Document:

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                                                                   EXHIBIT 10.4

** designates information omitted that has been filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment under 17 CFR 200.80.

              EXCLUSIVE DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

         THIS EXCLUSIVE DEVELOPMENT AND COMMERCIALIZATION AGREEMENT (the
"Agreement") is entered into and made effective as of May 11, 2001 (the
"Effective Date"), among INTERMUNE, INC., a Delaware corporation, having its
principal place of business at 1710 Gilbreth Road, Suite 301, Burlingame, CA
94010 ("InterMune"); MOLICHEM R&D, INC., a North Carolina corporation, having
its principal place of business at 267 Sweet Bay Place, Carrboro, North Carolina
27510 and MOLICHEM MEDICINES, INC., a Delaware corporation having its principal
place of business at 267 Sweet Bay Place, Carrboro, North Carolina 27510
(collectively "MoliChem"). InterMune and MoliChem may be referred to herein each
individually as a "Party" and jointly as the "Parties."

                                    RECITALS

         WHEREAS, InterMune is involved in the development and commercialization
of products potentially useful in the prevention, mitigation and treatment of
pulmonary and other diseases;

         WHEREAS, MoliChem has rights to the peptide designated as Moli1901,
which may be effective in the treatment of certain pulmonary diseases;

         WHEREAS, MoliChem has development capabilities and expertise related to
Moli1901; and

         WHEREAS, InterMune and MoliChem now desire to undertake jointly the
development and commercialization of Moli1901 in accordance with the terms and
conditions set forth herein.

         NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and agreements contained herein, the Parties hereby agree as
follows:

1.       DEFINITIONS

         1.1 "Affiliate" means with respect to any Party, any other Person which
controls, is controlled by, or is under common control with, such Party. As used
in this Section 1.1, "control" 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 has the actual ability to
control and direct the management of the entity, whether by contract or
otherwise.

         1.2 "Applicable Laws" shall mean all applicable federal, state,
provincial and local laws, ordinances, rules and regulations applicable to this
Agreement or the activities contemplated hereunder, including without
limitation, the Federal Food, Drug and Cosmetic Act, 21 U.S.C. ss. 321 et seq.,
as amended, and the regulations promulgated thereunder from time to time, the
Prescription Drug Marketing Act of 1987, as amended, and any final regulations
or guidances promulgated

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thereunder from time-to-time, the Medicare/Medicaid Anti-kickback Statute set
forth at 42 U.S.C. ss.1320a-7b(b) and any final regulations promulgated
thereunder from time to time, and equivalent state laws and regulations and any
requirements under any license agreement applicable to the Product worldwide,
whether such laws, ordinances, rules and regulations are now or hereafter in
effect.

         1.3 "Budget" means the collective annual Development Budget and
Commercialization Budget for a Product.

         1.4 "Commercialization Budget" means the annual budget for the
Commercialization Program for a Product.

         1.5 "Commercialization Committee" means the committee described in
Section 4.1.

         1.6 "Commercialization Expenses" means expenses incurred by a Party or
for its account pursuant to an approved Commercialization Budget.

         1.7 "Commercialization Plan" means the commercialization plan for the
pre-launch, launch, and post-launch of each Product with respect to the
marketing, promotion, detailing and sales of Product in accordance with the
Commercialization Program for a Product to be determined by the
Commercialization Committee in accordance with Section 4.

         1.8 "Commercialization Program" means the commercialization program for
commercializing each Product as described in Section 4.

         1.9 "Consideration" shall mean any cash or non-cash consideration of
any kind whatsoever, whether tangible or intangible, direct or indirect.

         1.10 "Development Budget" means the annual budget for the Development
Program for a Product.

         1.11 "Development Committee" means the committee described in Section
3.2.

         1.12 "Development Patent" means and includes any Patent that claims or
otherwise covers an invention in the Development Technology; provided however,
rights to inventions drawn to claims not related to Moli1901 shall not be
included in the Development Patent.

         1.13 "Development Plan" means the development plan in connection with
the Development Program for each Product to be determined by the Development
Committee pursuant to Section 3.

         1.14 "Development Program" means the development program for developing
each Product as described in Section 3.

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         1.15 "Development Technology" means

                  (a)      all Information relating to Moli1901 conceived of or
reduced to practice by either Party in the course of any work conducted pursuant
to this Agreement; and/or

                  (b)      Moli1901, its formulations and methods of
administration; and/or

                  (c)      Prior Development Technology; and

                  (d)      Joint Intellectual Property and Development Patents.

         1.16 "Development Term" means the period commencing on the Effective
Date and terminating on the earlier of (a) the termination of the Development
Program for each Product pursuant any termination pursuant to Section 11.

         1.17 "Drug Master File" means a submission to the FDA or other
regulatory authority that may be used to provide confidential detailed
information about facilities, processes, or articles used in the manufacturing,
processing, packaging and storing of Product.

         1.18 "Field" means all fields of use claimed by any of the Development
Patents.

         1.19 "Future Product Profit Share" means **

         1.20 "Glaxo/UNC Agreements" means collectively that certain: Assignment
Agreement between The Wellcome Foundation Ltd., Glaxo Wellcome, Inc., and
MoliChem, dated as of December 1, 1995; Assignment Agreement between Glaxo and
MoliChem, dated as of December 1, 1995; License Agreement between The University
of North Carolina and MoliChem, dated as of June 4, 1997, as amended on August
3, 1998; and April 17, 2001.

         1.21 "Information" means information, results and data of any type
whatsoever, in any tangible or intangible form, including without limitation
inventions, practices, methods, techniques, specifications, formulations,
formulae, knowledge, know-how, skill, experience, trade secrets, test data
(including pharmacological, biological, chemical, biochemical, toxicological and
clinical test data), analytical and quality control data, stability data,
studies and procedures, and patent and other legal information or descriptions,
and all intellectual property rights therein.

         1.22 "Initial Product Profit Share" means **

         1.23 "InterMoli" means the financial construct to account for the
Parties' development and commercialization costs and profits from sales of any
Product, as specifically set forth in Exhibit A, which is incorporated herein by
reference. InterMoli is not intended to be and is not a legal entity and has
been defined for accounting identification purposes only.

         1.24 "Joint Intellectual Property" means (i) any Information specific
to the development and/or commercialization of Moli1901 solely invented or
developed by either Party or jointly developed by the Parties pursuant to this
Agreement and all intellectual property rights therein,

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including without limitation any Patents claiming such Information, and (ii) any
Information jointly developed by the Parties pursuant to this Agreement and all
intellectual property rights therein, including without limitation any Patents
claiming such Information.

         1.25 "Moli1901" means the lantibiotic compound commonly known as
duramycin and previously designated by MoliChem as 2622U90; provided however,
that Moli1901 shall specifically not include any analogs, derivatives or
modifications of Moli1901.

         1.26 "NDA" means a New Drug Application filed with the U.S. Food and
Drug Administration (the "FDA") or any equivalent successor application.

         1.27 "Net Sales" means, with respect to any Product, the gross invoiced
sales of such Product by InterMune, its Affiliates and its sublicensees to Third
Party purchasers, less the following deductions:

         (a) discounts, credits, rebates, allowances, adjustments, rejections
and recalls for which the customer has been credited the original sales price
and returns;

         (b) trade, quantity, or cash discounts or rebates customary to the
industry and actually allowed, given or accrued (including, but not limited to,
cash, governmental and managed care rebates, and hospitals or other buying group
chargebacks);

         (c) sales, excise, turnover, inventory, value-added, and similar taxes
(other than income tax) assessed on the sale of such Product and borne by
InterMune;

         (d) transportation, importation and insurance charges;

         A sale of a Product shall be deemed to occur upon the earlier of (i)
receipt of Consideration for such Product from a Third Party purchaser; or (ii)
90 days after shipment of Product to a Third Party.

         1.28 "Patent" means (a) all patent applications heretofore or hereafter
filed or having legal force in any country, including without limitation,
divisionals, continuations, continuation-in-part and provisional applications;
(b) all issued, unexpired patents in any country, including utility, model and
design patents and certificates of invention; and (c) all substitutions,
extensions, reissues, renewals and supplementary protection certificates with
respect to any such issued patent.

         1.29 "Person" shall mean an individual, corporation, partnership,
trust, business trust, association, joint stock company, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization, governmental
authority, or any other form of entity not specifically listed herein.

         1.30 "Prior Development Technology" means (a) all Information related
to Moli1901 acquired and/or conceived of and/or reduced to practice by MoliChem
in the course of any research and/or any development work (including without
limitation any clinical trials) conducted prior to this Agreement and/or (b) all
right(s), title(s) and interest(s) in Information related to Moli1901 that
MoliChem has licensed, received by assignment and/or acquired in, from and/or
pursuant to the

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Glaxo/UNC Agreements or any other agreements, including without limitation any
Patents thereunder.

         1.31 "Product" means any product, use, application, administration,
method of administration or treatment that utilizes and/or incorporates the
Development Technology in the Field. For the purposes of this Agreement, any
product, use, application, administration, method of administration or treatment
that is developed for the same indication (e.g., Cystic Fibrosis) shall be
deemed to constitute the same Product.

         1.32 "Third Party" means any Person other than InterMune, MoliChem and
their respective Affiliates.

         1.33 "Valid Claim" means a claim in an issued Development Patent that
has not expired or been canceled, been declared invalid by an unreversed and
unappealable decision of a court or other appropriate body of competent
jurisdiction, been admitted to be invalid or unenforceable through reissue,
disclaimer or otherwise, and/or been abandoned.

2.       GRANT OF RIGHTS

         2.1 Grant to InterMune. Subject at all times to the terms and
conditions of this Agreement, MoliChem hereby grants to InterMune a co-exclusive
worldwide license, alongside MoliChem, to its rights in the Development
Technology, to use, manufacture, have manufactured, import, develop, market,
promote, detail, book sales, sell and have sold any Product in the Field,
including the right to grant sublicenses.

         2.2 Grant to MoliChem. Subject at all time to the terms and conditions
of this Agreement, InterMune hereby grants to MoliChem a co-exclusive worldwide
license, alongside InterMune, to any rights it may have or acquire in the
Development Technology, to use, manufacture, have manufactured, import, develop,
market, promote, detail, book sales, sell and have sold any Product in the
Field, including the right to grant sublicenses.

         2.3 Scope of License. The grant of rights set forth in Sections 2.1 and
2.2 of this Agreement shall be subject, at all times, to the authorization of
the Development Committee and/or the Commercialization Committee, unless the
Development Committee and/or Commercialization Committee for the Product subject
to the license grant have been terminated in accordance with Section 11. Any
sublicense granted pursuant to Section 2.1 or Section 2.2 must be authorized and
approved by the Development Committee and/or the Commercialization Committee,
unless the Development Committee and/or the Commercialization Committee for the
Product subject to the sublicense grant have been terminated in accordance with
Section 11. In the event either Party enters into a sublicense to the
Development Technology, the sublicensor will, within ten (10) days of execution
of such sublicense agreement, deliver a copy of such agreement to the other
Party.

         2.4 Exclusivity. Each Party hereby covenants that it shall not perform
any work for any Third Party relating to Moli1901 in the Field during the
Development Term without the prior written consent of the other Party, such
consent not to be unreasonably withheld or delayed.

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3.       DEVELOPMENT PROGRAM

         3.1 Development Program. The Development Program for each Product shall
include all development work for such Product, including without limitation, all
clinical trials, toxicology studies, all regulatory matters and filings and
post-marketing studies. The Parties agree to conduct the Development Program,
for each Product during the Development Term in accordance with the applicable
Development Plan, as such Development Plan may be amended from time to time by
the Development Committee. Each Party shall use its reasonable best efforts in
carrying out the Development Program and each Party shall furnish the
development staff, technical know-how, equipment, instruments, supplies and
facilities necessary to carry out the Development Program. The Parties shall
provide funding to support the Development Program as described in Section 6.2.

         3.2 Development Committee.

         (a) All the work performed in conducting the Development Program shall
be under the supervision of the Development Committee through its directives to
the investigators who shall directly supervise the Development Program. Promptly
after the Effective Date, the Parties shall form the Development Committee,
which shall be comprised of an equal number of members, with half of the members
appointed by each Party. Each member of the Development Committee shall have the
appropriate level of skill, experience and familiarity with the Development
Program. An officer of MoliChem shall serve as chairman of the Development
Committee. Each Party shall have the right to substitute different
representatives as members on the Development Committee as may be necessary from
time to time, and each Party may bring additional representatives to attend
meetings of the Development Committee in a non-voting, ad hoc capacity. The
Parties hereby agree that the Development Committee shall be bound by all
obligations and commitments of contracts and agreements approved by the
Development Committee and entered into by one Party or the other and all those
contracts and agreements previously entered into by MoliChem related to Moli1901
and set forth in Exhibit B hereto; provided however, neither InterMune nor the
Development Committee shall be bound by the financial obligations set forth in
the letters awarding grant support to MoliChem from Cystic Fibrosis Foundation,
listed in Exhibit B.

         (b) The Development Committee shall meet at least once every other
month at such times and at such meeting places as shall be mutually agreed upon
by the Parties. Each Party shall be responsible for its own expenses and costs
related to attendance at such meetings of the Development Committee. The
Development Committee meetings may be held by telephone or videoconference, if
agreed by the Development Committee members. Each Party will designate an
individual to serve as the liaison between the Parties to undertake and
coordinate any day-to-day communications as may be required between the Parties
relating to the Development Program. The Development Committee shall operate by
majority decision of its members, and the Development Committee members shall
use good faith efforts to reach agreement on all matters to be decided. In the
event the Development Committee is unable to reach agreement on any matter
before it within thirty (30) days of undertaking consideration of such matter,
then the matter shall be resolved pursuant to Section 12.2. Notwithstanding the
foregoing, in the event there is a split decision by the Development Committee
as to whether or not to proceed with the initiation of the development of a
Product, the decision shall be tabled for further discussion at subsequent
meetings of the Development Committee for a period of twelve (12) months. If, at
the conclusion of the 12-month

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period, the decision remains a split decision all rights to such Product shall
be subject to the terms of Section 11.7 of this Agreement.

         (c) The Development Committee shall decide who shall prepare the
minutes of the Development Committee's meetings. Such minutes shall be promptly
reviewed and shall be deemed approved when mutually accepted in writing by both
Parties through their respective Development Committee representatives; provided
however, that if the Development Committee representatives of a Party fail to
comment on, or otherwise indicate disagreement with, the minutes provided by the
other Party in writing within fifteen (15) days of receipt, then the receiving
Party shall be deemed to have approved such minutes.

         (d) Upon commencement of Phase III trials for the initial Product or
upon termination of the Development Program for such initial Product, the
Development Committee shall evaluate the feasibility of initiating development
of the next indication of the Product in the Field. Notwithstanding the
foregoing, nothing in this provision shall prevent the Development Committee
from undertaking discussion related to future product development prior to the
commencement of Phase III trials.

         3.3 Development Plan and Budget. Within 90 days of the Effective Date,
the Development Committee shall approve the first annual Development Budget for
the Development Program and define the specific tasks of each Party under the
Development Program, which tasks shall be set forth in the "Development Plan."
This first Development Budget shall set forth a budget through the end of the
initial calendar year and through the end of the first twelve (12) month period
of the Agreement. Thereafter, the Development Budget shall run on a calendar
year basis. ** The Development Plan may be amended or modified by the
Development Committee as necessary. MoliChem shall manage and control the
production, purification and formulation of Moli1901 under the direction of the
Development Committee. The Development Committee will agree upon the good
manufacturing practices process and specifications of the final commercial
product. The Development Committee shall manage and conduct all pre-clinical
trials, trials supporting IND requirement and clinical trials, including
adequate and well controlled Phase III clinical trials for Moli1901 for each of
the countries where such studies are required for regulatory approval in such
country. Other than as provided for in Section 3.5 of this Agreement, the
Development Committee shall also manage all regulatory negotiations with all
regulatory authorities in all countries worldwide.

         3.4 Duties and Authority of the Development Committee.

         (a) The Development Committee shall have the following duties and
responsibilities during the Development Term: (i) to prepare the Development
Plan for each Product; (ii) to coordinate and monitor the progress of the
Parties' efforts in conducting the Development Program; (iii) to review the
results of the Development Program; (iv) to prepare and allocate an annual
Development Budget; and (v) to amend or modify the Development Plan or
Development Budget with respect to each Product as appropriate or necessary.

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         (b) The powers of the Development Committee are limited to those
expressly set forth in this Agreement. Without limiting the generality of the
foregoing, the Development Committee shall not have the right to amend this
Agreement.

         3.5 Product Registration. Under the direction of the Development
Committee, MoliChem shall be responsible for managing all applications, requests
for authorization, submissions of information and data and for all interactions
with the United States and foreign regulatory authorities for the purpose of
attempting to obtain registration of the Products. MoliChem shall hold all
Product registrations in its name and shall retain control and ownership of the
Drug Master File related to Moli1901. However, qualified personnel of InterMune
shall participate and collaborate in the process of product registration
according to the plan set forth by the Development Committee. Such participation
shall include, but shall not be limited to (i) review of filings prior to
submission to the U.S. or foreign regulatory authorities, (ii) participation in
meetings with regulatory authorities, and (iii) interaction with MoliChem
personnel on a regular basis regarding the status of regulatory filings. In the
event MoliChem is unwilling or unable to continue directing the regulatory
filings, it may request that InterMune take responsibility for such filing, and
in such event InterMune will have the same obligations and responsibilities as
set forth above for MoliChem. In the event MoliChem has taken any action with
respect to the regulatory filings that materially jeopardizes the development of
any Product and InterMune can produce evidence that such MoliChem actions have
materially jeopardized the development of any Product and within thirty (30)
days of written notice by InterMune of such materially jeopardizing action or
omission MoliChem has not (i) reversed the action or cured the omission, then
all rights to control the regulatory filing with respect to such Product shall
thereafter be directed by InterMune; provided however, the regulatory filings
shall continue to be filed in the name of MoliChem and MoliChem shall have the
same rights of participation as set forth above for InterMune.

         3.6 Records; Inspection.

         (a) Each Party shall maintain records of all work conducted under the
Development Program and all results (including without limitation any
Inventions, discoveries and developments) made pursuant to its efforts under the
Development Program, in laboratory notebooks (or similar records) separate from
all other work conducted by such Party. Such records shall be complete and
accurate and shall fully and properly reflect all work done and results achieved
in the performance of the Development Program in sufficient detail and in good
scientific manner appropriate for patent and for regulatory purposes. The other
Party shall have the right, during normal business hours and upon reasonable
notice to inspect and copy such records.

         (b) Each Party and its appropriate employees, agents and outside
consultants may visit the other Party at its offices and laboratories during
normal business hours and upon reasonable notice, and may discuss the
Development Program and its results in detail with the technical personnel and
consultants of the other Party.

         (c) All inspections, copying and visits hereunder by a visiting Party
shall be conducted in a manner so as not to disrupt the other Party's business
nor cause any disclosure of any other confidential information of the other
Party.

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         3.7 Disclosure of Inventions and Development Results. Each Party shall
provide to the other Party a complete written disclosure for each and every
invention or other discovery, whether or not patentable, first conceived or
reduced to practice in the performance of the Development Program or
Commercialization Program (an "Invention"), promptly after each such Invention
is made. Each Party shall regularly inform the other Party of the results of the
Development Program, and shall provide copies of the results and raw data from
the Development Program as requested. As used herein, "raw data" means all
Information generated by persons working on the Development Program, whether in
written, graphic or electronic form, and including without limitation all
materials such as films, printouts, and photographs that record such
Information, concerning work conducted pursuant to the Development Program. Each
Party shall also provide monthly written summaries of the Development Program as
set forth in Section 3.9. The other Party shall be free to use all such
Information for any and all purposes.

         3.8 Reporting; Audits. The reporting requirements and audit rights for
the Development Program are set forth in Section 3 and Section 5, respectively,
of Exhibit A.

         3.9 Monthly Reports. Each Party shall provide the Development Committee
with a written progress report monthly during the Development Term. Each such
report shall summarize the work performed by such Party in relation to the goals
of the Development Program during such period, and shall provide any other
information reasonably requested by the other Party or the Development
Committee.

         3.10 MoliChem and InterMune Covenants.

         (a) Invention Assignment Agreements. Each Party hereby covenants that
each of its employees, consultants and agents performing any work under the
Development Program shall have entered into a written invention assignment
agreement requiring that each such individual assign to such Party all right,
title and interest in and to any Information conceived of and/or reduced to
practice by such individual in connection with any activities under the
Development Program.

         (b) No Misappropriation. Each Party hereby covenants that it shall not
knowingly misappropriate or otherwise misuse, nor shall it knowingly permit any
of its employees, consultants or agents to misappropriate or otherwise misuse,
any Information of any Third Party in its conduct of the Development Program
hereunder

         (c) Restrictions. Each Party agrees to abide by all restrictions set
forth in the Glaxo/UNC Agreements.

4.       COMMERCIALIZATION PROGRAM

         4.1 Commercialization Committee.

         (a) After successful completion of the final U.S. Phase II clinical
trial for any Product and approval by the FDA of the Phase III clinical trial
protocol, the Parties shall form the Commercialization Committee for such
Product, which shall be comprised of an equal number of members with half
appointed by each Party. Each member of the Commercialization Committee

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shall have the appropriate level of skill, experience and familiarity with the
Commercialization Program. InterMune's Vice President of Sales and Marketing
shall serve as one of InterMune's Commercialization Committee members and shall
be the Chairman of the Commercialization Committee. Each Party shall have the
right to substitute different representatives as members on the
Commercialization Committee as needed from time to time, and each Party may
bring additional representatives to attend meetings of the Commercialization
Committee in a non-voting, ad hoc capacity.

         (b) The Commercialization Committee shall meet as often as the
Committee deems necessary and at such meeting places as shall be mutually agreed
upon by the Parties. The Commercialization Committee meetings may be held by
telephone or videoconference, if agreed by the Commercialization Committee
members. Each Party will designate an individual to serve as the liaison between
the Parties to undertake and coordinate any communications as may be required
between the Parties relating to the Commercialization Program. The
Commercialization Committee shall operate by majority decision of its members
and shall use good faith efforts to reach agreement on all matters to be
decided. In the event the Commercialization Committee is unable to reach
agreement on any matter before it within thirty (30) days of undertaking
consideration of such matter, then the matter shall be resolved pursuant to
Section 12.2.

         4.2 Duties and Authority of the Commercialization Committee.

         (a) The Commercialization Committee shall have the following duties and
responsibilities during the term of this Agreement: (i) to prepare the
Commercialization Plan for each product; (ii) to coordinate and monitor the
progress of the Parties' efforts in conducting the Commercialization Program;
(iii) to prepare the Commercialization Budget within ninety (90) days of the
formation of the Commercialization Committee for each Product and to prepare and
allocate the annual Commercialization Budget for each Product; (iv) to assist in
the progress of InterMune's efforts in conducting the Commercialization Program;
(v) to review the results of the Commercialization Program; and (iv) to amend or
modify the Commercialization Plan or Commercialization Budget as appropriate or
necessary. The Parties hereby agree that the Commercialization Committee shall
be bound by all obligations and commitments of contracts and agreements approved
by the Development Committee or the Commercialization Committee and entered into
by one Party or the other and all contracts and agreements previously entered
into by MoliChem related to Moli1901 and set forth in Exhibit B hereto.

         (b) The powers of the Commercialization Committee are limited to those
expressly set forth in this Agreement. Without limiting the generality of the
foregoing, the Commercialization Committee shall not have the right to amend
this Agreement.

         (c) The Commercialization Committee shall also manage selection and
prosecution of all Product trademarks. All such trademarks shall be jointly
owned by the Parties and may only be used by the Parties in association with the
Product and may not be used with any other product, treatment, application, etc.
of either of the Parties.

         (d) The Commercialization Committee shall decide who shall prepare the
minutes of the Commercialization Committee's meetings. Such minutes shall be
promptly reviewed and

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shall be deemed approved when mutually accepted in writing by both Parties
through their respective Commercialization Committee representatives; provided
however, that if the Commercialization Committee representatives of a Party fail
to comment on, or otherwise indicate disagreement with, the minutes provided by
the other Party in writing within fifteen (15) days of receipt, then the
receiving Party shall be deemed to have approved such minutes.

         4.3 Commercialization Program. Each of the Parties shall use
commercially reasonable efforts in carrying out its obligations under the
Commercialization Program as determined by the Commercialization Committee. In
order to establish and maintain the largest market possible for each Product,
under the direction of the Commercialization Committee, InterMune shall direct,
all the marketing, sales, promotion, operational and technical personnel,
know-how, equipment, supplies and facilities necessary to carry out the
Commercialization Program, including without limitation appropriate staffing
levels on an experienced, well-trained sales force dedicated exclusively to the
Commercialization Program. InterMune shall be responsible for and shall
commercially launch each of the Products at the direction of the
Commercialization Committee. ** In addition, the Commercialization Committee
shall set reasonable minimum annual sales performance obligations prior to the
launch of each Product in each of the countries within the territory.

         4.4 Reporting; Audits. The reporting requirements and audit rights for
the Commercialization Program are set forth in Section 3 and Section 5,
respectively, of Exhibit A.

         4.5 Notwithstanding any other provision of this Agreement to the
contrary, in the event InterMune has taken any action with respect to
commercialization of any Product that materially jeopardizes the
commercialization of such Product and MoliChem can produce evidence that such
InterMune actions have materially jeopardized the commercialization of any
Product, and InterMune has failed to cure such action within ninety (90) days
after receiving notice from MoliChem that such actions have materially
jeopardized the commercialization of the Product, then all rights to control the
commercialization with respect to such Product shall thereafter be directed by
MoliChem.

5.       Supply and Manufacturing.

         5.1 At the direction of the Development Committee, MoliChem shall
manage the planning, agreements and operations concerning the supply and
manufacture of the Products for the Development Program; provided however, all
manufacturing specifications shall be established by the Development Committee.

         5.2 At the direction of the Development Committee, MoliChem shall also
manage all matters concerning the supply and manufacture of any Product for the
Commercialization Program, in accordance with the specifications established by
the Development Committee.

         5.3 Although MoliChem shall manage the manufacture of the Products,
qualified personnel of InterMune shall participate and collaborate in the supply
and manufacture of the Products according to the plan set forth by the
Development Committee and for so long as MoliChem continues to manage the
manufacture of the Products, InterMune shall have a right to

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audit the manufacture of Moli1901 in accordance with generally accepted audit
procedures for similar manufacturing processes.

         5.4 In the event MoliChem is unwilling or unable to manufacture any
Product, it may request that the Development Committee take responsibility for
the manufacture of such Product. All costs of manufacturing shall be borne by
InterMoli.

         5.5 Notwithstanding any other provision of this Agreement to the
contrary, in the event MoliChem has taken any action with respect to
manufacturing any Product that materially jeopardizes the commercialization of
such Product and InterMune can produce evidence that such MoliChem actions have
materially jeopardized the commercialization of any Product, and MoliChem has
failed to cure such action within ninety (90) days after receiving notice from
InterMune that such actions have materially jeopardized the commercialization of
the Product, then all rights to control the manufacturing with respect to such
Product shall thereafter be directed by InterMune.

6.       PAYMENTS

         6.1 Initial Payment. Upon the Effective Date and in partial
consideration for the rights granted to InterMune herein, InterMune shall make a
nonrefundable payment to MoliChem in the amount of One Million Four Hundred
Fifty Thousand Dollars ($1,450,000).

         6.2 Funding for Development and Commercialization. All reasonable and
direct costs of the Development Program and the Commercialization Program as set
forth in each approved Budget(s) shall be shared equally (i.e., 50%/50%) by the
Parties, no matter which Party incurs such costs. All Profit and Loss
calculations for the initial Product shall be in accordance with the terms of
Exhibit A. For the purposes of this Agreement, payment of Profits shall be
considered a payment obligation.

         6.3 Milestone Payments. InterMune shall make the following Milestone
Payments to MoliChem:

         **

         6.4 Profit Payments. InterMune shall be obligated to timely make all
Profit payments and detailed statements to MoliChem in accordance with the terms
of Exhibit A.

         6.5 Income Tax Withholding. If laws, rules or regulations require
withholding of income taxes or other taxes imposed upon payments set forth in
this Section 6, InterMune shall make such withholding payments as required and
subtract such withholding payments from the payments set forth in this Section
6. InterMune shall submit appropriate proof of payment of the withholding taxes
to MoliChem within a reasonable period of time.

                                      E-35

<PAGE>

7.       INTELLECTUAL PROPERTY MATTERS; PATENTS

         7.1 Ownership. All Joint Intellectual Property shall be jointly owned
by the Parties with each Party owning an undivided one-half interest. For all
other intellectual property developed pursuant to this Agreement, inventorship
shall be determined in accordance with the U.S. patent or other applicable laws.
MoliChem shall own all inventions not related to Moli1901 that have been
conceived or reduced to practice under this Agreement solely by MoliChem's
employees, consultants or others with an obligation to assign their rights to
MoliChem. Intermune shall own all inventions not related to Moli1901 that have
been conceived or reduced to practice under this Agreement solely by InterMune's
employees, consultants or others with an obligation to assign their rights to
InterMune. InterMune shall grant MoliChem a perpetual irrevocable, royalty free,
non- exclusive license to any and all intellectual property rights that are not
Joint Intellectual Property and arise from the Development Program or
Commercialization Program that relate to Moli1901 or any other lantibiotic
technology of MoliChem (including but not limited to manufacturing, formulation
and packaging technology), and shall execute at the request of MoliChem such
reasonable documents in furtherance of the foregoing license.

         7.2 Patent Filing, Prosecution and Maintenance.

         (a) MoliChem shall have the first right, but not the obligation, to
file applications for the Development Patents and to prosecute and maintain such
Development Patents in such countries as selected by the Development Committee
or the Commercialization Committee, as the case may be, at InterMoli's expense.
MoliChem shall reasonably consider any recommendations provided by InterMune
regarding the filing and/or prosecution of such Development Patents, but the
final decision as to the filing and/or prosecution matters shall rest with
MoliChem.

         (b) In the event that InterMune desires that MoliChem file and
prosecute a patent application claiming a particular invention in the
Development Technology, and MoliChem does not file such a patent application
within one hundred twenty (120) days of such request, or decides to abandon
prosecution of such a filed application, then InterMune may thereafter file,
prosecute and/or maintain the Patent(s) claiming such particular inventions, at
InterMune's expense. In such event, MoliChem shall cooperate reasonably with
InterMune in such efforts.

         (c) In the event that pursuant to the terms of Section 11, MoliChem's
rights in any of the Development Patents are subject to an exclusive license to
InterMune, even as to MoliChem, MoliChem's rights to control the prosecution of
such Development Patents shall be as set forth in Sections 7.2(a) and 7.2(b) of
this Agreement; provided however, all expenses related to such prosecution shall
be solely the responsibility of InterMune, and InterMune will promptly reimburse
MoliChem for any such expenses. InterMune shall have the right to review and
comment on all aspects of such prosecution and to direct the prosecution of such
Development Patents in the event MoliChem is no longer or able or willing to
continue with the prosecution of any of the Development Patents. Notwithstanding
the foregoing, in the event MoliChem has taken any action with respect to the
prosecution of the Development Patents subject to an exclusive license in
accordance with the terms of this Section, or MoliChem has taken any action with
respect to the prosecution of the Development Patents, subject to such exclusive
license that materially jeopardizes the commercialization of such exclusively
licensed Product, and InterMune can produce evidence

                                      E-36

<PAGE>

that such MoliChem actions have materially jeopardized the commercialization of
such exclusively licensed Product, and MoliChem has failed to cure such action
within ninety (90) days after receiving notice from InterMune that such actions
have materially jeopardized the commercialization of the Product, and all of the
claims pending in such Patent or Patent application relate solely to the
exclusively licensed Product, then all rights to control the prosecution of the
Development Patents subject to such exclusive license shall thereafter be
directed by InterMune; provided however, this provision shall not invoke any
transfer of ownership of such Development Patents.

         7.3 Cooperation. Each Party agrees to cooperate with the other and take
all reasonable additional actions as may be reasonably required to achieve the
intent of this Section 7, including, without limitation, the execution of
necessary and appropriate instruments and documents.

         7.4 Infringement of Third-Party Patents. In the event that a Third
Party files an action against a Party alleging that such Party's activities
under this Agreement infringe such Third Party's patent rights, such Party shall
give written notice to the other Party, and the Parties will consult and
cooperate on the best course of action. The Party that was sued shall have the
right to defend itself against such action, and the other Party shall provide
all reasonable assistance in such defense.

         7.5 Infringement of Development Patents. If either Party becomes aware
that a Third Party is infringing any rights in the Development Patents, such
Party shall give written notice to the other Party describing in detail the
nature of such infringement. MoliChem shall have the initial right to enforce
the Development Patents against such Third Party infringer. InterMune agrees to
provide MoliChem all reasonable assistance, at InterMoli's expense, in such
enforcement, including without limitation being joined as a party to the suit
where appropriate. In the event that MoliChem fails to institute an infringement
suit or take other reasonable action in response to such infringement within one
hundred twenty (120) days after its receipt of notice of such infringement,
InterMune shall have the right, but not the obligation, to institute such suit
or take other appropriate action in its own name to enforce the Development
Patents. Regardless of which Party brings an enforcement action under this
Section 7.5, the Party not bringing the action shall have the right to
participate in such action at its own expense with its own counsel. Any damages
or other recovery, whether by settlement or otherwise, from an action hereunder
to enforce the Development Patents shall first be applied pro rata to each Party
to pay the costs and expenses of participating in such action, and any remaining
amount shall be paid to the Party conducting the action.

         7.6 No Other Technology Rights. Except as otherwise provided in this
Agreement, under no circumstances shall a Party, as a result of this Agreement,
obtain any ownership interest or other right in any technology, know-how,
Patents, products, compounds, materials, vaccines, antibodies, cell lines or
cultures, or animals of the other Party, including items owned, controlled or
developed by the other, or transferred by the other to such Party at any time
pursuant to this Agreement. It is understood and agreed by the Parties that this
Agreement does not grant to either Party any license or other right in basic
technology of the other Party except to the extent necessary to enable the
Parties to carry out their obligations under this Agreement for the development
and commercialization of Products.

                                      E-37

<PAGE>

8.       CONFIDENTIALITY

         8.1 Confidential Information. As used herein, "Confidential
Information" means all Information relating to the Development Program for each
Product, all Information that the Parties have disclosed to each other since
September 12, 2000 and/or during the term of this Agreement and all Information
deemed "Confidential Information" under this Agreement, provided that
Confidential Information (other than Information relating to the Development
Program for each Product) has been marked "Confidential" or "Proprietary" or, if
orally presented, is indicated before disclosure to be confidential or
proprietary. Except to the extent expressly authorized by this Agreement or
otherwise agreed in writing by the Parties, each Party shall keep confidential
and shall not publish or otherwise disclose any Confidential Information and
shall not use such Confidential Information for any purpose not authorized by
this Agreement.

         8.2 Exceptions. Notwithstanding Section 8.1 above, "Confidential
Information" shall not include any Information that a Party can demonstrate by
competent written evidence:

         (a) was already known to such Party, other than under an obligation of
confidentiality, at the time of disclosure by the other Party or, prior to its
creation or discovery hereunder;

         (b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to such Party;

         (c) became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or omission of
such Party;

         (d) was disclosed to such Party, other than under an obligation of
confidentiality to a Third Party, by a Third Party who had no obligation to a
Party not to disclose such information to others; or

         (e) is independently developed by such Party without using any
Confidential Information.

         8.3 Permitted Disclosure. Notwithstanding the limitations in this
Section 8, each Party may disclose Confidential Information to the extent such
disclosure is reasonably necessary in the following instances, but solely for
the limited purpose of such necessity:

         (a) prosecuting or defending litigation;

         (b) complying with applicable governmental laws or regulations,
including without limitation, Nasdaq or SEC disclosure requirements or valid
court orders;

         (c) disclosure to employees, consultants or agents, solely in
furtherance of this Agreement, provided that such individuals have agreed in
writing to be bound by similar terms of confidentiality and non-use at least
equivalent in scope to those set forth in this Section 8; or

                                      E-38

<PAGE>

         (d) general information of a non-material nature regarding the general
status of a Development Program or a Commercialization Program.

         Notwithstanding the foregoing, in the event that a Party is required to
make a disclosure of the Confidential Information pursuant to subsections (a) or
(b) above, it will give prompt advance notice to the other Party of such
disclosure and shall use its best efforts to assist the other Party in securing
confidential treatment of such information.

         8.4 Publicity. The Parties shall agree upon the text of a press release
that will be distributed by InterMune and MoliChem in connection with the
effectiveness of this Agreement. Any press releases involving Moli1901 shall be
jointly approved by both MoliChem and InterMune before issuance; provided
however, if the Parties have previously approved a press release, the approved
disclosure may be included or referenced in a subsequent release of a similar
nature without prior approval of both Parties.

         8.5 Terms of the Agreement. The terms of this Agreement are deemed to
be Confidential Information, subject to Section 8.3 above; provided however,
Each Party shall be free to disclose the terms of the Agreement to potential
investors, financial institutions, granting entities, and its licensors and
assignors of Moli1901, provided such disclosures are subject to no less
restrictive terms of confidentiality than as are set forth in this Agreement.

         8.6 Survival. The provisions of this Section 8 shall survive for five
(5) years after the termination or expiration of this Agreement.

9.       REPRESENTATIONS AND WARRANTIES

         9.1 InterMune's Representations and Warranties. InterMune hereby
represents and warrants to MoliChem as of the Effective Date that:

         (a) It is a corporation duly organized, existing and in good standing
under the laws of the State of Delaware, with full right, power and authority to
enter into and perform this Agreement and to license and assign all of the
rights, property and authorizations herein granted;

         (b) This Agreement has been duly executed and delivered by InterMune
and is a legal, valid and binding obligation enforceable against InterMune in
accordance with its terms;

         (c) The execution, delivery and performance of this Agreement does not
and will not violate any law, statute, local ordinance, state or federal
regulation, court order, or administrative order ruling, its corporate charter
or bylaws, nor any agreement by which it is bound; and

         (d) In the event InterMune has voted against development of the
Development Technology for use with a particular indication or its rights and
licenses to a Product have been terminated, InterMune, its Affiliates,
sub-agents, distributors and licensees may not thereafter, market, promote,
advertise or detail a Product for off-label uses for such indication. If either
MoliChem or InterMune become aware of any off-label use of a Product, the
Parties agree to work

                                      E-39

<PAGE>

together to implement the appropriate commercially reasonable measures to
restrict sales of the Product for such off-label uses.

         9.2 MoliChem's Representations and Warranties. MoliChem hereby
represents and warrants to InterMune that as of the Effective Date:

         (a) To the best of MoliChem's knowledge, Moli1901 has not been
misappropriated from any Third Party nor is it the result of any misuse of any
Third Party's intellectual property;

         (b) To the best of MoliChem's knowledge, all the Patents in connection
with the Glaxo/UNC Agreements represent a Valid Claim, and no other claim,
whether or not embodied in an action past or present, of any infringement, of
any conflict with, or of any violation of any patent, trade secret or other
intellectual property right or similar right of any Third Party, has been made
or is pending or threatened with respect to such Patents or the Development
Technology;

         (c) It is a corporation duly organized, existing and in good standing
under the laws of the State of North Carolina in the case of MoliChem R&D, Inc.
and Delaware in the case of MoliChem Medicines, Inc., with full right, power and
authority to enter into and perform this Agreement and to grant all of the
rights, property and authorizations herein granted;

         (d) This Agreement has been duly executed and delivered by MoliChem and
is a legal, valid and binding obligation enforceable against MoliChem in
accordance with its terms;

         (e) To the best of MoliChem's knowledge, the execution, delivery and
performance of this Agreement does not and will not violate any law, statute,
local ordinance, state or federal regulation, court order, or administrative
order ruling, its corporate charter or bylaws, nor any agreement by which it is
bound;

         (f) Before entering into this Agreement, MoliChem delivered to
InterMune certain documents and information concerning MoliChem and Moli1901
(collectively, the "MoliChem Information Documents"). The MoliChem Information
 Documents are accurate, complete and correct in all material respects. MoliChem
has not failed to disclose to InterMune orally, or in this Agreement, the
MoliChem Information Documents or otherwise, any material information relating
to MoliChem or Moli1901;

         (g) MoliChem has no material liabilities and has not received notice of
any material contingent liabilities not disclosed in the MoliChem Information
Documents, except current liabilities incurred in the ordinary course of
business;

         (h) To the best of MoliChem's knowledge, there is no action, suit,
proceeding or investigation pending or threatened in a written notice against
MoliChem that challenges the validity of this Agreement or the right of MoliChem
to enter into this Agreement, or to consummate the transactions contemplated
hereby, or which might result, either individually or in the aggregate, in any
material adverse change in the development of Moli1901 or commercial sales of a
Product hereunder. The foregoing includes, without limitation, actions pending
or threatened involving the

                                      E-40

<PAGE>

prior employment of any of MoliChem's employees, their use in connection with
MoliChem's business or any information or techniques allegedly proprietary to
any of their former employers, or their obligations under any agreements with
prior employers;

         (i) MoliChem is not a party or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or government agency or
instrumentality that would have a material adverse effect on sales of any
Product;

         (j) To the best of MoliChem's knowledge, MoliChem is not in violation
of any applicable statute, rule, regulation, order or restriction of any
domestic or foreign government or any instrumentality or agency thereof in
respect of the conduct of its business or the ownership of its properties which
violation would have a material adverse effect on the development of Moli1901 or
the sales of a Product;

         (k) To the best of MoliChem's knowledge, MoliChem has all franchises,
permits, licenses and any similar authority necessary for the development and
commercialization of Moli1901 hereunder, as of the Effective Date , except for
those which would not have a material adverse effect on such activities;
provided however, MoliChem makes no representation or warranty that licenses to
third party technology may not be required in order to commercialize certain of
the Products as set forth in this Agreement;

         (l) MoliChem owns or controls under valid licenses and has the right to
license or sublicense, all right, title and interest in and to the Development
Patents listed on Exhibit D, subject to limitations on patent registrations as
set forth in the UNC License;

         (m) Exhibit D presents a complete list of the Patents as of the
Effective Date, relating to Moli1901, including the Moli1901 compositions and
methods of using Moli1901; and

         (n) To the best of MoliChem's knowledge, UNC has not elected to file
any foreign Patent applications pursuant to Section 9.2 of the UNC Agreement.

         9.3 By Both Parties. Each Party represents and warrants that it will
use its best efforts to maintain in full force and effect all necessary
licenses, permits and other authorizations required by Applicable Law to carry
out its duties and obligations under this Agreement. Each Party shall comply
with all Applicable Laws, provided that InterMune shall be solely responsible
for compliance with those Applicable Laws pertaining to the activities conducted
by it hereunder (including, without limitation, those Applicable Laws that apply
to documentation and records retention pertaining to the marketing, advertising,
promotion and detailing of Product worldwide). Without limiting the generality
of the foregoing, InterMune shall not, without the prior written consent of
MoliChem, such consent not to be unreasonably withheld or delayed, promote,
advertise or detail any Product for any indications not contained in the
approvals, applications and registration and product listing which have been
received for such Product or in any manner in conflict with the approved product
labeling and all Applicable Laws. Each Party shall cooperate with the other to
provide such letters, documentation and other information on a timely basis as
the other Party may reasonably require to fulfill its reporting and other
obligations under Applicable Laws to applicable regulatory authorities. Except
for such amounts as are expressly required to be paid by a Party to the other
under this

                                      E-41

<PAGE>

Agreement, each Party shall be solely responsible for any costs incurred by it
to comply with its obligations under Applicable Laws. Each Party shall conduct
its activities hereunder in an ethical and professional manner.

10.      INDEMNIFICATION AND INSURANCE

         10.1 By InterMune. Subject to MoliChem's compliance with Section 10.4,
InterMune hereby agrees to indemnify, defend and hold harmless MoliChem and its
officers, directors, agents and employees from and against any and all
liabilities, damages, judgments, awards or costs of defense (including without
limitation reasonable attorneys' fees, expenses to defend and amounts paid in
settlement of any action) (collectively, "Losses") arising from any Third Party
claim resulting directly or indirectly from InterMune's breach of any of its
covenants or representations and warranties hereunder, or InterMune's negligence
or wrongdoing, but only to the extent that such Losses do not result from
MoliChem's breach of any of its covenants or representations and warranties
hereunder or MoliChem's negligence or wrongdoing.

         10.2 By MoliChem. Subject to InterMune's compliance with Section 10.4,
MoliChem hereby agrees to indemnify, defend and hold harmless InterMune and its
officers, directors, agents and employees from and against any and all Losses
from any Third Party claim resulting directly or indirectly from MoliChem's
breach of any of its covenants or representations and warranties hereunder, or
MoliChem's negligence or wrongdoing, but only to the extent that such Losses do
not result from InterMune's breach of any of its covenants or representations
and warranties hereunder or InterMune's negligence or wrongdoing.

         10.3 Joint Liability. The Parties hereby agree that the Parties shall
be jointly liable for any third party claims made against either Party as a
result of the actions taken pursuant to the Development Program or the
Commercialization Program, provided that such actions have been specifically
authorized by either the Development Committee or the Commercialization
Committee, except to the extent those claims are based on the other Party's
breach of any of its covenants or representations and warranties hereunder or
the other Party's negligence or wrongdoing.

         10.4 Notice and Procedures. In all cases where one Party seeks
indemnification by the other under this Section 10, the Party seeking
indemnification shall promptly notify the indemnifying Party of receipt of any
claim or lawsuit covered by such indemnification obligation and shall cooperate
fully with the indemnifying Party in connection with the investigation and
defense of such claim or lawsuit. The indemnifying Party shall have the right to
control the defense, with counsel of its choice, provided that the
non-indemnifying Party shall have the right to be represented by advisory
counsel at its own expense. The indemnifying Party shall not settle or dispose
of the matter in any manner, which could negatively and materially affect the
rights or liability of the non-indemnifying Party without the non-indemnifying
Party's prior written consent, which shall not be unreasonably withheld or
delayed.

         10.5 Insurance. Each Party, at its own expense, shall maintain
comprehensive general liability insurance and clinical trial insurance coverage
in amounts reasonable and customary in the industry, but not less than
$1,000,000 per occurrence and $3,000,000 in the aggregate. InterMune shall
purchase product liability insurance with a reputable insurance company in an
amount that is

                                      E-42

<PAGE>

determined by the Commercialization Committee prior to the first commercial sale
or distribution of Product. The University of North Carolina and MoliChem shall
be named in such policy as additional insured parties. Each Party shall provide
documentation that such coverage exists upon request of the other Party. Each
Party shall maintain such insurance for so long as it continues to research,
develop, manufacture, commercialize, and market Products, and thereafter for so
long as it customarily maintains insurance for itself covering similar
activities with its other similar products.

11.      TERM AND TERMINATION

         11.1 Term.

         (a) Term. The term of this Agreement shall commence upon the Effective
Date and shall expire, unless earlier terminated as set forth in this Section
11, upon the date of the last to expire payment obligation under this Agreement.
The Parties agree that for so long as a Product is being developed or
commercialized hereunder, any payment obligation set forth herein shall
continue. Prior to expiration, the Parties shall agree upon the surviving rights
and obligations of the Parties and the disposition of any joint assets and/or
Development Technology.

         (b) Effect of Expiration. Upon expiration of the term of this Agreement
as set forth in this Section 11.1:

         (i) each Party shall have discontinued all use, development, marketing,
         promotion, detailing, manufacturing and selling of Products, if any,
         and discontinued the use of any trademarks solely or jointly owned by
         the other Party relating to the Products; and

         (ii) each Party shall promptly return all of the other Party's
         materials, documents and Information related to the Development
         Programs, the Commercialization Programs and otherwise created
         hereunder, and all Confidential Information of the other Party;
         provided however, each Party may retain one copy of each document of
         the other Party's Confidential Information to enable such Party to
         determine its surviving obligations of confidentiality and non- use
         with respect to the other Party's Confidential Information.

         11.2 Termination of Development Program or Commercialization for Cause.

         (a) Right to Terminate. Either Party may terminate, for cause, a
Development Program or Commercialization Program for any Product upon thirty
(30) days' prior written notice:

         (i) if there is a reasonable basis upon which to conclude that the
         safety of human subjects is at risk during or after dosing of Moli1901;

         (ii) if Moli1901 unequivocally fails any material toxicology study to
         support multi-dose use in humans;

         (iii) if prior to the initiation of a Phase II clinical trial for the
         initial Product, the Parties have not been able to demonstrate that
         Moli1901 can be manufactured in accordance with: (i) U.S. "Good
         Manufacturing Practices" and with an auditable quality system for the

                                      E-43

<PAGE>

         manufacturing process and (ii) the specifications set by the
         Development Committee, provided that such termination shall only be
         with respect to the initial Product; or

         (iv) if the Parties learn that a Third Party has rights to a Patent or
         invention that would prevent commercialization of the Product and
         negotiations to obtain a necessary license from such Third Party are
         unsuccessful.

         (b) Effect of Termination. If a Party terminates the Development
Program or Commercialization Program pursuant to Section 11.2(a), and the other
Party elects to continue with the development and/or commercialization of the
terminated Product:

         (i) the terminating Party shall discontinue all use, development,
         marketing, promotion, detailing, manufacturing and selling of the
         terminated Product;

         (ii) the license grants for the Development Technology set forth in
         Section 2.1 and Section 2.2, as the case may be, shall become exclusive
         with respect to such terminated Product in favor of the other Party
         even as to (i.e., in lieu of "alongside") the terminating Party;

         (iii) the terminating Party shall be entitled to its Initial Product
         Profit Share with respect to the initial Product, and with respect to
         all subsequent Products developed by the other Party shall be entitled
         to its Future Product Profit Share;

         (iv) in the event that MoliChem is the terminating Party, InterMune
         shall remain obligated to pay to MoliChem all the milestone payments
         for such terminated Product as set forth in Section 6.3;

         (v) the terminating Party, if able, shall timely provide commercially
         reasonable assistance with respect to development and commercialization
         of such Product as requested by the other Party, at the expense of the
         requesting Party; and

         (vi) the non-terminating Party shall indemnify, defend and hold the
         terminating Party and its agents, employees, officers and directors
         harmless from and against any and all liability, damage, loss, cost or
         expense, (including reasonable attorneys' fees) arising out of third
         party suits after the date of the date of the terminating Party's
         notice of termination and related to the non-terminating Party's
         development and/or commercialization of the terminated Products, except
         for those Losses arising from the gross negligence or willful
         misconduct of the terminating Party, its agents, employees, officers or
         directors.

         11.3 Termination of Agreement for Cause.

         (a) Right to Terminate. Either Party may terminate this Agreement for
cause upon thirty (30) days' prior written notice:

         (i) if the initial Product has been terminated as set forth in Section
         11.2(a) above; or

                                      E-44

<PAGE>

         (ii) if all Development Programs and Commercialization Programs have
         been terminated pursuant to Section 11.2(a) above.

         (b) Effect of Termination. If a Party terminates this Agreement
pursuant to Section 11.3(a), all the rights and obligations of the Parties and
all licenses granted hereunder shall terminate; provided that:

         (i) each Party shall have the rights and obligations with respect to
         each terminated Product as set forth in Section 11.2(b) above: and

         (ii) each Party shall promptly return all of the other Party's
         materials, documents and Information related to the Development
         Program, the Commercialization Program and otherwise created hereunder,
         and all Confidential Information of the other Party; provided however,
         each Party may retain one single copy of each document of the other
         Party's Confidential Information to solely enable such Party to
         determine its surviving obligations of confidentiality and non-use with
         respect to the other Party's Confidential Information.

         11.4 Termination of Agreement for Material Breach.

         (a) Right to Terminate. If a Party materially breaches this Agreement,
and within sixty (60) days of written notice of breach from the non-breaching
Party, the breaching Party has not (i) cured the breach, or (ii) initiated good
faith efforts to cure such breach to the reasonable satisfaction of the
non-breaching Party, then the non-breaching Party may terminate this Agreement
immediately upon expiration of such sixty- (60) day period. The term "Material
Breach" includes, without limitation, the following: A Party's gross negligence,
material omission, material misrepresentation or fraud related to the
development and/or commercialization of the Products.

         (b) Effect of Termination. If a non-breaching Party terminates the
Agreement pursuant to Section 11.4(a), each Party's rights and obligations
hereunder shall terminate; provided that:

         (i) the terminated Party shall discontinue all use, development,
         marketing, promotion, detailing, manufacturing and selling of the
         Products;

         (ii) the license grants for the Development Technology set forth in
         Section 2.1 and Section 2.2, as the case may be, shall become exclusive
         in favor of the non-breaching Party even as to (i.e., in lieu of
         "alongside") the breaching Party;

         (iii) the breaching Party shall be entitled to its Initial Product
         Profit Share with respect to the initial Product, and with respect to
         all subsequent Products developed by the other Party shall be entitled
         its Future Product Profit Share;

         (iv) in the event that MoliChem is the breaching Party, InterMune shall
         be obligated to pay to MoliChem all the milestone payments for all
         Products as set forth in Section 6.3;

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<PAGE>

         (v) the breaching Party shall, if able, timely provide all commercially
         reasonable assistance with respect to development and commercialization
         of any Products as requested by the other Party, at the expense of the
         requesting Party;

         (vi) the non-breaching Party shall indemnify, defend and hold the
         breaching Party and its agents, employees, officers and directors
         harmless from and against any and all liability, damage, loss, cost or
         expense, (including reasonable attorneys' fees) arising out of third
         party suits after the date of the date of the termination and related
         to the non-terminating Party's development and/or commercialization of
         the terminated Products, except for those Losses arising from the gross
         negligence or willful misconduct of the terminating Party, its agents,
         employees, officers or directors;

         (vii) if InterMune is the Party that has elected to terminate this
         Agreement and continue with the development and/or commercialization of
         the Product(s), and InterMune has failed to commercialize the
         Product(s), in the major markets for such Product(s) within a
         commercially reasonable time after U.S. NDA approval, in accordance
         with the standards of the industry, and as negotiated by the Parties as
         of the termination date, InterMune's rights with respect to such
         Product(s) and major markets for which it has failed to meet such
         commercialization obligations will terminate;

         (viii) each Party shall promptly return all of the other Party's
         materials, documents and Information related to the Development
         Program, the Commercialization Program and otherwise created hereunder,
         and all Confidential Information of the other Party; provided however,
         each Party may retain one copy of each document of the other Party's
         Confidential Information to enable such Party to determine its
         surviving obligations of confidentiality and non- use with respect to
         the other Party's Confidential Information; and

         (ix) the non-breaching Party may pursue all rights and remedies it may
         have hereunder or at law or in equity with respect to any breach of
         this Agreement as set forth in this Section 11.4.

         11.5 Termination of Agreement for Failure to Contribute to Initial
Product.

         (a) Right to Terminate. In the event either Party fails to contribute
fifty percent (50%) of the Development Expenses for the initial Product incurred
prior to the approval of the U.S. registration for such Product, in accordance
Section 3 of Exhibit A, the other Party shall have the right to terminate this
Agreement upon prior written notice.

         (b) Effect of Termination.

         (i) The terminated Party shall have no further right or obligation to
         financially contribute to the development and/or commercialization of
         subsequent Products; provided however, if a Development Budget has been
         approved by the Development Committee for a subsequent Product, the
         terminated Party's rights in and to development and commercialization
         of such subsequent Product in development shall continue as though the
         Agreement had not been

                                      E-46

<PAGE>

         terminated, and shall in no way limit the terminated Party's right to
         continue to fund the development of such subsequent Product;

         (ii) the license grants for the Development Technology set forth in
         Section 2.1 and Section 2.2, as the case may be, shall become exclusive
         in favor of the non-terminated Party even as to (i.e., in lieu of
         "alongside") the terminated Party for all Products other than the
         initial Product or Products in development prior to termination;

         (iii) the terminated Party shall be entitled to its Initial Product
         Profit Share, and with respect to all subsequent Products shall be
         entitled to a percentage of its Future Product Profit Share;

         (iv) in the event that MoliChem is the terminated Party, InterMune
         shall be obligated to pay to MoliChem all the milestone payments for
         all Products as set forth in Section 6.3;

         (v) the terminated Party shall, if able, timely provide all
         commercially reasonable assistance with respect to development and
         commercialization of any Products as requested by the other Party, at
         the expense of the requesting Party;

         (vi) the Development Committee and the Commercialization Committee with
         respect to each Product developed shall continue and the terminated
         Party shall have the right to participate in such Committees, provided
         that the number of members shall be proportional to its contribution to
         the initial Product;

         (vii) the continuing Party shall indemnify, defend and hold the
         terminating Party and its agents, employees, officers and directors
         harmless from and against any and all liability, damage, loss, cost or
         expense, (including reasonable attorneys' fees) arising out of third
         party suits after the date of the date of the termination and related
         to the continuing Party's development and/or commercialization of the
         terminated Products, except for those Losses arising from the gross
         negligence or willful misconduct of the terminating Party, its agents,
         employees, officers or directors;

         (viii) if InterMune is the Party that has elected to continue with the
         development and/or commercialization of the terminated Product, and
         InterMune has failed to commercialize the terminated Product, in the
         major markets for such Product within a commercially reasonable time
         after U.S. NDA approval, in accordance with the standards of the
         industry, and as negotiated by the Parties as of the termination date,
         InterMune's rights with respect to such Product and major markets for
         which it has failed to meet such commercialization obligations shall
         terminate; and

         (ix) each Party shall promptly return all of the other Party's
         materials, documents and Information related to the Development
         Program, the Commercialization Program and otherwise created hereunder,
         and all Confidential Information of the other Party; provided however,
         each Party may retain one copy of each document of the other Party's
         Confidential Information to enable such Party to determine its
         surviving obligations of confidentiality and non- use with respect to
         the other Party's Confidential Information.

                                      E-47

<PAGE>

         11.6 Termination of Agreement for Bankruptcy. All rights and licenses
granted under or pursuant to this Agreement are, and shall otherwise be deemed
to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of
rights to "intellectual property" as defined under Section 101 of the U.S.
Bankruptcy Code. The Parties agree that each, as a licensee of such rights under
this Agreement, shall retain and may fully exercise all of their rights and
elections under the U.S. Bankruptcy Code; provided however, nothing herein shall
be deemed to constitute a present exercise of such rights and elections. The
Parties further agree that, in the event of the commencement of a bankruptcy
proceeding by or against a Party under the U.S. Bankruptcy Code, the other Party
shall be entitled to a complete duplicate of (or complete access to, as
appropriate) any such intellectual property and all embodiments of such
intellectual property, and same, if not already in its possession, shall be
promptly delivered to such Party (a) upon any such commencement of a bankruptcy
proceeding upon their written request therefore, unless the bankrupt Party
elects to continue to perform all of its obligations under this Agreement, or
(b) if not delivered under (a) above, upon rejection of this Agreement by or on
behalf of the bankrupt Party upon written request therefore by the non-bankrupt
Party.

         (a) Right to Terminate. In the event of the bankruptcy of a Party, the
other Party may terminate this Agreement.

         (b) Effect of Termination. If a Party terminates this Agreement
pursuant to Section 11.6(a):

         (i) the bankrupt Party shall have no further right to develop or
         commercialize the Products;

         (ii) the license grants for the Development Technology set forth in
         Section 2.1 and Section 2.2, as the case may be, shall become exclusive
         in favor of the terminating Party even as to (i.e., in lieu of
         "alongside") the bankrupt Party;

         (iii) the bankrupt Party shall be entitled to its Initial Product
         Profit Share with respect to the initial Product and shall be entitled
         to its Future Product Profit Share with respect to the subsequent
         Products;

         (iv) the bankrupt Party, if able, shall timely provide all commercially
         reasonable assistance with respect to development and commercialization
         of such Product as requested by the other Party, at the expense of the
         requesting Party;

         (v) in the event that MoliChem is the bankrupt Party, InterMune shall
         remain obligated to pay to MoliChem all the milestone payments for such
         Product set forth in Section 6.3; and

         (vi) the bankrupt Party shall promptly return all of the other Party's
         materials, documents and Information related to the Development
         Program, the Commercialization Program and otherwise created hereunder,
         and all Confidential Information of the other Party; provided however,
         the bankrupt Party may retain one single copy of each document of the
         other

                                      E-48

<PAGE>

         Party's Confidential Information to enable such bankrupt Party solely
         to determine its surviving obligations of confidentiality and non-use
         with respect to the other Party's Confidential Information.

         11.7 Termination of Rights to Additional Products.

         (a) Right to Terminate Participation with Respect to Additional
Products. In the event both Parties have contributed fifty percent (50%) of the
Development Expenses for the initial Product incurred prior to the approval of
the U.S. registration for such Product, in accordance Section 3 of Exhibit A,
either Party shall have the right to elect not to participate in the development
or commercialization of any subsequent Product; provided that the development of
such Product has been voted upon by the Development Committee for such Product.

         (b) Effect of Termination. If a Party terminates its participation with
respect to any Product pursuant to Section 11.7(a):

         (i) the terminating Party may not develop or commercialize the
         terminated Product;

         (ii) the license grants for the Development Technology set forth in
         Section 2.1 and Section 2.2, as the case may be, shall become exclusive
         with respect to such terminated Product in favor of the other Party
         even as to (i.e., in lieu of "alongside") such terminating Party;

         (iii) such terminating Party shall be entitled to a Profit percentage
         in accordance with solely Section 1.19(ii) of the Future Product Profit
         Share for such terminated Product;

         (iv) in the event that MoliChem is the terminating Party, InterMune
         shall remain obligated to pay to MoliChem all the milestone payments
         for such terminated Product set forth in Section 6.3;

         (v) the terminating Party, if able, shall timely provide all
         commercially reasonable assistance with respect to development and
         commercialization of such terminated Product as requested by the other
         Party, at the expense of the requesting Party; and

         (vi) for so long as the Development Committee and/or the
         Commercialization Committee for the initial Product continue, the
         continuing Party shall, from time to time, report back to such
         committees with respect to the status, progress, problems, strategy,
         objectives and other relevant factors related to the development and
         commercialization of the terminated Product, and upon termination of
         the last Development Committee and Commercialization Committee, the
         continuing Party shall coordinate with the terminating Party, in a
         manner to be determined by the Parties, such that the terminating Party
         is adequately informed as to the status, progress, problems, strategy,
         objective and other relevant factors related to the development and
         commercialization of the terminated Product.

         11.8 Survival. The following provisions shall survive termination or
expiration of this Agreement: Sections 1, 2.1 (only as incorporated by Section

                                      E-49

<PAGE>

11), 2.2(only as incorporated by Section 11), 3.5 (with respect to the
registration name for regulatory filings), 3.10, 6.3, 6.4, 6.5, 7, 8 (for five
years), 9, 10, 11.3(b), 11.4(b) 11.5(b), 11.6(b), 12 and Exhibits A.2, A.3, A.4,
A.5 and A.7. Termination or expiration of this Agreement shall not relieve
either Party of any liability that accrued hereunder prior to the effective date
of such termination, nor preclude either Party from pursuing all rights and
remedies it may have hereunder or at law or in equity with respect to any breach
of this Agreement, nor prejudice either Party's right to obtain performance of
any obligation.

12.      MISCELLANEOUS

         12.1 Entire Agreement; Amendment. This Agreement sets forth the
complete, final and exclusive agreement between the Parties with respect to the
subject matter hereof, and all of the covenants, promises, agreements,
warranties, representations, conditions and understandings between the Parties
hereto with respect to such subject matter, and supersedes and terminates all
prior agreements and understandings between the Parties with respect to such
subject matter, including without limitation that certain Nondisclosure and
Nonuse Agreement, dated as of September 12, 2000, and that certain Exclusive
Dealing Binder, dated as of November 10, 2000, as amended on December 12, 2000,
on February 9, 2001, on March 15, 2001, on April 12, 2001 and on May 4, 2001.
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 are set forth herein and therein.
No subsequent alteration, amendment, change or addition to this Agreement shall
be binding upon the Parties unless reduced to writing and signed by an
authorized officer of each Party.

         12.2 Dispute Resolution. The Parties agree to consult and negotiate in
good faith to try to resolve any dispute, controversy or claim that arises out
of or relates to this Agreement. In the event of any controversy or claim
arising out of, relating to or in connection with Development Committee, the
Commercialization Committee or any other provision of this Agreement, or the
rights or obligations of the Parties hereunder, the Parties shall try to settle
their differences amicably between themselves by referring the disputed matter
to the Chief Executive Officer of InterMune and the President of MoliChem for
discussion and resolution. Either Party may initiate such informal dispute
resolution by sending written notice of the dispute to the other Party, and
within ten (10) days of such notice the Chief Executive Officer of InterMune and
the President of MoliChem shall meet for attempted resolution by good faith
negotiations. If such personnel are unable to resolve such dispute within thirty
(30) days of initiating such negotiations, the Board of Directors of each Party
shall meet to resolve the dispute. In the even the Board of Directors of each
Party are unable to resolve such dispute within thirty (30) days of initiating
such negotiations, each Party may thereafter pursue any and all rights and
remedies it may have at law or equity. If mutually agreeable, the Parties may
explore alternative forms of dispute resolution, such as mediation and/or
binding arbitration. This procedure shall be a prerequisite before a Party is
entitled to seek any legal or equitable remedy, except in cases presenting
extreme urgency in which a Party may seek other appropriate preliminary,
injunctive or extraordinary legal or equitable relief. The foregoing dispute
resolutions provisions shall not apply to any disputes, controversies or claims
arising under Article 8 (Confidentiality) and Article 10 (Indemnification).

         12.3 Force Majeure. Both Parties shall be excused from the performance
of their obligations under this Agreement to the extent that such performance is
prevented by force majeure

                                      E-50

<PAGE>

and the non-performing Party promptly provides notice
of the prevention to the other Party. Such excuse shall be continued so long as
the condition constituting force majeure continues and the non- performing Party
takes reasonable efforts to remove the condition. For purposes of this
Agreement, "force majeure" shall include conditions beyond the control of the
Parties, including without limitation, an act of God, , war, civil commotion,
labor strike or lock-out, epidemic, failure or default of public utilities or
common carriers, destruction of production facilities or materials by fire,
earthquake, storm or like catastrophe.

         12.4 Notices. Any notice required or permitted to be given under this
Agreement shall be in writing, shall specifically refer to this Agreement and
shall be deemed to have been sufficiently given for all purposes if mailed by
first class certified or registered mail, postage prepaid, express delivery
service or personally delivered, or if sent by facsimile and confirmed through
one of the foregoing methods. Unless otherwise specified in writing, the mailing
addresses of the Parties shall be as described below.

                  FOR INTERMUNE:            Intermune, Inc.
                                            1710 Gilbreth Road
                                            Suite 301
                                            Burlingame, CA 94101
                                            Fax: (650) 259 0774
                                            Attention: General Counsel

                  FOR MOLICHEM:             207 South Elliot Road
                                            PMB#231
                                            Chapel Hill, NC 27514
                                            Fax:
                                            Attention: Dr. Luis Molina

                  With Copy to:             Daniels & Daniels, P.A.
                                            PO Drawer 12218
                                            Research Triangle Park, NC  27709
                                            ATTN: Caroline H. Rockafellow

         12.5 Limitation of Liability. In no event will either Party be liable
to the other Party for any indirect, collateral, consequential, special or
punitive damages or for any lost profits of the other Party, however caused and
on any theory of liability, arising out of the performance or failure to perform
any obligations set forth herein, except for those damages caused by a Party's
gross negligence, omissions or willful malfeasance.

         12.6 Consents Not Unreasonably Withheld or Delayed. Whenever provision
is made in this Agreement for either Party to secure the consent or approval of
the other, that consent or approval shall not unreasonably be withheld or
delayed, and whenever in this Agreement provisions are made for one Party to
object to or disapprove a matter, such objection or disapproval shall not
unreasonably be exercised, unless expressly stated that such consent is to be
given in such Party's sole discretion.

                                      E-51

<PAGE>

         12.7 Independent Contractors. The status of the Parties under this
Agreement shall be that of independent contractors. Neither Party shall have the
right to enter into any agreements on behalf of the other Party, nor shall it
represent to any person that it has any such right or authority. Nothing in this
Agreement shall be construed as establishing a partnership or joint venture
relationship between the Parties.

         12.8 Maintenance of Records. Each Party shall keep and maintain all
records required by law or regulation with respect to the Product and shall make
copies of such records available to the other Party upon request.

         12.9 United States Dollars. References in this Agreement to "Dollars"
or "$" shall mean the legal tender of the United States of America.

         12.10 Assignment. Neither Party to this Agreement may assign or
transfer this Agreement or any rights or obligations hereunder without the prior
written consent of the other Party. Notwithstanding the foregoing, either Party
may assign or transfer this Agreement to a successor of a controlling interest
of such Party. Any permitted successor or assignee of rights and/or obligations
hereunder shall, in writing to the other Party, expressly assume performance of
such rights and/or obligations. This Agreement shall be binding upon and shall
inure to the benefit of each Party's permitted successors-in-interest and
permitted assigns. Any assignment or attempted assignment by either Party in
violation of the terms of this Section 12.10 shall be null and void and of no
legal effect.

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

         12.12 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.

         12.13 Severability. If any one or more of the provisions of this
Agreement is held to be invalid or unenforceable, the provision shall be
considered severed from this Agreement and shall not serve to invalidate any
remaining provisions hereof. The Parties shall make a good faith effort to
replace any invalid or unenforceable provision with a valid and enforceable one
such that the objectives contemplated by the Parties when entering this
Agreement may be realized.

         12.14 Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event of an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement.

         12.15 Headings. The headings for each article and section in this
Agreement have been inserted for convenience of reference only and are not
intended to limit or expand on the meaning of the language contained in the
particular article or section.

                                      E-52

<PAGE>

         12.16 No Waiver. Any delay in enforcing a Party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such Party's rights to the future enforcement of its
rights under this Agreement, excepting only as to an express written and signed
waiver as to a particular matter for a particular period of time.

         12.17 Governing Law; Jurisdiction and Venue. This Agreement will be
governed and construed in accordance with the laws of the State of New York. No
lawsuit pertaining to any matter arising under or growing out of this Agreement
shall be instituted in any jurisdiction other than in the state of the defendant
to any such action and the Parties consent to exclusive jurisdiction before the
federal or state courts of state of the defendant to any such action.

         12.18 Change of Law. It is the intention of the Parties to conform
strictly to all Applicable Laws, including but not limited to the Anti-kickback
Statute. Accordingly, upon the written request of either Party, the
Commercialization Committee shall engage at InterMoli's expense, a qualified and
experienced health care regulatory counsel acceptable to both Parties to deliver
an opinion that to the effect that, based upon the interpretation of prevailing
legal and regulatory authority, the compensation arrangement described in
Exhibit A is fully compliant with all Applicable Laws. In the event that the
Commercialization Committee is unable to provide such requested legal opinion
or the Commercialization Committee provides such legal opinion but it is
qualified and not otherwise unequivocal in support of the compliance of the
compensation arrangement described in Exhibit A, then in such event, the
Parties, in coordination with the Commercialization Committee, shall negotiate
in good faith such changes to the structure and terms of the transactions
provided for in this Agreement as may be necessary to make these arrangements,
as restructured, lawful under Applicable Laws, without materially disadvantaging
either Party, and this Agreement shall be deemed reformed in accordance with the
terms negotiated by the Parties. In the event that the Commercialization
Committee is unable to agree on appropriate adjustments, then the matter shall
be resolved pursuant to Section 12.2.

         12.19 Legal Fees. If any dispute arises between the Parties with
respect to the matters covered by this Agreement which leads to a proceeding to
resolve such dispute, the prevailing party in such proceeding shall be entitled
to receive its reasonable attorneys' fees, expert witness fees and out-of-pocket
costs incurred in connection with such proceeding, in addition to any other
relief it may be awarded.

         12.20 Injunctive Relief. A breach of any of the promises or agreements
contained in this Agreement may result in irreparable and continuing damage to a
Party for which there may be no adequate remedy at law, and each Party is
therefore entitled to seek injunctive relief as well as such other and further
relief as may be appropriate. The obligations provided under Section 8 of this
Agreement are acknowledged as necessary and reasonable in order to protect each
Party and its business, and the Parties expressly agree that monetary damages
would be inadequate to compensate either Party for the breach thereof.
Accordingly, each Party agrees and acknowledges that any such violation or
threatened violation will cause irreparable injury to the other Party and that,
in addition to any other remedies that may be available, in law, in equity or
otherwise, each Party shall be entitled to obtain injunctive relief against the
breach or threatened breach by the other Party of Section 8, without the
necessity of proving actual damages.

                                      E-53

<PAGE>

         IN WITNESS WHEREOF, the Parties have executed this Agreement in by
their authorized officers as of the date and year first above written.

INTERMUNE, INC.                           MOLICHEM R&D, INC.

By:                                       By:
    ---------------------------------         ----------------------------------

Print Name:                               Print Name:
            -------------------------                 --------------------------

Title:                                    Title:
       ------------------------------            -------------------------------

MOLICHEM MEDICINES, INC.

By:
   --------------------------------------------------

Print Name:
           ------------------------------------------

Title:
      -----------------------------------------------

                                      E-54<PAGE>

                                                                  EXHIBIT 10.6

                  EMPLOYMENT AGREEMENT FOR DR. GILLES CLOUTIER

         THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of the 1st
day of April, 2001 (the "Effective Date"), by and among MoliChem Medicines,
Inc., a Delaware corporation ("MLCM") with its mailing address at 207 South
Elliott Road, PMB No. 231, Chapel Hill, North Carolina 27514, MoliChem R&D,
Inc., a North Carolina corporation (the "Company") with its mailing address at
207 South Elliott Road, PMB No. 231, Chapel Hill, North Carolina 27514 and Dr.
Gilles Cloutier, an individual residing at 100 Chestnut Road, Chapel Hill, North
Carolina 27514 ("Employee"). MLCM, the Company and Employee may be referred to
herein collectively as the "Parties" and individually as a "Party".

                                    RECITALS

         A. The Company wishes to employ Employee and Employee desires to be
employed by the Company in a position of trust and confidence to aid the Company
in its business; and

         B. Prior to employment of Employee, as a condition of employment, and
as part of the initial financial compensation established for Employee, the
parties wish to establish the terms of employment and their respective rights in
and to use certain proprietary and confidential information and intellectual
property, and to enter into an understanding regarding the use of the Company's
assets, information and goodwill to compete with the Company; and

         C. The Company has informed Employee that entering into this Agreement
is a condition of initial employment and the Company would not employ Employee
unless Employee agreed to the terms of this Agreement.

         NOW, THEREFORE, in consideration of the premises, the mutual covenants
contained herein, and other good and valuable consideration, the parties agree
as follows:

         1. Term. The employment created by this Agreement shall be for a two
(2) year term beginning on the Effective Date (the "Term"), and shall
automatically renew for additional one (1) year periods upon the anniversary
date of the initial term and each renewal term, subject, however, to earlier
termination as provided in Section 8 below.

         2. Duties. Employee is initially engaged to act in the capacity of
Chief Business Officer, subject to change as appropriate to the needs of the
Company. Employee's duties and powers as Chief Business Officer shall be
determined from time to time by the Board of Directors of the Company. The
Company and Employee understand and agree that Employee is a part-time employee
and is obligated to provide the Company with a minimum of two (2) days of
service per week. Employee may perform his duties at the Company facilities, the
Employee's home offices (located in both Employee's permanent and temporary
residences) or any other remote location mutually agreed upon by Employee and
Company.

                                      E-55

<PAGE>

          3. Base Compensation. Subject to the terms and conditions of this
Agreement, as partial compensation for services rendered and Employee's
covenants and agreements under this Agreement, the Company shall pay to Employee
a base salary of ninety thousand dollars ($90,000) per year, payable in
accordance with the Company's standard practices. All applicable federal and
state taxes and other governmental assessments shall be deducted from Employee's
salary, as required by law.

          4. Additional Compensation. In addition to the compensation specified
in Section 3 above, Employee shall have the opportunity to earn an annual bonus
in the amount of twenty percent (20%) of base compensation and shall be eligible
for other incentive compensation payments, in accordance with such plans as may
be adopted by the Board of Directors of the Company.

          5. Options. In addition to the compensation under Sections 3 and 4
above, Employee shall be awarded a fully vested option for three hundred fifty
thousand (350,000) shares of the common stock of MLCM at a purchase price of one
dollar and fifty cents ($1.50) per share pursuant to the Option Agreement in the
form of Exhibit A.

         6.       Benefit Plans.

                  A. Personal Leave. Employee shall be entitled to six (6) days
(or an equivalent of three weeks of service) of paid personal leave per calendar
year, which shall accrue at the rate of one and one-half (1.5) days per quarter.
Vacation days not used in one calendar year shall not carry over to the
following calendar year. No compensation shall be due for unused vacation days
that do not carry over.

                  B. Sick Leave. Employee shall be entitled to four (4) days of
sick or personal leave each calendar year, which shall accrue at the rate of one
(1) day per quarter. Sick leave may be used with respect to illness of Employee
or to attend to illness of any member of Employee's immediate family who resides
with Employee. No payment shall be made for unused sick and personal leave upon
termination of Employee's employment.

                  C. Leave Policies. The Company may at its sole option change
its vacation or sick and personal leave policy by providing a new policy in
writing to Employee and specifically referencing it as an amendment to this
Agreement, such amendment to be prospective only.

                  D. Holidays. Employee shall be entitled to such paid holidays
as are provided to other employees of the Company.

                  E. Insurance. The Company shall make available, at Employee's
expense, the standard health, life and disability coverage provided to other
employees, which coverage may vary from time to time or may be eliminated
provided that Employee is treated the same as other employees similarly
situated.

                  F. Other Benefits. Employee shall be entitled to participate
in any other group benefit plans or arrangements made available to the Company's
Employees in the future, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and

                                      E-56

<PAGE>

arrangements. Nothing paid to Employee under any plan or arrangement shall be
deemed to be in lieu of compensation payable to Employee pursuant to Section 3.
Notwithstanding the foregoing, Employee shall not be entitled to such benefit if
the benefit provided does not provide such coverage to part-time employees
working the amount of time as Employee, and the Company is not reasonably able
to obtain, at comparable cost, another benefit provider.

         7. Expenses. The Company shall reimburse Employee for business expenses
directly and reasonably incurred in the performance of his duties provided that
Employee complies with the Company's policies concerning reimbursement for such
expenses.

         8. Termination.

                  A. Employee may terminate his employment at any time upon
giving one (1) month's prior written notice to the Company.

                  B. The Company may terminate Employee at any time for any
reason upon one (1) month's prior written notice to Employee.

                  C. In the event, (i) Company terminates Employee pursuant to
Section 8.b., (ii) the Employee terminates his employment as a result of his
title or duties being materially diminished, other than for good cause, or (iii)
Employee's position is eliminated as a result of a "change of control" (as
defined below), Employee shall be entitled to a severance payment in the amount
of six (6) months salary to be paid in regular monthly installments.

         For the purpose of this Agreement, "change of control" shall be deemed
to have occurred when, as a result of any merger, consolidation, reorganization
or other similar event, the shareholders of Company immediately prior to such
event own less than fifty percent (50%) of the outstanding securities of the
resulting entity immediately after such event.

                  D. The Company may terminate Employee immediately and without
payment of severance upon the happening of the following:

                           (i) Disability. In the event that (i) Employee is
totally and permanently disabled as determined in accordance with the Company's
long-term disability plan, if any, as in effect at such time, or (ii) if no such
plan is in effect, Employee is unable to perform his duties and responsibilities
hereunder by reason of illness, injury or incapacity for ninety (90) consecutive
days, this Agreement may be terminated by the Company, and the Company shall
have no further liability or obligation to Employee for compensation hereunder;
provided, however, that Employee shall continue to be compensated as provided in
Section 3 of this Agreement during such 90-day period and until termination
under this Section, and provided further, that Employee will be entitled to
receive the payments prescribed under any disability benefits plan in which
Employee was participating.

                           (ii) Death. In the event that Employee dies during
the Term, the Company shall pay to his executors, legal representatives or
administrators an amount equal to the remaining installment of Employee's
compensation set forth in Section 3 hereof for the month in which

                                      E-57

<PAGE>

Employee dies, and thereafter the Company shall have no further liability or
obligation hereunder to Employee's executors, legal representatives,
administrators, heirs or assigns or any other person claiming under or through
Employee; provided, however, that Employee's heirs, legal representatives or
administrators will be entitled to receive the payments prescribed under any
death or disability benefits plan of the Company in which Employee was
participating.

                           (iii) Cause. Nothing in this Agreement shall be
construed to prevent Employee's termination by the Company at any time for
"cause". For purposes of this Agreement, "cause" shall mean (i) the failure of
Employee to perform or observe (other than by reason of illness, injury or
incapacity) any of the material terms or provisions of this Agreement, (ii)
dishonesty or misconduct on the part of Employee that is or is reasonably likely
to be materially damaging or materially detrimental to the business of the
Company, (iii) conviction of a felony, (iv) failure to comply with the
reasonable directions of the Board of Directors or officers of the Company in a
way that is materially damaging or materially detrimental to the business of the
Company, or (v) failure to perform his material duties under this Agreement due
to abuse of alcohol or drugs. Prior to terminating this Agreement on account of
Employee's failure to perform or observe any of the material terms and
conditions of this Agreement (as described in clauses (i), (iv) or (v) of the
preceding sentence), the Company shall give Employee thirty (30) days' written
notice and an opportunity to cure such failure to the satisfaction of the
Company. Upon termination for cause, the Company shall pay to Employee all sums
due Employee through the date of such termination. Following such termination,
the Company shall have no further duty or obligation to Employee.

                  D. Notwithstanding any such termination, the obligations and
restrictions imposed on the Employee pursuant to Sections 9 through 14 and
Sections 21, 22, 23 and 27 shall survive termination of this Agreement and shall
exist in accordance with the terms of those Sections.

          9. Confidential Information. Employee may gain access to or knowledge
of information about the Company that is not generally known or available to the
public ("Confidential Information"). Such information may include trade secrets,
research, development, client information, marketing plans, contractual
arrangements, personnel records, finances, and client lists. Employee will not
disclose any Confidential Information during or after the term of this Agreement
to any person, firm, corporation, association or other entity for any reason or
purpose whatsoever or use such information except as directed or authorized by
the Company. All Confidential Information remains the property of the Company
and no license or other rights to Confidential Information is granted hereby. On
demand of the Company, at any time, Employee shall immediately deliver all
printed or written Confidential Information to the Company.

                  The following information shall not be deemed part of the
Confidential Information: (1) that was in the public domain at the time of
disclosure by the Company to the Employee; or (2) that entered the public domain
through no fault of Employee subsequent to the time of disclosure by the Company
to Employee; or (3) that was in the Employee's possession free of any obligation
of confidence at the time of disclosure by the Company; or (4) that was
rightfully communicated by a third party to Employee free of any obligation of
confidence subsequent to the time of disclosure by the Company to Employee; or
(5) that is deemed not confidential by the Board of Directors of the Company or
is not confidential under any confidentiality policies adopted by the Board of
Directors of the Company.

                                      E-58

<PAGE>

          10. Ownership of Confidential Information and Work Product. Except as
limited by this Section, Employee agrees that all Confidential Information and
all other work product of any type or nature created by Employee or resulting
from work performed by Employee for the Company, using the Company's facilities,
equipment, supplies or other property, during business hours, or related to the
Company's Business (defined below), even if not Confidential Information (such
Confidential Information and work product being defined as "Work Product"),
shall belong to the Company exclusively and without any additional compensation
to Employee. Employee agrees that any original copyrightable Work Product shall
be considered as "works made for hire," and that the Company shall be deemed the
author thereof, provided that to the extent such Work Product is determined not
to constitute "works made for hire" as a matter of law, Employee hereby
irrevocably assigns and transfers to the Company all rights in and to such Work
Product. For the purpose of this Agreement, it is understood by Employee that
the "Company's Business" includes, without limitation, development and
commercialization of treatments for respiratory diseases, including but not
limited to cystic fibrosis, chronic obstructive pulmonary disorders,
tuberculosis, chronic bronchitis and related diseases and treatment of sepsis,
ARDS and related diseases. Any notification of Employee by the Company, oral or
written, or any reasonable knowledge on the part of Employee that the Company's
Business includes other specific aspects shall expand Employee's obligations
under this Agreement to include those additional aspects of the Company's
Business.

         Upon request Employee will execute any instrument required to vest in
the Company complete title and ownership to all Work Product, and will, at the
request and expense of the Company, execute any instruments necessary to obtain
legal protection in the United States and foreign countries for all Work Product
and for the purpose of vesting title thereto in the Company, or its nominee, all
without any additional compensation of any kind to Employee.

         11. Disclosure to the Company. Upon the conception of any Work Product
by Employee (either solely or in conjunction with others) and without waiting to
perfect or complete it, Employee promises and agrees immediately to fully
disclose to an officer of the Company, and to no one else, and thereafter to
treat the Work Product as the property and secret of the Company. This shall
include Work Product made, conceived or reduced to practice after the term of
Employee's employment but which belong to the Company pursuant to Sections 10
and 18. Upon request Employee will reduce any concept in the Work Product to
writing and deliver all copies of the writing to the President of the Company,
or if Employee is the President of the Company, such copies shall be delivered
to the Secretary of the Company. These obligations shall continue beyond the
termination of employment with respect to Work Product conceived or made during
the period of employment.

         12. Collaboration. Employee warrants that Employee will disclose the
participation of any other person in any of Employee's work for the Company.
Absent such disclosure, Employee warrants that all work performed by Employee
will be Employee's own and that no other person shall have any right, title, or
interest in any work submitted to the Company.

         13. Records. Employee agrees that Employee will keep and maintain
adequate and current written records of all Work Product created by Employee.
All written records relating to any Work Product, whether in the form of notes,
data, reference materials, sketches, drawings,

                                      E-59
<PAGE>

memoranda, correspondence, blueprints, manuals, letters, notebooks, reports,
flowcharts, programs, proposals, or any other form, and whether in written,
electronic or other media, concerning the Company's Business or incorporating or
reflecting any of the Work Product, shall be and remain the property of and
available to the Company at all times, and shall be delivered to the Company on
demand or upon Employee leaving the Company's service. The Company may, at any
time and without notice to Employee, take possession of such records regardless
of their location, including Employee's files, desk, computer or other areas
under the control of the Company.

         14. Assistance After Employment. Employee agrees that if, subsequent to
Employee's employment by the Company, his assistance is needed in regard to
securing, defending, or enforcing any patent or copyright of which Employee is
an inventor, co-inventor, author or co-author Employee shall provide requested
assistance and the Company shall pay reasonable compensation for his time at a
rate to be agreed upon but not higher than 150% of the last salary rate paid to
Employee by the Company during his employment, together with full reimbursement
of reasonable and necessary directly-related expenses.

         15. Third-Party Obligations. Employee acknowledges that the Company
from time to time may have agreements with other person or entities or with
government or other agencies that impose obligations or restrictions on the
Company regarding Inventions, Confidential Information or Work Product created
by Employee or the Company during the course of work thereunder, or regarding
the confidential nature of the work or confidential information of the third
party disclosed during or used as part of such work. Employee agrees to be bound
by all such obligations and restrictions and to take all action necessary to
discharge the obligations of the Company thereunder.

         16. Notices. Any notices to be given hereunder by either Party to the
other may be effected in writing either by personal delivery, via telefacsimile
or by mail, registered or certified, postage prepaid with return receipt
requested to the addresses set forth above, provided however, each Party may
change the address by written notice in accordance with this Section 16. Notices
delivered personally or by telecopier (with answerback received) shall be deemed
communicated as of actual receipt mailed notices shall be deemed communicated as
of three days after mailing.

         17. Noncompetition. Employee agrees that during the term of this
Agreement and for a period of one (1) year after the last payment from the
Company to Employee has been delivered, Employee will not, without the prior
written consent of the Company (which consent may be withheld for any reason),
provide services, within the United States and in locations where Company
customers are located, substantially similar to the services to be provided by
Employee under this Agreement to any person or entity engaged in a business
which is substantially similar to the Company's Business, or which can
reasonably be expected to compete with the Company's Business. Notwithstanding
anything herein which may be construed to the contrary, Employee shall be free
to use and employ Employee's general skills, know-how and expertise, and to use,
disclose and employ any generalized ideas, concepts, know-how, methods,
techniques or skills gained or learned during the course of providing the
services hereunder, so long as Employee acquires and applies this information
without disclosure of any Confidential Information of the Company and without
violating the terms of this Section 17. The term of this noncompetition covenant
shall be tolled during any period of actual competition by the Employee and/or
any period of litigation required to enforce the Employee's obligations under
this Agreement. The Company acknowledges

                                      E-60
<PAGE>

that the Employee is a part-time employee of United Therapeutics Corporation and
Northern Therapeutics Corporation, and the Company agrees that Employee's work
for such companies, as of the Effective Date, does not fall within the scope of
services that competes with the Company's Business; provided however, in the
event the scope of the services provided by Employee to such companies or the
scope of the Company's Business change such that the services provided by
Employee to such companies or other third parties compete with the Company's
Business, the provision of this Paragraph with respect to noncompetition will
apply and may be enforced by the Company.

         18. Warranty by Employee. Employee represents and warrants that his
performance of all terms under this Agreement does not result in a breach of any
duty owed by Employee to another, under contract or otherwise, or violate any
confidence of another. Employee agrees not to disclose to the Company or induce
the Company to use any confidential or proprietary information belonging to any
of the Employee's previous employers or others. Employee warrants that Employee
has executed no prior noncompetition, nondisclosure or confidentiality
agreements that would in any way interfere with his work for or employment by
the Company. Employee agrees to notify the Company in writing before Employee
makes any disclosure to or performs any work on behalf of the Company which
appears to threaten or conflict with any proprietary right Employee claims in
any Work Product and in the event of Employee's failure to give such notice,
Employee shall make no claim against the Company with respect to any such Work
Product.

         19. Exit Interview. Employee agrees that upon termination of Employee's
employment for any reason, Employee shall participate in an exit interview with
Company personnel. At or prior to the time of this interview Employee shall
deliver to the Company all notes, data, reference materials, sketches, drawings,
memoranda, correspondence, manuals, letters, notebooks, reports, programs,
proposals, or any other documents, whether in written, electronic or other
media, concerning the Company's Business or incorporating or reflecting any of
the Confidential Information or Work Product. Employee agrees that, upon
request, Employee will execute a sworn statement that Employee has complied with
the terms of this Section, and that should Employee fail to execute such a
statement the Company may withhold any and all amounts due to Employee for any
reason, except minimum compensation required by law.

         20. Extraordinary Relief. Nothing in this Agreement shall be construed
as prohibiting the Company from pursuing all remedies available to the Company
for breach of this Agreement. Employee recognizes and agrees that because of the
unique nature of the Confidential Information and the competitive position of
the Company his breach of this Agreement will irreparably injure the Company,
for which the Company could not adequately be compensated by remedies at law.
Should Employee at any time reveal or use for the benefit of other than the
Company or threaten to so reveal or use any Confidential Information in
violation of Section 9, or during any restricted period violate or threaten to
violate any of the restrictions in Section 17, the Company shall be entitled to
an injunction restraining Employee from doing or continuing to do or performing
any such acts, and Employee hereby consents to the issuance of such injunction
against Employee. Employee further agrees to waive any bond requirement that may
arise if the Company is forced to seek injunctive relief to enforce the terms of
this Agreement.

                                      E-61
<PAGE>

         21. Accounting for Profits; Indemnification. Employee covenants and
agrees that if Employee shall violate any of Employee's covenants or agreements
under this Agreement, the Company shall be entitled to an accounting and
repayment of all profits, compensation, royalties, commissions, remunerations or
benefits which Employee directly or indirectly shall have realized or may
realize relating to, growing out of or in connection with any such violation;
such remedy shall be in addition to and not in limitation of any injunctive
relief or other rights or remedies to which the Company is or may be entitled at
law or in equity or otherwise under this Agreement. Employee hereby agrees to
defend, indemnify and hold harmless the Company against and in respect of: (i)
any and all losses and damages resulting from, relating or incident to, or
arising out of any misrepresentation or breach by Employee of any warranty,
covenant or agreement made or contained in this Agreement; and (ii) any and all
actions, suits, proceedings, claims, demands, judgments, payments, costs and
expenses (including reasonable attorneys' fees) incident to the foregoing.

         22. Successor Employers. Employee hereby authorizes the Company to
provide a copy of this Agreement, including any Exhibits, to any and all future
employers, and to notify any and all future employers that the Company intends
to exercise its legal rights arising out of or in conjunction with the Agreement
and/or any breach or any inducement of breach of it.

         23. Reasonableness and Enforceability. EMPLOYEE HAS READ AND CAREFULLY
CONSIDERED THE TERMS OF THIS AGREEMENT, HAS HAD THE OPPORTUNITY TO CONTACT
EMPLOYEE'S OWN LEGAL COUNSEL TO ADVISE EMPLOYEE REGARDING THE TERMS OF THIS
AGREEMENT, AND EMPLOYEE NOW AGREES THAT THE TERMS OF THIS AGREEMENT ARE FAIR AND
REASONABLE AND ARE REASONABLY REQUIRED FOR THE PROTECTION OF THE INTEREST OF THE
COMPANY AND ITS MEMBERS. EMPLOYEE FURTHER AGREES THAT THE RESTRICTIONS AND
COVENANTS OF THIS AGREEMENT WILL NOT IMPAIR THE ABILITY OF EMPLOYEE TO SECURE
EMPLOYMENT SO AS TO BE ABLE TO MAKE A REASONABLE LIVING. The provisions of this
Agreement shall be enforceable notwithstanding the existence of any claim or
cause of action of Employee against the Company whether predicated on this
Agreement or otherwise. Failure of the Company to enforce
at any time or for any period of time any of the conditions or covenants of this
Agreement shall not be construed as a waiver of such provisions or of the right
of the Company to enforce subsequent breaches of the same or other conditions
and covenants, unless such permanent waiver is provided to Employee in writing
and signed by the President of the Company or, if Employee is the President of
the Company, such writing is to be signed by the Secretary of the Company.

         24. Reformation/Severability of Agreement. If any provision of this
Agreement shall for any reason be adjudged by any court of competent
jurisdiction or arbiter to be illegal, invalid or otherwise unenforceable, such
judgment shall not affect, impair or invalidate the remainder of this Agreement
but shall be confined in its operation to the provision of this Agreement
directly involved in the controversy in which such judgment shall have been
rendered. The invalid or unenforceable provision shall be reformed so that each
party shall have the obligation to perform reasonably alternatively to give the
other party the benefit of its bargain. In the event the invalid or
unenforceable provision cannot be reformed, the other provisions or applications
of this Agreement shall be given full effect, and the invalid or unenforceable
provision shall be deemed struck.

                                      E-62
<PAGE>

         25. Construction of Terms. Any reference herein to the masculine shall
include the feminine or neuter, and any reference herein to the singular or
plural may be construed as plural or singular wherever the context requires.

         26. Successor and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company, its successors and assigns, including without
limitation any entity which may acquire all or substantially all of the
Company's assets and business or into which the Company may be consolidated or
merged, and the Employee, his heirs, executors, administrators and legal
representatives. Employee may not assign any of his obligations under this
Agreement.

         27. Governing Law and Venue. This Agreement shall be governed by and
construed in accordance with the laws of North Carolina applicable to contracts
between residents of North Carolina which are wholly executed and performed in
North Carolina. Any lawsuit brought under the terms of this Agreement shall have
exclusive venue in the state and federal courts of Orange County, North
Carolina; provided, however, that with respect to any proceeding for injunctive
relief the Company may, at its option, bring the proceeding before a court where
Employee resides at the time of such proceeding.

         28. Merger. This Agreement constitutes the entire Agreement between the
parties with respect to the subject matter hereof; and supersedes and replaces
any oral or written communications and any undertakings otherwise made between
the parties relating to the subject matter. Except as specified in Section 24,
no changes, modifications, or amendments of any terms and conditions of this
Agreement are valid or binding unless agreed to in a writing signed by Employee
and the President of the Company or, if Employee is the President or the
Secretary of the Company.

         This Agreement is effective as of the date first above written and is
executed in duplicate originals.

                         [Signatures on following page]

                                      E-63
<PAGE>

MOLICHEM MEDICINES, INC.                    MOLICHEM R&D, INC.

By: ______________________________          By:_______________________________
         President                                   President

                                            EMPLOYEE:

                                            ----------------------------------
                                            Dr. Gilles Cloutier

                                      E-64

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