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                                                                    Exhibit 10.6

                           EXCLUSIVE LICENSE AGREEMENT

                                     between

                          DISCOVERY THERAPEUTICS, INC.

                                       and

                                SCHWARZ PHARMA AG

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Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *. A complete version of this exhibit has
been filed separately with the Securities and Exchange Commission.
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                                    AGREEMENT

     Effective as of July 16, 1998 (the "Effective Date"), Discovery
Therapeutics, Inc., a Delaware corporation having a principal place of business
at 2028 Dabney Road, Suite E-17, Richmond, VA 23230-3311, U.S.A. ("DTI") and
Schwarz Pharma AG, a corporation having a principal place of business at
Alfred-Nobel-Stra(beta)e 10, 40789 Monheim, Germany ("Schwarz"), agree as
follows:

                                   Witnesseth

     Whereas, DTI owns certain patents, patent applications and know-how
relating to DTI's proprietary dopamine receptor agonist N-0923 and various other
compounds;

     Whereas, DTI has, over the past ten years, successfully advanced N-0923
through substantial preclinical and clinical development including a Phase IIb
clinical trial (TDS-0923-004);

     Whereas, Schwarz desires an exclusive license under such patents, patent
applications, and know-how to make, use and sell Licensed Products in all
countries of the world except Japan for the therapeutic treatment of disease in
humans;

     Whereas, DTI and Schwarz have executed a Letter Agreement dated May 6, 1998
to confirm the mutual understanding, with lump sum payment to DTI by Schwarz in
the amount of * creditable against the License fee, that the parties will
negotiate in good faith to finalize a License Agreement pertaining to worldwide
rights (except in Japan) to Licensed Products.

     Now, therefore, in consideration of the above premises and covenants
contained herein, the parties agree as follows:

1.   DEFINITIONS

     1.1 "Additional Products" means Licensed Products other than the Initial
Product.

     1.2 "Additional Product Development Plan" means the plan for development of
Additional Products described in Section 3.4(b).

     1.3 "Affiliate" means any entity that directly or indirectly Owns, is Owned
by or is under common Ownership with, a party to this Agreement. "Own" or
"Ownership" means direct or indirect possession of at least fifty percent (50%)
of the outstanding voting securities of a corporation or a comparable equity
interest in any other type of entity, or means substantial control of a
corporation.

     1.4 "Compounds" means:

         (a)  *;

         (b)  *;

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          (c)  *; and

          (d)  *.

     1.5  "Development Plan" means the Initial Product Development Plan, as
revised from time to time, pursuant to Section 3.5(a), and the Additional
Product Development Plan, collectively.

     1.6  "DTI Know-How" means all information, trade secrets, data, inventions
and know-how that is (i) owned by or licensed to DTI (with the right to
sublicense) during the term of this Agreement and (ii) necessary or useful to
the manufacture, use or sale of Licensed Products.

     1.7  "DTI Patent(s)" means all patent applications (including divisionals,
continuations and continuations in part) and issued patents (including
inventors' certificates, reissues, reexaminations, extensions or other
governmental actions which extend any of the subject matter of a patent, and any
substitutions, confirmations, registrations or additions of or to any of the
foregoing) owned by or licensed to DTI (with the right to sublicense) during the
term of this Agreement which claim inventions necessary or useful to the
manufacture, use or sale of Licensed Products, including any patent applications
and patents to which DTI acquires rights after the Effective Date, and including
without limitation any patents and patent applications that are jointly owned by
DTI, including but not limited to any future patents related to the transdermal
formulation of Compounds invented and owned jointly by DTI and LTS, and
excluding any patent applications pending before or patents issued by the patent
authorities in Japan. The DTI Patents (ex Japan) in existence as of the
Effective Date are set forth on Exhibit A.

     1.8  "FDA" means the United States Food and Drug Administration or its
equivalent outside the United States.

     1.9  "Field" means therapeutic treatment of disease in humans.

     1.10 "Initial Product" means the first Licensed Product sold by Schwarz,
its Affiliate or its sublicensee in the Territory.

     1.11 "Initial Product Development Plan" means the plan for development of
the Initial Product described in Section 3.4(a).

     1.12 "Licensed Product(s)" means any form or dosage of a Compound,
delivered by any mode of administration, including inter alia, a transdermal
patch formulation produced by LTS.

     1.13 "LTS" means Lohmann Therapie-Systeme headquartered in Andernach,
Germany.

     1.14 "Major Countries" means the United States, the United Kingdom, France,
Germany and Italy.

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     1.15  "Net Sales" means gross amounts invoiced by Schwarz and/or its
Affiliate or sublicensee(s) for sales of Licensed Product(s) produced hereunder
(excluding without limitation Licensed Product(s) used in clinical trials) to a
third party, less the sum of the following items:

           (a)   Sales, excise taxes and custom duties paid or allowed by the
selling party;

           (b)   Refunds, allowances or credit for returns or recalled Licensed
Product;

           (c)   Normal and customary trade, quantity and cash discounts and
allowances actually allowed;

           (d)   Transportation, freight and insurance allowances; and

           (e)   Rebates actually granted to wholesalers, administrative fees in
lieu of rebates paid to managed care and similar institutions, chargebacks and
retroactive price adjustments.

No deductions shall be made for commissions paid to individuals whether they be
with independent sales agencies or regularly employed by Schwarz, and/or its
sublicensee(s) and on its or their payroll or for cost of collections. Licensed
Products shall be considered "sold" when billed out or invoiced. Sale or
transfer to an Affiliate or Sublicensee for re-sale by such Affiliate or
Sublicensee shall not be considered a sale for the purpose of this provision,
but the resale by such Affiliate or Sublicensee to a third party shall be a sale
for such purposes.

     1.16  "Regulatory Approval" means all approvals by the regulatory agency in
the relevant country of the Territory necessary to market and sell a Licensed
Product, including all pricing approvals.

     1.17  "Schwarz Technology" means, to the extent necessary or useful to
make, use or sell a Licensed Product, all patents and patent applications and
information, trade secrets, data, inventions and know-how, owned by or licensed
to Schwarz (with the right to sublicense) during the term of this Agreement.

     1.18  "Territory" means all countries of the world other than Japan.

2.   LICENSE GRANT

     2.1   License to Schwarz. DTI hereby grants and Schwarz hereby accepts an
exclusive license, with the right to sublicense, under the DTI Patent(s) and DTI
Know-How to develop, make, have made, import use, market, offer for sale and
sell Licensed Product(s) in the Field in the Territory. If requested by Schwarz,
DTI shall furnish to Schwarz or to such representative(s) or patent attorney(s)
as Schwarz may designate all papers and documents necessary to permit Schwarz to
register the exclusive license under the DTI Patents with the patent office in
such countries of the Territory as may be required by regulation or otherwise.
Schwarz shall bear all expenses of registering such license.

     2.2   Sublicenses

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           (a)   Subject to Section 5.1(b), Schwarz shall have the right to
grant sublicenses to any party with respect to any rights conferred upon Schwarz
under this Agreement, provided, however, that (i) any such sublicense shall be
subject in all respects to the restrictions, exceptions, royalty and other
payment obligations, reports, and other provisions contained in this Agreement,
and (ii) Schwarz shall notify DTI of the identity of such sublicensee promptly
on execution of the sublicense.

           (b)   Schwarz agrees to forward to DTI a copy of any and all
sublicense agreements promptly upon execution by the parties.

     2.3   License Grant to DTI in Countries Excluded From the Territory.
Subject to the conditions and limitation set forth herein, Schwarz hereby grants
to DTI an exclusive (even as to Schwarz), paid-up license, under the Schwarz
Technology, to develop, make, have made, import, use, offer for sale or sell
Licensed Products in any country that becomes excluded from the Territory during
the term of this Agreement, except as specified section 4.2(b). Schwarz shall
also, to the extent it has the right to do so, sublicense to DTI any third party
licenses to which Schwarz has rights, to the extent that such rights are
necessary or useful to make, use and sell the Licensed Products, and DTI shall
thereafter assume the cost of maintaining such licenses.

     2.4   Disclosure of Know-How. Promptly following the Effective Date, DTI
shall disclose to Schwarz all DTI Know-How. In addition, DTI shall make
available to Schwarz, upon reasonable notice and during normal business hours,
the reasonable assistance of DTI's employees who are knowledgeable about the DTI
Know-How in order to facilitate Schwarz' efforts to develop and commercialize
Licensed Products. DTI shall provide such assistance for a period of 1 year from
the Effective Date, and Schwarz may, at its election, extend its right yearly to
receive such DTI assistance until the last regulatory filing necessary to obtain
marketing approval is made. Schwarz shall reimburse DTI for such assistance at
the rate equivalent to 1 FTE * annually, payable in quarterly installments, but
may terminate its right to receive DTI's assistance at any time. DTI will, at
its own expense, transfer to Schwarz all active INDs (and equivalent regulatory
submissions in other countries) for all Licensed Compounds, together with all
regulatory files and related documentation associated with such submissions. DTI
will make such transfer no later than 3 months after the Effective Date,
provided however, that if transfer is delayed due to actions, lack of action, or
policies of FDA, then the period for transfer shall be extended by the length of
the relevant delay.

     2.5   Covenant Not to Launch Competitive Product. In consideration for the
rights granted and sums paid pursuant to this Agreement, neither party shall,
during the term of this Agreement, conduct, fund, license or participate in,
directly or indirectly through one or more third parties, the development,
distribution or commercialization in any country, of any transdermal patch
containing a dopamine receptor agonist as an active ingredient for use in the
Field other than the Licensed Products.

3.   PRODUCT DEVELOPMENT

     3.1   General.  Schwarz shall be responsible for the development of, and
obtaining Regulatory Approval for, the Licensed Products in the Territory.
Subject to the Development

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Plan described in Sections 3.4 and 3.5, Schwarz shall have the final
decision-making authority with respect to all aspects of the development of the
Licensed Products.

     3.2   Engagement of Third Parties. In the course of performing its
development obligations under this Agreement, Schwarz may engage third parties
to perform certain development activities, provided that (i) DTI is informed of
the use and identity of third parties for the relevant activity, and (ii)
Schwarz obtains contractual undertakings from such third parties (including in
particular with respect to quality assurance, compliance with law, and
confidentiality) which are customary in the pharmaceutical industry for the
relevant activity.

     3.3   Development Committee. Promptly after the Effective Date, the parties
shall form a Development Committee which shall consist of two (2)
representatives of each party with expertise in such disciplines as clinical,
regulatory affairs, manufacturing or marketing, provided that Schwarz shall, in
addition, appoint an additional representative who shall serve as the
chairperson of the Development Committee. All decisions of the Development
Committee shall be made by a majority vote of the five (5) representatives on
the Development Committee. The Development Committee shall meet regularly (but
in no event less than semi-annually) at such times and at such locations as
shall be mutually agreed by the parties. The Development Committee shall
coordinate development activities in accordance with the Development Plan
including, but not limited to, the choice of contract research organization
(CRO), consultants, third party contract manufacturers and assignment of
development activities including the design and execution of studies to expand
labeling claims, develop new formulations and other product changes and
communication with FDA and other third parties. At least 10 business days prior
to each regularly scheduled meeting of the Development Committee, Schwarz shall
provide a written report to the Development Committee concerning its progress
with respect to the Development Plan and shall also provide minutes of each
meeting of the Development Committee, which shall include: (a) progress and
results since the previous meeting; (b) critical issues or problems encountered
or anticipated; and (c) a statement of goals for the scheduled activities.

     3.4   Development Plan.

           (a)   Initial Product. Within 6 months of the Effective Date of this
Agreement, the Development Committee will provide DTI with an Initial Product
Development Plan setting forth Schwarz's anticipated development program for the
Initial Product in the Territory, including target dates for key clinical and
regulatory events in the Major Countries. Such plan shall specify the dates by
which Schwarz shall enroll the first patient in a pivotal Phase III study and
file for regulatory approval in the first Major Country (these two dates are
hereafter referred to as the Critical Target Dates). Such plan shall be
finalized by the Development Committee and approved by DTI not later than 7
months after the Effective Date. Exhibit F contains a reasonable preliminary
plan which has been reviewed by both parties.

           (b)   Additional Products.  In the event Schwarz elects to develop
and commercialize any Additional Products, it shall notify DTI. The Development
Committee shall provide DTI with an Additional Product Development Plan setting
forth the anticipated development program for such Additional Products in the
Territory, including target dates for key clinical and regulatory events in the
Major Countries. Such Additional Product

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Development Plan shall be finalized by the Development Committee and approved by
DTI not later than 6 months after the date of Schwarz's notice to DTI.

     3.5  Diligence.

          (a) Development Efforts. Schwarz shall use commercially reasonable
efforts to carry out development of the Initial Product in accordance with the
Development Plan, and the Additional Products, if any, in accordance with the
Additional Product Development Plan. If Schwarz determines that it will be
unable to accomplish any of the key clinical events identified in the relevant
Development Plan within 6 months of the date specified in such Development Plan,
it shall promptly notify the Development Committee, and it shall develop a
revised Development Plan for the relevant Licensed Product. This revised plan
shall set new Critical Target Dates. As per Section 3.1, Schwarz shall have the
final decision making authority with respect to all aspects of any revised
Development Plan, except that DTI must agree to any change in the Critical
Target Dates, such agreement not to be unreasonably withheld. In the event DTI
does not agree to the Critical Target Dates set forth in the revised plan, then
the most recently approved Critical Target Dates shall apply and Schwarz may, at
its election, proceed under Section 3.5(c).

          (b) Extended Delay. With respect to the most recently approved
Critical Target Dates, if Schwarz does not initiate Phase III trials within 12
months of the date specified in the Development Plan or file for Regulatory
Approval of the Licensed Product in any Major Country within 18 months of the
date specified for such filing in the Development Plan then this shall be
considered a dispute and shall be resolved according to the process set forth in
Section 3.5(c). In the event that Schwarz is held to the Critical Target Dates,
and does not agree to meet these dates, then DTI may terminate Schwarz's rights
under this Agreement with respect to Licensed Products in the Major Country in
question, in which case such Major Country shall be deleted from the Territory.
In such event, Schwarz shall promptly transfer to DTI all INDs or their non-U.S.
equivalent (as applicable) and other relevant regulatory filings as it may hold
with respect to Licensed Products in such country, and any information as
Schwarz may possess which is useful to gain Regulatory Approval for and to
commercialize the Licensed Products in such country. Such transfer shall be
without cost to DTI, provided however, that DTI shall pay any governmental
filing or transfer fees that may be required. Schwarz shall also, to the extent
it has the right to do so, sublicense to DTI any third party licenses to which
Schwarz has rights, to the extent that such rights are necessary or useful to
make, use and sell the Licensed Products, and DTI shall thereafter assume the
cost of maintaining such licenses. As used in this Section, initiation of Phase
III trials shall mean enrollment of the first patient.

          (c) Disputes Regarding Critical Target Dates. If the parties are
unable to reach agreement as to the Critical Target Dates in any Development
Plan, then either party may submit the issue for binding arbitration before an
expert or expert panel in the field of clinical drug development (rather than
before a judge or an attorney) under this Section 3.5(c). Such expert may be
mutually agreed by the parties, but if no such expert is agreed upon within ten
(10) days after the written notice from one party to the other, then each party
shall promptly select one expert, and those two experts shall select a third
expert, which shall comprise the panel. The panel shall meet with the parties
within fifteen (15) days of selection to examine the Development Plan and shall
hear the views and proposals of each party. Within ten (10) days

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thereafter, it shall render its binding decision by majority vote, as to whether
the Development Plan is reasonable under all of the circumstances. The parties
shall share equally in the cost of the expert or expert panel, including any
fees and expenses payable to the experts. If the expert or expert panel
determines that the Development Plan is not reasonable, then Schwarz will be
held to the Critical Target Dates set forth in the most recently approved
Development Plan, subject to any modifications agreed to by DTI.

     3.6 Drug Approval Applications. Schwarz shall be responsible for preparing
and filing for Regulatory Approval of the Licensed Products in the Territory.
Schwarz will file the drug approval applications in its own name and shall be
responsible for prosecuting them. After filing for Regulatory Approval, Schwarz
shall use commercially reasonable efforts to obtain such approval in each
country of the Territory where it has decided to seek Regulatory Approval.
Schwarz shall keep DTI reasonably informed as to the progress of such drug
approval applications and of any issues raised by the relevant regulatory
agencies together with Schwarz' proposed response. Schwarz shall report to DTI
concerning its progress in obtaining Regulatory Approval on a periodic basis,
but not less than every (6) months. In the event any regulatory agency threatens
or initiates any action to remove a Licensed Product from the market in any
country of the Territory, Schwarz shall immediately notify DTI of such
communication. DTI shall use commercially reasonable efforts to cooperate with
Schwarz in Schwarz's performance of its obligations under this Section 3.6
including preparation for and participation with Schwarz when meeting with
regulatory authorities.

     3.7 Replacement of Compounds. If during its development of the Initial
Product Schwarz determines that the Compound which is the active ingredient in
the Initial Product (the "Original Compound") is not suitable for further
development into a therapeutic product for use in humans, for safety, efficacy,
or other reasons, Schwarz may then substitute a different Compound in place of
the Original Compound. In such event, the parties shall discuss appropriate
changes to the Development Plan to accommodate the changes in the regulatory
schedule necessitated by such substitution. If the parties are unable to agree
on such changes, either party may proceed in accordance with Section 3.5(c).

     3.8 Exchange of Information Between the Parties. Subject to the obligations
of confidentiality set forth in this Agreement and promptly following the
Effective Date, DTI shall provide to Schwarz all material documents in DTI's
possession as of the Effective Date describing preclinical, clinical, chemical,
pharmacological, toxicological, assay, control, and manufacturing data and other
information which is useful for development, registration and commercialization
of Licensed Products in the Territory, obtained by DTI in its study of Licensed
Products. Following the Effective Date, each party shall own all data generated
by such party and agrees to provide the other with all material information
available to such party concerning the Licensed Products, subject to any
contractual restrictions on disclosure.

     3.9 Exchange of Information Among Licensees. Subject to the obligations of
confidentiality set forth in this Agreement and its agreement with its other
licensees, DTI will use its best efforts to facilitate full and open exchange of
information among its licensees, including but not limited to post-market
surveillance information. Prior to disclosing any data generated by Schwarz to
other licensees of DTI, DTI shall discuss the conditions of disclosure with
Schwarz in good faith and shall obtain Schwarz approval for such disclosure,
such approval

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not to be unreasonably withheld. Exhibit B lists all third parties with which
DTI has developed agreements with respect to the Compounds.

     3.10 Exchange of Adverse Event Information. Without delay, each party
agrees to provide the other party and any other licensees or sublicensees with
any serious adverse event information of which it becomes aware, including but
not limited to post-market surveillance information, which may be required to be
provided to regulatory authorities in any jurisdiction. Such information shall
be provided as soon as possible, and all non-serious adverse event information
shall be exchanged between the parties at least quarterly. DTI shall disclose to
Schwarz the names of all DTI's licensees in order to allow the exchange of
information provided for in this Section 3.10 between Schwarz and DTI's
licensees.

4.   COMMERCIALIZATION

     4.1  General. Schwarz shall be responsible for commercializing the Licensed
Products in the Territory. Decisions regarding matters such as advertising and
promotion shall be the sole responsibility of Schwarz, provided however that
Schwarz's commercialization activities shall be consistent with Schwarz'
activities in commercializing pharmaceutical other products of similar market
potential, profit potential or strategic value, based on conditions then
prevailing.

     4.2  Failure to Launch.

          (a) If Schwarz or its sublicensee does not launch a Licensed Product
in a Major Country in the Territory within 12 months of obtaining Regulatory
Approval for such Licensed Product in such Major Country, or sooner notifies DTI
that it will not launch in such Major Country, Schwarz's rights under this
Agreement shall terminate upon the earlier of such notice or the 1 year
anniversary of the grant of Regulatory Approval, and DTI shall be free to
commercialize Licensed Products in such Major Country without any further
obligation to Schwarz. In such event, Schwarz shall promptly transfer to DTI all
INDs, applications for Regulatory Approval and Regulatory Approvals, or their
non-U.S. equivalents (as applicable) as it may hold with respect to Licensed
Products in such Major Country, and any information as Schwarz may possess which
is useful to gain Regulatory Approval for and to commercialize the Licensed
Products in such Major Country. Such transfer shall be without cost to DTI,
provided however that DTI shall pay any governmental filing or transfer fees
that may be required.

          (b) If Schwarz elects not to launch a Licensed Product in a country in
the Territory other than a Major Country because Schwarz has concluded in good
faith that Licensed Products distributed in such country will be imported into
other countries of the Territory where Schwarz has retained exclusive rights,
then Schwarz will not be obligated to launch such Licensed Product in such
country and DTI shall not launch Licensed Product in such country.

     4.3  Pricing and Product Distribution. Schwarz shall set prices for
Licensed Products in the Territory and shall obtain all pricing approvals as may
be required. Schwarz shall also be responsible for distribution of the Licensed
Products in the Territory.

     4.4  Advertising and Promotion. Schwarz will prepare or have prepared all
advertising and education materials for the Licensed Product in the Territory.

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     4.5 Trademarks. Schwarz shall be responsible for developing and registering
trademarks for the Licensed Products, and shall own all such trademarks. To
facilitate worldwide brand recognition, Schwarz shall, to the extent practicable
in Schwarz' sole discretion, market and sell the Licensed Products under a
single trademark throughout the Territory. Schwarz agrees to consult with DTI's
licensees set forth on Exhibit B to endeavor to coordinate its trademark
selection with the trademarks selected by such other licensees.

5.   PAYMENTS AND ROYALTIES

     5.1 Fees.

         (a) License Fee. Schwarz shall pay to DTI a noncreditable license
issue fee of * upon execution of this Agreement. Such payment shall be
nonrefundable, and the * lump sum payment made by Schwarz to DTI pursuant to the
Letter Agreement between the parties dated May 6, 1998 shall be deducted from
this License Fee.

         (b) Sublicense Fees. DTI has engaged in discussions, prior to the
Effective Date, with entities listed on Exhibit C. In the event Schwarz grants a
sublicense to any of the entities (or their Affiliates) set forth on Exhibit C,
Schwarz shall pay to DTI * of all non-royalty consideration (excluding sums
received for the purchase of equity or to fund research and development
activities) Schwarz receives as a result of such sublicense.

     5.2 Milestones. Schwarz shall pay to DTI the following amounts within
thirty (30) days of the first achievement, by any Licensed Product, of the
respective milestone event set forth below and shall not pay again for
subsequent Licensed Products:

               Milestone Event                             Payment

    Commencement of Phase III clinical trial                  *
    (enrollment of first patient)

    First issuance of joint DTI-LTS patent in                 *
    any Major Country of the Territory

    NDA Approval                                              *

    Regulatory Approval in the first three                    *
    non-US Major Countries

    Milestone payments shall be noncreditable and shall be nonrefundable.

     5.3 Earned Royalties. In addition, Schwarz shall pay DTI a running royalty
on annual Net Sales of all Licensed Products according to the following marginal
rates:

         (a) For annual Net Sales of Licensed Products up to * of such Net
Sales; and

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          (b) For the portion of annual Net Sales of Licensed Products in excess
of * of such Net Sales; and

          (c) For the portion of annual Net Sales of Licensed Products in excess
of * of such Net Sales.

          (d) As of the effective date of this Agreement, the parties anticipate
Schwarz will consummate a supply agreement with LTS. In such case the parties
may decide that Schwarz shall pay to LTS some or all of royalties pursuant to
Section 6.2 and reduce its royalty payments to DTI accordingly.

     5.4  Minimum Royalties

          (a) Notwithstanding the provisions of Section 5.3, Schwarz shall pay
DTI minimum annual royalties after launch of the Initial Product in any country
of the Territory in an amount equal to * of Forecast Net Sales (defined below)
multiplied by the applicable royalty rate pursuant to Section 5.3. For example,
if the Forecast Net Sales are $200 million, then the minimum royalties would be
calculated as follows:

     $200,000,000 x * (Net Sales amount on which minimum royalties will be
     calculated)

     *

     Total Minimum Royalties Due: *

All earned royalties paid by Schwarz pursuant to Section 5.3 shall be fully
creditable against minimum royalties.

          (b) As used in this Section 5.4, Forecast Net Sales shall be Schwarz's
projected Net Sales for the Licensed Products in the Territory during the
relevant calendar year ("Commercialization Year"), with the first
Commercialization Year being the calendar year of launch of the Initial Product
in the first country of the Territory. Schwarz shall deliver to DTI, not later
than forty-five (45) days prior to launch of the Initial Product in such
country, and thereafter on or before November 15 of each calendar year its
projected Net Sales of Licensed Products in the Territory for the relevant
Commercialization Year. Notwithstanding the foregoing, after the first
Commercialization Year which includes a full calendar year, Schwarz's minimum
royalty obligation shall be calculated on Forecast Net Sales in an amount not
less than * of Schwarz actual Net Sales in the previous Commercialization Year.

          (c) Schwarz's minimum royalty obligation shall expire as to a
particular country in the event any of the following occur:

              (i) The expiration, lapse or invalidation of the last remaining
DTI patents in such country which contains a valid and unexpired claim covering
the sale of the Initial Product and a third party launches a generic form of the
Initial Product delivered by a transdermal patch;

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               (ii) A third party launches a new product approved for marketing
and sale in any country of the Territory for the treatment of Parkinson's
Disease, which achieves a 10% share of the total annual worldwide sales of
products approved for marketing and sale for the treatment of Parkinson's
Disease as reported in the publication Data Monitor or an equivalent
publication.

              (iii) Schwarz has paid minimum royalties to DTI for * years.

          (d) At any time during the term of the Agreement, the parties agree to
renegotiate, in good faith, the conditions of this Section 5.4 in the event of
changes including, but not limited to, competition, pricing, reimbursement, and
distribution in the therapeutic treatment of Parkinson's Disease and or the
Parkinson Disease market.

     5.5  Royalties Term. If this Agreement is not terminated in accordance with
other provisions hereof, Schwarz's obligation to pay royalties hereunder shall
continue on a country-by-country and product-by-product basis until the
expiration, lapse or invalidation by a decision of a court or tribunal of
competent jurisdiction from which no appeal is or can be taken of the last
remaining DTI Patent (including any extension thereof) in such country which
contains a valid and unexpired claim covering the sale of the relevant Licensed
Product in such country or the * anniversary of the date of the first commercial
sale of Licensed Product(s) in the relevant country of the Territory, whichever
is longer (the "Royalty Term"). For purposes of Section 5.4 and this Section 5.5
"valid and unexpired claim" shall mean a composition of matter or method of use
claim or equivalent thereof, of an issued and unexpired DTI Patent (or
corresponding patent application, provided that the original application
containing such claim has not been pending for more than five (5) years) in a
country covering Licensed Product, which (i) has not been revoked or held
unenforceable or invalid by a decision of a court or other governmental agency
of competent jurisdiction, unappealable or unappealed within the time allowed
for appeal; or (ii) has not been abandoned, disclaimed, denied or admitted to be
invalid or unenforceable through reissue of disclaimer or otherwise.

     5.6  Third-Party Royalties and Competing Products. DTI shall be responsible
for payment of royalties due to the third parties listed on Exhibit B under
DTI's existing agreements with such third parties. In the event that Schwarz is
obligated to pay a royalty to a third party because the use and sale of the
Licensed Product(s) in a country of the Territory infringes one or more patents
held by such third party claiming subject matter that is also claimed in the DTI
Patents, then Schwarz may reduce the royalties owed to DTI under Section 5.3 for
the relevant country by * of the amount of all license fees paid to the third
party, and any royalties paid to the third party in the same calendar year,
provided however, that the royalties otherwise due to DTI in any particular
calendar year shall not be reduced by more than *. In the event that, and only
for so long as, sale of a Competing Product occurs, then the royalties payable
pursuant to section 5.3 shall on a country by county basis, be reduced by * and
the sublicense fees payable pursuant to section 5.1(b) shall be reduced to *. A
Competing Product shall mean any therapeutic product for Parkinson's disease or
its symptoms or related conditions which contains a Licensed Product.

     5.7  Withholding Taxes. Any tax paid or required to be withheld by Schwarz
on account of royalties payable to DTI under this Agreement shall be deducted
from the amount of royalties otherwise due. Schwarz shall secure and send to DTI
written proof of any such taxes

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withheld and paid by Schwarz or its sublicensees for the benefit of DTI. Schwarz
shall reasonably assist DTI in claiming exemption from such deductions or
withholdings under any double taxation or similar agreement or treaty from time
to time in force.

     5.8  Blocked Currency. In each country where the local currency is blocked
and cannot be removed from the country, at the election of Schwarz, royalties
accrued in that country shall be paid to DTI in the country in local currency by
deposit in a local bank designated by DTI.

     5.9  Royalty Payments and Reports. Beginning with the first commercial sale
of a Licensed Product, royalties shall accrue on a calendar quarter basis, and
Schwarz shall pay DTI all such amounts within 30 days following the end of the
relevant quarter. Each royalty payment shall be accompanied by a report
summarizing the number, description, and aggregate sales of Licensed Products
made and the royalty payable thereon according to Section 5.3, including a
description of any offsets or credits deducted from such sales, on a
product-by-product and country-by-country basis during the relevant three-month
period. For any given royalty period, Schwarz shall pay to DTI the royalty at
the rate specified in Section 5.3 applicable to the then current year-to-date
Net Sales level. Each statement provided at the end of the fourth quarter of
each year shall contain a reconciliation of actual royalty payments made during
that year and the amount actually owed for such year, and the resulting amount
shall be paid to DTI at the time of such fourth quarter statement, in accordance
with the terms of this Section 5.9.

     5.10 Currency; Exchange Rate. All amounts paid under this Agreement shall
be paid in U.S. dollars to DTI by wire transfer to a financial institution to be
designated by DTI. The royalty on sales by Schwarz or sublicensee(s) of Licensed
Products sold in a currency other than United States Dollars, such currency
shall be converted into United States Dollars using the selling rate of exchange
for the currency of the country from which the royalties are payable as
published by the Wall Street Journal, New York, N.Y., U.S.A., for the last
business day of the quarterly period for which the royalties are due.

     5.11 Accounting. Schwarz agrees to keep and maintain such records, using
generally accepted accounting principles (GAAP), as it normally generates in the
ordinary course of its business for a period of three (3) years showing the
manufacture, sale, use, and other disposition of products sold or otherwise
disposed of under the license herein granted. Such records shall be kept in
sufficient detail to enable the royalties payable hereunder by Schwarz to be
determined. Schwarz further agrees to permit its books and records to be
examined by an independent certified public accountant selected by DTI, at
ordinary business hours with reasonable prior notice to Schwarz and consent by
Schwarz, (not to be unreasonably withheld or delayed), and not more than once
per year, to the extent necessary to verify reports provided for in Section 5.9.
No copies of any Schwarz records shall be copied or retained by such examiner.
Such examination is to be made under appropriate confidentiality restrictions,
at the expense of DTI, except in the event that the results of the audit reveal
an underreporting of royalties due DTI of five percent (5%) or more in any year,
then the audit costs shall be paid by Schwarz.

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6.   MANUFACTURING

     6.1 General. Schwarz will be responsible for identifying a suitable
manufacturer, developing commercial manufacturing processes and supplying
clinical and commercial quantities of Licensed Products in the Territory.

     6.2 Transdermal Patch Product. Schwarz will use commercially reasonable
efforts to negotiate and finalize an agreement with LTS for fill and finish
manufacturing of Transdermal Patch Products prior to the commencement of any
clinical trials with respect to the Licensed Product. DTI will provide
reasonable assistance to Schwarz in concluding such negotiations with LTS.
Schwarz will bear any royalty due LTS pursuant to Section 3.03 of the LTS
Feasibility Agreement dated January 22, 1996, which might become due to LTS as a
result of sales of Licensed Products by Schwarz, its Affiliates or its
Sublicensees. Any such royalties paid shall be fully creditable against
royalties to be paid by Schwarz pursuant to Sections 5.3 and 5.4 of this
Agreement.

     6.3 Quality Assurance. Schwarz shall have day to day responsibility for
commercial manufacturing and formulation issues related to product safety and
regulatory compliance. All Licensed Products used in clinical and commercial
supplies will be manufactured, tested, and released according to current cGMP's.
Schwarz will be responsible for maintaining its facilities and procedures,
including those of third parties, in compliance with cGMP's. Schwarz will
promptly notify DTI of the results of any governmental regulatory inspections or
other governmental regulatory action concerning the facilities or other
manufacturing or formulation issues, and will promptly provide to DTI copies of
all Form 483's (or their non-U.S. equivalents) and compliance related
documentation, including all actions taken by Schwarz in response thereto or as
a result thereof. Any expenses incurred in improving compliance with regulatory
requirements or responding to Form 483's (or their non-U.S. equivalents) or
other compliance related documentation will be the full responsibility of
Schwarz. Schwarz shall indemnify and hold DTI harmless against any claims or
liabilities incurred by DTI as a result of Schwarz' breach of its obligations
under this Section 6.3.

     6.4 Technology Transfer in Event of Termination. Upon termination by
Schwarz of this Agreement (other than a termination for DTI's breach), Schwarz
shall continue to provide for such manufacture of such Licensed Products to the
extent provided prior to notice of such termination, from the time notice of
such termination is provided until such time as DTI is able to secure an
equivalent alternative commercial manufacturing source (provided, however, that
"equivalent" shall not be deemed to require an equivalent cost or price), in the
event that DTI using its best efforts is unable to secure such an alternative
source during the notice period. In no event shall Schwarz be required to
continue such supply for a period of more than one year from the time notice of
such termination is provided. To this end, as of the effective date of such
termination, Schwarz shall use its reasonable commercial efforts to assign all
third party manufacturing contracts to DTI, and the cost charged to DTI for any
manufacturing activities by Schwarz shall be the same as Schwarz's fully
burdened cost during the time that the Agreement was in effect. Further, upon
DTI's request, Schwarz shall provide such technical assistance and Know-how
licenses on a royalty free basis as may reasonably be requested to transfer such
technology as needed by DTI to commence or provide for commercial manufacture of
Licensed Products. Such technical assistance shall be provided at Schwarz's
cost, which cost shall be

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reimbursed by DTI. Schwarz shall also, to the extent it has the right to do so,
sublicense to DTI any third party licenses to which Schwarz has rights, to the
extent that such rights are necessary or useful to make, use and sell the
Licensed Products, and DTI shall thereafter assume the cost of maintaining such
licenses, provided, however, that if such Licensed Product is not the Initial
Product and utilizes delivery technology other man a DTI Patent, then such
license shall be upon commercially reasonable terms, including a reasonable
royalty to Schwarz. If the parties cannot agree upon terms for such license,
then either party may submit the issue for resolution pursuant to Section 13 of
this Agreement.

     6.5  Patent Marking. Schwarz shall mark all Licensed Products in accordance
with applicable patent marking requirements for the territory in which the
Products will be sold.

7.   REPRESENTATIONS AND WARRANTIES

     7.1  Warranties.

          (a)  Each party hereby warrants to the other that:

               (i)   this Agreement is a legal and valid obligation binding upon
such party and enforceable in accordance with its terms. The execution, delivery
and performance of this Agreement by such party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party
or by which it is bound, nor violate any law or regulation of any court,
governmental body or administrative or other agency having jurisdiction over it.
Each party expressly represents and warrants that it has full power and
authority to execute and deliver this agreement and to perform the obligations
contemplated hereby.

               (ii)  such party owns, in whole or in part, or controls all
patents and know-how that are the subject of the licenses granted to the other
party in this Agreement.

               (iii) such party has not, and during the term of the Agreement
will not, grant any right to a third party relating to its respective patents
and know-how in the Field that would conflict with the rights granted to the
other party under this Agreement.

          (b)  DTI represents and warrants, as of the Effective Date, that it
has not received any notices of infringement with respect to the Compounds, and
to the best of its knowledge the manufacture, use or sale of products containing
a Compound as set forth herein does not infringe any third party rights which
have not been licensed to DTI and by DTI to Schwarz pursuant to this Agreement.

          (c)  DTI represents and warrants that to the best of its knowledge DTI
has disclosed to Schwarz all the information in DTI's possession or control
concerning side effects, injury, toxicity or sensitivity reaction and incidents
associated with the use of Licensed Products obtained from any clinical and
non-clinical studies.

     7.2  Negation of Representations. Nothing in this Agreement is or shall be
construed as:

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          (a) A warranty or representation by DTI as to the validity or scope of
any DTI Patent(s);

          (b) A warranty or representation that anything made, used, sold, or
otherwise disposed of under any license granted in this Agreement is or will be
free from infringement of patents, copyrights, and other rights of third
parties;

          (c) An obligation to bring or prosecute actions or suits against third
parties for infringement, except to the extent and in the circumstances
described in Section 9.l; or

          (d) Granting by implication, estoppel, or otherwise any licenses or
rights under patents or other rights of DTI or other persons other than DTI
Patent(s), regardless of whether such patents or other rights are dominant or
subordinate to any DTI Patent(s).

     7.3  Warranty Disclaimer. Except expressly set forth in this Agreement, DTI
MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS
OR IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THE LICENSED PRODUCT(S)
WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS OR ANY OTHER
EXPRESS OR IMPLIED WARRANTIES.

8.   INDEMNITY AND INSURANCE

     8.1 Indemnification of DTI by Schwarz. Schwarz agrees to indemnify, hold
harmless and defend DTI and its officers, employees and agents against any and
all third party claims for death, illness, personal injury, property damage or
improper business practices arising out of the use, sale, handling or other
disposition of Licensed Product(s) by Schwarz or sublicensee(s), or their
customers, except to the extent such claims result from the negligent or
intentional misconduct of DTI and its officers, employees and agents.

     8.2 Indemnification of Schwarz by DTI. DTI agrees to indemnify, hold
harmless and defend Schwarz and its officers, employees and agents against any
and all third party claims for death, illness, personal injury, property damage
and improper business practices arising out of the negligent or intentional
misconduct of DTI and its officers, employees and agents with respect to the
use, sale or other disposition of Licensed Products in the Territory, except to
the extent such claims result from the negligent or intentional misconduct of
Schwarz and its officers, employees and agents.

     8.3 Insurance. In addition to the foregoing, Schwarz shall obtain
appropriate insurance in accordance with standard commercial practices to cover
the indemnity granted in Section 8.1 and such insurance policy shall name DTI as
an additional insured. Such insurance shall be written to cover claims incurred,
discovered, manifested, or made in connection with clinical development and sale
of the Licensed Product(s) in the Territory. Schwarz agrees to provide evidence
of such coverage if requested by DTI.

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9.   INFRINGEMENT BY OTHERS; PROTECTION OF PATENTS

     9.1 Infringement of DTI Patents. Each party shall promptly inform the other
of any suspected infringement of any DTI Patent(s) by a third party. DTI and
Schwarz each shall have the right to institute an action for infringement of the
DTI Patent(s) against such third party in accordance with the following:

         (a) If DTI and Schwarz agree to institute suit jointly, the suit shall
be brought in both their names, the out-of-pocket costs, including but not
limited to litigation costs, thereof shall be borne equally and any recovery or
settlement shall be shared equally. Schwarz and DTI shall work together to
manage such litigation with Schwarz having the primary responsibility for
controlling such suits. DTI may, if it so desires, also be represented by
separate counsel of its own selection, the fees for which counsel shall be paid
by DTI;

         (b) In the absence of agreement to institute a suit jointly, Schwarz
shall have the first right, but not the obligation, to institute suit and, at
its option, let DTI join as a party plaintiff. Schwarz shall bear the entire
cost of such litigation and shall be entitled to retain the entire amount of any
recovery or settlement. Schwarz shall indemnify DTI against any order for costs
that may be made against DTI in such proceedings, including photocopying costs
and witness travel fees, but expressly excluding attorneys' fees.

         (c) In the absence of agreement to institute a suit jointly as
provided in (a) above, and if Schwarz notifies DTI that it has decided not to
institute a suit as provided in (b) above, DTI may institute suit, and, at its
option, let Schwarz join as a party plaintiff. DTI shall bear the entire cost of
such litigation including attorneys' fees and shall be entitled to retain the
entire amount of any recovery or settlement.

         (d) Should either DTI or Schwarz commence a suit under the provisions
of Section 9.1 and thereafter elect to abandon the same, it shall give timely
notice to the other party who may, if it so desires, continue prosecution of
such suit, provided, however, that the sharing of expenses and any recovery in
such suit shall be agreed upon between DTI and Schwarz in advance of such
continuation.

         (e) In the event that DTI jointly owns any patent valid in the
Territory with a third party manufacturer, DTI shall use its best efforts to
arrange for such manufacturer to cooperate in any infringement actions in
accordance with the terms of this Section 9.1 and agrees not to prevent any suit
contemplated by Schwarz.

     9.2 Prosecution and Maintenance of DTI Patents.

         (a) DTI shall be primarily responsible for prosecuting and maintaining
the DTI Patent(s) in the Territory. DTI shall work with Schwarz to develop a
reasonable patent strategy appropriate for the technology at issue, and shall
permit Schwarz to review and comment on any documents filed with the relevant
patent authorities in the Territory with respect to the DTI Patent(s). DTI shall
notify Schwarz if it intends to abandon any such patent or otherwise forego any
patent rights in the Territory at least sixty (60) days prior to any relevant
deadline. Schwarz shall have the right, at its own expense and under Schwarz's
name, to file and assume prosecution and maintenance of any patent or patent
application abandoned by DTI.

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Thereafter, Schwarz shall not be required to pay royalties with respect to such
patent or patent application.

          (b) All reasonable costs incurred for prosecuting and maintaining the
DTI Patents in the Territory shall be borne by Schwarz, including costs of
registering this license as provided in Section 2.1, provided however, that
Schwarz shall only be responsible for DTI's share of the costs of prosecuting
and maintaining PCT Appl. No. "US *."  Schwarz shall provide reasonable support
and assistance with such patent prosecution and maintenance.

10.  CONFIDENTIALITY

     10.1 Information. Each party shall keep all information received from the
other party (the "Information") confidential and shall not disclose nor use the
Information without the other party's written consent except to the extent
contemplated by this Agreement. This restriction shall not, however, prevent
disclosure of the Information if and to the extent that disclosure is required
by law, provided that the disclosing party informs the other party without delay
of any such requirement, in order to allow such other party to object to such
disclosure and to seek an appropriate protective order or similar protection
prior to disclosure.

     10.2 Exceptions. The above obligations shall not apply or shall cease to
apply to Information which:

          (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 furnished 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 any
breach of this Section 10; or

          (e) is the subject of a written permission to disclose provided by the
disclosing party.

     10.3 Permitted Disclosures. Information may be disclosed for the purpose of
filing, prosecuting and maintaining patents and patent applications, and for
obtaining regulatory approvals, manufacture and sale of Licensed Products, and
to employees, agents, consultants, sublicensees or suppliers of the recipient
party or its affiliates, but only to the extent required to accomplish the
purposes of this Agreement and only if such individuals are required by law,
contract or otherwise not to use or disclose such information except as
permitted by this Agreement. Each 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 such employees, agents, consultants, sublicensees or suppliers do
not disclose or make any unauthorized use of the Information.

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     10.4 Disclosure of Agreement. Except as required by law, neither DTI nor
Schwarz shall release to any third party or publish in any way any non-public
information with respect to the terms of this Agreement or concerning their
cooperation without the prior written consent of the other, which consent will
not be unreasonably withheld or delayed; provided; however that either party may
disclose the terms of this Agreement to the extent required to comply with
applicable laws, including without limitation the rules and regulations
promulgated by the Securities and Exchange Commission. Notwithstanding any other
provision of this Agreement, each party may disclose the terms of this Agreement
to lenders, investment bankers, financial advisors and other financial
institutions of its choice solely for purposes of financing the business
operations of such party, or to potential investors in or acquirers of such
party either (i) upon the written consent of the other party or (ii) if the
disclosing party obtains a signed confidentiality agreement with such intended
recipient with respect to such information, upon terms substantially similar to
those contained in this Section. Notwithstanding the foregoing, the parties will
issue a joint press release in the form attached hereto as Exhibit D which shall
be specified within 60 days of the Effective Date.

11.  TERM AND TERMINATION

     11.1 Term. This Agreement shall commence on the Effective Date and expire
at the end of the Royalty Term under Section 5.5. Upon the expiration (but not
the earlier termination) of the Royalty Term, the licenses granted hereunder to
Schwarz shall convert to an exclusive, as to the territory, fully paid and
royalty-free licenses.

     11.2 Termination by Schwarz. Schwarz may terminate this Agreement by giving
DTI notice in writing as follows:

          (a)   Upon * months prior written notice to DTI, provided that such
notice may not be given prior to the first anniversary of the date of this
Agreement; or;

          (b)   Upon * days prior written notice to DTI if Schwarz in the
exercise of its reasonable judgment, determines that there are issues concerning
the safety, efficacy, or supply of the Licensed Product which materially
adversely affect its medical or competitive commercial viability, including,
without limitation, a clinical hold or other adverse regulatory action.

     In the event of termination under this Section 11.2(a), Schwarz shall,
during the * month period between notice and the effective date of the
termination, continue to fund development activities in accordance with the
Development Plans and shall cooperate with DTI to effect an orderly transition
of such development activities from Schwarz to DTI. Under any termination
Schwarz shall promptly transfer to DTI at DTI's written request all INDs,
applications for Regulatory Approval and Regulatory Approvals, or their non-U.S.
equivalents (as applicable) as it may hold with respect to Licensed Products in
such country, and any information as Schwarz may possess which is useful to gain
Regulatory Approval for and to commercialize the Licensed Products in such
country. Such transfer shall be without cost to DTI, provided however that DTI
shall pay any governmental filing or transfer fees that may be required.

     11.3 Termination for Material Breach. If either party commits a material
breach of this Agreement and such breach is not cured within * after written
notice thereof by the non-

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breaching party, or if such breach is incapable of cure during the applicable
notice period, the breaching party fails to make good faith efforts to cure such
breach, the non-breaching party may terminate this Agreement upon expiration of
the notice period.

     11.4 Effect of Termination by DTI for Material Breach. In the event of a
termination by DTI under Section 11.3, all licenses to Schwarz under this
Agreement shall terminate. In addition:

          (a) Schwarz and DTI shall cooperate to ensure that the development and
commercialization of Licensed Products in the Territory continues with a minimum
of delay resulting from the transfer of rights back to DTI. In particular,
Schwarz shall provide to DTI all available preclinical and clinical data and
regulatory documents in its possession or control, and shall promptly assign or
cause to be assigned to DTI, or its designee, every government approval,
clearance, registration or permit relating to the Licensed Products obtained by
Schwarz in the Territory. In the event such assignment is not permitted by law,
Schwarz will cooperate in the cancellation of such government approval,
clearance, registration or permit standing in its name and the reissuance of
such government approval, clearance, registration or permit to DTI or its
designee. Schwarz shall take all such other actions and execute such other
instruments, assignments and documents as may be necessary to effect the
transfer of rights hereunder to DTI.

          (b) If Schwarz has already commenced manufacturing of the Licensed
Product, Schwarz shall continue to provide for manufacture of the Licensed
Products to the extent necessary to meet market demand, from the effective date
of such termination until such time as DTI is able to secure an equivalent
alternative commercial manufacturing source, as requested by DTI, provided,
however, that cost to DTI shall not be considered as a constituent factor of
such equivalency, and further provided, that Schwarz shall in no event be
required to continue to manufacture for more than * after the notice of such
termination or in quantities in excess of those being produced at the time of
such termination. The cost charged to DTI for any manufacturing activities by
Schwarz shall be the same as Schwarz's fully burdened cost during the time that
the Agreement was in effect. As of the effective date of such termination, all
third party manufacturing contracts for manufacture of Licensed Products shall
be assigned to DTI, to the extent that Schwarz has the right to do so, and DTI
will assume payment for third party royalties, if any. In addition, upon DTI's
request, Schwarz shall provide such technical assistance and know-how licenses
on a royalty-free basis as may reasonably be requested to transfer such
technology as is needed by DTI to commence or provide for commercial manufacture
of Licensed Product. If any technology needed by DTI to commence or provide for
commercial manufacture of Licensed Product is covered by one or more patents
owned or controlled by Schwarz, DTI shall receive a fully paid-up, royalty-free,
non-exclusive worldwide license to practice any and all such patents for the
purposes contemplated in this Section 11.4, with the right to grant sublicenses.

     11.5 Accrued Obligations. Except where expressly provided for otherwise in
this Agreement, termination of this Agreement shall not relieve the Parties
hereto of any liability, including any obligation to make payments hereunder,
which accrued hereunder prior to the effective date of such termination, nor
preclude any 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 any Party's right to obtain performance of any obligation.

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     11.6 Effect of Termination by Schwarz for Material Breach. If Schwarz
terminates this Agreement pursuant to Section 11.3, it shall continue to be
obligated during the termination notice period to perform all of its obligations
under this Agreement; provided that Schwarz shall have not obligation to make
any milestone payments pursuant to Section 5.2 with respect to any milestone
achieved during the termination notice period.

     11.7 Surviving Obligations. Surviving any termination are:

          (a) Schwarz's obligation to pay accrued royalties up to the effective
date of termination;

          (b) any cause of action or claim of Schwarz or DTI, accrued or to
accrue, because of any breach or default by the other party; and

          (c) the provisions of Sections (3.5(c), 3.10, 4.5, 5.6, 5.7, 5.8, 5.9,
5.10, 5.11, 6.4, 11.2, 11.4, 11.5, 11.6, 11.7, 13 and 14.3 and Articles 7, 8, 10
and 13).

     11.8 Bankruptcy. All rights and licenses granted under or pursuant to this
Agreement by DTI to Schwarz are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to
"intellectual property" as defined under Section 101(52) of the Bankruptcy Code.
The parties agree that Schwarz, as a licensee of such rights under this
Agreement, shall retain and may fully exercise all of its rights and elections
under the Bankruptcy Code. The parties further agree that in the event of the
commencement of a bankruptcy proceeding by or against DTI under the Bankruptcy
Code, Schwarz 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 Schwarz (i) upon any such commencement of a bankruptcy
proceeding upon written request therefor by Schwarz unless DTI elects to
continue to perform all of its obligations under this Agreement, or (ii) if not
delivered under (i) above, upon the rejection of this Agreement by or on behalf
of DTI upon written request therefor by Schwarz.

12.  ASSIGNMENT

     This Agreement may not be assigned by either party without the prior
written consent of the other party except to an Affiliate or in connection with
a merger, consolidation or sale of all or substantially all of the line of
business to which this Agreement relates. This Agreement shall be binding upon
and inure to the benefit of all successors and permitted assigns of the parties.

13.  DISPUTE RESOLUTION

     13.1 Discussion. In the event of any dispute between the parties regarding
their respective rights or obligations under this Agreement, each party agrees
to discuss such matter in good faith in an effort to resolve the dispute without
resort to formal dispute resolution procedures. At any time, either party may
call a meeting between an Executive Board member of Schwarz and the Chief
Executive Officer of DTI to attempt to resolve the dispute. Such meeting shall
be held not later than thirty (30) days after it is requested in writing by
either party in New York, New York. If such dispute cannot be resolved through
such procedures within

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forty-five (45) days of the date either party requests a meeting of the officers
designated above, then either party may request an arbitration proceeding as
provided in Section 13.2.

     13.2 Alternative Dispute Resolution. Any dispute controversy or claim
arising out of or relating to the validity, construction, enforceability or
performance of this Agreement, including disputes relating to an alleged breach
or to termination of this Agreement and including any claim of inducement by
fraud or otherwise, but excluding (i) any dispute, controversy or claim arising
out of or relating to the validity, enforceability, or infringement of any DTI
Patent or any Schwarz Patent and (ii) any dispute which is expressly prohibited
herein from being resolved by this mechanism, shall be settled by binding
Alternative Dispute Resolution ("ADR") by Mediation and Arbitration in the
manner described below:

     13.3 Mediation.

          (a) Any such dispute, controversy or claim which would, but for this
provision, be submitted to arbitration shall, before submission to arbitration,
first be mediated through non-binding mediation in accordance with the Model
Procedures for the Mediation of Business Disputes promulgated by the Center for
Public Resources ("CPR") then in effect, except where those rules conflict with
these provisions, in which case these provisions control. The mediation shall be
conducted in the United States and shall be attended by a senior executive with
authority to resolve the dispute from each of the operating companies that are
parties.

          (b) The mediator shall be an attorney specializing in business
litigation who has at least 15 years of experience as a lawyer with a law firm
of over 25 lawyers or was a judge of a court of general jurisdiction and who
shall be appointed from the list of neutrals maintained by CPR.

          (c) The Parties shall promptly confer in an effort to select a
mediator by mutual agreement. In the absence of such an agreement, the mediator
shall be selected from a list generated by CPR with each party having the right
to exercise challenges for cause and two peremptory challenges within 72 hours
of receiving the CPR list.

          (d) The mediator shall confer with the Parties to design procedures to
conclude the mediation within no more than 45 days after initiation. Under no
circumstances shall the commencement of arbitration under Section 13.4 be
delayed more than 45 days by the mediation process specified herein.

          (e) Each party agrees to all applicable statutes of limitation during
the mediation process and not to use the period or pendancy of the mediation to
disadvantage the other party procedurally or otherwise. No statements made to
either side during the mediation may be used by the other during any subsequent
arbitration.

          (f) Each party has the right to pursue provisional relief from any
court such as attachment, preliminary injunction, replevin, etc., to avoid
irreparable harm, maintain the status quo, or preserve the subject matter of the
arbitration, even though mediation has not been commenced or completed.

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<PAGE>

     13.4 Arbitration. Except as provided in paragraph (c) below, any dispute,
controversy or claim arising out of or relating to the validity, construction,
enforceability or performance of this Agreement which is not resolved by
mediation, including disputes relating to alleged breach or to termination of
this Agreement, other than disputes which are expressly prohibited herein from
being resolved by this mechanism, shall be settled by binding Alternative
Dispute Resolution ("ADR")in the manner described below:

          (a) If a party intends to begin an ADR to resolve a dispute, such
party shall provide written notice (the "ADR Request") to counsel for the other
party informing such other party of such intention and the issues to be
resolved. From the date of the ADR Request and until such time as any matter has
been finally settled by ADR, the running of the time periods contained in
Article 14 as to which party must cure a breach of this Agreement shall be
suspended as to the subject matter of the dispute.

          (b) Within ten (10) business days after the receipt of the ADR
Request, the other party may, by written notice to the counsel for the party
initiating ADR, add additional issues to be resolved.

          (c) Any dispute regarding the validity or enforceability of a patent
or trademark applicable to a Product shall be submitted to a court of competent
jurisdiction in the country in which such patent or trademark right exists.

     13.5 Procedure. The ADR shall be conducted pursuant to JAMS/ENDISPUTE Rules
A and C, attached hereto as Exhibit E. Notwithstanding those rules, the
following provisions shall apply to the ADR hereunder.

          (a) Arbitrator. The arbitration shall be conducted by a single
arbitrators ("the Arbitrator"). The Arbitrator shall be selected from a pool of
retired independent federal judges to be presented to the Parties by
JAMS/ENDISPUTE. Neither party shall engage in ex parte contact with the
arbitrator.

          Proceedings. The time periods set forth in the JAMS/ENDISPUTE rules
shall be followed, unless a party can demonstrate to the Arbitrator that the
complexity of the issues or other reasons warrant the extension of one or more
of the time tables. In such case, the panel may extend such time tables, but in
no event shall the time tables being extended so that the ADR proceeding extends
more than 18 months from its beginning to the Award. In regard to such time
tables, that Parties (i) acknowledge that the issues that may arise in any
dispute involving this Agreement may involve a number of complex matters and
(ii) confirm their intention that each party will have the opportunity to
conduct complete discovery with respect to all material issues involved in a
dispute within the framework provided above. The Arbitrator shall not award
punitive damages to either party and the Parties shall be deemed to have waived
any right to such damages. The Arbitrator shall, in rendering its decision,
apply the substantive law of the State of Delaware, without regard to its
conflict of laws provisions, except that the interpretation of and enforcement
of this Section shall be governed by the Federal Arbitration Act. The Arbitrator
shall apply the Federal Rules of Evidence to the hearing. The proceeding shall
take place in the United States. The fees of the Arbitrators and JAMS/ENDISPUTE
shall be paid by the losing party, which shall be designated by the Arbitrator.
If the Arbitrator is

                                       22

<PAGE>

          (b) unable to designate a losing party, it shall so state and the fees
shall be split equally between the Parties.

          (c) Award. The Arbitrator is empowered to award any remedy allowed by
law, including money damages, prejudgment interest and attorneys' fees, and to
grant final, complete, interim, or interlocutory relief, including injunctive
relief but excluding punitive damages.

          (d) Confidentiality. The ADR proceeding shall be confidential and the
Panel shall issue appropriate protective orders to safeguard each party's
Confidential Information. Except as required by law, no party shall make (or
instruct the Panel to make) any public announcement with respect to the
proceedings or decision of the Panel without prior written consent of each other
party. The existence of any dispute submitted to ADR, and the award, shall be
kept in confidence by the parties and the Panel, except as required in
connection with the enforcement of such award or as otherwise required by
applicable law.

14.  GENERAL

     14.1 Notices. All notices under this Agreement shall be deemed to have
been fully given when done in writing and deposited in the United States mail,
registered or certified, or sent by express courier (receipt confirmed) and
addressed as follows:

               To DTI:                2028 Dabney Road
                                      Suite E-17
                                      Richmond, VA 23230-3311
                                      Attention: Chief Executive Officer

               With a copy to:        Cooley Godward LLP
                                      5 Palo Alto Square
                                      3000 El Camino Real
                                      Palo Alto, California 94306
                                      Attn: Alan C. Mendelson, Esq.

               To Schwarz:            Schwarz Pharma AG
                                      Alfred Nobel-Strasse 10
                                      40789 Monheim, Germany
                                      Attention: President

               With two copies to:    Schwarz Pharma USA
                                      6140 West Executive Drive
                                      Mequon, Wisconsin 53092
                                      Attn: Chief Executive Officer
                                      Attn: General Counsel

     Either party may change its address upon written notice to the other party.

     14.2 Entire Agreement. This Agreement embodies the entire understanding
between the parties relating to the subject matter hereof and supersedes all
prior understandings and

                                       23

<PAGE>

agreements, whether written or oral. None of the terms of this Agreement can be
amended or waived except by an instrument in writing executed by authorized
representatives of each party.

     14.3 Governing Law. This Agreement shall be governed by the laws of the
State of Delaware, without regard to conflict of laws principles.

     14.4 Severability. Any of the provisions of this Agreement which are
determined to be invalid or unenforceable in any jurisdiction shall be
ineffective to the extent of such invalidity or unenforceability in such
jurisdiction, without rendering invalid or unenforceable the remaining
provisions hereof or affecting the validity or enforceability of any of the
terms of this Agreement in any other jurisdiction.

     14.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.

                                       24

<PAGE>

     In Witness Whereof, the parties hereto have executed this Agreement in
duplicate originals by their duly authorized officers or representatives.

Discovery Therapeutics, Inc.            Schwarz Pharma AG

Signature: /s/ Donald A. McAfee         Signature: /s/ K. Langer; /s/ L. Ekman
           --------------------                    ---------------------------
Name: Donald A. McAfee                  Name: K. Langer; L. Ekman

Title: President and CEO                Title: Finances & Technical Operations;
                                        Research & Development; Member of
                                        Executive Board

Date: July 17/th/, 1998                 Date: July 17, 1998

                                       25

<PAGE>

                                    EXHIBIT A

DTI PATENTS

U.S. Patent No.*

U.S. Patent No. *

European Patent No. *

Canada Patent No. *

Canada Patent No. *

S. Korea Patent Appl. No. *

U.S. Patent No. *

PCT Appl. No. *

--------------------------------------------------------------------------------
* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
--------------------------------------------------------------------------------

<PAGE>

                                    Exhibit B

                             THIRD PARTY AGREEMENTS

         Licensee
         --------

         *

         Other Relationships
         -------------------

         *

--------------------------------------------------------------------------------
* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
--------------------------------------------------------------------------------

<PAGE>

                                    Exhibit C

                            PROSPECTIVE DTI LICENSEES

         Prospective Licensee                                 Territory

         *

--------------------------------------------------------------------------------
* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission.  Confidential treatment has been
requested with respect to the omitted portions.
--------------------------------------------------------------------------------

<PAGE>

                                    Exhibit D

                                  PRESS RELEASE

<PAGE>

                                    EXHIBIT E
                                 JAMS/ENDISPUTE
                                  COMPREHENSIVE
                                ARBITRATION RULES
                                 AND PROCEDURES

<TABLE>
<S>                                                                                               <C>
Rule 1.    Scope of Rules .......................................................................  1
Rule 2.    Party-Agreed Procedures ..............................................................  1
Rule 3.    Amendment of Rules ...................................................................  1
Rule 4.    Conflict with Law ....................................................................  1
Rule 5.    Commencing an Arbitration ............................................................  1
Rule 6.    Preliminary and Other Administrative Conferences/Optional Appeal Procedure ...........  2
Rule 7.    Number of Arbitrators and Appointment of Chairperson .................................  3
Rule 8.    Service ..............................................................................  3
Rule 9.    Notice of Claims .....................................................................  3
Rule 10.   Interpretation of Rules and Jurisdictional Challenges ................................  4
Rule 11.   Representation .......................................................................  4
Rule 12.   Withdrawal from Arbitration ..........................................................  4
Rule 13.   Ex Parte Communications ..............................................................  5
Rule 14.   Arbitrator Selection and Replacement .................................................  5
Rule 15.   Exchange of Information ..............................................................  6
Rule 16.   Summary Disposition of a Claim or Issue ..............................................  7
Rule 17.   Scheduling of Hearing ................................................................  7
Rule 18.   Pre-Hearing Submissions ..............................................................  7
Rule 19.   Securing Witnesses and Documents for the Arbitration Hearing .........................  8
Rule 20.   The Arbitration Hearing ..............................................................  8
Rule 21.   Waiver of Hearing ....................................................................  9
Rule 22.   The Award ............................................................................  9
Rule 23.   Optional Appeal Procedure ............................................................ 10
Rule 24.   Enforcement of the Award ............................................................. 11
Rule 25.   Confidentiality and Privacy .......................................................... 11
Rule 26.   Waiver of Objection .................................................................. 11
Rule 27.   Settlement and Consent Award ......................................................... 11
Rule 28.   Sanctions ............................................................................ 12
Rule 29.   Disqualification of the Arbitrator as a Witness or Party and Exclusion of Liability .. 12
Rule 30.   Fees ................................................................................. 12
Rule 31.   Bracketed (or High-Low) Arbitration Option ........................................... 12
Rule 32.   "Final Offer (or Baseball)" Arbitration Option ....................................... 13
</TABLE>

Rule 1.       Scope of Rules

The JAMS/ENDISPUTE Comprehensive Arbitration Rules and Procedures ("Rules")
govern binding Arbitrations of disputes or claims that are administered by
JAMS/ENDISPUTE and in which any disputed claim or counterclaim exceeds $250,000,
not including interest.

Rule 2.       Party-Agreed Procedures

The Parties may agree on any procedures not specified herein that are consistent
with the applicable law. The Parties will promptly notify the JAMS/ENDISPUTE
Case Administrator of any Party-agreed procedures and will confirm these
procedures in writing. The Party-agreed procedures will be enforceable as if
contained in these Rules. These Rules will control any matters not changed by
the Party-agreed procedures.

Rule 3.       Amendment of Rules

JAMS/ENDISPUTE may amend these Rules without notice. The Rules in effect on the
date of the commencement of an Arbitration (as defined in Rule 5) will apply to
that Arbitration, unless the Parties have specified that another version of the
Rules will apply.

Rule 4.       Conflict with Law

If any of these Rules, or a modification of these Rules agreed on by the
Parties, is discovered to be in conflict with a mandatory provision of
applicable law, the provision of law will govern, and no other Rule will be
affected.

Rule 5.       Commencing an Arbitration

JAMS/ENDISPUTE Comprehensive Arbitration is commenced by one of the following:

<PAGE>

(a) the submission to JAMS/ENDISPUTE by all Parties of a fully executed
post-dispute Arbitration Agreement; or

(b) the submission to JAMS/ENDISPUTE of a pre-dispute written contractual
provision requiring the Parties to arbitrate the dispute or claim, along with
either written evidence of the intent of all Parties to comply with the
requirement or a written demand by one Party that the other Party(ies) comply
with evidence that such written demand has been served on the other Party(ies)
in accordance with either the pre-dispute written contractual provision or Rule
8, including, if appropriate, proof of service in accordance with the Federal
Rules of Civil Procedure; or

(c) the oral agreement of all Parties to participate in an Arbitration conducted
pursuant to these Rules.

The Arbitration process is considered commenced when JAMS/ENDISPUTE confirms in
writing that the above requirements for commencement have been met. The date of
commencement of the Arbitration is the date of JAMS/ENDISPUTE's commencement
letter.

In the event of an oral agreement to participate in an Arbitration, even if the
Arbitration is commenced with the issuance of a JAMS/ENDISPUTE commencement
letter, the Arbitration Hearing will not take place until all Parties have
executed an Arbitration Agreement.

If a Party that is a signatory to a pre-dispute written contractual provision
fails to agree to participate in the Arbitration process, JAMS/ENDISPUTE will
confirm in writing the failure to respond or participate and, pursuant to Rule
20, will schedule, and provide appropriate notice of a Hearing or other
opportunity for the Party demanding the Arbitration to demonstrate its
entitlement to relief.

                         Return to index at top of page.
                                   -----

Rule 6. Preliminary and Other Administrative Conferences/Optional Appeal
Procedure

(a) A Case Administrator/1/ may conduct a preliminary conference with the
Parties by telephone. This conference may occur within fourteen (14) calendar
days after the date of commencement of the Arbitration if the Arbitration was
commenced under the circumstances described in Section (b) of Rule 5. This
conference may occur within seven (7) calendar days after the date of
commencement of the Arbitration in all other circumstances. Unless the Parties
agree otherwise, if for any reason the conference does not take place within the
time specified above, the Case Administrator will proceed with the Arbitrator
selection process pursuant to Rule 14 as if the preliminary conference had, in
fact, been held.

The Case Administrator will answer any questions regarding these rules and will
discuss procedural matters such as the pleading or notice of claim sequence,
Arbitrator selection, a schedule for discovery, if any, and the expectations of
the Parties as to the length of time the Arbitration Hearing is likely to
require. The Parties may agree to a date for the hearing subject to Arbitrator
availability. In the absence of agreement, the date[s] of the hearing will be
set by the Arbitrator pursuant to Rule 17.

At the request of a Party and in the absence of Party agreement, the Case
Administrator may make a determination regarding the location of the Hearing,
subject to Arbitrator review. In determining the location of the Hearing, the
Case Administrator will take into account such factors as the convenience of the
Parties and witnesses as well as the relative resources of the Parties.

(b) At any subsequent time, the Case Administrator may convene, or the Parties
may request, additional conferences to discuss administrative or procedural
matters.

(c) At either the Preliminary Conference or at subsequent conferences, the
Parties and the Case Administrator may identify any substantive, evidentiary,
procedural or discovery-related disputes that

__________________________
/1/ All decisions to be made under these Rules by the Case Administrator will be
made under the supervision of the Senior Neutral or other "lead neutral" in the
particular JAMS/ENDISPUTE office.

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<PAGE>

should be considered in a conference with the Arbitrator(s). In addition, at
either the Preliminary conference or subsequent conferences, the Case
Administrator may offer the assistance of JAMS/ENDISPUTE in exploring settlement
through mediation or other non-binding alternative dispute resolution processes.

(d) During the Preliminary Conference, the Case Administrator may ask the
Parties if they agree to ire Optional Appeal Procedure set forth in Rule 23. All
Parties must agree in writing for the Optional Procedure be effective. Once a
Party has agreed to the Optional Appeal Procedure, it cannot unilaterally
withdraw from it, unless it withdraws, pursuant to Rule 12, from the
Arbitration. The Parties may subsequently agree to the Optional Appeal Procedure
at any time prior to the Arbitration Award becoming final pursuant to Rule 22.

Rule 7. Number of Arbitrators and Appointment of Chairperson

(a) JAMS/ENDISPUTE Comprehensive Arbitrations will be conducted by one neutral
Arbitrator, unless all Parties agree otherwise.

(b) In cases involving more than one Arbitrator, the Parties will agree on, or
in the absence of agreement the Case Administrator will designate, a Chairperson
of the Arbitration Panel. The Chairperson will have the authority to act as a
single Arbitrator for the purposes of ruling on all discovery and procedural
matters, including pleading issues, but not with respect to dispositive,
jurisdictional and sanction issues. All references to the Arbitrator in these
Rules will apply to the Chairperson of the Arbitration Panel where appropriate.

Rule 8. Service

Service under these Rules will be made by providing one copy of the document
with original signatures to each Party and two copies with original signatures
to the Case Administrator. Service may be made by hand-delivery, overnight
delivery service, U.S. mail or in accordance with the Federal Rules of Civil
Procedure. Service is considered effective upon the date of receipt of the
document or as otherwise set forth in the Federal Rules of Civil Procedure.
Service by facsimile transmission is considered effective upon receipt, but only
if followed within one week of delivery by service of an appropriate number of
copies and originals by one of the other service methods.

Rule 9. Notice of Claims

(a) If a matter has been submitted for a JAMS/ENDISPUTE Comprehensive
Arbitration after litigation has been commenced in court regarding the same
claim or dispute, the pleadings in the court case, including the Complaint and
Answer (with affirmative defenses and counter or cross claims), will be served
on JAMS/ENDISPUTE within fourteen (14) days of the date of commencement, and if
served, will be considered part of the record of the Arbitration. It will be
assumed that the existence of such pleadings constitutes appropriate notice to
the Parties of the claims, remedies sought, counter or cross claims and
affirmative defenses that each has. If necessary, such notice may be
supplemented pursuant to Rule 9 (b).

(b) If a matter has been submitted prior to or in lieu of the filing of the case
in court or prior to the filing of an Answer, the Parties must give each other
notice of all claims, remedies sought, counter or cross claims and affirmative
defenses (including jurisdictional challenges) that each has. Such notice may be
served upon the other Party(ies) and upon JAMS/ENDISPUTE, in the form of either
an appropriate pleading (either a Complaint or Answer) or a letter. The letter
should include a short statement of the factual basis for the claims, remedies
sought, counter or cross claims and affirmative defenses (including the basis of
any jurisdictional challenge).

Notice of claims, remedies sought, counter or cross claims and affirmative
defenses may be served simultaneously, in which case they should be served on
JAMS/ENDISPUTE within fourteen (14) calendar days of the date of commencement of
the Arbitration, or by such other date as the Parties may agree. The Responding
Party(ies) may, however, in its sole discretion, wait to receive the notice of
claim before serving its response, including counter or cross claims or
affirmative defenses. In this case, the response, including counter or cross
claims and affirmative defenses, should be served on the other Party(ies) and

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<PAGE>

upon JAMS/ENDISPUTE within fourteen (14) calendar days of having received the
notice of claim. If the Notice of Claim has been served on the Responding
Party(ies) prior to the date of commencement, the response, including counter or
cross claims and affirmative defenses, will be served within fourteen (14)
calendar days from the date of commencement.

Any Party that is a recipient of a counter or cross claim may reply to such
counter or cross claim, including asserting jurisdictional challenges. In this
case, the reply must be served on the other Party(ies) and JAMS/ENDISPUTE within
fourteen (14) calendar days of having received the notice of counter or cross
claim.

No claim, remedy, counter or cross claim or affirmative defense will be
considered by the Arbitrator in the absence of prior notice to the other
Party(ies), unless all Parties agree that such consideration is appropriate
notwithstanding the lack of prior notice.

If any Party fails to respond to a claim or fails to reply to a counter or cross
claim, that Party will be deemed to have denied the claims, counter or cross
claims made against it but to have waived the right to assert other claims or
challenges to jurisdiction.

(c) Amendments or additions to claims and counter or cross claims may be made
only on application to the Arbitrator, who may allow such changes upon a showing
of good cause and no prejudice to the opposing Party(ies).

Rule 10. Interpretation of Rules and Jurisdictional Challenges

(a) Once appointed, the Arbitrator will resolve disputes about the
interpretation and applicability of these Rules, including disputes relating to
the duties of the Arbitrator and the conduct of the Arbitration Hearing, except
that in cases involving more than one Arbitrator all such issues that may be
dispositive with respect to a claim will be ruled on by the Arbitration Panel.
The resolution of the issue by the Arbitrator or Panel is final.

Jurisdictional and arbitrability disputes, including disputes over the
existence, validity, interpretation or scope of the agreement under which
Arbitration is sought, may be submitted to and ruled on by the Arbitrator(s),
unless the relevant law requires that a court make such determinations.
Notwithstanding the provisions of Rule 16 (a), the Arbitrator has the authority
to determine jurisdiction and arbitrability prior to conducting a full hearing
on the merits.

(b) Disputes arising before the appointment of the Arbitrator will be resolved
by the Case Administrator, but only those disputes relating to jurisdiction and
the location and conduct of the Hearing are subject to subsequent review by the
Arbitrator.

(c) The Arbitrator upon good cause shown, or at his/her own discretion only when
necessary to facilitate the Arbitration, may extend any deadlines stated in
these rules, except the time for rendering the Award.

                         Return to index at top of page.
                                   -----

Rule 11. Representation

The Parties may be represented by counsel. Such representation is encouraged.
Each Party will promptly notify in writing the Case Administrator and the other
Party(ies) of the name, address and telephone and fax numbers of its counsel.
The attorney for a Party may act on the Party's behalf in complying with these
Rules.

Rule 12. Withdrawal from Arbitration

(a) No Party may terminate or withdraw from an Arbitration after it commences
(as defined in Rule 5) except by written agreement of all Parties to the
Arbitration.

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<PAGE>

(b) A Party that asserts a claim or counterclaim may unilaterally withdraw that
claim or counterclaim without prejudice by serving written notice on the other
Party(ies) and on the Arbitrator(s). However, the opposing Party(ies) may,
within fourteen (14) calendar days of having received notice of the withdrawal
of the claim or counterclaim, request that the Arbitrator(s) deem that the
withdrawal is with prejudice.

Rule 13. Ex Parte Communications

No Party will have any ex parte communication with the Arbitrator(s) regarding
any issue related to the Arbitration. Any necessary ex parte communication with
JAMS/ENDISPUTE, whether before or after the Arbitration Hearing, will be
conducted through the Case Administrator.

Rule 14. Arbitrator Selection and Replacement

(a) Unless the Arbitrator(s) has been previously selected by agreement of the
Parties, the Case Administrator at the Preliminary Conference may attempt to
reach agreement among the Parties regarding selection of the Arbitrator(s).

(b) If the Parties do not agree on an Arbitrator within seven (7) calendar days
of when the Preliminary Conference was or should have been held, the Case
Administrator will send the Parties a list of at least five (5) Arbitrator
candidates. JAMS/ENDISPUTE will also provide each Party with a brief description
of the background and experience of each Arbitrator candidate.

Any Party may, within seven (7) calendar days of receipt of the list of names,
challenge an Arbitrator candidate for cause. The Director of Professional
Services or Senior Judicial Officer or other "lead neutral" of the particular
JAMS/ENDISPUTE office will promptly rule on such challenge, and his or her
decision will be final. If a challenge for cause is upheld, a replacement name
will be sent to the Parties.

Within seven (7) calendar days of the receipt by the Parties of the final list
of names, each Party may strike two (2) names, and will rank the remaining
Arbitrator candidates in order of preference. The remaining Arbitrator candidate
with the highest composite ranking will become the Arbitrator.

If this process does not yield an Arbitrator, JAMS/ENDISPUTE will designate the
Arbitrator.

(c) If a Party fails to respond to the list of Arbitrator candidates within
seven (7) calendar days of the receipt by the Parties of the final list, the
Case Administrator will deem that Party to have accepted all of the Arbitrator
candidates.

(d) In cases involving more than two Parties or the selection of more than one
Arbitrator, the Case Administrator's list will include a sufficient number of
candidates to yield the specified number of Arbitrators, while allowing each
Party up to two (2) strikes.

(e) Entities whose interests are not adverse with respect to the issues in
dispute will be treated as a single Party for purposes of the Arbitrator
selection process. JAMS/ENDISPUTE will determine whether the interests between
entities are adverse for purposes of Arbitrator selection, considering such
factors as whether the entities are represented by the same attorney and whether
the entities are presenting joint or separate positions at the Arbitration.

(f) If, for any reason, the Arbitrator who is selected is unable to fulfill the
Arbitrator's duties, a successor Arbitrator will be chosen in accordance with
this Rule. If a member of a panel of Arbitrators becomes unable to fulfill his
or her duties after the beginning of a Hearing but before the issuance of an
Award, a new Arbitrator will be chosen in accordance with this Rule unless the
Parties agree to proceed with the remaining two Arbitrators. The Director of
Professional Services or Senior Judicial Officer or other "lead neutral" of the
particular JAMS/ENDISPUTE office will make the final determination as to whether
an Arbitrator is unable to fulfill his or her duties, and his or her decision
will be final.

(g) Any disclosures that are mandated by applicable law regarding the selected
Arbitrator(s) will be made within fourteen (14) calendar days from the date of
appointment.

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<PAGE>

(h) The obligation of the Arbitrator(s) to make all disclosures that are
mandated by applicable law will continue throughout the Arbitration process. At
any time during the Arbitration process, a Party may challenge the continued
service of an Arbitrator for cause. The challenge must be based upon information
that was not available to the Parties at the time the Arbitrator was selected.
The Director of Professional Services or Senior Judicial Officer or other "lead
neutral" of the particular JAMS/ENDISPUTE office will make the final
determination on such challenge, and his or her decision will be final.

Rule 15.      Exchange of Information

(a) The Parties will cooperate in good faith in the voluntary, prompt and
informal exchange of all non-privileged documents and other information relevant
to the dispute or claim.

(b) The Parties will exchange copies of all non-privileged documents relevant to
the dispute or a claim, including copies of all documents in their possession or
control on which they rely in support of their positions or which they intend to
introduce as exhibits at the Arbitration Hearing. The Parties will serve the
documents within twenty-one (21) calendar days after all pleadings or notice of
claims have been received, unless otherwise agreed, but in no event later than
fourteen (14)calendar days before the Arbitration Hearing.

(c) The Parties will exchange the names of all individuals with knowledge of be
dispute or claim, including all individuals who they may call as witnesses at
the Arbitration Hearing. The Parties wail serve the names of such witnesses
within twenty-one (21) calendar days after all pleadings or notice of claims
have been received, unless otherwise agreed, but in no event later than fourteen
(l4) calendar days before the Arbitration Hearing.

(d) The Parties will exchange the names of all experts who may be called upon to
testify or whose report may be introduced at the Arbitration Hearing. The
Parties will serve the names of such experts within twenty-one (21)calendar days
after all pleadings or notice of claims have been received, unless otherwise
agreed, but in no event later than fourteen (14) calendar days before the
Arbitration Hearing.

(e) At any time after all pleadings or notice of claims have been received, but
no later than fourteen (14) calendar days before the Arbitration Hearing, each
Party may take one deposition of an opposing Party or of one individual under
the control of the opposing Party. The Parties will attempt to agree on the
time, location and duration of the deposition, and if the Parties do not agree
these issues will be determined by the Arbitrator. Any Party may conduct
depositions of its own witnesses which may be introduced as evidence at the
Arbitration Hearing if the other Party(ies) was given fair opportunity attend
the deposition and cross-examine the witness.

(f) Upon the request of any Party, the Arbitrator may conduct a conference for
the purpose of establishing an information exchange schedule or determining
whether any information should be exchanged, including whether any additional
depositions may be taken. If the Arbitrator determines that the requesting Party
has a reasonable need for the requested information, and that the request is not
overly burdensome on the opposing Party(ies), the Arbitrator may order the
additional information exchange. The producing Party(ies) will promptly comply
with any directive of the Arbitrator by the date specified by the Arbitrator
which, in no event, will be later than fourteen (14) calendar days before the
Arbitration Hearing.

(g) As they become aware of new documents or information, including experts who
may be called upon to testify, all Parties remain under a continuing obligation
to provide relevant, non-privileged documents, to supplement their
identification of witnesses and experts and to honor any informal agreements or
understandings between the Parties regarding documents or information to be
exchanged. Documents that have not been previously exchanged, or witnesses and
experts not previously identified, will not be considered by the Arbitrator(s)
at the Hearing, unless agreed by the Parties.

(h) The Parties will promptly notify the Case Administrator when an unresolved
dispute exists regarding discovery issues. The Case Administrator may attempt to
facilitate an informal resolution of the dispute by the Parties themselves. If
the dispute is not informally resolved, the Case Administrator will arrange a

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conference with the Arbitrator, either by telephone or in person, and the
Arbitrator will decide the dispute. With the consent of all Parties, the
Arbitrator may appoint a special master to assist in resolving the dispute.

                         Return to index at top of page.
                                   -----

Rule 16.      Summary Disposition of a Claim or Issue

(a) The Arbitrator(s) may hear and determine a Motion for Summary Disposition of
a particular claim or issue, either by agreement of all interested Parties or at
the request of one Party, provided other interested Parties have reasonable
notice to respond to the request.

(b) The Case Administrator may obtain the agreement of the Parties on a briefing
schedule and record for the Motion. If no agreement is reached, the
Arbitrator(s) will set the briefing schedule and contents of the record.
Ordinarily, only opening briefs (of no more than 20 double-spaced pages) and
response briefs (of no more than 10 double-spaced pages) will be allowed, in a
sequence to be determined. The briefs may be in the form of a letter.
Ordinarily, oral argument will not be allowed, unless all Parties or the
Arbitrator(s) so request.

(c) The Arbitrator(s) will apply the same burdens as a court in the jurisdiction
would apply under similar circumstances. With respect to substantive issues, the
Arbitrator(s) will apply the same standard in deciding the Motion as would be
applicable to the Arbitration Award.

Rule 17.      Scheduling of Hearing

The Arbitrator, after consulting with the Parties who have appeared, will
determine the date and time of the Hearing. Absent unusual circumstances, the
Arbitration Hearing should begin within ninety (90) calendar days of the
commencement of the Arbitration. The Arbitrator and the Parties will attempt to
schedule consecutive Hearing days if more than one day is necessary.

If a Party has failed to answer a claim and JAMS/ENDISPUTE reasonably believes
that the Party will not participate in the Hearing, the Arbitrator may set the
Hearing Date(s) without consulting with that Party. The non-participating Party
shall be served with a Notice of Hearing at least thirty (30) calendar days
prior to the scheduled date unless the law of the relevant jurisdiction allows
for shorter notice.

Rule 18.      Pre-Hearing Submissions

(a) The Arbitrator may require a pre-Hearing conference for the purposes both of
narrowing the focus of the Arbitration Hearing by stipulations of fact or joint
statements of issues to be determined and of resolving any outstanding issues
relating to the conduct of the Hearing. The pre-Hearing conference may be
conducted by telephone.

(b) By at least seven (7) calendar days before the Arbitration Hearing, the
Parties will exchange a list of the witnesses they intend to call, including any
experts, a short description of the anticipated testimony of each such witness,
an estimate of the length of the witness's direct testimony, and a list of
exhibits. In addition, at least seven (7) calendar days before the Arbitration
Hearing, the Parties will exchange copies of all exhibits intended to be used at
the Hearing to the extent that any such exhibit has not been previously
exchanged. The Parties should pre-mark exhibits and should attempt themselves to
resolve any disputes regarding the admissibility of exhibits prior to the
Hearing. The list of witnesses, with the description and estimate of length of
their testimony and the copies of all exhibits that the Parties intend to use at
the Hearing, in pre-marked form, should also be provided to JAMS/ENDISPUTE for
transmission to the Arbitrator, whether or not the Parties have stipulated to
the admissibility of all such exhibits.

(c) The Arbitrator(s) may require that each Party submit concise written
statements of position, including summaries of the facts and evidence a Party
intends to present, discussion of the applicable law and the basis for the
requested Award or denial of relief sought. The statements, which may be in the
form of a letter, should not exceed twenty (20) double-spaced pages in length,
and should be submitted to JAMS/ENDISPUTE, and served upon the other Party(ies),
by at least seven (7) calendar days before the

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Hearing date. Rebuttal statements or other pre-Hearing written submissions may
be permitted or required at the discretion of the Arbitrator(s).

Rule 19.      Securing Witnesses and Documents for the Arbitration Hearing

At the request of another Party, all other Parties will produce for the
Arbitration Hearing all witnesses in their employ or under their control without
need of subpoena. The Arbitrator may issue subpoenas for the attendance of
witnesses or the production of documents. In the event a Party or a subpoenaed
person objects to the production of a witness or other evidence, the Party may
file an objection with the Arbitrator, who will promptly rule on the objection,
weighing both the burden on the producing Party and the need of the proponent
for the witness or other evidence.

Rule 20.      The Arbitration Hearing

(a) The Arbitrator(s) will ordinarily conduct the Arbitration Hearing in the
manner set forth in these Rules. The Arbitrator(s) may vary these procedures if
the Arbitrator(s) determines that it is reasonable and appropriate to do so.

(b) The Arbitrator(s) will determine the order of proof, which will generally be
similar to that of a court trial.

(c) The Arbitrator(s) will require witnesses to testify under oath if requested
by any Party.

(d) The Arbitrator(s) will consider evidence that he or she finds relevant and
material to the dispute, giving the evidence such weight as he or she determines
is appropriate. The Arbitrator(s) may be guided in that determination by the
Federal Rules of Evidence or by any other applicable judicial rules of evidence;
however, strict conformity to such rules of evidence is not required, except
that the Arbitrator(s) will apply the law relating to privileges and work
product. The Arbitrator may limit testimony to exclude evidence that would be
immaterial or unduly repetitive, provided that all Parties are afforded the
opportunity to present material and relevant evidence.

(e) The Arbitrator(s) will receive and consider witnesses' deposition testimony
recorded by transcript or videotape, provided that the other Parties have had
the opportunity to attend and cross-examine. The Arbitrator(s) may in his or her
discretion consider witness affidavits or other recorded testimony even if the
other Parties have not had the opportunity to cross-examine, but will give that
evidence only such weight as the Arbitrator(s) deems appropriate.

(f) The Parties will not offer as evidence, and the Arbitrator(s) will neither
admit into the record nor consider, prior settlement offers by the Parties or
statements or recommendations made by a mediator or other person in connection
with efforts to resolve the dispute being arbitrated.

(g) When the Arbitrator(s) determines that all relevant and material evidence
and arguments have been presented, the Arbitrator will declare the Hearing
closed. The Arbitrator(s) may defer the closing of the Hearing until a date
agreed upon by the Arbitrator(s) and the Parties, to permit the Parties to
submit post-Hearing briefs, which may be in the form of a letter, and/or to make
closing arguments. If post-Hearing briefs are to be submitted, or closing
arguments are to be made, the Hearing will be deemed closed upon receipt by the
Arbitrator(s) of such briefs or the making of such closing arguments.

(h) At any time before the Award is rendered, the Arbitrator(s) may, on his or
her own initiative or on application of a Party for good cause shown, re-open
the Hearing. If the Hearing is re-opened and the re-opening prevents the
rendering of the Award within the time limits specified by these Rules, the time
limits will be extended for an appropriate period of time.

(i) The Arbitrator(s) may proceed with the Hearing in the absence of a Party
who, after having executed an Arbitration agreement, or who is otherwise bound
to arbitrate, and after having received notice of the Hearing pursuant to Rule
17, fails to attend. The Arbitrator(s) may not render an Award solely on the
basis of the default or absence of the Party, but will require any Party(ies)
who is present to submit such evidence

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as the Arbitrator(s) may require for the rendering of an Award. If
JAMS/ENDISPUTE reasonably believes that a Party will not attend the Hearing, the
Arbitrator may receive the evidence necessary to render an Award either by a
telephone conference or by affidavit.

(j) Any Party may request that a stenographic or other record be made of the
Hearing, provided that the requesting Party bear the cost of such stenographic
record and that the original of the record be maintained by the reporting
service so that the other Party(ies) has equal access to it. If a stenographic
or other record is made of the Hearing, the requesting Party(ies) will provide a
copy to the Arbitrator. If the Parties agree to an Optional Appeal Procedure,
they will ensure that a stenographic or other record is made of the Hearing and
will share the cost.

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Rule 21.      Waiver of Hearing

The Parties may agree to waive the oral Hearing and submit the dispute to the
Arbitrator(s) for an Award based on written submissions and other evidence upon
which the Parties agree.

Rule 22.      The Award

(a) Absent good cause for an extension, the Arbitrator should render the award
within thirty (30) calendar days after the date of the closing of the Hearing
or, if an Arbitration Hearing has been waived, within thirty (30) calendar days
after the receipt by the Arbitrator(s) of all materials specified by the
Parties.

(b) Where a panel of Arbitrators has heard the dispute, the decision and Award
of a majority of the panel will constitute the Arbitration Award and will be
binding on the Parties.

(c) Unless the Parties specify a different standard, in determining the Award
the Arbitrator(s) will be guided by principles of law and equity as applied to
the facts found at the Arbitration Hearing, including those facts relating to
custom and agreement between the Parties.

(d) The Arbitrator(s) is authorized to award any remedy allowed by the
applicable law, including multiple damages, pre- or post judgment interest and
attorneys' fees and expenses, and to grant final or interlocutory relief,
including injunctive relief, unless the Parties have agreed to a narrower scope
of permissible relief. Notwithstanding this authority, the Arbitrator may not
Award punitive damages unless previously agreed by the Parties or unless
punitive damages are required by law to be an available remedy in such cases. In
the Award, the Arbitrator may also assess Arbitration fees and expenses if
provided by agreement of the Parties, allowed by applicable law or pursuant to
Rule 30(c),in favor of either Party.

(e) The Award will consist of a written statement signed by the Arbitrator(s)
regarding the disposition of each claim and the relief, if any, awarded as to
each claim. Unless all Parties agree otherwise, the Arbitrator(s) will also
provide a concise written statement of the reasons for the Award, but this
statement will not become part of the Award nor be admissible in any judicial
proceeding to enforce or vacate the Award.

(f) JAMS/ENDISPUTE will issue the Award by serving copies on the Parties.

(g) Within seven (7) calendar days after service of the Award, any Party, with
written notice to all other Parties, may serve upon the other Party(ies) and
JAMS/ENDISPUTE a request that the Arbitrator(s) correct any computational,
typographical or similar error in an Award, or the Arbitrator(s) may correct
such errors in the Award on his or her own initiative. The Arbitrator(s) will
make any necessary and appropriate correction to the Award within seven (7)
calendar days of receiving a request, provided that the other Party(ies) has a
reasonable opportunity to respond. The corrected Award will be served upon the
Parties.

(h) The Award is considered final, for purposes of either the Optional Appeal
Procedure pursuant to Rule 23 or a judicial proceeding to enforce, modify or
vacate the Award pursuant to Rule 24, after seven

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(7) calendar days of service of the Award, if no request for a correction is
made, or as of the date of service of a corrected Award.

Rule 23.      Optional Appeal Procedure

(a) The Appeal Panel will consist of three neutral members, unless the Parties
agree that there will be one neutral member. Upon receipt by the Case
Administrator of the written agreement of the Parties to the Optional Appeal
Procedure, the Case Administrator will recommend to the Parties an Appeal Panel
and will make any disclosures that are mandated by applicable law regarding the
candidates for the Panel. The Case Administrator will seek the agreement of the
Parties as to the selection of Appeal Panel ___ mbers. If the Parties do not
agree on the composition of the Appeal Panel within seven (7)calendar days of
having received the Case Administrator recommendation for the Appeal Panel, the
Case Administrator will appoint an Appeal Panel.

(b) The procedure for filing and arguing an Appeal is as follows:

      (i) If all Parties have agreed to the Optional Appeal Procedure, any Party
      may Appeal an Arbitration Award that has been rendered pursuant to Rule 22
      and has become final. The Appeal must be served, in writing, to the Case
      Administrator and on the opposing Party(ies) within fourteen (14) calendar
      days after the Award has become final. The letter or other writing
      evidencing the Appeal must specify those elements of the Award that are
      being appealed and must contain a brief statement of the basis for the
      Appeal.

      (ii) Within seven (7) calendar days of the service of the Appeal, the
      opposing Party(ies) may serve on the Case Administrator and on the
      opposing Party(ies) a Cross-Appeal with respect to any element of the
      Award. The letter or other writing evidencing the Cross-Appeal must
      specify those elements of the Award that are being Appealed and must
      contain a brief statement of the basis for the Cross-Appeal.

      (iii) The record on Appeal will consist of the stenographic or other
      record of the Arbitration Hearing and all exhibits, deposition transcripts
      and affidavits that had been accepted into the record of the Arbitration
      Hearing by the Arbitrator(s). The Parties will cooperate with the Case
      Administrator in compiling the record on Appeal, and the Case
      Administrator will provide the record to the Appeal Panel. No evidence not
      previously accepted by the Arbitrator(s) will be considered by the Appeal
      Panel, unless the basis of the Appeal is non-acceptance by the Arbitrator
      of certain evidence or unless the Appeal Panel determines that there is
      good cause to re-open the record pursuant to Rule 23(d).

      (iv) The Parties may elect to rely on the memoranda or briefs previously
      submitted to the Arbitrator(s). In the absence of such election, the Case
      Administrator will obtain the agreement of the Parties on a briefing
      schedule. If no agreement is reached, the Case Administrator will set the
      briefing schedule. Ordinarily, only opening briefs (of no more than 25
      double-spaced pages) and response briefs (of no more than 15 double-spaced
      pages) will be allowed. The briefs maybe in the form of a letter.

      (v) The Appeal Panel will conduct an oral argument if all Parties request
      such argument or may conduct oral argument, in complex cases or unusual
      circumstances, on its own initiative. If there is to be oral argument, the
      Case Administrator will obtain the agreement of the Parties on both the
      date of such argument and the duration, including the allocation of time.
      In the absence of agreement, the Appeal Panel will set the date and
      duration of the oral argument, including the allocation of time.

(c) Once an Appeal has been timely filed, the Arbitration Award is no longer
considered final for purposes of seeking judicial enforcement, modification or
vacating pursuant to Rule 24.

The Appeal Panel will apply the same standard of review as the first-level
appellate court in the jurisdiction would apply under similar circumstances and
will also apply the grounds for review under the applicable Arbitration review
statute. The Appeal Panel will respect the evidentiary standard set forth in
Rule 20(d). The Panel may affirm, reverse or modify an Award. It may not remand
to the original Arbitrator, but may

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re-open the record in order to review evidence that had been improperly excluded
by the Arbitrator or evidence that is now necessary in light of the Panel's
interpretation of the relevant .substantive law. A three-member Appeal Panel
will make its decision by majority vote and, absent good cause for an extension,
will issue the decision within twenty-one (21) calendar days of the date of the
oral argument, the receipt of the new evidence or receipt of the record and of
all briefs, whichever is applicable or later. Its decision will consist of a
concise written explanation, unless all Parties agree otherwise.

(e) If a Party refuses to participate in the Optional Appeal Procedure after
having agreed to do so, the Appeal Panel will maintain jurisdiction over the
Appeal and will consider the Appeal as if all Parties were participating,
including retaining the authority to modify any Award or element of an Award
that had previously been entered in favor of the non-participating Party,
assuming it believes that the record, after application of the appropriate
standard of Appeal, justifies such action.

(f) JAMS/ENDISPUTE will serve the Appeal Panel decision on the Parties. Upon
service of the Appeal Panel decision, the Award will be final for purposes of
judicial review.

Rule 24.      Enforcement of the Award

Proceedings to enforce, confirm, modify or vacate an Award will be controlled by
and conducted in conformity with the Federal Arbitration Act, 9 U.S.C. Sec 1 et.
seq. or applicable state law.

Rule 25.      Confidentiality and Privacy

(a) The Parties, the Case Administrator and the Arbitrator will maintain the
confidential nature of the Arbitration proceeding and the Award, including the
Hearing and the written explanation of the Award, except as necessary in
connection with a judicial challenge to or enforcement of an Award, or unless
otherwise required by law or judicial decision.

(b) The Arbitrator may issue orders to protect the confidentiality of
proprietary information, trade secrets or other sensitive information.

(c) Subject to the discretion of the Arbitrator or agreement of the Parties, any
person having a direct interest in the Arbitration may attend the Arbitration
Hearing. The Arbitrator will have the discretion to exclude any non-Party from
any part of a Hearing.

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Rule 26.      Waiver of Objection

If a Party becomes aware of a violation or failure to comply with these Rules
and fails promptly to object in writing, the objection will be deemed waived,
unless the Arbitrator or Senior Neutral determines that waiver will cause
substantial injustice or hardship.

Rule 27.      Settlement and Consent Award

(a) The Parties may agree, at any stage of the Arbitration process, to submit
the case to JAMS/ENDISPUTE for mediation. The JAMS/ENDISPUTE mediator assigned
to the case will not be an Arbitrator or a member of the Appeal Panel, unless
the Parties so agree pursuant to Rule 27(b).

(b) The Parties may also agree to seek the assistance of the Arbitrator(s) in
reaching settlement. However, the Parties must confirm in writing that the
assistance of the Arbitrator(s) in such settlement efforts will not disqualify
the Arbitrator(s) from serving as Arbitrator(s) if settlement is not reached nor
will such assistance be argued to a reviewing court as the basis for vacating or
modifying an Award.

(c) If the Parties inform the Case Administrator in writing that they have
reached a settlement, the Arbitration will be deemed terminated. If the Parties
request, the Arbitrator(s) may set forth the terms of the agreed settlement in
an Award, which will be referred to as a Consent Award, or the Arbitrator may
sign a

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Consent Award prepared by the Parties. The Consent Award will be binding on the
Parties and will be deemed the Award of the Arbitrator for purposes of
enforcement.

Rule 28. Sanctions

The Arbitrator(s) may order appropriate sanctions for failure of a Party to
comply with its obligations under any of these Rules. These sanctions may
include, but are not limited to, assessment of costs, prohibition of certain
evidence, or in extreme cases ruling on an issue submitted to Arbitration
adversely to the Party who has failed to comply.

Rule 29. Disqualification of the Arbitrator as a Witness or Party and Exclusion
of Liability

The Parties will not call the Arbitrator(s), the Case Administrator, Director of
Professional Services, Senior Judicial Officer or any other JAMS/ENDISPUTE
employee or agent as a witness or as an expert in any pending or subsequent
litigation or other proceeding involving the Parties and relating to the dispute
that is the subject of the Arbitration. The Arbitrator(s), Case Administrator,
Director of Professional Services, Senior Judicial Officer and other
JAMS/ENDISPUTE employees and agents are also disqualified as witnesses or
experts. The Parties will defend the Arbitrator(s), Case Administrator, Director
of Professional Services, Senior Judicial Officer and JAMS/ENDISPUTE from any
subpoenas from outside Parties arising from the Arbitration. Neither the
Arbitrator(s), Case Administrator, Director of Professional Services, Senior
Judicial Officer nor JAMS/ENDISPUTE is a necessary party in any litigation or
other proceeding relating to the Arbitration or the subject matter of the
Arbitration, and neither the Arbitrator(s), Case Administrator, Director of
Professional Services, Senior Judicial Officer nor JAMS/ENDISPUTE, including its
employees or agents, will be liable to any Party for any act or omission in
connection with any Arbitration conducted under these Rules.

Rule 30. Fees

(a) Each Party will pay its pro-rata share of JAMS/ENDISPUTE's fees and expenses
as set forth in the JAMS/ENDISPUTE fee schedule in effect at the time of the
commencement of the Arbitration, unless the Parties agree on a different
allocation of fees and expenses. To the extent possible, the allocation of such
fees and expenses will not be disclosed to the Arbitrator(s). JAMS/ENDISPUTE's
agreement to render services is not only with the Party, but also with the
attorney or other representative of the Party in the Arbitration.

(b) JAMS/ENDISPUTE requires that the Parties deposit the fees and expenses for
the Arbitration prior to the Hearing and may preclude a Party that has failed to
deposit its pro-rata or agreed-upon share of the fees and expenses from offering
evidence at the Hearing. JAMS/ENDISPUTE may waive the deposit requirement upon a
showing of good cause.

(c) The Parties are jointly and severally liable for the payment of the fees and
expenses of JAMS/ENDISPUTE. In the event that one Party has not appeared and the
other Party has paid the full amount of the fees, upon request the Arbitrator
will award the defaulting Party's share of the fee obligation against it and in
favor of the Party that has paid. In addition, the Arbitrator may award against
any Party any costs or fees that the Party owes with respect to the Arbitration.

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Rule 31. Bracketed (or High-Low) Arbitration Option

(a) At any time before the issuance of the Arbitration Award, the Parties may
agree, in writing, on minimum and maximum amounts of damages that may be awarded
on each claim or on all claims in the aggregate. The Parties will promptly
notify the Case Administrator, and provide to the Case Administrator a copy of
their written agreement setting forth the agreed-upon maximum and minimum
amounts.

(b) The Case Administrator will not inform the Arbitrator(s) of the agreement to
proceed with this option or of the agreed-upon minimum and maximum levels,
unless all Parties agree that he or she should so inform the Arbitrator(s).

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(c) The Arbitrator(s) will render the Award within thirty (30) calendar days
after the date of the closing of the Hearing or, if an Arbitration Hearing has
been waived, within thirty (30) calendar days after the date of the
Arbitrator(s) receipt of all materials specified by the Parties. In rendering
the Award, the Arbitrator(s) will apply the standard set forth in Rule 22(c).
The form of the final Award will be governed by Rule 22(e).

(d) In the event that the Award of the Arbitrator(s) is in between the
agreed-upon minimum and maximum amounts, the Award will become final as is. In
the event that the Award of the Arbitrator(s) is below the agreed-upon minimum
amount, the final Award issued will be at the agreed-upon minimum amount. In the
event that the Award of the Arbitrator(s) is above the agreed-upon maximum
amount, the final Award issued will be the agreed-upon maximum amount.

Rule 32. "Final Offer (or Baseball)" Arbitration Option

(a) Upon agreement of the Parties to utilize the option set forth in this Rule,
at least seven (7) calendar days before the Arbitration Hearing, the Parties
will exchange and provide to the Case Administrator written proposals for the
amount of money damages they would offer or demand, as applicable, and that they
believe to be appropriate based on the standard set forth in Rule 22(c). The
Case Administrator will promptly provide a copy of the Parties' proposals to the
Arbitrator(s), unless the Parties agree that they should not be provided to the
Arbitrator(s). Anytime prior to the close of the Arbitration Hearing, the
Parties remain free to exchange revised written proposals of offers or demands,
which will supersede all prior proposals. The revised written proposals will be
provided to the Case Administrator who will promptly provide them to the
Arbitrator(s), unless the Parties agree otherwise.

(b) If the Arbitrator(s) has been informed of the written proposals, in
rendering the Award the Arbitrator(s) will select between the Parties' last
proposals, choosing the proposal that the Arbitrator(s) finds most reasonable
and appropriate in light of the standard set forth in Rule 22(c).

(c) If the Arbitrator(s) has not been informed of the written proposals, the
Arbitrator will render the Award as if pursuant to Rule 22, except that the
Award will thereafter be adjusted to conform to the closest of the last
proposals, and the closest of the last proposals will become the Award.

(d) The Arbitrator will render the Award within thirty (30) calendar days after
the date of the closing of the Hearing or, if an Arbitration Hearing has been
waived, within thirty (30) calendar days after the date of the Arbitrator(s)
receipt of all materials specified by the Parties. The form of the final Award
will be governed by Rule 22(e).

_____________________
[/1/] All decisions to be made under these Rules by the Case Administrator will
be made under the supervision of the Director of Professional Services, Senior
Judicial Officer or other "lead neutral" in the particular JAMS/ENDISPUTE
office.

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                                    EXHIBIT F
                                        *

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* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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<PAGE>

                                 AMENDMENT NO. 1
                                TO THE AGREEMENT
                                     BETWEEN
                          DISCOVERY THERAPEUTICS, INC.
                                       AND
                                SCHWARZ PHARMA AG

     THIS AMENDMENT NO. 1 is entered into as of the 22 day of December, 1999,
("Amendment Effective Date") by and among DISCOVERY THERAPEUTICS, INC., a
Delaware corporation having a princapl place of business at 2028 Dabney Road,
Suite E-17, Richmond, VA 23230-3311 ("DTI") and SCHWARZ PHARMA AG, a corporation
formed under the laws of Germany and having a principle place of business at
Alfred-Nobel-Strasse 10, 40789 Monheim, Germany ("Schwarz").

                                    RECITALS

     WHEREAS, DTI and Schwarz entered into an Agreement dated as of July 16,
1996, for the late-stage development and commercialization of DTI's proprietary
dopamine receptor agonist N-0923 and various other compounds in all countries of
the world except Japan (the "Agreement");

     WHEREAS, DTI and Schwarz desire to amend the Agreement to expand the
territory in which Schwarz has rights to include Japan; and

     WHEREAS, not later than 30 days after the execution of this Amendment,
Schwarz will purchase * worth of Series C Preferred Stock of DTI pursuant to the
Stock Purchase Agreement described herein.

     NOW, THEREFORE, in consideration of the foregoing and the covenants and
promises contained in this Amendment, DTI and Schwarz hereby amend the Agreement
as follows:

1.   Section 1.18 shall be deleted in its entirety and the following shall be
     inserted in its place:

          1.18 "Territory" means all countries of the world.

2.   Section 5.2 shall be deleted in its entirety and the following shall be
     inserted in its place:

          5.2  Milestones. Schwarz shall pay to DTI the following amounts within
     thirty (30) days of the first achievement, by any Licensed Product, of the
     respective milestone event set forth below and shall not pay again for
     subsequent Licensed Products:

               Milestone Event                                 Payment

     Commencement of Phase III clinical trial                     *
     (enrollment of first patient)

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* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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<PAGE>

               Milestone Event                                 Payment

     First issuance of joint DTI-LTS patent in                    *
     any Major Country of the Territory

     Submission to regulatory authority of                        *
     Regulatory Approval in Japan

     NDA Approval                                                 *

     Regulatory Approval in the first three                       *
     non-US Major Countries ex Japan

     Regulatory Approval in Japan                                 *

     Milestone payments shall be noncreditable and shall be nonrefundable.

3.   Section 5.3 shall be deleted in its entirety and the following shall be
     inserted in its place:

          5.3  Earned Royalties. In addition, Schwarz shall pay DTI a running
     royalty on annual Net Sales of all Licensed Products according to the
     following marginal rates:

               (a)  For annual Net Sales of Licensed Products up to *, * of such
     Net Sales; and

               (b)  For the portion of annual Net Sales of Licensed Products in
     excess of * and not exceeding *, * of such Net Sales; and

               (c)  For the portion of annual Net Sales of Licensed Products in
     excess of * of such Net Sales.

               (d)  As of the Effective Date of this Agreement, the parties
     anticipate Schwarz will consummate a supply agreement with LTS. In such
     case the parties may decide that Schwarz shall pay to LTS some or all of
     royalties pursuant to Section 6.2 and reduce its royalty payments to DTI
     accordingly.

4.   The following new Section 5.12 shall be added to Article 5 of the
     Agreement:

          5.12 Equity Investment in DTI. Not later than thirty (30) days after
     the Amendment Effective Date, the parties shall enter into a Stock Purchase
     Agreement pursuant to which Schwarz shall purchase * worth of Series C
     Preferred Stock of DTI which shall represent * of DTI's capital stock on a
     fully diluted basis.

5.   Except as otherwise amended herein, the Agreement shall remain in full
     force and effect.

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* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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6.   This Amendment may be executed in any number of counterparts, each of which
     shall be deemed an original, and all of which taken together shall
     constitute one and the same instrument.

7.   This Amendment shall be effective as of the date first written above.

     IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment.

DISCOVERY THERAPEUTICS, INC.           SCHWARZ PHARMA AG

By: /s/ Donald A. McAfee               By: /s/ Lars Ekman; P. Schwarz-Schutte
----------------------------           -----------------------------------------
Title: Chairman and CEO                Title: Member of Board; Chairman of Board
----------------------------           -----------------------------------------

                                        3<PAGE>

                                                                    EXHIBIT 10.7

                               EARN OUT AGREEMENT

This EARN OUT AGREEMENT, made and entered into this 25/th/ day of April, 1994,
by and between Whitby, Inc. ("Whitby"), a Virginia Corporation with offices
located at 1211 Sherwood Avenue, Richmond, Virginia 23261 and Discovery
Therapeutics, Inc. ("Discovery"), a Delaware corporation with offices located at
911 East Leigh Street, Richmond, Virginia 23219.

Whereas, Discovery has agreed to pay Whitby as additional compensation for the
purchase of the Capital Stock of Whitby Research, Inc. ("Whitby Research") a
percentage of royalties and other compensation for certain Patents and Know-How.

NOW, THEREFORE, in consideration of the promises, representations and conditions
herein contained, the parties hereto agree as follows:

ARTICLE I.  ASSETS SUBJECT TO THE EARN OUT AGREEMENT
----------------------------------------------------

Section 1.01

The following compounds, processes, formulations and products are subject to the
Earn Out Agreement:

(a)    The compounds, processes, formulations and/or products covered by the
Patents and/or Know-How of Whitby Research as of the date of the closing of the
sale of the Whitby Research, Inc. stock including (i) all Patents, Patent
applications and Patent applications in preparation, (ii) compounds synthesized
by or for Whitby Research as listed in the Compound Library and (iii) molecules
not currently in the Compound Library but covered by one or more Patents or
Know-How are subject to this Earn Out Agreement.

(b)    The Compound Library shall consist of three categories:

       Category I    Compounds included in approved INDs.

       Category II   Compounds for which data on functional pharmacology (whole
                     tissue assay) has been obtained.

       Category III  All other compounds in the library.

Discovery acknowledges and agrees that the Compounds and Patents listed in
Appendix A and B of this Agreement is the entire list of such compounds and
patents delivered to Discovery pursuant to the Purchase Agreement dated April
25, 1994, by and between Whitby and Discovery ("Purchase Agreement") and that no
other compounds or patents are required to be delivered by Whitby, Inc. to
Discovery.

--------------------------------------------------------------------------------
Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as *. A complete version of this exhibit has been filed
separately with the Securities and Exchange Commission.
--------------------------------------------------------------------------------

<PAGE>

(c)  "Know-How" shall mean the formulation, methods of administration,
specifications, data and information relating to clinical, pharmacological,
toxicological, analytical and/or other tests and studies transferred to
Discovery, as well as all other information or data disclosed to Discovery
pursuant to the Purchase Agreement.

(d)  "Patents" shall mean all patents, patent applications and patent
applications in preparation that were transferred to Discovery pursuant to the
Purchase Agreement and listed in Appendix B.

ARTICLE II.  COMPENSATION
--------------------------

Section 2.01

(a)   Discovery Therapeutics will remit or will cause Whitby Research to remit
to Whitby, Inc. a portion of any payment received for products or processes
using the Patents and/or Know-How of Whitby Research listed in Article I of this
Agreement. The amount remitted shall be according to the schedule in Appendix C
of this Agreement and shall be payable within ten (10) days after the end of the
calendar quarter during which the first sale, license, use or payment occurs and
quarterly thereafter.

(b)   All obligations of payment, for Patent royalties, fees and other patent
related payments will cease upon expiration of the last Patent whose claims
cover the product, process or compound in question. Obligations for the payment
of Know-How fees will continue for 15 years after expiration of the last Patent
whose claims cover the product, process, formulation or compound in question.

ARTICLE III.  REPORTS AND RECORDS
---------------------------------

Section 3.01

Discovery Therapeutics shall keep and shall cause Whitby Research to keep full,
true and accurate books of accounts containing all particulars that may be
necessary for the purpose of establishing the basis for the payments to Whitby,
Inc. and compliance with this Agreement including, but not limited to, the
number of products, total revenue for products or processes, deductions
applicable as provided in Appendix C and total payments due. Said books of
accounts shall be kept at Discovery's principal place of business. Said books
and the supporting data shall be open at all reasonable times and upon
reasonable notice for five (5) years following the end of the calendar year to
which they pertain, to the inspection of Whitby, Inc. or an independent
certified public accountant retained by Whitby, Inc., for the purpose of
verifying payments and compliance with this Agreement.

                                      -2-

<PAGE>

ARTICLE IV.  GENERAL PROVISIONS
-------------------------------

Section 4.01 - Assignment

This Agreement shall not be assignable by either party hereto; provided,
however, Whitby or Discovery may assign their respective rights and obligations
hereunder to a transferee of either party's entire business by sale, merger,
acquisition or otherwise, provided that the transferee assumes all the
obligations of the assignor set forth herein, and the assignor remains
responsible for the performance of its obligations under this Agreement.

Section 4.02 - Governing Law

This Agreement shall be governed by and construed in accordance with the laws of
the Commonwealth of Virginia without reference to the choice of law principles
thereof.

Section 4.03 - Notice

Any notice or communication required under this Agreement shall be in writing
and shall be sent by (i) commercial courier or (ii) personal delivery or (iii)
telecopy to the following addresses:

         TO WHITBY:                  COPY TO: Steven M. Mayer, Esq.
         Whitby, Inc.                      V.P. and General Counsel
         1211 Sherwood Avenue              Ethyl Corporation
         Richmond, VA 23261-5054           330 South Fourth Street
                                           Richmond, VA 23219

         TO DISCOVERY:
         Discovery Therapeutics, Inc.
         911 East Leigh Street
         Richmond, VA 23219

Section 4.04 - Entire Agreement

This Agreement and its schedules constitute the entire agreement between the
parties pertaining to its subject matter and supersedes all prior and
contemporaneous agreements and understandings of the parties in connection with
it. No covenant or condition not expressed in this Agreement shall affect or be
effective to interpret, change or restrict this Agreement. No modification,
waiver, termination, rescission, discharge or cancellation of this Agreement and
no waiver of any provision of or default under this Agreement shall affect the
right of the Purchaser or the Seller thereafter to enforce any other provision
or to exercise any right or

                                      -3-

<PAGE>

remedy in the event of another default, whether or not similar.

IN WITNESS WHEREOF, Discovery has caused this Agreement to be signed by one of
its officers thereunto duly authorized, and Whitby has caused this Agreement to
be signed by one of its officers thereunto duly authorized, all as of the day
and year first above written.

Discovery Therapeutics, Inc.               Whitby, Inc.

By: /s/ Donald A. McAfee                   By: /s/
   -------------------------                  --------------------------
   President                                  President
   -------------------------                  --------------------------
   Title                                      Title

                                       -4-

<PAGE>

                                   Category I

Compounds with Clinical Experience

*

CATEGORY I SHALL ALSO INCLUDE ANY AND ALL FORMULATIONS CONTAINING THE
ABOVE-REFERENCED COMPOUNDS.

--------------------------------------------------------------------------------
* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
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<PAGE>

                                   Category II

Compounds with Functional Data

Dopamine Agonists

         *

Penetration Enhancers

         *

Penetration Blocker

         *

Melatonin Derivatives

         *

--------------------------------------------------------------------------------
* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
--------------------------------------------------------------------------------

<PAGE>

                            Category II (continued)

Adenosine A 1 Agonists

                  *

Adenosine A/2/ Agonists

                  *

Adenosine A/1/ Antagonists

                  *

CATEGORY II SHALL ALSO INCLUDE ANY AND ALL FORMULATIONS CONTAINING THE
ABOVE-REFERENCED COMPOUNDS.

--------------------------------------------------------------------------------
* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
--------------------------------------------------------------------------------

<PAGE>

                                  Category III

Compounds with No Functional Data

          *

--------------------------------------------------------------------------------
* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
--------------------------------------------------------------------------------

<PAGE>

                            CATEGORY III (continued)

                                        *

CATEGORY III SHALL ALSO INCLUDE ANY AND ALL FORMULATIONS CONTAINING THE
ABOVE-REFERENCED COMPOUNDS.

--------------------------------------------------------------------------------
* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
--------------------------------------------------------------------------------

<PAGE>

                                   APPENDIX C
                                 Earn Out Rates

1.   Category I - Molecules
     ----------------------

(a) Royalty rates of * of net sales by Discovery, Whitby Research and/or their
respective subsidiaries shall apply to any product, process, formulation or
compound that contains a molecule or a process used to make such molecule in
Category I of Appendix A which is covered by the claims of a Patent ("Category I
Products"). In addition, * of all royalties, milestone payments, option fees,
license fees and any other payment for license or sale of such Category I
Products, processes, formulations or compounds due to Discovery, Whitby Research
and/or their respective subsidiaries shall be payable to Whitby. The obligations
for the payment of the above Patent royalties and other payments shall terminate
upon expiration of the last Patent whose claims cover the product, process,
formulation or compound in question.

(b) A Know-How fee of (i) * of net sales by Discovery, Whitby Research and/or
their respective subsidiaries and (ii) * of any other fee or payment due to
Discovery, Whitby Research and/or their respective subsidiaries for Category I
Products, processes, formulations or compounds shall also be payable to Whitby.
Obligations for the payment of Know-How fees shall expire fifteen (15) years
after the expiration date of the last Patent whose claims cover the product,
process, formulation or compound in question.

(c) The obligations under subsections (a) and (b) are not additive. Discovery
shall pay or shall cause Whitby Research to pay the greater of the payments set
forth in subsection (a) or (b) if the product, process, formulation or compound
is covered by both subsections.

2.   Category II - Molecules
     -----------------------

(a) Royalty rates of * of net sales by Discovery, Whitby Research and/or their
respective subsidiaries shall apply to any product, process, formulation or
compound that contains a molecule or a process used to make such molecule in
Category II of Appendix A which is covered by the claims of a Patent ("Category
II Products"). In addition, * of all royalties, milestone payments, option
fees, license fees and any other payment for license or sale of such Category II
Products, processes, formulations or compounds due to Discovery, Whitby Research
and/or their respective subsidiaries shall be payable to Whitby. The obligations
for the payment of the above Patent royalties and other payments shall terminate
upon expiration of the last Patent whose claims cover the product, process,
formulation or compound in question.

(b) A Know-How fee of (i) * of net sales by Discovery, Whitby Research and/or
their respective subsidiaries and (ii) * of any other fee or payment due to
Discovery, Whitby Research and/or their respective subsidiaries for Category II
Products, processes, formulations or compounds shall also be payable to Whitby.
Obligations for the payment of Know-How fees shall expire fifteen (15) years
after the expiration date of the last Patent whose claims cover the product,
process, formulation or compound in question.

--------------------------------------------------------------------------------
* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
--------------------------------------------------------------------------------

<PAGE>

(c) The obligations under subsections (a) and (b) are not additive. Discovery
shall pay or shall cause Whitby Research to pay the greater of the payments set
forth in subsection (a) or (b) if the product, process, formulation or compound
is covered by both subsections.

3.   Category III - Molecules
     ------------------------

(a) Royalty rates of * of net sales by Discovery, Whitby Research and/or
their respective subsidiaries shall apply to any product, process, formulation
or compound that contains a molecule or processes used to make such molecule in
Category III of Appendix A which is covered by the claims of a Patent ("Category
III Products"). In addition, * of all royalties, milestone payments, option
fees, license fees and any other payment for license or sale of such Category
III Products, processes, formulations or compounds due to Discovery, Whitby
Research and/or their respective subsidiaries shall be payable to Whitby. The
obligations for the payment of the above Patient royalties and other payments
shall terminate upon expiration of the last Patent whose claims; cover the
product, process, formulation or compound in question.

(b) A Know-How fee of (i) * of net sales by Discovery, Whitby Research and/or
their respective subsidiaries and (ii) * of any other fee or payment due to
Discovery, Whitby Research and/or their respective subsidiaries for Category III
Products, processes, formulations or compounds shall also be payable to Whitby.
Obligations for the payment of Know-How fees shall expire fifteen (15) years
after the expiration date of the last Patent whose claims cover the product,
process; formulation or compound in question.

(c) The obligations under subsections (a) and (b) are not additive. Discovery
shall pay or shall cause Whitby Research to pay the greater of the payments set
forth in subsection (a) or (b) if the product, process, formulation or compound
is covered by both subsections.

4.   Other Molecules
     ---------------

(a) Royalty rates of * of net sales by Discovery, Whitby Research and/or
their respective subsidiaries shall apply to any product, process, formulation
or compound (i) that contains a molecule or a process used to make such a
molecule not currently in the Compound Library but is covered by the claims of
one or more Patents (Category IV Products). In addition, * of all royalties,
milestone payments, option fees, license fees and any other payment for license
or sale of such Category IV Products, processes, formulations or compounds used
to make such products or compounds due to Discovery, Whitby Research and/or
their respective subsidiaries shall be payable to Whitby. The obligations for
the payment of the above Patent royalties and other payments shall terminate
upon expiration of the last Patent whose claims cover the product, process,
formulation or compound in question.

(b) A Know-How fee of (i) * of net sales by Discovery, Whitby Research and/or
their respective subsidiaries and (ii) * of any other fee or payment due to
Discovery, Whitby Research and/or their respective subsidiaries for Category IV
Products, processes, formulations or compounds shall also be payable to Whitby.
Obligations for the payment of Know-How fees shall expire fifteen (15) years
after the expiration date of the last Patent whose claims cover the product,
process, formulation or compound in question.

--------------------------------------------------------------------------------
* Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
--------------------------------------------------------------------------------

<PAGE>

(c) The obligations under subsections (a) and (b) are not additive. Discovery
shall pay or shall cause Whitby Research to pay the greater of the payments set
forth in subsection (a) or (b) if the product, process, formulation or compound
is covered by both subsections.

5.   Definition of Net Sales
     -----------------------

"Net Sales" shall mean Discovery, Whitby Research and/or their respective
subsidiaries billings for products subject to this Agreement less the sum of the
following:

     (a)  sales, tariff duties and/or use taxes imposed on account of sales;
     (b)  outbound transportation prepaid or allowed;
     (c)  amounts allowed or credited on returns;
     (d)  transportation insurance; and
     (e)  discounts allowed in amounts customary in the trade excluding cash
          discounts.

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