Document:

SYNTROLEUM CORPORATION - SYNTROLEUM PLAZA - 1350 SOUTH BOULDER - SUITE 1100 -
                         TULSA, OKLAHOMA, 74119-3295 USA
                      (918) 592-7900  -  FAX (918) 592-7979

                                 AUGUST 3, 2000

Commonwealth  of  Australia
represented  by  the  Department  of  Industry  Science
and  Resources  (Invest  Australia)
Level  6,  20  Allara  Street
CANBERRA  ACT  2601

RE:     SUBLICENSE FROM SYNTROLEUM AUSTRALIA LICENSING CORPORATION (SALC) TO THE
COMMONWEALTH  OF  AUSTRALIA  (COMMONWEALTH)
LOAN  FROM  THE  COMMONWEALTH  TO SYNTROLEUM AUSTRALIA CREDIT COOPERATION (SACC)
DEAR  SIR:
Syntroleum Corporation (SYNTROLEUM) is the parent company of SALC and SACC.  The
Commonwealth  proposes  entering into a Sublicense with SALC, a copy of which is
attached  and  marked  "A"  (SUBLICENSE).  The  Commonwealth  proposes  to  make
available to SACC financial accommodation in accordance with a loan agreement, a
copy  of  which  is  attached  and  marked  "C"  (LOAN  AGREEMENT).
SUBLICENCE
In  consideration  of  the Commonwealth at the request of Syntroleum agreeing to
enter  into  the  Sublicense,  Syntroleum  agrees  with  the  Commonwealth that:
(a)     Syntroleum will comply with its obligations under the licence granted by
Syntroleum  to  SALC  a  copy  of  which  is attached and marked "B", (LICENCE);
(b)     if  the  Licence  is terminated or for any other reason ends, Syntroleum
will  itself  at  the request of the Commonwealth grant the Commonwealth (or any
assignee  of  the  Commonwealth)  directly  :
(i)     a  licence  on  the  same  terms  and  conditions as the Sublicense; and
(ii)     a  site  licence  in  respect  of any Licensed Plant (as defined in the
Sublicence)  (SITE LICENCE) on the same terms and conditions as any then current
Site  Licence;
(c)     if  the  Sublicence  or  any Site Licence is terminated or for any other
reason  ends,  (other  than  as  a  result of default by the Commonwealth or its
assignee),  Syntroleum  will itself at the request of the Commonwealth grant the
Commonwealth  (or  any  assignee  of  the  Commonwealth)  directly:
(i)     a  licence  on  the  same  terms  and  conditions as the Sublicense; and
(ii)     a  Site  Licence  in  respect  of any Licensed Plant (as defined in the
Sublicence)  on  the same terms and conditions as any then current Site Licence,
notwithstanding  anything  to the contrary in the Licence, the Sublicence or any
Site  Licence.
Syntroleum  agrees  that  any assignee of the Sublicence or any Site Licence may
rely on this letter notwithstanding this letter is not addressed to the assignee
and  for that purpose the Commonwealth holds the benefit of this letter on trust
for  any  assignee.
LOAN  AGREEMENT
In consideration of the Commonwealth's entry into the Loan Agreement, Syntroleum
agrees  with  the  Commonwealth  that  Syntroleum will use reasonable commercial
efforts to undertake to assist SALC in meeting those of SALC's obligations under
the  Loan Agreement as are specified in Sections 12.1(q) through (t) of the Loan
Agreement; provided, however, that the Commonwealth acknowledges and agrees that
           --------  -------
the  foregoing  agreement  by  Syntroleum  does not, and shall not be deemed to,
constitute a guarantee (or a similar assurance of the payment) of the borrower's
indebtedness  under  the  Loan  Agreement  and  other  Transaction  Documents.
This  letter  is  the  "side  letter"  for  the  purposes of the Loan Agreement.
Yours  faithfully

                    /s/
         -------------------------
         RANDALL  M.  THOMPSON
         VICE  PRESIDENT  AND
         CHIEF  FINANCIAL  OFFICER<PAGE>

                                                                    EXHIBIT 10.1

                       AGREEMENT OF LIMITED PARTNERSHIP

                                      of

                         ICOS-TEXAS BIOTECHNOLOGY L.P.

                                     among

                              ICOS-ET-LP LLC and

                       TEXAS BIOTECHNOLOGY CORPORATION,

                             as Limited Partners,

                                      and

                              ICOS-ET-GP LLC and

                                 TBC-ET, Inc.,

                             as General Partners.

                                Effective as of

                                 June 6, 2000
<PAGE>

                               TABLE OF CONTENTS
<TABLE>
<CAPTION>

<C>         <S>                                                             <C>
ARTICLE 1 DEFINITIONS; INTERPRETATION........................................ 2
     1.1      Definitions.................................................... 2
     1.2      Interpretation................................................. 8
ARTICLE 2 GENERAL PROVISIONS................................................. 8
     2.1      Name........................................................... 8
     2.2      Principal Place of Business; Registered Office and Agent....... 8
     2.3      Certificate of Limited Partnership............................. 8
     2.4      Term........................................................... 9
     2.5      Purpose........................................................ 9
              2.5.1   Principal Purposes......................................9
              2.5.2   [*].....................................................9
     2.6      Title to Partnership Property..................................10
     2.7      Confidentiality................................................10
     2.8      Press Releases.................................................11
ARTICLE 3 CAPITAL............................................................11
     3.1      Initial Capital Contributions..................................11
     3.2      [ * ] Contribution of Background Technology....................11
              3.2.1   [*]....................................................11
              3.2.2   TBC's Initial [ * ] Capital Contribution of Background
                      Technology...   11
                      (a)  Transfer Pursuant to Endothelin License Agreement.11
                      (b)  [*]...............................................12
                      (c)  [*]...............................................12
                      (d)  Basis Allocation..................................12
              3.2.3   Additional Capital Contributions [ * ].................12
      3.3     Management Committee Declared Capital Calls....................12
              3.3.1   Capital Calls..........................................12
              3.3.2   Defaulting Partner.....................................12
      3.4     [*] Research Payments and Royalties............................13
      3.5     No Withdrawal of Capital; No Interest on Capital...............13
ARTICLE 4 TAX PROVISIONS.....................................................13
      4.1     Maintenance of Capital Accounts................................13
      4.2     Allocation of Profits..........................................14
      4.3     Allocation of Losses...........................................14
      4.4     Special Allocations............................................14
              4.4.1   Minimum Gain Chargeback................................14
              4.4.2   Partner Minimum Gain Chargeback........................15
              4.4.3   Qualified Income Offset................................15
              4.4.4   Gross Income Allocation................................15
              4.4.5   Nonrecourse Deductions.................................16
</TABLE>

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -i-
<PAGE>

<TABLE>
<CAPTION>
<S>  <C>                                                                  <C>
              4.4.6   Partner Nonrecourse Deductions.........................16
              4.4.7   Code Section 754 Adjustments...........................16
              4.4.8   Allocations Relating to Taxable Issuance of Interests..16
      4.5     [*]............................................................16
      4.6     Code Section 704(c) Allocations................................16
      4.7     Other Allocations Rules........................................17
      4.8     Tax Matters Partner............................................17
ARTICLE 5 DISTRIBUTIONS OF CASH..............................................18
      5.1     Distributions..................................................18
              5.1.1  Limitations.............................................18
              5.1.2  Amount of Distributions.................................18
              5.1.3  Timing of Distributions.................................18
      5.2     Additional Limitations on Distributions........................19
      5.3     [*]............................................................19
      5.4     Distribution to Pay Taxes......................................19
ARTICLE 6 MANAGEMENT AND OPERATION...........................................19
      6.1     Management of the Partnership..................................19
              6.1.1   General Partners.......................................19
              6.1.2   Limited Partners.......................................20
      6.2     Appointment of Committee Members...............................20
      6.3     Performance of Duties..........................................20
      6.4     Devotion of Time...............................................21
      6.5     Meetings of the Management Committee...........................21
      6.6     Action by Committee Members Without a Meeting..................21
      6.7     Quorum and Voting at Meetings of Committee Members.............21
      6.8     Officers; Teams/Committees.....................................22
      6.9     Internal Controls..............................................22
      6.10    Financial and Business Information and Tax Returns.............22
      6.11    Bank Accounts..................................................23
      6.12    Independent Enterprise.........................................23
      6.13    Compensation...................................................23
      6.14    Fiduciary Duty.................................................23
      6.15    Other Activities...............................................23
      6.16    Noncompetition.................................................24
      6.17    Conflicts of Interest..........................................24
      6.18    Patents........................................................25
      6.19    Operations Outside the United States...........................25
      6.20    Trademarks.....................................................25
      6.21    Responsible Party for Regulatory Purposes......................25
      6.22    Marketing, Co-Promotion and Sales..............................25
      6.23    Manufacturing..................................................26
      6.24    Regulatory Matters.............................................26
</TABLE>

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -ii-
<PAGE>

<TABLE>
<CAPTION>

<S>  <C>                                                                   <C>
ARTICLE 7 RIGHTS, OBLIGATIONS AND POWERS OF THE MEMBERS......................26
      7.1     Compensation of Partners.......................................26
      7.2     Services.......................................................26
              7.2.1   Types of Services......................................26
              7.2.2   Charges for Services...................................26
      7.3     Admission of Additional Partners...............................27
   ARTICLE 8 LIMITATION UPON LIABILITY; INDEMNIFICATION......................27
      8.1     Limitation Upon Liability of Limited Partners..................27
      8.2     Indemnification by Partnership.................................27
ARTICLE 9 REPRESENTATIONS AND WARRANTIES.....................................27
      9.1     Representations and Warranties.................................28
              9.1.1   Organization and Existence.............................28
              9.1.2   Power and Authority....................................28
              9.1.3   Authorization and Enforceability.......................28
              9.1.4   No Governmental Consents...............................28
              9.1.5   No Conflict or Breach..................................28
              9.1.6   No Proceedings.........................................28
              9.1.7   No Endothelin Agents...................................29
      9.2     Additional Representations and Warranties of TBC...............29
      9.3     Warranty of Statements.........................................29
      9.4     Survival of Representations and Warranties.....................29
ARTICLE 10 INDEMNIFICATION...................................................30
      10.1    Indemnification................................................30
      10.2    Mechanism for Indemnification..................................30
ARTICLE 11 DISPUTE RESOLUTION................................................31
      11.1    Dispute........................................................31
      11.2    Mediation......................................................31
ARTICLE 12 TRANSFERS OF MEMBERSHIP INTERESTS.................................31
      12.1    Overall Restrictions...........................................31
      12.2    Additional Restrictions on the Limited Partners................31
              12.2.1  Event Involving ICOS-LP................................31
              12.2.2  Event Involving TBC....................................32
      12.3    Purchase Price and Payment Date................................32
      12.4    Change in Control..............................................32
              12.4.1  ICOS-LP................................................32
              12.4.2  TBC....................................................33
              12.4.3  Definition.............................................33
      12.5    Admission of Substituted Partners..............................33
      12.6    Specific Performance...........................................34
ARTICLE 13 SALE, DISSOLUTION AND LIQUIDATION.................................34
      13.1    Events of Dissolution..........................................34
      13.2    Final Accounting and Tax Returns...............................35
      13.3    Liquidation....................................................35
      13.4    Distributions in Liquidation...................................35
</TABLE>

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -iii-
<PAGE>

<TABLE>
<CAPTION>

<S> <C>                                                                    <C>
      13.5    Deficit Capital Accounts.......................................36
      13.6    Termination of Partnership and Agreement.......................37
ARTICLE 14 ACCOUNTING AND REPORTS............................................37
      14.1    Books and Records..............................................37
      14.2    Accounting Method..............................................38
      14.3    Fiscal Year....................................................38
      14.4    Reports; Tax Returns...........................................38
      14.5    Required Governmental Filings..................................39
ARTICLE 15 GENERAL PROVISIONS................................................39
      15.1    Notices........................................................39
      15.2    Waiver.........................................................40
      15.3    Severability...................................................41
      15.4    Waiver of Partition............................................41
      15.5    Further Assurances.............................................41
      15.6    Governing Law..................................................41
      15.7    Counterparts...................................................41
      15.8    Limitation on Rights of Others.................................41
      15.9    Successors and Assigns.........................................42
      15.10   Entire Agreement; Amendment....................................42
      15.11   Expenses.......................................................42
      15.12   Construction...................................................42
      15.13   Disclaimer of Agency...........................................42
      15.14   Rights and Remedies............................................42
      15.15   Attorneys' Fees................................................43
EXHIBIT A ENDOTHELIN LICENSE AGREEMENT........................................1
EXHIBIT B RESEARCH AND DEVELOPMENT SERVICE AGREEMENT..........................1
EXHIBIT C PRESS RELEASE.......................................................1
EXHIBIT D SCHEDULE OF [*] PAYMENTS............................................1
</TABLE>

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -iv-
<PAGE>

                       AGREEMENT OF LIMITED PARTNERSHIP
                                      OF
                         ICOS-TEXAS BIOTECHNOLOGY L.P.

     THIS AGREEMENT OF LIMITED PARTNERSHIP (this "Agreement") of ICOS-TEXAS
BIOTECHNOLOGY L.P. (the "Partnership") is entered into effective as of this 6th
day of June 2000 (the "Effective Date") by and between ICOS-ET-LP LLC, a
Washington limited liability company ("ICOS-LP"), and TEXAS BIOTECHNOLOGY
CORPORATION, a Delaware corporation ("TBC"), as the Limited Partners; and ICOS-
ET-GP LLC, a Washington limited liability company ("ICOS-GP"), and TBC-ET, Inc.,
a Delaware corporation ("TBC-GP"), as the General Partners.  The Limited
Partners and General Partners are referred to hereafter collectively as the
"Partners."

                                   RECITALS

     A.  TBC has conducted research, has developed and possesses certain
existing proprietary patent rights, technical information, technology and know-
how relating to Endothelin Agents and their ligands.

     B.  The Partners believe that the aforementioned patent rights,
information, technology and know-how will have important application to the
development of products.

     C.  The Partners formed the Partnership for the principal purpose of
developing, manufacturing, producing and selling throughout the Territory on a
commercial basis Endothelin Products.

     D.  TBC intends to license to the Partnership its technology related to
Endothelin Agents for use in the Field in partial consideration for a
Partnership Interest in the Partnership as more fully set forth herein.

     E.  ICOS-LP, ICOS-GP and TBC-GP each intend to contribute cash to the
Partnership in consideration for Partnership Interests in the Partnership as
more fully set forth herein.

     F.  The Partners believe that it is in their best interest to set forth
their mutual understanding with respect to, among other things, management and
operation of the Partnership and the ownership and Transfer of the Partnership
Interests.

     NOW, THEREFORE, in consideration of the mutual covenants of the parties,
each to the other, and of good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -1-
<PAGE>

                                   ARTICLE 1
                          DEFINITIONS; INTERPRETATION

1.1  Definitions

     Capitalized terms used herein shall have the following meanings:

     "Act" means the Delaware Revised Uniform Limited Partnership Act, as
      ---
provided in Title 6, Chapter 17 of the Delaware Code, (S) 101 et. seq., as
                                                              -- ----
amended from time to time.

     "Adjusted Capital Account Deficit" means, with respect to any Partner, the
      --------------------------------
deficit balance, if any, in such Partner's Capital Account as of the end of the
relevant Fiscal Year, after giving effect to the following adjustments:

          (a) Credit to such Capital Account any amounts that such Partner is
obligated to restore pursuant to any provision of this Agreement or is deemed to
be obligated to restore pursuant to the penultimate sentences of Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

          (b) Debit to such Capital Account the items described in Regulations
Sections 1.704-l(b)(2)(ii)(d)(4), 1.704-l(b)(2)(ii)(d)(5) and 1.704-
l(b)(2)(ii)(d)(6).

     The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Regulations Section 1.704-l(b)(2)(ii)(d) and shall
be interpreted consistently therewith.

     "Affiliate" means, with respect to any Person, another Person that,
      ---------
directly or indirectly, controls, is controlled by or is under common control
with such Person.  The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.  The direct or indirect ownership of [ * ] or, if
smaller, the maximum allowed by applicable law, of the voting securities of a
business entity or of an interest in the assets, profits or earnings of an
Entity shall be deemed to constitute "control" of the Entity.

     "Agreement" means this Agreement of Limited Partnership, including all
      ---------
exhibits attached hereto, as originally executed and as amended from time to
time.

     "Background Technology" shall have the meaning set forth in the Endothelin
      ---------------------
License Agreement.  The Background Technology consists of proprietary technical
information, technology and know-how, including patents, patent applications and
copyrights, owned or controlled by TBC as of the Effective Date that relate to
Endothelin Agents and that are required in the development, manufacture,
production, use or sale of Endothelin Products.  The

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -2-
<PAGE>

Background Technology is being licensed to the Partnership effective as of the
Effective Date pursuant to the Endothelin License Agreement.

     "Capital Account" means the capital account to be determined and maintained
      ---------------
for each Partner pursuant to Section 4.1 throughout the existence of the
Partnership, which shall be interpreted and applied in a manner consistent with
Regulations Section 1.704-1(b).

     "Capital Contribution" means, with respect to any Partner, the amount of
      --------------------
money and the initial Gross Asset Value of any property (other than money)
contributed to the Partnership with respect to the Partnership Interest held by
such Partner reduced by the amount of any liabilities of such Partner assumed by
the Partnership in connection with such Capital Contribution or that is secured
by any property contributed by such Partner as a part of such Capital
Contribution.

     "Certificate of Limited Partnership" has the meaning set forth in Section
      ----------------------------------
2.3.

     "Chair" means the chairperson of the Management Committee as appointed in
      -----
Section 6.2.

     "Change in Control" has the meaning set forth in Section 12.4.3.
      -----------------

     "Code" means the Internal Revenue Code of 1986, as amended.
      ----

     "Committee Member" means a person appointed to the Management Committee
      ----------------
pursuant to Article 6.

     "Depreciation" means, for each Fiscal Year, an amount equal to the
      ------------
depreciation, amortization or other cost recovery deduction allowable with
respect to an asset for such Fiscal Year, except that if the Gross Asset Value
of an asset differs from its adjusted basis for federal income tax purposes as
of the beginning of such Fiscal Year, Depreciation shall be an amount that bears
the same ratio to such beginning Gross Asset Value as the federal income tax
depreciation, amortization or other cost recovery deduction for such Fiscal Year
bears to such beginning adjusted tax basis; provided, however, that if the
adjusted basis for federal income tax purposes of an asset at the beginning of
such Fiscal Year is zero, Depreciation shall be determined with reference to
such beginning Gross Asset Value using any reasonable method selected by the
Management Committee.

     "Effective Date" means the effective date of this Agreement as indicated in
      --------------
the first paragraph hereof.

     "Endothelin Agent" [ * ].
      ----------------

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -3-
<PAGE>

     "Endothelin License Agreement" means the license agreement to be entered
      ----------------------------
into between the Partnership and TBC as of the Effective Date, a copy of which
is attached hereto as Exhibit A.

     "Endothelin Products" means [ * ].
      -------------------

     "Endothelin Receptor" means [ * ].
      -------------------

     "Endothelin Technology" shall have the same meaning as "Partnership
      ---------------------
Technology" as set forth in the Research and Development Service Agreement.

     "Entity" means any general partnership, limited partnership, limited
      ------
liability partnership, limited liability company, corporation, joint venture,
trust, estate, business trust, cooperative or association or any other
organization that is not a natural Person.

     "EtRAs" means [ * ].
      -----

     "Event of Withdrawal of a General Partner" means an event that causes a
      ----------------------------------------
Person to cease to be a general partner as provided in (S) 17-402 of the Act.

     "Field" means [ * ].
      -----

     "Fiscal Year" has the meaning set forth in Section 14.3.
      -----------

     "General Partners" means ICOS-GP and TBC-GP and all other Persons admitted
      ----------------
as additional or substituted general partners pursuant to this Agreement, so
long as they remain general partners.

     "Gross Asset Value" means, with respect to any asset, the asset's adjusted
      -----------------
basis for federal income tax purposes, except as follows:

          (a) The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset,
as determined by the contributing Partner and the Management Committee, provided
that the initial Gross Asset Value of the assets contributed to the Partnership
pursuant to Article 3 shall be as set forth in such Article;

          (b) The Gross Asset Values of Property shall be adjusted to equal
their respective gross fair market values, as determined by the Management
Committee, as of the following times:  (i) the acquisition of an additional
Partnership Interest by any new or existing Partner in exchange for more than a
de minimis Capital Contribution; (ii) the distribution by the Partnership to a
Partner of more than a de minimis amount of Property as consideration for an
Interest; and (iii) the liquidation of the Partnership within the meaning of
Regulations Section 1.704-l(b)(2)(ii)(g); provided, however, that the
adjustments pursuant to clauses (i) and (ii) above

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -4-
<PAGE>

shall be made only if the Management Committee reasonably determines that such
adjustments are necessary or appropriate to reflect the relative economic
interests of the Partners in the Partnership;

          (c) The Gross Asset Value of any Property distributed to any Partner
shall be adjusted to equal the gross fair market value of such Property on the
date of distribution as determined by the distributee and the Management
Committee; and

          (d) The Gross Asset Values of Property shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-l(b)(2)(iv)(m) and Section 4.1 hereof;
provided, however, that the Gross Asset Values shall not be adjusted pursuant to
this clause (d) to the extent the Management Committee determines that an
adjustment pursuant to clause (b) is necessary or appropriate in connection with
a transaction that would otherwise result in an adjustment pursuant to this
clause (d).

If the Gross Asset Value of an asset has been determined or adjusted pursuant to
clause (a), (b) or (d) above, such Gross Asset Value shall thereafter be used
for purposes of calculating Depreciation with respect to such asset for purposes
of determining Profits and Losses.

     "ICOS Partners" means ICOS-LP and ICOS-GP collectively.
      -------------

     [ * ]

     "IRS" means the Internal Revenue Service of the U.S. Department of the
      ---
Treasury.

     "Limited Partners" means ICOS-LP and TBC and all other Persons admitted as
      ----------------
additional or substituted limited partners pursuant to this Agreement, so long
as they remain limited partners.

     "Management Committee" means the Management Committee established in
      --------------------
accordance with Section 6.1.

     [ * ]

     "Nonrecourse Deductions" has the meaning set forth in Regulations Section
      ----------------------
1.704-2(b)(1).

     "Nonrecourse Liability" has the meaning set forth in Regulations Section
      ---------------------
1.704-2(b)(3).

     "Partner Nonrecourse Debt" has the meaning of "partner nonrecourse debt"
      ------------------------
set forth in Regulations Section 1.704-2(b)(4).

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -5-
<PAGE>

     "Partner Nonrecourse Debt Minimum Gain" means an amount, with respect to
      -------------------------------------
each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would
result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability
determined in accordance with Regulations Section 1.704-2(i)(3).

     "Partners" means the General Partners and the Limited Partners or their
      --------
respective successors and permitted assigns.

     "Partnership" means ICOS-Texas Biotechnology L.P. formed pursuant to the
      -----------
Certificate of Limited Partnership and governed by this Agreement.

     "Partnership Interest" or "Interest" means the interest in the Partnership
      --------------------      --------
representing each Partner's percentage ownership in, and share of Profits and
Losses of, and the right to receive distributions under Sections 5.1 and 13.4
from, the Partnership.

     "Partnership Minimum Gain" has the meaning of "partnership minimum gain"
      ------------------------
set forth in Regulations Sections 1.704-2(b)(2) and 1.704-2(d).

     "Person" means any individual or Entity, and the heirs, executors,
      ------
administrators, legal representatives, successors and assigns of such Person
where the context so permits.

     "Profits" and "Losses" mean the net taxable income and net tax loss of the
      -------       ------
Partnership computed for each Fiscal Year or other relevant period, as
determined in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss, or deduction required to be stated separately pursuant to
Code Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:

          (a) Any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Profits and Losses
pursuant to this clause (a) shall be added to such taxable income or loss;

          (b) Any expenditures of the Partnership described in Code Section
705(a)(2)(B) (including expenditures treated as described in Code Section
705(a)(2)(B) under Regulations Section 1.704-l(b)(2)(iv)(i)), and not otherwise
taken into account in computing Profits and Losses pursuant to this definition,
shall be subtracted from such taxable income or loss;

          (c) In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to the terms of this Agreement, the amount of such adjustment
shall be taken into account as gain or loss from the disposition of such asset
for purposes of computing Profits and Losses;

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -6-
<PAGE>

          (d) Gain or loss resulting from any disposition of Property with
respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Property disposed
of, notwithstanding that the adjusted tax basis of such Property differs from
its Gross Asset Value;

          (e) In lieu of the depreciation, amortization and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such Fiscal Year, computed in
accordance with the terms hereof;

          (f) To the extent an adjustment to the adjusted tax basis of any
Property pursuant to Code Section 734(b) or Code Section 743(b) is required
pursuant to Regulations Section 1.704-l(b)(2)(iv)(m)(4) to be taken into account
in determining Capital Accounts as a result of a distribution other than in
liquidation of the Partner's interest, the amount of such adjustment shall be
treated as an item of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases the basis of the asset) from the
disposition of the Property and shall be taken into account for purposes of
computing Profits or Losses; and

          (g) Notwithstanding any other provisions of this Agreement, any items
that are specially allocated by the Partnership pursuant to Section 4.4 or 4.5
shall not be taken into account in computing Profits or Losses.  The amount of
the items of Partnership income, gain, loss or deduction available to be
specially allocated pursuant to Sections 4.4 and 4.5 shall be determined by
applying rules analogous to those set forth in this definition of Profits and
Losses.

     "Property" means any real, personal, tangible or intangible property
      --------
contributed to or purchased, developed or otherwise acquired and owned by the
Partnership, including any improvements thereto.

     "Regulations" means the income tax regulations promulgated under the Code,
      -----------
as such regulations are amended from time to time (including corresponding
provisions of succeeding regulations).

     "Research and Development Service Agreement" means the agreement to be
      ------------------------------------------
entered into among the Partnership, ICOS Corporation and  TBC as of the
Effective Date, a copy of which is attached hereto as Exhibit B.

     [ * ]

     "TBC Partners" means TBC and TBC-GP collectively.
      ------------

     "Territory" means [ * ].
      ---------

     "Transfer" means any sale, assignment, exchange, pledge, encumbrance or any
      --------
other disposition of all or any part of a Partnership Interest, whether
voluntary or involuntary.

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -7-
<PAGE>

1.2  Interpretation

     (a) When required by the context, the singular includes the plural and vice
versa, and the masculine includes the feminine and neuter genders, and vice
versa;

     (b) Except as otherwise specifically indicated, all references in this
Agreement to "Exhibits," "Schedules," "Articles," "Sections" and other
subdivisions are to the corresponding Exhibits, Schedules, Articles, Sections or
subdivisions of this Agreement as they may be amended from time to time; and

     (c) Headings set forth in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this Agreement.

                                   ARTICLE 2
                              GENERAL PROVISIONS

2.1  Name

     The name of the Partnership shall be ICOS-Texas Biotechnology L.P.  All
business of the Partnership shall be conducted under such name and under such
variations thereof as the General Partners deem necessary or appropriate to
comply with the requirements of law in any jurisdiction in which the Partnership
may elect to do business.

2.2  Principal Place of Business; Registered Office and Agent

     (a) The address and principal place of business of the Partnership shall be
1209 Orange Street, Wilmington, DE 19801, or at such other place as the
Management Committee may from time to time determine.

     (b) The registered office of the Partnership in the State of Delaware is
located at 1209 Orange Street, Wilmington, DE 19801.  The registered agent of
the Partnership to accept service of process is The Corporation Trust Company.

2.3  Certificate of Limited Partnership

     The Partners shall form the Partnership under and pursuant to the Act by
filing a Certificate of Limited Partnership for the Partnership (the
"Certificate of Limited Partnership") with the Secretary of State of the State
of Delaware.

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -8-
<PAGE>

2.4  Term

     The term of the Partnership shall commence upon the filing of the
Certificate of Limited Partnership with the Secretary of State of the State of
Delaware and shall continue until dissolved in accordance with Article 13.

2.5  Purpose

     2.5.1  Principal Purposes

            The purposes of the Partnership are to engage in the business of
developing, manufacturing, producing, promoting and selling throughout the
Territory within the Field Endothelin Products, to otherwise exploit the
Endothelin Technology for commercial purposes by whatever means and to do all
things necessary, appropriate or advisable in furtherance thereof.  [ * ]  The
Partnership shall not engage in any other business or activity without the
unanimous written agreement of the General Partners.

     2.5.2  Commitment to [ * ]

            The Partners agree that they will use commercially reasonable best
efforts under the Research and Development Service Agreement to cause the
Partnership to accomplish the following goals [ * ]

               [ * ]

            The Partners agree to commit the personnel, and create development
plans under the Research and Development Service Agreement and to make Capital
Contributions to the Partnership hereunder consistent with the obligations
hereunder to cause the Partnership to accomplish these goals [ * ] provided,
however, that it is recognized and agreed that the General Partners may agree to
change these goals and/or the time necessary to achieve these goals and that no
party will be in breach of this Section 2.5.2 if either goal cannot be
reasonably accomplished due to scientific, safety, efficacy, CMC or regulatory
developments.

            In the event that either goal is not attained within [ * ] of the
Effective Date and a dispute arises between the General Partners concerning [ *
] the Dispute shall be resolved in accordance with the terms and provisions of
this Section 2.5.2.  No party shall have the right to litigate the Dispute in
any court, state or federal.

            [ * ]

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                      -9-
<PAGE>

2.6  Title to Partnership Property

     The Property shall be owned solely by the Partnership as an entity, and no
Partner, individually, shall have any ownership interest in any of the Property.

2.7  Confidentiality

     (a) Each Partner agrees (i) to take all reasonable precautions and to use
its best efforts to maintain the confidentiality of all Confidential Information
that such Partner or any of its Affiliates (the "Recipient") obtains in respect
to any other Partner, the Partnership or any of their Affiliates (the
"Disclosing Partner") and (ii) not to use or disclose such Confidential
Information to any third parties other than as permitted by Section 2.7(b).  For
purposes of this Section 2.7, "Confidential Information" means all proprietary
or confidential information owned or provided by a Disclosing Partner,
including, but not limited to, proprietary or confidential information provided
under the two Confidential Disclosure Agreements (CDAs) dated [ * ] and [ * ]
between ICOS Corporation and TBC regarding confidential information, other than
information that (A) was previously known to the Recipient (other than from a
Disclosing Partner), or (B) is available or, without the fault of the Recipient
(other than the Partnership) becomes available to the general public, or (C) is
lawfully received by the Recipient without an obligation of confidentiality from
a third party that, to the Recipient's knowledge, is not bound by any obligation
of confidentiality.  The disclosure of Confidential Information shall not
constitute any grant of any license or any other rights or generate any business
arrangements unless specifically set forth herein or in another agreement.

     (b) A Recipient may disclose Confidential Information (i) with the prior
written consent of the Disclosing Partner, (ii) to appropriate regulatory
authorities, attorneys and accountants and pursuant to any order of a court,
administrative agency or other governmental authority, or (iii) to take any
lawful action that it deems necessary to protect its interests or the interests
of its Affiliates under, or to enforce compliance with the terms and conditions
of, this Agreement; provided, however, that in the event a Recipient may become
legally compelled to disclose any Confidential Information it will promptly
consult with the Disclosing Partner as to the reasons for such disclosure and
will afford the Disclosing Partner a reasonable opportunity to obtain a
protective order as to such information and will use reasonable efforts to
obtain reliable assurance that the information disclosed will be treated
confidentially.

     (c) This Section 2.7 shall supersede and cancel the two Confidential
Disclosure Agreements (CDAs) dated [ * ] and [ * ] between ICOS Corporation and
TBC regarding confidential information.

     (d) This Section 2.7 shall survive this Agreement and shall continue in
full force and effect for a period of five (5) years after the dissolution of
the Partnership.

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -10-
<PAGE>

2.8  Press Releases

     Attached hereto as Exhibit C is a form of press release that the Partners
intend to release upon execution of this Agreement or shortly thereafter.  All
future press releases by any Partner relating to the subject matter of this
Agreement and related agreements shall be approved in advance by each Partner
after written notice of such press release is given to the other Partners,
except to the extent the press release is required by law in the opinion of
legal counsel to the Partner or the substance thereof has been previously
reviewed and released by the Partners or is in the public domain through no
fault of the releasing Partner.  The content and timing of any notice of any
future press release shall be reasonable under the circumstances.

                                   ARTICLE 3
                                    CAPITAL

3.1  Initial Capital Contributions

     Within ten (10) days of the Effective Date, (a) ICOS-GP shall make a [ * ]
Capital Contribution to the Partnership of [ * ], (b) TBC-GP shall make a [ * ]
Capital Contribution to the Partnership of [ * ], (c) ICOS-LP shall make a [ * ]
Capital Contribution to the Partnership of [ * ], and (d) TBC shall make a
Capital Contribution to the Partnership of [ * ] in the manner described in
Section 3.2.2(a) (collectively, the "Initial Capital Contributions").  In
exchange for their [ * ] contributions, ICOS-GP and TBC-GP will each receive a
one-tenth of one percent (0.1%) Partnership Interest.  The Partnership Interests
of ICOS-LP and TBC are described below.

3.2  [ * ] Contribution of Background Technology

     3.2.1  ICOS-LP's Initial Disguised Sale Payment

            In exchange for its [ * ] Initial Capital Contribution, ICOS-LP
shall receive a forty-nine and nine-tenths percent (49.9%) Partnership Interest
and shall have an initial Capital Account balance equal to [ * ]

     3.2.2  TBC's Initial [ * ] Capital Contribution of Background Technology

            (a) Transfer Pursuant to Endothelin License Agreement

                TBC shall transfer to the Partnership the Endothelin License
Agreement pursuant to which the Partnership (as licensee) shall receive a
license to the Background Technology. Notwithstanding the use of the Endothelin
License Agreement to effect the transfer, the parties agree that TBC has
transferred ownership, for U.S. federal income tax purposes, of the Background
Technology that is licensed exclusively to the Partnership.

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -11-
<PAGE>

          (b)  [ * ]

          (c)  Transfer as Part Sale and Part Capital Contribution

               In exchange for its Initial Capital Contribution, TBC shall
receive: (i) the [ * ] and (ii) a forty-nine and nine-tenths percent (49.9%)
Partnership Interest and shall have an initial Capital Account balance of [ * ]

          (d)  Basis Allocation

               [ * ]

     3.2.3  Additional Capital Contributions [ * ]

          ICOS-LP shall make additional Capital Contributions of up to [ * ] in
the aggregate in accordance with the terms of Exhibit D attached hereto (each
such payment, a [ * ].  Upon ICOS-LP's making each [ * ], ICOS-LP's Capital
Account balance shall be increased by the dollar amount of such payment.  [ * ]

3.3  Management Committee Declared Capital Calls

     3.3.1  Capital Calls

          Upon each party's contribution of its Initial Capital Contributions as
required in Sections 3.1, the Management Committee, in its sole discretion, may
from time to time require each Limited Partner to make additional Capital
Contributions to the Partnership to fund activities (a "Capital Call").  To make
a Capital Call, the Management Committee shall give written notice to each
Limited Partner at least ninety (90) business days prior to the due date for
making such additional Capital Contribution.  Such notice shall contain the
following information:  (a) the total capital to be contributed; (b) the amount
owed by each Limited Partner; and (c) the date on which such amount is due (the
"Due Date").  Each Limited Partner shall be required to contribute only an
amount of the Capital Call equal to such Partner's percentage ownership interest
in the Partnership relative to the ownership interests owned by all Limited
Partners, and shall fund its Capital Contributions in cash.

     3.3.2  Defaulting Partner

            If a Limited Partner (the "Defaulting Partner") does not contribute
all of its respective share of any Capital Call (the difference between its
share and the amount contributed, the "Default Amount") on or before the Due
Date, the Partnership shall, [ * ]

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -12-
<PAGE>

3.4  [ * ] Research Payments and Royalties

     [ * ]

3.5  No Withdrawal of Capital; No Interest on Capital

     No Partner shall be entitled to withdraw or demand the return of any part
of such Partner's Capital Contributions, except as provided in Section 3.3.2 or
Article 13.  No Partner shall have the right to receive interest on its Capital
Contribution or its Capital Account.

                                   ARTICLE 4
                                 TAX PROVISIONS

4.1  Maintenance of Capital Accounts

     A Capital Account shall be established and maintained for each Partner in
accordance with the following provisions:

          (a) Each Partner's Capital Account shall be increased by (i) the
amount of such Partner's Capital Contribution, (ii) such Partner's allocable
share of Profits and any items of the nature of income or gain that are
specially allocated pursuant to Section 4.4 or 4.5, and (iii) the amount of any
Partnership liabilities assumed by such Partner or that are secured by any
Property distributed to such Partner.  [ * ]

          (b) Each Partner's Capital Account shall be decreased by (i) the
amount of cash and the Gross Asset Value of any Property distributed to such
Partner pursuant to any provision of this Agreement, (ii) such Partner's
distributable share of Losses and any items in the nature of expenses or losses
that are specially allocated pursuant to Section 4.4 or 4.5, and (iii) the
amount of any liabilities of such Partner assumed by the Partnership or that are
secured by any property contributed by such Partner to the Partnership.

          (c) Upon the Transfer of all or part of an Interest, the Capital
Account of the transferor that is attributable to the transferred Interest shall
carry over to the transferee Partner in accordance with the provisions of
Regulations Section 1.704-l(b)(2)(iv)(1), except as otherwise required to
satisfy Regulations Section 1.704-l(b) in connection with a termination of the
Partnership.

          (d) In determining the amount of any liability for purposes of
maintaining Capital Accounts for the Partners, there shall be taken into account
Code Section 752(c) and any other applicable provisions of the Code and the
Regulations.

     In the event the Management Committee shall determine that it is prudent to
modify the manner in which the Capital Accounts, or any debits or credits
thereto (including, without

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -13-
<PAGE>

limitation, debits or credits relating to liabilities that are secured by
contributed or distributed Property or that are assumed by the Partnership or
the Partners), are computed in order to comply with the Code and the
Regulations, the Management Committee may make such modification, provided that
it is not likely to have any material effect on the amounts distributable to any
Partner pursuant to Article 13 upon the dissolution of the Partnership. The
Management Committee also shall make (i) any adjustments that are necessary or
appropriate to maintain equality between (A) the Capital Accounts of the
Partners and (B) the amount of Partnership capital reflected on the
Partnership's balance sheet, as computed for book purposes, in accordance with
Regulations Section 1.704-1(b)(2)(iv)(g) and (ii) any appropriate modifications
in the event unanticipated events might otherwise cause this Agreement not to
comply with Regulations Section 1.704-1(b).

4.2  Allocation of Profits

     After giving effect to the special allocations set forth in Sections 4.4
and 4.5, Profits for any Fiscal Year shall be allocated among the Partners in
proportion to their respective Partnership Interests.

4.3  Allocation of Losses

     After giving effect to the special allocations set forth in Sections 4.4
and 4.5, Losses for any Fiscal Year shall be allocated among the Partners in
proportion to their respective Partnership Interests.

4.4  Special Allocations

     The following special allocations shall be made in the following order and
priority:

     4.4.1  Minimum Gain Chargeback

          Except as otherwise provided in Regulations Section 1.704-2(f),
notwithstanding any other provision of this Article 4, if there is a net
decrease in Partnership Minimum Gain during any Fiscal Year, each Partner shall
be specially allocated items of Partnership income and gain for such Fiscal Year
(and if necessary subsequent Fiscal Years) in an amount equal to such Partner's
share of the net decrease in Partnership Minimum Gain, determined in accordance
with Regulations Section 1.704-2(g).  Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to be
allocated to each Partner pursuant thereto.  The items to be so allocated shall
be determined in accordance with Regulations Sections 1.704-2(f)(6) and 1.704-
2(j)(2).  This Section 4.4.1 is intended to comply with the minimum gain
chargeback requirement in Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith.

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -14-
<PAGE>

     4.4.2  Partner Minimum Gain Chargeback

            Except as otherwise provided in Regulations Section 1.704-2(i)(4),
notwithstanding any other provision of this Article 4, if there is a net
decrease in Partner Nonrecourse Debt Minimum Gain attributable to a Partner
Nonrecourse Debt during any Fiscal Year, each Partner who has a share of the
Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be
specially allocated items of Partnership income and gain for such Fiscal Year
(and, if necessary, subsequent Fiscal Years) in an amount equal to such
Partner's share of the net decrease in Partner Nonrecourse Debt Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in accordance with
Regulations Section 1.704-2(i)(4).  Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to be
allocated to each Partner pursuant thereto.  The items to be so allocated shall
be determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-
2(j)(2).  This Section 4.4.2 is intended to comply with the minimum gain
chargeback requirement in Regulations Section 1.704-2(i)(4) and shall be
interpreted consistently therewith.

     4.4.3  Qualified Income Offset

            In the event any Partner unexpectedly receives any adjustments,
allocations or distributions described in Regulations Section 1.704-
1(b)(2)(ii)(d)(4), Section 1.704-1(b)(2)(ii)(d)(5) or Section 1.704-
1(b)(2)(ii)(d)(6), items of Partnership income and gain shall be specifically
allocated to such Partner in an amount and manner sufficient to eliminate, to
the extent required by the Regulations, the Adjusted Capital Account Deficit of
such Partner as quickly as possible, provided that an allocation pursuant to
this Section 4.4.3 shall be made only if and to the extent that such Partner
would have an Adjusted Capital Account Deficit after all other allocations
provided for in this Section 4 have been tentatively made as if this Section
4.4.3 were not in this Agreement.

     4.4.4  Gross Income Allocation

            In the event any Partner has a deficit Capital Account at the end of
any Fiscal Year that is in excess of the sum of (a) the amount such Partner is
obligated to restore pursuant to any provision of this Agreement and (b) the
amount such Partner is deemed to be obligated to restore pursuant to the
penultimate sentences of Regulation Sections 1.704-2(g)(1) and 1.704-2(i)(5),
such Partner shall be specially allocated items of Partnership income and gain
in the amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 4.4.4 shall be made only if and to the extent that such
Partner would have a deficit Capital Account in excess of such sum after all
other allocations provided for in this Section 4 have been made as if Section
4.4.3 and this Section 4.4.4 were not in this Agreement.

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -15-
<PAGE>

     4.4.5  Nonrecourse Deductions

            Nonrecourse Deductions for any Fiscal Year shall be specially
allocated among the Partners in proportion to their Partnership Interests.

     4.4.6  Partner Nonrecourse Deductions

            Any Nonrecourse Deductions for any Fiscal Year shall be specially
allocated to the Partner who bears the economic risk of loss with respect to the
Nonrecourse Debt to which such Nonrecourse Deductions are attributable in
accordance with Regulations Section 1.704-2(i)(1).

     4.4.7  Code Section 754 Adjustments

            In the event a Partnership Interest is Transferred or Property is
distributed to a Partner, the Management Committee shall, upon the written
request of any General Partner, elect to cause the basis of the Property to be
adjusted for federal income tax purposes under Sections 734, 743 and 754 of the
Code.  To the extent an adjustment to the adjusted tax basis of any Partnership
asset pursuant to Code Section 734(b) or Code Section 743(b) is required
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Section 1.704-
1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a
result of a distribution to a Partner in complete liquidation of its Interest,
the amount of such adjustment to Capital Accounts shall be treated as an item of
gain (if the adjustment increases the basis of the asset) or loss (if the
adjustment decreases the basis of the asset) and such gain or loss shall be
specially allocated to the Partners in accordance with their Interests in the
Partnership in the event Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or
to the Partner to whom such distribution was made in the event Regulations
Section 1.704-1(b)(2)(iv)(m)(4) applies.

     4.4.8  Allocations Relating to Taxable Issuance of Interests

            Income, gain, loss or deduction, if any, realized by the Partnership
as a direct or indirect result of the issuance of an Interest by the Partnership
to a Partner (the "Issuance Items") shall be allocated among the Partners so
that, to the extent possible, the Capital Account balance for each Partner for
any Fiscal Year is equal to the Capital Account balance that would have been
maintained for such Partner for such Fiscal Year had the Partnership not
realized the Issuance Items.

4.5  [ * ]

4.6  Code Section 704(c) Allocations

     In accordance with Code Section 704(c) and the Regulations thereunder,
income, gain, loss and deduction with respect to any property contributed to the
capital of the Partnership shall

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -16-
<PAGE>

be allocated among the Partners, solely for federal income tax purposes, so as
to take account of any variation between the adjusted basis of the property to
the Partnership for federal income tax purposes and its initial Gross Asset
Value (computed in accordance with this Agreement). Such allocations shall be
consistently made in accordance with the [ * ] as provided in Regulations
Section 1.704-3(c); provided that such [ * ] shall be limited exclusively to
TBC's proportionate share of items of tax depreciation and amortization
deductions attributable to those portions of the Background Technology [ * ].

     In the event the Gross Asset Value of any Partnership asset is adjusted
pursuant to the terms of this Agreement other than as a result of [ * ],
subsequent allocations of income, gain, loss and deduction with respect to such
asset shall take into account any variation between the adjusted basis of such
asset for federal income tax purposes and its Gross Asset Value in a manner
determined by the Management Committee consistent with Code Section 704(c) and
Regulations promulgated thereunder.

4.7  Other Allocations Rules

     (a) For purposes of determining the Profits, Losses or any other items
allocable to any period, Profits, Losses and any such other items shall be
determined on a daily, monthly or other basis, as determined by the Management
Committee using any permissible method under Code Section 706 and the
Regulations thereunder.

     (b) Except as otherwise provided in Section 4.6 with respect to allocations
pursuant to Code Section 704(c), for federal income tax purposes, all
allocations of Partnership income, gain, loss or deduction shall be made in a
manner that is consistent with the allocation of Profits and Losses pursuant to
this Article 4.  The Partners are aware of the income tax consequences of the
allocations of this Article 4 and hereby agree to be bound by the provisions of
this Article 4 in reporting their allocable shares of Partnership income and
loss for income tax purposes.

     (c) Solely for purposes of determining a Partner's proportionate share of
the "excess nonrecourse liabilities" of the Partnership within the meaning of
Regulations Section 1.752-3(a)(3), the Partners' interests in Partnership
profits shall be equal to their respective Partnership Interests.

4.8  Tax Matters Partner

     (a) ICOS-GP shall be the "tax matters partner" (the "Tax Matters Partner")
for the Partnership within the meaning of Code Section 6231(a)(7).

     (b) The Tax Matters Partner shall notify and provide copies to the other
Partners within five (5) business days (or as soon as reasonably practicable
thereafter) of any communication received from any governmental authority
regarding any proposed or existing

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -17-
<PAGE>

audit, administrative or judicial proceeding, request for information,
preliminary discussion or any other formal or informal communication regarding
any tax matters pertaining to the Partnership or any Partner. In addition to and
not in limitation of the foregoing, the Tax Matters Partner shall request,
pursuant to Code Section 6223, that the other Partners receive notice from the
IRS regarding any proceedings or adjustments. The Tax Matters Partner shall
consult with the other Partners concerning all tax matters and shall not take
any action in connection with any audit or proceeding, or enter into any
agreement with the IRS, that may adversely affect the other Partners without
their express prior written consent.

     (c) Notwithstanding anything to the contrary contained in this Agreement,
the Tax Matters Partner shall assure that for the first tax period of its
operations and all subsequent periods of its operation (unless the Partners have
mutually agreed otherwise) the Partnership shall have in effect an election
under Code Section 754 and all applicable regulations thereunder.

                                   ARTICLE 5
                             DISTRIBUTIONS OF CASH

5.1  Distributions

     5.1.1  Limitations

            Except as provided in Sections 5.3 and 5.4, no distributions shall
be made until the [ * ].

     5.1.2  Amount of Distributions

            Upon meeting the requirements of Section 5.1.1, the Management
Committee shall attempt to minimize the amount of cash and cash equivalents held
by the Partnership yet maintain sufficient funds to operate the Partnership in
accordance with the purposes of the Partnership as stated in Section 2.5.  The
Management Committee shall cause the Partnership to distribute on each
Distribution Date, as defined in Section 5.1.3, all amounts that the Management
Committee determines are not necessary to sustain operations of the Partnership
through the following December 31 (the "Distributable Cash").  To determine the
amount of Distributable Cash, the Management Committee shall, prior to each
Distribution Date, determine the amount of funds necessary to sustain operations
of the Partnership through the following December 31 (the "Retained Funds")
based on compliance with an annual operating plan to be developed by the
Management Committee and in consideration of other forecasts.  The Retained
Funds shall be that amount of capital necessary to run the business through the
following December 31 considering:  [ * ].

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

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     5.1.3  Timing of Distributions

            Upon meeting the requirements in Section 5.1.1 and considering the
objectives set forth in Section 5.1.2, on or before June 30 and December 31 of
each year (the "Distribution Dates"), the Management Committee shall cause the
Partnership to distribute the Distributable Cash expected to be on hand on such
dates (or such other amount as determined by the Management Committee) to the
Partners in proportion to their respective Partnership Interests.

5.2  Additional Limitations on Distributions

     Except as provided in Section 5.3, no distribution shall be made if it
would render the Partnership insolvent or compromise its ability to operate.
Further, the Management Committee shall not distribute any Property in kind
except upon liquidation of the Partnership.

5.3  [ * ]

5.4  Distribution to Pay Taxes

     Notwithstanding Section 5.1 but subject to the limitations on distributions
under Section 5.2, in the event a Partner is allocated an amount of taxable
income for a Fiscal Year (other than the Fiscal Year of the Partnership's
liquidation) in excess of such Partner's proportionate share of the
Partnership's entire taxable income for such year, the Partnership shall timely
distribute to such Partner an amount equal to the effective federal, state and
local income taxes (based on the highest applicable rates in such year) that
would be paid by a corporation recognizing such excess taxable income.  Such
distribution shall reduce the Capital Account of the recipient Partner, but
shall not otherwise reduce such Partner's interest in any other Partnership
attribute.

                                   ARTICLE 6
                            MANAGEMENT AND OPERATION

6.1  Management of the Partnership

     6.1.1  General Partners

            The General Partners, acting jointly, shall have the exclusive
management and control of the affairs of the Partnership and shall have all the
rights and powers of general partners as provided in the Act and as otherwise
provided by law.  The General Partners shall exercise their Partnership
management responsibilities through a Management Committee (the "Management
Committee").  Unless expressly and duly authorized in writing to do so by the
Management Committee, no individual General Partner shall (a) have any power or
authority to bind or act on behalf of the Partnership in any way, to pledge its
credit, to execute any instrument on its behalf or to render it liable for any
purpose or (b) delegate any of its power or authority granted under this
Agreement to any Person.

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -19-
<PAGE>

     6.1.2  Limited Partners

            No Limited Partner shall take part in the management or control of
the business of the Partnership nor transact any business in the name of the
Partnership. Except as otherwise expressly provided in this Agreement, no
Limited Partner shall have the power or the authority to bind the Partnership or
to sign any agreement or document in the name of the Partnership. No Limited
Partner shall have any power or authority with respect to the Partnership except
insofar as the consent of any Limited Partner shall be expressly required by the
Act or by this Agreement.

6.2  Appointment of Committee Members

     The business of the Partnership shall be conducted in accordance with the
policies, decisions, guidelines and budgets made or approved by the Management
Committee.  The Management Committee shall be composed of six (6) Committee
Members, three (3) of which shall be designated by ICOS-GP (the "ICOS-GP
Committee Members") and three (3) of which shall be designated by TBC-GP (the
"TBC-GP Committee Members").  ICOS-GP may remove any ICOS-GP Committee Member or
fill any vacancy created by the resignation, death or disability of an ICOS-GP
Committee Member and determine the effective date of such replacement.  TBC-GP
may remove any TBC-GP Committee Member or fill any vacancy created by the
resignation, death or disability of a TBC-GP Committee Member and determine the
effective date of such replacement.  The number of Committee Members cannot be
decreased or increased without the unanimous written consent of the General
Partners.  The Management Committee shall appoint one Committee Member to serve
as Chair, who shall serve in such capacity for a term of two (2) years.  The
Management Committee shall attempt to alternate between appointing a ICOS-GP
Committee Member and an TBC-GP Committee Member as Chair in each succeeding
term; provided, however, a Committee Member may serve consecutive terms if so
appointed by the Management Committee.

6.3  Performance of Duties

     Each Committee Member shall perform his or her managerial duties in good
faith, in a manner he or she reasonably believes to be in the best interests of
the Partnership and its Partners, and with such care, including reasonable
inquiry, as an ordinarily prudent person in a like position would use under
similar circumstances.  In performing his or her duties, the Committee Members
shall be entitled to rely on information, opinions, reports or statements,
including financial statements and other financial data, of the following
persons or groups, unless they have knowledge concerning the matter in question
that would cause such reliance to be unwarranted and provided that the Committee
Member acts in good faith and after reasonable inquiry when the need therefor is
indicated by the circumstances:

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -20-
<PAGE>

          (a) one or more officers, employees or other agents of the Partnership
or a Partner whom the Committee Member reasonably believes to be reliable and
competent in the matters presented; or

          (b) any attorney, independent accountant or other person as to matters
that the Committee Member reasonably believes to be within such person's
professional or expert competence.

6.4  Devotion of Time

     A Committee Member is not obligated to devote all of his or her time or
business efforts to the affairs of the Partnership.  A Committee Member shall
devote whatever time, effort and skill as he or she deems appropriate for the
operation of the Partnership.

6.5  Meetings of the Management Committee

     The Management Committee shall meet at least once every quarter.  In
addition, the Management Committee shall meet upon the request of any Committee
Member made to the Chair.  Committee Members may participate in meetings by
means of audio or video conferencing equipment through which all Committee
Members participating in the meeting can hear each other at the same time, and
participation by such means shall constitute presence in person at a meeting.
Meetings shall be held at such place and time as agreed to by the Management
Committee.  The Chair shall provide at least five (5) business days' advance
written notice and an agenda of each meeting of the Management Committee to each
Committee Member, unless a Committee Member waives the advance notice
requirement with respect to that Committee Member.  Records of proceedings of
the Management Committee shall be prepared by the Chair and shall be subject to
the approval of the Management Committee.

6.6  Action by Committee Members Without a Meeting

     Any action that could be taken at a meeting of the Management Committee may
be taken without a meeting if [ * ].

6.7  Quorum and Voting at Meetings of Committee Members

     (a) Quorum.  [ * ] shall constitute a quorum of the Management Committee
for the transaction of business.

     (b) Voting.  Except as provided in Section 6.7(c), any management decision
shall require the approval of the Management Committee, which approval shall
exist only upon the affirmative vote of [ * ] at a meeting of the Management
Committee at which a quorum is present.

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -21-
<PAGE>

     (c) Established Policies.  The Management Committee may establish policies
and procedures for conducting the normal business of the Partnership and may
delegate to representatives, as approved by the General Partners, the authority
to take actions in accordance with those policies and procedures; provided, that
the following actions will in any event require Management Committee approval as
provided in Section 6.7(b):

          (i) Any lending or borrowing of money by the Partnership;

          (ii) The acquisition, mortgage, pledge, sale, assignment, transfer,
license, sublicense or other disposition of any property of the Partnership
having a fair market value in excess of [ * ] by the Partnership (other than in
connection with the sale of products and services in the ordinary course of its
business) or of any interest (regardless of value) in the legal or beneficial
ownership of any other corporation or enterprise;

          (iii)  The adoption of a business plan or annual capital, operating
and development plans and budgets, including any material modification thereof
("Business Documents"); and

          (iv) Any capital expenditure in excess of [ * ] by the Partnership.

6.8  Officers; Teams/Committees

     The Management Committee may, but is not required to, establish officers of
the Partnership and prescribe the duties of such officers.  The officers of the
Partnership shall be chosen by, and shall serve at the pleasure of, the
Management Committee, and shall hold their respective offices until their
resignation, removal or other disqualification from service in a manner
determined by the Management Committee, or until their respective successors
shall be elected.  The Management Committee may, but is not required to,
establish such teams or sub-committees composed of representatives from the
Partners or otherwise and delegate to such teams or committees such authority,
duties and responsibilities as it deems appropriate.  To assist the Management
Committee in performing its authorized management duties, the Management
Committee expects to establish a "Joint Venture Operating Team," composed of
individuals appointed by the Management Committee, each of whom shall serve for
one (1) year terms and be subject to reappointment by the Management Committee.
The Joint Venture Operating Team shall perform such functions as directed by the
Management Committee.

6.9  Internal Controls

     The Management Committee shall conduct the business of the Partnership at
all times in accordance with high standards of business ethics and devise and
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (a) transactions are executed in accordance with
general or specific authorizations granted by the General Partners and (b)

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -22-
<PAGE>

transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles, to
permit preparation of all tax returns and to maintain accountability for assets
as set forth in Section 14.1.

6.10  Financial and Business Information and Tax Returns

     The Management Committee shall make available to all General Partners on a
regular basis, and as reasonably requested, all such information and/or
documents (including Business Documents as defined in Section 6.7(c)(iii)) as
may be required to permit the Management Committee and the General Partners, as
the case may be, to make informed judgments with respect to all matters
concerning the Partnership of interest to them.

6.11  Bank Accounts

      All funds of the Partnership shall be deposited in the name of the
Partnership in such bank accounts as shall be determined by the Management
Committee.  No withdrawals for cash may be made in excess of [ * ] at any one
time.  Any payment from the accounts may be made or authorized only by an
individual who is so authorized by the Management Committee and approved by the
General Partners; provided, however, that the [ * ] (b) for the purpose of
making any payments to any Partner or its Affiliate.  The funds of the
Partnership shall not be commingled with the funds of any other Person, and
neither the Management Committee nor the General Partners shall employ, or
permit any other Person to employ, such funds in any manner except for the
benefit of the Partnership.  The General Partners shall not make deposits into
or issue any checks against the Partnership bank accounts without full, proper
and complete supporting records.

6.12  Independent Enterprise

      The Partners agree to cause the Partnership at all times to be conducted
as an independent enterprise for profit. Except as otherwise agreed to by the
General Partners in writing or provided herein, all commercial transactions
between the Partnership and any Partner (or its Affiliates) shall be conducted
on an arm's-length basis with neither granting to the other terms or conditions
more favorable than would be accorded unrelated third parties, except as the
General Partners otherwise agree in writing prior to such transactions.

6.13  Compensation

      No Committee Member shall be entitled to compensation from the Partnership
for services rendered to the Partnership as Committee Member, except that the
Partnership shall reimburse each Committee Member for reasonable out-of-pocket
expenses incurred by the Committee Member in connection with the Partnership's
business.  The previous sentence,

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -23-
<PAGE>

however, shall not preclude any Committee Member from serving the Partnership in
any other capacity and receiving compensation therefor.

6.14  Fiduciary Duty

      Each General Partner, Committee Member and officer shall all have the
fiduciary responsibility for the safekeeping and use of all funds and assets
(including records) of the Partnership, whether or not in immediate possession
or control, for the exclusive benefit of the Partnership and its Partners.

6.15  Other Activities

      The Partners may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, whether
presently existing or hereafter created, other than for the purpose of
development, manufacture, production and sale of Endothelin Products in the
Territory.

6.16  Noncompetition

      Other than pursuant to the Research and Development Service Agreement,
until dissolution of the Partnership in accordance with Article 13 or purchase
of the Partner's Interest in accordance with this Agreement, no Partner shall,
and each Partner shall cause its Affiliates not to, [ * ].

6.17  Conflicts of Interest

      The Committee Members who represent any General Partner referred to in
Section 6.2 (the "Interested Partner") shall not be entitled to vote on any
matter that involves (a) a claim by the Partnership against the Interested
Partner or an Affiliate of the Interested Partner; (b) a claim by the Interested
Partner or its Affiliate against the Partnership; (c) the declaration by the
Partnership of a default under any agreement between the Partnership and the
Interested Partner or its Affiliate; (d) the exercise by the Partnership of any
right to terminate any agreement between the Partnership and the Interested
Partner or its Affiliate based on a default thereunder; (e) the negotiation of
any new agreements to be entered into by the Partnership and such Interested
Partner or its Affiliate; or (f) any and all disputes between the Partnership
and the Interested Partner or its Affiliate.  As to matters where the
representatives of a Partner are not entitled to vote, the representatives of
the other Partner who are not disqualified may exercise the powers of the
Management Committee in accordance with, and subject to the other provisions of,
this Agreement.  Notwithstanding the foregoing, however, no claim shall be
asserted by the Partnership or by an Interested Partner (or its Affiliate)
against the other, and no default shall be declared by the Partnership or an
Interested Partner (or its Affiliate) with respect to the other,

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -24-
<PAGE>

unless such claim or dispute cannot be resolved either by the approval of the
Management Committee as provided under Section 6.7 or under Article 11.

6.18  Patents

      The Partnership will undertake to [ * ].

6.19  Operations Outside the United States

      It is expected that structures for doing business outside the United
States in the Territory will be created to enable the achievement of the
purposes set forth in Section 2.5. In establishing the structures, the following
principles and objectives will serve as guidelines:

          (a)  [ * ]

          (b)  [ * ]

          (c)  [ * ]

          (d)  [ * ]

6.20  Trademarks

      At or shortly after formation the Partners will grant the Partnership a
nonexclusive, royalty free, worldwide license to use the Limited Partners' names
and logos in the name of the Partnership and with the Partnership's products,
product literature (including promotional materials) and services, subject to
the terms of reasonable trademark licenses to be negotiated in good faith.

6.21  Responsible Party for Regulatory Purposes

      No later than the [ * ], the Management Committee shall identify a
responsible party and his/her foreign equivalents for the Partnership for the
purposes of meeting health authority requirements.  This person will be
considered the most responsible individual within, or on behalf of, the
Partnership for regulatory purposes.

6.22  Marketing, Co-Promotion and Sales

      The Partnership shall establish a marketing and sales plan(s) [ * ].

6.23  Manufacturing

      The Partnership shall make necessary arrangements to ensure [ * ].

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -25-
<PAGE>

6.24  Regulatory Matters

      The Partnership shall use commercially reasonable efforts to [ * ].

                                   ARTICLE 7
                 RIGHTS, OBLIGATIONS AND POWERS OF THE MEMBERS

7.1  Compensation of Partners

     Except as may be specifically provided in this Agreement or in any other
written agreement, no Partner shall receive any salary, fee or draw for services
rendered to or on behalf of the Partnership.

7.2  Services

     7.2.1  Types of Services

          The General Partners and their Affiliates expect to provide the
Partnership with business management, accounting and financial support services
in connection with the daily operation of the Partnership's business, including
operating and sales services, in the United States and potentially throughout
the rest of the Territory.  Both General Partners or their Affiliates are
expected to provide the Partnership with legal advice and related support
services in connection with filing of patent applications, protection of
intellectual property and support of litigation related to intellectual property
matters and with such other services as the Partnership may require and the
General Partners may agree to provide.  The foregoing services that are expected
to be provided to the Partnership shall be subject to the terms of reasonable
service agreements to be negotiated in good faith.

     7.2.2  Charges for Services

            Services supplied to the Partnership by the General Partners or
their Affiliates may be charged on the following basis:

               (a) Each General Partner may charge the Partnership [ * ].

               (b) If a General Partner retains a third party to provide
consulting or other services to the Partnership, the General Partner may charge
the Partnership for providing such services in the amount that the third party
charges the General Partner, provided such charges are reasonable.

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -26-
<PAGE>

7.3  Admission of Additional Partners

     The General Partners, acting jointly, may admit to the Partnership
additional Partners, from time to time, subject to the following:

          (a) All the General Partners agree in writing to the admission of the
new Partner;

          (b) The additional Partner shall make a Capital Contribution in such
amount and on such terms as the Management Committee determines to be
appropriate; and

          (c) No additional Partner shall be admitted if the effect of such
admission would be to terminate the Partnership within the meaning of Code
Section 708(b).

                                   ARTICLE 8
                   LIMITATION UPON LIABILITY; INDEMNIFICATION

8.1  Limitation Upon Liability of Limited Partners

     The liability of each Limited Partner shall be limited to its Capital
Contributions as and when payable under the provisions of this Agreement, and as
provided under the Act.  No Limited Partner shall have any other liability to
contribute money to, or in respect of the liabilities or obligations of, the
Partnership, nor shall any Limited Partner be personally liable for any
obligations of the Partnership, except as and to the extent provided in the Act.
No Limited Partner shall be obligated to make loans to the Partnership.

8.2  Indemnification by Partnership

     The Partnership shall indemnify and hold harmless all Partners, Committee
Members, officers, their Affiliates and authorized agents of the Partnership (an
"indemnitee") against any liability, loss, damage, cost or expense (including
attorneys' fees and costs) incurred by an indemnitee on behalf of the
Partnership or in furtherance of the Partnership's interests; provided, however,
that the Partnership shall not indemnify and hold harmless an indemnitee in any
of the circumstances under which such indemnification is not allowed under the
Act.  Any indemnification required hereunder shall be made promptly as the
liability, loss or expense is incurred or suffered, and the indemnification
provided by this Section 8.2 shall be in addition to any other rights to which
those indemnified may be entitled under any agreement, as a matter of law or
equity, or otherwise, and shall continue as to a Partner, Committee Member or
officer who has ceased to serve in that capacity, and shall inure to the benefit
of the heirs, successors, assigns and administrators of the indemnitees.

[*] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -27-
<PAGE>

                                   ARTICLE 9

                         REPRESENTATIONS AND WARRANTIES

9.1  Representations and Warranties

     Each Partner hereby represents and warrants to the other Partners as of the
date hereof the following:

     9.1.1  Organization and Existence

            Such Partner is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it was
incorporated.

     9.1.2  Power and Authority

            Such Partner has the full power and authority to execute, deliver
and perform this Agreement, and to own and lease its properties and to carry on
its business as now conducted and as contemplated hereby.

     9.1.3  Authorization and Enforceability

            The execution and delivery of this Agreement by such Partner and the
carrying out by such Partner of the transactions contemplated hereby have been
duly authorized by all requisite corporate and limited liability company
actions, and this Agreement has been duly executed and delivered by such Partner
and constitutes the legal, valid and binding obligation of such Partner,
enforceable against it in accordance with the terms hereof, subject, as to
enforceability of remedies, to limitations imposed by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the
enforcement of creditors' rights generally and general principles of equity.

     9.1.4  No Governmental Consents

            No authorization, consent or approval of, or notice to or filing
with, any governmental authority is required for the execution, delivery and
performance by such Partner of this Agreement.

     9.1.5  No Conflict or Breach

            None of the execution, delivery and performance by such Partner of
this Agreement, the compliance with the terms and provisions hereof, and the
carrying out of the transactions contemplated hereby conflicts or will conflict
with or will result in a breach or violation of any of the terms, conditions or
provisions of any law, governmental rule or regulation or the charter documents,
as amended, or bylaws, as amended, of such Partner or any

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -28-
<PAGE>

order, writ, injunction, judgment or decree of any court of governmental
authority against such Partner or by which it or any of its proprieties is
bound, or any loan agreement, indenture, mortgage, note, resolution, bond, or
contract or other agreement or instrument to which such Partner is a party or by
which it or any of its properties is bound, or constitutes or will constitute a
default thereunder or will result in the imposition of any lien upon any of its
properties.

     9.1.6  No Proceedings

            There are no suits or proceedings pending, or to the knowledge of
such Partner, threatened in any court or before any regulatory commission, board
or other governmental administrative agency against or affecting such Partner
that could have a material adverse effect on the business or operations of such
Partner, financial or otherwise, or on its ability to fulfill its obligations
hereunder.

     9.1.7  No Endothelin Agents

            Except for EtRAs and the other compounds included in the Endothelin
License Agreement with respect to TBC and to each Partner's knowledge and the
knowledge of its Affiliates, such Partner and its Affiliates (a) [ * ] (b) [ * ]
and (c) are not selling any product that contains an Endothelin Agent or
conducting any clinical trial of an Endothelin Agent. [ * ].

9.2  Additional Representations and Warranties of TBC

     TBC hereby represents and warrants to the Partners as of the date hereof,
subject to the Endothelin License Agreement, that (a) it owns or controls the
Background Technology (except technology that is not the subject of patents),
(b) the Background Technology is free and clear of any liens, claims or
encumbrances other than pursuant to the LG Chem License described in Section
3.4, (c) [ * ] (d) to its knowledge, there is no material and unauthorized use,
infringement or misappropriation of any of its rights in the Background
Technology, (e) it has provided to ICOS Corporation a complete and accurate copy
of all third party agreements associated with the Background Technology, (f) set
forth in Attachment A to the Endothelin License Agreement is a complete listing
of patents, patent applications and invention disclosures that are owned by TBC
relating to the Background Technology, (g) [ * ].

9.3  Warranty of Statements

     No representation or warranty of any Partner, or any exhibit, document,
statement, certificate or schedule pursuant hereto or in connection with the
transactions contemplated hereby, contains or will contain any untrue statement
of a material fact, or omits or will omit to state a material fact necessary to
make statements or facts contained therein not misleading.  The representations
and warranties of the Partners set forth in this Agreement and in any exhibit,
document, statement, certificate or schedule furnished or to be furnished
pursuant hereto shall be

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -29-
<PAGE>

true on and as of the Effective Date as though such representations and
warranties were made on and as of Effective Date.

9.4  Survival of Representations and Warranties

     The respective representations and warranties of the Partners shall survive
the Effective Date and continue in full force and effect for a period thereafter
equal to five (5) years following the Effective Date.

                                   ARTICLE 10

                                INDEMNIFICATION

10.1  Indemnification

      Each Partner (the "Indemnifying Partner") shall indemnify and hold the
other Partners, the Partnership and their respective Affiliates, Committee
Members, officers, employees and agents harmless from and against any and all
claims, liabilities, losses, costs, damages and expenses, including costs of
investigation, court costs and reasonable attorneys' fees, to which any of them
may become subject arising from or in any manner connected with, directly or
indirectly, any material misstatement, error or omission in any representation
or warranty of the Indemnifying Partner contained in this Agreement (without
effect on the Indemnifying Partner's liability under the various instruments and
documents to be executed in connection herewith).

10.2  Mechanism for Indemnification

      The Partner seeking indemnification hereunder ("Indemnified Partner")
shall give written notice to the Indemnifying Partner of its indemnification
claims hereunder, specifying the amount and nature of the claim, and giving the
Indemnifying Partner the right to contest any such claim represented by counsel
of its choice; if any such claim is made hereunder by the Indemnified Partner
and such claim arises from the claims of a third party against the Indemnified
Partner and the Indemnifying Partner does not elect to undertake the defense
thereof by written notice within fifteen (15) days after receipt of the original
notice from the Indemnified Partner, the Indemnified Partner shall be entitled
to indemnity pursuant to the terms of this Agreement to the extent of its
payment in respect of such claim. To the extent that the Indemnifying Partner
undertakes the defense of such claim in good faith by proceeding diligently at
its expense, and without materially impairing the financial conditions or
operations of the Indemnified Partner, the Indemnified Partner shall be entitled
to indemnity hereunder only if, and to the extent that, such defense is
unsuccessful as determined by a final judgment of a court of competent
jurisdiction or is settled with the consent of the Indemnifying Partner. The
Partner defending a third-party claim shall have the right to choose its own
counsel.

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -30-
<PAGE>

                                   ARTICLE 11
                               DISPUTE RESOLUTION

11.1  Dispute

      Except as provided in Section 2.5.2, in the event a dispute arises between
the Partners regarding the application or interpretation of any provision of
this Agreement or if there is a deadlock among the Committee Members or the
General Partners with respect to any management decision (a "Dispute" for
purposes of this Article 11 only), then upon the written request of any Partner
that includes a summary of the Dispute, [ * ].

11.2  Mediation

      Except as provided in Section 2.5.2, any Dispute that the Partners are
unable to resolve through [ * ] shall be submitted to nonbinding mediation,
which will be held in Houston, Texas, if initiated by either ICOS Partner and in
Seattle, Washington, if initiated by either TBC Partner.  The Partners will
mutually determine the mediator from a list of mediators obtained from the
American Arbitration Association office located in the city in which the
proceeding will take place.  If the Partners are unable to agree on the
mediator, the mediator will be selected by the American Arbitration Association
with a preference for selecting a retired federal judge or state supreme court
judge as the mediator.

                                   ARTICLE 12
                       TRANSFERS OF MEMBERSHIP INTERESTS

12.1  Overall Restrictions

      The Partnership will be owned on the Effective Date by four (4) entities
that have the compatibility and financial stability that are major elements
contributing toward the prospect of the future success of the Partnership.
Except in accordance with the terms of this Agreement, no Partner shall Transfer
all or any part of its Partnership Interest, or any interest therein, unless the
Partner (a) obtains the prior written consent of each General Partner, which
consent may be withheld in the sole and absolute discretion of each General
Partner, and (b) provides satisfactory evidence to the Partnership that such
Transfer shall not violate applicable securities laws.  Unless such prior
requirements are met, the proposed Transfer may not take place, and any
attempted Transfer in derogation hereof shall be deemed null and void. [ * ] If
for any reason any clause or provision of this Section 12.1 should be held
unenforceable, invalid or in violation of law by any court or tribunal, then the
non-Transferring Partners shall have the right, exercisable in writing within
ninety (90) days of the date of final determination of invalidity or
unenforceability, to purchase the Partnership Interest purported to be
Transferred, pursuant to the terms of Section 12.3.

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -31-
<PAGE>

12.2  Additional Restrictions on the Limited Partners

      12.2.1  Event Involving ICOS-LP

          Upon the occurrence of any of the following events with respect to
ICOS-LP or its parent company:  (a) any transfer of substantially all of its
assets, (b) a liquidation or dissolution, or (c) any insolvency or bankruptcy
proceeding, then TBC shall have the right, exercisable in writing within sixty
(60) days after the later of (i) receipt of written notice of the occurrence of
such event and (ii) the conclusion of the appraisal contemplated in Section
12.3, to purchase all Partnership Interests held by both ICOS Partners pursuant
to the terms of Section 12.3 or to dissolve the Partnership pursuant to the
terms of Article 13.  ICOS-LP shall notify TBC in writing of any occurrence
described in clauses (a), (b) or (c) of this Section 12.2.1 at the earliest time
practicable.

      12.2.2  Event Involving TBC

          Upon the occurrence of any of the following events with respect to
TBC:  (a) any transfer of substantially all of its assets, (b) a liquidation or
dissolution, or (c) any insolvency or bankruptcy proceeding, then ICOS-LP shall
have the right, exercisable in writing within sixty (60) days after the later of
(i) receipt of written notice of the occurrence of such event and (ii) the
conclusion of the appraisal contemplated in Section 12.3, to purchase all
Partnership Interests held by both TBC Partners pursuant to the terms of Section
12.3 or to dissolve the Partnership pursuant to the terms of Article 13.  TBC
shall notify ICOS-LP in writing of any occurrence described in clauses (a), (b)
or (c) of this Section 12.2.2 at the earliest time practicable.

12.3  Purchase Price and Payment Date

      The purchase price to be paid for either (a) the Partnership Interest of
the transferring Partner described in Section 12.1 or (b) the Partnership
Interests of the respective Partners described in Section 12.2, shall be
computed as follows:

          (a) Within sixty (60) days after the occurrence of an event described
in Section 12.1 or 12.2, the Limited Partners shall jointly appoint an
investment banking firm or failing this joint action, each Limited Partner shall
designate an investment banking firm.  Within thirty (30) days after their
appointment, the two designated investment banking firms shall designate a third
investment banking firm (the "Neutral Investment Banker").  The failure by any
Limited Partner to appoint an investment banking firm within the time allowed
shall be deemed equivalent to appointing the other Limited Partner's investment
banking firm as the jointly appointed investment banking firm.  Within sixty
(60) days after the appointment of the jointly appointed investment banking firm
or the Neutral Investment Banker, as the case may be, the jointly appointed
investment banking firm or the Neutral Investment Banker, as the case may be,
shall render its appraisal of the fair market value of the Partnership
Interest(s) being purchased,

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -32-
<PAGE>

which appraisal shall be binding and conclusive. The Partnership shall bear all
appraisal expenses.

          (b) The payment date of the purchase price pursuant to this Section
12.3 shall not be later than sixty (60) days after the sixty (60) day period set
forth in Section 12.3(a).

12.4  Change in Control

      12.4.1  ICOS-LP

          In the event of a Change in Control of either of the ICOS Partners or
their parent company, TBC shall be [ * ], except (a) all accrued obligations
shall survive, (b) the provisions of Sections 2.7, 3.2.3 and 5.3 and Articles 10
and 11 shall survive, (c) the Endothelin License Agreement will not terminate,
and (d) Article 6 of the Research and Development Service Agreement shall
survive but shall not operate as to any future developments, inventions or
discoveries.

      12.4.2  TBC

          In the event of a Change in Control of either of the TBC Partners,
ICOS-LP shall [ * ], except (a) all accrued obligations shall survive, (b) the
provisions of Sections 2.7, 3.2.3 and 5.3 and Articles 10 and 11 shall survive,
(c) the Endothelin License Agreement will not terminate, and (d) Article 6 of
the Research and Development Service Agreement shall survive but shall not
operate as to any future developments, inventions or discoveries.

      12.4.3  Definition

          A "Change in Control" occurs when (a) any Person becomes, after the
date hereof, the beneficial owner, directly or indirectly, of more than [ * ] of
the outstanding securities of a Partner or (b) any Partner is involved in a
reorganization, merger or consolidation, except a "Change in Control" will not
have occurred if, after the transaction, [ * ] or more of the outstanding voting
securities of the entity acquiring the Partner's voting securities or resulting
or surviving from the reorganization, merger or consolidation are owned by the
Partner's shareholders in the same proportion as they owned the Partner's voting
securities immediately prior to such transaction.

12.5  Admission of Substituted Partners

      Subject to the other provisions of this Section 12, a transferee of a
Partnership Interest may be admitted to the Partnership as a substituted Partner
only upon satisfaction of the following conditions:

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -33-
<PAGE>

          (a) The Partners unanimously consent to such admission, which consent
may be given or withheld in the sole discretion of each Partner;

          (b) The transferee becomes a party to this Agreement as a Partner and
executes such documents and instruments as the Management Committee and General
Partners may reasonably request as may be necessary or appropriate to confirm
such transferee as a Partner and bind such transferee by the terms and
conditions of this Agreement; and

          (c) The transferee pays or reimburses the Partnership for all
reasonable legal, filing and publication costs that the Partnership incurs in
connection with the admission of the transferee as a Partner with respect to the
transferred Interest.

12.6  Specific Performance

      Each of the Partners acknowledges that the rights and obligations provided
by this Section 12 are of unique value to it and that the payment of monetary
damages could not adequately compensate the other Partner for any breach of the
obligations set forth herein.  Accordingly, the rights of the Partners set forth
in this Section 12 shall be specifically enforceable in accordance with their
terms.

                                   ARTICLE 13
                       SALE, DISSOLUTION AND LIQUIDATION

13.1  Events of Dissolution

      The Partnership shall be dissolved only upon the following events:

      (a) The mutual written consent of the Limited Partners.

      (b) Upon the occurrence of any of the events set forth in Section 12.2 if
the Partner that is not subject to the occurrence of the stated event shall not
have exercised the purchase option provided in Section 12.2 and shall have
requested, within sixty (60) days after such occurrence, that the Partnership be
dissolved.

      (c) By either Limited Partner upon the bankruptcy, receivership or
insolvency of the other Limited Partner or the Partnership, or upon the material
breach of this Agreement by the other Limited Partner; provided, however, that
such dissolution shall be with respect to federal and Delaware income tax
purposes, but preserved in nominal form for Delaware state law purposes.

      (d) The occurrence of an Event of Withdrawal of a General Partner, unless
the Limited Partners agree within thirty (30) days of such event not to dissolve
the Partnership.

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -34-
<PAGE>

      In addition, the Partners recognize that the Partnership may be dissolved
by order of a court of competent jurisdiction pursuant to (S) 17-802 of the Act.

13.2  Final Accounting and Tax Returns

      Upon the dissolution of the Partnership, a complete and accurate
accounting shall be made by the Partnership's independent certified public
accountants from the date of the last previous accounting to the date of
dissolution, and all required tax returns shall be timely filed in connection
therewith.

13.3  Liquidation

      Upon the dissolution of the Partnership, each General Partner shall
appoint an individual to act as a liquidator to wind up the Partnership (and, if
either General Partner fails to appoint such individual within sixty (60) days
after the written request of the other General Partner, the individual that
shall have been appointed by such other General Partner within such sixty (60)
day period shall act as the liquidator) (the individuals so appointed shall be
referred to collectively as the "Liquidator"). The Liquidator shall have full
power and authority to take full account of the Partnership's assets and
liabilities and to wind up and liquidate the affairs of the Partnership in an
orderly and business-like manner as is consistent with obtaining the fair value
thereof upon dissolution. The Partnership shall engage in no further business
thereafter other than as necessary to operate on an interim basis, collect its
receivables, pay its liabilities and liquidate its assets.

13.4  Distributions in Liquidation

      (a) Upon dissolution of the Partnership and the liquidation of the assets
of the Partnership pursuant to this Article 13, the Liquidator shall wind up the
affairs of the Partnership and liquidate the Property as promptly as is
consistent with obtaining fair value therefor and cause the remaining Property,
including proceeds of sales or other dispositions in liquidation of Property, to
be applied in accordance with the following priorities:

          (i) First, to payment of the debts and obligations of the Partnership
to its creditors (including to the Partners that are creditors), to the extent
otherwise permitted by law, in satisfaction of liabilities of the Partnership
(whether by payment or the making of reasonable provision for payment thereof)
other than liabilities for which reasonable provision for payment has been made
and liabilities for distributions to Partners and former Partners under Sections
17-601 or 17-604 of the Act;

          (ii) Second, to the establishment of such reserves as required by
Section 17-804(b) of the Act for the purposes as stated therein;

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -35-
<PAGE>

          (iii)  Third, to the Partners having positive Capital Accounts pro
rata in accordance with their relative positive Capital Accounts (as determined
after taking into account all Capital Account adjustments for the Partnership's
Fiscal Year during which such liquidation occurs), until all such positive
Capital Accounts are reduced to zero; and

          (iv) Fifth, among the Partners in proportion to their respective
Partnership Interests.

The reserves established pursuant to clause (ii) of this Section 13.4(a) shall
be paid over by the Liquidator to a bank or other financial institution to be
held in escrow for the purpose of paying unliquidated, contingent or unforeseen
liabilities or obligations, and, at the expiration of such period as the
Liquidator deems advisable, and in compliance with the requirements of the Act,
such reserves shall be distributed to the Partners or their assigns in the
priority set forth in clauses (iii) and (iv) of this Section 13.4(a).
Distributions to the Partners pursuant to this Section 13.4(a) shall be made
within the time period prescribed by Regulations Section 1.704-1(b)(2)(ii)(b).

      (b) In the event the Liquidator determines that an immediate sale of part
or all of the Partnership assets would cause undue loss to the Partners, the
Liquidator, in order to avoid such loss, may either (i) defer liquidation of any
assets of the Partnership for a reasonable time, except those assets necessary
to satisfy Partnership debts and obligations, or (ii) distribute the assets in
kind to the Partners.  If any assets of the Partnership are to be distributed in
kind, such assets shall be valued and shall be deemed sold at their fair market
value and any gain or loss deemed realized shall be allocated to the Capital
Accounts of the Partners for purposes of applying this Section 13.4 as if such
gain or loss had actually been fully realized.  Any assets that are to be so
distributed shall be distributed on the basis of the fair market value thereof
and any Partner entitled to an interest in such assets shall receive such
interest therein as a tenant-in-common with all other Partners so entitled.  The
fair market value of such assets shall be determined by an appraiser to be
selected by the Liquidator or by agreement of all the Partners.  In the event of
such distribution in kind, the distributee Partner shall not thereafter sell or
otherwise Transfer or dispose of any interest in any assets so distributed which
it holds as a tenant-in-common without first offering such interest in writing
to the other tenant-in-common upon the same terms and conditions and for the
same price as such proposed sale or Transfer.  The other tenant-in-common shall
have thirty (30) days after the receipt of such offer within which to accept the
same and shall have the right to acquire such interest.  If the other tenant-in-
common shall fail to accept such offer within such period of time, such
distributee Partner shall be free to sell the interest in such assets upon the
terms and conditions described in the offer disclosed to the other tenants-in-
common free of any further rights of first refusal.

13.5  Deficit Capital Accounts

     (C)Except as may otherwise be required by law, notwithstanding anything to
the contrary contained in this Agreement, to the extent that any Partner has a
deficit Capital Account balance

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -36-
<PAGE>

upon dissolution of the Partnership, that balance shall not be an asset of the
Partnership and that Partner shall not be obligated to contribute any amount to
the Partnership to bring the balance of that Partner's Capital Account to zero.

13.6  Termination of Partnership and Agreement

      Upon the completion of the distributions in liquidation of the Partnership
as provided in this Article 13, (a) the Liquidator shall take all actions as may
be appropriate to finally dissolve and liquidate the Partnership and (b) this
Agreement shall terminate.

                                   ARTICLE 14
                             ACCOUNTING AND REPORTS

14.1  Books and Records

      (a) Procedures.  The Management Committee shall implement standard
          ----------
procedures with respect to accounting, financial reporting and management
information, including, without limitation, statements reflecting Partnership
distributions, earnings, Profits and Losses, residual value of Partnership
Property and taxable income.

      (b) Records.  At all times during the term of the Partnership, the
          -------
Management Committee shall keep or cause to be kept full and accurate books,
records and accounts, which shall, in reasonable detail, accurately and fairly
reflect each transaction of the Partnership; provided, however, that at a
minimum the Management Committee shall, on behalf of the Partnership, maintain
such records as listed in Section 17-305(a) of the Act.  Each Partner and its
representatives shall have access to such books, records and documents during
reasonable business hours and may inspect and make copies of any of them.  The
Management Committee may delegate to a third party or General Partner the duty
to maintain and oversee the preparation of such records and books of account.
The Management Committee shall maintain all such books and records for the six
(6) most recent Fiscal Years or until such year is closed for tax audit
purposes.

      (c) Audit of Partnership's Statements.  The Partnership will engage and
          ---------------------------------
pay for an external accounting firm to audit its financial statements at least
annually. Since it is anticipated that one General Partner, as chosen by the
Management Committee (the "Accounting Services Provider"), will provide
accounting services to the Partnership, the Management Committee is advised
that, whenever practicable, it should appoint the primary external accounting
firm which provides services to the Accounting Services Provider. The General
Partner which is not the Accounting Services Provider shall have the right,
during regular business hours and upon reasonable advance notice, to review the
audited financial statements and the related work papers and findings of the
external accounting firm supporting the financial statements or request

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -37-
<PAGE>

another external accounting firm to perform such examination, the cost of which
shall be borne by the party requesting the examination.

      (d) Examination of Partner Transactions.  Each Partner shall keep
          -----------------------------------
comprehensive books and records relating to (i) such Partner's reimbursements
under this Agreement and (ii) any compensation or reimbursements under any
agreement with the Partnership, on a full accrual basis of accounting in
accordance with generally accepted accounting principles for the three (3) most
recent Fiscal Years.  Either Partner, upon reasonable advance notice to the
other Partner, may examine or engage an external accounting firm to examine the
accuracy of revenues, billings and supporting documentation of the other Partner
for services or payments to or from the Partnership during the prior three (3)
Fiscal Years, including under the Research and Development Service Agreement and
any other agreements involving the Partnership and the other Partner.  The
Partner requesting the review shall, for purposes of such review, utilize the
other Partner's regular outside certified public accounting firm.  The cost of
such examination shall be borne by the Partner requesting the examination;
however, in the event such examination reveals information that deviates by [ *
] or more from the information previously provided to the Partner requesting the
examination, the cost of the examination shall be borne by the other Partner.

14.2  Accounting Method

      The books and records of the Partnership shall be kept in accordance with
generally accepted accounting principles and methods applied on a consistent
basis from year to year.

14.3  Fiscal Year

      The Partnership shall use the calendar year as its fiscal year for all
financial reporting and tax purposes (the "Fiscal Year").

14.4  Reports; Tax Returns

      Copies of all accounts, reports and other writings pertaining to the
business of the Partnership furnished by a Partner, the Partnership or the
Partnership's accountants to any Partner or regulatory agency shall
contemporaneously be delivered to all Partners.

      On a periodic basis, the Partnership shall submit to the Partners the
following financial information:

          (a)  [ * ]

          (b)  [ * ]

          (c)  [ * ]

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -38-
<PAGE>

      Calendars and subsequent revisions thereto, if any, referred to above will
be provided to the Partnership within ten (10) days of their publication and
distributions within ICOS-GP.

      Prior to March 15 of each year, the Management Committee shall provide to
the Partners regular annual audited financial statements prepared by
independent, nationally recognized certified public accountants as chosen under
Section 14.1(c), which shall include a statement of profits and losses, changes
in financial position and a balance sheet for the year then ended, as well as
such other appropriate financial information reasonably requested by the
Management Committee or Partners.

      The Management Committee shall cause to be prepared and filed, on the
Partnership's behalf and at the Partnership's expense, all federal, state and
other tax returns required to be filed, and shall submit the same to the
Partners for review and approval not less than thirty (30) days prior to the
respective due dates for such returns (including any extensions thereof), but,
with respect to the Partnership's United States federal income tax information
return, in no event later than May 15 of each year.  Apportionment data for
state returns will be provided by June 1 of each year.

14.5  Required Governmental Filings

      The Management Committee shall cause the Partnership to file, on or before
the dates the same may be due, giving effect to extensions obtained, all
reports, returns and applications that may be required by any governmental or
quasi-governmental body having jurisdiction.

                                   ARTICLE 15
                               GENERAL PROVISIONS

15.1  Notices

      Any notice, request, instruction or other document to be given hereunder
by a Partner to another Partner hereto shall be in writing, delivered in person,
or mailed by certified or registered mail, return receipt requested, or
transmitted by facsimile transmission with electronic confirmation of receipt to
the addressee's address or facsimile number set forth below (or such other
address or facsimile number as the party changing its address specifies in a
notice to the other parties):

      If to ICOS-LP or ICOS-GP:

          ICOS Corporation
          22021 - 20th Avenue S.E.
          Bothell, WA 98021
          Attention:  President

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -39-
<PAGE>

          Phone:      (425) 485-1900
          Facsimile:  (425) 485-1911

     with a copy to:

          Perkins Coie LLP
          1201 Third Avenue, Suite 4800
          Seattle, WA 98101-3099
          Attention:  James R. Lisbakken, Esq.
          Phone:      (206) 583-8888
          Facsimile:  (206) 583-8500

     If to TBC or TBC-GP:

          Texas Biotechnology Corporation
          7000 Fannin, 20th Floor
          Houston, TX 77030
          Attention:   President
          Phone:       (713) 796-8822
          Facsimile:   (713) 796-8232

     with a copy to:

          Porter & Hedges, L.L.P.
          700 Louisiana, 35th Floor
          Houston, TX 77002-2764
          Attention:    Robert G. Reedy, Esq.
          Phone:        (713) 226-0674
          Facsimile:    (713) 226-0274

Notices shall be deemed to have been given on the date of service, if served
personally on the party to whom notice is to be given, or on the first day after
transmission by facsimile transmission, if transmitted by facsimile as set forth
above, or on the fifth day after mailing, if mailed as set forth above.

15.2  Waiver

      No waiver of any breach of the terms of this Agreement shall be effective
unless such waiver is in writing and signed by the Partner against whom such
waiver is claimed.  No waiver of any breach shall be deemed to be a waiver of
any other or subsequent breach.

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -40-
<PAGE>

15.3  Severability

      If any provision of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

15.4  Waiver of Partition

      No Partner, either directly or indirectly, shall take any action to
require partition of the Partnership or any of its assets or properties.
Notwithstanding any provisions of applicable law to the contrary, each Partner
(and its successors and assigns) hereby irrevocably waives any and all right to
maintain any action for partition or to compel any sale with respect to its
Partnership Interest, or with respect to any assets or properties of the
Partnership, except as expressly provided in this Agreement.

15.5  Further Assurances

      Each Partner shall execute such deeds, assignments, endorsements,
evidences of transfer and other instruments and documents and shall give further
assurances as shall be necessary to perform its obligations hereunder and shall
execute such estoppel and other documents as are reasonably requested by any
other Partner regarding the status of the Partnership.

15.6  Governing Law

      This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, without regard to the choice of law provisions of
the State of Delaware or any other jurisdiction.

15.7  Counterparts

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

15.8  Limitation on Rights of Others

      This Agreement is entered into between the Partners for the exclusive
benefit of the Partnership, its Partners, and their successors and permitted
assigns.  This Agreement is not intended for the benefit of any creditor of the
Partnership or any other Person.  Except to the extent provided by applicable
statute, and then only to that extent, no creditor or third party shall have any
rights under this Agreement or under any other agreement between the Partnership
and any Partner with respect to any contribution to the Partnership or
otherwise.

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -41-
<PAGE>

15.9   Successors and Assigns

       This Agreement shall be binding on and inure to the benefit of the
Partners and their respective successors and permitted assigns.

15.10  Entire Agreement; Amendment

       This Agreement constitutes the entire agreement between the Partners with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, whether oral or written, between the Partners (and their
Affiliates) with respect to the subject matter hereof, including the two
Confidential Disclosure Agreements (CDAs) dated [ * ] and [ * ] between ICOS
Corporation and TBC regarding confidential information (which is superseded and
replaced by Section 2.7).  This Agreement may be amended only in writing signed
by all the Partners.

15.11  Expenses

       Except as otherwise provided herein or agreed to in writing by the
Partners or their Affiliates, each Partner shall bear its own costs and
expenses, including legal fees, associated with carrying on its business as a
Partner hereof.

15.12  Construction

       This Agreement has been submitted to the scrutiny of, and has been
negotiated by, all Partners hereto and their counsel, and shall be given a fair
and reasonable interpretation in accordance with the terms hereof, without
consideration or weight being given to its having been drafted by any party
hereto or its counsel.

15.13  Disclaimer of Agency

       This Agreement does not create any entity or relationship beyond the
scope set forth herein, and except as otherwise expressly provided herein, this
Agreement shall not constitute any Partner the legal representative or agent of
the other, nor shall any Partner or any Affiliate of a Partner have the right or
authority to assume, create or incur any liability or obligation, express or
implied, against, in the name of or on behalf of any other Partner, its
Affiliates, the Partnership or its Affiliates.

15.14  Rights and Remedies

       The rights and remedies provided by this Agreement are cumulative and the
use of any one right or remedy shall not preclude or waive the right to use any
or all other remedies. These rights and remedies are given in addition to any
other rights, other than the right of partition, the Partners may have by law,
statute, ordinance or otherwise.

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -42-
<PAGE>

15.15  Attorneys' Fees

       In the event of a dispute between the Committee Member and Partners, or
the Partners, arising out of this Agreement that is arbitrated or litigated and
except as decided by the arbitrators under Section 2.5, the nonprevailing party
shall pay the reasonable costs and attorneys' fees of the prevailing party,
including the reasonable costs and attorneys' fees incurred in the appeal of any
final or interlocutory judgment.

                         [signatures on following page]

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -43-
<PAGE>

      IN WITNESS WHEREOF, the Partners hereto have executed this Agreement as of
the day and year first above written.

                              GENERAL PARTNERS:

                              ICOS-ET-GP LLC

                              By: /s/ Paul Clark
                                 ---------------------------

                              Name: Paul Clark
                                   -------------------------

                              Title: Chairman & CEO
                                    ------------------------

                              TBC-ET, INC.

                              By: /s/ David B. McWilliams
                                 ---------------------------

                              Name: David B. McWilliams
                                   -------------------------

                              Title: President
                                    ------------------------

                              LIMITED PARTNERS:

                              ICOS-ET-LP LLC

                              By: /s/ Paul Clark
                                 ---------------------------

                              Name: Paul Clark
                                   -------------------------

                              Title: Chairman & CEO
                                    ------------------------

                              TEXAS BIOTECHNOLOGY CORPORATION

                              By: /s/ David B. McWilliams
                                 ---------------------------

                              Name: David B. McWilliams
                                   -------------------------

                              Title: President/CEO
                                    ------------------------

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

                                     -44-
<PAGE>

                                   EXHIBIT C
                                 PRESS RELEASE

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.
<PAGE>

                                   EXHIBIT D

     [ * ]

[ * ] designates portions of this document that have been omitted pursuant to a
request for confidential treatment filed separately with the Commission.

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