Document:

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                                                                   EXHIBIT 10.30

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

                        ARRAY LIBRARY SCREENING AGREEMENT

         This LIBRARY SCREENING AGREEMENT (the "Agreement"), effective as of
August 1st, 2000 (the "Effective Date"), is made by and between Array BioPharma
Inc., a Delaware corporation having its principal offices located at 1885 33rd
Street, Boulder, CO 80301 ("Array"), and E. I. du Pont de Nemours and Company, a
Delaware corporation having its principal offices located at 1007 Market Street,
Wilmington, DE 19898 ("DuPont").

                                   BACKGROUND

    A.   Array has developed novel proprietary methods for the generation of
         compound libraries.

    B.   Pursuant to that certain Confidentiality Agreement dated February 1st,
         2000 (the "Confidentiality Agreement," attached hereto as Exhibit D),
         Array has disclosed to DuPont the structures of certain compounds.

    C.   DuPont desires to obtain certain of such compound libraries for
         screening to identify candidate compounds for further evaluation and at
         DuPont's option to further optimize such compounds, all on the terms
         and conditions set forth below.

         NOW, THEREFORE, for and in consideration of the covenants, conditions,
and undertakings hereinafter set forth, it is agreed by and between the parties
as follows:

         1 DEFINITIONS

                  1.1 "Activation Fee" shall have the meaning as set forth in
Section 3.3 below.

                  1.2 "Activation Period" shall mean the period commencing upon
delivery of the Compound to DuPont and ending on the date three (3) years
thereafter.

                  1.3 "Active Compound" shall mean a Compound designated and
activated pursuant to Section 3.2 and for which the Activation Fee has been paid
in accordance with Section 3.3 below. It is understood that each designation of
Active Compound shall include all non-covalent derivatives of such chemically
distinct compound, including but not limited to acid addition salts and cationic
salts, and shall include all diastereomeric and enantiomeric forms thereof.

                  1.4 "Active Derivative" shall have the meaning as set forth in
Section 3.4. It is understood that each designation of Active Derivative shall
include all non-covalent derivatives of such chemically distinct compound,
including but not limited to acid addition salts and cationic salts, and shall
include all diastereomeric and enantiomeric forms thereof.

                  1.5 "Analog" shall mean that:

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

<PAGE>   2

                           [ * ]

         It is further understood that the term Analog shall be deemed to
include all non-covalent derivatives of such compound, including but not limited
to acid addition salts and cationic salts, and shall include all diastereomeric
and enantiomeric forms thereof.

         Moreover, for purposes of this Agreement, it is understood and agreed
that any compound subject to the confidentiality provisions of this Agreement or
the Confidentiality Agreement shall not be deemed an Analog.

                  1.6 "Compound" shall mean each chemically distinct compound
which is contained in the Library provided to DuPont by Array under this
Agreement.

                  1.7 "Core Chemistry" shall mean the core chemical structures
of the Compounds within the First Year Library, the Second Year Library or the
Third Year Library.

                  1.8 "Derivative" shall mean any compound which is chemically
related to a Core Chemistry but shall exclude specific compounds disclosed by
Array to DuPont pursuant to the Confidentiality Agreement or the provisions of
Section 4.1 of this Agreement.

                  1.9 "DuPont Field" shall mean [ * ].

                  1.10 "Library" shall have the meaning as set forth in
Sections 2.1, 2.2, and 2.3 below.

                  1.11 "Licensed Technology" shall mean Array Patent Rights and
confidential Compound Information. Notwithstanding the foregoing, it is
understood that Licensed Technology shall not include any patent or other rights
to high-speed synthesis technology, methods or compound libraries (except
Libraries).

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

<PAGE>   3

                           (a) "Array Patent Rights" shall mean (i) all patents
and patent applications that claim a Compound, or method of use or process for
the synthesis thereof or composition-of-matter containing such Compound, for
which the earliest effective filing date is prior to the end of the Activation
Period for the Compound, and (ii) any divisions, continuations,
continuations-in-part, reissues, reexaminations, or extensions to the extent the
same have an earliest effective filing date prior to the date described in (i)
above, and any substitutions, confirmations, or registrations of any of the
foregoing, in each case, which is owned by Array (solely or jointly), to the
extent Array has the right to license or sublicense the same.

                           (b) "Compound Information" shall have the meaning as
set forth in Section 2.5 below.

                  1.12 "Re-Supply Compound" shall have the meaning as set forth
in Section 2.4 below.

                  1.13 "Scaffold" shall mean a group of Compounds with a [ * ]
of the following functionality: [ * ].

         2 LIBRARY

                  2.1 The First Year Library. Subject to the terms and
conditions of this Agreement, in the calendar year [ * ],  Array shall deliver
to DuPont the combinatorial compound library described in this Section 2.1 (the
"First Year Library") on a non-exclusive basis. The First Year Library shall
consist of a minimum of [ * ] Compounds, selected on a plate by plate basis by
DuPont from up to [ * ] Core Chemistries, as set forth in Exhibit A. The First
Year Library shall contain a minimum of [ * ] micromoles of each Compound and
shall conform to the specifications and meet the quality control criteria set
forth in Exhibit B. The Compounds will be supplied to DuPont at approximately
[ * ] Compounds per month from [ * ].

                  2.2 The Second Year Library. Subject to the terms and
conditions of this Agreement, in the calendar year [ * ],  Array shall deliver
to DuPont the combinatorial compound library described in this Section 2.2 (the
"Second Year Library") on a non-exclusive basis. The Second Year Library shall
consist of a minimum of [ * ] Compounds, selected on a plate by plate basis by
DuPont from up to [ * ] Core Chemistries, from those described in Exhibit A and
Exhibit C. The Second Year Library shall contain a minimum of [ * ] micromoles
of each Compound and shall conform to the specifications and meet the quality
control criteria set forth in Exhibit B. The Compounds will be supplied to
DuPont at approximately [ * ] Compounds per month from [ * ]

                  2.3 The Third Year Library Option. The Third Year Library is
an option that can be cancelled by either party with [ * ] days written notice
prior to [ * ].  Assuming the parties agree to proceed with this option, subject
to the terms and conditions of this Agreement, in the calendar year [ * ],
Array shall deliver to DuPont the combinatorial compound library described in
this Section 2.3 (the "Third Year Library") on a non-exclusive basis. The

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

<PAGE>   4

Third Year Library shall consist of a minimum of [ * ] Compounds, selected on a
plate by plate basis by DuPont from up to [ * ] Core Chemistries selected from
those described in Exhibit C and from additional Core Chemistries that will be
shown to DuPont by Array prior to [ * ]. The Third Year Library shall contain a
minimum of [ * ] micromoles of each Compound and shall conform to the
specifications and meet the quality control criteria set forth in Exhibit B. The
Compounds will be supplied to DuPont at approximately [ * ] Compounds per month
from [ * ].

                  2.4 Resupply of Compounds. DuPont shall have the option to
obtain additional quantities of any Compound already delivered hereunder
(collectively, "Re-Supply Compounds"), by written order to Array specifying the
Compound(s) desired, together with a complete description of the chemical
structure. Upon receipt of the request for Re-Supply Compounds, Array will
provide DuPont within [ * ] business days with a quote for the length of time
and the cost to provide such Re-Supply Compounds. Array will base such DuPont
quotations [ * ] of Re-Supply Compounds. Such Re-Supply Compounds shall be
supplied in [ * ] per Re-Supply Compound and shall comply with the applicable
specifications of Exhibit B. Array's obligation to re-supply Compounds shall
continue for a period of [ * ] following the expiration or earlier termination
(other than by Array for breach by DuPont) of this Agreement.

                  2.5 Compound Information. Array shall make available to DuPont
the following information for the Compounds delivered hereunder: (i) structural
data for each Compound; (ii) plate location coordinates and an identification
number for each Compound; and [ * ] In addition, Array shall make available to
DuPont a copy of the quality control data and methods used for Compounds
delivered hereunder.

                  2.6 Delivery. Array shall use good faith efforts to deliver
Compounds in accordance with a schedule mutually agreed upon by the parties.
Compounds shall be delivered F.O.B. Array's facility to DuPont's facility at the
address set forth above (or such other address as DuPont may specify in writing
prior to the shipping date). The carrier shall be paid by DuPont, and shall be
selected by agreement between Array and DuPont, provided that in the event no
such agreement is reached Array shall select the carrier.

                  2.7 Payments on Delivery. Except as set forth in Section 2.4
with respect to Re-Supply Compounds, the price to be paid by DuPont for
Compounds delivered in accordance with this Agreement shall be [ * ] per
Compound. Together with each shipment of Compounds hereunder, Array shall submit
an invoice to DuPont therefor. Each invoice shall state the total invoiced
amount and the number of Compounds included in a particular shipment, plus any
insurance, taxes or other costs incident to the shipment or delivery of
Compounds hereunder initially paid by Array but to be borne by DuPont. All
payments hereunder shall be made in U.S. Dollars, by direct bank transfer to an
account designated in Array's invoice, within thirty (30) days after DuPont's
receipt of the particular shipment meeting all sample and electronic data
formats specified by DuPont pursuant to this Agreement. If DuPont fails to
notify Array within one week that a shipment does not meet the applicable

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

<PAGE>   5

specifications, then the shipment shall be deemed accepted. Any payments
hereunder that are not paid on the date such payments are due under this
Agreement shall bear interest to the extent permitted by applicable law at the
prime rate reported by Norwest Bank, Denver, Colorado, on the date such payment
is due, calculated on the number of days such payment is delinquent.

                  2.8 Taxes. Any sales, use or other taxes or other governmental
charges incident to the transfer of Compounds to DuPont pursuant to this
Agreement shall be the sole responsibility of DuPont.

                  2.9 Title. Without limiting DuPont's rights under Article 3
below, it is understood and agreed that Array retains title to the Compounds
subject to the confidentiality provisions of Section 4.1 that are delivered to
DuPont under this Agreement.

         3 LICENSES; ACTIVE COMPOUNDS; INTELLECTUAL PROPERTY

                  3.1 Licenses.

                           (a) License Grant. Subject to the terms and
conditions of this Agreement, Array hereby grants to DuPont the following
licenses under the applicable Licensed Technology: (i) a non-exclusive right and
license to make, have made and use the Compounds and Compound Information for
its own internal research and development purposes including the right to make
derivatives, and (ii) subject to Section 3.6, an exclusive, fully-paid,
perpetual license to make, have made, use, sell, offer for sale and export and
import Active Compounds and Active Derivatives.

                           (b) Sublicenses. The license granted under Section
3.1(a)(ii) above shall include the right to grant sublicenses, but the license
granted under Section 3.1(a)(i) shall be without the right to grant sublicenses.

                           (c) Reservation. Notwithstanding Section 3.1(a)
above, Array hereby reserves the right, including the right to authorize others,
under the Licensed Technology to make, have made, and use all Compounds for
research and/or other purposes. Notwithstanding the foregoing, once DuPont has
designated a Compound as an Active Compound, Array will not provide such Active
Compound to third parties as part of a compound library or otherwise.

                  3.2 Active Compounds. At any time prior to the expiration of
the Activation Period applicable to a particular Compound, DuPont shall have the
right to designate such compound as an Active Compound, as set forth in this
Section 3.2 below.

                           (a) Designation. To designate a Compound as an Active
Compound, DuPont shall so notify Array in writing, with a description of the
Compound (including a complete description of its chemical structure), and pay
Array the applicable Activation Fee for such Active Compound pursuant to Section
3.3 below. It is understood, however, that any such designation shall be subject
to Sections 3.2(b) and 3.6 below; and to the extent that such designation is
precluded as described in Section 3.6 below, such Compound shall not be an
Active Compound hereunder. Likewise, if [ * ]

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

<PAGE>   6

designation of a Compound as an Active Compound it is understood that the
designation shall include as Active Compounds all non-covalent derivatives of
such chemically distinct compound, including but not limited to acid addition
salts and cationic salts, and shall include as Active Compounds all
diastereomeric and enantiomeric forms thereof. A Compound designated as Active
Compound together with its non-covalent derivatives and its diastereomeric and
enantiomeric forms shall be considered a single designation.

                           (b) Restriction. DuPont agrees that for so long as
such Compounds are subject to the provisions of Section 4.1, it will not, and
will not authorize any third party to, commercialize any Compound for any
purpose unless such Compound has been designated and activated as an Active
Compound hereunder.

                  3.3 Activation Fee. For DuPont to designate up to [ * ]
(together with their non-covalent derivatives and disastereomers and enantiomers
as provided in Section 3.2(a)) based on [ * ] as Active Compounds hereunder and
to initiate DuPont's exclusive rights with respect thereto under Section
3.1(a)(ii) above, DuPont shall pay to Array an activation fee of [ * ] as an
Active Compound. Separate Activation Fees shall be due for [ * ]. Should DuPont
wish to activate more [ * ] based on a single Scaffold, then the parties will
negotiate a suitable fee for activation. [ * ].

                  3.4 [ * ]

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

<PAGE>   7

         [ * ]

                  3.5 Intellectual Property.

                           (a) [ * ].

                                    (i) [ * ]. Matters of inventorship shall be
determined in accordance with U.S. patent law. For so long as a Compound remains
subject to the confidentiality obligations under Section 4.1 of this Agreement,
DuPont will not file, prosecute or maintain patent applications or patents
claiming a Compound (and/or a composition of matter containing a Compound,
and/or a method of use employing a Compound, and/or the Compound's non-covalent
derivatives and disastereomers and enantiomers) unless DuPont first designates
the Compound as an Active Compound under Section 3.2 of this Agreement. It is
understood that DuPont may nevertheless file, prosecute, and/or maintain patent
applications and patents which [ * ]

                                    (ii) For inventions other than those vested
in DuPont pursuant to 3.5(a)(i), all right, title and interest in and to such
inventions arising from or made in the performance of this Agreement are
retained by the party that is the employer of the inventor (i.e., inventions
made solely by Array personnel and all intellectual property rights therein
shall be owned by Array, inventions made solely by DuPont personnel and all
intellectual property rights therein shall be owned by DuPont, and inventions
made jointly by DuPont personnel and Array personnel and all intellectual
property rights therein shall be owned jointly by DuPont and Array). Except as
provided in this Article 3 (including Section 3.2(b)), neither party shall have
an obligation to account to the other, or obtain the consent of the other, with
respect to the exploitation (directly or through licensees of third parties) of
any jointly owned invention or intellectual property right, and each party
hereby waives any right it may have under the laws of any jurisdiction to
require such an accounting or consent.

                           (b) Patent Prosecution For inventions owned by DuPont
pursuant to Section 3.5(a)(i) Array will cooperate with and assist DuPont, at
DuPont's expense, in filing for and obtaining such patents or such other
protection of DuPont's intellectual property rights in the Active Compounds,
Active Derivatives and Analogs as is reasonably necessary or appropriate. For
inventions co-owned according to 3.5(a)(ii) the parties will discuss at the
request of either party any steps desirable and/or necessary to secure patent
protection and their respective responsibilities.

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

<PAGE>   8

                           (c) Infringement. In the event a third party is
infringing any Array Patent Right by reason of the manufacture, sale, use or
importation of an Active Compound, provided that such infringement is
substantial and continuing, DuPont shall have the right to bring a lawsuit or
other appropriate legal proceeding to enforce such Array Patent Rights with
respect to such infringement. Otherwise, the parties agree that Array shall have
and retain the exclusive right to enforce the Array Patent Rights (itself or
through third parties). Array agrees to cooperate with DuPont with respect to
the enforcement of the Array Patent Rights pursuant to this Section 3.5(c),
including upon request of DuPont by joining as a nominal party at DuPont's
expense, where so joining is required for the Initiating Party to bring such
suit. Any action brought in accordance with this Section 3.5(c) shall be at the
expense of the Initiating Party, and as between the parties hereto, any
recoveries shall be retained by the Initiating Party.

                           (d) [ * ]

                  3.6 Third Party Rights. It is understood that Array is in the
business of providing combinatorial compound libraries to third parties, and
except as expressly provided herein, nothing herein shall prevent or restrict
Array from providing Compounds (together with their non-covalent derivatives and
disastereomers and enantiomers) and/or Derivatives to third parties, or from
using the Compounds (together with their non-covalent derivatives and
disastereomers and enantiomers) and/or Derivatives for any purposes. It is
further understood that Array may grant to third parties rights to acquire
licenses in the Compounds (together with their non-covalent derivatives and
disastereomers and enantiomers) similar to those granted to DuPont hereunder;
accordingly, DuPont's right to designate any particular Compound as an Active
Compound and/or any particular Derivative as an Active Derivative, and Array's
grant of rights to DuPont under this Article 3, are limited to the extent that
Array has prior to designation of an Active Compound or Active Derivative
granted a third party a license or other right with respect to such a Compound
(together with its non-covalent derivatives and disastereomers and enantiomers)
or Derivative. It is understood and agreed that so long as Array complies with
this Article 3, Array shall have no liability with respect to any conflict of
DuPont's rights and those rights granted to third parties by Array.

                  3.7 No Liability. It is understood and agreed that, even if
Array complies with its obligations under this Agreement, compounds provided to
Third Parties in the course of Array's other business activities may result in
Third Party patent applications and patents, including patent applications and
patents owned by such Third Parties, or jointly owned by Array and such Third
Parties, which could conflict with patent applications and patents owned by
DuPont, or jointly owned by Array and DuPont hereunder. Array shall use its
reasonable efforts to avoid such conflict; provided, however, that unless DuPont
is damaged as a proximate result of a material breach by Array of Section
3.1(c), that Array shall have no liability under this Agreement with respect to
any such conflict.

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
<PAGE>   9

         4 CONFIDENTIALITY

                  4.1 Confidential Information. Except as expressly provided
herein, the receiving party (hereinafter, the "Receiving Party") shall not
disclose to any third party or use for any purpose any Confidential Information
furnished to it by the other party (hereinafter the "Disclosing Party") pursuant
to this Agreement for a period ending [ * ] after the term of this Agreement
provided in Section 7.1. For purposes of this Article 4, "Confidential
Information" shall mean any information disclosed by the Disclosing Party to the
Receiving Party which if disclosed in tangible form is marked "confidential" or
with other similar designation to indicate its confidential or proprietary
nature or if disclosed orally is indicated orally to be confidential or
proprietary by the Disclosing Party at the time of such disclosure and is
confirmed in writing as confidential or proprietary by the Disclosing Party
within [ * ] days after such disclosure; provided, however, the Compounds
(together with their non-covalent derivatives and disastereomers and
enantiomers) and Compound Information provided hereunder shall be deemed
Confidential Information of Array whether or not so marked. Notwithstanding the
foregoing, Confidential Information shall not include any information that, in
each case as demonstrated by written documentation (i) was already known to the
Receiving Party, other than under an obligation of confidentiality to the
Disclosing Party, at the time of disclosure; (ii) was generally available to the
public or otherwise part of the public domain at the time of its disclosure to
the Receiving Party; (iii) 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 the Receiving Party in breach of this Agreement; (iv) was
subsequently lawfully disclosed to the Receiving Party by a third party who did
not acquire it directly or indirectly from the Disclosing Party; or (v) was
developed by the Receiving Party without use of or reference to any Confidential
Information of the Disclosing Party.

                  4.2 Disclosure to Array. Notwithstanding Section 4.1 above, if
DuPont desires to disclose to Array Confidential Information related to (i) the
activity of a compound in biological or other screens or targets, (ii) the
targets against which a compound is or will be screened, (iii) a request for
re-supply of a Compound, (iv) DuPont's election to activate a Compound or (v)
other development or screening efforts with respect to a compound, DuPont agrees
to first provide Array with a non-confidential summary of such information, and
shall not disclose such Confidential Information to Array, if Array notifies
DuPont that Array does not desire to receive such Confidential Information.

                  4.3 Permitted Use and Disclosures. The Receiving Party may use
and disclose the Confidential Information of the Disclosing Party to the extent
necessary to exercise its rights or perform its obligations under this
Agreement. Examples of permitted uses and disclosures include DuPont's rights to
file and prosecute patent applications and patents (including without limitation
DuPont's rights to disclose methods of synthesis of Active Compounds covered
under Licensed Technology), a Receiving Party's rights to prosecute or defend
litigation, a Receiving Party's obligation to comply with applicable
governmental regulations or court order or to otherwise submit information to
tax or other governmental authorities, or a Receiving Party's right to
sublicense or otherwise exercise license rights expressly granted by the other
party to it pursuant to the terms of this Agreement. However, except for any
DuPont disclosure to any government agency for the purpose of obtaining approval
to test or market a product or for the

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

<PAGE>   10

purpose of obtaining patent protection, if the Receiving Party is required
(e.g., by court order) to make any disclosure of the Disclosing Party's
Confidential Information without a confidentiality agreement in place it shall
give reasonable advance notice to the Disclosing Party of such disclosure to
enable the Disclosing Party to seek confidential treatment of such Confidential
Information, whether by protective order or otherwise. Moreover for the
avoidance of doubt and in recognition of DuPont's various research interests,
DuPont may disclose (a) any compound other than a compound (together with its
non-covalent derivatives and disastereomers and enantiomers) specifically
disclosed by Array to DuPont pursuant to either the Confidentiality Agreement or
the provisions of Section 4.1. In addition the Receiving Party may disclose
Confidential Information of the Disclosing Party to an Affiliate of the
Receiving Party which agrees to protect the Disclosing Party's Confidential
Information as provided by the Confidentiality Agreement or by this Agreement as
the case may be. For purposes of this Agreement "Affiliate" shall mean companies
under control of, controlled by or under common control with either of the
Parties and "control" shall mean ownership of at least 50% of the stock or other
interest of such company.

                  4.4 Nondisclosure of Terms. Each of the parties hereto agrees
not to disclose to any third party other than an Affiliate the terms of this
Agreement without the prior written consent of the other party hereto, except to
such party's attorneys, advisors, investors and others on a need to know basis
under circumstances that reasonably ensure the confidentiality thereof, or to
the extent required by law. Notwithstanding the foregoing, the parties shall
agree upon a press release to announce the execution of this Agreement

         5 REPRESENTATIONS AND WARRANTIES

                  5.1 DuPont. DuPont represents and warrants that it has the
legal power, authority and right to enter into this Agreement, and to perform
all its obligations hereunder.

                  5.2 Array. Array represents and warrants that: (i) it has the
legal power, authority and right to enter into this Agreement, and to perform
all its obligations hereunder; (ii) it has the legal right and power to extend
the rights granted in this Agreement; (iii) it has not previously granted, and
during the term of this Agreement will not knowingly make any commitment or
grant any rights which are inconsistent in any material manner with the rights
and licenses granted to DuPont herein; (iv) to the best of its knowledge, as of
the Effective Date, there are no existing or threatened actions, suits or claims
pending against it with respect to the Licensed Technology; and (v) as of the
Effective Date, the Licensed Technology does not include intellectual property
licensed from third parties that would require DuPont to pay to such third
parties a royalty or other amounts to make, have made, use or import Active
Compounds.

                  5.3 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN
THIS ARTICLE 5, NEITHER ARRAY NOR DUPONT MAKES ANY REPRESENTATION OR WARRANTIES
OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO COMPOUNDS
OR PRODUCTS BASED THEREON, OR INFORMATION DISCLOSED HEREUNDER, INCLUDING, BUT
NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, VALIDITY OF ANY LICENSED TECHNOLOGY, PATENTED OR

<PAGE>   11

UNPATENTED, OR NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES.

         6 INDEMNIFICATION

                  6.1 DuPont. DuPont agrees to indemnify, defend and hold Array,
and its directors, officers, employees and agents harmless from and against any
losses, costs, claims, damages, liabilities or expense (including reasonable
attorneys" and professional fees and court and other expenses of litigation)
(collectively, "Liabilities") arising out of or in connection with third party
claims relating to (i) any Compounds (together with their non-covalent
derivatives and disastereomers and enantiomers) or product based thereon
developed, manufactured, used, sold or otherwise distributed by or under
authority of DuPont or its designees (including, without limitation, product
liability claims), or (ii) any breach by DuPont of the representations and
warranties made in this Agreement, except in each case, to the extent such
Liabilities resulted from the gross negligence or intentional misconduct of
Array.

                  6.2 Array. Array agrees to indemnify, defend and hold DuPont,
and its directors, officers, employees and agents harmless from and against any
losses, costs, claims, damages, liabilities or expense (including reasonable
attorneys' and professional fees and court and other expenses of litigation)
(collectively, "Liabilities") arising out of or in connection with third party
claims relating to any breach by Array of the representations and warranties
made in this Agreement, except in each case, to the extent such Liabilities
resulted from the gross negligence or intentional misconduct of DuPont.

                  6.3 Procedure. A party that intends to claim indemnification
(the "Indemnitee") under this Article 6 shall promptly notify the indemnifying
party (the "Indemnitor") in writing of any third party claim, suit or proceeding
included within the indemnification described in this Article 6 above (each a
"Claim") with respect to which the Indemnitee intends to claim such
indemnification, and the Indemnitor shall have sole control of the defense
and/or settlement thereof; provided that the Indemnitee shall have the right to
participate, at its own expense, with counsel of its own choosing in the defense
and/or settlement of such Claim. The indemnification under this Article 6 shall
not apply to amounts paid in settlement of any Claim if such settlement is
effected without the consent of the Indemnitor, which consent shall not be
unreasonably withheld or delayed. The Indemnitee under this Article 6, and its
employees, at the Indemnitor's request and expense, shall provide full
information and reasonable assistance to Indemnitor and its legal
representatives with respect to such Claims.

         7 TERM AND TERMINATION

                  7.1 Term. This Agreement shall become effective on the
Effective Date and shall remain in full force and effect until expiration of the
Activation Period for the last Compound delivered hereunder, unless earlier
terminated in accordance with this Article 7 below, or December 31, 2005,
whichever is earlier.

                  7.2 Termination.

<PAGE>   12

                           (a) For Cause. Either party to this Agreement shall
have the right to terminate this Agreement in the event the other party
materially breaches or defaults in the performance of any of its material
obligations hereunder, and such default continues for sixty (60) days after
written notice thereof is provided to the breaching party by the non-breaching
party. Any such termination shall become effective at the end of such sixty (60)
day period unless the breaching party (or any other party on its behalf) has
cured any such breach or default prior to the expiration of the sixty (60) day
period.

                           (b) [ * ].

                  7.3 Termination for Insolvency. If voluntary or involuntary
proceedings by or against a party are instituted in bankruptcy under any
insolvency law, or a receiver or custodian is appointed for such party, or
proceedings are instituted by or against such party for corporate reorganization
or the dissolution of such party, which proceedings, if involuntary, shall not
have been dismissed within sixty (60) days after the date of filing, or if such
party makes an assignment for the benefit of creditors, or substantially all of
the assets of such party are seized or attached and not released within sixty
(60) days thereafter, the other party may immediately terminate this Agreement
effective upon notice of such termination.

                  7.4 Effects. It is understood that termination of this
Agreement shall not relieve a party from any right or obligation which, at the
time of such termination, has already accrued to the other party. The provisions
of Articles 1, 4, , 6 and 8 and Sections 3.1, 3.5, 3.6, 3.7 and 7.4 shall
survive the expiration or termination of this Agreement for any reason. In
addition, the provisions of Sections 2.5, 2.6, 3.2, 3.3, and 3.4 shall survive
the expiration or termination of this Agreement for breach by Array but not
breach by DuPont. The provisions of Sections 3.2, 3.3, and 3.4 also shall
survive termination of this Agreement under Section 7.2(b). All other rights and
obligations of the parties shall cease upon expiration or termination of this
Agreement. For purposes of the foregoing, if a Section that so survives is
expressly stated to continue for a period of time specified in such surviving
Section, the same shall survive only for the remainder of the period specified
in such Section. Except as otherwise expressly provided in this Article 7, all
other rights and obligations of the parties shall terminate.

         8 MISCELLANEOUS

                  8.1 Governing Laws. This Agreement and any dispute arising
from the construction, performance or breach hereof shall be governed by and
construed and enforced in accordance with the laws of the state of Colorado,
without reference to conflicts of laws principles.

                  8.2 No Implied Licenses. Nothing herein shall be construed as
granting either party, by implication, estoppel or otherwise, any license or
other right to any intellectual property, except for the licenses expressly
granted herein.

                  8.3 Waiver. Any waiver of the terms and conditions hereof must
be explicitly in writing. The waiver by either party of any breach of any
provision hereof by the other party shall

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

<PAGE>   13

not be construed to be a waiver of any succeeding breach of such provision or a
waiver of the provision itself.

                  8.4 Assignment. The parties agree that their rights and
obligations under this Agreement may not be assigned or otherwise transferred to
a third party without the prior written consent of the other party hereto except
as follows: either party may transfer or assign its rights and obligations under
this Agreement to a successor to all or substantially all of its business or
assets relating to this Agreement whether by sale, merger, operation of law or
otherwise; provided that such assignee or transferee has agreed in writing to be
bound by the terms and conditions of this Agreement. Any attempted transfer or
assignment in violation of this Section 8.4 shall be void. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
parties hereto, their successors and assigns.

                  8.5 Independent Contractors. The relationship of the parties
hereto is that of independent contractors. The parties hereto shall not be
deemed to be agents, partners or joint ventures for any purpose as a result of
this Agreement or the transactions contemplated thereby.

                  8.6 Compliance with Laws. In exercising their rights under
this Agreement, each party shall fully comply in all material respects with the
requirements of any and all applicable laws, regulations, rules and orders of
any governmental body having jurisdiction over the exercise of rights hereunder
including, without limitation, those applicable to the discovery, development,
manufacture, distribution, import and export and sale of products pursuant to
this Agreement.

                  8.7 Notices. Any notice required or permitted to be given or
made under this Agreement by either party shall be in writing and delivered to
the other party at its address indicated below (or to such other address as a
party may specify by notice hereunder by courier or by registered or certified
airmail, postage prepaid, or by facsimile; provided, however, that all facsimile
notices shall be promptly confirmed, in writing, by registered or certified
airmail, postage prepaid. All notices shall be effective as of the date received
by the addressee.

         if to Array, to:                   Array BioPharma Inc.
                                            1885 33rd Street
                                            Boulder, Colorado 80301
                                            Attn: David L. Snitman
                                            Fax number: (303) 449-5376

         if to DuPont, to:                  [ * ]

                  8.8 Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement

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

<PAGE>   14

shall continue in full force and effect without said provision, and the parties
shall amend the Agreement to the extent feasible to lawfully include the
substance of the excluded provision to as fully as possible realize the intent
of the parties and their commercial bargain, unless the invalid provision(s) are
of such essential importance to this Agreement that it is to be reasonably
assumed that the parties would not have entered into this Agreement without the
invalid provision(s).

                  8.9 Force Majeure. Nonperformance of either party (except for
payment obligations) shall be excused to the extent that performance is rendered
impossible by acts of God, strike, fire, earthquake, flood, governmental acts or
orders or restrictions, failure of suppliers, or any other reason where failure
to perform is beyond the reasonable control and not caused by the negligence,
intentional conduct or misconduct of the non-performing party, provided such
party uses its best efforts to resume performance as promptly as possible.

                  8.10 No Consequential Damages. EXCEPT PURSUANT TO ARTICLE 6,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL,
EXEMPLARY OR INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR
PROFITS RELATING TO THE SAME), ARISING FROM ANY CLAIM RELATING TO THIS
AGREEMENT, WHETHER SUCH CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE)
OR OTHERWISE, EVEN IF AN AUTHORIZED REPRESENTATIVE OF SUCH PARTY IS ADVISED OF
THE POSSIBILITY OR LIKELIHOOD OF SAME. THESE LIMITATIONS SHALL APPLY
NOTWITHSTANDING THE FAILURE OF THE ESSENTIAL PURPOSE OF ANY LIMITED REMEDY, AND
THE PARTIES ACKNOWLEDGE THAT THIS SECTION 8.10 REPRESENTS A REASONABLE
ALLOCATION OF RISK.

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

                  8.12 Headings. Headings included herein are for convenience
only, do not form a part of this Agreement and shall not be used in any way to
construe or interpret this Agreement.

                  8.13 Entire Agreement. The terms and provisions contained in
the Agreement, including the Exhibits hereto, constitute the entire agreement
between the parties and shall supersede all previous communications,
representations, agreements or understandings, either oral or written, between
the parties with respect to the subject matter hereof. No agreement or
understanding varying or extending this Agreement shall be binding upon either
party hereto, unless set forth in a writing which specifically refers to the
Agreement signed by duly authorized officers or representatives of the
respective parties, and the provisions hereof not specifically amended thereby
shall remain in full force and effect. Notwithstanding the foregoing, it is
understood and agreed that the provisions of the Confidentiality Agreement shall
remain in full force and effect; except that, for that any chemical compound
disclosed by Array to DuPont pursuant to the Confidentiality Agreement that
DuPont selects to be delivered by Array as a

<PAGE>   15

Compound under this Agreement, the provisions of this Agreement shall apply. ANY
ADDITIONAL OR INCONSISTENT TERMS OR CONDITIONS OF ANY PURCHASE ORDER,
ACKNOWLEDGMENT OR SIMILAR STANDARDIZED FORM GIVEN OR RECEIVED PURSUANT TO THIS
AGREEMENT SHALL HAVE NO EFFECT AND SUCH TERMS AND CONDITIONS ARE HEREBY
EXCLUDED.

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

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their authorized representatives and delivered in duplicate
originals as of the Effective Date.

ARRAY BIOPHARMA INC.                E. I. DU PONT DE NEMOURS AND COMPANY

By:     /s/ DAVID SNITMANN           By:     [ * ]
    -----------------------              -----------------------

Name:   David Snitmann               Name:         [ * ]
      ---------------------                ---------------------

Title:  COO                          Title:  [ * ]
       --------------------                 --------------------

Date:   7/31/00                      Date:   [ * ]
      ---------------------                ---------------------

[ * ] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.<PAGE>   1
                                                                   EXHIBIT 10.31

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

                           LEAD OPTIMIZATION AGREEMENT

                                     BETWEEN

                           ARRAY BIOPHARMA CORPORATION

                                       AND

                                ICOS CORPORATION

                               DECEMBER 22, 1998

<PAGE>   2

                           LEAD OPTIMIZATION AGREEMENT

                  THIS LEAD OPTIMIZATION AGREEMENT (the "Agreement") is entered
into and made effective as of December 22, 1998 (the "Effective Date"), by and
between ARRAY BIOPHARMA INC, a Delaware corporation having its principal offices
located at 1885 33rd Street, Boulder, CO 80301 ("Array") and ICOS CORPORATION, a
Delaware corporation having its principal offices located at 22021 20th Avenue
S.E., Bothell, Washington 98021 ("ICOS").

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

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

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

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

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

                  NOW, THEREFORE, the Parties agree as follows:

                  1. DEFINITIONS

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

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

                                       2
<PAGE>   3

requirements, any company owned or controlled by or owning or controlling such
Party at the maximum control or ownership right permitted in the country where
such company exists.

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

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

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

                  1.6 "Confidential Information" shall mean:

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

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

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

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

                  1.8 "Derivative" shall [ * ].

                  1.9 "Exclusivity Period" means [ * ].

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

                                       3
<PAGE>   4

                  1.10 "Field" means all indications for any Optimization Target
against which an Optimization Compound or Products may be directed.

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

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

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

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

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

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

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

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

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

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

                                       4
<PAGE>   5

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

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

                  1.22 "Restored Active Target" means an Active Target which has
ceased to be an Active Target either by agreement of the Parties or by operation
of the Optimization Program, and which, by reasonable written notice has been
again designated as an Active Target. For the purposes of this definition
reasonable notice shall be thirty (30) days unless the Party's have agreed to a
shorter period of notice either by written agreement or by parties performance.

                  1.23 "Territory" means the entire world.

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

                  2. OPTIMIZATION PROGRAM

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

                           (a)      During the Optimization Period, Array shall
                                    (i) review data and information regarding
                                    the Active Target and lead compounds
                                    provided by ICOS; (ii) based on such data
                                    and information design Daughter Libraries
                                    and optimize the lead compounds supplied by
                                    ICOS; and (iii) synthesize compounds as
                                    provided in Section 5.3 below.

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

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

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

                                       5
<PAGE>   6

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

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

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

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

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

                  3. TARGETS

                  3.1 Active Target. The initial Active Target shall be as
specified in Appendix B or as specified by reasonable written notice from ICOS
to Array. There shall be only [ * ] designated as the Active Target unless Array
and ICOS have mutually agreed in writing to there being specific additional
Optimization Targets simultaneously designated as Active Targets together with
additional terms and conditions, if any.

                  3.2 Restored Active Target. Any Optimization Target which has
ceased to be an Active Target due to the later designation of another
Optimization Target as an Active Target, may always be restored to the status of
an additional Active Target provided that negotiation has taken place between
the Parties regarding reasonable scheduling and consideration.

                  3.3 Disclosure of Active Target Information. ICOS agrees not
to disclose to Array any Confidential Information relating to an Optimization
Target, or lead compounds

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

                                       6
<PAGE>   7

therefor until such Optimization Target is designated as the Active Target in
accordance with Section 3.1 above.

                  4. EXCLUSIVITY

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

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

                  4.3 Duration of Exclusivity for Optimization Targets.
Notwithstanding any other provision of this Agreement, it is understood and
agreed that once an Optimization Program has been initiated for any Active
target Array's obligations under Section 4.1 shall continue until ICOS has
released Array from the effect of this Section 4.3 by written notice or the end
of the Exclusivity Period, whichever occurs first.

                  5. OPTIMIZATION COMPOUNDS

                  5.1 Intellectual Property Rights: [ * ]. Subject to Section
7.2 and except as set forth in this Section 5.1, ICOS shall have exclusive
rights in all Optimization Patents and the subject matter contained therein and
all intellectual property and know-how (whether or not patentable) embodied in
Optimization Compounds and Products and methods specifically directed to the
manufacture of Optimization Compounds and methods of use of Products, in each
case resulting from the Optimization Program; to the extent possible such
exclusive rights shall be achieved by Array assigning its interest, if any, in
such Patents and intellectual property and know-how to ICOS and where such
assignment is not legally possible ICOS shall receive an exclusive license or
sublicense to the maximum extent of Array's rights. ICOS shall file, maintain
and prosecute all Patents arising out of, or comprising, the rights and
interests granted in this Section 5.1 and Array shall do everything reasonably
necessary to assist ICOS in filing such Patents. Prior to the filing of any such
Patent applications or during the pendency of such applications, Array shall
assign to ICOS or its designee all intellectual property

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

                                       7
<PAGE>   8

rights it may have, to the extent granted in this Section 5.1, in the
Optimization Patents and the subject matter disclosed and claimed therein which
are necessary for the development and commercialization of such Optimization
Compounds by ICOS or its designee. Notwithstanding anything in this Section 5.1
to the contrary, nothing in this Section 5.1, or the operation thereof, shall be
deemed to grant to ICOS any rights in or to any Array Technology.

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

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

                  6. CONSIDERATION

                  6.1 Optimization Program Funding.

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

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

                                       8
<PAGE>   9

                           (b)      Expansion or Contraction of Project Team.
                                    ICOS may request that Array expand or
                                    contract its Project Team during the
                                    Optimization Period in order to match the
                                    work on Active Targets; provided that the
                                    Project Team shall not be less than [ * ]
                                    except by agreement of Array. In such event,
                                    the Parties shall promptly confer as the
                                    appropriate number of FTEs to constitute the
                                    Project Team, as mutually agreed, at cost to
                                    ICOS [ * ], to be paid as specified in
                                    Section 6.1(a).

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

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

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

                  7. LICENSE GRANTS; OUTLICENSE

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

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

                                       9
<PAGE>   10

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

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

                  8. TERM AND TERMINATION OF THE AGREEMENT

                  8.1 Term, Renewals and Extensions. The term of this Agreement
and Optimization Program shall commence upon the Effective Date of this
Agreement, and unless earlier terminated as provided in this Agreement, shall
expire on the second anniversary thereafter provided, however, that the term
shall be automatically extended for a further one (1) year unless either party
provides written notice sixty (60) days or more prior to such second anniversary
canceling such extension. Unless terminated early pursuant to Section 8.2 below,
the Optimization Period may be renewed for additional periods upon mutual
agreement of the Parties; provided that neither Party shall be obligated to
approve any such renewal.

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

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

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

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

                                       10
<PAGE>   11

                  9. CONFIDENTIAL INFORMATION

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

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

                  10. PUBLICATIONS AND PUBLIC STATEMENTS

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

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

                                       11
<PAGE>   12

does not approve such Public Statement, either Party may still use the name of
the other Party in any Public Statement without the prior written approval of
the other Party, if such Party is advised by counsel that such disclosure is
required to comply with applicable law.

                  11. INDEMNIFICATION

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

                  11.2 Procedures. If Array (the "Indemnified Party") seeks
indemnification under this Section 11, it shall inform ICOS (the "Indemnifying
Party") of a claim as soon as reasonably practicable after it receives notice of
the claim, shall permit the Indemnifying Party to assume direction and control
of the defense of the claim (including the right to settle any claim brought
against the Indemnified Party upon prior written consent, which shall not be
unreasonably withheld), and shall give reasonable cooperation (at the expense of
the Indemnifying Party) in the defense of such claim.

                  12. ASSIGNABILITY

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

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

                                       12
<PAGE>   13

                  13. DISPUTE RESOLUTION PROCEDURES

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

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

                  14. NOTICES

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

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

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

         15 SURVIVAL

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

                                       13
<PAGE>   14

          16. ADDITIONAL TERMS

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

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

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

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

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

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

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

          17. REPRESENTATIONS AND WARRANTIES

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

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

                                       14
<PAGE>   15

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

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

ARRAY BIOPHARMA, INC.                        ICOS CORPORATION

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

                                       15
<PAGE>   16

                                   APPENDIX A

                             Milestones and Payments
                                (in U.S. Dollars)

[ * ]

                                       16
<PAGE>   17

                                   APPENDIX B
                              Optimization Targets

[ * ]

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

                                       17

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