligence or willful misconduct
or breach of this Agreement of the such Party or its employees and agents and do
not also result from the negligence or willful misconduct or breach of this
Agreement of the Party seeking indemnification.

     13.5 NOTICE OF CLAIM. In the event that a Party is seeking indemnification
under this Article 13, it shall inform the other Party of a claim as soon as
reasonably practicable after it receives notice of the claim, shall permit the
indemnifying Party to assume direction and control of the defense of the claim
(including the right to settle the claim solely for monetary consideration), and
shall cooperate as requested (at the expense of Warner) in the defense and
settlement of the claim. The indemnified Party shall not voluntarily make any
payment or incur any expense in connection with any claim or suit without the
consent of the Indemnifying Party.

                                   ARTICLE 14

                                  MISCELLANEOUS

     14.1 DISPUTE RESOLUTION.

         (a) INFORMAL RESOLUTION PROCEDURE. The Parties recognize that disputes
as to certain matters may from time to time arise during the term of this
Agreement which relate to either Party's rights and/or obligations. It is the
objective of the Parties to establish procedures to facilitate the resolution of
disputes arising under this Agreement in an expedient manner by mutual
cooperation and without resort to litigation, if possible. To accomplish this
objective, the Parties agree to follow the procedures set in Sections 2.6 and
this Article 14 if and when an issue or dispute arises under this Agreement.

         (b) SENIOR EXECUTIVE DISCUSSION. If the Steering Committee is unable to
resolve any issue or dispute arising within its authority (or referred to it
pursuant to Section 2.6) under the terms of the Agreement within thirty (30)
days thereof, or upon any other dispute or issue regarding a Party's rights or
obligations under the Agreement, any Party may, by written notice to the other,
have such dispute or issue referred to their respective executive officers

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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designated below or their successors, for attempted resolution by good faith
negotiations. Said designated officers are as follows:

                  For Warner:   President of Pharmaceutical Research Division

                  For Onyx:     Chief Executive Officer

Upon such referral of an issue or dispute for resolution, such designated
officers shall meet promptly thereafter and shall use good faith efforts to
attempt to resolve such dispute or issue.

         (c) WARNER RESOLUTION OF CERTAIN MATTERS. With respect to any dispute
or issue referred to the Parties' designated officers for resolution under
Section 14.1(b) above and described in Section 2.6 clause (i), if the designated
officers are not able to resolve such issue or dispute within thirty (30) days
of such referral, then Warner shall make a final resolution of such dispute or
issue.

         (d) FORMAL RESOLUTION. With respect to any dispute or issue referred to
the Parties' designated officers for resolution under Section 14.1(b) above,
other than one described in Section 2.6 clause (i), if the designated officers
are not able to resolve such issue or dispute within thirty (30) days of such
referral, then either Party may at any time thereafter seek to have the issue or
dispute resolved in any court of proper jurisdiction and venue.

     14.2 ASSIGNMENT.

         (a) AFFILIATES. Warner may assign any of its rights or obligations
under this Agreement in any country to any Affiliates; provided, however, that
such assignment shall not relieve Warner of its responsibilities for performance
of its obligations under this Agreement, and further provided that if a proposed
assignment would have an adverse financial impact upon Onyx (e.g., by reason of
changed tax treatment of payments due under this Agreement), such assignment
shall be subject to Onyx' prior written consent.

         (b) MERGER, ACQUISITION OR SALE OF ASSETS. Subject to the terms hereof,
either Party may assign its rights or obligations under this Agreement to a
non-Affiliate only in connection with a merger or similar reorganization or the
sale of all or substantially all of its assets or the sale of all or
substantially all of its pharmaceutical and/or healthcare assets, or otherwise
with the prior written consent of the other Party. This Agreement shall survive
any such merger or reorganization of either Party with or into, or such sale of
assets to, another party and no consent for such merger, reorganization or sale
shall be required hereunder; provided, that in the event of such merger,
reorganization or sale, no intellectual property rights of the acquiring
corporation shall be included in the technology licensed hereunder.

         (c) BINDING UPON SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the successors and permitted assigns of
the Parties. Any assignment not in accordance with this Agreement shall be void.

     14.3 FORCE MAJEURE. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses on account of failure of
performance by the defaulting Party if

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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the failure is occasioned by government action, war, fire, earthquake,
explosion, flood, strike, lockout, embargo, act of God, or any other similar or
dissimilar cause beyond the control of the defaulting Party, provided that the
Party claiming force majeure has exerted all reasonable efforts to avoid or
remedy such force majeure.

     14.4 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and deliver
such further instruments, and to do all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.

     14.5 NO TRADEMARK RIGHTS. Except as otherwise provided herein, no right,
express or implied, is granted by the Agreement to use in any manner the name
Warner, Onyx or any other trade name or trademark of the other Party or its
Affiliates in connection with the performance of the Agreement.

     14.6 NOTICES. All notices hereunder shall be in writing and shall be deemed
given if delivered personally or by facsimile transmission (receipt verified),
telexed, mailed by registered or certified mail (return receipt requested),
postage prepaid, or sent by express courier service, to the Parties at the
following addresses (or at such other address for a Party as shall be specified
by like notice; provided, that notices of a change of address shall be effective
only upon receipt thereof).

If to Onyx, addressed to:      Onyx Pharmaceuticals, Inc.
                               3031 Research Drive
                               Richmond, CA 94806
                               Attention:  CEO
                               Telephone:  (510) 222-9700
                               Telecopy:  (510) 758-3405

With a copy to:                Cooley Godward LLP
                               Five Palo Alto Square
                               3000 El Camino Real
                               Palo Alto, CA 94306-2155
                               Attention:  Robert L. Jones, Esq.
                               Telephone:  (650) 843-5000
                               Telecopy:  (650) 857-0663

If to Warner, addressed to:    Warner-Lambert Company
                               2800 Plymouth Road
                               Ann Arbor, MI 48105
                               Attention: President, Parke-Davis Pharmaceutical
                               Research Division
                               Telephone:  (734) 622-7000
                               Telecopy:  (734) 622-1553

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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With a copy to:                Warner-Lambert Company
                               201 Tabor Road
                               Morris Plains, NJ 07950
                               Attention:  Vice President and General Counsel
                               Telephone:  (973) 540-2000
                               Telecopy:  (973) 540-3117

     14.7 TANGIBLE PROPERTY. Any tangible personal property deliverable under
this Agreement by Onyx to Warner shall be delivered to a Warner facility outside
California (as from time to time designated by Warner). Any sales or use taxes
imposed on such transfers shall be a Development Cost. Each Party shall use
reasonable good faith efforts to reduce or eliminate any sales or use taxes that
might arise under this Agreement, including the delivery of any required resale
certificates.

     14.8 LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY OR ITS
RESPECTIVE AFFILIATES AND PERMITTED SUBLICENSEES BE LIABLE FOR SPECIAL,
EXEMPLARY, CONSEQUENTIAL OR PUNITIVE DAMAGES, WHETHER IN CONTRACT, WARRANTY,
TORT, STRICT LIABILITY OR OTHERWISE, except to the extent such Party may be
required to indemnify the other party from such damages claimed by Third Parties
under Article 13.

     14.9 WAIVER. Except as specifically provided for herein, the waiver from
time to time by either of the Parties of any of their rights or their failure to
exercise any remedy shall not operate or be construed as a continuing waiver of
same or of any other of such Party's rights or remedies provided in this
Agreement.

     14.10 SEVERABILITY. If any term, covenant or condition of this Agreement or
the application thereof to any Party or circumstance shall, to any extent, be
held to be invalid or unenforceable, then (i) the remainder of this Agreement,
or the application of such term, covenant or condition to the Parties or under
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (ii) the Parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant or condition of this Agreement or
the application thereof that is invalid or unenforceable, it being the intent of
the Parties that the basic purposes of this Agreement are to be effectuated.

     14.11 AMBIGUITIES. Ambiguities, if any, in this Agreement shall not be
construed against any Party, irrespective of which Party may be deemed to have
authored the ambiguous provision.

     14.12 GOVERNING LAW. This Agreement shall be governed by and interpreted
under the laws of the State of New York.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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     14.13 HEADINGS. The Article and Section headings contained herein are for
the purposes of convenience only and are not intended to define or limit the
contents of said Articles or Sections.

     14.14 COUNTERPARTS. This Agreement may be executed in two (2), each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

     14.15 ENTIRE AGREEMENT. This Agreement including all Exhibits attached
hereto, and all documents delivered concurrently herewith, together with the
Stock Put and Purchase Agreement by and between the Parties of even date
herewith, set forth all the covenants, promises, agreements, warranties,
representations, conditions and understandings between the Parties hereto with
respect to the subject matter hereof and supersede and terminate all prior
agreements and understanding between the Parties as to such subject matter.
There are no covenants, promises, agreements, warranties, representations,
conditions or understandings, either oral or written, between the Parties with
respect to such subject matter other than as set forth herein and therein. No
subsequent alteration, amendment, change or addition to this Agreement shall be
binding upon the Parties hereto unless reduced to writing and signed by the
respective authorized officers of the Parties. This Agreement shall not
constitute an amendment of either of the existing collaboration agreements
between the Parties, each of which will continue in full force and effect.

     14.16 INDEPENDENT CONTRACTORS. Onyx acknowledges that neither it nor any of
its employees are employees of Warner and that neither it nor any of its
employees are eligible to participate in any employee benefit plans of Warner.
Onyx further acknowledges that neither it nor any of its employees are eligible
to participate in any such benefit plans even if it is later determined that its
or any of its employees' status during the period of this Agreement was that of
an employee of Warner. In addition, Onyx waives any claim that it may have under
the terms of any such benefit plans or under any law for participation in or
benefits under any of Warner's benefit plans.

     14.17 USE OF NAMES. Neither Party shall use the name of the other Party in
relation to this transaction in any public announcement, press release or other
public document without the written consent of such other Party, which consent
shall not be unreasonably withheld or delayed; provided, however, that either
Party may use the name of the other Party in any document required to be filed
to obtain Regulatory Approval or to comply with applicable laws, rules or
regulations.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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         IN WITNESS WHEREOF, the Parties have executed this Agreement in
duplicate originals by their proper officers as of the Effective Date.

ONYX PHARMACEUTICALS, INC.                  WARNER-LAMBERT COMPANY

By:  /s/ Hollings C. Renton                 By:  /s/ Anthony Wild, Ph.D.
   ---------------------------------           ---------------------------------
Name:  Hollings C. Renton                   Name:  Anthony Wild, Ph.D.
     -------------------------------             -------------------------------
Title:  President & CEO                     Title:  President, Parke-Davis
      ------------------------------              ------------------------------

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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                                    EXHIBIT A

                    DETERMINATION OF CERTAIN ACCOUNTING TERMS

     "Product Profit" for the Shared Territory shall be determined in the manner
specified below. As used herein, the term "operating unit" shall mean the
smallest operating unit in which an operating profit and loss statement is
prepared for management accounting purposes in accordance with U.S. generally
accepted accounting principles.

     1. COST OF GOODS SOLD

         1.1 EXCLUDED COSTS. Notwithstanding the foregoing, Cost of Goods Sold
shall exclude administrative costs other than indirect manufacturing labor
specifically attributable to the Product being manufactured. Administrative
costs of the operating units manufacturing a Product shall be separately
recovered under the category of Allocated Administrative Costs.

     2. MARKETING EXPENSES

     Marketing Expenses shall be the sum of Selling Expenses, Marketing
Management, Market and Consumer Research, Advertising, Trade Promotion, Consumer
Promotion, and Education Expenses, each of which is specified below, and all
other costs which are generally consistent with the Marketing Plan and
attributable to the sale, promotion or marketing of Licensed Products.

         2.1 "SELLING EXPENSES" shall mean all costs and expenses directly
associated with the efforts of field sales representatives with respect to
Licensed Products, including field sales force (including field sales managers);
field sales offices; home offices staffs directly involved in the management of
and the performance of the selling functions; and payments to Third Parties
under co-promotion agreements approved by the Steering Committee. Reasonable
field samples shall normally be charged to Trade Promotion, but if sales
management has direct decision making authority for the distribution of field
sales samples, it may be appropriate to charge these costs to Selling Expenses.
The costs of detailing sales calls shall be allocated based on field force time
at an accounting charge rate consistently applied within and across its
operating units and which is no less favorable to the Licensed Products than the
internal charge rate used by Warner for its own internal cost accounting
purposes for products other than Licensed Products (excluding internal profit
margins and markups).

         2.2 "MARKETING MANAGEMENT" shall include product management and sales
promotion management compensation and departmental expenses, including product
related public relations, relationships with opinion leaders and professional
societies, health care economics studies, contract pricing and administration,
market information systems, governmental affairs activities for reimbursement,
formulary acceptance and other activities directly related to the Licensed
Products, management and administration of managed care and national accounts
and other activities associated with developing overall sales and marketing
strategies and planning for Licensed Products. In addition, payments to Third
Parties in connection with trademark selection, filing, prosecution and
enforcement shall be included in

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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this category. Such costs may be allocated on a percent of sales or other basis
consistently applied within and across its operating units and which is no less
favorable to the Licensed Products than the internal allocation for Warner's
other products.

         2.3 "MARKET AND CONSUMER RESEARCH" shall include compensation and
departmental expenses for market and consumer research personnel and payments to
Third Parties related to conducting and monitoring professional and consumer
appraisals of existing, new or proposed Licensed Products such as market share
services, special research testing and focus groups. Expenditures not directly
related to a product may be allocated on a percent of sales or other basis
consistently applied within and across its operating units and which is no less
favorable to the Licensed Products than the internal allocation for Warner's
other products.

         2.4 "ADVERTISING" shall mean all costs incurred for the advertising and
promotion of Licensed Products in the Shared Territory through any means,
including, without limitation, (i) television and radio advertisements; (ii)
advertisements appearing in journals, newspapers, magazines or other media;
(iii) seminars and conventions; (iv) packaging design; (v) professional
education programs; (vi) samples, visual aids and other selling materials; (vii)
hospital formulary committee presentations; (viii) presentations to state and
other governmental formulary committees, and (ix) all media costs associated
with Product advertising as follows: production expense/artwork including set
up; design and art work for an advertisement; the cost of securing print space,
air time, etc. in newspapers, magazines, trade journals, television, radio,
billboards, etc.

         2.5 "TRADE PROMOTION" shall include the allowances given to retailers,
brokers, distributors, hospital buying groups, etc. for purchasing, promoting,
and distribution of Licensed Products. This shall include purchasing,
advertising, new distribution, and display allowances as well as free goods,
wholesale allowances and reasonable field sales samples. To the extent multiple
products are involved and some of such products are not Licensed Products, then
such allowances shall be allocated on a pro rata basis based upon net sales of
each respective product by such operating unit during the most recent quarter.

         2.6 "CONSUMER PROMOTION" shall include the expenses associated with
programs to promote Licensed Products directly to the end user. This category
shall include expenses associated with promoting products directly to the
professional community such as professional samples, professional literature,
promotional material costs, patient aids and detailing aids. To the extent
multiple products are involved and some of such products are not Licensed
Products, then such allowances shall be allocated on a pro rata basis based upon
net sales of each respective product by such operating unit during the most
recent quarter.

         2.7 "EDUCATION" shall include expenses associated with professional
education with respect to Licensed Products through any means not covered above,
including articles appearing in journals, newspapers, magazines or other media;
seminars, scientific exhibits, and conventions; and symposia, advisory boards
and opinion leader development activities.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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     3. DISTRIBUTION EXPENSES

     Distribution Expenses shall be an amount equal to a percentage of Net Sales
to be determined after the characteristics and anticipated price of the Licensed
Products have been determined. Such percentage shall be agreed upon by the
Parties in good faith, and shall be designed to approximate Warner's cost of
distributing such Licensed Products in the Shared Territory.

     4. POST-LAUNCH PRODUCT R&D EXPENSES

     Post-Launch Product R&D Expenses shall include certain research and
development costs incurred by a Party in relation to a Product after the first
commercial launch and shall exclude administrative expenses and costs that are
included within Costs of Goods Sold or Development Costs. Such post-launch
research and development costs shall include:

         4.1 Phase IV Clinical Trials.

         4.2 Ongoing product support.

         4.3 Ongoing medical affairs.

         4.4 Preclinical research.

         4.5 Fees and expenses of outside counsel in respect of regulatory
affairs unrelated to obtaining Regulatory Approvals.

     5. ALLOCATED ADMINISTRATION EXPENSES

     The costs eligible for allocation as Allocated Administration Expenses
shall include the following costs for the operating units directly involved in
manufacturing, marketing and selling Shared Products. Similar costs incurred by
operating units involved in the manufacture, marketing and sale of Licensed
Products in the Other Territory shall be borne by the party incurring such
expense, and shall not be recovered as an Allocated Administration Expense.

     The costs recoverable as Allocated Administration Expenses are the costs of
finance, management information services, human resources and employees engaged
in general management functions for the operating units in question. Cost
categories included within Allocated Administration Expenses shall not be
included in any other cost recoverable under this Agreement.

     Recoverable administration expenses shall include the direct costs of
employees performing such functions, the costs of supporting such individuals in
the performance of their job (e.g., occupancy costs, travel, computers, and
telephones), and outside services (e.g., consulting and audit services). Such
costs shall be calculated in accordance with U.S. generally accepted accounting
principles. Such costs shall be allocated based on a percentage determined by
Shared Product Net Sales divided by the total net sales of such operating
unit(s) during the relevant quarter.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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     The Parties shall attempt to agree upon a fixed percentage of Net Sales to
cover the expected Allocated Administration Expenses.

     6. CURRENCY GAINS OR LOSSES

     Currency Gains or Losses shall include the following:

         6.1 UNHEDGED TRANSACTIONS. Transaction gains or losses are gains or
losses resulting from a change in exchange rates between the functional currency
and the currency in which the transaction is denominated. The transaction gain
or loss is determined by measuring the increase or decrease in the functional
currency cash flow due to the changes in the exchange rate from the date of the
transaction to the settlement date. The difference between the functional
currency amount calculated using the current exchange rate at the transaction
date and the amount calculated using the currency exchange rate at the
settlement date is the transaction gain or loss. Transaction gains or losses on
unsettled foreign currency transactions are also reported in this manner. When
there is a balance sheet date between the transaction date and settlement date,
the gain or loss on the unsettled balance shall be measured using the current
exchange rate at the balance sheet date.

         6.2 HEDGED TRANSACTIONS. For purposes of this collaboration, neither
Party shall buy or sell forward, directly or indirectly, foreign currencies in
amounts greater than those which can reasonably be expected to be received or
paid, as the case may be, over the relevant time period. If a Party enters into
a hedged transaction, the gain or loss realized from the hedge must be included
in the underlying transaction. If the currency transaction gain or loss has been
included in Net Sales, inventories, Costs of Goods Sold, etc., it shall not be
included in this category.

     7. REGULATORY EXPENSES

     "REGULATORY EXPENSES" shall mean all costs incurred to comply with all
Regulatory Approvals and all regulatory agencies, including FDA user and other
fees, reporting, and other regulatory affairs activities.

     8. ALLOCATION OF COSTS.

     The following guidelines shall be used to allocate costs to the Licensed
Products:

                  (a) If the expense is specifically and exclusively used for
the Commercialization of a Product in the Shared Territory, 100% of such expense
shall be an Allowable Expense.

                  (b) If the expense is specifically and exclusively used for
the Commercialization of a Licensed Product in the Shared Territory and the
Other Territory, it shall be allocated based on objective means (such as
man-hours or amounts consumed) or, if such method cannot reasonably be used,
based on Net Sales in each such Territory.

                  (c) If the expense is not specifically and exclusively used
for the Commercialization of a Licensed Product (i.e., for other products of
Warner or Onyx), it shall be

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      59
<PAGE>

allocated based on objective means (such as man-hours or amounts consumed) or,
if such method cannot reasonably be used, based on Net Sales of each such
product.

                  (d) No item of cost shall be duplicated in any of the
categories comprising Allowance Expenses.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                                      60
<PAGE>

                                    EXHIBIT B

                                  ONYX PATENTS

(1) The following Patents are owned by Onyx and are applicable to Licensed
Products:

<TABLE>
<CAPTION>
-------------------------------------------- ------------
       PATENT NO. OR APPLICATION NO.           STATUS
-------------------------------------------- ------------
<S>                                          <C>
U.S. Pat. No. [ * ]                          issued
-------------------------------------------- ------------
U.S. Pat. No. 5,846,945                      issued
-------------------------------------------- ------------
U.S. Pat. No. 5,677,178                      issued
-------------------------------------------- ------------
U.S. Pat. No. [ * ]                          issued
-------------------------------------------- ------------
U.S. Pat. App. Serial No. [ * ]              pending
-------------------------------------------- ------------
U.S. Pat. App. Serial No. [ * ]              pending
-------------------------------------------- ------------
PCT/US[ * ]                                  filed
-------------------------------------------- ------------
Australia Pat. [ * ]                         issued
-------------------------------------------- ------------
Canada No. [ * ]                             pending
-------------------------------------------- ------------
EP Pat. [ * ]                                issued
-------------------------------------------- ------------
EP No. [ * ]                                 pending
-------------------------------------------- ------------
Japan No. [ * ]                              pending
---------------------------------------------------------
</TABLE>

(2) The following Patents are exclusively licensed to Onyx by the National
Institutes of Health to the extent potentially applicable to Licensed Products:

<TABLE>
<CAPTION>
-------------------------------------------- ------------
       PATENT NO. OR APPLICATION NO.           STATUS
-------------------------------------------- ------------
<S>                                          <C>
U.S. Pat. No. [ * ]                          issued
-------------------------------------------- ------------
U.S. Pat. App. Serial No. [ * ]              pending
-------------------------------------------- ------------
U.S. Pat. App. Serial No. [ * ]              pending
-------------------------------------------- ------------
U.S. Pat. App. Serial No. [ * ]              pending
-------------------------------------------- ------------
U.S. Pat. App. Serial No. [ * ]              pending
-------------------------------------------- ------------
U.S. Pat. App. Serial No. [ * ]              pending
-------------------------------------------- ------------
U.S. Pat. App. Serial No. [ * ]              pending
-------------------------------------------- ------------
EPO No. [ * ]                                issued
-------------------------------------------- ------------
</TABLE>

(3) The following Patents are non-exclusively licensed to Onyx by [ * ] to the
extent potentially applicable to Licensed Products:

<TABLE>
<CAPTION>
-------------------------------------------- ------------
         PATENT OR APPLICATION NO.             STATUS
-------------------------------------------- ------------
<S>                                          <C>
U.S. Pat. No. [ * ]                          issued
-------------------------------------------- ------------
U.S. Pat. No. [ * ]                          issued
-------------------------------------------- ------------
U.S. Pat. App. Serial No. [ * ]              pending
-------------------------------------------- ------------
U.S. Pat. App. Serial No. [ * ]              pending
-------------------------------------------- ------------
EPO No. [ * ]                                issued
-------------------------------------------- ------------
EPO Pub. [ * ]                               pending
-------------------------------------------- ------------
EPO Pub. [ * ]                               pending
-------------------------------------------- ------------
EPO Pub. [ * ]                               pending
-------------------------------------------- ------------
Japan No. [ * ]                              pending
-------------------------------------------- ------------
Japan No. [ * ]                              pending
-------------------------------------------- ------------
UK No. [ * ]                                 pending
-------------------------------------------- ------------
UK No. [ * ]                                 pending
-------------------------------------------- ------------
UK No. [ * ]                                 pending
-------------------------------------------- ------------
UK No. [ * ]                                 pending
-------------------------------------------- ------------
UK No. [ * ]                                 pending
-------------------------------------------- ------------
UK No. [ * ]                                 pending
-------------------------------------------- ------------
UK No. [ * ]                                 pending
-------------------------------------------- ------------
PCT/WO[ * ]                                  published
-------------------------------------------- ------------
PCT/US[ * ]                                  pending
-------------------------------------------- ------------
</TABLE>

(4) Under the [ * ] Agreement dated as of [ * ] (the "[ * ] Agreement"), Onyx
has an exclusive license from [ * ] ("[ * ]") to patents and patent applications
claiming inventions made by [ * ] solely or jointly with Onyx in the course of
performance of the research program under the [ * ] Agreement, within the field
of [ * ], that have all of the following properties: (1) [ * ], and (2) are [ *
] using technology licensed under such agreement and (3) are used for the [ * ].
[ * ] retains the rights to such inventions outside the foregoing field. There
are no such patents or patent applications as of the Effective Date.

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

<PAGE>

                                LIST OF EXHIBITS

         A.       DETERMINATION OF CERTAIN ACCOUNTING TERMS

         B.       ONYX PATENTS

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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