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As filed with the Securities and Exchange Commission on March 28, 2002

Registration No. 333-84050

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

MITOKOR, INC.
(Exact name of Registrant as specified in its charter)

Delaware (After Reincorporation)	2834	33-0472944
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Number)	(I.R.S. Employer Identification No.)

11494 Sorrento Valley Road
San Diego, California 92121
(858) 793-7800
(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)

Walter H. Moos, Ph.D.
Chief Executive Officer and Chairman of the Board of Directors
MitoKor, Inc.
11494 Sorrento Valley Road
San Diego, California 92121
(858) 793-7800
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

Copies to:

Scott M. Stanton, Esq.
Christian Waage, Esq.
Gray Cary Ware & Freidenrich LLP
4365 Executive Dr., Suite 1100
San Diego, CA 92121
(858) 677-1400 Gary J. Kocher, Esq.
Preston Gates & Ellis LLP
701 5th Avenue, Suite 5000
Seattle, WA 98104
(206) 623-7580

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.

        If any of the securities being registered on this form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended, check the following box. / /

        If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. / /

        If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. / /

        If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. / /

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

        The purpose of this Amendment No. 1 to the Registration Statement is solely to file certain exhibits to the Registration Statement, as set forth below in Item 16(a) of Part II.

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13.    Other Expenses of Issuance and Distribution.

        The following table sets forth all expenses, other than the underwriting discounts and commissions, payable by the registrant in connection with the sale of the common stock being registered. All amounts shown are estimates except for the registration fee and the NASD filing fee.

Registration fee		$	5,520
NASD filing fee			6,500
Nasdaq National Market listing fee			100,000
Printing and engraving expenses			150,000
Legal fees and expenses			400,000
Accounting fees and expenses			400,000
Transfer agent and registrar fees			10,000
Miscellaneous fees and expenses			27,980
	Total	$	1,100,000

Item 14.    Indemnification of Directors and Officers.

        Section 145 of the Delaware General Corporation Law permits indemnification of directors, officers and other corporate agents under certain circumstances and subject to certain limitations. The registrant's certificate of incorporation and bylaws, which will become effective upon the closing of this offering, provide that the registrant shall indemnify its directors, officers, employees and agents to the full extent permitted by the Delaware General Corporation Law, including circumstances in which indemnification is otherwise discretionary under Delaware law. In addition, the registrant has entered into separate indemnification agreements with its directors and officers which require the registrant, among other things, to indemnify them against certain liabilities which may arise by reason of their status or service (other than liabilities arising from acts or omissions not in good faith or willful misconduct).

        These indemnification provisions and the indemnification agreements entered into between the registrant and its directors and officers may be sufficiently broad to permit indemnification of the registrant's directors and officers for liabilities, including reimbursement of expenses incurred, arising under the Securities Act.

        The underwriting agreement filed as Exhibit 1.1 to this registration statement provides for indemnification by the underwriters of the registrant and its directors and officers, and by the registrant of the underwriters, for certain liabilities, including liabilities arising under the Securities Act, or otherwise.

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Item 15.    Recent Sales of Unregistered Securities.

        a)    On various dates between January 1, 1999 and December 31, 2001, the registrant issued options to approximately 100 employees, directors, consultants and other service providers to purchase up to a total of 1,250,518 shares of the registrant's common stock under the registrant's 1993 Stock Option Plan and 2000 Outside Directors Stock Option Plan. The exercise prices per share ranged from $0.80 to $2.00. No consideration was paid to the registrant by any recipient of any of the foregoing options for the grant of such options. From January 1, 1999 through December 31, 2001, 22 option holders exercised options for an aggregate of 99,377 shares of our common stock. The registrant has received aggregate consideration of approximately $53,500 in connection with the exercise of these options.

        b)    In February 2000, the registrant issued an aggregate of 500,000 shares of Series E convertible preferred stock to Chiron Corporation in connection with the purchase of the Mimotopes business. The shares of Series E convertible preferred stock were issued pursuant to an Asset Purchase Agreement dated February 7, 2000.

        c)    In August and September 2000, the registrant sold 2,511,681 shares of Series F convertible preferred stock to 28 investors in exchange for an aggregate purchase price of $18,837,608 in cash. The shares of Series F convertible preferred stock were sold pursuant to a Series F Preferred Stock Purchase Agreement dated August 24, 2000.

        d)    In June 2001, the registrant issued an aggregate of 1,847,625 shares of Series G convertible preferred stock and warrants to purchase 279,397 shares of Series G convertible preferred stock in connection with the merger with Apollo BioPharmaceutics, Inc. The shares of Series G convertible preferred stock and the warrants to purchase shares of Series G convertible preferred stock were issued in exchange for the outstanding shares of common stock and options and warrants to purchase common stock of Apollo BioPharmaceutics, Inc. pursuant to an Agreement and Plan of Merger and Reorganization dated May 8, 2001.

        e)    In November 2001, the registrant sold an aggregate 833,341 shares of Series F-1 convertible preferred stock to 13 investors in exchange for an aggregate purchase price of $6,250,057 in cash. The shares of Series F-1 convertible preferred stock were sold pursuant to a Series F-1 preferred stock purchase agreement dated November 9, 2001. The registrant issued 33,334 shares of Series F-1 preferred stock to RBC Dain Rauscher Inc., which acted as placement agent in connection with the sale of the registrant's Series F-1 convertible preferred stock, as partial payment of the fees that were payable to RBC Dain Rauscher Inc. for such services.

        The issuances described in Item 15(a) were deemed exempt from registration under the Securities Act in reliance on Rule 701 promulgated thereunder as transactions pursuant to compensatory benefit plans and contracts relating to compensation. In addition, the issuances described in Items 15(b), 15(c), 15(d) and 15(e) were deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act or Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. The recipients of securities in each such transaction represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the share certificates and other instruments issued in such transactions. All recipients either received adequate information about the registrant or had access, through employment or other relationships, to such information.

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Item 16.    Exhibits and Financial Statement Schedules.

(a)

Exhibits.

Exhibit Number	Description of Documents
1.1*	Form of Underwriting Agreement
2.1**	Asset Purchase Agreement dated February 7, 2000 by and among the registrant, Mimotopes Pty. Ltd., Chiron Corporation and Chiron Technologies Pty. Ltd.
2.2**	Agreement and Plan of Merger and Reorganization dated May 8, 2001 by and among the registrant, Mito Acquisition Corp. and Apollo BioPharmaceutics, Inc.
3.1	Certificate of Incorporation of the registrant
3.2*	Amended and Restated Certificate of Incorporation of the registrant
3.3	Bylaws of the registrant
3.4*	Amended and Restated Bylaws of the registrant
4.1*	Specimen Common Stock Certificate
5.1*	Opinion of Gray Cary Ware & Freidenrich LLP
10.1	Form of Indemnity Agreement for directors and officers
10.2	1993 Stock Option Plan and forms of Incentive Stock Option Agreement and Nonstatutory Stock Option Agreement thereunder
10.3*	2000 Outside Directors Stock Option Plan, as amended, terms of Stock Option Agreement and form of Stock Option Grant Agreement thereunder
10.4*	2002 Stock Option Plan, terms of Stock Option Agreement and form of Stock Option Grant Agreement thereunder
10.5*	2002 Employee Stock Purchase Plan and form of subscription agreement thereunder
10.6**	Series F Preferred Stock Purchase Agreement dated August 24, 2000 by and among the registrant and the undersigned individuals and entities thereto
10.7**	Amended and Restated Investors' Rights Agreement dated as of November 9, 2001 by and among the registrant and the undersigned parties thereto
10.8**	Form of Warrant to Purchase Series G Preferred Stock, issued to the former stockholders of Apollo BioPharmaceutics, Inc.
10.9**	Form of Warrant to Purchase Series G Preferred Stock, issued to the former option and warrant holders of Apollo BioPharmaceutics, Inc.
10.10**	Series F-1 Preferred Stock Purchase Agreement dated November 9, 2001 by and among the registrant and the undersigned individuals and entities thereto
10.11**	Employment Letter Agreement dated December 11, 1996 by and between the registrant and Walter H. Moos, Ph.D.
10.12**	Employment Letter Agreement dated March 15, 2001 by and between the registrant and Ronald E. Deane
10.13**	Standard Industrial Lease dated February 28, 2001 by and between the registrant and Collins Development Company
10.14**	Standard Industrial Lease dated February 28, 2001 by and between the registrant and Collins Development Company
10.15**	Transfer of Lease dated September 14, 2001 by and among Mimotopes Pty. Ltd., Chiron Technologies Pty. Ltd. and Monash University
10.16**	Amended and Restated Loan and Security Agreement dated June 21, 2001 by and between the registrant and Silicon Valley Bank

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10.17**	Warrant to Purchase Series F Preferred Stock dated June 21, 2001 issued by the registrant to Silicon Valley Bank
10.18**	Equipment Loan and Security Agreement dated as of December 15, 1999 by and between the registrant and MMC/GATX Partnership No. 1
10.19**	Warrant to Purchase Shares of Series E Preferred Stock dated December 15, 1999 issued by the registrant to Meier Mitchell & Company
10.20+	Services Agreement for Chiron Corporation dated February 7, 2000 by and between Mimotopes Pty. Ltd. and Chiron Corporation, as amended
10.21+	License and Option Agreement dated February 8, 1999 by and between Apollo BioPharmaceutics, Inc. and American Home Products Corporation acting through its Wyeth-Ayerst Laboratories Division
10.22+	Collaborative Research and Development Agreement dated November 4, 1998 by and between the registrant and Pfizer Inc., as amended
10.23+	License and Royalty Agreement dated November 4, 1998 by and between the registrant and Pfizer Inc.
21.1**	Subsidiaries of the registrant
23.1**	Consent of PricewaterhouseCoopers LLP
23.2*	Consent of Gray Cary Ware & Freidenrich LLP (included in Exhibit 5.1)
23.3**	Consent of BDO Seidman, LLP
24.1**	Power of Attorney (see page II-6)

*

To be filed by amendment.

**

Filed with initial Registration Statement on Form S-1 (File No. 333-84050) dated March 8, 2002.

+

Confidential treatment requested.

(b)

Financial Statement Schedules.

        No schedules have been filed because the information required to be set forth therein is not applicable or is shown in the financial statements or notes thereto.

Item 17. Undertakings

        The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

        Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, statement or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has

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been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

        The undersigned registrant hereby undertakes that:

        (1)  For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

        (2)  For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of San Diego, State of California, on the 28th day of March, 2002.

MITOKOR, INC.
By:	WALTER H. MOOS, PH.D.* Walter H. Moos, Ph.D. Chief Executive Officer and Chairman of the Board of Directors

        Pursuant to the requirements of the Securities Act, this registration statement has been signed by the following persons in the capacities and on the dates indicated:

Signature	Title	Date
WALTER H. MOOS, PH.D.* Walter H. Moos, Ph.D.	Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)	March 28, 2002
/s/  CRAIG JOHNSON Craig Johnson	Chief Financial Officer and Vice President, Finance and Administration (Principal Financial and Accounting Officer)	March 28, 2002
MICHAEL CALLAGHAN* Michael Callaghan	Director	March 28, 2002
JEAN DELEAGE, PH.D.* Jean Deleage, Ph.D.	Director	March 28, 2002
STANDISH M. FLEMING* Standish M. Fleming	Director	March 28, 2002
ALAN S. ROSENTHAL, M.D.* Alan S. Rosenthal, M.D.	Director	March 28, 2002

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RICHARD S. SCHNEIDER, PH.D.* Richard S. Schneider, Ph.D.	Director	March 28, 2002
JERRY A. WEISBACH, PH.D.* Jerry A. Weisbach, Ph.D.	Director	March 28, 2002

*By:	/s/  CRAIG JOHNSON	March 28, 2002
	Craig Johnson Attorney-in-fact

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INDEX TO EXHIBITS

Exhibit Number	Description of Documents
1.1*	Form of Underwriting Agreement
2.1**	Asset Purchase Agreement dated February 7, 2000 by and among the registrant, Mimotopes Pty. Ltd., Chiron Corporation and Chiron Technologies Pty. Ltd.
2.2**	Agreement and Plan of Merger and Reorganization dated May 8, 2001 by and among the registrant, Mito Acquisition Corp. and Apollo BioPharmaceutics, Inc.
3.1	Certificate of Incorporation of the registrant
3.2*	Amended and Restated Certificate of Incorporation of the registrant
3.3	Bylaws of the registrant
3.4*	Amended and Restated Bylaws of the registrant
4.1*	Specimen Common Stock Certificate
5.1*	Opinion of Gray Cary Ware & Freidenrich LLP
10.1	Form of Indemnity Agreement for directors and officers
10.2	1993 Stock Option Plan and forms of Incentive Stock Option Agreement and Nonstatutory Stock Option Agreement thereunder
10.3*	2000 Outside Directors Stock Option Plan, as amended, terms of Stock Option Agreement and form of Stock Option Grant Agreement thereunder
10.4*	2002 Stock Option Plan, terms of Stock Option Agreement and form of Stock Option Grant Agreement thereunder
10.5*	2002 Employee Stock Purchase Plan and form of subscription agreement thereunder
10.6**	Series F Preferred Stock Purchase Agreement dated August 24, 2000 by and among the registrant and the undersigned individuals and entities thereto
10.7**	Amended and Restated Investors' Rights Agreement dated as of November 9, 2001 by and among the registrant and the undersigned parties thereto
10.8**	Form of Warrant to Purchase Series G Preferred Stock, issued to the former stockholders of Apollo BioPharmaceutics, Inc.
10.9**	Form of Warrant to Purchase Series G Preferred Stock, issued to the former option and warrant holders of Apollo BioPharmaceutics, Inc.
10.10**	Series F-1 Preferred Stock Purchase Agreement dated November 9, 2001 by and among the registrant and the undersigned individuals and entities thereto
10.11**	Employment Letter Agreement dated December 11, 1996 by and between the registrant and Walter H. Moos, Ph.D.
10.12**	Employment Letter Agreement dated March 15, 2001 by and between the registrant and Ronald E. Deane
10.13**	Standard Industrial Lease dated February 28, 2001 by and between the registrant and Collins Development Company
10.14**	Standard Industrial Lease dated February 28, 2001 by and between the registrant and Collins Development Company
10.15**	Transfer of Lease dated September 14, 2001 by and among Mimotopes Pty. Ltd., Chiron Technologies Pty. Ltd. and Monash University
10.16**	Amended and Restated Loan and Security Agreement dated June 21, 2001 by and between the registrant and Silicon Valley Bank
10.17**	Warrant to Purchase Series F Preferred Stock dated June 21, 2001 issued by the registrant to Silicon Valley Bank
10.18**	Equipment Loan and Security Agreement dated as of December 15, 1999 by and between the registrant and MMC/GATX Partnership No. 1

10.19**	Warrant to Purchase Shares of Series E Preferred Stock dated December 15, 1999 issued by the registrant to Meier Mitchell & Company
10.20+	Services Agreement for Chiron Corporation dated February 7, 2000 by and between Mimotopes Pty. Ltd. and Chiron Corporation, as amended
10.21+	License and Option Agreement dated February 8, 1999 by and between Apollo BioPharmaceutics, Inc. and American Home Products Corporation acting through its Wyeth-Ayerst Laboratories Division
10.22+	Collaborative Research and Development Agreement dated November 4, 1998 by and between the registrant and Pfizer Inc., as amended
10.23+	License and Royalty Agreement dated November 4, 1998 by and between the registrant and Pfizer Inc.
21.1**	Subsidiaries of the registrant
23.1**	Consent of PricewaterhouseCoopers LLP
23.2*	Consent of Gray Cary Ware & Freidenrich LLP (included in Exhibit 5.1)
23.3**	Consent of BDO Seidman, LLP
24.1**	Power of Attorney (see page II-6)

*

To be filed by amendment.

**

Filed with initial Registration Statement on Form S-1 (File No. 333-84050) dated March 8, 2002.

+

Confidential treatment requested.

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EXPLANATORY NOTE
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
SIGNATURES
INDEX TO EXHIBITS

EX-3.1

                                                                     Exhibit 3.1


                          CERTIFICATE OF INCORPORATION

                                       OF

                                  MITOKOR, INC.


         FIRST: The name of the corporation is MitoKor, Inc., (the
"Corporation")

         SECOND: The address of its registered office in the State of Delaware
is 1209 Orange Street in the City of Wilmington, County of New Castle. The name
of its registered agent at such address is CT Corporation.

         THIRD: The nature of the business or purposes to be conducted or
promoted is to engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.

         FOURTH: The Corporation is authorized to issue one class of stock, to
be designated "Common Stock," with a par value of $0.001 per share. The total
number of shares of Common Stock that the Corporation shall have authority to
issue is one hundred (100).

         FIFTH: The business and affairs of the Corporation shall be managed by
or under the direction of the Corporation's board of directors (the "Board of
Directors"). In addition to the powers and authority expressly conferred upon
them by statute or by this Certificate of Incorporation or the Bylaws of the
Corporation (the "Bylaws"), the directors are hereby empowered to exercise all
such powers and do all such acts and things as may be exercised or done by the
Corporation. Election of directors need not be by written ballot, unless the
Bylaws so provide.

         SIXTH: The Board of Directors is authorized to make, adopt, amend,
alter or repeal the Bylaws. The stockholders shall also have power to make,
adopt, amend, alter or repeal the Bylaws.

         SEVENTH: The name and mailing address of the incorporator is:

                           Mark Cadigan
                           Gray Cary Ware & Freidenrich LLP
                           4365 Executive Drive, Suite 1100
                           San Diego, CA 92121-2133

         EIGHTH: To the fullest extent permitted by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, a director of
the Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
Any repeal or modification of the foregoing provisions of this Article EIGHTH by
the stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of, or increase
the liability of any director of the Corporation with respect to any acts or
omissions occurring prior to, such repeal or modification.


                                       1



         THE UNDERSIGNED, being the incorporator hereinbefore named, for the
purpose of forming a corporation pursuant to the General Corporation Law of
Delaware, does make this certificate, hereby declaring and certifying that this
is my act and deed and the facts herein stated are true, and accordingly have
hereunto set my hand this 7th day of March, 2002.


                                       /s/ Mark Cadigan
                                       -----------------------------------------
                                       Mark Cadigan, Incorporator


                                       2

EX-3.3

                                                                     Exhibit 3.3







                                     BYLAWS

                                       OF

                                  MITOKOR, INC.








                                     BYLAWS
                                       OF
                                  MITOKOR, INC.


                                    ARTICLE I
                                  STOCKHOLDERS

         Section 1.1 ANNUAL MEETING. An annual meeting of the stockholders of
MitoKor, Inc., (the "Corporation"), for the election of directors and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, on such date, and at such time as the Corporation's
board of directors (the "Board of Directors") shall each year fix, which date
shall be within thirteen months subsequent to the later of the date of
incorporation or the last annual meeting of stockholders.

         Section 1.2 SPECIAL MEETINGS. Special meetings of the stockholders, for
any purpose or purposes prescribed in the notice of the meeting, may be called
by (1) the Board of Directors pursuant to a resolution adopted by a majority of
the total number of authorized directors (whether or not there exist any
vacancies in previously authorized directorships at the time any such resolution
is presented to the Board of Directors for adoption), (2) the Chief Executive
Officer or (3) the holders of shares entitled to cast not less than ten percent
(10%) of the votes at the meeting, and shall be held at such place, on such
date, and at such time as they shall fix. Business transacted at special
meetings shall be confined to the purpose or purposes stated in the notice.

         Section 1.3 NOTICE OF MEETINGS. Written notice of the place, date, and
time of all meetings of the stockholders shall be given not less than ten (10)
nor more than sixty (60) days before the date on which the meeting is to be
held, to each stockholder entitled to vote at such meeting, except as otherwise
provided herein or required by law (meaning, here and hereinafter, as required
from time to time by the Delaware General Corporation Law or the Certificate of
Incorporation of the Corporation).

         When a meeting is adjourned to another place, date or time, written
notice need not be given of the adjourned meeting if the place, date and time
thereof are announced at the meeting at which the adjournment is taken;
PROVIDED, HOWEVER, that if the date of any adjourned meeting is more than thirty
(30) days after the date for which the meeting was originally noticed, or if a
new record date is fixed for the adjourned meeting, written notice of the place,
date, and time of the adjourned meeting shall be given in conformity herewith.
At any adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.

         Section 1.4 QUORUM. At any meeting of the stockholders, the holders of
a majority of all of the shares of the stock entitled to vote at the meeting,
present in person or by proxy, shall constitute a quorum for all purposes,
unless or except to the extent that the presence of a larger number may be
required by law or by the Corporation's Certificate of Incorporation (the
"Certificate of Incorporation") or the bylaws of this Corporation (these
"Bylaws").


                                       1



         If a quorum shall fail to attend any meeting, the chairman of the
meeting or the holders of a majority of the shares of stock entitled to vote who
are present, in person or by proxy, may adjourn the meeting to another place,
date, or time.

         If a notice of any adjourned special meeting of stockholders is sent to
all stockholders entitled to vote thereat, stating that it will be held with
those present constituting a quorum, then except as otherwise required by law,
those present at such adjourned meeting shall constitute a quorum, and all
matters shall be determined by a majority of the votes cast at such meeting.

         Section 1.5 ORGANIZATION. Such person as the Board of Directors may
have designated or, in the absence of such a person, the chief executive officer
of the Corporation or, in his absence, such person as may be chosen by the
holders of a majority of the shares entitled to vote who are present, in person
or by proxy, shall call to order any meeting of the stockholders and act as
chairman of the meeting. In the absence of the Secretary of the Corporation, the
secretary of the meeting shall be such person as the chairman appoints.

         Section 1.6 CONDUCT OF BUSINESS. The chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him in order.

         Section 1.7 PROXIES AND VOTING. At any meeting of the stockholders,
every stockholder entitled to vote may vote in person or by proxy authorized by
an instrument in writing filed in accordance with the procedure established for
the meeting.

         Each stockholder shall have one vote for every share of stock entitled
to vote which is registered in such stockholder's name on the record date for
the meeting, except as otherwise provided herein or required by law.

         All voting, except where otherwise required by law, may be by a voice
vote; PROVIDED, HOWEVER, that upon demand therefor by a stockholder entitled to
vote or by his or her proxy, a stock vote shall be taken. Every stock vote shall
be taken by ballots, each of which shall state the name of the stockholder or
proxy voting and such other information as may be required under the procedure
established for the meeting. Every vote taken by ballots shall be counted by an
inspector or inspectors appointed by the chairman of the meeting.

         All elections shall be determined by a plurality of the votes cast, and
except as otherwise required by law or these Bylaws, all other matters shall be
determined by a majority of the votes cast.

         Section 1.8 STOCK LIST. A complete list of stockholders entitled to
vote at any meeting of stockholders, arranged in alphabetical order for each
class of stock and showing the address of each such stockholder and the number
of shares registered in his or her name, shall be open to the examination of any
such stockholder, for any purpose germane to the meeting, during ordinary
business hours for a period of at least ten (10) days prior to the meeting,
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or if not so specified, at the
place where the meeting is to be held.


                                       2



         The stock list shall also be kept at the place of the meeting during
the whole time thereof and shall be open to the examination of any such
stockholder who is present. This list shall presumptively determine the identity
of the stockholders entitled to vote at the meeting and the number of shares
held by each of them.

         Section 1.9 STOCKHOLDER ACTION BY WRITTEN CONSENT. Any action which may
be taken at any annual or special meeting of stockholders may be taken without a
meeting and without prior notice, if a consent in writing, setting forth the
actions so taken, is signed by the holders of outstanding shares having not less
than the minimum number of votes which would be necessary to authorize or take
such action at a meeting at which all shares entitled to vote thereon were
present and voted. All such consents shall be filed with the Secretary of the
Corporation and shall be maintained in the corporate records. Prompt notice of
the taking of a corporate action without a meeting by less than unanimous
written consent shall be given to those stockholders who have not consented in
writing.

                                   ARTICLE II
                               BOARD OF DIRECTORS

         Section 2.1 NUMBER AND TERM OF OFFICE. The number of directors shall be
a range of not less than five (5) nor more than nine (9), with the number of
directors initially set at seven (7). The minimum or maximum number of directors
provided by this Section 2.1 may be changed or a definite number fixed without
provision for an indefinite number, by the Board of Directors pursuant to a
resolution adopted by a majority of the total number of authorized directors
(whether or not there exist any vacancies in previously authorized directorships
at the time any such resolution is presented to the Board of Directors for
adoption). Each director shall hold office until his successor is elected and
qualified or until his earlier death, resignation, retirement, disqualification
or removal.

         Section 2.2 VACANCIES AND NEWLY CREATED DIRECTORSHIPS. Newly created
directorships resulting from any increase in the authorized number of directors
or any vacancies in the Board of Directors resulting from death, resignation,
retirement, disqualification, or other cause (other than removal from office by
a vote of the stockholders) may be filled only by a majority vote of the
directors then in office, though less than a quorum, and directors so chosen
shall hold office for a term expiring at the next annual meeting of
stockholders. No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.

         Section 2.3 REMOVAL. Subject to the limitations stated in the
Certificate of Incorporation, any director, or the entire Board of Directors,
may be removed from office at any time, with or without cause, but only by the
affirmative vote of the holders of at least a majority of the voting power of
all of the then outstanding shares of stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class.
Vacancies in the Board of Directors resulting from such removal may be filled by
(i) a majority of the directors then in office, though less than a quorum, or
(ii) the stockholders at a special meeting of the stockholders properly called
for that purpose, by the vote of the holders of a majority of the shares
entitled to vote at such special meeting. Directors so chosen shall hold office
until the next annual meeting of stockholders.


                                       3



         Section 2.4 REGULAR MEETINGS. Regular meetings of the Board of
Directors shall be held at such place or places, on such date or dates, and at
such time or times as shall have been established by the Board of Directors and
publicized among all directors. A notice of each regular meeting shall not be
required.

         Section 2.5 SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by a majority of the directors then in office by the
Chairman of the Board or by the Chief Executive Officer and shall be held at
such place, on such date, and at such time as they or he shall fix. Notice of
the place, date, and time of each such special meeting shall be given each
director by whom it is not waived by mailing written notice not less than five
(5) days before the meeting (one (1) day before the meeting if delivered by an
overnight courier service and two (2) days before the meeting if by overseas
courier service) or by telephoning, telecopying, telegraphing or personally
delivering the same not less than twenty-four (24) hours before the meeting.
Unless otherwise indicated in the notice thereof, any and all business may be
transacted at a special meeting.

         Section 2.6 QUORUM. At any meeting of the Board of Directors, a
majority of the total number of authorized directors shall constitute a quorum
for all purposes. If a quorum shall fail to attend any meeting, a majority of
those present may adjourn the meeting to another place, date, or time, without
further notice or waiver thereof.

         Section 2.7 PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE. Members
of the Board of Directors, or of any committee of the Board of Directors, may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and such participation shall
constitute presence in person at such meeting.

         Section 2.8 CONDUCT OF BUSINESS. At any meeting of the Board of
Directors, business shall be transacted in such order and manner as the Board of
Directors may from time to time determine, and all matters shall be determined
by the vote of a majority of the directors present, except as otherwise provided
herein or required by law. Action may be taken by the Board of Directors without
a meeting if all members thereof consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board of Directors.

         Section 2.9 POWERS. The Board of Directors may, except as otherwise
required by law, exercise all such powers and do all such acts and things as may
be exercised or done by the Corporation, including, without limiting the
generality of the foregoing, the unqualified power:

                  (1) To declare dividends from time to time in accordance with
law;

                  (2) To purchase or otherwise acquire any property, rights or
privileges on such terms as it shall determine;

                  (3) To authorize the creation, making and issuance, in such
form as it may determine, of written obligations of every kind, negotiable or
non-negotiable, secured or unsecured, and to do all things necessary in
connection therewith;


                                       4



                  (4) To remove any officer of the Corporation with or without
cause, and from time to time to pass on the powers and duties of any officer
upon any other person for the time being;

                  (5) To confer upon any officer of the Corporation the power to
appoint, remove and suspend subordinate officers, employees and agents;

                  (6) To adopt from time to time such stock option, stock
purchase, bonus or other compensation plans for directors, officers, employees
and agents of the Corporation and its subsidiaries as it may determine;

                  (7) To adopt from time to time such insurance, retirement, and
other benefit plans for directors, officers, employees and agents of the
Corporation and its subsidiaries as it may determine; and

                  (8) To adopt from time to time regulations, not inconsistent
with these Bylaws, for the management of the Corporation's business and affairs.

         Section 2.10 COMPENSATION OF DIRECTORS. Directors, as such, may
receive, pursuant to resolution of the Board of Directors, fixed fees and other
compensation for their services as directors, including, without limitation,
their services as members of committees of the Board of Directors.

         Section 2.11 NOMINATION OF DIRECTOR CANDIDATES. Nominations for the
election of directors may be made by the Board of Directors or a proxy committee
appointed by the Board of Directors or by any stockholder entitled to vote in
the election of directors.

                                   ARTICLE III
                                   COMMITTEES

         Section 3.1 COMMITTEES OF THE BOARD OF DIRECTORS. The Board of
Directors, by a vote of a majority of the whole Board of Directors, may from
time to time designate committees of the Board of Directors, with such lawfully
delegable powers and duties as it thereby confers, to serve at the pleasure of
the Board of Directors and shall, for those committees and any others provided
for herein, elect a director or directors to serve as the member or members,
designating, if it desires, other directors as alternate members who may replace
any absent or disqualified member at any meeting of the committee. Any committee
so designated may exercise the power and authority of the Board of Directors to
declare a dividend, to authorize the issuance of stock or to adopt an agreement
of merger or consolidation if the resolution which designates the committee or a
supplemental resolution of the Board of Directors shall so provide. In the
absence or disqualification of any member of any committee and any alternate
member in his place, the member or members of the committee present at the
meeting and not disqualified from voting, whether or not he or she or they
constitute a quorum, may by unanimous vote appoint another member of the Board
of Directors to act at the meeting in the place of the absent or disqualified
member.


                                       5



         Section 3.2 CONDUCT OF BUSINESS. Each committee may determine the
procedural rules for meeting and conducting its business and shall act in
accordance therewith, except as otherwise provided herein or required by law.
Adequate provision shall be made for notice to members of all meetings;
one-third of the authorized members shall constitute a quorum unless the
committee shall consist of one or two members, in which event one member shall
constitute a quorum; and all matters shall be determined by a majority vote of
the members present. Action may be taken by any committee without a meeting if
all members thereof consent thereto in writing, and the writing or writings are
filed with the minutes of the proceedings of such committee.

                                   ARTICLE IV
                                    OFFICERS

         Section 4.1 GENERALLY. The officers of the Corporation shall consist of
a Chief Executive Officer, a Secretary and a Chief Financial Officer. The
Corporation may also have, at the discretion of the Board of Directors, a
Chairman of the Board, one or more Vice Presidents, and such other officers as
may from time to time be appointed by the Board of Directors. Officers shall be
elected by the Board of Directors, which shall consider that subject at its
first meeting after every annual meeting of stockholders. Each officer shall
hold office until his or her successor is elected and qualified or until his or
her earlier resignation or removal. Any number of offices may be held by the
same person.

         Section 4.2 CHAIRMAN OF THE BOARD. The Chairman of the Board, if there
shall be such an officer, shall, if present, preside at all meetings of the
Board of Directors, and exercise and perform such other powers and duties as may
be from time to time assigned to him by the Board of Directors or as provided by
these Bylaws.

         Section 4.3 CHIEF EXECUTIVE OFFICER. Subject to such supervisory
powers, if any, as may be given by the Board of Directors to the Chairman of the
Board, if there be such an officer, the Chief Executive Officer shall be the
general manager and chief operating officer of the Corporation and shall,
subject to the control of the Board of Directors, have general supervision,
direction, and control of the business and officers of the Corporation. He shall
preside at all meetings of the stockholders. He shall be ex officio a member of
all the standing committees, including the executive committee, if any, and
shall have the general powers and duties of management usually vested in the
office of chief executive officer of a Corporation, and shall have such other
powers and duties as may be prescribed by the Board of Directors or by these
Bylaws.

         Section 4.4 VICE PRESIDENT. In the absence or disability of the Chief
Executive Officer, the Vice Presidents in order of their rank as fixed by the
Board of Directors, or if not ranked, the Vice President designated by the Board
of Director, shall perform the duties of the Chief Executive Officer, and when
so acting shall have all the powers of, and be subject to all the restrictions
upon, the Chief Executive Officer. The Vice Presidents shall have such other
powers and perform such other duties as from time to time may be prescribed for
them respectively by the Board of Directors or these Bylaws.


                                       6



         Section 4.5 CHIEF FINANCIAL OFFICER. Unless otherwise designated by the
Board of Directors, the Chief Financial Officer shall be the Treasurer. The
Chief Financial Officer shall keep and maintain or cause to be kept and
maintained, adequate and correct books and records of account in written form or
any other form capable of being converted into written form.

         The Chief Financial Officer shall deposit all monies and other
valuables in the name and to the credit of the Corporation with such
depositaries as may be designated by the Board of Directors. He shall disburse
all funds of the Corporation as may be ordered by the Board of Directors, shall
render to the Chief Executive Officer and directors, whenever they request it,
an account of all of his transactions as Chief Financial Officer and of the
financial condition of the Corporation, and shall have such other powers and
perform such other duties as may be prescribed by the Board of Directors or by
these Bylaws.

         Section 4.6 SECRETARY. The Secretary shall keep, or cause to be kept, a
book of minutes in written form of the proceedings of the Board of Directors,
committees of the Board of Directors, and stockholders. Such minutes shall
include all waivers of notice, consents to the holding of meetings, or approvals
of the minutes of meetings executed pursuant to these Bylaws or the Delaware
General Corporation Law. The Secretary shall keep, or cause to be kept at the
principal executive office or at the office of the Corporation's transfer agent
or registrar, a record of its stockholders, giving the names and addresses of
all stockholders and the number and class of shares held by each.

         The Secretary shall give or cause to be given, notice of all meetings
of the stockholders and of the Board of Directors required by these Bylaws or by
law to be given, and shall keep the seal of the Corporation in safe custody, and
shall have such other powers and perform such other duties as may be prescribed
by the Board of Directors or these Bylaws.

         Section 4.7 DELEGATION OF AUTHORITY. The Board of Directors may from
time to time delegate the powers or duties of any officer to any other officers
or agents, notwithstanding any provision hereof.

         Section 4.8 REMOVAL. Any officer of the Corporation may be removed at
any time, with or without cause, by the Board of Directors.

         Section 4.9 ACTION WITH RESPECT TO SECURITIES OF OTHER CORPORATIONS.
Unless otherwise directed by the Board of Directors, the Chief Executive Officer
or any officer of the Corporation authorized by the Chief Executive Officer
shall have power to vote and otherwise act on behalf of the Corporation, in
person or by proxy, at any meeting of stockholders of or with respect to any
action of stockholders of any other corporation in which this Corporation may
hold securities and otherwise to exercise any and all rights and powers which
this Corporation may possess by reason of its ownership of securities in such
other corporation.

                                    ARTICLE V
                                      STOCK

         Section 5.1 CERTIFICATES OF STOCK. Each stockholder shall be entitled
to a certificate signed by, or in the name of the Corporation by, the Chairman
or Vice-Chairman, if any, of the


                                       7



Board of Directors, or the Chief Executive Officer or a Vice President, and by
the Secretary or an Assistant Secretary, or the Treasurer or an Assistant
Treasurer, certifying the number of shares owned by him or her. Any of or all
the signatures on the certificate may be facsimile.

         Section 5.2 TRANSFERS OF STOCK. Transfers of stock shall be made only
upon the transfer books of the Corporation kept at an office of the Corporation
or by transfer agents designated to transfer shares of the stock of the
Corporation. Except where a certificate is issued in accordance with Section 5.4
of these Bylaws, an outstanding certificate for the number of shares involved
shall be surrendered for cancellation before a new certificate is issued
therefor.

         Section 5.3 RECORD DATE. The Board of Directors may fix a record date,
which shall not be more than sixty (60) nor fewer than ten (10) days before the
date of any meeting of stockholders, nor more than sixty (60) days prior to the
time for the other action hereinafter described, as of which there shall be
determined the stockholders who are entitled: to notice of or to vote at any
meeting of stockholders or any adjournment thereof; to receive payment of any
dividend or other distribution or allotment of any rights; or to exercise any
rights with respect to any change, conversion or exchange of stock or with
respect to any other lawful action.

         Section 5.4 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event of the
loss, theft or destruction of any certificate of stock, another may be issued in
its place pursuant to such regulations as the Board of Directors may establish
concerning proof of such loss, theft or destruction and concerning the giving of
a satisfactory bond or bonds of indemnity.

         Section 5.5 REGULATIONS. The issue, transfer, conversion and
registration of certificates of stock shall be governed by such other
regulations as the Board of Directors may establish.

                                   ARTICLE VI
                                     NOTICES

         Section 6.1 NOTICES. Except as otherwise specifically provided herein
or required by law, all notices required to be given to any stockholder,
director, officer, employee or agent shall be in writing and may in every
instance be effectively given by hand delivery to the recipient thereof, by
depositing such notice in the mails, postage paid, or by sending such notice by
prepaid telegram, mailgram, telecopy or commercial courier service. Any such
notice shall be addressed to such stockholder, director, officer, employee or
agent at his or her last known address as the same appears on the books of the
Corporation. The time when such notice shall be deemed to be given shall be the
time such notice is received by such stockholder, director, officer, employee or
agent, or by any person accepting such notice on behalf of such person, if hand
delivered, or the time such notice is dispatched, if delivered through the mails
or by telegram, courier or mailgram.

         Section 6.2 WAIVERS. A written waiver of any notice, signed by a
stockholder, director, officer, employee or agent, whether before or after the
time of the event for which notice is to be given, shall be deemed equivalent to
the notice required to be given to such stockholder, director, officer, employee
or agent. Neither the business nor the purpose of any meeting need be specified
in such a waiver. Attendance of a person at a meeting shall constitute


                                       8



a waiver of notice for such meeting, except when the person attends a meeting
for the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.

                                   ARTICLE VII
                                  MISCELLANEOUS

         Section 7.1 FACSIMILE SIGNATURES. In addition to the provisions for use
of facsimile signatures elsewhere specifically authorized in these Bylaws,
facsimile signatures of any officer or officers of the Corporation may be used
whenever and as authorized by the Board of Directors or a committee thereof.

         Section 7.2 CORPORATE SEAL. The Board of Directors may provide a
suitable seal, containing the name of the Corporation, which seal shall be in
the charge of the Secretary. If and when so directed by the Board of Directors
or a committee thereof, duplicates of the seal may be kept and used by the Chief
Financial Officer or by an Assistant Secretary or other officer designated by
the Board of Directors.

         Section 7.3 RELIANCE UPON BOOKS, REPORTS AND RECORDS. Each director,
each member of any committee designated by the Board of Directors, and each
officer of the Corporation shall, in the performance of his duties, be fully
protected in relying in good faith upon the books of account or other records of
the Corporation, including reports made to the Corporation by any of its
officers, by an independent certified public accountant, or by an appraiser.

         Section 7.4 FISCAL YEAR. The fiscal year of the Corporation shall be as
fixed by the Board of Directors.

         Section 7.5 TIME PERIODS. In applying any provision of these Bylaws
which require that an act be done or not done a specified number of days prior
to an event or that an act be done during a period of a specified number of days
prior to an event, calendar days shall be used, the day of the doing of the act
shall be excluded, and the day of the event shall be included.

                                  ARTICLE VIII
                    INDEMNIFICATION OF DIRECTORS AND OFFICERS

         Section 8.1 RIGHT TO INDEMNIFICATION. Each person who was or is made a
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
("Proceeding"), by reason of the fact that he or she or a person of whom he or
she is the legal representative, is or was a director or officer of the
Corporation or is or was serving at the request of the Corporation as a director
or officer of another corporation, or as a controlling person of a partnership,
joint venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such Proceeding is alleged action
in an official capacity as a director, officer or employee or in any other
capacity while serving as a director or officer, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the Delaware
General Corporation Law, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification rights


                                       9



than said Law permitted the Corporation to provide prior to such amendment)
against all expenses, liability and loss reasonably incurred or suffered by such
person in connection therewith and such indemnification shall continue as to a
person who has ceased to be a director or officer and shall inure to the benefit
of his or her heirs, executors and administrators; PROVIDED, HOWEVER, that,
except as provided in Section 8.2, the Corporation shall indemnify any such
person seeking indemnity in connection with an action, suit or proceeding (or
part thereof) initiated by such person only if (a) such indemnification is
expressly required to be made by law, (b) the action, suit or proceeding (or
part thereof) was authorized by the Board of Directors, (c) such indemnification
is provided by the Corporation, in its sole discretion, pursuant to the powers
vested in the Corporation under the Delaware General Corporation Law, or (d) the
action, suit or proceeding (or part thereof) is brought to establish or enforce
a right to indemnification under an indemnity agreement or any other statute or
law or otherwise as required under Section 145 of the Delaware General
Corporation Law. The rights hereunder shall be contract rights and shall include
the right to be paid by the Corporation expenses incurred in defending any such
proceeding in advance of its final disposition; PROVIDED, HOWEVER, that, if the
Delaware General Corporation Law then so requires, the payment of such expenses
incurred by a director or officer of the Corporation in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of such Proceeding, shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such director or officer, to
repay all amounts so advanced if it should be determined ultimately that such
director or officer is not entitled to be indemnified under this Section or
otherwise.

         Section 8.2 RIGHT OF CLAIMANT TO BRING SUIT. If a claim under Section
8.1 is not paid in full by the Corporation within ninety (90) days after a
written claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if such suit is not frivolous or brought in bad faith, the
claimant shall be entitled to be paid also the expense of prosecuting such
claim. It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in defending any proceeding in advance of
its final disposition where the required undertaking, if any, has been tendered
to this Corporation) that the claimant has not met the standards of conduct
which make it permissible under the Delaware General Corporation Law for the
Corporation to indemnify the claimant for the amount claimed, but the burden of
proving such defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that a claimant has not
met such applicable standard of conduct.

         Section 8.3 NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any
person by Sections 8.1 and 8.2 shall not be exclusive of any other right which
such persons may have or


                                       10



hereafter acquire under any statute, provision of the Certificate of
Incorporation, bylaw, agreement, vote of stockholders or disinterested directors
or otherwise.

         Section 8.4 INDEMNIFICATION CONTRACTS. The Board of Directors is
authorized to enter into a contract with any director, officer, employee or
agent of the Corporation, or any person serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including employee
benefit plans, providing for indemnification rights equivalent to or, if the
Board of Directors so determines, greater than, those provided for in this
Article VIII.

         Section 8.5 INSURANCE. The Corporation may maintain insurance to the
extent reasonably available, at its expense, to protect itself and any such
director, officer, employee or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise against any such expense,
liability or loss, whether or not the Corporation would have the power to
indemnify such person against such expense, liability or loss under Delaware
General Corporation Law.

         Section 8.6 EFFECT OF AMENDMENT. Any amendment, repeal or modification
of any provision of this Article VIII by the stockholders or the directors of
the Corporation shall not adversely affect any right or protection of a director
or officer of the Corporation existing at the time of such amendment, repeal or
modification.

                                   ARTICLE IX
                                   AMENDMENTS

         The Board of Directors is expressly empowered to adopt, amend or repeal
these Bylaws, subject to the right of the stockholders to adopt, amend, alter or
repeal these Bylaws. Any adoption, amendment or repeal of these Bylaws by the
Board of Directors shall require the approval of a majority of the total number
of authorized directors (whether or not there exist any vacancies in previously
authorized directorships at the time any resolution providing for adoption,
amendment or repeal is presented to the Board of Directors). The stockholders
shall also have power to adopt, amend or repeal these Bylaws.


                                       11



                     SECRETARY'S CERTIFICATE OF ADOPTION OF

                                  THE BYLAWS OF

                                  MITOKOR, INC.


         I hereby certify:

         That I am the duly elected Secretary of MitoKor, Inc., a Delaware
corporation;

         That the foregoing Bylaws comprising eleven (11) pages, constitute the
Bylaws of said corporation as duly adopted by the sole incorporator of the
Corporation on March 7, 2002 and by the sole Director of the Corporation on
March 7, 2002.

         IN WITNESS WHEREOF, I have hereunder subscribed my name this 7th day of
March, 2002.



                                           /s/ Craig Johnson
                                           -------------------------------------
                                           Craig Johnson, Secretary


                                       12

EX-10.1

                                                                    Exhibit 10.1


                               INDEMNITY AGREEMENT


         This Indemnity Agreement, dated as of ____________, 2002, is made by
and between MitoKor, Inc., a Delaware corporation (the "COMPANY") and
____________ (the "INDEMNITEE").

                                    RECITALS

         A.       The Company is aware that competent and experienced persons
are increasingly reluctant to serve as directors, officers or agents of
corporations unless they are protected by comprehensive liability insurance or
indemnification, due to increased exposure to litigation costs and risks
resulting from their service to such corporations, and due to the fact that the
exposure frequently bears no reasonable relationship to the compensation of such
directors, officers and other agents.

         B.       The statutes and judicial decisions regarding the duties of
directors and officers are often difficult to apply, ambiguous, or conflicting,
and therefore fail to provide such directors, officers and agents with adequate,
reliable knowledge of legal risks to which they are exposed or information
regarding the proper course of action to take.

         C.       Plaintiffs often seek damages in such large amounts and the
costs of litigation may be so enormous (whether or not the case is meritorious),
that the defense and/or settlement of such litigation is often beyond the
personal resources of directors, officers and other agents.

         D.       The Company believes that it is unfair for its directors,
officers and agents and the directors, officers and agents of its
subsidiaries to assume the risk of huge judgments and other expenses which
may occur in cases in which the director, officer or agent received no
personal profit and in cases where the director, officer or agent was not
culpable.

         E.       The Company recognizes that the issues in controversy in
litigation against a director, officer or agent of a corporation such as the
Company or its subsidiaries are often related to the knowledge, motives and
intent of such director, officer or agent, that he is usually the only witness
with knowledge of the essential facts and exculpating circumstances regarding
such matters, and that the long period of time which usually elapses before the
trial or other disposition of such litigation often extends beyond the time that
the director, officer or agent can reasonably recall such matters; and may
extend beyond the normal time for retirement for such director, officer or agent
with the result that he, after retirement or in the event of his death, his
spouse, heirs, executors or administrators, may be faced with limited ability
and undue hardship in maintaining an adequate defense, which may discourage such
a director, officer or agent from serving in that position.

         F.       Based upon their experience as business managers, the Board of
Directors of the Company (the "BOARD OF DIRECTORS") has concluded that, to
retain and attract talented and experienced individuals to serve as directors,
officers and agents of the Company and its subsidiaries and to encourage such
individuals to take the business risks necessary for the success of the Company
and its subsidiaries, it is necessary for the Company to contractually indemnify
its directors, officers and agents and the directors, officers and agents of its
subsidiaries, and to assume for itself maximum liability for expenses and
damages in connection


                                       1



with claims against such directors, officers and agents in connection with their
service to the Company and its subsidiaries, and has further concluded that the
failure to provide such contractual indemnification could result in great harm
to the Company and its subsidiaries and the Company's stockholders.

         G.       Section 145 of the General Corporation Law of Delaware, under
which the Company is organized ("SECTION 145"), empowers the Company to
indemnify its directors, officers, employees and agents by agreement and to
indemnify persons who serve, at the request of the Company, as the directors,
officers, employees or agents of other corporations or enterprises, and
expressly provides that the indemnification provided by Section 145 is not
exclusive.

         H.       The Company desires and has requested the Indemnitee to serve
or continue to serve as a director, officer or agent of the Company and/or one
or more subsidiaries of the Company free from undue concern for claims for
damages arising out of or related to such services to the Company and/or one or
more subsidiaries of the Company.

         I.       Indemnitee is willing to serve, or to continue to serve, the
Company and/or one or more subsidiaries of the Company, provided that he is
furnished the indemnity provided for herein.

                                    AGREEMENT

         NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:

         1.       DEFINITIONS.

                  (a)      AGENT. For the purposes of this Agreement, "agent" of
the Company means any person who is or was a director, officer, employee or
other agent of the Company or a subsidiary of the Company; or is or was serving
at the request of, for the convenience of, or to represent the interests of the
Company or a subsidiary of the Company as a director, officer, employee or agent
of another foreign or domestic corporation, partnership, joint venture, trust or
other enterprise; or was a director, officer, employee or agent of a foreign or
domestic corporation which was a predecessor corporation of the Company or a
subsidiary of the Company, or was a director, officer, employee or agent of
another enterprise at the request of, for the convenience of, or to represent
the interests of such predecessor corporation.

                  (b)      EXPENSES. For purposes of this Agreement, "expenses"
include all out-of-pocket costs of any type or nature whatsoever (including,
without limitation, all attorneys' fees and related disbursements), actually and
reasonably incurred by the Indemnitee in connection with either the
investigation, defense or appeal of a proceeding or establishing or enforcing a
right to indemnification under this Agreement or Section 145 or otherwise;
provided, however, that "expenses" shall not include any judgments, fines, ERISA
excise taxes or penalties, or amounts paid in settlement of a proceeding.


                                       2



                  (c)      PROCEEDING. For the purposes of this Agreement,
"proceeding" means any threatened, pending, or completed action, suit or other
proceeding, whether civil, criminal, administrative, or investigative.

                  (d)      SUBSIDIARY. For purposes of this Agreement,
"subsidiary" means any corporation of which more than 50% of the outstanding
voting securities is owned directly or indirectly by the Company, by the Company
and one or more other subsidiaries, or by one or more other subsidiaries.

         2.       AGREEMENT TO SERVE. The Indemnitee agrees to serve and/or
continue to serve as agent of the Company, at its will (or under separate
agreement, if such agreement exists), in the capacity Indemnitee currently
serves as an agent of the Company, so long as he is duly appointed or elected
and qualified in accordance with the applicable provisions of the Bylaws of the
Company or any subsidiary of the Company or until such time as he tenders his
resignation in writing; provided, however, that nothing contained in this
Agreement is intended to create any right to continued employment by Indemnitee.

         3.       LIABILITY INSURANCE.

                  (a)      MAINTENANCE OF D&O INSURANCE. The Company hereby
covenants and agrees that, so long as the Indemnitee shall continue to serve as
an agent of the Company and thereafter so long as the Indemnitee shall be
subject to any possible proceeding by reason of the fact that the Indemnitee was
an agent of the Company, the Company, subject to Section 3(c), shall promptly
obtain and maintain in full force and effect directors' and officers' liability
insurance ("D&O Insurance") in reasonable amounts from established and reputable
insurers.

                  (b)      RIGHTS AND BENEFITS. In all policies of D&O
Insurance, the Indemnitee shall be named as an insured in such a manner as to
provide the Indemnitee the same rights and benefits as are accorded to the most
favorably insured of the Company's directors, if the Indemnitee is a director;
or of the Company's officers, if the Indemnitee is not a director of the Company
but is an officer; or of the Company's key employees, if the Indemnitee is not a
director or officer but is a key employee.

                  (c)      LIMITATION ON REQUIRED MAINTENANCE OF D&O INSURANCE.
Notwithstanding the foregoing, the Company shall have no obligation to obtain or
maintain D&O Insurance if the Company determines in good faith that such
insurance is not reasonably available, the premium costs for such insurance are
disproportionate to the amount of coverage provided, the coverage provided by
such insurance is limited by exclusions so as to provide an insufficient
benefit, or the Indemnitee is covered by similar insurance maintained by a
subsidiary of the Company.

         4.       MANDATORY INDEMNIFICATION. Subject to Section 9 below, the
Company shall indemnify the Indemnitee as follows:

                  (a)      SUCCESSFUL DEFENSE. To the extent the Indemnitee has
been successful on the merits or otherwise in defense of any proceeding
(including, without limitation, an action by or in the right of the Company) to
which the Indemnitee was a party by reason of the fact that he is or was an
agent of the Company at any time, against all expenses of any type whatsoever


                                       3



actually and reasonably incurred by him in connection with the investigation,
defense or appeal of such proceeding.

                  (b)      THIRD PARTY ACTIONS. If the Indemnitee is a person
who was or is a party or is threatened to be made a party to any proceeding
(other than an action by or in the right of the Company) by reason of the fact
that he is or was an agent of the Company, or by reason of anything done or not
done by him in any such capacity, the Company shall indemnify the Indemnitee
against any and all expenses and liabilities of any type whatsoever (including,
but not limited to, judgments, fines, ERISA excise taxes and penalties, and
amounts paid in settlement) actually and reasonably incurred by him in
connection with the investigation, defense, settlement or appeal of such
proceeding, provided the Indemnitee acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company
and its stockholders, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful.

                  (c)      DERIVATIVE ACTIONS. If the Indemnitee is a person who
was or is a party or is threatened to be made a party to any proceeding by or in
the right of the Company by reason of the fact that he is or was an agent of the
Company, or by reason of anything done or not done by him in any such capacity,
the Company shall indemnify the Indemnitee against all expenses actually and
reasonably incurred by him in connection with the investigation, defense,
settlement, or appeal of such proceeding, provided the Indemnitee acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company and its stockholders; except that no indemnification
under this subsection 4(c) shall be made in respect to any claim, issue or
matter as to which such person shall have been finally adjudged to be liable to
the Company by a court of competent jurisdiction unless and only to the extent
that the court in which such proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such amounts which the court shall deem proper.

                  (d)      ACTIONS WHERE INDEMNITEE IS DECEASED. If the
Indemnitee is a person who was or is a party or is threatened to be made a party
to any proceeding by reason of the fact that he is or was an agent of the
Company, or by reason of anything done or not done by him in any such capacity,
and if prior to, during the pendency of after completion of such proceeding
Indemnitee becomes deceased, the Company shall indemnify the Indemnitee's heirs,
executors and administrators against any and all expenses and liabilities of any
type whatsoever (including, but not limited to, judgments, fines, ERISA excise
taxes and penalties, and amounts paid in settlement) actually and reasonably
incurred to the extent Indemnitee would have been entitled to indemnification
pursuant to Sections 4(a), 4(b), or 4(c) above were Indemnitee still alive.

                  (e)      Notwithstanding the foregoing, the Company shall not
be obligated to indemnify the Indemnitee for expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes
and penalties, and amounts paid in settlement) for which payment is actually
made to or on behalf of Indemnitee under a valid and collectible insurance
policy of D&O Insurance, or under a valid and enforceable indemnity clause,
bylaw or agreement.


                                       4



         5.       PARTIAL INDEMNIFICATION. If the Indemnitee is entitled under
any provision of this Agreement to indemnification by the Company for some or a
portion of any expenses or liabilities of any type whatsoever (including, but
not limited to, judgments, fines, ERISA excise taxes and penalties, and amounts
paid in settlement) incurred by him in the investigation, defense, settlement or
appeal of a proceeding, but not entitled, however, to indemnification for all of
the total amount hereof, the Company shall nevertheless indemnify the Indemnitee
for such total amount except as to the portion hereof to which the Indemnitee is
not entitled.

         6.       MANDATORY ADVANCEMENT OF EXPENSES. Subject to Section 8(a)
below, the Company shall advance all expenses incurred by the Indemnitee in
connection with the investigation, defense, settlement or appeal of any
proceeding to which the Indemnitee is a party or is threatened to be made a
party by reason of the fact that the Indemnitee is or was an agent of the
Company. Indemnitee hereby undertakes to repay such amounts advanced only if,
and to the extent that, it shall be determined ultimately that the Indemnitee is
not entitled to be indemnified by the Company as authorized hereby. The advances
to be made hereunder shall be paid by the Company to the Indemnitee within
twenty (20) days following delivery of a written request therefor by the
Indemnitee to the Company. In the event that the Company fails to pay expenses
as incurred by the Indemnitee as required by this paragraph, Indemnitee may seek
mandatory injunctive relief from any court having jurisdiction to require the
Company to pay expenses as set forth in this paragraph. If Indemnitee seeks
mandatory injunctive relief pursuant to this paragraph, it shall not be a
defense to enforcement of the Company's obligations set forth in this paragraph
that Indemnitee has an adequate remedy at law for damages.

         7.       NOTICE AND OTHER INDEMNIFICATION PROCEDURES.

                  (a)      Promptly after receipt by the Indemnitee of notice of
the commencement of or the threat of commencement of any proceeding, the
Indemnitee shall, if the Indemnitee believes that indemnification with respect
thereto may be sought from the Company under this Agreement, notify the Company
of the commencement or threat of commencement thereof.

                  (b)      If, at the time of the receipt of a notice of the
commencement of a proceeding pursuant to Section 7(a) hereof, the Company has
D&O Insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.

                  (c)      In the event the Company shall be obligated to pay
the expenses of any proceeding against the Indemnitee, the Company, if
appropriate, shall be entitled to assume the defense of such proceeding, with
counsel approved by the Indemnitee, upon the delivery to the Indemnitee of
written notice of its election so to do. After delivery of such notice, approval
of such counsel by the Indemnitee and the retention of such counsel by the
Company, the Company will not be liable to the Indemnitee under this Agreement
for any fees of counsel subsequently incurred by the Indemnitee with respect to
the same proceeding, provided that (i) the Indemnitee shall have the right to
employ his counsel in any such proceeding at the Indemnitee's expense; and (ii)
if (A) the employment of counsel by the Indemnitee has been previously
authorized by


                                       5



the Company, (B) the Indemnitee shall have reasonably concluded that there may
be a conflict of interest between the Company and the Indemnitee in the conduct
of any such defense, or (C) the Company shall not, in fact, have employed
counsel to assume the defense of such proceeding, then the fees and expenses of
Indemnitee's counsel shall be at the expense of the Company.

         8.       EXCEPTIONS. Any other provision herein to the contrary
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:

                  (a)      CLAIMS INITIATED BY INDEMNITEE. To indemnify or
advance expenses to the Indemnitee with respect to proceedings or claims
initiated or brought voluntarily by the Indemnitee and not by way of defense,
unless (i) such indemnification is expressly required to be made by law, (ii)
the proceeding was authorized by the Board of Directors, (iii) such
indemnification is provided by the Company, in its sole discretion, pursuant to
the powers vested in the Company under the General Corporation Law of Delaware,
or (iv) the proceeding is brought to establish or enforce a right to
indemnification under this Agreement or any other statute or law or otherwise as
required under Section 145;

                  (b)      LACK OF GOOD FAITH. To indemnify the Indemnitee for
any expenses incurred by the Indemnitee with respect to any proceeding
instituted by the Indemnitee to enforce or interpret this Agreement, if a court
of competent jurisdiction determines that each of the material assertions made
by the Indemnitee in such proceeding was not made in good faith or was
frivolous; or

                  (c)      UNAUTHORIZED SETTLEMENTS. To indemnify the Indemnitee
under this Agreement for any amounts paid in settlement of a proceeding unless
the Company consents to such settlement, which consent shall not be unreasonably
withheld.

         9.       NON-EXCLUSIVITY. The provisions for indemnification and
advancement of expenses set forth in this Agreement shall not be deemed
exclusive of any other rights which the Indemnitee may have under any provision
of law, the Company's Certificate of Incorporation or Bylaws, the vote of the
Company's stockholders or disinterested directors, other agreements, or
otherwise, both as to action in his official capacity and to action in another
capacity while occupying his position as an agent of the Company, and the
Indemnitee's rights hereunder shall continue after the Indemnitee has ceased
acting as an agent of the Company and shall inure to the benefit of the heirs,
executors and administrators of the Indemnitee.

         10.      ENFORCEMENT. Any right to indemnification or advances granted
by this Agreement to Indemnitee shall be enforceable by or on behalf of
Indemnitee in any court of competent jurisdiction if (i) the claim for
indemnification or advances is denied, in whole or in part, or (ii) no
disposition of such claim is made within ninety (90) days of request therefor.
Indemnitee, in such enforcement action, if successful in whole or in part, shall
be entitled to be paid also the expense of prosecuting his claim. It shall be a
defense to any action for which a claim for indemnification is made under this
Agreement (other than an action brought to enforce a claim for expenses pursuant
to Section 6 hereof, provided that the required undertaking has been tendered to
the Company) that Indemnitee is not entitled to indemnification because of the
limitations set forth in Sections 4 and 8 hereof. Neither the failure of the
Corporation (including its Board of Directors or its stockholders) to have made
a determination prior to the


                                       6



commencement of such enforcement action that indemnification of Indemnitee is
proper in the circumstances, nor an actual determination by the Company
(including its Board of Directors or its stockholders) that such indemnification
is improper, shall be a defense to the action or create a presumption that
Indemnitee is not entitled to indemnification under this Agreement or otherwise.

         11.      SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee, who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.

         12.      SURVIVAL OF RIGHTS.

                  (a)      All agreements and obligations of the Company
contained herein shall continue during the period Indemnitee is an agent of the
Company and shall continue thereafter so long as Indemnitee shall be subject to
any possible claim or threatened, pending or completed action, suit or
proceeding, whether civil, criminal, arbitrational, administrative or
investigative, by reason of the fact that Indemnitee was serving in the capacity
referred to herein.

                  (b)      The Company shall require any successor to the
Company (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the Company,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform if no such
succession had taken place.

         13.      INTERPRETATION OF AGREEMENT. It is understood that the parties
hereto intend this Agreement to be interpreted and enforced so as to provide
indemnification to the Indemnitee to the fullest extent permitted by law
including those circumstances in which indemnification would otherwise be
discretionary.

         14.      SEVERABILITY. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever,
(i) the validity, legality and enforceability of the remaining provisions of the
Agreement (including without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby and (ii) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable and to give
effect to Section 13 hereof.

         15.      MODIFICATION AND WAIVER. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.


                                       7



         16.      NOTICE. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed duly
given (i) if delivered by hand and receipted for by the party addressee or (ii)
if mailed by certified or registered mail with postage prepaid, on the third
business day after the mailing date. Addresses for notice to either party are as
shown on the signature page of this Agreement, or as subsequently modified by
written notice.

         17.      GOVERNING LAW. This Agreement shall be governed exclusively by
and construed according to the laws of the State of Delaware as applied to
contracts between Delaware residents entered into and to be performed entirely
within Delaware.

         The parties hereto have entered into this Indemnity Agreement effective
as of the date first above written.

                                        COMPANY:

                                        MITOKOR, INC.


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

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

                                        Address:   11494 Sorrento Valley Road
                                                   San Diego, California 92121
                                                   Attn:
                                                        ------------------------

                                        INDEMNITEE:


                                        ----------------------------------------
                                        [NAME]

                                        Address:
                                                --------------------------------

                                                --------------------------------

                                                --------------------------------


                                       8

EX-10.2

                                                                    EXHIBIT 10.2

                                     MITOKOR

                              AMENDED AND RESTATED

                             1993 STOCK OPTION PLAN

     1.   ESTABLISHMENT, PURPOSE AND TERM OF PLAN.

          1.1  ESTABLISHMENT. The Company's 1993 Stock Plan was initially
established effective November 1, 1993 (the "INITIAL PLAN"). The Initial Plan is
hereby amended and restated in its entirety as the MitoKor Amended and Restated
1993 Stock Option Plan (the "PLAN") effective as of October 24, 1996, as amended
(the "EFFECTIVE DATE").

          1.2  PURPOSE. The purpose of the Plan is to advance the interests of
the Participating Company Group and its shareholders by providing an incentive
to attract, retain and reward persons performing services for the Participating
Company Group and by motivating such persons to contribute to the growth and
profitability of the Participating Company Group.

          1.3  TERM OF PLAN. The Plan shall continue in effect until the earlier
of its termination by the Board or the date on which all of the shares of Stock
available for issuance under the Plan have been issued and all restrictions on
such shares under the terms of the Plan and the agreements evidencing Options
granted under the Plan have lapsed. However, all Options shall be granted, if at
all, within ten (10) years from the earlier of the date the Plan is adopted by
the Board or the date the Plan is duly approved by the shareholders of the
Company.

     2.   DEFINITIONS AND CONSTRUCTION.

          2.1  DEFINITIONS. Whenever used herein, the following terms shall have
their respective meanings set forth below:

               (a)  "BOARD" means the Board of Directors of the Company. If one
or more Committees have been appointed by the Board to administer the Plan,
"Board" also means such Committee(s).

               (b)  "CODE" means the Internal Revenue Code of 1986, as amended,
and any applicable regulations promulgated thereunder.

               (c)  "COMMITTEE" means the Compensation Committee or other
committee of the Board duly appointed to administer the Plan and having such
powers as shall be specified by the Board. Unless the powers of the Committee
have been specifically limited, the Committee shall have all of the powers of
the Board granted herein, including, without limitation, the power to amend or
terminate the Plan at any time, subject to the terms of the Plan and any
applicable limitations imposed by law.

                                        1


               (d)  "COMPANY" means MitoKor, a California corporation, or any
successor corporation thereto.

               (e)  "CONSULTANT" means any person, including an advisor, engaged
by a Participating Company to render services other than as an Employee or a
Director.

               (f)  "DIRECTOR" means a member of the Board or of the board of
directors of any other Participating Company.

               (g)  "EMPLOYEE" means any person treated as an employee
(including an officer or a Director who is also treated as an employee) in the
records of a Participating Company; provided, however, that neither service as a
Director nor payment of a director's fee shall be sufficient to constitute
employment for purposes of the Plan.

               (h)  "FAIR MARKET VALUE" means, as of any date, the value of a
share of stock or other property as determined by the Board, in its sole
discretion, or by the Company, in its sole discretion, if such determination is
expressly allocated to the Company herein.

               (i)  "INCENTIVE STOCK OPTION" means an Option intended to be (as
set forth in the Option Agreement) and which qualifies as an incentive stock
option within the meaning of Section 422(b) of the Code.

               (j)  "NONSTATUTORY STOCK OPTION" means an Option not intended to
be (as set forth in the Option Agreement) or which does not qualify as an
Incentive Stock Option.

               (k)  "OPTION" means a right to purchase Stock (subject to
adjustment as provided in Section 4.2) pursuant to the terms and conditions of
the Plan. An Option may be either an Incentive Stock Option or a Nonstatutory
Stock Option.

               (l)  "OPTION AGREEMENT" means a written agreement between the
Company and an Optionee setting forth the terms, conditions and restrictions of
the Option granted to the Optionee and any shares acquired upon the exercise
thereof.

               (m)  "OPTIONEE" means a person who has been granted one or more
Options.

               (n)  "PARENT CORPORATION" means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.

               (o)  "PARTICIPATING COMPANY" means the Company or any Parent
Corporation or Subsidiary Corporation.

               (p)  "PARTICIPATING COMPANY GROUP" means, at any point in time,
all corporations collectively which are then Participating Companies.

                                        2


               (q)  "STOCK" means the common stock, without par value, of the
Company, as adjusted from time to time in accordance with Section 4.2.

               (r)  "SUBSIDIARY CORPORATION" means any present or future
"subsidiary corporation" of the Company, as defined in Section 424(f) of the
Code.

               (s)  "TEN PERCENT OWNER OPTIONEE" means an Optionee who, at the
time an Option is granted to the Optionee, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of a
Participating Company within the meaning of Section 422(b)(6) of the Code.

          2.2  CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of the Plan. Except when otherwise indicated by the context, the
singular shall include the plural, the plural shall include the singular, and
the term "or" shall include the conjunctive as well as the disjunctive.

     3.   ADMINISTRATION.

          3.1  ADMINISTRATION BY THE BOARD. The Plan shall be administered by
the Board, including any duly appointed Committee of the Board. All questions of
interpretation of the Plan or of any Option shall be determined by the Board,
and such determinations shall be final and binding upon all persons having an
interest in the Plan or such Option. Any officer of a Participating Company
shall have the authority to act on behalf of the Company with respect to any
matter, right, obligation, determination or election which is the responsibility
of or which is allocated to the Company herein, provided the officer has
apparent authority with respect to such matter, right, obligation, determination
or election.

          3.2  POWERS OF THE BOARD. In addition to any other powers set forth in
the Plan and subject to the provisions of the Plan, the Board shall have the
full and final power and authority, in its sole discretion:

               (a)  to determine the persons to whom, and the time or times at
which, Options shall be granted and the number of shares of Stock to be subject
to each Option;

               (b)  to designate Options as Incentive Stock Options or
Nonstatutory Stock Options;

               (c)  to determine the Fair Market Value of shares of Stock or
other property;

               (d)  to determine the terms, conditions and restrictions
applicable to each Option (which need not be identical) and any shares acquired
upon the exercise thereof, including, without limitation, (i) the exercise price
of the Option, (ii) the method of payment for shares purchased upon the exercise
of the Option, (iii) the method for satisfaction of any tax

                                        3


withholding obligation arising in connection with the Option or such shares,
including by the withholding or delivery of shares of stock, (iv) the timing,
terms and conditions of the exercisability of the Option or the vesting of any
shares acquired upon the exercise thereof, (v) the time of the expiration of the
Option, (vi) the effect of the Optionee's termination of employment or service
with the Participating Company Group on any of the foregoing, and (vii) all
other terms, conditions and restrictions applicable to the Option or such shares
not inconsistent with the terms of the Plan;

               (e)  to approve one or more forms of Option Agreement;

               (f)  to amend, modify, extend, or renew, or grant a new Option in
substitution for, any Option or to waive any restrictions or conditions
applicable to any Option or any shares acquired upon the exercise thereof;

               (g)  to accelerate, continue, extend or defer the exercisability
of any Option or the vesting of any shares acquired upon the exercise thereof,
including with respect to the period following an Optionee's termination of
employment or service with the Participating Company Group;

               (h)  to prescribe, amend or rescind rules, guidelines and
policies relating to the Plan, or to adopt supplements to, or alternative
versions of, the Plan, including, without limitation, as the Board deems
necessary or desirable to comply with the laws of, or to accommodate the tax
policy or custom of, foreign jurisdictions whose citizens may be granted
Options; and

               (i)  to correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Option Agreement and to make all other
determinations and take such other actions with respect to the Plan or any
Option as the Board may deem advisable to the extent consistent with the Plan
and applicable law.

     4.   SHARES SUBJECT TO PLAN.

          4.1  MAXIMUM NUMBER OF SHARES ISSUABLE. Subject to adjustment as
provided in Section 4.2, the maximum aggregate number of shares of Stock that
may be issued under the Plan shall be Two Million Four Hundred Sixty Thousand
(2,460,000) and shall consist of authorized but unissued or reacquired shares of
Stock or any combination thereof. If an outstanding Option for any reason
expires or is terminated or canceled or shares of Stock acquired, subject to
repurchase, upon the exercise of an Option are repurchased by the Company, the
shares of Stock allocable to the unexercised portion of such Option, or such
repurchased shares of Stock, shall again be available for issuance under the
Plan.

          4.2  ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event of any
stock dividend, stock split, reverse stock split, recapitalization, combination,
reclassification or similar change in the capital structure of the Company,
appropriate adjustments shall be made in the number and class of shares subject
to the Plan and to any outstanding Options and in the exercise

                                        4


price per share of any outstanding Options. If a majority of the shares which
are of the same class as the shares that are subject to outstanding Options are
exchanged for, converted into, or otherwise become (whether or not pursuant to
an Ownership Change Event, as defined in Section 8.1) shares of another
corporation (the "NEW SHARES"), the Board may unilaterally amend the outstanding
Options to provide that such Options are exercisable for New Shares. In the
event of any such amendment, the number of shares subject to, and the exercise
price per share of, the outstanding Options shall be adjusted in a fair and
equitable manner as determined by the Board, in its sole discretion.
Notwithstanding the foregoing, any fractional share resulting from an adjustment
pursuant to this Section 4.2 shall be rounded up or down to the nearest whole
number, as determined by the Board, and in no event may the exercise price of
any Option be decreased to an amount less than the par value, if any, of the
stock subject to the Option. The adjustments determined by the Board pursuant to
this Section 4.2 shall be final, binding and conclusive.

     5.   ELIGIBILITY AND OPTION LIMITATIONS.

          5.1  PERSONS ELIGIBLE FOR OPTIONS. Options may be granted only to
Employees, Consultants, and Directors. For purposes of the foregoing sentence,
"Employees" shall include prospective Employees to whom Options are granted in
connection with written offers of employment with the Participating Company
Group, and "Consultants" shall include prospective Consultants to whom Options
are granted in connection with written offers of engagement with the
Participating Company Group. Eligible persons may be granted more than one (1)
Option.

          5.2  OPTION GRANT RESTRICTIONS. Any person who is not an Employee on
the effective date of the grant of an Option to such person may be granted only
a Nonstatutory Stock Option. An Incentive Stock Option granted to a prospective
Employee upon the condition that such person become an Employee shall be deemed
granted effective on the date such person commences service with a Participating
Company, with an exercise price determined as of such date in accordance with
Section 6.1.

          5.3  FAIR MARKET VALUE LIMITATION. To the extent that the aggregate
Fair Market Value of stock with respect to which options designated as Incentive
Stock Options are exercisable by an Optionee for the first time during any
calendar year (under all stock option plans of the Participating Company Group,
including the Plan) exceeds One Hundred Thousand Dollars ($100,000), the portion
of such options which exceeds such amount shall be treated as Nonstatutory Stock
Options. For purposes of this Section 5.3, options designated as Incentive Stock
Options shall be taken into account in the order in which they were granted, and
the Fair Market Value of stock shall be determined as of the time the option
with respect to such stock is granted. If the Code is amended to provide for a
different limitation from that set forth in this Section 5.3, such different
limitation shall be deemed incorporated herein effective as of the date and with
respect to such Options as required or permitted by such amendment to the Code.
If an Option is treated as an Incentive Stock Option in part and as a
Nonstatutory Stock Option in part by reason of the limitation set forth in this
Section 5.3, the Optionee may designate which portion of such Option the
Optionee is exercising and may request that separate certificates representing
each such portion be issued upon the exercise of the Option. In the absence of
such designation,

                                        5


the Optionee shall be deemed to have exercised the Incentive Stock Option
portion of the Option first.

     6.   TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by Option
Agreements specifying the number of shares of Stock covered thereby, in such
form as the Board shall from time to time establish. Option Agreements may
incorporate all or any of the terms of the Plan by reference and shall comply
with and be subject to the following terms and conditions:

          6.1  EXERCISE PRICE. The exercise price for each Option shall be
established in the sole discretion of the Board; provided, however, that (a) the
exercise price per share for an Incentive Stock Option shall be not less than
the Fair Market Value of a share of Stock on the effective date of grant of the
Option, (b) the exercise price per share for a Nonstatutory Stock Option shall
be not less than eighty-five percent (85%) of the Fair Market Value of a share
of Stock on the effective date of grant of the Option, and (c) no Option granted
to a Ten Percent Owner Optionee shall have an exercise price per share less than
one hundred ten percent (110%) of the Fair Market Value of a share of Stock on
the effective date of grant of the Option. Notwithstanding the foregoing, an
Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may be
granted with an exercise price lower than the minimum exercise price set forth
above if such Option is granted pursuant to an assumption or substitution for
another option in a manner qualifying under the provisions of Section 424(a) of
the Code.

          6.2  EXERCISE PERIOD. Options shall be exercisable at such time or
times, or upon such event or events, and subject to such terms, conditions,
performance criteria, and restrictions as shall be determined by the Board and
set forth in the Option Agreement evidencing such Option; provided, however,
that (a) no Option shall be exercisable after the expiration of ten (10) years
after the effective date of grant of such Option, (b) no Incentive Stock Option
granted to a Ten Percent Owner Optionee shall be exercisable after the
expiration of five (5) years after the effective date of grant of such Option,
and (c) no Option granted to a prospective Employee or prospective Consultant
may become exercisable prior to the date on which such person commences service
with a Participating Company.

          6.3  PAYMENT OF EXERCISE PRICE.

               (a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise
provided below, payment of the exercise price for the number of shares of Stock
being purchased pursuant to any Option shall be made (i) in cash, by check, or
cash equivalent, (ii) by tender to the Company of shares of Stock owned by the
Optionee having a Fair Market Value (as determined by the Company without regard
to any restrictions on transferability applicable to such stock by reason of
federal or state securities laws or agreements with an underwriter for the
Company) not less than the exercise price, (iii) by the assignment of the
proceeds of a sale or loan with respect to some or all of the shares being
acquired upon the exercise of the Option (including, without limitation, through
an exercise complying with the provisions of Regulation T as promulgated from
time to time by the Board of Governors of the Federal Reserve System) (a
"CASHLESS EXERCISE"), (iv) by the Optionee's promissory note in a form approved
by the Company, (v) by such other consideration as may be approved by the Board

                                        6


from time to time to the extent permitted by applicable law, or (vi) by any
combination thereof. The Board may at any time or from time to time, by adoption
of or by amendment to the standard forms of Option Agreement described in
Section 7, or by other means, grant Options which do not permit all of the
foregoing forms of consideration to be used in payment of the exercise price or
which otherwise restrict one or more forms of consideration.

               (b)  TENDER OF STOCK. Notwithstanding the foregoing, an Option
may not be exercised by tender to the Company of shares of Stock to the extent
such tender of Stock would constitute a violation of the provisions of any law,
regulation or agreement restricting the redemption of the Company's stock.
Unless otherwise provided by the Board, an Option may not be exercised by tender
to the Company of shares of Stock unless such shares either have been owned by
the Optionee for more than six (6) months or were not acquired, directly or
indirectly, from the Company.

               (c)  CASHLESS EXERCISE. The Company reserves, at any and all
times, the right, in the Company's sole and absolute discretion, to establish,
decline to approve or terminate any program or procedures for the exercise of
Options by means of a Cashless Exercise.

               (d)  PAYMENT BY PROMISSORY NOTE. No promissory note shall be
permitted if the exercise of an Option using a promissory note would be a
violation of any law. Any permitted promissory note shall be on such terms as
the Board shall determine at the time the Option is granted. The Board shall
have the authority to permit or require the Optionee to secure any promissory
note used to exercise an Option with the shares of Stock acquired upon the
exercise of the Option or with other collateral acceptable to the Company.
Unless otherwise provided by the Board, if the Company at any time is subject to
the regulations promulgated by the Board of Governors of the Federal Reserve
System or any other governmental entity affecting the extension of credit in
connection with the Company's securities, any promissory note shall comply with
such applicable regulations, and the Optionee shall pay the unpaid principal and
accrued interest, if any, to the extent necessary to comply with such applicable
regulations.

          6.4  TAX WITHHOLDING. The Company shall have the right, but not the
obligation, to deduct from the shares of Stock issuable upon the exercise of an
Option, or to accept from the Optionee the tender of, a number of whole shares
of Stock having a Fair Market Value, as determined by the Company, equal to all
or any part of the federal, state, local and foreign taxes, if any, required by
law to be withheld by the Participating Company Group with respect to such
Option or the shares acquired upon the exercise thereof. Alternatively or in
addition, in its sole discretion, the Company shall have the right to require
the Optionee, through payroll withholding, cash payment or otherwise, including
by means of a Cashless Exercise, to make adequate provision for any such tax
withholding obligations of the Participating Company Group arising in connection
with the Option or the shares acquired upon the exercise thereof. The Company
shall have no obligation to deliver shares of Stock or to release shares of
Stock from an escrow established pursuant to the Option Agreement until the
Participating Company Group's tax withholding obligations have been satisfied by
the Optionee.

                                        7


          6.5  REPURCHASE RIGHTS. Shares issued under the Plan may be subject to
a right of first refusal, one or more repurchase options, or other conditions
and restrictions as determined by the Board in its sole discretion at the time
the Option is granted. The Company shall have the right to assign at any time
any repurchase right it may have, whether or not such right is then exercisable,
to one or more persons as may be selected by the Company. Upon request by the
Company, each Optionee shall execute any agreement evidencing such transfer
restrictions prior to the receipt of shares of Stock hereunder and shall
promptly present to the Company any and all certificates representing shares of
Stock acquired hereunder for the placement on such certificates of appropriate
legends evidencing any such transfer restrictions.

     7.   STANDARD FORMS OF OPTION AGREEMENT.

          7.1  INCENTIVE STOCK OPTIONS. Unless otherwise provided by the Board
at the time the Option is granted, an Option designated as an "Incentive Stock
Option" shall comply with and be subject to the terms and conditions set forth
in the form of Incentive Stock Option Agreement adopted by the Board
concurrently with its adoption of the Plan and as amended from time to time.

          7.2  NONSTATUTORY STOCK OPTIONS. Unless otherwise provided by the
Board at the time the Option is granted, an Option designated as a "Nonstatutory
Stock Option" shall comply with and be subject to the terms and conditions set
forth in the form of Nonstatutory Stock Option Agreement adopted by the Board
concurrently with its adoption of the Plan and as amended from time to time.

          7.3  STANDARD TERM OF OPTIONS. Except as otherwise provided in Section
6.2 or by the Board in the grant of an Option, any Option granted hereunder
shall have a term of ten (10) years from the effective date of grant of the
Option.

          7.4  AUTHORITY TO VARY TERMS. The Board shall have the authority from
time to time to vary the terms of any of the standard forms of Option Agreement
described in this Section 7 either in connection with the grant or amendment of
an individual Option or in connection with the authorization of a new standard
form or forms; provided, however, that the terms and conditions of any such new,
revised or amended standard form or forms of Option Agreement shall be in
accordance with the terms of the Plan. Such authority shall include, but not by
way of limitation, the authority to grant Options which are immediately
exercisable subject to the Company's right to repurchase any unvested shares of
Stock acquired by an Optionee upon the exercise of an Option in the event such
Optionee's employment or service with the Participating Company Group is
terminated for any reason, with or without cause.

                                        8


     8.   TRANSFER OF CONTROL.

          8.1  DEFINITIONS.

               (a)  An "OWNERSHIP CHANGE EVENT" shall be deemed to have occurred
if any of the following occurs with respect to the Company:

                    (i)   the direct or indirect sale or exchange in a single or
series of related transactions by the shareholders of the Company of more than
fifty percent (50%) of the voting stock of the Company;

                    (ii)  a merger or consolidation in which the Company is a
party;

                    (iii) the sale, exchange, or transfer of all or
substantially all of the assets of the Company; or

                    (iv)  a liquidation or dissolution of the Company.

               (b)  A "TRANSFER OF CONTROL" shall mean an Ownership Change Event
or a series of related Ownership Change Events (collectively, the "TRANSACTION")
wherein the shareholders of the Company immediately before the Transaction do
not retain immediately after the Transaction, in substantially the same
proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting stock of the Company or the corporation or corporations to
which the assets of the Company were transferred (the "TRANSFEREE
CORPORATION(S)"), as the case may be. For purposes of the preceding sentence,
indirect beneficial ownership shall include, without limitation, an interest
resulting from ownership of the voting stock of one or more corporations which,
as a result of the Transaction, own the Company or the Transferee
Corporation(s), as the case may be, either directly or through one or more
subsidiary corporations. The Board shall have the right to determine whether
multiple sales or exchanges of the voting stock of the Company or multiple
Ownership Change Events are related, and its determination shall be final,
binding and conclusive.

          8.2  EFFECT OF TRANSFER OF CONTROL ON OPTIONS. In the event of a
Transfer of Control, the surviving, continuing, successor, or purchasing
corporation or parent corporation thereof, as the case may be (the "ACQUIRING
CORPORATION"), may either assume the Company's rights and obligations under
outstanding Options or substitute for outstanding Options substantially
equivalent options for the Acquiring Corporation's stock. Any Options which are
neither assumed or substituted for by the Acquiring Corporation in connection
with the Transfer of Control nor exercised as of the date of the Transfer of
Control shall terminate and cease to be outstanding effective as of the date of
the Transfer of Control. Notwithstanding the foregoing, shares acquired upon
exercise of an Option prior to the Transfer of Control and any consideration
received pursuant to the Transfer of Control with respect to such shares shall
continue to be

                                        9


subject to all applicable provisions of the Option Agreement evidencing such
Option except as otherwise provided in such Option Agreement. Furthermore,
notwithstanding the foregoing, if the corporation the stock of which is subject
to the outstanding Options immediately prior to an Ownership Change Event
described in Section 8.1(a)(i) constituting a Transfer of Control is the
surviving or continuing corporation and immediately after such Ownership Change
Event less than fifty percent (50%) of the total combined voting power of its
voting stock is held by another corporation or by other corporations that are
members of an affiliated group within the meaning of Section 1504(a) of the Code
without regard to the provisions of Section 1504(b) of the Code, the outstanding
Options shall not terminate unless the Board otherwise provides in its sole
discretion.

     9.   PROVISION OF INFORMATION. At least annually, copies of the Company's
balance sheet and income statement for the just completed fiscal year shall be
made available to each Optionee and purchaser of shares of Stock upon the
exercise of an Option. The Company shall not be required to provide such
information to persons whose duties in connection with the Company assure them
access to equivalent information.

     10.  NONTRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee, an
Option shall be exercisable only by the Optionee or the Optionee's guardian or
legal representative. No Option shall be assignable or transferable by the
Optionee, except by will or by the laws of descent and distribution.

     11.  TRANSFER OF COMPANY'S RIGHTS. In the event any Participating Company
assigns, other than by operation of law, to a third person, other than another
Participating Company, any of the Participating Company's rights to repurchase
any shares of Stock acquired upon the exercise of an Option, the assignee shall
pay to the assigning Participating Company the value of such right as determined
by the Company in the Company's sole discretion. Such consideration shall be
paid in cash. In the event such repurchase right is exercisable at the time of
such assignment, the value of such right shall be not less than the Fair Market
Value of the shares of Stock which may be repurchased under such right (as
determined by the Company) minus the repurchase price of such shares. The
requirements of this Section 11 regarding the minimum consideration to be
received by the assigning Participating Company shall not inure to the benefit
of the Optionee whose shares of Stock are being repurchased. Failure of a
Participating Company to comply with the provisions of this Section 11 shall not
constitute a defense or otherwise prevent the exercise of the repurchase right
by the assignee of such right.

     12.  INDEMNIFICATION. In addition to such other rights of indemnification
as they may have as members of the Board or officers or employees of the
Participating Company Group, members of the Board and any officers or employees
of the Participating Company Group to whom authority to act for the Board is
delegated shall be indemnified by the Company against all reasonable expenses,
including attorneys' fees, actually and necessarily incurred in connection with
the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken or failure to act under or in connection with the Plan, or any right
granted hereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected

                                       10


by the Company) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, except in relation to matters as to which it shall
be adjudged in such action, suit or proceeding that such person is liable for
gross negligence, bad faith or intentional misconduct in duties; provided,
however, that within sixty (60) days after the institution of such action, suit
or proceeding, such person shall offer to the Company, in writing, the
opportunity at its own expense to handle and defend the same.

     13.  TERMINATION OR AMENDMENT OF PLAN. The Board may terminate or amend the
Plan at any time. However, subject to changes in the law or other legal
requirements that would permit otherwise, without the approval of the Company's
shareholders, there shall be (a) no increase in the maximum aggregate number of
shares of Stock that may be issued under the Plan (except by operation of the
provisions of Section 4.2), (b) no change in the class of persons eligible to
receive Incentive Stock Options, and (c) no expansion in the class of persons
eligible to receive Nonstatutory Stock Options. In any event, no termination or
amendment of the Plan may adversely affect any then outstanding Option or any
unexercised portion thereof, without the consent of the Optionee, unless such
termination or amendment is required to enable an Option designated as an
Incentive Stock Option to qualify as an Incentive Stock Option or is necessary
to comply with any applicable law or government regulation.

     14.  SHAREHOLDER APPROVAL. The Plan or any increase in the maximum number
of shares of Stock issuable thereunder as provided in Section 4.1 (the "MAXIMUM
SHARES") shall be approved by the shareholders of the Company within twelve (12)
months of the date of adoption thereof by the Board. Options granted prior to
shareholder approval of the Plan or in excess of the Maximum Shares previously
approved by the shareholders shall become exercisable no earlier than the date
of shareholder approval of the Plan or such increase in the Maximum Shares, as
the case may be.

     15.  CONTINUATION OF INITIAL PLAN AS TO OUTSTANDING OPTIONS. Any other
provision of the Plan to the contrary notwithstanding, the terms of the Initial
Plan shall remain in effect and apply to all Options and shares of Stock granted
pursuant to the Initial Plan.

                                       11


                                  PLAN HISTORY

November 1, 1993          Board adopts Initial Plan, with a share reserve of
                          925,000 shares.

August 15, 1994           Shareholders approve Initial Plan, with a share
                          reserve of 925,000 shares.

April 25, 1996            Board approves a share reserve increase of 8,775,000
                          for a total reserve of 9,700,000 shares.

May 20, 1996              Shareholders approve a share reserve increase of
                          8,775,000 for a total reserve of 9,700,000 shares.

August 26, 1996           Board approves a share reserve increase of 5,000,000
                          for a total reserve of 14,700,000 shares.

October 24, 1996          Shareholders approve a share reserve increase of
                          5,000,000 for a total reserve of 14,700,000 shares.

October 24, 1996          Board amends and restates the Initial Plan as the
                          Plan, with a share reserve of 14,700,000 shares.

October 24, 1996          Shareholders approve amendment and restatement of the
                          Initial Plan as the Plan, with a share reserve of
                          14,700,000 shares.

December 11, 1996         Board approves a share reserve increase of 4,000,000
                          for a total reserve of 18,700,000 shares.

December 11, 1996         Shareholders approve a share reserve increase of
                          4,000,000 for a total reserve of 18,700,000 shares.

March 26, 1997            Board approves a share reserve increase of 300,000 for
                          a total reserve of 19,000,000 shares.

March 26, 1997            Shareholders approve a share reserve increase of
                          300,000 for a total reserve of 19,000,000 shares.

June 30, 1997             Company effects 25:1 reverse stock split, resulting in
                          a total reserve of 760,000 shares.

June 30, 1997             Board approves a share reserve increase of 320,000 for
                          a total reserve of 1,080,000 shares.



June 30, 1997             Shareholders approve a share reserve increase of
                          320,000 for a total reserve of 1,080,000 shares.

April 2, 1998             Board approves a share reserve increase of 230,000 for
                          a total reserve of 1,310,000 shares.

April 2, 1998             Shareholders approve a share reserve increase of
                          230,000 for a total reserve of 1,310,000 shares.

December 4, 1998          Board approves a share reserve increase of 250,000 for
                          a total reserve of 1,560,000 shares.

December 4, 1998          Shareholders approve a share reserve increase of
                          250,000 for a total reserve of 1,560,000 shares.

April 19, 2000            Board approves a share reserve increase of 500,000
                          shares for a total reserve of 2,060,000 shares.

April 19, 2000            Shareholders approve a share reserve increase of
                          500,000 for a total reserve of 2,060,00 shares.

May 3, 2001               Board approves a share reserve increase of 400,000
                          shares for a total reserve of 2,460,000 shares.



THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN QUALIFIED
WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE
ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF
THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE
SALE IS SO EXEMPT.

THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

                                     MITOKOR

                        INCENTIVE STOCK OPTION AGREEMENT

     THIS INCENTIVE STOCK OPTION AGREEMENT (the "OPTION AGREEMENT") is made and
entered into as of ________, 19___ by and between MitoKor and _________________
(the "OPTIONEE").

     The Company has granted to the Optionee pursuant to the MitoKor Amended and
Restated 1993 Stock Option Plan (the "PLAN") an option to purchase certain
shares of Stock, upon the terms and conditions set forth in this Option
Agreement (the "OPTION"). The Option shall in all respects be subject to the
terms and conditions of the Plan, the provisions of which are incorporated
herein by reference.

     1.   DEFINITIONS AND CONSTRUCTION.

          1.1.  DEFINITIONS. Unless otherwise defined herein, capitalized terms
shall have the meanings assigned to such terms in the Plan. Whenever used
herein, the following terms shall have their respective meanings set forth
below:

                (a) "DATE OF OPTION GRANT" means __________, 199__.

                (b) "NUMBER OF OPTION SHARES" means _____________________ shares
of Stock, as adjusted from time to time pursuant to Section 9.

                                        1


                (c) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

                (d) "EXERCISE PRICE" means $ 0.01 per share of Stock, as
adjusted from time to time pursuant to Section 9.

                (e) "INITIAL EXERCISE DATE" means the Initial Vesting Date.

                (f) "INITIAL VESTING DATE" means the date occurring one (1) year
after (check one):

                    -     the Date of Option Grant.

                    -     _____________, 19__, the date the Optionee's Service
                          commenced.

                (g) "VESTED RATIO" means, on any relevant date, the ratio
determined as follows:



                                                                 Vested Ratio
                                                                 ------------
                                                              
               Prior to Initial Vesting Date                           0

               On Initial Vesting Date, provided the                 1/5
               Optionee's Service is continuous
               from the Date of Option Grant until
               the Initial Vesting Date

               PLUS

               For each three months of the                         1/20
               Optionee's continuous Service from
               the Initial Vesting Date until the
               Vested Ratio equals 1/1, an
               additional


                (h) "OPTION EXPIRATION DATE" means the date ten (10) years after
the Date of Option Grant.

                (i) "COMPANY" means MitoKor, a California corporation, or any
successor corporation thereto.

                (j) "DISABILITY" means the inability of the Optionee, in the
opinion of a qualified physician acceptable to the Company, to perform the major

                (k) "SECURITIES ACT" means the Securities Act of 1933, as
amended.

                                        2


                (l) "SERVICE" means the Optionee's employment or service with
the Participating Company Group, whether in the capacity of an Employee, a
Director or a Consultant. The Optionee's Service shall not be deemed to have
terminated merely because of a change in the capacity in which the Optionee
renders Service to the Participating Company Group or a change in the
Participating Company for which the Optionee renders such Service, provided that
there is no interruption or termination of the Optionee's Service. The
Optionee's Service shall be deemed to have terminated either upon an actual
termination of Service or upon the corporation for which the Optionee performs
Service ceasing to be a Participating Company. Subject to the foregoing, the
Company, in its sole discretion, shall determine whether the Optionee's Service
has terminated and the effective date of such termination. (NOTE: If the Option
is exercised more than three (3) months after the date on which the Optionee
ceased to be an Employee (other than by reason of death or a permanent and total
disability as defined in Section 22(e)(3) of the Code), the Option will be
treated as a Nonstatutory Stock Option and not as an Incentive Stock Option to
the extent required by Section 422 of the Code.)

          1.2.  CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Option Agreement. Except when otherwise indicated by the
context, the singular shall include the plural, the plural shall include the
singular, and the term "or" shall include the conjunctive as well as the
disjunctive.

     2.   TAX CONSEQUENCES.

          2.1.  TAX STATUS OF OPTION. This Option is intended to be an Incentive
Stock Option within the meaning of Section 422(b) of the Code, but the Company
does not represent or warrant that this Option qualifies as such. The Optionee
should consult with the Optionee's own tax advisor regarding the tax effects of
this Option and the requirements necessary to obtain favorable income tax
treatment under Section 422 of the Code, including, but not limited to, holding
period requirements. (NOTE: If the aggregate Exercise Price of the Option (that
is, the Exercise Price multiplied by the Number of Option Shares) plus the
aggregate exercise price of any other Incentive Stock Options held by the
Optionee (whether granted pursuant to the Plan or any other stock option plan of
the Participating Company Group) is greater than One Hundred Thousand Dollars
($100,000), the Optionee should contact the Chief Financial Officer of the
Company to ascertain whether the entire Option qualifies as an Incentive Stock
Option.)

          2.2.  ELECTION UNDER SECTION 83(b) OF THE CODE. If the Optionee
exercises this Option to purchase shares of Stock that are both nontransferable
and subject to a substantial risk of forfeiture, the Optionee understands that
the Optionee should consult with the Optionee's tax advisor regarding the
advisability of filing with the Internal Revenue Service an election under
Section 83(b) of the Code, which must be filed no later than thirty (30) days
after the date on which the Optionee exercises the Option. Shares acquired upon
exercise of the Option are nontransferable and subject to a substantial risk of
forfeiture if, for example, (a) they are unvested and are subject to a right of
the Company to repurchase such shares at the Optionee's original purchase price
if the Optionee's Service terminates, or (b) the Optionee is subject to a
restriction on transfer to comply with "Pooling-of-Interests Accounting" rules.
Failure to file an

                                        3


election under Section 83(b), if appropriate, may result in adverse tax
consequences to the Optionee. The Optionee acknowledges that the Optionee has
been advised to consult with a tax advisor prior to the exercise of the Option
regarding the tax consequences to the Optionee of the exercise of the Option. AN
ELECTION UNDER SECTION 83(b) MUST BE FILED WITHIN 30 DAYS AFTER THE DATE ON
WHICH THE OPTIONEE PURCHASES SHARES. THIS TIME PERIOD CANNOT BE EXTENDED. THE
OPTIONEE ACKNOWLEDGES THAT TIMELY FILING OF A SECTION 83(b) ELECTION IS THE
OPTIONEE'S SOLE RESPONSIBILITY, EVEN IF THE OPTIONEE REQUESTS THE COMPANY OR ITS
REPRESENTATIVE TO FILE SUCH ELECTION ON HIS OR HER BEHALF.

     3.   ADMINISTRATION. All questions of interpretation concerning this Option
Agreement shall be determined by the Board, including any duly appointed
Committee of the Board. All determinations by the Board shall be final and
binding upon all persons having an interest in the Option. Any officer of a
Participating Company shall have the authority to act on behalf of the Company
with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.

     4.   EXERCISE OF THE OPTION.

          4.1.  RIGHT TO EXERCISE. Except as otherwise provided herein, the
Option shall be exercisable on and after the Initial Exercise Date and prior to
the termination of the Option (as provided in Section 6) in an amount not to
exceed the Number of Option Shares multiplied by the Vested Ratio, less the
number of shares previously acquired upon exercise of the Option, subject to the
Optionee's agreement that any shares purchased upon exercise are subject to the
Company's repurchase rights set forth in Section 11. In no event shall the
Option be exercisable for more shares than the Number of Option Shares.

          4.2.  METHOD OF EXERCISE. Exercise of the Option shall be by written
notice to the Company which must state the election to exercise the Option, the
number of whole shares of Stock for which the Option is being exercised and such
other representations and agreements as to the Optionee's investment intent with
respect to such shares as may be required pursuant to the provisions of this
Option Agreement. The written notice must be signed by the Optionee and must be
delivered in person, by certified or registered mail, return receipt requested,
by confirmed facsimile transmission, or by such other means as the Company may
permit, to the Chief Financial Officer of the Company, or other authorized
representative of the Participating Company Group, prior to the termination of
the Option as set forth in Section 6, accompanied by (i) full payment of the
aggregate Exercise Price for the number of shares of Stock being purchased and
(ii) an executed copy, if required herein, of the then current forms of escrow
and security agreement referenced below. The Option shall be deemed to be
exercised upon receipt by the Company of such written notice, the aggregate
Exercise Price, and, if required by the Company, such executed agreements.

                                        4


          4.3.  PAYMENT OF EXERCISE PRICE.

                (a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise
provided below, payment of the aggregate Exercise Price for the number of shares
of Stock for which the Option is being exercised shall be made (i) in cash, by
check, or cash equivalent, (ii) by tender to the Company of whole shares of
Stock owned by the Optionee having a Fair Market Value (as determined by the
Company without regard to any restrictions on transferability applicable to such
stock by reason of federal or state securities laws or agreements with an
underwriter for the Company) not less than the aggregate Exercise Price, (iii)
by means of a Cashless Exercise, as defined in Section 4.3(c), (iv) in the
Company's sole discretion at the time the Option is exercised, by the Optionee's
promissory note for the aggregate Exercise Price, or (v) by any combination of
the foregoing.

                (b) TENDER OF STOCK. Notwithstanding the foregoing, the Option
may not be exercised by tender to the Company of shares of Stock to the extent
such tender of Stock would constitute a violation of the provisions of any law,
regulation or agreement restricting the redemption of the Company's stock. The
Option may not be exercised by tender to the Company of shares of Stock unless
such shares either have been owned by the Optionee for more than six (6) months
or were not acquired, directly or indirectly, from the Company.

                (c) CASHLESS EXERCISE. A "CASHLESS EXERCISE" means the
assignment in a form acceptable to the Company of the proceeds of a sale or loan
with respect to some or all of the shares of Stock acquired upon the exercise of
the Option pursuant to a program or procedure approved by the Company
(including, without limitation, through an exercise complying with the
provisions of Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System). The Company reserves, at any and all
times, the right, in the Company's sole and absolute discretion, to decline to
approve or terminate any such program or procedure.

                (d) PAYMENT BY PROMISSORY NOTE. No promissory note shall be
permitted if an exercise of the Option using a promissory note would be a
violation of any law. The promissory note permitted in clause (iv) of Section
4.3(a) shall be a full recourse note in a form satisfactory to the Company, with
principal payable no more than four (4) years after the date the Option is
exercised. Interest on the principal balance of the promissory note shall be
payable in annual installments at the minimum interest rate necessary to avoid
imputed interest pursuant to all applicable sections of the Code. Such recourse
promissory note shall be secured by the shares of Stock acquired pursuant to the
then current form of security agreement as approved by the Company. At any time
the Company is subject to the regulations promulgated by the Board of Governors
of the Federal Reserve System or any other governmental entity affecting the
extension of credit in connection with the Company's securities, any promissory
note shall comply with such applicable regulations, and the Optionee shall pay
the unpaid principal and accrued interest, if any, to the extent necessary to
comply with such applicable regulations. Except as the Company in its sole
discretion shall determine, the Optionee shall pay the unpaid principal balance
of the promissory note and any accrued interest thereon upon termination of the
Optionee's Service with the Participating Company Group for any reason, with or
without cause.

                                        5


          4.4.  TAX WITHHOLDING. At the time the Option is exercised, in whole
or in part, or at any time thereafter as requested by the Company, the Optionee
hereby authorizes withholding from payroll and any other amounts payable to the
Optionee, and otherwise agrees to make adequate provision for (including by
means of a Cashless Exercise to the extent permitted by the Company), any sums
required to satisfy the federal, state, local and foreign tax withholding
obligations of the Participating Company Group, if any, which arise in
connection with the Option, including, without limitation, obligations arising
upon (i) the exercise, in whole or in part, of the Option, (ii) the transfer, in
whole or in part, of any shares acquired upon exercise of the Option, (iii) the
operation of any law or regulation providing for the imputation of interest, or
(iv) the lapsing of any restriction with respect to any shares acquired upon
exercise of the Option. The Optionee is cautioned that the Option is not
exercisable unless the tax withholding obligations of the Participating Company
Group are satisfied. Accordingly, the Optionee may not be able to exercise the
Option when desired even though the Option is vested, and the Company shall have
no obligation to issue a certificate for such shares or release such shares from
any escrow provided for herein.

          4.5.  CERTIFICATE REGISTRATION. Except in the event the Exercise Price
is paid by means of a Cashless Exercise, the certificate for the shares as to
which the Option is exercised shall be registered in the name of the Optionee,
or, if applicable, in the names of the heirs of the Optionee.

          4.6.  RESTRICTIONS ON GRANT OF THE OPTION AND ISSUANCE OF SHARES. The
grant of the Option and the issuance of shares of Stock upon exercise of the
Option shall be subject to compliance with all applicable requirements of
federal, state or foreign law with respect to such securities. The Option may
not be exercised if the issuance of shares of Stock upon exercise would
constitute a violation of any applicable federal, state or foreign securities
laws or other law or regulations or the requirements of any stock exchange or
market system upon which the Stock may then be listed. In addition, the Option
may not be exercised unless (i) a registration statement under the Securities
Act shall at the time of exercise of the Option be in effect with respect to the
shares issuable upon exercise of the Option or (ii) in the opinion of legal
counsel to the Company, the shares issuable upon exercise of the Option may be
issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT
THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED.
ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED
EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to obtain from
any regulatory body having jurisdiction the authority, if any, deemed by the
Company's legal counsel to be necessary to the lawful issuance and sale of any
shares subject to the Option shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the exercise of the
Option, the Company may require the Optionee to satisfy any qualifications that
may be necessary or appropriate, to evidence compliance with any applicable law
or regulation and to make any representation or warranty with respect thereto as
may be requested by the Company.

                                        6


          4.7.  FRACTIONAL SHARES. The Company shall not be required to issue
fractional shares upon the exercise of the Option.

     5.   NONTRANSFERABILITY OF THE OPTION. The Option may be exercised during
the lifetime of the Optionee only by the Optionee or the Optionee's guardian or
legal representative and may not be assigned or transferred in any manner except
by will or by the laws of descent and distribution. Following the death of the
Optionee, the Option, to the extent provided in Section 7, may be exercised by
the Optionee's legal representative or by any person empowered to do so under
the deceased Optionee's will or under the then applicable laws of descent and
distribution.

     6.   TERMINATION OF THE OPTION. The Option shall terminate and may no
longer be exercised on the first to occur of (a) the Option Expiration Date, (b)
the last date for exercising the Option following termination of the Optionee's
Service as described in Section 7, or (c) a Transfer of Control to the extent
provided in Section 8.

     7.   EFFECT OF TERMINATION OF SERVICE.

          7.1.  OPTION EXERCISABILITY.

                (a) DISABILITY. If the Optionee's Service with the Participating
Company Group is terminated because of the Disability of the Optionee, the
Option, to the extent unexercised and exercisable on the date on which the
Optionee's Service terminated, may be exercised by the Optionee (or the
Optionee's guardian or legal representative) at any time prior to the expiration
of six (6) months after the date on which the Optionee's Service terminated, but
in any event no later than the Option Expiration Date. (NOTE: If the Option is
exercised more than three (3) months after the date on which the Optionee's
Service as an Employee terminated as a result of a Disability other than a
permanent and total disability as defined in Section 22(e)(3) of the Code, the
Option will be treated as a Nonstatutory Stock Option and not as an Incentive
Stock Option to the extent required by Section 422 of the Code.)

                (b) DEATH. If the Optionee's Service with the Participating
Company Group is terminated because of the death of the Optionee, the Option, to
the extent unexercised and exercisable on the date on which the Optionee's
Service terminated, may be exercised by the Optionee (or the Optionee's legal
representative, or other person who acquired the right to exercise the Option by
reason of the Optionee's death) at any time prior to the expiration of six (6)
months after the date on which the Optionee's Service terminated, but in any
event no later than the Option Expiration Date. The Optionee's Service shall be
deemed to have terminated on account of death if the Optionee dies within ninety
(90) days after the Optionee's termination of Service.

                (c) OTHER TERMINATION OF SERVICE. If the Optionee's Service with
the Participating Company Group terminates for any reason, except Disability or
death, the Option, to the extent unexercised and exercisable by the Optionee on
the date on which the Optionee's Service terminated, may be exercised by the
Optionee within ninety (90) days (or such other longer period of time as
determined by the Board, in its sole discretion) after the date on which the
Optionee's Service terminated, but in any event no later than the Option
Expiration Date.

                                        7


          7.2.  ADDITIONAL LIMITATION ON OPTION EXERCISE. Except as the Company
and the Optionee otherwise agree, exercise of the Option pursuant to Section 7.1
following termination of the Optionee's Service may not be made by delivery of a
promissory note as provided in Section 4.3(a).

          7.3.  EXTENSION IF EXERCISE PREVENTED BY LAW. Notwithstanding the
foregoing, if the exercise of the Option within the applicable time periods set
forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option
shall remain exercisable until three (3) months after the date the Optionee is
notified by the Company that the Option is exercisable, but in any event no
later than the Option Expiration Date. The Company makes no representation as to
the tax consequences of any such delayed exercise. The Optionee should consult
with the Optionee's own tax advisor as to the tax consequences of any such
delayed exercise.

          7.4.  EXTENSION IF OPTIONEE SUBJECT TO SECTION 16(b). Notwithstanding
the foregoing, if a sale within the applicable time periods set forth in Section
7.1 of shares acquired upon the exercise of the Option would subject the
Optionee to suit under Section 16(b) of the Exchange Act, the Option shall
remain exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day
after the Optionee's termination of Service, or (iii) the Option Expiration
Date. The Company makes no representation as to the tax consequences of any such
delayed exercise. The Optionee should consult with the Optionee's own tax
advisor as to the tax consequences of any such delayed exercise.

          7.5.  LEAVE OF ABSENCE. For purposes of Section 7.1, the Optionee's
Service with the Participating Company Group shall not be deemed to terminate if
the Optionee takes any military leave, sick leave, or other bona fide leave of
absence approved by the Company of ninety (90) days or less. In the event of a
leave of absence in excess of ninety (90) days, the Optionee's Service shall be
deemed to terminate on the ninety-first (91st) day of such leave unless the
Optionee's right to reemployment with the Participating Company Group remains
guaranteed by statute or contract. Notwithstanding the foregoing, unless
otherwise designated by the Company (or required by law), a leave of absence
shall not be treated as Service for purposes of determining the Optionee's
Vested Ratio.

     8.   TRANSFER OF CONTROL.

          8.1.  DEFINITIONS.

                (a) An "OWNERSHIP CHANGE EVENT" shall be deemed to have occurred
if any of the following occurs with respect to the Company:

                    (i)   the direct or indirect sale or exchange in a single or
series of related transactions by the shareholders of the Company of more than
fifty percent (50%) of the voting stock of the Company;

                                        8


                    (ii)  a merger or consolidation in which the Company is a
party; or

                    (iii) the sale, exchange, or transfer of all or
substantially all of the assets of the Company; or

                    (iv) a liquidation or dissolution of the Company.

                (b) A "TRANSFER OF CONTROL" shall mean an Ownership Change Event
or a series of related Ownership Change Events (collectively, the "TRANSACTION")
wherein the shareholders of the Company immediately before the Transaction do
not retain immediately after the Transaction, in substantially the same
proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting stock of the Company or the corporation or corporations to
which the assets of the Company were transferred (the "TRANSFEREE
CORPORATION(S)"), as the case may be. For purposes of the preceding sentence,
indirect beneficial ownership shall include, without limitation, an interest
resulting from ownership of the voting stock of one or more corporations which,
as a result of the Transaction, own the Company or the Transferee
Corporation(s), as the case may be, either directly or through one or more
subsidiary corporations. The Board shall have the right to determine whether
multiple sales or exchanges of the voting stock of the Company or multiple
Ownership Change Events are related, and its determination shall be final,
binding and conclusive.

          8.2.  EFFECT OF TRANSFER OF CONTROL ON OPTION. In the event of a
Transfer of Control, the surviving, continuing, successor, or purchasing
corporation or parent corporation thereof, as the case may be (the "ACQUIRING
CORPORATION"), may either assume the Company's rights and obligations under the
Option or substitute for the Option a substantially equivalent option for the
Acquiring Corporation's stock. The Option shall terminate and cease to be
outstanding effective as of the date of the Transfer of Control to the extent
that the Option is neither assumed or substituted for by the Acquiring
Corporation in connection with the Transfer of Control nor exercised as of the
date of the Transfer of Control. Notwithstanding the foregoing, shares acquired
upon exercise of the Option prior to the Transfer of Control and any
consideration received pursuant to the Transfer of Control with respect to such
shares shall continue to be subject to all applicable provisions of this Option
Agreement except as otherwise provided herein. Furthermore, notwithstanding the
foregoing, if the corporation the stock of which is subject to the Option
immediately prior to an Ownership Change Event described in Section 8.1(a)(i)
constituting a Transfer of Control is the surviving or continuing corporation
and immediately after such Ownership Change Event less than fifty percent (50%)
of the total combined voting power of its voting stock is held by another
corporation or by other corporations that are members of an affiliated group
within the meaning of Section 1504(a) of the Code without regard to the
provisions of Section 1504(b) of the Code, the Option shall not terminate unless
the Board otherwise provides in its sole discretion.

     9.   ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event of any
stock dividend, stock split, reverse stock split, recapitalization, combination,
reclassification, or similar

                                        9


change in the capital structure of the Company, appropriate adjustments shall be
made in the number, Exercise Price and class of shares of stock subject to the
Option. If a majority of the shares which are of the same class as the shares
that are subject to the Option are exchanged for, converted into, or otherwise
become (whether or not pursuant to an Ownership Change Event) shares of another
corporation (the "NEW SHARES"), the Board may unilaterally amend the Option to
provide that the Option is exercisable for New Shares. In the event of any such
amendment, the Number of Option Shares and the Exercise Price shall be adjusted
in a fair and equitable manner, as determined by the Board, in its sole
discretion. Notwithstanding the foregoing, any fractional share resulting from
an adjustment pursuant to this Section 9 shall be rounded up or down to the
nearest whole number, as determined by the Board, and in no event may the
Exercise Price be decreased to an amount less than the par value, if any, of the
stock subject to the Option. The adjustments determined by the Board pursuant to
this Section 9 shall be final, binding and conclusive.

     10.  RIGHTS AS A SHAREHOLDER, EMPLOYEE OR CONSULTANT. The Optionee shall
have no rights as a shareholder with respect to any shares covered by the Option
until the date of the issuance of a certificate for the shares for which the
Option has been exercised (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company). No
adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date such certificate is issued, except as
provided in Section 9. Nothing in this Option Agreement shall confer upon the
Optionee any right to continue in the Service of a Participating Company or
interfere in any way with any right of the Participating Company Group to
terminate the Optionee's Service as an Employee or Consultant, as the case may
be, at any time.

     11.  RIGHT OF FIRST REFUSAL.

          11.1. GRANT OF RIGHT OF FIRST REFUSAL. Except as provided in Section
11.7 below, in the event the Optionee, the Optionee's legal representative, or
other holder of shares acquired upon exercise of the Option proposes to sell,
exchange, transfer, pledge, or otherwise dispose of any shares acquired upon
exercise of the Option (the "TRANSFER SHARES") to any person or entity,
including, without limitation, any shareholder of the Participating Company
Group, the Company shall have the right to repurchase the Transfer Shares under
the terms and subject to the conditions set forth in this Section 11 (the "RIGHT
OF FIRST REFUSAL").

          11.2. NOTICE OF PROPOSED TRANSFER. Prior to any proposed transfer of
the Transfer Shares, the Optionee shall give a written notice (the "TRANSFER
NOTICE") to the Company describing fully the proposed transfer, including the
number of Transfer Shares, the name and address of the proposed transferee (the
"PROPOSED TRANSFEREE") and, if the transfer is voluntary, the proposed transfer
price, and containing such information necessary to show the bona fide nature of
the proposed transfer. In the event of a bona fide gift or involuntary transfer,
the proposed transfer price shall be deemed to be the Fair Market Value of the
Transfer Shares, as determined by the Board in good faith. If the Optionee
proposes to transfer any Transfer Shares to more than one Proposed Transferee,
the Optionee shall provide a separate Transfer Notice for the proposed transfer
to each Proposed Transferee. The Transfer Notice shall be signed by both the
Optionee and the Proposed Transferee and must constitute a binding

                                       10


commitment of the Optionee and the Proposed Transferee for the transfer of the
Transfer Shares to the Proposed Transferee subject only to the Right of First
Refusal.

          11.3. BONA FIDE TRANSFER. If the Company determines that the
information provided by the Optionee in the Transfer Notice is insufficient to
establish the bona fide nature of a proposed voluntary transfer, the Company
shall give the Optionee written notice of the Optionee's failure to comply with
the procedure described in this Section 11, and the Optionee shall have no right
to transfer the Transfer Shares without first complying with the procedure
described in this Section 11. The Optionee shall not be permitted to transfer
the Transfer Shares if the proposed transfer is not bona fide.

          11.4. EXERCISE OF RIGHT OF FIRST REFUSAL. If the Company determines
the proposed transfer to be bona fide, the Company shall have the right to
purchase all, but not less than all, of the Transfer Shares (except as the
Company and the Optionee otherwise agree) at the purchase price and on the terms
set forth in the Transfer Notice by delivery to the Optionee of a notice of
exercise of the Right of First Refusal within thirty (30) days after the date
the Transfer Notice is delivered to the Company. The Company's exercise or
failure to exercise the Right of First Refusal with respect to any proposed
transfer described in a Transfer Notice shall not affect the Company's right to
exercise the Right of First Refusal with respect to any proposed transfer
described in any other Transfer Notice, whether or not such other Transfer
Notice is issued by the Optionee or issued by a person other than the Optionee
with respect to a proposed transfer to the same Proposed Transferee. If the
Company exercises the Right of First Refusal, the Company and the Optionee shall
thereupon consummate the sale of the Transfer Shares to the Company on the terms
set forth in the Transfer Notice within sixty (60) days after the date the
Transfer Notice is delivered to the Company (unless a longer period is offered
by the Proposed Transferee); provided, however, that in the event the Transfer
Notice provides for the payment for the Transfer Shares other than in cash, the
Company shall have the option of paying for the Transfer Shares by the present
value cash equivalent of the consideration described in the Transfer Notice as
reasonably determined by the Company. For purposes of the foregoing,
cancellation of any indebtedness of the Optionee to any Participating Company
shall be treated as payment to the Optionee in cash to the extent of the unpaid
principal and any accrued interest canceled.

          11.5. FAILURE TO EXERCISE RIGHT OF FIRST REFUSAL. If the Company fails
to exercise the Right of First Refusal in full (or to such lesser extent as the
Company and the Optionee otherwise agree) within the period specified in Section
11.4 above, the Optionee may conclude a transfer to the Proposed Transferee of
the Transfer Shares on the terms and conditions described in the Transfer
Notice, provided such transfer occurs not later than ninety (90) days following
delivery to the Company of the Transfer Notice. The Company shall have the right
to demand further assurances from the Optionee and the Proposed Transferee (in a
form satisfactory to the Company) that the transfer of the Transfer Shares was
actually carried out on the terms and conditions described in the Transfer
Notice. No Transfer Shares shall be transferred on the books of the Company
until the Company has received such assurances, if so demanded, and has approved
the proposed transfer as bona fide. Any proposed transfer on terms and
conditions different from those described in the Transfer Notice, as well as any
subsequent

                                       11


proposed transfer by the Optionee, shall again be subject to the Right of First
Refusal and shall require compliance by the Optionee with the procedure
described in this Section 11.

          11.6. TRANSFEREES OF TRANSFER SHARES. All transferees of the Transfer
Shares or any interest therein, other than the Company, shall be required as a
condition of such transfer to agree in writing (in a form satisfactory to the
Company) that such transferee shall receive and hold such Transfer Shares or
interest therein subject to all of the terms and conditions of this Option
Agreement, including this Section 11 providing for the Right of First Refusal
with respect to any subsequent transfer. Any sale or transfer of any shares
acquired upon exercise of the Option shall be void unless the provisions of this
Section 11 are met.

          11.7. TRANSFERS NOT SUBJECT TO RIGHT OF FIRST REFUSAL. The Right of
First Refusal shall not apply to any transfer or exchange of the shares acquired
upon exercise of the Option if such transfer or exchange is in connection with
an Ownership Change Event. If the consideration received pursuant to such
transfer or exchange consists of stock of a Participating Company, such
consideration shall remain subject to the Right of First Refusal unless the
provisions of Section 11.9 below result in a termination of the Right of First
Refusal.

          11.8. ASSIGNMENT OF RIGHT OF FIRST REFUSAL. The Company shall have the
right to assign the Right of First Refusal at any time, whether or not there has
been an attempted transfer, to one or more persons as may be selected by the
Company.

          11.9. EARLY TERMINATION OF RIGHT OF FIRST REFUSAL. The other
provisions of this Option Agreement notwithstanding, the Right of First Refusal
shall terminate and be of no further force and effect upon (a) the occurrence of
a Transfer of Control, unless the Acquiring Corporation assumes the Company's
rights and obligations under the Option or substitutes a substantially
equivalent option for the Acquiring Corporation's stock for the Option, or (b)
the existence of a public market for the class of shares subject to the Right of
First Refusal. A "PUBLIC MARKET" shall be deemed to exist if (i) such stock is
listed on a national securities exchange (as that term is used in the Exchange
Act) or (ii) such stock is traded on the over-the-counter market and prices
therefor are published daily on business days in a recognized financial journal.

     12.  ESCROW.

          12.1. ESTABLISHMENT OF ESCROW. To ensure that shares subject to the
Right of First Refusal or securing any promissory note will be available for
repurchase, the Company may require the Optionee to deposit the certificate
evidencing the shares which the Optionee purchases upon exercise of the Option
with an agent designated by the Company under the terms and conditions of escrow
and security agreements approved by the Company. If the Company does not require
such deposit as a condition of exercise of the Option, the Company reserves the
right at any time to require the Optionee to so deposit the certificate in
escrow. Upon the occurrence of an Ownership Change Event or a change, as
described in Section 9, in the character or amount of any of the outstanding
stock of the corporation the stock of which is subject to the provisions of this
Option Agreement, any and all new, substituted or additional securities or other
property to which the Optionee is entitled by reason of the Optionee's

                                       12


ownership of shares of Stock acquired upon exercise of the Option that remain,
following such Ownership Change Event or change described in Section 9, subject
to the Right of First Refusal or any security interest held by the Company shall
be immediately subject to the escrow to the same extent as such shares of Stock
immediately before such event. The Company shall bear the expenses of the
escrow.

          12.2. DELIVERY OF SHARES TO OPTIONEE. As soon as practicable after the
expiration of the Right of First Refusal and after full repayment of any
promissory note secured by the shares or other property in escrow, but not more
frequently than twice each calendar year, the escrow agent shall deliver to the
Optionee the shares and any other property no longer subject to such restriction
and no longer securing any promissory note.

          12.3. NOTICES AND PAYMENTS. In the event the shares and any other
property held in escrow are subject to the Company's exercise of the Right of
First Refusal, the notices required to be given to the Optionee shall be given
to the escrow agent, and any payment required to be given to the Optionee shall
be given to the escrow agent. Within thirty (30) days after payment by the
Company, the escrow agent shall deliver the shares and any other property which
the Company has purchased to the Company and shall deliver the payment received
from the Company to the Optionee.

     13.  STOCK DISTRIBUTIONS SUBJECT TO OPTION AGREEMENT. If, from time to
time, there is any stock dividend, stock split or other change, as described in
Section 9, in the character or amount of any of the outstanding stock of the
corporation the stock of which is subject to the provisions of this Option
Agreement, then in such event any and all new, substituted or additional
securities to which the Optionee is entitled by reason of the Optionee's
ownership of the shares acquired upon exercise of the Option shall be
immediately subject to the Right of First Refusal and any security interest held
by the Company with the same force and effect as the shares subject to the Right
of First Refusal and such security interest immediately before such event.

                                       13


     14.  NOTICE OF SALES UPON DISQUALIFYING DISPOSITION. The Optionee shall
dispose of the shares acquired pursuant to the Option only in accordance with
the provisions of this Option Agreement. In addition, the Optionee shall
promptly notify the Chief Financial Officer of the Company if the Optionee
disposes of any of the shares acquired pursuant to the Option within one (1)
year after the date of the Optionee exercises all or part of the Option or
within two (2) years after the Date of Option Grant. Until such time as the
Optionee disposes of such shares in a manner consistent with the provisions of
this Option Agreement, unless otherwise expressly authorized by the Company, the
Optionee shall hold all shares acquired pursuant to the Option in the Optionee's
name (and not in the name of any nominee) for the one-year period immediately
after the exercise of the Option and the two-year period immediately after Date
of Option Grant. At any time during the one-year or two-year periods set forth
above, the Company may place a legend on any certificate representing shares
acquired pursuant to the Option requesting the transfer agent for the Company's
stock to notify the Company of any such transfers. The obligation of the
Optionee to notify the Company of any such transfer shall continue
notwithstanding that a legend has been placed on the certificate pursuant to the
preceding sentence.

     15.  LEGENDS. The Company may at any time place legends referencing the
Right of First Refusal, and any applicable federal, state or foreign securities
law restrictions on all certificates representing shares of stock subject to the
provisions of this Option Agreement. The Optionee shall, at the request of the
Company, promptly present to the Company any and all certificates representing
shares acquired pursuant to the Option in the possession of the Optionee in
order to carry out the provisions of this Section. Unless otherwise specified by
the Company, legends placed on such certificates may include, but shall not be
limited to, the following:

          15.1. "THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 OR RULE 701 UNDER THE ACT, OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO
THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT."

          15.2. Any legend required to be placed thereon by the Commissioner of
Corporations of the State of California.

          15.3. "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE CORPORATION OR ITS ASSIGNEE SET
FORTH IN AN AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER, OR SUCH
HOLDER'S PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
OFFICE OF THIS CORPORATION."

                                       14


          15.4. "THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE
CORPORATION TO THE REGISTERED HOLDER UPON EXERCISE OF AN INCENTIVE STOCK OPTION
AS DEFINED IN SECTION 422 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
("ISO"). IN ORDER TO OBTAIN THE PREFERENTIAL TAX TREATMENT AFFORDED TO ISOs, THE
SHARES SHOULD NOT BE TRANSFERRED PRIOR TO ___________. SHOULD THE REGISTERED
HOLDER ELECT TO TRANSFER ANY OF THE SHARES PRIOR TO THIS DATE AND FOREGO ISO TAX
TREATMENT, THE TRANSFER AGENT FOR THE SHARES SHALL NOTIFY THE CORPORATION
IMMEDIATELY. THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE
INCENTIVE STOCK OPTION IN THE REGISTERED HOLDER'S NAME (AND NOT IN THE NAME OF
ANY NOMINEE) PRIOR TO THIS DATE OR UNTIL TRANSFERRED AS DESCRIBED ABOVE."

     16.  PUBLIC OFFERING. The Optionee hereby agrees that in the event of any
underwritten public offering of stock, including an initial public offering of
stock, made by the Company pursuant to an effective registration statement filed
under the Securities Act, the Optionee shall not offer, sell, contract to sell,
pledge, hypothecate, grant any option to purchase or make any short sale of, or
otherwise dispose of any shares of stock of the Company or any rights to acquire
stock of the Company for such period of time from and after the effective date
of such registration statement as may be established by the underwriter for such
public offering; provided, however, that such period of time shall not exceed
one hundred eighty (180) days from the effective date of the registration
statement to be filed in connection with such public offering. The foregoing
limitation shall not apply to shares registered in the public offering under the
Securities Act. The Optionee shall be subject to this Section provided and only
if the officers and directors of the Company are also subject to similar
arrangements.

     17.  BINDING EFFECT. Subject to the restrictions on transfer set forth
herein, this Option Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, administrators,
successors and assigns.

     18.  TERMINATION OR AMENDMENT. The Board may terminate or amend the Plan or
the Option at any time; provided, however, that except as provided in Section
8.2 in connection with a Transfer of Control, no such termination or amendment
may adversely affect the Option or any unexercised portion hereof without the
consent of the Optionee unless such termination or amendment is necessary to
comply with any applicable law or government regulation or is required to enable
the Option to qualify as an Incentive Stock Option. No amendment or addition to
this Option Agreement shall be effective unless in writing.

     19.  INTEGRATED AGREEMENT. This Option Agreement and the Plan constitute
the entire understanding and agreement of the Optionee and the Participating
Company Group with respect to the subject matter contained herein and therein
and there are no agreements, understandings, restrictions, representations, or
warranties among the Optionee and the Participating Company Group with respect
to such subject matter other than those as set forth or provided for herein or
therein. To the extent contemplated herein or therein, the provisions of this
Option Agreement shall survive any exercise of the Option and shall remain in
full force and effect.

                                       15


     20.  APPLICABLE LAW. This Option Agreement shall be governed by the laws of
the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State
of California.

                                               MITOKOR

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

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

     The Optionee represents that the Optionee is familiar with the terms and
provisions of this Option Agreement, including the Right of First Refusal set
forth in Section 11, and hereby accepts the Option subject to all of the terms
and provisions thereof. The Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board upon any
questions arising under this Option Agreement. The undersigned acknowledges
receipt of a copy of the Plan.

                                               OPTIONEE

Date:
     ------------------------------------      --------------------------

                                       16


THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN QUALIFIED
WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE
ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF
THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE
SALE IS SO EXEMPT.

THE SECURITY REPRESENTED BY THIS CERTIFICATE HAS BEEN ACQUIRED FOR INVESTMENT
AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

                                     MITOKOR

                       NONSTATUTORY STOCK OPTION AGREEMENT

     THIS NONSTATUTORY STOCK OPTION AGREEMENT (the "OPTION AGREEMENT") is made
and entered into as of _________, 199__, by and between MitoKor and ___________
(the "OPTIONEE").

     The Company has granted to the Optionee pursuant to the MitoKor Amended and
Restated 1993 Stock Option Plan (the "PLAN") an option to purchase certain
shares of Stock, upon the terms and conditions set forth in this Option
Agreement (the "OPTION"). The Option shall in all respects be subject to the
terms and conditions of the Plan, the provisions of which are incorporated
herein by reference.

     1.   DEFINITIONS AND CONSTRUCTION.

          1.1.  DEFINITIONS. Unless otherwise defined herein, capitalized terms
shall have the meanings assigned to such terms in the Plan. Whenever used
herein, the following terms shall have their respective meanings set forth
below:

                (a) "DATE OF OPTION GRANT" means ____________, 199__.

                (b) "NUMBER OF OPTION SHARES" means ____________ shares of
Stock, as adjusted from time to time pursuant to Section 9.

                (c) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

                                        1


                (d) "EXERCISE PRICE" means $__________ per share of Stock, as
adjusted from time to time pursuant to Section 9.

                (e) "INITIAL EXERCISE DATE" means the Initial Vesting Date.

                (f) DETERMINATION OF VESTING: shares shall be fully vested as of
the Date of Option Grant.

                (g) "OPTION EXPIRATION DATE" means the date ten (10) years after
the Date of Option Grant.

                (h) "COMPANY" means MitoKor, a California corporation, or any
successor corporation thereto.

                (i) "DISABILITY" means the inability of the Optionee, in the
opinion of a qualified physician acceptable to the Company, to perform the major
duties of the Optionee's position with the Participating Company Group because
of the sickness or injury of the Optionee.

                (j) "SECURITIES ACT" means the Securities Act of 1933, as
amended.

                (k) "SERVICE" means the Optionee's employment or service with
the Participating Company Group, whether in the capacity of an Employee, a
Director or a Consultant. The Optionee's Service shall not be deemed to have
terminated merely because of a change in the capacity in which the Optionee
renders Service to the Participating Company Group or a change in the
Participating Company for which the Optionee renders such Service, provided that
there is no interruption or termination of the Optionee's Service. The
Optionee's Service shall be deemed to have terminated either upon an actual
termination of Service or upon the corporation for which the Optionee performs
Service ceasing to be a Participating Company. Subject to the foregoing, the
Company, in its sole discretion, shall determine whether the Optionee's Service
has terminated and the effective date of such termination.

          1.2.  CONSTRUCTION. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Option Agreement. Except when otherwise indicated by the
context, the singular shall include the plural, the plural shall include the
singular, and the term "or" shall include the conjunctive as well as the
disjunctive.

     2.   TAX CONSEQUENCES.

          2.1.  TAX STATUS OF OPTION. This Option is intended to be a
Nonstatutory Stock Option and shall not be treated as an Incentive Stock Option
within the meaning of Section 422(b) of the Code.

          2.2.  ELECTION UNDER SECTION 83(b) OF THE CODE. If the Optionee
exercises this Option to purchase shares of Stock that are both nontransferable
and subject to a substantial risk of forfeiture, the Optionee understands that
the Optionee should consult with the Optionee's tax advisor regarding the
advisability of filing with the Internal Revenue Service an election under
Section 83(b) of the Code, which must be filed no later than thirty (30) days
after the date on

                                        2


which the Optionee exercises the Option. Shares acquired upon exercise of the
Option are nontransferable and subject to a substantial risk of forfeiture if,
for example, (a) they are unvested and are subject to a right of the Company to
repurchase such shares at the Optionee's original purchase price if the
Optionee's Service terminates, or (b) the Optionee is subject to a restriction
on transfer to comply with "Pooling-of-Interests Accounting" rules. Failure to
file an election under Section 83(b), if appropriate, may result in adverse tax
consequences to the Optionee. The Optionee acknowledges that the Optionee has
been advised to consult with a tax advisor prior to the exercise of the Option
regarding the tax consequences to the Optionee of the exercise of the Option. AN
ELECTION UNDER SECTION 83(b) MUST BE FILED WITHIN 30 DAYS AFTER THE DATE ON
WHICH THE OPTIONEE PURCHASES SHARES. THIS TIME PERIOD CANNOT BE EXTENDED. THE
OPTIONEE ACKNOWLEDGES THAT TIMELY FILING OF A SECTION 83(b) ELECTION IS THE
OPTIONEE'S SOLE RESPONSIBILITY, EVEN IF THE OPTIONEE REQUESTS THE COMPANY OR ITS
REPRESENTATIVE TO FILE SUCH ELECTION ON HIS OR HER BEHALF.

     3.   ADMINISTRATION. All questions of interpretation concerning this Option
Agreement shall be determined by the Board, including any duly appointed
Committee of the Board. All determinations by the Board shall be final and
binding upon all persons having an interest in the Option. Any officer of a
Participating Company shall have the authority to act on behalf of the Company
with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.

     4.   EXERCISE OF THE OPTION.

          4.1.  RIGHT TO EXERCISE. Except as otherwise provided herein, the
Option shall be exercisable on and after the Initial Exercise Date and prior to
the termination of the Option (as provided in Section 6), subject to the
Optionee's agreement that any shares purchased upon exercise are subject to the
Company's repurchase rights set forth in Section 11. In no event shall the
Option be exercisable for more shares than the Number of Option Shares.

          4.2.  METHOD OF EXERCISE. Exercise of the Option shall be by written
notice to the Company which must state the election to exercise the Option, the
number of whole shares of Stock for which the Option is being exercised and such
other representations and agreements as to the Optionee's investment intent with
respect to such shares as may be required pursuant to the provisions of this
Option Agreement. The written notice must be signed by the Optionee and must be
delivered in person, by certified or registered mail, return receipt requested,
by confirmed facsimile transmission, or by such other means as the Company may
permit, to the Chief Financial Officer of the Company, or other authorized
representative of the Participating Company Group, prior to the termination of
the Option as set forth in Section 6, accompanied by (i) full payment of the
aggregate Exercise Price for the number of shares of Stock being purchased and
(ii) an executed copy, if required herein, of the then current forms of escrow
and security agreement referenced below. The Option shall be deemed to be
exercised upon receipt by the Company of such written notice, the aggregate
Exercise Price, and, if required by the Company, such executed agreements.

          4.3.  PAYMENT OF EXERCISE PRICE.

                                        3



                (a) FORMS OF CONSIDERATION AUTHORIZED. Except as otherwise
provided below, payment of the aggregate Exercise Price for the number of shares
of Stock for which the Option is being exercised shall be made (i) in cash, by
check, or cash equivalent, (ii) by tender to the Company of whole shares of
Stock owned by the Optionee having a Fair Market Value (as determined by the
Company without regard to any restrictions on transferability applicable to such
stock by reason of federal or state securities laws or agreements with an
underwriter for the Company) not less than the aggregate Exercise Price, (iii)
by means of a Cashless Exercise, as defined in Section 4.3(c), (iv) in the
Company's sole discretion at the time the Option is exercised, by the Optionee's
promissory note for the aggregate Exercise Price, or (v) by any combination of
the foregoing.

                (b) TENDER OF STOCK. Notwithstanding the foregoing, the Option
may not be exercised by tender to the Company of shares of Stock to the extent
such tender of Stock would constitute a violation of the provisions of any law,
regulation or agreement restricting the redemption of the Company's stock. The
Option may not be exercised by tender to the Company of shares of Stock unless
such shares either have been owned by the Optionee for more than six (6) months
or were not acquired, directly or indirectly, from the Company.

                (c) CASHLESS EXERCISE. A "CASHLESS EXERCISE" means the
assignment in a form acceptable to the Company of the proceeds of a sale or loan
with respect to some or all of the shares of Stock acquired upon the exercise of
the Option pursuant to a program or procedure approved by the Company
(including, without limitation, through an exercise complying with the
provisions of Regulation T as promulgated from time to time by the Board of
Governors of the Federal Reserve System). The Company reserves, at any and all
times, the right, in the Company's sole and absolute discretion, to decline to
approve or terminate any such program or procedure.

                (d) PAYMENT BY PROMISSORY NOTE. No promissory note shall be
permitted if an exercise of the Option using a promissory note would be a
violation of any law. The promissory note permitted in clause (iv) of Section
4.3(a) shall be a full recourse note in a form satisfactory to the Company, with
principal payable no more than four (4) years after the date the Option is
exercised. Interest on the principal balance of the promissory note shall be
payable in annual installments at the minimum interest rate necessary to avoid
imputed interest pursuant to all applicable sections of the Code. Such recourse
promissory note shall be secured by the shares of Stock acquired pursuant to the
then current form of security agreement as approved by the Company. At any time
the Company is subject to the regulations promulgated by the Board of Governors
of the Federal Reserve System or any other governmental entity affecting the
extension of credit in connection with the Company's securities, any promissory
note shall comply with such applicable regulations, and the Optionee shall pay
the unpaid principal and accrued interest, if any, to the extent necessary to
comply with such applicable regulations. Except as the Company in its sole
discretion shall determine, the Optionee shall pay the unpaid principal balance
of the promissory note and any accrued interest thereon upon termination of the
Optionee's Service with the Participating Company Group for any reason, with or
without cause.

          4.4.  TAX WITHHOLDING. At the time the Option is exercised, in whole
or in part, or at any time thereafter as requested by the Company, the Optionee
hereby authorizes

                                        4


withholding from payroll and any other amounts payable to the Optionee, and
otherwise agrees to make adequate provision for (including by means of a
Cashless Exercise to the extent permitted by the Company), any sums required to
satisfy the federal, state, local and foreign tax withholding obligations of the
Participating Company Group, if any, which arise in connection with the Option,
including, without limitation, obligations arising upon (i) the exercise, in
whole or in part, of the Option, (ii) the transfer, in whole or in part, of any
shares acquired upon exercise of the Option, (iii) the operation of any law or
regulation providing for the imputation of interest, or (iv) the lapsing of any
restriction with respect to any shares acquired upon exercise of the Option. The
Optionee is cautioned that the Option is not exercisable unless the tax
withholding obligations of the Participating Company Group are satisfied.
Accordingly, the Optionee may not be able to exercise the Option when desired
even though the Option is vested, and the Company shall have no obligation to
issue a certificate for such shares or release such shares from any escrow
provided for herein.

          4.5.  CERTIFICATE REGISTRATION. Except in the event the Exercise Price
is paid by means of a Cashless Exercise, the certificate for the shares as to
which the Option is exercised shall be registered in the name of the Optionee,
or, if applicable, in the names of the heirs of the Optionee.

          4.6.  RESTRICTIONS ON GRANT OF THE OPTION AND ISSUANCE OF SHARES. The
grant of the Option and the issuance of shares of Stock upon exercise of the
Option shall be subject to compliance with all applicable requirements of
federal, state or foreign law with respect to such securities. The Option may
not be exercised if the issuance of shares of Stock upon exercise would
constitute a violation of any applicable federal, state or foreign securities
laws or other law or regulations or the requirements of any stock exchange or
market system upon which the Stock may then be listed. In addition, the Option
may not be exercised unless (i) a registration statement under the Securities
Act shall at the time of exercise of the Option be in effect with respect to the
shares issuable upon exercise of the Option or (ii) in the opinion of legal
counsel to the Company, the shares issuable upon exercise of the Option may be
issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act. THE OPTIONEE IS CAUTIONED THAT
THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED.
ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED
EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to obtain from
any regulatory body having jurisdiction the authority, if any, deemed by the
Company's legal counsel to be necessary to the lawful issuance and sale of any
shares subject to the Option shall relieve the Company of any liability in
respect of the failure to issue or sell such shares as to which such requisite
authority shall not have been obtained. As a condition to the exercise of the
Option, the Company may require the Optionee to satisfy any qualifications that
may be necessary or appropriate, to evidence compliance with any applicable law
or regulation and to make any representation or warranty with respect thereto as
may be requested by the Company.

          4.7.  FRACTIONAL SHARES. The Company shall not be required to issue
fractional shares upon the exercise of the Option.

     5.   NONTRANSFERABILITY OF THE OPTION. The Option may be exercised during
the lifetime of the Optionee only by the Optionee or the Optionee's guardian or
legal representative and may not be assigned or transferred in any manner except
by will or by the laws of descent and

                                        5


distribution. Following the death of the Optionee, the Option, to the extent
provided in Section 7, may be exercised by the Optionee's legal representative
or by any person empowered to do so under the deceased Optionee's will or under
the then applicable laws of descent and distribution.

     6.   TERMINATION OF THE OPTION. The Option shall terminate and may no
longer be exercised on the first to occur of (a) the Option Expiration Date, (b)
the last date for exercising the Option following termination of the Optionee's
Service as described in Section 7, or (c) a Transfer of Control to the extent
provided in Section 8.

     7.   EFFECT OF TERMINATION OF SERVICE.

          7.1.  OPTION EXERCISABILITY.

                (a) DISABILITY. If the Optionee's Service with the Participating
Company Group is terminated because of the Disability of the Optionee, the
Option, to the extent unexercised and exercisable on the date on which the
Optionee's Service terminated, may be exercised by the Optionee (or the
Optionee's guardian or legal representative) at any time prior to the expiration
of six (6) months after the date on which the Optionee's Service terminated, but
in any event no later than the Option Expiration Date.

                (b) DEATH. If the Optionee's Service with the Participating
Company Group is terminated because of the death of the Optionee, the Option, to
the extent unexercised and exercisable on the date on which the Optionee's
Service terminated, may be exercised by the Optionee (or the Optionee's legal
representative, or other person who acquired the right to exercise the Option by
reason of the Optionee's death) at any time prior to the expiration of six (6)
months after the date on which the Optionee's Service terminated, but in any
event no later than the Option Expiration Date. The Optionee's Service shall be
deemed to have terminated on account of death if the Optionee dies within ninety
(90) days after the Optionee's termination of Service.

                (c) OTHER TERMINATION OF SERVICE. If the Optionee's Service with
the Participating Company Group terminates for any reason, except Disability or
death, the Option, to the extent unexercised and exercisable by the Optionee on
the date on which the Optionee's Service terminated, may be exercised by the
Optionee within ninety (90) days (or such other longer period of time as
determined by the Board, in its sole discretion) after the date on which the
Optionee's Service terminated, but in any event no later than the Option
Expiration Date.

          7.2.  ADDITIONAL LIMITATION ON OPTION EXERCISE. Except as the Company
and the Optionee otherwise agree, exercise of the Option pursuant to Section 7.1
following termination of the Optionee's Service may not be made by delivery of a
promissory note as provided in Section 4.3(a).

          7.3.  EXTENSION IF EXERCISE PREVENTED BY LAW. Notwithstanding the
foregoing, if the exercise of the Option within the applicable time periods set
forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option
shall remain exercisable until three (3) months after the date the Optionee is
notified by the Company that the Option is exercisable, but in any event no
later than the Option Expiration Date.

                                        6


          7.4.  EXTENSION IF OPTIONEE SUBJECT TO SECTION 16(b). Notwithstanding
the foregoing, if a sale within the applicable time periods set forth in Section
7.1 of shares acquired upon the exercise of the Option would subject the
Optionee to suit under Section 16(b) of the Exchange Act, the Option shall
remain exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day
after the Optionee's termination of Service, or (iii) the Option Expiration
Date.

          7.5.  LEAVE OF ABSENCE. For purposes of Section 7.1, the Optionee's
Service with the Participating Company Group shall not be deemed to terminate if
the Optionee takes any military leave, sick leave, or other bona fide leave of
absence approved by the Company of ninety (90) days or less. In the event of a
leave of absence in excess of ninety (90) days, the Optionee's Service shall be
deemed to terminate on the ninety-first (91st) day of such leave unless the
Optionee's right to reemployment with the Participating Company Group remains
guaranteed by statute or contract. Notwithstanding the foregoing, unless
otherwise designated by the Company (or required by law), a leave of absence
shall not be treated as Service for purposes of determining the Optionee's
vested shares.

     8.   TRANSFER OF CONTROL.

          8.1.  DEFINITIONS.

                (a) An "OWNERSHIP CHANGE EVENT" shall be deemed to have occurred
if any of the following occurs with respect to the Company:

                    (i)   the direct or indirect sale or exchange in a single or
series of related transactions by the shareholders of the Company of more than
fifty percent (50%) of the voting stock of the Company;

                    (ii)  a merger or consolidation in which the Company is a
party; or

                    (iii) the sale, exchange, or transfer of all or
substantially all of the assets of the Company; or

                    (iv)  a liquidation or dissolution of the Company.

                (b) A "TRANSFER OF CONTROL" shall mean an Ownership Change Event
or a series of related Ownership Change Events (collectively, the "TRANSACTION")
wherein the shareholders of the Company immediately before the Transaction do
not retain immediately after the Transaction, in substantially the same
proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting stock of the Company or the corporation or corporations to
which the assets of the Company were transferred (the "TRANSFEREE
CORPORATION(S)"), as the case may be. For purposes of the preceding sentence,
indirect beneficial ownership shall include, without limitation, an interest
resulting from ownership of the voting stock of one or more corporations which,
as a result of the Transaction, own the Company or the Transferee
Corporation(s), as the

                                        7


case may be, either directly or through one or more subsidiary corporations. The
Board shall have the right to determine whether multiple sales or exchanges of
the voting stock of the Company or multiple Ownership Change Events are related,
and its determination shall be final, binding and conclusive.

          8.2.  EFFECT OF TRANSFER OF CONTROL ON OPTION. In the event of a
Transfer of Control, the surviving, continuing, successor, or purchasing
corporation or parent corporation thereof, as the case may be (the "ACQUIRING
CORPORATION"), may either assume the Company's rights and obligations under the
Option or substitute for the Option a substantially equivalent option for the
Acquiring Corporation's stock. The Option shall terminate and cease to be
outstanding effective as of the date of the Transfer of Control to the extent
that the Option is neither assumed or substituted for by the Acquiring
Corporation in connection with the Transfer of Control nor exercised as of the
date of the Transfer of Control. Notwithstanding the foregoing, shares acquired
upon exercise of the Option prior to the Transfer of Control and any
consideration received pursuant to the Transfer of Control with respect to such
shares shall continue to be subject to all applicable provisions of this Option
Agreement except as otherwise provided herein. Furthermore, notwithstanding the
foregoing, if the corporation the stock of which is subject to the Option
immediately prior to an Ownership Change Event described in Section 8.1(a)(i)
constituting a Transfer of Control is the surviving or continuing corporation
and immediately after such Ownership Change Event less than fifty percent (50%)
of the total combined voting power of its voting stock is held by another
corporation or by other corporations that are members of an affiliated group
within the meaning of Section 1504(a) of the Code without regard to the
provisions of Section 1504(b) of the Code, the Option shall not terminate unless
the Board otherwise provides in its sole discretion.

     9.   ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE. In the event of any
stock dividend, stock split, reverse stock split, recapitalization, combination,
reclassification, or similar change in the capital structure of the Company,
appropriate adjustments shall be made in the number, Exercise Price and class of
shares of stock subject to the Option. If a majority of the shares which are of
the same class as the shares that are subject to the Option are exchanged for,
converted into, or otherwise become (whether or not pursuant to an Ownership
Change Event) shares of another corporation (the "New Shares"), the Board may
unilaterally amend the Option to provide that the Option is exercisable for New
Shares. In the event of any such amendment, the Number of Option Shares and the
Exercise Price shall be adjusted in a fair and equitable manner, as determined
by the Board, in its sole discretion. Notwithstanding the foregoing, any
fractional share resulting from an adjustment pursuant to this Section 9 shall
be rounded up or down to the nearest whole number, as determined by the Board,
and in no event may the Exercise Price be decreased to an amount less than the
par value, if any, of the stock subject to the Option. The adjustments
determined by the Board pursuant to this Section 9 shall be final, binding and
conclusive.

     10.  RIGHTS AS A SHAREHOLDER, EMPLOYEE OR CONSULTANT. The Optionee shall
have no rights as a shareholder with respect to any shares covered by the Option
until the date of the issuance of a certificate for the shares for which the
Option has been exercised (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company). No
adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date such certificate is issued, except as
provided in Section 9.

                                        8


Nothing in this Option Agreement shall confer upon the Optionee any right to
continue in the Service of a Participating Company or interfere in any way with
any right of the Participating Company Group to terminate the Optionee's Service
as an Employee or Consultant, as the case may be, at any time.

     11.  RIGHT OF FIRST REFUSAL.

          11.1. GRANT OF RIGHT OF FIRST REFUSAL. Except as provided in Section
11.7 below, in the event the Optionee, the Optionee's legal representative, or
other holder of shares acquired upon exercise of the Option proposes to sell,
exchange, transfer, pledge, or otherwise dispose of any shares acquired upon
exercise of the Option (the "TRANSFER SHARES") to any person or entity,
including, without limitation, any shareholder of the Participating Company
Group, the Company shall have the right to repurchase the Transfer Shares under
the terms and subject to the conditions set forth in this Section 11 (the "RIGHT
OF FIRST REFUSAL").

          11.2. NOTICE OF PROPOSED TRANSFER. Prior to any proposed transfer of
the Transfer Shares, the Optionee shall give a written notice (the "TRANSFER
NOTICE") to the Company describing fully the proposed transfer, including the
number of Transfer Shares, the name and address of the proposed transferee (the
"PROPOSED TRANSFEREE") and, if the transfer is voluntary, the proposed transfer
price, and containing such information necessary to show the bona fide nature of
the proposed transfer. In the event of a bona fide gift or involuntary transfer,
the proposed transfer price shall be deemed to be the Fair Market Value of the
Transfer Shares, as determined by the Board in good faith. If the Optionee
proposes to transfer any Transfer Shares to more than one Proposed Transferee,
the Optionee shall provide a separate Transfer Notice for the proposed transfer
to each Proposed Transferee. The Transfer Notice shall be signed by both the
Optionee and the Proposed Transferee and must constitute a binding commitment of
the Optionee and the Proposed Transferee for the transfer of the Transfer Shares
to the Proposed Transferee subject only to the Right of First Refusal.

          11.3. BONA FIDE TRANSFER. If the Company determines that the
information provided by the Optionee in the Transfer Notice is insufficient to
establish the bona fide nature of a proposed voluntary transfer, the Company
shall give the Optionee written notice of the Optionee's failure to comply with
the procedure described in this Section 11, and the Optionee shall have no right
to transfer the Transfer Shares without first complying with the procedure
described in this Section 11. The Optionee shall not be permitted to transfer
the Transfer Shares if the proposed transfer is not bona fide.

          11.4. EXERCISE OF RIGHT OF FIRST REFUSAL. If the Company determines
the proposed transfer to be bona fide, the Company shall have the right to
purchase all, but not less than all, of the Transfer Shares (except as the
Company and the Optionee otherwise agree) at the purchase price and on the terms
set forth in the Transfer Notice by delivery to the Optionee of a notice of
exercise of the Right of First Refusal within thirty (30) days after the date
the Transfer Notice is delivered to the Company. The Company's exercise or
failure to exercise the Right of First Refusal with respect to any proposed
transfer described in a Transfer Notice shall not affect the Company's right to
exercise the Right of First Refusal with respect to any proposed transfer
described in any other Transfer Notice, whether or not such other Transfer
Notice is issued by the Optionee or issued by a person other than the Optionee
with respect to a proposed transfer to the

                                        9


same Proposed Transferee. If the Company exercises the Right of First Refusal,
the Company and the Optionee shall thereupon consummate the sale of the Transfer
Shares to the Company on the terms set forth in the Transfer Notice within sixty
(60) days after the date the Transfer Notice is delivered to the Company (unless
a longer period is offered by the Proposed Transferee); provided, however, that
in the event the Transfer Notice provides for the payment for the Transfer
Shares other than in cash, the Company shall have the option of paying for the
Transfer Shares by the present value cash equivalent of the consideration
described in the Transfer Notice as reasonably determined by the Company. For
purposes of the foregoing, cancellation of any indebtedness of the Optionee to
any Participating Company shall be treated as payment to the Optionee in cash to
the extent of the unpaid principal and any accrued interest canceled.

          11.5. FAILURE TO EXERCISE RIGHT OF FIRST REFUSAL. If the Company fails
to exercise the Right of First Refusal in full (or to such lesser extent as the
Company and the Optionee otherwise agree) within the period specified in Section
11.4 above, the Optionee may conclude a transfer to the Proposed Transferee of
the Transfer Shares on the terms and conditions described in the Transfer
Notice, provided such transfer occurs not later than ninety (90) days following
delivery to the Company of the Transfer Notice. The Company shall have the right
to demand further assurances from the Optionee and the Proposed Transferee (in a
form satisfactory to the Company) that the transfer of the Transfer Shares was
actually carried out on the terms and conditions described in the Transfer
Notice. No Transfer Shares shall be transferred on the books of the Company
until the Company has received such assurances, if so demanded, and has approved
the proposed transfer as bona fide. Any proposed transfer on terms and
conditions different from those described in the Transfer Notice, as well as any
subsequent proposed transfer by the Optionee, shall again be subject to the
Right of First Refusal and shall require compliance by the Optionee with the
procedure described in this Section 11.

          11.6. TRANSFEREES OF TRANSFER SHARES. All transferees of the Transfer
Shares or any interest therein, other than the Company, shall be required as a
condition of such transfer to agree in writing (in a form satisfactory to the
Company) that such transferee shall receive and hold such Transfer Shares or
interest therein subject to all of the terms and conditions of this Option
Agreement, including this Section 11 providing for the Right of First Refusal
with respect to any subsequent transfer. Any sale or transfer of any shares
acquired upon exercise of the Option shall be void unless the provisions of this
Section 11 are met.

          11.7. TRANSFERS NOT SUBJECT TO RIGHT OF FIRST REFUSAL. The Right of
First Refusal shall not apply to any transfer or exchange of the shares acquired
upon exercise of the Option if such transfer or exchange is in connection with
an Ownership Change Event. If the consideration received pursuant to such
transfer or exchange consists of stock of a Participating Company, such
consideration shall remain subject to the Right of First Refusal unless the
provisions of Section 11.9 below result in a termination of the Right of First
Refusal.

          11.8. ASSIGNMENT OF RIGHT OF FIRST REFUSAL. The Company shall have the
right to assign the Right of First Refusal at any time, whether or not there has
been an attempted transfer, to one or more persons as may be selected by the
Company.

          11.9. EARLY TERMINATION OF RIGHT OF FIRST REFUSAL. The other
provisions of this Option Agreement notwithstanding, the Right of First Refusal
shall terminate and be of no further force and effect upon (a) the occurrence of
a Transfer of Control, unless the Acquiring

                                       10


Corporation assumes the Company's rights and obligations under the Option or
substitutes a substantially equivalent option for the Acquiring Corporation's
stock for the Option, or (b) the existence of a public market for the class of
shares subject to the Right of First Refusal. A "PUBLIC MARKET" shall be deemed
to exist if (i) such stock is listed on a national securities exchange (as that
term is used in the Exchange Act) or (ii) such stock is traded on the
over-the-counter market and prices therefor are published daily on business days
in a recognized financial journal.

     12.  ESCROW.

          12.1. ESTABLISHMENT OF ESCROW. To ensure that shares subject to the
Right of First Refusal or securing any promissory note will be available for
repurchase, the Company may require the Optionee to deposit the certificate
evidencing the shares which the Optionee purchases upon exercise of the Option
with an agent designated by the Company under the terms and conditions of escrow
and security agreements approved by the Company. If the Company does not require
such deposit as a condition of exercise of the Option, the Company reserves the
right at any time to require the Optionee to so deposit the certificate in
escrow. Upon the occurrence of an Ownership Change Event or a change, as
described in Section 9, in the character or amount of any of the outstanding
stock of the corporation the stock of which is subject to the provisions of this
Option Agreement, any and all new, substituted or additional securities or other
property to which the Optionee is entitled by reason of the Optionee's ownership
of shares of Stock acquired upon exercise of the Option that remain, following
such Ownership Change Event or change described in Section 9, subject to the
Right of First Refusal or any security interest held by the Company shall be
immediately subject to the escrow to the same extent as such shares of Stock
immediately before such event. The Company shall bear the expenses of the
escrow.

          12.2. DELIVERY OF SHARES TO OPTIONEE. As soon as practicable after the
expiration of the Right of First Refusal and after full repayment of any
promissory note secured by the shares or other property in escrow, but not more
frequently than twice each calendar year, the escrow agent shall deliver to the
Optionee the shares and any other property no longer subject to such restriction
and no longer securing any promissory note.

          12.3. NOTICES AND PAYMENTS. In the event the shares and any other
property held in escrow are subject to the Company's exercise of the Right of
First Refusal, the notices required to be given to the Optionee shall be given
to the escrow agent, and any payment required to be given to the Optionee shall
be given to the escrow agent. Within thirty (30) days after payment by the
Company, the escrow agent shall deliver the shares and any other property which
the Company has purchased to the Company and shall deliver the payment received
from the Company to the Optionee.

     13.  STOCK DISTRIBUTIONS SUBJECT TO OPTION AGREEMENT. If, from time to
time, there is any stock dividend, stock split or other change, as described in
Section 9, in the character or amount of any of the outstanding stock of the
corporation the stock of which is subject to the provisions of this Option
Agreement, then in such event any and all new, substituted or additional
securities to which the Optionee is entitled by reason of the Optionee's
ownership of the shares acquired upon exercise of the Option shall be
immediately subject to the Right of First Refusal and any security interest held
by the Company with the same force and effect as the

                                       11


shares subject to the Right of First Refusal and such security interest
immediately before such event.

     14.  LEGENDS. The Company may at any time place legends referencing the
Right of First Refusal, and any applicable federal, state or foreign securities
law restrictions on all certificates representing shares of stock subject to the
provisions of this Option Agreement. The Optionee shall, at the request of the
Company, promptly present to the Company any and all certificates representing
shares acquired pursuant to the Option in the possession of the Optionee in
order to carry out the provisions of this Section. Unless otherwise specified by
the Company, legends placed on such certificates may include, but shall not be
limited to, the following:

          14.1. "THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 OR RULE 701 UNDER THE ACT, OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO
THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT."

          14.2. Any legend required to be placed thereon by the Commissioner of
Corporations of the State of California.

          14.3. "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE CORPORATION OR ITS ASSIGNEE SET
FORTH IN AN AGREEMENT BETWEEN THE CORPORATION AND THE REGISTERED HOLDER, OR SUCH
HOLDER'S PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
OFFICE OF THIS CORPORATION."

     15.  PUBLIC OFFERING. The Optionee hereby agrees that in the event of any
underwritten public offering of stock, including an initial public offering of
stock, made by the Company pursuant to an effective registration statement filed
under the Securities Act, the Optionee shall not offer, sell, contract to sell,
pledge, hypothecate, grant any option to purchase or make any short sale of, or
otherwise dispose of any shares of stock of the Company or any rights to acquire
stock of the Company for such period of time from and after the effective date
of such registration statement as may be established by the underwriter for such
public offering; provided, however, that such period of time shall not exceed
one hundred eighty (180) days from the effective date of the registration
statement to be filed in connection with such public offering. The foregoing
limitation shall not apply to shares registered in the public offering under the
Securities Act. The Optionee shall be subject to this Section provided and only
if the officers and directors of the Company are also subject to similar
arrangements.

     16.  BINDING EFFECT. Subject to the restrictions on transfer set forth
herein, this Option Agreement shall inure to the benefit of and be binding upon
the parties hereto and their

                                       12


respective heirs, executors, administrators, successors and assigns.

     17.  TERMINATION OR AMENDMENT. The Board may terminate or amend the Plan or
the Option at any time; provided, however, that except as provided in Section
8.2 in connection with a Transfer of Control, no such termination or amendment
may adversely affect the Option or any unexercised portion hereof without the
consent of the Optionee unless such termination or amendment is necessary to
comply with any applicable law or government regulation. No amendment or
addition to this Option Agreement shall be effective unless in writing.

     18.  INTEGRATED AGREEMENT. This Option Agreement and the Plan constitute
the entire understanding and agreement of the Optionee and the Participating
Company Group with respect to the subject matter contained herein and therein
and there are no agreements, understandings, restrictions, representations, or
warranties among the Optionee and the Participating Company Group with respect
to such subject matter other than those as set forth or provided for herein or
therein. To the extent contemplated herein or therein, the provisions of this
Option Agreement shall survive any exercise of the Option and shall remain in
full force and effect.

     19.  APPLICABLE LAW. This Option Agreement shall be governed by the laws of
the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State
of California.

                                            MITOKOR

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

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

     The Optionee represents that the Optionee is familiar with the terms and
provisions of this Option Agreement, including the Right of First Refusal set
forth in Section 11, and hereby accepts the Option subject to all of the terms
and provisions thereof. The Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board upon any
questions arising under this Option Agreement. The undersigned acknowledges
receipt of a copy of the Plan.

                                            OPTIONEE

Date:
     ---------------------------------      -------------------------------

                                       13

EX-10.20

                                                                   Exhibit 10.20

    [CERTAIN MATERIAL (INDICATED BY A [*CON*]) HAS BEEN OMITTED FROM THIS
    DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED
MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]


                             SERVICES AGREEMENT FOR
                               CHIRON CORPORATION

This Services Agreement ("AGREEMENT") is made effective as of February 7, 2000
("Effective Date") by and between Chiron Corporation ("CHIRON"), a Delaware
corporation with its principal place of business at 4560 Horton Street,
Emeryville, California 94608 and Mimotopes Pty. Ltd. ("MIMOTOPES"), an
Australian proprietary company with its principal place of business at 11
Duerdin Street, Clayton, Victoria 3168 Australia.

WHEREAS:

         By the terms of an Asset Purchase Agreement dated as of the Effective
Date of this Agreement ("PURCHASE AGREEMENT"), Chiron transferred certain of the
assets of its wholly owned subsidiary Chiron Technologies Pty. Ltd. ("CTPL") to
Mimotopes.

         Following such transfer, Chiron desires to have Mimotopes perform
certain services for Chiron.

THEREFORE,

         Chiron, hereby, contracts with Mimotopes to perform new services as
well as services formerly provided by CTPL to Chiron.

         1.       DESCRIPTION OF SERVICES

                  1.1      SERVICES. Mimotopes shall use reasonable commercial
efforts to provide at Chiron's request all services and technical assistance in
the synthesis and design of molecules in the support of Chiron's drug discovery
program for (a) projects involving discovery and development of (i) [ * CON * ]
and (ii) [ * CON * ]; and (b) other projects which may be mutually agreed to by
the parties as described below in this Section (the "SERVICES"). From time to
time, Chiron shall nominate such fields of research or specification of
compounds to be synthesized by submitting a written work order to Mimotopes, for
approval, which approval shall not be unreasonably withheld. The parties shall
mutually agree to a written research plan for each project outlining the
Services to be performed by Mimotopes for each such project. Mimotopes shall not
be required to provide Services that require staffing beyond the number of FTE's
set forth in Section 1.2 ("Employees"). The parties specifically agree that
Mimotopes is not responsible for any negligence, errors or omissions by CTPL in
CTPL's performance of the services prior to the Effective Date of this
Agreement.

                  1.2      EMPLOYEES. Mimotopes shall provide a minimum of
[ * CON * ] Full-Time Equivalents ("FTE's") to perform the Services (as defined
in Section 1.3 herein) during the first year of this Agreement, [ * CON * ]
FTE's to perform the Services during the second year of this Agreement and
[ * CON * ] FTE's to perform the Services during the third year of this
Agreement. Chiron reserves the right in its sole discretion to designate each of
the initial FTE's, further identified as the FTE Team and listed in ATTACHMENT
A. Subsequently, Chiron shall have the right to approve each additional or
replacement FTE on the basis of qualifications, with such approval not to be
unreasonably withheld.


                                       1



                  1.3      TERM. The Services shall be provided for a term of
three (3) years commencing on the Effective Date ("TERM"), unless earlier
amended or extended in accordance with the terms and conditions of Article 9
("Amendment, Termination and Survival") herein.

         2.       WORK PRODUCT AND MATERIALS.

                  2.1      All data, reports, materials, inventions and
discoveries generated or created by Mimotopes arising from its conduct of the
Services which are conceived or reduced to practice during the Term of this
Agreement are hereafter collectively referred to as "WORK PRODUCT". Chiron shall
own all right, title and interest in the Work Product, except for any Process
Improvements (as defined below), which shall be the sole and exclusive property
of Mimotopes. A Process Improvements is any new, improved or modified technique,
process, method, instrument or equipment or similar know-how, including without
limitation new chemical processes, synthesis protocols, linker systems, cleavage
methods, or analytic techniques, developed or created by Mimotopes which is not
specific to Chiron Chemical Matter. Chiron will retain a non-exclusive,
royalty-free license to use any Process Improvements, with the right to
sublicense. Work Product will be deemed Confidential Information as defined in
Article 4 ("Confidentiality and Non-Use Obligation") herein. Subject to the
provisions of the Purchase Agreement, this Agreement (i) does not convey to
Mimotopes any right, title or interest to or in any patents, patent
applications, know-how (whether patentable or unpatentable) or other
intellectual property rights of Chiron; and (ii) does not convey to Chiron any
right, title or interest to or in any patents, patent applications, know-how
(whether patentable or unpatentable) or other intellectual property rights of
Mimotopes.

                  2.2.     Mimotopes shall provide to Chiron a written report on
the current status of the Services, FTE's and Work Product, including but not
limited to a financial accounting and a project review. The report shall be made
within fifteen days of the close of each calendar quarter. Additionally,
Mimotopes shall send to Chiron, annually and at its expense, not more than
[ * CON * ] ([ * CON * ]) people-trips of lead scientists to participate in a
project meeting. If Chiron desires, and so requests, more people-trips within
any contract year, then either (i) Chiron will send its personnel to Mimotopes'
facility in Australia for such meeting; or (ii) Chiron will reimburse Mimotopes
for all out-of-pocket costs associated with such travel.

                  2.3      Mimotopes shall keep separate laboratory notebook
records, prepared and witnessed according to standard laboratory practices, of
all work performed under this Agreement. These notebooks and other records shall
be owned, properly maintained and stored by Mimotopes. Upon written request by
Chiron, Mimotopes shall (i) make such laboratory notebook records reasonably
available to Chiron for on-site inspection at Mimotopes; (ii) provide to Chiron
copies of the relevant portions of such laboratory notebook records as
reasonably needed by Chiron for routine patent protection (e.g., filing and
prosecution) or other purposes; and (iii) in the event Chiron needs the original
laboratory notebook records for litigation or patent interference purposes,
Mimotopes shall make such original records available to Chiron. Mimotopes shall
ordinarily bear the cost of the activities set forth in (i), (ii) and (iii);
provided, however, that in cases where Mimotopes in its reasonable discretion
determines that Chiron's requests become a significant burden in terms of time
and/or expense, then Mimotopes reserves the right to require Chiron to reimburse
Mimotopes for such activities.


                                       2



                  2.4      Mimotopes shall cooperate with Chiron and make its
scientists reasonably available for purposes of filing, prosecuting and
defending patent applications arising out of the Work Product. Mimotopes shall
ordinarily bear the cost of the activities set forth in this Section 2.4;
provided, however, that in cases where Mimotopes in its reasonable discretion
determines that Chiron's requests become a significant burden in terms of time
and/or expense, then Mimotopes reserves the right to request Chiron to reimburse
Mimotopes for such activities.

         3.       COMPENSATION. As compensation for Mimotopes' conduct of the
Services, Chiron shall pay Mimotopes in United States dollars at the rate of
[ * CON * ] dollars ($[ * CON * ]) per FTE per year. In any case, the payment
shall not exceed [ * CON * ] dollars ($[ * CON * ]) in the first year of this
Agreement, [ * CON * ] dollars ($[ * CON * ]) in the second year of this
Agreement and [ * CON * ] dollars ($[ * CON * ]) in the third year of this
Agreement. Chiron's first year payment shall be made within thirty (30) days
after the Effective Date of this Agreement. All other payments shall be made in
advance at the beginning of each subsequent year of the Term, that is, on the
first and second anniversary, of this Agreement.

         4.       CONFIDENTIALITY AND NON-USE OBLIGATIONS.

                  4.1      CONFIDENTIAL INFORMATION. During the course of
activities contemplated by this Agreement, either party, its employees, agents,
representatives and consultants (collectively, "Recipient") shall have access to
certain confidential and proprietary information ("Confidential Information") of
the other party ("Dislcoser"). Confidential Information shall include without
limitation Chiron's lead compounds (the "Chiron Chemical Matter") or either
party's proprietary materials and technologies, research and development data
and plans, business or research strategies, trade secrets and material
embodiments thereof, and manufacturing processes and technologies. Chiron and
Mimotopes each retains exclusive title to its Confidential Information.

                  4.2      CONFIDENTIALITY AND NON-USE. The Recipient shall
maintain the Discloser's Confidential Information in confidence. The Recipient
shall use the Discloser's Confidential Information solely for performing or
evaluating the Services unless otherwise mutually agreed in writing. Upon
request by the Discloser, the Recipient shall return all Confidential
Information, including all copies and extracts thereof, to the Discloser;
provided, however, that Mimotopes will be entitled to retain one copy of any
Work Product.

                  4.3      EXCLUSIONS. The Recipient's obligations of
confidentiality and non-use shall not apply to any information that: (i) is
shown by contemporaneous documentation of the Recipient to have been in its
rightful possession prior to receipt from the Discloser; (ii) is or becomes,
through no fault of the Recipient, publicly known; (iii) is furnished to the
Recipient by a third party without breach of a duty to the Discloser; (iv) the
Recipient is required to disclose such information by law, order or regulation
of a governmental agency or a court of competent jurisdiction or international
authority (after providing the Discloser with reasonable notice of such
requirement to divulge and with an opportunity to obtain a protective order; or
(v) was or is independently developed by the Recipient without reference to the
Discloser's Confidential Information.


                                       3



         5.       COMPLIANCE WITH LAW; STANDARD OF CARE. Mimotopes shall comply
with all applicable laws, ordinances, rules and regulations pertaining to its
performance of the Services. Mimotopes shall perform the Services in accordance
with the reasonable commercial standards of care and diligence practiced by
recognized firms in providing services of a similar nature and shall provide the
reasonable commercial skill and judgment of its employees in providing the
Services.

         6.       NOTICES. All notices and other official communications
hereunder shall be in writing and shall be deemed given if delivered personally
or by commercial delivery service, or within seventy-two (72) hours after being
mailed by registered or certified mail (return receipt requested) or sent via
facsimile (with confirmation of receipt) to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):

                  In the case of Mimotopes:

                           Mimotopes Pty. Ltd.
                           11 Duerdin Street
                           Clayton, Victoria 3168 Australia
                           Attention:  Managing Director
                           Fax:     61-3-9565-1199
                           Tel:     61-3-9565-1111

                  with copies to:

                           MitoKor
                           11494 Sorrento Valley Road
                           San Diego, CA  92121
                           Attention:  Chief Executive Officer
                           Fax:     858-793-7805
                           Tel:     858-793-7800

                  In the case of Chiron:

                           Chiron Corporation
                           4560 Horton Street
                           Emeryville, California 94608
                           Attention:  Office of the General Counsel
                           Fax:     510-654-5360

                           cc: President, Chiron Technologies
                           Fax:     510-923-[ * CON * ]

                           cc: Dr. [ * CON * ]
                           Fax:     (510) 923-[ * CON * ]


                                       4



         7.       INDEMNIFICATION.

                  7.1      To the extent permitted by applicable law, and except
to the extent caused by the negligence or willful misconduct of Chiron, or its
employees, agents or representatives, Mimotopes shall indemnify, defend, protect
and hold Chiron, and its directors, officers, stockholders, employees, agents
and representatives, harmless from any and all liability, damages, causes of
action, loss, cost or expense (including but not limited to, reasonable
attorneys' fees) (collectively, "Losses") arising at any time out of Mimotopes'
negligence or willful misconduct performing under this Agreement. For the
avoidance of doubt, Chiron specifically agrees that Mimotopes' indemnification
does not, in any circumstances, extend to Losses arising out of Chiron's and/or
any third party's sale or use of any products which incorporate, or are produced
using, the Work Product or any derivative or modification thereof.

                  7.2      To the extent permitted by applicable law, and except
to the extent caused by the negligence or willful misconduct of Mimotopes, or
its employees, agents or representatives, Chiron shall indemnify, defend,
protect and hold Mimotopes, and its directors, officers, stockholders,
employees, agents and representatives, harmless from any and all Losses arising
at any time out of (i) Chiron's negligence or willful misconduct in performing
under this Agreement; or (ii) Chiron's and/or any third party's sale or use of
any products which incorporate, or are produced using, the Work Product or any
derivative or modification thereof.

                  7.3      The party seeking indemnification under Section 7.1
or 7.2 (the "Indemnified Party") agrees to give prompt notice to the party
against whom indemnity is sought (the "Indemnifying Party") of the assertion of
any claim, or the commencement of any suit, action or proceeding in respect of
which indemnity may be sought under such section. The Indemnifying Party may,
and at the request of the Indemnified Party shall, participate in and control
the defense of any such third party suit, action or proceeding at its own
expense. The Indemnifying Party shall not be liable under Section 7.1 or 7.2 for
any settlement effected without its consent of any claim, litigation, or
proceeding in respect of which indemnity may be sought hereunder.

         8.       INDEPENDENT CONTRACTOR. Mimotopes is an independent contractor
engaged by Chiron to perform the Services in accordance with the provisions of
this Agreement, and the relationship hereby created is specifically governed by,
limited to, and subject to all of the terms and conditions contained in this
Agreement. The parties further agree that Chiron does not have the authority to
hire or fire employees of Mimotopes, nor does Chiron determine the rate or
method of pay of such employees. Additionally, nothing contained in this
Agreement shall entitle either party to the right or authority to make any
representation on behalf of or bind the other party to others in any manner,
except as may be specifically authorized in writing by the other party. Neither
party may make any representations or commitments on the other's behalf, nor may
either party use the other party's name or trademarks in any public disclosure,
without the named party's prior written consent.

         9.       AMENDMENT, TERMINATION AND SURVIVAL.

                  9.1.     This Agreement may be amended or renewed only with
the written agreement of both parties.


                                       5



                  9.2      Either party may terminate this Agreement if such
party provides written notice of Material Breach to the breaching party and such
Material Breach has not been remedied within thirty (30) days after the date of
such notice. In the case of Mimotopes, a Material Breach of this Agreement shall
be defined as a substantial failure by Mimotopes to meet any material mutually
agreed upon written performance criteria or a failure of Mimotopes to provide
the required number of FTE's. In the case of Chiron, a Material Breach of this
Agreement shall be defined as the failure to make any required payment. Upon
early termination of this Agreement under this Section by either party, (i) if
Chiron has made payment for Services which have not yet been performed, then
Chiron shall be entitled, as damages, to a pro-rated return of the compensation
it has paid under Section 3 ("Compensation") of this Agreement; or (ii) if
Mimotopes has not yet been paid for Services which it has performed, then
Mimotopes shall be entitled to a pro-rated payment of such compensation for the
period in which the Services were performed.

                  9.3      Those terms and obligations which by their nature
should continue shall survive any termination or expiration of this Agreement,
including without limitation the terms and obligations of Articles 1.1
("Services"), 2 ("Work Product and Materials"), 4 ("Confidentiality and
Non-Use"), 7 ("Indemnification"), 8 ("Independent Contractor") and 13 ("Warranty
Disclaimer; Consequential Damages").

         10.      WAIVER AND SEVERABILITY. No waiver of any of the provisions of
this Agreement shall be deemed, or shall constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing
waiver. No waiver shall be binding unless executed in writing by the party
making the waiver. This Agreement shall be interpreted as a whole and neither
for or against either party, in accordance with their common meaning, but taking
into account the nature of the Services to be rendered by Mimotopes.

         11.      ASSIGNMENT. This Agreement and any rights under it may be
assigned by Chiron with the prior written consent of Mimotopes, which shall not
be unreasonably withheld. This Agreement and any rights under is may not be
assigned by Mimotopes, except that either party may assign its rights and
obligations under this Agreement, in whole or in part, to a successor in
interest, in whole or in part, of the business to which this Agreement relates.
Such assignment shall be binding upon and inure to the benefit of the parties,
their successors and permissible assigns.

         12.      ENTIRE AGREEMENT. This Agreement contains all the
representations and the entire agreement between the parties with respect to the
Services identified herein. The terms and conditions of the Purchase Agreement
shall continue to apply to all other aspects of the relationship between the
parties not specifically addressed in this Agreement.

         13.      WARRANTY DISCLAIMER; CONSEQUENTIAL DAMAGES. ANY WORK PRODUCT
IS PROVIDED WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED. MIMOTOPES MAKES NO
REPRESENTATION OR WARRANTY THAT THE WORK PRODUCT WILL NOT INFRINGE ANY PATENT OR
OTHER PROPRIETARY RIGHTS. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING FROM THIS AGREEMENT.


                                       6



         14.      COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original as against any party
whose signature appears on such counterpart and all of which shall be considered
on and the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other
party, it being understood that each party need not sign the same counterpart.
This Agreement may be executed by facsimile signature as long as the party so
executing commits to deliver an original signature within twenty (20) days.

         15.      GOVERNING LAW; VENUE AND JURISDICTION. This Agreement shall be
governed and construed in accordance with the laws of the State of California
without regard to any applicable conflicts of laws principles. Any legal action
arising under this Agreement shall be resolved in the courts located in San
Diego, California if brought by Chiron and in San Francisco, California if
brought by Mimotopes.

         16.      THIRD PARTY BENEFICIARIES. Nothing contained in this Agreement
is intended to confer upon any person other than the parties hereto and their
respective successors and permitted assigns, any rights, remedies or obligations
under, or by reason of this Agreement.


[Remainder of this page intentionally left blank]


                                       7



         This Agreement is executed by the parties to be effective as of the
Effective Date.


CHIRON CORPORATION                       MIMOTOPES PTY. LTD.

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

Name:                                    Name:
       ------------------------------             ------------------------------

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


                                       8



                                  ATTACHMENT A
                          FTE TEAM FOR CHIRON PROJECTS

The following FTE's will work 100% of their time on Chiron projects and the
entire team shall not be changed without Chiron's written approval.

[ * CON * ]


                                       9


October 3, 2000

Walter H. Moos, Ph.D.
Chairman
Mimotopes Pty. Ltd.
11494 Sorrento Valley Road
San Diego, CA 92121

Dear Dr. Moos:

In response to your request, and pursuant to the Services Agreement entered into
by Mimotopes Pty. Ltd. and Chiron Corp. effective February 7, 2000 and the Asset
Purchase Agreement executed concurrently by the parties, the parties hereby
agree to amend such services specifically relating to Mimotopes' employee
staffing allocations during the term of that agreement.

Specifically, the parties agree that Section 1.2 of the Services Agreement is
hereby amended in entirety as follows:

1.2 EMPLOYEES. Mimotopes shall provide a minimum of [ * CON * ] Full-Time
Equivalents ("FTE's") to perform the Services (as defined in Section 1.3 herein)
during each full year of this Agreement. Chiron reserves the right in its sole
discretion to designate each of the initial FTE's, further identified as the FTE
Team and listed in Attachment A. Subsequently, Chiron shall have the right to
approve each additional or replacement FTE on the basis of qualifications, with
such approval not to be unreasonably withheld.

If you agree to this modification, please indicate your approval by signing
below.

Sincerely,



Sean O'Connell
Chiron Corporation


I agree:


- ------------------------------                       ------------
Walter H. Moos, PhD.                                 Date
Chairman of the Board of Directors
Mimotopes Pty. Ltd.

EX-10.21

                                                                   Exhibit 10.21

    [CERTAIN MATERIAL (INDICATED BY A [*CON*]) HAS BEEN OMITTED FROM THIS
    DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED
MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]



                          LICENSE AND OPTION AGREEMENT



                                 BY AND BETWEEN



                          APOLLO BIOPHARMACEUTICS, INC.



                                       AND



                       AMERICAN HOME PRODUCTS CORPORATION

              ACTING THROUGH ITS WYETH-AYERST LABORATORIES DIVISION







                                FEBRUARY 8, 1999


                                TABLE OF CONTENTS


                                                                                                 
1.       DEFINITIONS.....................................................................................1

         1.1      "AFFILIATE(S)".........................................................................1
         1.2      "APOLLO NCE"...........................................................................1
         1.3      "APOLLO PATENT RIGHTS".................................................................2
         1.4      "COMMERCIALLY REASONABLE EFFORTS"......................................................2
         1.5      "CONTROL" OR "CONTROLLED"..............................................................2
         1.6      "EFFECTIVE DATE".......................................................................2
         1.7      [ * CON * ]............................................................................2
         1.8      [ * CON * ]............................................................................3
         1.9      "FIELD"................................................................................3
         1.10     "FIRST COMMERCIAL SALE"................................................................3
         1.11     [ * CON * ]............................................................................3
         1.12     "HSR ACT"..............................................................................3
         1.13     "INTERIM CLINICAL EVALUATION POINT" OR "ICE"...........................................3
         1.14     "IND FILING"...........................................................................3
         1.15     "IND TRACK"............................................................................3
         1.16     "KNOW-HOW".............................................................................3
         1.17     "LICENSED PRODUCT(S)"..................................................................3
         1.18     "MAJOR COUNTRY"........................................................................4
         1.19     "NET SALES"............................................................................4
         1.20     [ * CON * ]............................................................................5
         1.21     [ * CON * ]............................................................................5
         1.22     "OPTION TERM"..........................................................................5
         1.23     "PRODUCT"..............................................................................5
         1.24     "PRODUCT TYPE".........................................................................5
         1.25     "REGULATORY APPROVAL"..................................................................5
         1.26     "REGULATORY AUTHORITY".................................................................5
         1.27     "SCIENTIFIC REVIEW COMMITTEE"..........................................................6
         1.28     "START PHASE III"......................................................................6
         1.29     "TERRITORY"............................................................................6
         1.30     "THIRD PARTY(IES)".....................................................................6
         1.31     "TYPE A PRODUCT".......................................................................6
         1.32     "TYPE B PRODUCT".......................................................................6
         1.33     "TYPE C PRODUCT".......................................................................6
         1.34     "TYPE D PRODUCT".......................................................................6
         1.35     "TYPE E PRODUCT".......................................................................6
         1.36     [ * CON * ]............................................................................6
         1.37     "VALID CLAIM"..........................................................................6

2.       RIGHTS GRANTED..................................................................................7

         2.1      EXCLUSIVE LICENSE......................................................................7
         2.2      SUBLICENSES............................................................................7
         2.3      GRANT OF OPTIONS.......................................................................7
                  2.3.1    TYPE C PRODUCTS...............................................................8
                  2.3.2    TYPE D PRODUCTS...............................................................8
                  2.3.3    TYPE E PRODUCTS...............................................................8
         2.4      EXERCISE OF OPTIONS....................................................................8
         2.5      [ * CON * ]............................................................................9
         2.6      HSR FILING AND APPROVALS...............................................................9
                  2.6.1    HSR FILING....................................................................9
                  2.6.2    APOLLO'S AND AHPC'S OBLIGATIONS..............................................10
                  2.6.3    ADDITIONAL APPROVALS.........................................................10


                                       i


                                                                                                 
                  2.6.4    FAILURE TO CLOSE.............................................................10
         2.7      U.S. MANUFACTURE......................................................................11

3.       CONSIDERATION..................................................................................11

         3.1      LICENSE FEE...........................................................................11
         3.2      ADDITIONAL FEES - TYPE A PRODUCT......................................................11
         3.3      ADDITIONAL FEES - TYPE B PRODUCTS.....................................................12
         3.4      OPTION TERM EXTENSION FEES............................................................12
         3.5      OPTION EXERCISE FEE...................................................................12
                  3.5.1    TYPE C PRODUCTS..............................................................12
                  3.5.2    TYPE D PRODUCTS..............................................................12
                  3.5.3    TYPE E PRODUCTS..............................................................13
         3.6      ADDITIONAL FEES - TYPE C PRODUCTS.....................................................13
         3.7      ADDITIONAL FEES - TYPE D PRODUCTS.....................................................13
         3.8      ADDITIONAL FEES - TYPE E PRODUCTS.....................................................14
         3.9      ROYALTIES.............................................................................14
                  3.9.1    ROYALTY RATES -- TYPE A PRODUCTS.............................................14
                  3.9.2    ROYALTY RATES -- TYPE B PRODUCTS.............................................15
                  3.9.3    ROYALTY RATES -- TYPE C PRODUCTS.............................................15
                  3.9.4    ROYALTY RATES -- TYPE D PRODUCTS.............................................15
                  3.9.5    ROYALTY RATES -- TYPE E PRODUCTS.............................................16
                  3.9.6    TERM AND SCOPE OF ROYALTY OBLIGATIONS........................................16
                  3.9.7    THIRD PARTY LICENSES.........................................................16
         3.10     REPORTS AND PAYMENT OF ROYALTY........................................................17
                  3.10.1   ROYALTIES PAID QUARTERLY.....................................................17
                  3.10.2   METHOD OF PAYMENT............................................................17
         3.11     MAINTENANCE OF RECORDS; AUDITS........................................................17
                  3.11.1   RECORD KEEPING BY AHPC.......................................................17
                  3.11.2   AUDIT BY APOLLO..............................................................18
                  3.11.3   UNDERPAYMENTS/OVERPAYMENTS...................................................18
                  3.11.4   RECORD KEEPING BY SUBLICENSEE................................................19
                  3.11.5   CONFIDENTIALITY..............................................................19
         3.12     TAXES AND WITHHOLDING.................................................................19
         3.13     FOREIGN EXCHANGE......................................................................19
         3.14     INTEREST..............................................................................19

4.       PRODUCT DEVELOPMENT AND COMMERCIALIZATION......................................................19

         4.1      DEVELOPMENT AND REGISTRATION OF LICENSED PRODUCTS.....................................19
                  4.1.1    DILIGENCE OBLIGATION.........................................................19
                  4.1.2    TYPE D PRODUCTS..............................................................20
                  4.1.3    TYPE E PRODUCTS..............................................................20
         4.2      EXTENSION OF TIME.....................................................................20
         4.3      COMMERCIALIZATION OF LICENSED PRODUCTS................................................20
         4.4      STATUS REPORTS........................................................................20
         4.5      APOLLO DEVELOPMENT AND REPORTING OBLIGATIONS..........................................21
                  4.5.1    DEVELOPMENT..................................................................21
                  4.5.2    SCIENTIFIC REVIEW COMMITTEE; REPORTS.........................................21

5.       REGULATORY MATTERS.............................................................................22

         5.1      REGULATORY FILINGS....................................................................22
         5.2      ADVERSE EVENT REPORTING...............................................................22


                                       ii


                                                                                                 
6.       INTELLECTUAL PROPERTY..........................................................................22

         6.1      FILING, PROSECUTION AND MAINTENANCE OF APOLLO PATENT RIGHTS...........................22
         6.2      OPTION OF AHPC TO PROSECUTE AND MAINTAIN APOLLO PATENT RIGHTS.........................23
         6.3      ENFORCEMENT OF APOLLO PATENT RIGHTS...................................................23
                  6.3.1    NOTICE AND DISCONTINUANCE OF INFRINGEMENT....................................23
                  6.3.2    CONTINUANCE OF INFRINGEMENT..................................................24
         6.4      INFRINGEMENT OF THIRD PARTY PATENTS; THIRD PARTY LICENSES.............................25
                  6.4.1    COURSE OF ACTION.............................................................25
                  6.4.2    AHPC OPTION TO NEGOTIATE.....................................................25
                  6.4.3    APOLLO OPTION TO NEGOTIATE...................................................25
                  6.4.4    THIRD PARTY INFRINGEMENT SUIT................................................25
         6.5      CERTIFICATION UNDER DRUG PRICE COMPETITION AND PATENT RESTORATION ACT.................27
         6.6      ABANDONMENT...........................................................................27
         6.7      PATENT TERM RESTORATION...............................................................27
         6.8      NOTICES REGARDING PATENTS.............................................................28

7.       REPRESENTATIONS AND WARRANTIES.................................................................29

         7.1      REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES........................................29
         7.2      REPRESENTATIONS AND WARRANTIES OF APOLLO..............................................29
         7.3      REPRESENTATION BY LEGAL COUNSEL.......................................................31
         7.4      PRIOR AGREEMENTS......................................................................31
         7.5      APOLLO DISCLAIMER.....................................................................32

8.       TERM AND TERMINATION...........................................................................32

         8.1      TERM AND EXPIRATION...................................................................32
         8.2      TERMINATION BY AHPC...................................................................32
         8.3      TERMINATION BY APOLLO FOR LACK OF DILIGENCE...........................................32
                  8.3.1    FAILURE TO USE COMMERCIALLY REASONABLE EFFORTS...............................33
                  8.3.2    FAILURE TO FILE IND..........................................................33
         8.4      TERMINATION FOR CAUSE.................................................................33
         8.5      EFFECT OF TERMINATION.................................................................34
                  8.5.1    TERMINATION BY AHPC..........................................................34
                  8.5.2    TERMINATION BY APOLLO........................................................34
                  8.5.3    EFFECT OF BANKRUPTCY.........................................................35
         8.6      SURVIVAL OF OBLIGATIONS...............................................................35

9.       INDEMNIFICATION AND INSURANCE..................................................................35

         9.1      INDEMNIFICATION BY AHPC...............................................................35
         9.2      INDEMNIFICATION BY APOLLO.............................................................36
         9.3      CONDITIONS TO INDEMNIFICATION.........................................................36
         9.4      SETTLEMENTS...........................................................................37
         9.5      LIMITATION OF LIABILITY...............................................................37
         9.6      INSURANCE.............................................................................37

10.      CONFIDENTIALITY................................................................................38

         10.1     NONDISCLOSURE OBLIGATION..............................................................38
         10.2     PERMITTED DISCLOSURES.................................................................39
         10.3     RETURN OF INFORMATION.................................................................39
         10.4     DISCLOSURE OF AGREEMENT...............................................................39
         10.5     PUBLICITY.............................................................................39


                                      iii


                                                                                                 
11.      MISCELLANEOUS..................................................................................40

         11.1     FORCE MAJEURE.........................................................................40
         11.2     ASSIGNMENT............................................................................40
                  11.2.1   ASSIGNMENT BY APOLLO.........................................................40
                  11.2.2   ASSIGNMENT BY AHPC...........................................................40
                  11.2.3   BINDING NATURE OF ASSIGNMENT.................................................41
         11.3     NO WAIVER.............................................................................41
         11.4     SEVERABILITY..........................................................................41
         11.5     RELATIONSHIP BETWEEN THE PARTIES......................................................41
         11.6     CORRESPONDENCE AND NOTICES............................................................41
                  11.6.1   ORDINARY NOTICES.............................................................41
                  11.6.2   EXTRAORDINARY NOTICES........................................................41
                  11.6.3   ADDRESSES....................................................................42
         11.7     CHOICE OF LAW; DISPUTE RESOLUTION.....................................................42
         11.8     PROVISIONS FOR INSOLVENCY.............................................................44
                  11.8.1   EFFECT ON LICENSES...........................................................44
                  11.8.2   RIGHTS TO INTELLECTUAL PROPERTY..............................................45
                  11.8.3   AHPC'S RIGHTS................................................................45
         11.9     EXPORT CONTROLS.......................................................................46
         11.10    NON-USE OF NAMES......................................................................46
         11.11    ENTIRE AGREEMENT; AMENDMENT...........................................................46
         11.12    HEADINGS..............................................................................46
         11.13    COUNTERPARTS..........................................................................47
         11.14    FURTHER ACTIONS.......................................................................47




Exhibit A - Apollo Patent Rights
Exhibit B - Definition of Estrogen Excerpted from U.S. Patent 5,554,601
Exhibit C - Adverse Drug Experience Reporting Procedures


                                       iv


                          LICENSE AND OPTION AGREEMENT

         THIS LICENSE AND OPTION AGREEMENT (the "Agreement") is entered into as
of this 8th day of February, 1999, by and between APOLLO BIOPHARMACEUTICS, INC.,
a corporation organized and existing under the laws of the state of Delaware and
having a place of business at One Broadway, Suite 600, Cambridge, Massachusetts
02142 ("Apollo"), and AMERICAN HOME PRODUCTS CORPORATION, acting through its
WYETH-AYERST LABORATORIES DIVISION, a corporation organized and existing under
the laws of the State of Delaware and having a place of business at 555
Lancaster Avenue, St. Davids, Pennsylvania 19087, USA ("AHPC"). Both Apollo and
AHPC are referred to herein individually as a "Party" and collectively as the
"Parties".

         WHEREAS, Apollo has rights to certain patents and/or patent
applications and know-how pertaining to the use of certain estrogen compounds
for the treatment or prevention of neurodegenerative diseases, some of which
rights were obtained pursuant to and are governed by a license granted to Apollo
by [ * CON * ]; and

         WHEREAS, AHPC desires to obtain an exclusive license under such
patents, patent applications and know-how and Apollo desires to grant such a
license to AHPC.

         NOW THEREFORE, in consideration of the foregoing premises and the
mutual promises, covenants and conditions set forth below, the Parties,
intending to be legally bound, hereby agree as follows:

1.       DEFINITIONS.

         1.1      "AFFILIATE(S)" shall mean any corporation, company,
                  partnership, joint venture and/or firm which controls, is
                  controlled by or is under common control with a Party. For
                  purposes of this Section 1.1, "control" shall mean (a) in the
                  case of corporate entities, direct or indirect ownership of at
                  least fifty percent (50%) of the stock or shares having the
                  right to vote for the election of directors, and (b) in the
                  case of non-corporate entities, direct or indirect ownership
                  of at least fifty percent (50%) of the equity interest with
                  the power to direct the management and policies of such
                  non-corporate entities, PROVIDED, HOWEVER, that, for purposes
                  of this Agreement, the term "Affiliate" shall not include any
                  entity with respect to which there is a contractual
                  restriction on the right to elect a majority of the directors
                  or to otherwise direct the management and policies of such
                  entity, until such time as such restrictions are no longer in
                  effect.

         1.2      "APOLLO NCE" shall mean a compound, consisting of an [ * CON *
                  ] and useful or potentially useful as an active ingredient in
                  a pharmaceutical product, the making, using or selling of
                  which would, but for the licenses granted hereunder, infringe
                  a Valid Claim included within the Apollo



                  Patent Rights which Valid Claim reads on the composition of
                  matter of such Compound.

         1.3      "APOLLO PATENT RIGHTS" shall mean all patents or patent
                  applications and all divisionals, continuations,
                  continuations-in-part, reissues, renewals, substitutions,
                  extensions, supplementary protection certificates and foreign
                  counterparts thereof, existing as of the Effective Date or
                  filed or issuing during the term of this Agreement which (i)
                  are Controlled by Apollo or its Affiliates and (ii) contain at
                  least one claim which reads on either the composition of
                  matter of any Product or a method of using any Product in the
                  Field. For the sake of clarity, a "method of using any
                  Product" shall not be deemed to include any drug delivery
                  system which may otherwise be encompassed by the Apollo Patent
                  Rights, except to the extent that, with respect to Type D
                  Products and/or Type E Products, on a Product by Product
                  basis, such drug delivery system is the only mechanism or
                  method for delivering such Product to a patient in order to
                  achieve both the desired safety profile and the desired
                  therapeutic or prophylactic effect in the Field. The Apollo
                  Patent Rights existing as of the Effective Date are listed in
                  Exhibit A attached hereto.

         1.4      "COMMERCIALLY REASONABLE EFFORTS" shall mean efforts and
                  resources normally used by a Party for a product owned by it
                  or to which it has rights, which is of similar market
                  potential at a similar stage in its development or product
                  life, taking into account issues of safety and efficacy,
                  product profile, the competitiveness of the marketplace, the
                  proprietary position of the compound or product, the
                  regulatory structure involved, the profitability of the
                  applicable products, and other relevant factors.

         1.5      "CONTROL" OR "CONTROLLED" shall mean with respect to any (i)
                  item of information, including, without limitation, Know-How,
                  or (ii) intellectual property right, the possession (whether
                  by ownership or license) by a Party of the ability to grant to
                  the other Party access and/or a license as provided herein
                  under such item or right without violating the terms of any
                  agreement or other arrangements with any Third Party.

         1.6      "EFFECTIVE DATE" shall mean the next business day following
                  the last to occur of: (i) the delivery to each Party of fully
                  executed counterparts of this Agreement, (ii) a determination
                  made by AHPC's finance committee that a notification of this
                  Agreement is not required to be made under the HSR Act, and
                  (iii) if notification of this Agreement is required to be made
                  under the HSR Act, the expiration or earlier termination of
                  any notice and waiting period under the HSR Act.

         1.7 [ * CON * ]


                                       2


         1.8      [ * CON * ]

         1.9      "FIELD" shall mean [ * CON * ].

         1.10     "FIRST COMMERCIAL SALE" shall mean, with respect to any
                  Licensed Product, the first sale of such Licensed Product, for
                  use in the Field, by AHPC, its Affiliates or sublicensees, to
                  a Third Party in any country of the Territory, after such
                  Licensed Product has been granted Regulatory Approval for use
                  in the Field by the competent Regulatory Authorities in such
                  country.

         1.11     [ * CON * ] shall mean that certain Patent License Agreement
                  With Research Component entered into [ * CON * ].

         1.12     "HSR ACT" shall mean the Hart-Scott-Rodino Antitrust
                  Improvements Act of 1976, as amended, and the rules and
                  regulations promulgated thereunder.

         1.13     "INTERIM CLINICAL EVALUATION POINT" or "ICE" shall mean, with
                  respect to any Licensed Product, [ * CON * ].

         1.14     "IND FILING" shall mean the submission by AHPC (with respect
                  to Type A, Type B or Type C Products) or by either Party (with
                  respect to Type D or Type E Products) of an application to the
                  United States Food and Drug Administration ("FDA") to conduct
                  clinical trials with a Product and the allowance by the FDA to
                  commence such studies.

         1.15     "IND TRACK" shall mean the nomination by AHPC, its Affiliates
                  or sublicensees of a Licensed Product for development to IND
                  Filing, according to AHPC's standard internal criteria, an
                  example of which has been provided by AHPC to Apollo on or
                  before the date this Agreement was signed by the Parties.

         1.16     "KNOW-HOW" shall mean all know-how, processes, materials,
                  information, data and analyses including any copyright
                  relating thereto Controlled by Apollo as of the Effective Date
                  or coming into the Control of Apollo during the term of this
                  Agreement relating to estrogen compounds with respect to the
                  Field.

         1.17     "LICENSED PRODUCT(S)" shall mean any Type A Product or Type B
                  Product, and upon AHPC's exercise of the option(s) granted
                  under Section 2.3 hereof and the payment of the applicable
                  option exercise fee, any Type C Product, Type D Product and/or
                  Type E Product, as applicable. For purposes of this Agreement,
                  if two or more Licensed Products contain the same active
                  ingredients they shall be considered to be the same Licensed

                                       3


                  Product. Additionally, if one or more of the following
                  products become Licensed Products under this Agreement they
                  shall be considered to be the same Licensed Product for all
                  purposes under this Agreement: [ * CON * ].

         1.18     "MAJOR COUNTRY" shall mean the USA, Canada, France, Germany,
                  U.K., Italy, Japan.

         1.19     "NET SALES" shall mean with respect to a Licensed Product, the
                  gross amount invoiced by AHPC, its Affiliates and/or its
                  sublicensees, on sales or other dispositions of such Licensed
                  Product to unrelated Third Parties, less the following items,
                  provided that such items are actually included in the price
                  charged and do not exceed reasonable and customary amounts in
                  the country in which such sale occurred:

                           (a)      Trade, cash and quantity discounts actually
                                    allowed and taken directly with respect to
                                    such sales;

                           (b)      Excises, sales taxes or other taxes imposed
                                    upon and paid directly with respect to such
                                    sales (excluding national, state or local
                                    taxes based on income);

                           (c)      Amounts repaid or credited by reason of
                                    rejections, defects, recalls or returns or
                                    because of rebates or retroactive price
                                    reduction; and

                           (d)      freight, transportation and insurance.

                  Such amounts shall be determined from the books and records of
                  AHPC, its Affiliates and/or its sublicensees, maintained in
                  accordance with generally accepted accounting principles,
                  consistently applied.

                  If such Licensed Product is sold in bulk (as distinguished
                  from packaged pharmaceutical form) for resale in packaged or
                  finished form, Net Sales shall be calculated by determining
                  the quantity of such Licensed Product in packaged
                  pharmaceutical form that would reasonably be produced from the
                  bulk quantity of such Licensed Product so sold, and by
                  multiplying such quantity by the average price for such
                  Licensed Product in packaged pharmaceutical form during the
                  applicable royalty reporting period. If such Licensed Product
                  is sold, or otherwise commercially disposed of for value
                  (including, without limitation, disposition in connection with
                  the delivery of other products or services), in a transaction
                  that is not a sale for cash to an independent Third Party,
                  then the gross amount invoiced in such transaction shall be
                  deemed to be the gross amount that would have been paid had
                  there been such a sale at the average sale price of such
                  Licensed Product during the applicable royalty reporting
                  period; provided, however, that sale of such


                                       4


                  Licensed Product in bulk to a Third Party end user who
                  repackages but does not resell such Licensed Product shall be
                  calculated at the actual transaction price.

                  Net Sales shall not include any consideration received by
                  AHPC, its Affiliates or its licensees or sublicensees in
                  respect of the sale, use or other disposition of such Licensed
                  Product in a country as part of a clinical trial prior to the
                  receipt of all Regulatory Approvals required to commence full
                  commercial sales of such Licensed Product in such country,
                  except sales under "treatment INDS," "named patient sales,"
                  "compassionate use sales," or their equivalents pursuant to
                  which AHPC, its Affiliates or licenses and sublicensees is/are
                  entitled, under applicable laws, regulations and regulatory
                  policies, to recover costs incurred in providing such Licensed
                  Products to the patients.

         1.20     [ * CON * ]

         1.21     [ * CON * ]

         1.22     "OPTION TERM" shall mean the [ * CON * ] ([ * CON * ]) year
                  period commencing on the Effective Date and any extensions of
                  such [ * CON * ] ([ * CON * ]) year period made in accordance
                  with Section 2.4 hereof or as may otherwise be agreed to by
                  the Parties in writing.

         1.23     "PRODUCT" shall mean any pharmaceutical product containing, as
                  an active ingredient, [ * CON * ] or an Apollo NCE.

         1.24     "PRODUCT TYPE" shall mean either all Type A Products, all Type
                  B Products, all Type C Products, all Type D Products or all
                  Type E Products.

         1.25     "REGULATORY APPROVAL" shall mean the technical, medical and
                  scientific licenses, registrations, authorizations and
                  approvals (including, without limitation, approvals of New
                  Drug Applications, supplements and amendments, pre- and post-
                  approvals, pricing and third party reimbursement approvals,
                  and labeling approvals) of any national, supra-national,
                  regional, state or local regulatory agency, department,
                  bureau, commission, council or other governmental entity,
                  necessary for the development, manufacture, distribution,
                  marketing, promotion, offer for sale, use, import, export or
                  sale of Licensed Product(s) in a regulatory jurisdiction.

         1.26     "REGULATORY AUTHORITY" shall mean any mean any national (e.g.,
                  the United States Food and Drug Administration),
                  supra-national (e.g., the European Commission, the Council of
                  the European Union, or the


                                       5


                  European Agency for the Evaluation of Medicinal Products),
                  regional, state or local regulatory agency, department,
                  bureau, commission, council or other governmental entity in
                  each country of the Territory involved in the granting of
                  Regulatory Approval for the Licensed Product.

         1.27     "SCIENTIFIC REVIEW COMMITTEE" shall have the meaning set forth
                  in Section 4.5.2 hereof.

         1.28     "START PHASE III" shall mean the first dosing of a patient in
                  a pivotal, registration clinical trial post-Phase II, under a
                  protocol approved by a governmental regulatory agency, to the
                  extent necessary (e.g., the U.S. FDA), in a Major Country.

         1.29     "TERRITORY" shall mean all countries of the world.

         1.30     "THIRD PARTY(IES)" shall mean any person(s) or entity(ies)
                  other than AHPC, Apollo or their respective Affiliates.

         1.31     "TYPE A PRODUCT" shall mean a Product, [ * CON * ], and (iii)
                  the manufacture, use or sale of which, but for the licenses
                  granted hereunder, would infringe a Valid Claim included
                  within the Apollo Patent Rights.

         1.32     "TYPE B PRODUCT" shall mean a Product, [ * CON * ] the
                  manufacture, use or sale of which, but for the licenses
                  granted hereunder, would infringe a Valid Claim included
                  within the Apollo Patent Rights.

         1.33     "TYPE C PRODUCT" shall mean a Product, [ * CON * ]
                  manufacture, use or sale of which, but for the licenses
                  granted hereunder, would infringe a Valid Claim included
                  within the Apollo Patent Rights.

         1.34     "TYPE D PRODUCT" shall mean a Product, [ * CON * ] the
                  manufacture, use or sale of which, but for the licenses
                  granted hereunder, would infringe a Valid Claim included
                  within the Apollo Patent Rights.

         1.35     "TYPE E PRODUCT" shall mean a Product [ * CON * ].

         1.36     [ * CON * ]

         1.37     "VALID CLAIM" shall mean an unexpired claim of an issued and
                  unexpired patent or a claim of a pending patent application,
                  each forming part of the Apollo Patent Rights, which claim has
                  not been (i) declared invalid or unenforceable by a government
                  agency or an order of a court or other tribunal of competent
                  jurisdiction from which no appeal has been or can be taken, or
                  (ii) admitted to be invalid or unenforceable through
                  reexamination, disclaimer or otherwise. Notwithstanding the
                  foregoing, if


                                       6


                  a claim of a pending patent application has not issued as a
                  claim of an issued patent within the Apollo Patent Rights,

                           (a)      in the case of United States patent
                                    applications, within [ * CON * ] ([ * CON *
                                    ]) years after the filing date from which
                                    such claim takes priority or

                           (b)      in the case of patent applications filed in
                                    countries other than the United States, [ *
                                    CON * ] ([ * CON * ]) years after the later
                                    of (x) the filing date from which such claim
                                    takes priority or (y) if such national
                                    patent application takes priority from a
                                    patent application filed under the Patent
                                    Cooperation Treaty ("PCT"), the filing date
                                    of such PCT patent application, PROVIDED,
                                    HOWEVER, that with respect to Japanese
                                    patent applications, such [ * CON * ] ([ *
                                    CON * ]) year period shall begin on the date
                                    that the first national patent application
                                    containing such claim is filed in Japan,

                  such pending claim shall cease to be a Valid Claim for
                  purposes of this Agreement unless and until such claim becomes
                  an issued claim of an issued patent within the Apollo Patent
                  Rights.

2.       RIGHTS GRANTED.

         2.1      EXCLUSIVE LICENSE. Apollo hereby grants to AHPC an exclusive
                  (exclusive, even as to Apollo and Apollo's Affiliates) license
                  under the Apollo Patent Rights and to use the Know-How to
                  develop, make, have made, use, market, promote, import, offer
                  for sale, and sell, in the Territory, Licensed Products for
                  use in the Field. With respect to any Apollo Patent Rights
                  which Apollo Controls by virtue of the license granted to
                  Apollo by [ * CON * ], the license granted to AHPC under this
                  Section 2.1 shall be subject only to (i) the non-exclusive
                  license granted to the United States Government, which license
                  is described in Section 2.1 of the [ * CON * ], and (ii) [ *
                  CON * ] reservation of rights, on behalf of the [ * CON * ],
                  to practice under such Apollo Patent Rights for [ * CON * ]
                  own non-commercial research purposes.

         2.2      SUBLICENSES. AHPC shall have the right to grant one or more
                  sublicenses of the license granted to it under Section 2.1
                  hereof to any of its Affiliates or to any Third Party,
                  provided, however, that after granting any such sublicense,
                  AHPC shall provide Apollo with written notice that such
                  sublicense has been granted.

         2.3      GRANT OF OPTIONS.


                                       7


                  2.3.1    TYPE C PRODUCTS. Apollo hereby grants to AHPC an
                           exclusive option to obtain an exclusive (exclusive,
                           even as to Apollo and its Affiliates) license under
                           the Apollo Patent Rights and to use the Know-How to
                           develop, make, have made, use, market, promote,
                           import, offer for sale, and sell, in the Territory,
                           Type C Products for use in the Field. In the event
                           that AHPC, in accordance with Section 2.4 hereof,
                           exercises the option provided under this Section
                           2.3.1, Type C Products shall be considered to be
                           Licensed Products for purposes of this Agreement as
                           of the date the applicable option exercise fee is
                           paid in accordance with Section 3.5 hereof.

                  2.3.2    TYPE D PRODUCTS. Apollo hereby grants to AHPC an
                           exclusive option to obtain an exclusive (exclusive,
                           even as to Apollo and its Affiliates) license under
                           the Apollo Patent Rights and to use the Know-How How
                           to develop, make, have made, use, market, promote,
                           import, offer for sale, and sell, in the Territory,
                           Type D Products for use in the Field. In the event
                           that AHPC, in accordance with Section 2.4 hereof,
                           exercises the option provided under this Section
                           2.3.1, Type D Products shall be considered to be
                           Licensed Products for purposes of this Agreement as
                           of the date the applicable option exercise fee is
                           paid in accordance with Section 3.5 hereof.

                  2.3.3    TYPE E PRODUCTS. Apollo hereby grants to AHPC an
                           exclusive option to obtain an exclusive (exclusive,
                           even as to Apollo and its Affiliates) license under
                           the Apollo Patent Rights and to use the Know-How to
                           develop, make, have made, use, market, promote,
                           import, offer for sale, and sell, in the Territory,
                           Type E Products for use in the Field, on a Type E
                           Product by Type E Product basis. In the event that
                           AHPC, in accordance with Section 2.4 hereof,
                           exercises the option provided under this Section
                           2.3.1, with respect to a Type E Product, such Type E
                           Product shall be considered to be a Licensed Product
                           for purposes of this Agreement as of the date the
                           applicable option exercise fee is paid in accordance
                           with Section 3.5 hereof.

         2.4      EXERCISE OF OPTIONS. AHPC may exercise any or all of the
                  options granted to it under Section 2.3.1 hereof by providing
                  to Apollo written notice of AHPC's election to do so prior to
                  the end of the Option Term. AHPC may exercise any or all of
                  the options granted to it under Section 2.3.2 or 2.3.3 hereof
                  by providing to Apollo written notice of AHPC's election to do
                  so no later than forty-five (45) days after AHPC receives the
                  final report at the final meeting of the Scientific Review
                  Committee. After exercising its option with respect to one or
                  more Product Types as set forth


                                       8


                  above, AHPC shall pay the applicable option exercise fee(s) as
                  and when required under Section 3.5 hereof, at which time the
                  applicable Product Type(s) shall become Licensed Products
                  under this Agreement. Notwithstanding the foregoing, with
                  respect to Type C Products and Type E Products, AHPC may
                  extend the Option Term by up to [ * CON * ] ([ * CON * ])
                  additional [ * CON * ] ([ * CON * ]) year periods, by (i)
                  providing written notice to Apollo of its intent to so extend
                  the Option Term at least ninety (90) days prior to the
                  expiration of the then current Option Term (as such Option
                  Term may have been extended in accordance with this Section
                  2.4) and (ii) the payment of the appropriate option term
                  extension fee as set forth in Section 3.4 hereof.

         2.5      [ * CON * ]. AHPC acknowledges that a portion of the Apollo
                  Patent Rights and Know-How licensed to AHPC hereunder or
                  pertaining to the options granted to AHPC hereunder are owned
                  by [ * CON * ] and are Controlled by Apollo pursuant to the [
                  * CON * ]. Apollo represents and warrants to AHPC and AHPC
                  acknowledges and agrees that, in the event the [ * CON * ] is
                  terminated for any reason and, at such time, AHPC is not in
                  default of its material obligations under this Agreement such
                  that Apollo would have the right to terminate this Agreement
                  as provided in Article 8 hereof, pursuant to the provisions of
                  the [ * CON * ], any licenses granted or to be granted by
                  Apollo to AHPC hereunder with respect to any Apollo Patent
                  Rights or Know-How which are subject to the [ * CON * ] (i.e.,
                  which are sublicensed, under the [ * CON * ], by Apollo to
                  AHPC) shall become direct licenses between [ * CON * ] and
                  AHPC and, as of such time and thereafter, AHPC shall make all
                  payments due hereunder with respect to such Apollo Patent
                  Rights and Know-How directly to [ * CON * ], which payments,
                  if overdue, shall bear interest until payment is made at the
                  monthly rate of [ * CON * ] percent ([ * CON * ]%) in
                  accordance with Section 5.4 of the [ * CON * ]. Any payments
                  so made to [ * CON * ] shall be deducted from any payments due
                  and payable to Apollo hereunder. Apollo agrees that it will
                  not modify or amend the [ * CON * ] without AHPC's prior
                  written consent, which consent shall not be unreasonably
                  withheld.

         2.6      HSR FILING AND APPROVALS.

                  2.6.1    HSR FILING. To the extent necessary, each of Apollo
                           and AHPC shall file, as soon as practicable after the
                           date this Agreement was signed by each of the
                           Parties, with the Federal Trade Commission (the
                           "FTC") and the Antitrust Division of the United
                           States Department of Justice (the "Antitrust
                           Division") the notification and report form (the
                           "Report") required under the HSR Act with respect to
                           the transactions as contemplated hereby and shall


                                       9


                           reasonably cooperate with the other Party to the
                           extent necessary to assist the other Party in the
                           preparation of its Report and to proceed to obtain
                           necessary approvals under the HSR Act, including but
                           not limited to the expiration or earlier termination
                           of any and all applicable waiting periods required by
                           the HSR Act. AHPC shall be responsible for paying any
                           fees required to be paid to any governmental agency
                           in connection with making such filings and each party
                           shall bear its own expenses, including, without
                           limitation, legal fees, incurred in connection with
                           preparing such filings.

                  2.6.2    APOLLO'S AND AHPC'S OBLIGATIONS Each of Apollo and
                           AHPC shall use its good faith efforts to eliminate
                           any concern on the part of any court or government
                           authority regarding the legality of the proposed
                           transaction, including, if required by federal or
                           state antitrust authorities, promptly taking all
                           steps to secure government antitrust clearance,
                           including, without limitation, cooperating in good
                           faith with any government investigation including the
                           prompt production of documents and information
                           demanded by a second request for documents and of
                           witnesses if requested.

                  2.6.3    ADDITIONAL APPROVALS. Apollo and AHPC will cooperate
                           and use respectively all reasonable efforts to make
                           all other registrations, filings and applications, to
                           give all notices and to obtain as soon as practicable
                           all governmental or other consents, transfers,
                           approvals, orders, qualifications authorizations,
                           permits and waivers, if any, and to do all other
                           things necessary or desirable for the consummation of
                           the transactions as contemplated hereby. Neither
                           Party shall be required, however, to divest products
                           or assets or materially change its business if doing
                           so is a condition of obtaining approval under the HSR
                           Act or other governmental approvals of the
                           transactions contemplated by this Agreement.

                  2.6.4    FAILURE TO CLOSE. In the event that on or before [ *
                           CON * ], [ * CON * ], (i) AHPC has not paid to Apollo
                           the initial [ * CON * ] dollar ($[ * CON * ]) license
                           fee as required under Section 3.1 hereof and (ii)
                           AHPC's finance committee fails to make a
                           determination as to whether or not a notification is
                           required to be filed under the HSR Act or, in the
                           event that AHPC's finance committee has determined
                           that a notification must be filed under the HSR Act,
                           AHPC has not filed such notification, then Apollo,
                           prior to the Effective Date, shall have the right to
                           terminate this Agreement by providing AHPC with
                           written notice to such effect. Upon AHPC's receipt of
                           such written notice, this Agreement shall


                                       10


                           be null, void and of no effect and neither Party
                           shall have any further rights or obligations
                           hereunder. Notwithstanding the foregoing, the
                           provision of such notice shall have no effect on any
                           other agreements that may exist between the Parties,
                           including, without limitation, that certain
                           confidential disclosure agreement entered into by the
                           Parties on or about [ * CON * ], [ * CON * ].

         2.7      U.S. MANUFACTURE. To the extent that any Licensed Product
                  which (a) is sold in the United States and (b) embodies an
                  invention or is made through the use of an invention which
                  invention is (i) claimed in one or more of the Apollo Patent
                  Rights that Apollo Controls by virtue of the license granted
                  to it by [ * CON * ] under the [ * CON * ] and (ii) a subject
                  invention (as such term is defined in 37 CFR Section 401.2) of
                  a funding agreement between an agency of the United States
                  Government and [ * CON * ], AHPC agrees that it shall
                  substantially manufacture such Licensed Product in the United
                  States, its territories or possessions unless such requirement
                  is waived by the funding agency. Apollo, upon AHPC's request,
                  shall cooperate with AHPC and [ * CON * ] in seeking a waiver
                  of such requirement.

3.       CONSIDERATION.

         3.1      LICENSE FEE. In partial consideration for the rights and
                  licenses granted to AHPC hereunder, AHPC, on the Effective
                  Date, shall pay to Apollo a license fee in the amount of [ *
                  CON * ] dollars ($[ * CON * ]). Additionally, within thirty
                  (30) days after Apollo has provided AHPC with written evidence
                  that a European Patent encompassed within the Apollo Patent
                  Rights and corresponding to United States Patent [ * CON * ]
                  has been granted and published, AHPC shall pay to Apollo the
                  sum of [ * CON * ] dollars ($[ * CON * ]), provided, however,
                  that such amount shall be payable one time only and shall
                  become due and payable only if, in AHPC's reasonable judgment,
                  the claim structure of such European Patent is materially no
                  less comprehensive than the claim structure in United States
                  Patent [ * CON * ].

         3.2      ADDITIONAL FEES - TYPE A PRODUCT. In further consideration for
                  the rights and licenses granted to AHPC hereunder with respect
                  to Type A Product, AHPC shall pay to Apollo additional license
                  fees as follows for each Type A Product developed by AHPC, its
                  Affiliates or sublicensees hereunder for use in the Field,
                  each such payment being due and payable (i) within thirty (30)
                  days after the occurrence of the event triggering such payment
                  hereunder and (ii) only one time with respect to any Type A
                  Product:

                  [ * CON * ]


                                       11


         3.3      ADDITIONAL FEES - TYPE B PRODUCTS. In further consideration
                  for the rights and licenses granted to AHPC hereunder with
                  respect to Type B Products, AHPC shall pay to Apollo
                  additional license fees as follows for each Type B Product
                  developed by AHPC, its Affiliates or sublicensees hereunder
                  for use in the Field, each such payment being due and payable
                  (i) within thirty (30) days after the occurrence of the event
                  triggering such payment hereunder and (ii) only one time with
                  respect to any Type B Product:

                           [ * CON * ]

         3.4      OPTION TERM EXTENSION FEES. In the event that AHPC, pursuant
                  to Section 2.4 hereof, elects to extend the Option Term for [
                  * CON * ] ([ * CON * ]) additional [ * CON * ] ([ * CON * ])
                  year period, AHPC shall pay to Apollo an option extension fee
                  in the amount of [ * CON * ] dollars ($[ * CON * ]) which fee
                  shall be due and payable on the [ * CON * ] anniversary of the
                  Effective Date and in the event that AHPC, pursuant to Section
                  2.4 hereof, elects to extend the Option Term for a [ * CON * ]
                  additional [ * CON * ] ([ * CON * ]) year period, AHPC shall
                  also pay to Apollo an additional option extension fee in the
                  amount of [ * CON * ] ($[ * CON * ]), which fee shall be due
                  and payable on the [ * CON * ] anniversary of the Effective
                  Date.

         3.5      OPTION EXERCISE FEE.

                  3.5.1    TYPE C PRODUCTS. In the event that AHPC exercises the
                           option granted to it under Section 2.3.1 hereof, AHPC
                           shall pay to Apollo an option exercise fee in the
                           amount of [ * CON * ] dollars ($[ * CON * ]) which
                           option exercise fee shall be due and payable within
                           ten (10) business days after the later of (i)
                           Apollo's receipt of AHPC's written notice exercising
                           its option under Section 2.3.1 or (ii) if a
                           notification is required to be filed under the HSR
                           Act with respect to AHPC's exercise of the option
                           under Section 2.3.1 hereof, the expiration or early
                           termination of any applicable notice and waiting
                           period under the HSR Act.

                  3.5.2    TYPE D PRODUCTS. In the event that AHPC exercises the
                           option granted to it under Section 2.3.2 hereof, AHPC
                           shall pay to Apollo an option exercise fee in the
                           amount of [ * CON * ] dollars ($[ * CON * ]) which
                           option exercise fee shall be due and payable within
                           ten (10) business days after the later of (i)
                           Apollo's receipt of AHPC's written notice exercising
                           its option under Section 2.3.2 or (ii) if a
                           notification is required to be filed under the HSR
                           Act with respect to AHPC's exercise of the option
                           under Section 2.3.2


                                       12


                           hereof, the expiration or early termination of any
                           applicable notice and waiting period under the HSR
                           Act.

                  3.5.3    TYPE E PRODUCTS. In the event that AHPC exercises the
                           option granted to it under Section 2.3.3 hereof, AHPC
                           shall pay to Apollo an option exercise fee in the
                           amount of [ * CON * ] dollars ($[ * CON * ]) which
                           option exercise fee shall be due and payable within
                           ten (10) business days after the later of (i)
                           Apollo's receipt of AHPC's written notice exercising
                           its option under Section 2.3.3 or (ii) if a
                           notification is required to be filed under the HSR
                           Act with respect to AHPC's exercise of the option
                           under Section 2.3.3 hereof, the expiration or early
                           termination of any applicable notice and waiting
                           period under the HSR Act.

         3.6      ADDITIONAL FEES - TYPE C PRODUCTS. In the event that AHPC
                  exercises its option under Section 2.3.1 hereof, then in
                  further consideration for the rights and licenses granted to
                  AHPC hereunder with respect to Type C Products, AHPC shall pay
                  to Apollo additional license fees as follows for each Type C
                  Product developed by AHPC, its Affiliates or sublicensees
                  hereunder for use in the Field, each such payment being due
                  and payable (i) within thirty (30) days after the occurrence
                  of the event triggering such payment hereunder and (ii) only
                  one time with respect to any Type C Product:

                           [ * CON * ]

         3.7      ADDITIONAL FEES - TYPE D PRODUCTS. In the event that AHPC
                  exercises its option under Section 2.3.2 hereof, then in
                  further consideration for the rights and licenses granted to
                  AHPC hereunder with respect to Type D Products, AHPC shall pay
                  to Apollo additional license fees as follows for each Type D
                  Product developed by AHPC, its Affiliates or sublicensees
                  hereunder for use in the Field, each such payment being due
                  and payable (i) within thirty (30) days after the occurrence
                  of the event triggering such payment hereunder and (ii) only
                  one time with respect to any Type D Product:

                           [ * CON * ]

                  Notwithstanding the foregoing, the amounts payable by AHPC
                  under parts (k), (l), (m), (n), (o), and (p) of this Section
                  3.7 shall be payable only for the [ * CON * ] label indication
                  per Type D Product to trigger each such payment, with [ * CON
                  * ] percent ([ * CON * ]%) of the amount specified being
                  payable for the [ * CON * ] such Type D Product label
                  indication to trigger such payment and [ * CON * ] percent ([
                  * CON *


                                       13


                  ]%) of the amount specified being payable for the [ * CON * ]
                  such Type D Product label indication to trigger such payment.

         3.8      ADDITIONAL FEES - TYPE E PRODUCTS. In the event that AHPC
                  exercises its option under Section 2.3.3 hereof, then in
                  further consideration for the rights and licenses granted to
                  AHPC hereunder with respect to Type E Products, AHPC shall pay
                  to Apollo additional license fees as follows for each Type E
                  Product developed by AHPC, its Affiliates or sublicensees
                  hereunder for use in the Field, each such payment being due
                  and payable (i) within thirty (30) days after the occurrence
                  of the event triggering such payment hereunder and (ii) only
                  one time with respect to any Type E Product:

                           [ * CON * ]

                  Notwithstanding the foregoing, the amounts payable by AHPC
                  under parts (k), (l), (m), (n), (o), and (p) of this Section
                  3.8 shall be payable only for the [ * CON * ] label
                  indications per Type E Product to trigger each such payment,
                  with [ * CON * ] percent ([ * CON * ]%) of the amount
                  specified being payable for the [ * CON * ] such Type E
                  Product label indication to trigger such payment and [ * CON *
                  ] percent ([ * CON * ]%) of the amount specified being payable
                  for the [ * CON * ] such Type E Product label indication to
                  trigger such payment.

         3.9      ROYALTIES.

                  3.9.1    ROYALTY RATES -- TYPE A PRODUCTS. In further
                           consideration for the licenses and other rights
                           granted to AHPC hereunder with respect to Type A
                           Products, AHPC shall pay to Apollo royalties, with
                           respect to each Type A Product sold by AHPC, its
                           Affiliates or sublicensees, as follows:

                                    [ * CON * ]

                           Each such quarterly payment shall be made at the time
                           set forth in Section 3.10.1 hereof, with the first
                           such quarterly payment being due and payable after
                           the end of the Calendar Quarter in which such First
                           Commercial Sale was made. Notwithstanding the
                           foregoing, in the event that, during any Calendar
                           Quarter, AHPC, its Affiliates, or sublicensees sell a
                           Type A Product in one or more countries of the
                           Territory where there is not a Valid Claim covering
                           the use of such Type A product in the Field, the
                           royalty payable with respect to such Calendar Quarter
                           under this Section 3.9.1 shall be adjusted by
                           multiplying the amount set forth in Section 3.9.1(a),
                           3.9.1(b) or 3.9.1(c), as applicable, by a factor
                           equal to [ * CON * ],


                                       14


                           where [ * CON * ] is the sum of AHPC's, its
                           Affiliates' and its sublicensees' Net Sales of Type A
                           Products in such countries during such Calendar
                           Quarter and [ * CON * ] is the sum of AHPC's, its
                           Affiliates' and its sublicensees' worldwide Net Sales
                           of Type A Products during such Calendar Quarter.

                  3.9.2    ROYALTY RATES -- TYPE B PRODUCTS. In further
                           consideration for the licenses and other rights
                           granted to AHPC hereunder with respect to Type B
                           Products, AHPC shall pay to Apollo royalties in the
                           amount of [ * CON * ] ([ * CON * ]%) of the Net Sales
                           of Type B Products sold for use in the Field. In the
                           event that AHPC, its Affiliates or sublicensees has
                           been granted Regulatory Approval in any country of
                           the Territory to market a Type B Product for use both
                           in the Field and in at least one additional
                           therapeutic or prophylactic indication, [ * CON * ],
                           AHPC and Apollo shall meet to discuss the methods
                           proposed to be used by AHPC to determine what
                           proportion of such Type B Product sold in such
                           country(ies) was sold for use in the Field for
                           purposes of calculating the royalty payable
                           hereunder.

                  3.9.3    ROYALTY RATES -- TYPE C PRODUCTS. If AHPC exercises
                           the option granted to it under Section 2.3.1 hereof,
                           then in further consideration for the licenses and
                           other rights granted to AHPC hereunder with respect
                           to Type C Products, AHPC shall pay to Apollo
                           royalties in the amount of [ * CON * ] ([ * CON * ]%)
                           of the Net Sales of Type C Products sold for use in
                           the Field. In the event that AHPC, its Affiliates or
                           sublicensees has been granted Regulatory Approval in
                           any country of the Territory to market a Type C
                           Product for use both in the Field and in at least one
                           additional therapeutic or prophylactic indication [ *
                           CON * ] AHPC and Apollo shall meet to discuss the
                           methods proposed to be used by AHPC to determine what
                           proportion of such Type C Product sold in such
                           country(ies) was sold for use in the Field for
                           purposes of calculating the royalty payable
                           hereunder.

                  3.9.4    ROYALTY RATES -- TYPE D PRODUCTS. If AHPC exercises
                           the option granted to it under Section 2.3.2 hereof,
                           then in further consideration for the licenses and
                           other rights granted to AHPC hereunder with respect
                           to Type D Products, AHPC shall pay to Apollo
                           royalties in the amount of [ * CON * ] ([ * CON * ]%)
                           of the Net Sales of Type D Products sold for use in
                           the Field. In the event that AHPC, its Affiliates or
                           sublicensees has been granted Regulatory Approval in
                           a Major Country to market a Type D Product for use
                           both in the Field and in at least one additional
                           therapeutic or prophylactic indication [ * CON * ]
                           AHPC and


                                       15


                           Apollo shall meet to discuss the methods proposed to
                           be used by AHPC to determine what proportion of such
                           Type D Product sold in such country(ies) was sold for
                           use in the Field for purposes of calculating the
                           royalty payable hereunder.

                  3.9.5    ROYALTY RATES -- TYPE E PRODUCTS. If AHPC exercises
                           the option granted to it under Section 2.3.3 hereof,
                           then in further consideration for the licenses and
                           other rights granted to AHPC hereunder with respect
                           to such Type E Products, AHPC shall pay to Apollo
                           royalties in the amount of [ * CON * ].

                  3.9.6    TERM AND SCOPE OF ROYALTY OBLIGATIONS. Royalties on
                           each Licensed Product sold by or on behalf of AHPC,
                           its Affiliates or their respective sublicensees, at
                           the rates set forth in this Section 3.9 shall
                           continue on a Licensed Product by Licensed Product
                           and a country-by-country basis until the expiration
                           of the Term of this Agreement in such country with
                           respect to such Licensed Product as provided in
                           Section 8.1 hereof. No royalties shall be due upon
                           the sale or other transfer among AHPC, its Affiliates
                           or sublicensees, but in such cases the royalty shall
                           be due and calculated upon AHPC's or its Affiliates'
                           or its sublicensees' Net Sales to the first
                           independent Third Party.

                  3.9.7    THIRD PARTY LICENSES. In the event that AHPC
                           determines, based on the advice of outside patent
                           counsel selected by AHPC and reasonably acceptable to
                           Apollo, that patent licenses from Third Parties
                           (hereinafter "Third Party Patent Licenses"), are
                           required by AHPC, its Affiliates and sublicensees in
                           order to develop, make, have made, import, export,
                           use, distribute, promote, market, offer for sale or
                           sell any Licensed Product in the Field, PROVIDED,
                           HOWEVER, that in the case of Type A Products, Type B
                           Products, Type C Products or Type D Products, such
                           Third Party Patents claim the use of such Licensed
                           Products in the Field then the royalty rates set
                           forth in this Section 3.9 shall be adjusted such that
                           the royalty which AHPC is obligated to pay Apollo
                           hereunder for such Licensed Product shall be reduced
                           by [ * CON * ] cents ($[ * CON * ]) for each [ * CON
                           * ] in royalties which AHPC is obligated to pay Third
                           Parties under Third Party Patent Licenses PROVIDED,
                           HOWEVER, that the royalty payable by AHPC hereunder
                           shall not be reduced, pursuant to this Section 3.9.7,
                           to less than [ * CON * ] percent ([ * CON * ]%) of
                           the royalty that would have otherwise been due to
                           Apollo hereunder in any Calendar Quarter. For
                           purposes of this Section 3.9.7, patent claims reading
                           on (i) [ * CON * ] shall not be considered to be a
                           claim on the use of such Licensed Products in the
                           Field. To the extent that AHPC is able to


                                       16


                           do so without foregoing any attorney-client privilege
                           that AHPC may have with respect to the advice
                           provided by such outside patent counsel, AHPC, upon
                           Apollo's request, shall communicate or shall
                           authorize such outside patent counsel to communicate
                           the substance of such advice to Apollo or Apollo's
                           outside patent counsel, PROVIDED, HOWEVER, that AHPC
                           shall have no obligation whatsoever to provide Apollo
                           with a copy of any written opinion of such outside
                           patent counsel or other written communication between
                           AHPC and such outside patent counsel.

         3.10     REPORTS AND PAYMENT OF ROYALTY.

                  3.10.1   ROYALTIES PAID QUARTERLY. Within sixty (60) calendar
                           days following the close of each Calendar Quarter,
                           following the First Commercial Sale of a Licensed
                           Product, AHPC shall furnish to Apollo a written
                           report for the Calendar Quarter showing, on a Product
                           Type by Product Type basis and, only to the extent
                           necessary to calculate any reductions in royalties
                           made pursuant to Sections 3.9.1 or 6.4.4 hereof, on a
                           country-by-country basis, (i) the Net Sales of Type B
                           Products and, if the applicable options under Section
                           2.3 have been exercised, Type C Products, Type D
                           Products and Type E Products sold by AHPC, its
                           Affiliates and its sublicensees in the Territory
                           during such Calendar Quarter, and (ii) the royalties
                           payable under this Agreement for such Calendar
                           Quarter. Simultaneously with the submission of the
                           written report, AHPC shall pay to Apollo, for the
                           account of AHPC or the applicable Affiliate or
                           sublicensee, as the case may be, a sum equal to the
                           aggregate royalty due for such Calendar Quarter
                           calculated in accordance with this Agreement
                           (reconciled for any previous overpayments,
                           underpayments or credits).

                  3.10.2   METHOD OF PAYMENT. Payments to be made by AHPC to
                           Apollo under this Agreement shall be paid at AHPC's
                           option, either by bank wire transfer in immediately
                           available funds to such bank account as is designated
                           in writing by Apollo from time to time or by check in
                           immediately available funds. Royalty payments shall
                           be made in United States dollars.

         3.11     MAINTENANCE OF RECORDS; AUDITS.

                  3.11.1   RECORD KEEPING BY AHPC. AHPC shall keep and shall
                           cause its Affiliates and sublicensees to keep
                           accurate books and accounts of record in connection
                           with the sale of the Licensed Products in sufficient
                           detail to permit accurate determination of all
                           figures necessary for verification of payments
                           required to be paid


                                       17


                           hereunder. AHPC and its Affiliates and sublicensees
                           shall maintain such records for a period of at least
                           three (3) years after the end of the year in which
                           they were generated.

                  3.11.2   AUDIT BY APOLLO. Upon forty-five (45) days prior
                           written notice from Apollo, AHPC shall permit an
                           independent certified public accounting firm of
                           nationally recognized standing selected by Apollo and
                           reasonably acceptable to AHPC, to examine, at
                           Apollo's sole expense, the relevant books and records
                           of AHPC and its Affiliates as may be reasonably
                           necessary to verify the accuracy of the royalty
                           reports and royalties paid hereunder. The examination
                           shall be limited to pertinent books and records for
                           any year ending not more than thirty-six (36) months
                           prior to the date of such request. An examination
                           under this Section 3.11.2 shall not occur more than
                           once in any calendar year. Such examination shall be
                           conducted after reasonable prior written notice to
                           AHPC and during ordinary business hours. The
                           accounting firm shall provide both Apollo and AHPC a
                           written report disclosing only whether the royalty
                           reports are correct or incorrect and the specific
                           details concerning any discrepancies. No other
                           information shall be provided to Apollo. All such
                           accounting firms shall sign a confidentiality
                           agreement (in form and substance reasonably
                           acceptable to AHPC) as to any of AHPC's or its
                           Affiliate's confidential information which they are
                           provided, or to which they have access, while
                           conducting any audit pursuant to this Section 3.11.2.
                           Upon the expiration of sixty (60) months following
                           the end of any year, the calculation of royalties
                           payable with respect to such year shall be binding
                           and conclusive upon Apollo and AHPC and its
                           Affiliates and sublicensees shall be released from
                           any liability or accountability with respect to
                           royalties for such year.

                  3.11.3   UNDERPAYMENTS/OVERPAYMENTS. If such independent
                           accountant correctly concludes that additional
                           royalties were owed during such period, AHPC shall
                           pay the additional royalties, together with any
                           interest that may be due thereon as provided in
                           Section 3.14, within thirty (30) days of the date
                           AHPC receives such accountant's written report so
                           concluding. If such underpayment exceeds [ * CON * ]
                           percent ([ * CON * ]%) of the royalty correctly due
                           Apollo then the reasonable fees charged by such
                           accountant for the work associated with the
                           underpayment audit shall be paid by AHPC. Any
                           overpayments by AHPC will be promptly refunded by
                           Apollo to AHPC together with interest thereon at the
                           rate provided in Section 3.14.


                                       18


                  3.11.4   RECORD KEEPING BY SUBLICENSEE. AHPC shall include in
                           each sublicense granted by it pursuant to this
                           Agreement a provision requiring the sublicensee to
                           make reports to AHPC, to keep and maintain records of
                           sales made pursuant to such sublicense and to grant
                           access to such records by Apollo's independent
                           certified public accounting to the same extend
                           required of AHPC under this Agreement.

                  3.11.5   CONFIDENTIALITY. Apollo shall treat all financial
                           information subject to review under this Section
                           3.11, or under any sublicense agreement, in
                           accordance with the provisions of Article 10 hereof,
                           except when it is necessary to reveal such
                           information in order to enforce its rights under this
                           Agreement.

         3.12     TAXES AND WITHHOLDING. All taxes, assessments and fees of any
                  nature levied or incurred on account of any payments from AHPC
                  to Apollo accruing under this Agreement, by national, state or
                  local governments, will be assumed and paid by AHPC, except
                  taxes levied thereon as income to Apollo and if such taxes are
                  required to be withheld by AHPC they will be deducted from
                  payments due to Apollo and will be timely paid by AHPC to the
                  proper taxing authority for the account of Apollo, a receipt
                  or other proof of payment therefor secured and sent to Apollo
                  as soon as practicable.

         3.13     FOREIGN EXCHANGE. For the purpose of computing Net Sales for
                  Licensed Products sold in a currency other than United States
                  Dollars, such currency shall be converted into United States
                  Dollars in accordance with AHPC's customary and usual
                  translation procedures, consistently applied.

         3.14     INTEREST. Any payment that is more than [ * CON * ] ([ * CON *
                  ]) days past due shall thereafter be subject to interest at an
                  annual percentage rate of [ * CON * ] ([ * CON * ]) [ * CON *
                  ] on the date that such interest begins to accrue.

4.       PRODUCT DEVELOPMENT AND COMMERCIALIZATION.

         4.1      DEVELOPMENT AND REGISTRATION OF LICENSED PRODUCTS.

                  4.1.1    DILIGENCE OBLIGATION. AHPC shall use its Commercially
                           Reasonable Efforts to develop and apply for
                           Regulatory Approval for at least one Licensed Product
                           in the Field in each of the Major Countries,
                           PROVIDED, HOWEVER, that the decision of whether or
                           not to initiate or continue the development of any
                           particular Product or Product Type for use in the
                           Field shall be in AHPC's sole discretion.


                                       19


                  4.1.2    TYPE D PRODUCTS. If AHPC exercises its option under
                           Section 2.3.2 hereof, AHPC, notwithstanding its
                           obligations as set forth in Section 4.1.1 hereof,
                           which obligations may be met by using its
                           Commercially Reasonable Efforts to develop and apply
                           for Regulatory Approval for at least one Type D
                           Product in the Field in each of the Major Countries,
                           also shall use its Commercially Reasonable Efforts to
                           file an IND with respect to at least one Type D
                           Product prior to the later to occur of (i) the [ *
                           CON * ] anniversary of the Effective Date or (ii) [ *
                           CON * ] ([ * CON * ]) year after the payment of the
                           option exercise fee required under Section 3.5.2
                           hereof.

                  4.1.3    TYPE E PRODUCTS. If AHPC exercises its option under
                           Section 2.3.3 hereof for one or more Type E Products,
                           AHPC, notwithstanding its obligations as set forth in
                           Section 4.1.1 hereof, which obligations may be met by
                           using its Commercially Reasonable Efforts to develop
                           and apply for Regulatory Approval for at least one
                           Type E Product in the Field in each of the Major
                           Countries, also shall use its Commercially Reasonable
                           Efforts to file an IND with respect to at least one
                           Type E Product prior to the later to occur of (i) the
                           [ * CON * ] anniversary of the Effective Date or (ii)
                           [ * CON * ] ([ * CON * ]) year after the payment of
                           the option exercise fee required under Section 3.5.3
                           hereof.

         4.2      EXTENSION OF TIME. Upon AHPC's request and subject to Apollo's
                  consent, such consent not to be unreasonably withheld or
                  delayed, the time periods specified in Sections 4.1.3, 4.1.4
                  and 4.1.5 for filing an IND for the applicable Licensed
                  Product shall be extended by the period of time specified in
                  AHPC's request, provided that AHPC is able to reasonably
                  demonstrate that the reason the filing of the applicable IND
                  was not accomplished within the time period specified in
                  Section 4.1.3, 4.1.4 or 4.1.5, as applicable, was not due to a
                  lack of Commercially Reasonable Efforts on AHPC's part and
                  that, due to circumstances beyond AHPC's reasonable control,
                  such additional time period is necessary.

         4.3      COMMERCIALIZATION OF LICENSED PRODUCTS. After obtaining
                  Regulatory Approval for a Licensed Product, other than a Type
                  B Product, in a Major Country, AHPC shall use its Commercially
                  Reasonable Efforts to market and sell such Licensed Product in
                  such Major Country.

         4.4      STATUS REPORTS. Within sixty (60) days after each December 31
                  and June 30 during the term of this Agreement AHPC shall
                  provide Apollo with a report summarizing the development
                  decisions made with respect to Licensed Products during the
                  period covered by the report and the then


                                       20


                  current status of its Licensed Product development activities.
                  Such summary shall include estimated time lines for planned
                  future development activities for Licensed Products then under
                  development. Apollo acknowledges that such reports are being
                  provided at Apollo's request for informational purposes only
                  and any information or statements made therein shall not be
                  construed as imposing upon AHPC any specific obligations with
                  respect to the development of any particular Licensed Product
                  Apollo shall treat all such reports as Information in
                  accordance with Article 10 hereof. Notwithstanding the
                  foregoing, the first such report shall be due within sixty
                  (60) days after June 30, 1999.

         4.5      APOLLO DEVELOPMENT AND REPORTING OBLIGATIONS.

                  4.5.1    DEVELOPMENT. As a fundamental condition of, and in
                           consideration of the payments to Apollo contemplated
                           by this Agreement, Apollo agrees, throughout the
                           Option Term, to use its Commercially Reasonable
                           Efforts and to apply such of its technical and
                           financial resources as are reasonably necessary to
                           establish and maintain one or more programs for the
                           discovery and/or development of Type E Products. Such
                           resources shall include, without limitation, internal
                           and/or external programs with scientific experts in
                           steroid chemistry and related analytical methods as
                           well as programs for specific structure/function
                           analysis specific to applications in the Field.

                  4.5.2    SCIENTIFIC REVIEW COMMITTEE; REPORTS. Promptly after
                           the Effective Date, the Parties will establish a
                           Scientific Review Committee (the "Committee")
                           consisting of two (2) representatives from AHPC and
                           two (2) representatives from Apollo. The chairperson
                           of such Committee shall be one of the AHPC
                           representatives. Either Party may replace any of its
                           representatives at any time upon written notice to
                           the other Party. The Committee shall meet in person
                           to review new Know-How Controlled by Apollo or its
                           Affiliates which relates to Type D Products and/or
                           Type E Products or the active ingredients thereof.
                           Such meetings shall occur at least two (2) times per
                           year (or more or less frequently as the Parties may
                           mutually agree in writing) during the Option Term and
                           a final meeting shall be held no later than thirty
                           (30) days after the end of the Option Term. During
                           such final meeting Apollo shall present and submit to
                           the Committee and AHPC a final written report
                           describing the Know-How and Apollo Patent Rights
                           Controlled by Apollo or its Affiliates which relates
                           to Type D Products and/or Type E Products or the
                           active ingredients thereof. The time and date of each
                           such meeting shall be set by mutual agreement of the
                           Committee members and the


                                       21


                           location of such meetings shall alternate between the
                           facilities of Apollo and AHPC with the first such
                           meeting being held at one of AHPC's facilities. Each
                           party shall be responsible for the expenses incurred
                           by its representatives in attending such Committee
                           meetings.

5.       REGULATORY MATTERS.

         5.1      REGULATORY FILINGS. Subject to the obligations set forth in
                  Section 4.1 hereof, AHPC shall, in its own name and at its own
                  expense, prepare and file all INDs and all applications for
                  Regulatory Approval of Licensed Products for use in the Field
                  in those countries of the Territory where AHPC, in its sole
                  discretion, deems it commercially reasonable to do so. AHPC
                  agrees to provide Apollo with copies of correspondence with
                  the applicable Regulatory Authorities which correspondence
                  concerns the INDs permitting the study, in humans, of Type E
                  Products and applications for Regulatory Approval of Type E
                  Products. AHPC shall have no obligation to disclose to Apollo
                  any INDs, applications for Regulatory Approval or related
                  correspondence that pertains to any other Product Type.

         5.2      ADVERSE EVENT REPORTING. AHPC shall be responsible for
                  reporting all adverse events associated with each Licensed
                  Product to the appropriate Regulatory Authorities in
                  accordance with applicable laws, rules and regulations.
                  Additionally, in the event Apollo receives information
                  regarding adverse drug experiences related to the use of any
                  Licensed Product, Apollo shall promptly provide AHPC with such
                  information in accordance with the Adverse Drug Experience
                  Reporting Procedures (as may be amended from time to time upon
                  mutual agreement) set forth in Exhibit C. Further, AHPC shall
                  provide Apollo with copies of any adverse drug experience
                  reports concerning Type E Products which reports have been
                  submitted by AHPC to the applicable Regulatory Authorities.

6.       INTELLECTUAL PROPERTY.

         6.1      FILING, PROSECUTION AND MAINTENANCE OF APOLLO PATENT RIGHTS.
                  Apollo agrees to use its Commercially Reasonable Efforts to
                  file, prosecute and maintain in the Territory, upon
                  appropriate consultation with AHPC, the Apollo Patent Rights
                  Controlled in whole or in part by Apollo and licensed to AHPC
                  under this Agreement. Apollo shall give AHPC an opportunity to
                  review the text of the applications for such Apollo Patent
                  Rights before filing, shall consult with AHPC with respect
                  thereto, and shall supply AHPC with a copy of the applications
                  as filed, together with notice of its filing date and serial
                  number. Apollo shall keep AHPC advised of the status of the
                  actual and prospective patent filings (including,


                                       22


                  without limitation, the grant of any such Apollo Patent
                  Rights), and shall provide advance copies of any substantive
                  papers related to the filing, prosecution and maintenance of
                  such patent filings. AHPC acknowledges that, pursuant to the
                  Florida License, all final decisions with respect to the
                  prosecution of any of the Apollo Patent Rights which are owned
                  by [ * CON * ] and Controlled by Apollo by virtue of the
                  license granted to Apollo by [ * CON * ] under the [ * CON * ]
                  shall be reserved to [ * CON * ]. Notwithstanding the
                  foregoing, Apollo shall not be required to disclose to AHPC
                  any such application which claims the composition or use of a
                  Type E Product but does not claim or describe the composition
                  or use of any other Product Type, until after the first patent
                  application (including, without limitation, a provisional
                  patent application) claiming the composition or use of such
                  Type E Product has been filed. AHPC shall reimburse Apollo for
                  the reasonable out-of-pocket expenses incurred by Apollo after
                  the Effective Date in filing, prosecuting and maintaining the
                  Apollo Patent Rights owned in whole or in part by Apollo and
                  licensed to AHPC under this Agreement, PROVIDED, HOWEVER, that
                  AHPC, in its sole discretion, may elect not to pay for the
                  defense of an interference or other legal action relating to
                  such Patent Rights in the Territory. Within thirty (30) days
                  after the end of each calendar quarter Apollo shall invoice
                  AHPC for any reimbursable expenses paid by Apollo during such
                  calendar quarter. AHPC shall reimburse Apollo for such
                  expenses within thirty (30) days of AHPC's receipt of such
                  invoice.

         6.2      OPTION OF AHPC TO PROSECUTE AND MAINTAIN APOLLO PATENT RIGHTS.
                  Apollo shall give one hundred and eighty (180) days written
                  notice to AHPC of any desire to cease prosecution and/or
                  maintenance of a particular Apollo Patent Right and, in such
                  case, shall permit AHPC, at AHPC's sole discretion, to
                  continue prosecution or maintenance of such Apollo Patent
                  Right at AHPC's own expense. If AHPC elects to continue
                  prosecution or maintenance of such Apollo Patent Right, Apollo
                  shall execute such documents and perform such acts, at
                  Apollo's expense, as may be reasonably necessary to effect an
                  assignment to AHPC of such Apollo Patent Rights which are
                  owned by Apollo. Any such assignment shall be completed in a
                  timely manner so as to allow AHPC to continue such prosecution
                  or maintenance. Any patents or patent applications so assigned
                  shall thereafter not be considered Apollo Patent Rights for
                  any purpose under this Agreement.

         6.3      ENFORCEMENT OF APOLLO PATENT RIGHTS.

                  6.3.1    NOTICE AND DISCONTINUANCE OF INFRINGEMENT. In the
                           event that either Apollo or AHPC becomes aware of any
                           infringement within the Territory of any Valid Claim
                           within the Apollo Patent Rights, it


                                       23


                           will notify the other Party in writing to that
                           effect. Any such notice shall include evidence to
                           support an allegation of infringement by such Third
                           Party. Apollo shall have the right, but not the
                           obligation to take any such action which it
                           reasonably deems necessary to obtain a discontinuance
                           of such infringement or to bring suit against the
                           Third Party infringer. AHPC shall have the right,
                           prior to commencement of the trial, suit or action
                           brought by Apollo, to join any such suit or action,
                           in which event the expenses of any such suit shall be
                           shared equally by Apollo and AHPC. In no event shall
                           Apollo enter into any settlement, consent judgment or
                           other voluntary final disposition of such suit which
                           would adversely affect AHPC's rights under this
                           Agreement in any way without first obtaining AHPC's
                           written consent to do so, which consent shall not be
                           unreasonably withheld. Additionally, in the event
                           that AHPC has joined in the action and shared in the
                           costs thereof as set forth above, no settlement,
                           consent judgment or other voluntary final disposition
                           of the suit may be entered into without the consent
                           of AHPC. In the event that AHPC has not joined the
                           suit or action, AHPC will reasonably cooperate with
                           Apollo in any such suit or action and shall have the
                           right to consult with Apollo and be represented by
                           its own counsel at its own expense. [ * CON * ] It is
                           understood that Apollo may share its portion of
                           expenses and any recovery with [ * CON * ] pursuant
                           to the [ * CON * ].

                  6.3.2    CONTINUANCE OF INFRINGEMENT. If the alleged
                           infringement of the Apollo Patent Rights is occurring
                           within the Field and, within six (6) months after
                           AHPC has provided Apollo with the notice specified in
                           the first sentence of Section 6.2.1, Apollo has not
                           overcome the allegation of infringement, obtained a
                           discontinuance of such infringement or filed suit
                           against such Third Party infringer, then AHPC shall
                           have the right, but not the obligation, to bring suit
                           against such Third Party infringer under the Apollo
                           Patent Rights and join Apollo as a party plaintiff.
                           Apollo will cooperate with AHPC in any suit for
                           infringement of an Apollo Patent Right brought by
                           AHPC against a Third Party, and shall have the right
                           to consult with AHPC and to participate in and be
                           represented by independent counsel in such litigation
                           at its own expense. If the Apollo Patent Rights that
                           are allegedly being infringed are Controlled by
                           Apollo by virtue of the license granted to Apollo by
                           [ * CON * ] under the [ * CON * ], AHPC shall
                           not enter into any settlement, consent judgment or
                           other voluntary final disposition of such suit
                           without first obtaining [ * CON * ] written consent
                           to do so, which consent, pursuant to the [


                                       24


                           * CON * ], shall not be unreasonably withheld. Apollo
                           shall cooperate with AHPC in obtaining such consent.
                           [ * CON * ]

         6.4      INFRINGEMENT OF THIRD PARTY PATENTS; THIRD PARTY LICENSES.

                  6.4.1    COURSE OF ACTION. In the event that AHPC's, its
                           Affiliates' or its sublicensees' making, having made,
                           importing, exporting, using, distributing, marketing,
                           promoting, offering for sale or selling Licensed
                           Products in the Field infringes, will infringe or is
                           alleged by a Third Party to infringe a Third Party's
                           patent (PROVIDED, HOWEVER, that in the case of Type A
                           Products, Type B Products, Type C Products and Type D
                           Products, such Third Party patent claims the use of
                           such Licensed Product in the Field) the Party
                           becoming aware of same shall promptly notify the
                           other.

                  6.4.2    AHPC OPTION TO NEGOTIATE. AHPC shall in the first
                           instance have the right to negotiate with said Third
                           Party for a suitable license or assignment PROVIDED,
                           HOWEVER, that AHPC shall enter into no such agreement
                           unless it has first obtained Apollo's approval (which
                           approval shall not be unreasonably withheld or
                           delayed) of any royalties or payments which are to be
                           deducted from payments to be made to Apollo
                           hereunder. In the event that such negotiation results
                           in a consummated agreement, then any lump sum payment
                           made thereunder shall be paid by AHPC and [ * CON * ]
                           percent ([ * CON * ]%) of such payment shall offset
                           any royalties due Apollo hereunder, but only to the
                           extent of reducing royalties due Apollo with respect
                           to the Product Type(s) and country(ies) affected by [
                           * CON * ] percent ([ * CON * ]%) in any Calendar
                           Quarter. Any unused amounts not so offset can be
                           carried over to subsequent quarters.

                  6.4.3    APOLLO OPTION TO NEGOTIATE. Should AHPC fail to
                           consummate an agreement with said Third Party within
                           one (1) year of initiating negotiations, then Apollo
                           shall have the right to negotiate with said Third
                           Party for a suitable license or assignment. In the
                           event that such negotiation results in a consummated
                           agreement, then any lump sum payments made thereafter
                           shall be paid by Apollo. Should such agreement
                           require the payment of royalties, AHPC shall continue
                           to pay the royalties due Apollo hereunder and Apollo
                           shall pay any royalties due said Third Party on
                           AHPC's behalf.

                  6.4.4    THIRD PARTY INFRINGEMENT SUIT. In the event that a
                           Third Party sues AHPC alleging that AHPC's, its
                           Affiliates' or its sublicensees' making, having made,
                           importing, exporting, using,


                                       25


                           distributing, marketing, promoting, offering for sale
                           or selling any Licensed Product in the Field
                           infringes or will infringe said Third Party's patent
                           (PROVIDED, HOWEVER, that in the case of Type A
                           Products, Type B Products, Type C Products and/or
                           Type D Products, such Third Party patent claims the
                           use of such Licensed Products in the Field), then
                           AHPC may, in its sole discretion, elect to defend
                           such suit and, during the period in which such suit
                           is pending, AHPC shall have the right to apply [ *
                           CON * ] the royalties due Apollo, which royalties are
                           based on the allegedly infringing sales of Licensed
                           Product(s) against its litigation expenses, including
                           settlement costs and royalties paid in settlement of
                           any such suit, PROVIDED, HOWEVER, that in the event
                           that a Type A Product is the subject of such an
                           infringement suit, the portion of the royalties
                           payable under Section 3.9.1 hereof which shall be
                           attributable to the allegedly infringing sales of
                           such Licensed Product for purposes of calculating the
                           amount of royalties payable in any Calendar Quarter
                           that may be attributed to litigation expenses under
                           this Section 6.4.4. shall be calculated by
                           multiplying the royalty amount set forth in Section
                           3.9.1(a), 3.9.1(b) or 3.9.1(c), as applicable, by a
                           factor equal to [ * CON * ], where [ * CON * ] is the
                           sum of AHPC's, its Affiliates' and its sublicensees'
                           Net Sales made during such Calendar Quarter of Type A
                           Products in the country(ies) where the infringement
                           is alleged to be taking place and [ * CON * ] is the
                           sum of AHPC's, its Affiliates' and its sublicensees'
                           worldwide Net Sales of Type A Products during such
                           Calendar Quarter. Upon AHPC's request and in
                           connection with AHPC's defense of any such Third
                           Party infringement suit, Apollo shall provide
                           reasonable assistance to AHPC for such defense. For
                           purposes of this Section 6.4.4, patent claims reading
                           on (i) the composition of Type A Products, Type B
                           Products, Type C Products and/or Type D Products,
                           (ii) processes for manufacturing such Licensed
                           Products and/or drug delivery systems used by AHPC in
                           connection with such Licensed Products shall not be
                           considered not be considered to be a claim on the use
                           of such Licensed Products in the Field. Should AHPC
                           recovery any damages, by way of settlement or
                           otherwise, in connection with any counterclaim made
                           by it in any such Third Party infringement suit, such
                           recovery shall be used first to reimburse AHPC for
                           the costs and expenses it incurred in defending such
                           Third Party infringement suit (including, without
                           limitation, the costs and expenses incurred in
                           pursuing any counterclaims in such suit) and second
                           to reimburse Apollo for any royalties withheld
                           pursuant to this Section 6.4.4. Any remaining amounts
                           from such recovery shall be shared pro rata by the
                           Parties, based on the


                                       26


                           portion of the expenses paid by each Party in
                           defending such suit and prosecuting such
                           counterclaims.

         6.5      CERTIFICATION UNDER DRUG PRICE COMPETITION AND PATENT
                  RESTORATION ACT. Apollo and AHPC each shall immediately give
                  written notice to the other of any certification of which they
                  become aware filed pursuant to 21 U.S.C. Section 355(b)(2)(A)
                  (or any amendment or successor statute thereto) claiming that
                  Apollo Patent Rights covering any Licensed Product or the use
                  of any Licensed Product in the Field are invalid or that
                  infringement will not arise from the manufacture, use or sale
                  of Licensed Product(s) by a Third Party. Notwithstanding any
                  provision to the contrary, in the event that Apollo has failed
                  to bring an infringement action against such Third Party at
                  least fourteen (14) days prior to expiration of the forty five
                  (45) day period set forth in 21 U.S.C. Section 355(c)(3)(C)
                  (or any amendment or successor statute thereto), AHPC shall
                  have the right to bring such an infringement action, in its
                  sole discretion and at its own expense, in its own name and/or
                  in the name of Apollo. At AHPC's request, Apollo shall provide
                  AHPC reasonable assistance to conduct such infringement
                  action, including, without limitation, causing the execution
                  of such legal documents as AHPC may deem necessary for the
                  prosecution of such action. AHPC shall periodically reimburse
                  Apollo for its out-of-pocket costs (excluding any of Apollo's
                  costs of retaining independent counsel) incurred in assisting
                  AHPC. AHPC shall incur no liability to Apollo as a consequence
                  of such litigation or any unfavorable decision resulting
                  therefrom, including any decision holding any of the Apollo
                  Patent Rights invalid or unenforceable. In the event that AHPC
                  recovers any sums in such litigation by way of damages or in
                  settlement thereof, AHPC shall have the right to retain all
                  such sums to offset its costs, losses and expenses.

         6.6      ABANDONMENT. Subject to AHPC's rights pursuant to Section 6.2,
                  Apollo shall at the earliest known date give notice to AHPC of
                  the grant, lapse, revocation, surrender, invalidation of
                  abandonment of any Apollo Patent Rights licensed to AHPC for
                  which Apollo is responsible for the filing, prosecution and
                  maintenance under this Agreement.

         6.7      PATENT TERM RESTORATION. Apollo shall have the right, in the
                  first instance, to determine whether to seek patent term
                  restoration (or its equivalent) with respect to any Apollo
                  Patent Right and shall notify AHPC, in writing, as to whether
                  or not Apollo has elected to seek such patent term restoration
                  (or its equivalent), provided, however, that in the event
                  Apollo has elected not to seek such patent term restoration
                  (or its equivalent), such written notice must be delivered to
                  AHPC no later than ninety (90) days prior to the date that any
                  action must be taken in order to


                                       27


                  preserve the ability to obtain such a patent term restoration
                  (or its equivalent). In the event that Apollo elects not to
                  seek patent term restoration (or its equivalent) with respect
                  to any Apollo Patent Right, AHPC shall have the right, but not
                  the obligation, to seek patent term restoration (or its
                  equivalent) for such Apollo Patent Right at its own expense,
                  PROVIDED, HOWEVER, that if AHPC does elect to seek such patent
                  term restoration (or its equivalent) with respect to such
                  Apollo Patent Right as permitted by this sentence, then, as of
                  the date such Apollo Patent Right would have otherwise expired
                  but for AHPC seeking such patent term restoration (or its
                  equivalent) such Apollo Patent Right shall no longer be
                  included within the definition of the Apollo Patent Rights
                  hereunder solely for the purpose of calculating royalties
                  payable under Section 3.9 hereof, but not for any other
                  purpose. In the event that either Party elects to seek patent
                  term restoration (or its equivalent) for any Apollo Patent
                  Right as provided in this Section 6.7, the Parties shall
                  cooperate with each other in obtaining such patent term
                  restoration (or its equivalent) which cooperation shall
                  include, without limitation, executing those documents that
                  may be necessary for either Party to seek and obtain such
                  patent term restoration (or its equivalent).

         6.8      NOTICES REGARDING PATENTS. All notices, inquiries and
                  communications in connection with this Article IV shall be
                  sent in the manner set forth in Section 13.7 to the Parties at
                  the addresses and facsimile numbers indicated below.

                  If to Apollo:             Apollo BioPharmaceutics, Inc.
                                            One Broadway
                                            Suite 600
                                            Cambridge, Massachusetts  02142
                                            Attn.:  President
                                            Fax No.:  (617) 621-7156

                           with a copy to:       Palmer & Dodge
                                                 One Beacon Street
                                                 Boston, Massachusetts  02108
                                                 Attn.: [ * CON * ]
                                                 Fax No.: (617) 227-4420


                  If to AHPC:               American Home Products Corporation
                                            One Campus Drive
                                            Parsippany, New Jersey 07054
                                            Attn.: Senior Vice President
                                            Patent and Trademark Department


                                       28


                                            Fax No.: (973) 683-4121

7.       REPRESENTATIONS AND WARRANTIES.

         7.1      REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES. As of the
                  Effective Date, each of Apollo and AHPC hereby represents,
                  warrants and covenants to the other Party hereto as follows:

                  (a)      it is a corporation or entity duly organized and
                           validly existing under the laws of the state or other
                           jurisdiction of incorporation or formation;

                  (b)      the execution, delivery and performance of this
                           Agreement by such Party has been duly authorized by
                           all requisite corporate action and do not require any
                           shareholder action or approval;

                  (c)      it has the power and authority to execute and deliver
                           this Agreement and to perform its obligations
                           hereunder;

                  (d)      the execution, delivery and performance by such Party
                           of this Agreement and its compliance with the terms
                           and provisions hereof does not and will not conflict
                           with or result in a breach of any of the terms and
                           provisions of or constitute a default under (i) a
                           loan agreement, guaranty, financing agreement,
                           agreement affecting a product or other agreement or
                           instrument binding or affecting it or its property;
                           (ii) the provisions of its charter or operative
                           documents or bylaws; or (iii) any order, writ,
                           injunction or decree of any court or governmental
                           authority entered against it or by which any of its
                           property is bound; and

                  (e)      it shall at all times comply with all applicable
                           material laws and regulations relating to its
                           activities under this Agreement, including, without
                           limitation, for all patent applications and patents
                           claiming inventions that are subject inventions (as
                           such term is defined in 37 CFR Section 401) of a
                           funding agreement between an agency of the united
                           States Government and [ * CON * ] or the [ * CON * ],
                           all rights and limitations of U.S. Code Title 35,
                           Chapter 38, and the implementing regulations thereof.

         7.2      REPRESENTATIONS AND WARRANTIES OF APOLLO. In addition to the
                  representations and warranties made by Apollo under Section
                  7.1 hereof, Apollo hereby represents and warrants to AHPC
                  that:


                                       29


                  (a)      it has the full right, power and authority to grant
                           the licenses and options granted to AHPC under
                           Article 2 hereof;

                  (b)      all inventors (who are known as of the Effective
                           Date) of any inventions included within the Apollo
                           Patent Rights and the Know-How have assigned their
                           entire right, title and interest in and to such
                           inventions and the Apollo Patent Rights either to
                           Apollo or to the Third Party from whom Apollo has
                           obtained a license whereby Apollo Controls such
                           inventions or Apollo Patent Rights and, to the best
                           of Apollo's knowledge, such knowledge being
                           developed, at least in part, by due investigation by
                           Apollo, no person, other than those persons named as
                           inventors on any patent or patent application
                           included within the Apollo Patent Rights, is an
                           inventor of the invention(s) claimed in such patent
                           or patent application;

                  (c)      to the best of Apollo's knowledge, such knowledge
                           being developed, at least in part, by due
                           investigation by Apollo, the [ * CON * ] has (i)
                           complied with all of its obligations under applicable
                           United States Government laws and regulations with
                           respect to any inventions included within the Apollo
                           Patent Rights or the Know-How which inventions are
                           subject inventions of a funding agreement with the
                           United States Government or any agency thereof and
                           (ii) elected to retain title to any such invention as
                           provided in 37 CFR Part 401.

                  (d)      all Apollo Patent Rights that are existing as of the
                           Effective Date are listed on Exhibit A attached
                           hereto and to the best of Apollo's knowledge all such
                           Apollo Patent Rights are not invalid or
                           unenforceable, in whole or in part;

                  (e)      except as described in Section 7.4 hereof, it has
                           not, prior to the Effective Date, previously
                           assigned, transferred, conveyed or otherwise
                           encumbered its right, title and interest in any of
                           the Apollo Patent Rights or the Know-How;

                  (f)      as of the Effective Date, there are no claims,
                           judgments or settlements against or owed by Apollo
                           or, to the best of its knowledge, pending or
                           threatened claims or litigation relating to the
                           Apollo Patent Rights or the Know-How and during the
                           term of this Agreement Apollo shall promptly notify
                           AHPC, in writing, upon learning of any such actual or
                           threatened claim, judgment or settlement;

                  (g)      during the Term of this Agreement it will use
                           diligent efforts not to diminish the rights under the
                           Apollo Patent Rights or the Know-


                                       30


                           How including, without limitation, by not committing
                           or permitting any actions or omissions which would
                           cause the breach of any agreements between itself and
                           Third Parties which provide for intellectual property
                           rights applicable to the development, manufacture,
                           use or sale of Licensed Products in the Field, and
                           that it will provide AHPC promptly with notice of any
                           such alleged breach, and that, as of the Effective
                           Date, it is in compliance in all material respects
                           with any agreements with Third Parties relating to
                           the Apollo Patent Rights and the Know-How;

                  (h)      as of the Effective Date, there are no collaborative,
                           licensing, material transfer, supply, distributorship
                           or marketing agreements or arrangements or other
                           similar agreements to which it or any of its
                           Affiliates is a party relating to the Apollo Patent
                           Rights, the Know-How or any Product, which agreements
                           are inconsistent with AHPC's rights hereunder;

                  (i)      it has not granted any rights to any Third Party with
                           respect to the Apollo Patent Rights, the Know-How or
                           any Product, which grant of rights would be
                           inconsistent with the rights granted to AHPC
                           hereunder; and

                  (j)      it has no knowledge of any material information,
                           other than information provided to AHPC in writing
                           prior to the signing of this Agreement, which would
                           negatively affect the ability of AHPC to obtain
                           Regulatory Approval for the use of any Licensed
                           Product in the Field or which would negatively affect
                           the timing for obtaining such Regulatory Approval.

         7.3      REPRESENTATION BY LEGAL COUNSEL. Each Party hereto represents
                  that it has been represented by legal counsel in connection
                  with this Agreement and acknowledges that it has participated
                  in the drafting hereof. In interpreting and applying the terms
                  and provisions of this Agreement, the Parties agree that no
                  presumption shall exist or be implied against the Party which
                  drafted such terms and provisions.

         7.4      PRIOR AGREEMENTS. Apollo had previously entered into
                  agreements with [ * CON * ] relating to all or part of the
                  Apollo Patent Rights and/or the Know-How. Additionally, Apollo
                  had previously entered into an agreement with [ * CON * ]
                  pursuant to which Apollo agreed, INTER ALIA, to pay to [ * CON
                  * ] a royalty based, in part, on payments Apollo receives from
                  licensing or otherwise transferring to other parties all or
                  part of the Apollo Patent Rights and/or Know-How. Apollo
                  represents and warrants to AHPC that the agreement with [ *
                  CON * ] including, without limitation, [ * CON * ], each have
                  no further right, title, interest or claim


                                       31


                  in or to any Apollo Patent Right, the Know-How or any Licensed
                  Product. Apollo also represents and warrants to AHPC that the
                  agreement with [ * CON * ] other than Apollo, each have no
                  further right, title, interest or claim in or to any Apollo
                  Patent Right, the Know-How or any Licensed Product. Apollo
                  further represents and warrants to AHPC that, except for the
                  specific right to receive payments from Apollo in connection
                  with the Apollo Patent Rights, the Know-How and the Licensed
                  Products, [ * CON * ] has no other right, title, interest or
                  claim in or to any Apollo Patent Right, the Know-How or any
                  Licensed Product.

         7.5      APOLLO DISCLAIMER. APOLLO MAKES NO REPRESENTATION OR WARRANTY,
                  EITHER EXPRESS OR IMPLIED, THAT ANY MEHODS DESCRIBED IN THE
                  APOLLO PATENT RIGHTS OR KNOW-HOW WILL BE EFFECTIVE OR THAT ANY
                  OF THE LICENSED PRODUCTS WILL BE MERCHANTIBLE OR FIT FOR A
                  PARTICULAR PURPOSE.

8.       TERM AND TERMINATION.

         8.1      TERM AND EXPIRATION. This Agreement shall be effective as of
                  the Effective Date and unless terminated earlier by mutual
                  written agreement of the Parties or pursuant to Sections 8.2
                  or 8.3 below, the Term of this Agreement shall continue, on a
                  country-by-country and Licensed Product-by-Licensed Product
                  basis, in effect until expiration of the last to expire Patent
                  Right in such country incorporating a Valid Claim which
                  encompasses the composition or use of such Licensed Product in
                  the Field. Upon expiration of this Agreement AHPC's license to
                  use the Know-How pursuant to Section 2.1 hereof shall become a
                  fully paid-up, perpetual, irrevocable license.

         8.2      TERMINATION BY AHPC. AHPC may terminate this Agreement on a
                  Licensed Product by Licensed Product and on a country by
                  country basis at any time upon ninety (90) days prior written
                  notice to Apollo, provided, however that if AHPC elects to
                  terminate its rights and obligations under this Agreement with
                  respect to a Licensed Product in a Major Country, which
                  Licensed Product is then being marketed by AHPC, its
                  Affiliates or sublicensees in such Major Country, the notice
                  period set forth above in this Section 8.2 shall be extended
                  to three hundred sixty (360) days. Notwithstanding the
                  foregoing, in the event that AHPC learns of a lack of
                  efficacy, safety concerns or adverse regulatory actions
                  associated with such Licensed Product, AHPC may terminate this
                  Agreement with respect to such Licensed Product on a country
                  by country basis upon immediate written notice to Apollo.

         8.3      TERMINATION BY APOLLO FOR LACK OF DILIGENCE.


                                       32


                  8.3.1    FAILURE TO USE COMMERCIALLY REASONABLE EFFORTS. If,
                           after the [ * CON * ] anniversary of the Effective
                           Date, AHPC commits a material breach of its
                           obligations under Section 4.1.1 hereof, and, after
                           the Parties have attempted to resolve any dispute
                           relating to such alleged breach, in good faith, in
                           accordance with the dispute resolution process set
                           forth in Section 11.7 hereof, AHPC, within ninety
                           (90) days after the date such dispute resolution
                           process is to be complete as provided in Section 11.7
                           hereof, fails to commence using Commercially
                           Reasonable Efforts to develop and apply for
                           Regulatory Approval for [ * CON * ] as required in
                           Section 4.1.1 hereof, , Apollo, as its sole and
                           exclusive remedy, may, upon thirty (30) days prior
                           written notice to AHPC, terminate this Agreement in
                           its entirety.

                  8.3.2    FAILURE TO FILE IND. In the event that AHPC has
                           exercised one or more of its options under Section
                           2.3 hereof and has failed to use its Commercially
                           Reasonable Efforts to file an IND for [ * CON * ]
                           within the time periods specified in either Section
                           4.1.2 or 4.1.3 , as applicable and as may be extended
                           pursuant to Section 4.2 hereof, Apollo may, as its
                           sole and exclusive remedy, terminate AHPC's license
                           under this Agreement with respect to such Product
                           Type by providing to AHPC, within sixty (60) days
                           after the expiration of the applicable time period
                           and any extensions thereof, written notice of such
                           termination.

         8.4      TERMINATION FOR CAUSE. Either Party may terminate this
                  Agreement with respect to a particular Product Type upon
                  written notice provided to the other Party at any time during
                  the Term :

                           (a)      if the other Party commits a material breach
                                    of its obligations, other than AHPC's
                                    obligations under Section 4.1.1 hereof,
                                    relating to such Product Type under this
                                    Agreement, and, after the Parties have
                                    attempted to resolve any dispute relating to
                                    such alleged breach, in good faith, in
                                    accordance with the dispute resolution
                                    process set forth in Section 11.7 hereof,
                                    such breach remains uncured for ninety (90)
                                    days measured from the date such dispute
                                    resolution process is to be complete as
                                    provided in Section 11.7 hereof, PROVIDED,
                                    HOWEVER, that if such breach is not
                                    susceptible of cure within such ninety (90)
                                    day period and the breaching Party uses
                                    diligent good faith efforts to cure such
                                    breach, such ninety (90) day period shall be
                                    extended to one hundred eighty (180) days;
                                    or


                                       33


                           (b)      upon the filing or institution of
                                    bankruptcy, reorganization, liquidation or
                                    receivership proceedings, or upon an
                                    assignment of a substantial portion of the
                                    assets for the benefit of creditors by the
                                    other Party, or in the event a receiver or
                                    custodian is appointed for such Party's
                                    business, or if a substantial portion of
                                    such Party's business is subject to
                                    attachment or similar process; PROVIDED,
                                    HOWEVER, that in the case of any involuntary
                                    bankruptcy proceeding such right to
                                    terminate shall only become effective if the
                                    proceeding is not dismissed within sixty
                                    (60) days after the filing thereof.

         8.5      EFFECT OF TERMINATION.

                  8.5.1    TERMINATION BY AHPC. In the event AHPC terminates
                           this Agreement under Section 8.4(a), AHPC's licenses
                           pursuant to Sections 2.1 and 2.2 with respect to the
                           Product Type as to which the breach relates shall
                           become fully paid-up, perpetual, irrevocable
                           licenses, PROVIDED, HOWEVER, with respect to any of
                           the said licenses granted to AHPC herein pursuant to
                           any Apollo Patent Right that is Controlled by Apollo
                           by virtue of the license granted by [ * CON * ] AHPC
                           shall, upon conversion of this license to a direct
                           license with [ * CON * ] pursuant to Section 2.5
                           hereof, become obligated to pay to [ * CON * ] the
                           portion of the license fees and royalties that Apollo
                           would have received from AHPC and would have been
                           obligated to pay, but had not yet paid, to [ * CON *
                           ] pursuant to [ * CON * ] had this Agreement not been
                           so terminated.

                  8.5.2    TERMINATION BY APOLLO.

                           (a)      In the event that Apollo terminates this
                                    Agreement with respect to one or more
                                    Product Type(s) under either Section 8.3.1
                                    or 8.4(a) hereof, then the rights and
                                    licenses granted to AHPC under Section 2.1
                                    of this Agreement with respect to such
                                    Product Type(s) shall terminate and all
                                    rights to the Apollo Patent Rights and
                                    Apollo Know-How with respect to Licensed
                                    Products included within such Product
                                    Type(s) shall revert to Apollo.

                           (b)      In the event that Apollo terminates this
                                    Agreement with respect to one or more
                                    Product Type(s) under Section 8.3.2 hereof,
                                    then the rights and licenses granted to AHPC
                                    under Section 2.1 of this Agreement with
                                    respect to such Product


                                       34


                                    Type(s) shall terminate and all rights to
                                    the Apollo Patent Rights and Apollo Know-How
                                    with respect to Licensed Products included
                                    within such Product Type(s) shall revert to
                                    Apollo. Additionally, in the event Apollo
                                    has terminated this Agreement under either
                                    Section 8.3.2 or Section 8.4(a) hereof with
                                    respect to Type D Products or Type E
                                    Products, AHPC shall provide Apollo with and
                                    Apollo shall have the right to use any
                                    preclinical or clinical test data that AHPC
                                    has generated with respect to such Licensed
                                    Products and AHPC will assign to Apollo all
                                    Regulatory Approvals and applications for
                                    Regulatory Approval for such Licensed
                                    Products, PROVIDED, HOWEVER, that AHPC SHALL
                                    PROVIDE NO REPRESENTATION OR WARRANTY OF ANY
                                    KIND, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
                                    LIMITATION WARRANTIES OF MERCHANTABILITY AND
                                    FITNESS FOR A PARTICULAR PURPOSE, WITH
                                    RESPECT TO SUCH TEST DATA, REGULATORY
                                    APPROVALS OR APPLICATIONS FOR REGULATORY
                                    APPROVAL AND APOLLO'S USE OF ANY SUCH TEST
                                    DATA, REGULATORY APPROVALS, AND APPLICATIONS
                                    FOR REGULATORY APPROVAL SHALL BE AT APOLLO'S
                                    SOLE RISK.

                  8.5.3    EFFECT OF BANKRUPTCY. In the event AHPC terminates
                           this Agreement under Section 8.4(b) or this Agreement
                           is otherwise terminated under Section 8.4(b), the
                           Parties agree that AHPC, as a licensee of rights to
                           intellectual property under this Agreement, shall
                           retain and may fully exercise all of its rights and
                           elections under Title 11, including as set forth in
                           Section 11.8 hereof.

         8.6      SURVIVAL OF OBLIGATIONS. Expiration or termination of the
                  Agreement shall not relieve the Parties of any obligation
                  accruing prior to such expiration or termination, and the
                  provisions of Articles 9 and 10 and Sections 3.11, 5.2 and
                  11.6 shall survive the expiration or any termination of the
                  Agreement. Except as otherwise expressly provided herein, any
                  expiration or early termination of this Agreement shall be
                  without prejudice to the rights of either Party against the
                  other accrued or accruing under this Agreement prior to
                  termination, including the obligation to pay royalties for
                  Licensed Product(s) sold prior to such termination.

9.       INDEMNIFICATION AND INSURANCE.

         9.1      INDEMNIFICATION BY AHPC. AHPC shall indemnify, defend and hold
                  harmless (i) Apollo and its Affiliates, and each of its and
                  their respective


                                       35


                  employees, officers, directors and agents and (ii) [ * CON *
                  ], and those inventors of any Apollo Patent Right which is
                  Controlled by Apollo by virtue of the license granted to it by
                  [ * CON * ] which inventors were employees of [ * CON * ] at
                  the time the inventions claimed in such Apollo Patent Rights
                  were made and have assigned their entire right, title and
                  interest in and to such Apollo Patent Rights to [ * CON * ]
                  (each of (i) and (ii), an "Apollo Indemnified Party") from and
                  against any and all liability, loss, damage, cost, and expense
                  (including reasonable attorneys' fees) to any Third Party
                  (collectively, a "Liability") which the Apollo Indemnified
                  Party may incur, suffer or be required to pay resulting from
                  or arising in connection with (i) the breach by AHPC of any
                  representation or warranty contained in Article 7 of this
                  Agreement; (ii) the manufacture, use or sale of Licensed
                  Products by AHPC; or (iii) the successful enforcement by an
                  Apollo Indemnified Party of its rights under this Section 9.1.
                  Notwithstanding the foregoing, AHPC shall have no obligation
                  under this Agreement to indemnify, defend or hold harmless any
                  Apollo Indemnified Party with respect to claims, demands,
                  costs or judgments which result from willful misconduct or
                  negligent acts or omissions of any Apollo Indemnified Party.

         9.2      INDEMNIFICATION BY APOLLO. Apollo shall indemnify, defend and
                  hold harmless AHPC and its Affiliates, and each of its and
                  their respective employees, officers, directors and agents
                  (each, an "AHPC Indemnified Party") from and against any
                  Liability which the AHPC Indemnified Party may incur, suffer
                  or be required to pay resulting from or arising in connection
                  with (i) the breach by Apollo of any representation or
                  warranty contained in Article 7 of this Agreement; (ii) any
                  negligent act or omission or intentional misconduct by Apollo
                  or any of its Affiliates in performing any of its obligations
                  hereunder; or (iii) the successful enforcement by an AHPC
                  Indemnified Party of its rights under this Section 9.2.
                  Notwithstanding the foregoing, Apollo shall have no obligation
                  under this Agreement to indemnify, defend, or hold harmless
                  any AHPC Indemnified Party with respect to claims, demands,
                  costs or judgments which result from willful misconduct or
                  negligent acts or omissions of AHPC, its Affiliates, or any of
                  their respective employees, officers, directors or agents.

         9.3      CONDITIONS TO INDEMNIFICATION. The obligations of the
                  indemnifying Party under Sections 9.1 and 9.2 are conditioned
                  upon the delivery of written notice to the indemnifying Party
                  of any potential Liability promptly after the indemnified
                  Party becomes aware of such potential Liability. The
                  indemnifying Party shall have the right to assume the defense
                  of any suit or claim related to the Liability if it has
                  assumed responsibility for the suit or claim in writing;
                  however, if in the reasonable judgment of the


                                       36


                  indemnified Party, such suit or claim involves an issue or
                  matter which could have a materially adverse effect on the
                  business operations or assets of the indemnified Party, the
                  indemnified Party may waive its rights to indemnity under this
                  Agreement and control the defense or settlement thereof, but
                  in no event shall any such waiver be construed as a waiver of
                  any indemnification rights such Party may have at law or in
                  equity. If the indemnifying Party defends the suit or claim,
                  the indemnified Party may participate in (but not control) the
                  defense thereof at its sole cost and expense.

         9.4      SETTLEMENTS. Neither Party may settle a claim or action
                  related to a Liability without the consent of the other Party,
                  if such settlement would impose any monetary obligation on the
                  other Party or require the other Party to submit to an
                  injunction or otherwise limit the other Party's rights under
                  this Agreement. Any payment made by a Party to settle any such
                  claim or action shall be at its own cost and expense.

         9.5      LIMITATION OF LIABILITY. With respect to any claim by one
                  Party against the other arising out of the performance or
                  failure of performance of the other Party under this
                  Agreement, the Parties expressly agree that the liability of
                  such Party to the other Party for such breach shall be limited
                  under this Agreement or otherwise at law or equity to direct
                  damages only and in no event shall a Party be liable for,
                  punitive, exemplary or consequential damages. The limitations
                  set forth in this Section 8.5 shall not apply with respect to
                  the obligations of either Party to indemnify the other under
                  Sections 8.2 or 8.3 hereof in connection with a Liability to a
                  Third Party.

         9.6      INSURANCE. Apollo shall obtain and maintain at all times
                  during the term of this Agreement, Commercial General
                  Liability Insurance, including contractual liability coverage,
                  with reputable and financially secure insurance carriers, with
                  limits of not less than [ * CON * ] dollars ($[ * CON * ]) per
                  occurrence and in the aggregate. Additionally, if AHPC
                  exercises its option(s) under either Section 2.3.2 (with
                  respect to Type D Products) or 2.3.3 hereof (with respect to
                  Type E Products), at the earlier of (i) such time as human
                  clinical trials are initiated by or on behalf of AHPC for any
                  Type D Product or Type E Product, as applicable, or (ii) the
                  first Regulatory Approval is obtained for such a Type D
                  Product or Type E Product, as applicable, Apollo also shall
                  obtain and thereafter maintain Product Liability Insurance,
                  with reputable and financially secure insurance carriers, such
                  that the limits of Apollo's Commercial General Liability
                  Insurance, including Products Liability Insurance, are not
                  less than [ * CON * ] dollars ($[ * CON * ]) per occurrence
                  and in the aggregate. Apollo agrees that each such insurance
                  policy shall name


                                       37


                  AHPC as an additional insured and shall contain a provision
                  requiring ten (10) day advance notification to AHPC in the
                  event of its cancellation or termination. Within thirty (30)
                  days after obtaining each such insurance policy as required
                  under this Section 9.6, Apollo shall provide to AHPC a
                  certificate of insurance or other evidence (reasonably
                  acceptable to AHPC) of such insurance.

10.      CONFIDENTIALITY.

         10.1     NONDISCLOSURE OBLIGATION. Each of Apollo and AHPC shall use
                  only in accordance with this Agreement and shall not disclose
                  to any Third Party any information including, without
                  limitation, Know-How, received by it from the other Party (the
                  "Information"), without the prior written consent of the other
                  Party. The foregoing obligations shall survive the expiration
                  or earlier termination of this Agreement for a period of [ *
                  CON * ] ([ * CON * ]) years. These obligations shall not apply
                  to Information that:

                           (i)      is known by the receiving Party at the time
                                    of its receipt, and not through a prior
                                    disclosure by the disclosing Party, as
                                    documented by business records;

                           (ii)     is at the time of disclosure or thereafter
                                    becomes published or otherwise part of the
                                    public domain without breach of this
                                    Agreement by the receiving Party;

                           (iii)    is subsequently disclosed to the receiving
                                    Party by a Third Party who has the right to
                                    make such disclosure;

                           (iv)     is developed by the receiving Party
                                    independently of the Information received
                                    from the disclosing Party and such
                                    independent development can be documented by
                                    the receiving Party; or

                           (v)      is required by law, regulation, rule, act or
                                    order of any governmental authority or
                                    agency to be disclosed by a Party, PROVIDED
                                    that notice is promptly delivered to the
                                    other Party in order to provide an
                                    opportunity to seek a protective order or
                                    other similar order with respect to such
                                    Information and thereafter the disclosing
                                    Party discloses to the requesting entity
                                    only the minimum Information required to be
                                    disclosed in order to comply with the
                                    request, whether or not a protective order
                                    or other similar order is obtained by the
                                    other Party.


                                       38


         10.2     PERMITTED DISCLOSURES. Information may be disclosed to
                  employees or consultants of the receiving Party and, in the
                  case of AHPC, AHPC's Affiliates, but, in each case, only to
                  the extent required to accomplish the purposes of this
                  Agreement and only if the receiving Party obtains prior
                  agreement from such employees and consultants to hold in
                  confidence and not make use of such Information for any
                  purpose other than those permitted by this Agreement. Each
                  Party will use at least the same standard of care as it uses
                  to protect proprietary or confidential information of its own
                  to ensure that such employees, agents, consultants,
                  sublicensees or suppliers do not disclose or make any
                  unauthorized use of the Information.

         10.3     RETURN OF INFORMATION. If this Agreement is terminated for any
                  reason, then each Party, upon the request of the other Party,
                  shall return to such other Party all copies of Information
                  received from such other Party hereunder, provided, however,
                  that each Party's legal counsel may retain one copy of such
                  Information in a secure location solely for purposes of
                  determining such Party's continuing obligations hereunder.

         10.4     DISCLOSURE OF AGREEMENT. Neither Apollo nor AHPC shall release
                  to any Third Party or publish in any way any non-public
                  information with respect to the terms of this Agreement or
                  concerning their cooperation without the prior written consent
                  of the other, which consent will not be unreasonably withheld
                  or delayed, provided, however, that either Party may disclose
                  the terms of this Agreement to the extent required to comply
                  with applicable laws, including without limitation the rules
                  and regulations promulgated by the United States Securities
                  and Exchange Commission and the Party intending to disclose
                  the terms of this Agreement shall provide the nondisclosing
                  Party an opportunity to review and comment on the intended
                  disclosure which is reasonable under the circumstances.
                  Notwithstanding the foregoing, Apollo, to the extent required
                  by [ * CON * ], may provide, to [ * CON * ] copies of the
                  royalty reports submitted by AHPC to Apollo under Section
                  3.10.1 hereof, provided, however, that in so disclosing such
                  reports to [ * CON * ] Apollo takes all reasonable actions
                  that are necessary to ensure that [ * CON * ] maintains the
                  confidentiality of such reports and all information contained
                  therein and does not disclose such reports or any information
                  contained therein to any Third Party or use such reports or
                  any information contained therein for any purpose other than
                  verifying the amount of royalties or other fees that are due
                  from Apollo to [ * CON * ] pursuant to the [ * CON * ].

         10.5     PUBLICITY. Subject to Section 10.4, all publicity, press
                  releases and other announcements relating to this Agreement or
                  the transactions contemplated hereby shall be reviewed in
                  advance by, and shall be subject


                                       39


                  to the approval of, both Parties, which approval shall not be
                  unreasonably withheld or delayed.

11.      MISCELLANEOUS.

         11.1     FORCE MAJEURE. Neither Party shall be liable to the other for
                  delay or failure in the performance of the obligations on its
                  part contained in this Agreement if and to the extent that
                  such failure or delay is due to circumstances beyond its
                  control. It shall notify the other Party promptly should such
                  circumstances arise, giving an indication of the likely extent
                  and duration thereof, and shall use all Commercially
                  Reasonable Efforts to resume performance of its obligations as
                  soon as practicable.

         11.2     ASSIGNMENT.

                  11.2.1   ASSIGNMENT BY APOLLO. Apollo shall not assign this
                           Agreement or any of its rights or obligations
                           hereunder to any Third Party without the prior
                           written consent of AHPC, which consent may be
                           provided or withheld in AHPC's sole discretion.
                           Notwithstanding, the foregoing, subject to the prior
                           written consent of AHPC, which consent shall not be
                           unreasonably withheld, Apollo may assign this
                           Agreement or any of its rights or obligations
                           hereunder to any of its Affiliates, for so long as
                           they remain Affiliates; provided, however, that such
                           assignment shall not relieve Apollo of its
                           responsibilities for performance of its obligations
                           under this Agreement. Additionally, AHPC's consent
                           shall not be required in the event that Apollo
                           assigns this Agreement to a Third Party as a part of
                           a merger of Apollo, with or the sale of all of
                           Apollo's assets to such Third Party, provided,
                           however, that (i) within ten (10) days of signing an
                           agreement for such merger or sale, Apollo shall
                           provide AHPC with written notice thereof, specifying
                           to whom this Agreement is to be assigned and when
                           such assignment is to become effective and (ii) on
                           the effective date of such assignment, such Third
                           Party delivers to AHPC a signed agreement assuming
                           all of Apollo' obligations under this Agreement.

                  11.2.2   ASSIGNMENT BY AHPC. AHPC may assign this Agreement
                           and/or any of its rights or obligations hereunder to
                           any of its Affiliates or to any Third Party;
                           provided, that in the event of such an assignment, no
                           intellectual property rights of the assignee shall be
                           included in the technology to be licensed to Apollo
                           upon Apollo's exercise of its option hereunder. AHPC
                           shall promptly provide Apollo with written notice of
                           any such assignment.


                                       40


                  11.2.3   BINDING NATURE OF ASSIGNMENT. This Agreement shall be
                           binding upon and inure to the benefit of the
                           successors and permitted assigns of the Parties. Any
                           assignment not in accordance with this Section 11.2
                           shall be void.

         11.3     NO WAIVER. The failure of either Party to require performance
                  by the other Party of any of that other Party's obligations
                  hereunder shall in no manner affect the right of such Party to
                  enforce the same at a later time. No waiver by any Party
                  hereto of any condition, or of the breach of any provision,
                  term, representation or warranty contained in this Agreement,
                  whether by conduct or otherwise, in any one or more instances,
                  shall be deemed to be or construed as a further or continuing
                  waiver of any such condition or breach, or of any other
                  condition or of the breach of any other provision, term,
                  representation or warranty hereof.

         11.4     SEVERABILITY. If a court or other tribunal of competent
                  jurisdiction should hold any term or provision of this
                  Agreement to be excessive, or invalid, void or unenforceable,
                  the offending term or provision shall be deleted or revised to
                  the extent necessary to be enforceable, and, if possible,
                  replaced by a term or provision which, so far as practicable
                  achieves the legitimate aims of the Parties.

         11.5     RELATIONSHIP BETWEEN THE PARTIES. Both Parties are independent
                  contractors under this Agreement. Nothing herein contained
                  shall be deemed to create an employment, agency, joint venture
                  or partnership relationship between the Parties hereto or any
                  of their agents or employees, or any other legal arrangement
                  that would impose liability upon one Party for the act or
                  failure to act of the other Party. Neither Party shall have
                  any express or implied power to enter into any contracts or
                  commitments or to incur any liabilities in the name of, or on
                  behalf of, the other Party, or to bind the other Party in any
                  respect whatsoever.

         11.6     CORRESPONDENCE AND NOTICES.

                  11.6.1   ORDINARY NOTICES. Correspondence, reports,
                           documentation, and any other communication in writing
                           between the Parties in the course of ordinary
                           implementation of this Agreement shall be delivered
                           by hand, sent by facsimile, or by airmail to the
                           employee or representative of the other Party who is
                           designated by such other Party to receive such
                           written communication.

                  11.6.2   EXTRAORDINARY NOTICES. Extraordinary notices and
                           communications (including, without limitation,
                           Apollo' exercise of its option, notices of
                           termination, force majeure, material breach, change
                           of address) shall be in writing and delivered by hand
                           or sent


                                       41


                           by nationally recognized overnight delivery service,
                           prepaid registered or certified air mail, or by
                           facsimile confirmed by prepaid first class,
                           registered or certified mail letter, and shall be
                           deemed to have been properly served to the addressee
                           upon receipt of such written communication.

                  11.6.3   ADDRESSES. In the case of Apollo, the proper address
                           for communications shall be:

                                    Apollo BioPharmaceutics, Inc.
                                    One Broadway
                                    Suite 600
                                    Cambridge, MA  02142
                                    Attn: President
                                    Fax:  (617) 621-7156

                                    with a copy to:        Palmer & Dodge
                                                           One Beacon Street
                                                           Boston, MA 02108
                                                           Attn: [ * CON * ]
                                                           FAX:  (617) 227-4420

                           and it the case of AHPC, the proper address for
                           communications and for all payments shall be:

                                    Wyeth-Ayerst Laboratories
                                    555 East Lancaster Avenue
                                    St. Davids, Pennsylvania  19087
                                    Attn:  Senior Vice President,
                                           Global Business Development
                                    Fax:  (610) 688-9498

                                    with a copy to:

                                            American Home Products Corporation
                                            5 Giralda Farms
                                            Madison, New Jersey 07940
                                            Attn:  Senior Vice President and
                                                   General Counsel
                                            Fax: (973) 660-7156


         11.7     CHOICE OF LAW; DISPUTE RESOLUTION. This Agreement is subject
                  to and governed by the laws of the State of Delaware,
                  excluding its conflict of laws provisions. The Parties
                  recognize that a bona fide dispute as to certain matters may
                  from time to time arise during the term of this Agreement. In
                  the event of the occurrence of such a dispute either Party


                                       42


                  may, by written notice to the other Party (which notice shall
                  specify, without limitation, the particulars of the dispute
                  and the relevant provisions of this Agreement relating to such
                  dispute), have such dispute referred to their respective
                  officers (designated below) or their successors for attempted
                  resolution by good faith negotiations within thirty (30)
                  calendar days after such notice is received. Said designated
                  officers are as follows:

                           For AHPC:        Senior Vice President
                                            Global Business Development
                                            Wyeth-Ayerst Laboratories

                           For Apollo:      Vice President, Business Development
                                            Apollo BioPharmaceutics, Inc.

                           In the event the designated officers are not able to
                  resolve such dispute through good faith negotiations within
                  such thirty (30) calendar day period, the dispute shall then
                  be referred to their respective officers (designated below) or
                  their successors for attempted resolution by good faith
                  negotiations within thirty (30) calendar days after the end of
                  the thirty (30) day period described above. Said designated
                  officers are as follows:

                           If the dispute relates to a scientific or development
                  matter:

                           For AHPC:        President
                                            Wyeth-Ayerst Research

                           For Apollo:      President
                                            Apollo BioPharmaceutics, Inc.

                           If the dispute relates to a commercial or business
matter:

                           For AHPC:        Executive Vice President
                                            American Home Products Corporation

                           For Apollo:      President
                                            Apollo BioPharmaceutics, Inc.

                  In the event the designated officers are not able to resolve
                  such dispute through good faith negotiations within such
                  thirty (30) calendar day period, either Party may pursue any
                  legal or equitable remedies available to it by filing a claim
                  in the state or federal courts of the state of Delaware and
                  each Party hereby consents to the jurisdiction of such court
                  and each Party hereby irrevocably waives its right to a jury
                  trial before such court. Notwithstanding the foregoing,
                  nothing in this Section 11.7 shall prohibit a Party from
                  seeking temporary or injunctive relief from a state or federal


                                       43


                  court in Delaware pending the resolution of a dispute in
                  accordance with the provisions of this Section 11.7.
                  Notwithstanding the foregoing, none of the provisions of this
                  Section 11.7 shall apply if and to the extent that this
                  Agreement becomes a direct license between [ * CON * ] and
                  AHPC as provided in Section 2.5 hereof, PROVIDED, HOWEVER,
                  that [ * CON * ] and AHPC will use good faith efforts to have
                  any disputes between them resolved by their respective senior
                  management prior to seeking any remedies that may be available
                  through the courts.

         11.8     PROVISIONS FOR INSOLVENCY.

                  11.8.1   EFFECT ON LICENSES. All rights and licenses granted
                           under or pursuant to this Agreement by Apollo to AHPC
                           are, for all purposes of Section 365(n) of Title 11
                           of the United States Code ("Title 11"), licenses of
                           rights to "intellectual property" as defined in Title
                           11. Apollo agrees that AHPC, as licensee of such
                           rights under this Agreement shall retain and may
                           fully exercise all of its rights and elections under
                           Title 11. Apollo agrees during the Term of this
                           Agreement to create and maintain current copies or,
                           if not amenable to copying, detailed descriptions or
                           other appropriate embodiments, to the extent
                           feasible, of all such intellectual property. If a
                           case is commenced by or against Apollo under Title
                           11, Apollo (in any capacity, including
                           debtor-in-possession) and its successors and assigns
                           (including, without limitation, a Title 11 Trustee)
                           shall,

                                    (i)      as AHPC may elect in a written
                                             request, immediately upon such
                                             request:

                                            (A)      perform all of the
                                                     obligations provided in
                                                     this Agreement to be
                                                     performed by Apollo
                                                     including, where applicable
                                                     and without limitation,
                                                     providing to AHPC portions
                                                     of such intellectual
                                                     property (including
                                                     embodiments thereof) held
                                                     by Apollo and such
                                                     successors and assigns or
                                                     otherwise available to
                                                     them; or

                                            (B)      provide to AHPC all such
                                                     intellectual property
                                                     (including all embodiments
                                                     thereof) held by Apollo and
                                                     such successors and assigns
                                                     or otherwise available to
                                                     them; and

                                    (ii)    not interfere with the rights of
                                            AHPC under this Agreement, or any
                                            agreement supplemental hereto,


                                       44


                                            to such intellectual property
                                            (including such embodiments),
                                            including any right to obtain such
                                            intellectual property (or such
                                            embodiments) from another entity.

                  11.8.2   RIGHTS TO INTELLECTUAL PROPERTY. If a Title 11 case
                           is commenced by or against Apollo, and this Agreement
                           is rejected as provided in Title 11, and AHPC elects
                           to retain its rights hereunder as provided in Title
                           11, then Apollo (in any capacity, including
                           debtor-in-possession) and its successors and assigns
                           (including, without limitation, a Title 11 Trustee)
                           shall provide to AHPC all such intellectual property
                           (including all embodiments thereof) held by Apollo
                           and such successors and assigns, or otherwise
                           available to them, immediately upon AHPC's written
                           request. Whenever Apollo or any of its successors or
                           assigns provides to AHPC any of the intellectual
                           property licensed hereunder (or any embodiment
                           thereof) pursuant to this Section 14.8, AHPC shall
                           have the right to perform the obligations of Apollo
                           hereunder with respect to such intellectual property,
                           but neither such provision nor such performance by
                           AHPC shall release Apollo from any such obligation or
                           liability for failing to perform it.

                  11.8.3   AHPC'S RIGHTS. All rights, powers and remedies of
                           AHPC provided herein are in addition to and not in
                           substitution for any and all other rights, powers and
                           remedies now or hereafter existing at law or in
                           equity (including, without limitation, Title 11) in
                           the event of the commencement of a Title 11 case by
                           or against Apollo. AHPC, in addition to the rights,
                           power and remedies expressly provided herein, shall
                           be entitled to exercise all other such rights and
                           powers and resort to all other such remedies as may
                           now or hereafter exist at law or in equity
                           (including, without limitation, Title 11) in such
                           event. The Parties agree that they intend the
                           foregoing AHPC rights to extend to the maximum extent
                           permitted by law, including, without limitation, for
                           purposes of Title 11:

                                    (i)      the right of access to any
                                             intellectual property (including
                                             all embodiments thereof) of Apollo,
                                             or any Third Party with whom Apollo
                                             contracts to perform an obligation
                                             of Apollo under this Agreement,
                                             and, in the case of the Third
                                             Party, which is necessary for the
                                             development, registration,
                                             manufacture and marketing of
                                             Licensed Compounds and/or Licensed
                                             Products; and


                                       45


                                    (ii)    the right to contract directly with
                                            any Third Party described in (i) to
                                            complete the contracted work.

         11.9     EXPORT CONTROLS. AHPC hereby agrees that it shall not sell,
                  transfer, export or re-export any Licensed Product or related
                  information in any form, or any direct products of such
                  information, except in compliance with all applicable laws,
                  including the export laws of the United States Government and
                  any federal regulations implementing such laws. AHPC shall be
                  solely responsible for obtaining all licenses, permits or
                  authorizations required from the United States Government or
                  the government of any other nation for any such export or
                  re-export. Apollo agrees to provide AHPC with such assistance
                  as AHPC may reasonably request in obtaining such license,
                  permits or authorizations.

         11.10    NON-USE OF NAMES. AHPC shall not use Apollo's, [ * CON * ]
                  name or the names of either of such institution's employees or
                  any adaptation thereof, in any advertising, promotional or
                  sales literature without the prior written consent obtained
                  from Apollo, [ * CON * ], as applicable. Apollo shall not use
                  AHPC's name, the names of any of AHPC's Affiliates or the
                  names of any of their respective employees, or any adaptation
                  thereof, in any advertising, promotional or sales literature
                  without AHPC's prior written consent. Notwithstanding the
                  foregoing, to the extent permitted under Section 10.4 hereof,
                  AHPC and Apollo may each state that the [ * CON * ] and that
                  this Agreement are in effect.

         11.11    ENTIRE AGREEMENT; AMENDMENT. This Agreement and all the
                  covenants, promises, agreements, warranties, representations,
                  conditions and understandings contained herein sets forth the
                  complete, final and exclusive agreement between the Parties
                  and supersedes and terminates all prior and contemporaneous
                  agreements and understandings between the Parties, whether
                  oral or in writing. There are no covenants, promises,
                  agreements, warranties, representations, conditions or
                  understandings, either oral or written, between the Parties
                  other than as are set forth in this Agreement. No subsequent
                  alteration, amendment, change, waiver or addition to this
                  Agreement shall be binding upon the Parties unless reduced to
                  writing and signed by an authorized officer of each Party. No
                  understanding, agreement, representation or promise, not
                  explicitly set forth herein, has been relied on by either
                  Party in deciding to execute this Agreement.

         11.12    HEADINGS. The headings and captions used in this Agreement are
                  solely for the convenience of reference and shall not affect
                  its interpretation.


                                       46


         11.13    COUNTERPARTS. This Agreement may be executed in one or more
                  counterparts each of which shall be an original and all of
                  which shall constitute together the same document.

         11.14    FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
                  deliver such further instruments, and to do all other acts, as
                  may be necessary or appropriate in order to carry out the
                  purposes and intent of this Agreement including, without
                  limitation, any filings with any antitrust agency which may be
                  required.

         IN WITNESS WHEREOF, this Agreement has been executed by the duly
authorized representatives of the Parties as of the date set forth below.


AMERICAN HOME PRODUCTS CORPORATION           APOLLO BIOPHARMACEUTICS, INC.



- --------------------------------------       ----------------------------------
Name:                                        Name:
Title:                                       Title:


                                       47



    [CERTAIN MATERIAL (INDICATED BY A [*CON*]) HAS BEEN OMITTED FROM THIS
    DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED
MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]



                                    EXHIBIT A
                             APOLLO PATENT RIGHTS

[ * CON * ]


                                      A-1


                                    EXHIBIT B

          DEFINITION OF "ESTROGEN" EXCERPTED FROM U.S PATENT [ * CON * ]


[ * CON * ]


                                      B-1



                                    EXHIBIT C

                  ADVERSE DRUG EXPERIENCE REPORTING PROCEDURES


[ * CON * ]


                                      C-1

EX-10.22

                                                                   Exhibit 10.22


    [CERTAIN MATERIAL (INDICATED BY A [*CON*]) HAS BEEN OMITTED FROM THIS
    DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED
MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]


                COLLABORATIVE RESEARCH AND DEVELOPMENT AGREEMENT


This COLLABORATIVE RESEARCH AGREEMENT ("Agreement") is entered into as of
November 4, 1998 by and between PFIZER INC, and its Affiliates ("Pfizer"), a
Delaware corporation, having an office at 235 East 42nd Street, New York, New
York 10017, and MITOKOR, and its Affiliates ("Mitokor"), a California
corporation, having an office at 11494 Sorrento Valley Road, San Diego,
California 92121;

WHEREAS, Mitokor has expertise in biology, biochemistry, proteomics and
molecular sciences focused on the mitochondria ; and

WHEREAS, Mitokor owns the patents and patent applications set forth in Exhibit A
attached to and made part of this Agreement with respect to cybrid cell line
technology and mitochondrial research reagents; and

WHEREAS, Pfizer has the capability to undertake research for the discovery and
evaluation of agents for treatment of disease and also the capability for
clinical analysis, manufacturing and marketing with respect to therapeutic
agents; and

WHEREAS, Pfizer and Mitokor enter into this Agreement to discover and develop
patentable small molecules that affect mitochondrial biochemical targets useful
in the treatment, prevention or diagnosis of disease in human and animal health;

NOW, THEREFORE, the parties agree as follows:

1. DEFINITIONS




                                       2

Whenever used in this Agreement, the terms defined in this Section 1 shall have
the meanings specified.

      1.1 "AFFILIATE" means any corporation or other legal entity owning,
directly or indirectly, fifty percent (50%) or more of the voting capital shares
or similar voting securities of Pfizer or Mitokor; any corporation or other
legal entity fifty percent (50%) or more of the voting capital shares or similar
voting rights of which is owned, directly or indirectly, by Pfizer or Mitokor or
any corporation or other legal entity fifty percent (50%) or more of the voting
capital shares or similar voting rights of which is owned, directly or
indirectly, by a corporation or other legal entity which owns, directly or
indirectly, fifty percent (50%) or more of the voting capital shares or similar
voting securities of Pfizer or Mitokor.

      1.2 "RESEARCH PLAN" means the written plan describing the research and
development in the Area to be carried out by Pfizer and Mitokor pursuant to this
Agreement. The initial Research Plan is attached to and made a part of this
Agreement as Exhibit B.

      1.3 "RESEARCH PROGRAM" is the collaborative research program in the Area
conducted by Pfizer and Mitokor pursuant to the Research Plan.

      1.4 "EFFECTIVE DATE" is November 4, 1998.

      1.5 "CONTRACT PERIOD" means the period beginning on the Effective Date and
ending on the date on which this Agreement terminates.

      1.6 "AREA" means research and development of small molecules directed to
Molecular Targets with respect to therapeutic agents directed to the treatment
or prevention or both of mitochondrial dysfunction in neurodegenerative disease
and [ * CON * ] in the course of the research or development as specified in the
Research Plan.

      1.7 "TECHNOLOGY" means and includes all materials, technology, technical
information, know-how, expertise and trade secrets within the Area.



                                       3


      1.8 "MITOKOR TECHNOLOGY" means Technology that is or was developed by
employees of or consultants to Mitokor alone or jointly with third parties prior
to the Effective Date, but, in the case of consultants or third parties, only to
the extent Mitokor has the right to grant rights to such Technology.

      1.9 "PROGRAM TECHNOLOGY" means Technology that is or was developed by
employees of or consultants to Pfizer or Mitokor solely or jointly with each
other in the course of performing the Research Program including (i) Molecular
Targets (ii) associated assays, research reagents and high throughput screens;
provided, however that Cybrid Cell Lines shall not be Program Technology and
shall be owned by Mitokor and deemed to be Mitokor Technology.

      1.10 "PFIZER TECHNOLOGY" means Technology that is or was developed by
employees of or consultants to Pfizer alone or jointly with third parties prior
to the Effective Date, but, in the case of consultants or third parties, only to
the extent Pfizer has the right to grant rights to such Technology.

      1.11 "MITOKOR CONFIDENTIAL INFORMATION" means all information about any
element of the Mitokor Technology or Program Technology which is disclosed by
Mitokor to Pfizer and designated "Confidential" in writing by Mitokor at the
time of disclosure or within thirty (30) days following disclosure, to the
extent that such information as of the date of disclosure to Pfizer is not (i)
known to Pfizer other than by virtue of a prior confidential disclosure to
Pfizer by Mitokor; or (ii) disclosed in published literature, or otherwise
generally known to the public through no fault or omission of Pfizer; or (iii)
obtained from a third party free from any obligation of confidentiality to
Mitokor.

      1.12 "PFIZER CONFIDENTIAL INFORMATION" means all information about any
element of Pfizer or Program Technology which is disclosed by Pfizer to Mitokor
and designated "Confidential" in writing by Pfizer at the time of disclosure or
within thirty (30) days following disclosure to the extent that such information
as



                                       4


of the date of disclosure to Mitokor is not (i) known to Mitokor other than by
virtue of a prior confidential disclosure to Mitokor by Pfizer; or (ii)
disclosed in published literature, or otherwise generally known to the public
through no fault or omission of Mitokor; or (iii) obtained from a third party
free from any obligation of confidentiality to Pfizer.

      1.13 "VALID CLAIM" means a claim within Patent Rights so long as such
claim shall not have been disclaimed by Pfizer (in the case of Patent Rights
within the Pfizer Technology) or by Mitokor (in the case of Patent Rights within
the Mitokor Technology) or both (in the case of Patent Rights within the Program
TECHNOLOGY) and shall not have been held invalid in a final decision rendered by
a tribunal of competent jurisdiction from which no appeal has been or can be
taken.

      1.14 "PATENT RIGHTS" shall mean all patent rights in and to inventions
within Pfizer Technology, Mitokor Technology or Program Technology including all
the Valid Claims of patent applications, whether domestic or foreign, claiming
such patentable inventions, including all continuations, continuations-in-part,
divisions, and renewals, all letters patent granted thereon, and all reissues,
reexaminations and extensions thereof, including but not limited to, as to
Mitokor Technology, those listed in Exhibit A.

      1.15 "MOLECULAR TARGET " shall mean one of the specific proposed molecular
targets that both parties agree to include in the collaborative Research
Program.

      1.16 " DIAGNOSTIC PRODUCT" means any product within the Area useful for
the identification or quantification of the propensity toward or actual
existence of a disease state in a human or animal patient or any other human or
animal diagnostic utility identified in the course of research the manufacture,
use, sale, offer for sale or import of which would infringe any Valid Claim
within the Patent Rights.



                                       5


      1.17 "THERAPEUTIC PRODUCT" means any product directed to a Molecular
Target for the management of any disease or pre-disease state in a patient or
[ * CON * ] in the course of the Research Program the manufacture, use, sale,
offer for sale or import of which would infringe any Valid Claim within the
Patent Rights.

      1.18 "HTS" means a primary assay supplied by Mitokor to Pfizer in a format
suitable for Pfizer to prepare an automated high throughput screen against a
Molecular Target for the purpose of initially identifying small molecules that
affect the Molecular Target.

      1.19 "CYBRID CELL LINES" are cybrid cell lines developed by Mitokor prior
to the Research Program or in the course of conducting the Research Program.

      1.20 "PFIZER'S COMPOUND LIBRARY" are those compounds in Pfizer's
possession which may be screened by Pfizer using the HTS assays provided to
Pfizer pursuant to this Agreement.

2. COLLABORATIVE RESEARCH PROGRAM

      2.1 PURPOSE. Mitokor and Pfizer shall conduct the Research Program
throughout the Contract Period. All Technology in the Area developed in the
course of performing the Research Plan will become part of the Program
Technology. The objective of the Research Program is to discover and develop
Therapeutic Products.

      2.2 RESEARCH PLAN. The initial Research Plan is described in the attached
Exhibit B. Each new Research Plan, for the addition of each succeeding Molecular
Target in the Area, or otherwise, shall be appended to Exhibit B and made part
of this Agreement.

      2.3 EXCLUSIVITY. Mitokor agrees that during the Contract Period, Mitokor
shall not conduct research itself or sponsor any other research, or engage



                                       6


in any research sponsored by any third party for any Molecular Target, with the
exception of any research and development necessary for Diagnostic Products,
without Pfizer's consent.

      2.4 RESEARCH COMMITTEE

            2.4.1 PURPOSE. Pfizer and Mitokor shall establish a Research
Committee (the "Research Committee"):

            (a) to review and evaluate progress under the Research Plan;

            (b) to prepare the Research Plan, and any amendments; and

            (c) to propose, discuss, select and document in writing, the mutual
acceptance of Molecular Targets in the Area to be included in the Research Plan;
and

            (d) to coordinate and monitor publication of research results
obtained from the Research Program as specified in Section 4.2 and to coordinate
and monitor the exchange of information and materials that relate to the
Research Program (this function shall survive the termination of this
Agreement).

            2.4.2 MEMBERSHIP. Pfizer and Mitokor each shall appoint, in its sole
discretion, three members to the Research Committee. Substitutes may be
appointed at any time.

            The members initially shall be:

            Pfizer Appointees:     Dr. [ * CON * ] (co-Chair)
                                   To be named
                                   Dr. [ * CON * ]

            Mitokor Appointees:    Dr. [ * CON * ] (co-Chair)
                                   To be named
                                   Dr. [ * CON * ]



                                       7


            2.4.3 CHAIR. The Research Committee shall be chaired by two
co-chairpersons, one appointed by Pfizer and the other appointed by Mitokor.

            2.4.4 MEETINGS. The Research Committee shall meet at least
quarterly, at places selected by each party in turn and on dates mutually agreed
by the parties. The location of the first meeting of the Research Committee
shall be at Pfizer's election. Representatives of Pfizer or Mitokor or both, in
addition to members of the Research Committee, may attend such meetings at the
invitation of either party.

            2.4.5 MINUTES. The Research Committee shall keep accurate minutes of
its deliberations which record all proposed decisions and all actions
recommended or taken. Drafts of the minutes shall be delivered to all Research
Committee members within five (5) business days after each meeting. The party
choosing the location for the meeting shall be responsible for the preparation
and circulation of the draft minutes. Draft minutes shall be edited by the
co-chairpersons and shall be issued in final form only with their approval and
agreement.

            2.4.6 DECISIONS. All decisions of the Research Committee shall be
made by a majority of the members. Notwithstanding the foregoing or any other
provision of this Agreement, Research Plans may only be amended (and Research
Plans for an additional Molecular Targets adopted) as mutually agreed by the
Research Committee and approved by Pfizer's and Mitokor's managements.

            2.4.7 EXPENSES. Pfizer and Mitokor shall [ * CON * ], related to the
participation of their designated members of the Research Committee,
respectively.

      2.5 REPORTS AND MATERIALS.

            2.5.1 REPORTS. During the Contract Period, Pfizer and Mitokor each
shall furnish to the Research Committee:



                                       8


            (a) summary written reports within fifteen (15) days after the end
of each stage of the Research Plan, commencing on the Effective Date, describing
the progress under the Research Plan; and

            (b) comprehensive written reports within thirty (30) days after the
end of each contract year, describing in detail the work accomplished by it
under the Research Plan during the year and discussing and evaluating the
results of such work.

            2.5.2 MATERIALS. Mitokor and Pfizer shall, during the Contract
Period, as a matter of course as described in the Research Plan, or upon each
other's written or oral request, furnish to each other samples of biochemical,
biological or synthetic chemical materials which are part of Pfizer Technology,
Mitokor Technology or Program Technology and which are necessary for each party
to carry out its responsibilities under the Research Plan; provided, however,
that Mitokor shall, upon request, deliver to Pfizer samples of any material made
pursuant to the Research Plan; and, further provided that such material will not
include the transfer of Cybrid Cell Lines by Mitokor. To the extent that Pfizer
requests [ * CON * ] under the Research Plan, Pfizer shall [ * CON * ].

      2.6 LABORATORY FACILITIES AND PERSONNEL. Mitokor shall provide suitable
laboratory facilities, equipment and personnel for the work to be done by
Mitokor in carrying out the Research Program.

      2.7 DILIGENT EFFORTS. Pfizer and Mitokor each shall use reasonably
diligent efforts to achieve the objectives of the Research Program. Mitokor will
use reasonably diligent efforts to achieve the objectives listed in the Research
Plan and Pfizer will use reasonably diligent efforts to assist Mitokor in each
Research Plan.

3. PAYMENTS.



                                       9


      3.1 RESEARCH PROGRAM FUNDING. Pfizer will fund the research to be
performed by Mitokor, pursuant to this Agreement, according to the following
schedule:

Commitment Year                               Annual Commitment
- ---------------                               -----------------
     1                                          $ [ * CON * ]
     2                                          $ [ * CON * ]
     3                                          $ [ * CON * ]


      The funding payments are expected to support the work of [ * CON * ]
      ([ * CON * ]) full time equivalents (FTEs).

            3.1.1 All funding payments shall be made quarterly in advance for
work scheduled to be performed by Mitokor during any three (3) month period,
against Mitokor's invoice for such three (3) month period. Adjustments as
necessary to reflect the work actually performed by Mitokor shall be made at the
end of each three (3) month period and shall be reflected in Mitokor's invoice
for the next three (3) month period. It is understood that all payments pursuant
to this Section are noncreditable and nonrefundable.

            3.1.2 The amount of the Funding Payment for each quarter shall be
based on the work in progress pursuant to the applicable Research Plan and the
associated annual budget; provided, however, that the aggregate amount of
Funding Payments made in any Commitment Year shall not exceed the Annual
Commitment for such Commitment Year.

      3.2 OTHER PAYMENTS.

            3.2.1 INITIAL PAYMENT. Within ten (10) days of the execution of this
Agreement, Pfizer will pay to Mitokor a one time, non refundable, noncreditable
payment of $[ * CON * ].

            3.2.2 As set forth in the initial Research Plan and subsequent
amendments, Mitokor will provide to Pfizer [ * CON * ] ([ * CON * ]) HTS,
reasonably acceptable to Pfizer . For each additional HTS



                                       10


provided by Mitokor and accepted by Pfizer, after the [ * CON * ] ([ * CON * ])
described above and included in the Research Plan, Pfizer will pay to Mitokor
the sum of $[ * CON * ] for each HTS which contains a [ * CON * ], or the sum of
$[ * CON * ] for an HTS that does not contain a [ * CON * ]. These payments are
in addition to the Research Funding in Section 3.1 and are noncreditable and
non-refundable.

            3.2.3 ADDITIONAL EQUITY PURCHASE. Concurrently with the execution of
this Agreement, Pfizer has made an initial investment in Mitokor in accordance
with the Stock Purchase Agreement attached as Exhibit D. At such time as
[ * CON * ] ([ * CON * ]) HTS have been accepted by the Research Committee and
added to the Research Plan, as described above, Pfizer shall purchase from
Mitokor $ [ * CON * ] in additional shares of capital stock in Mitokor at a
[ * CON * ] percent ([ * CON * ]%) premium to the then current price for such
shares. Such purchase shall be, at Mitokor's sole discretion, by means of
Pfizer's participation in a further round of private financing or a public
offering. Such purchase shall be in accordance with the terms and conditions of
a stock purchase agreement to be entered into between Mitokor and Pfizer, which
agreement shall contain substantially the same terms, conditions and
registration rights for shares as in the Stock Purchase Agreement.

            3.2.4 Pfizer will pay to Mitokor the sum of $[ * CON * ] when Pfizer
issues a [ * CON * ] with respect to a compound derived from the Research
Program. This payment will be made one time only for each compound directed
against a Molecular Target and a specific indication and will not include
back-up compounds directed against the same Molecular Target and indication.
These payments are noncreditable and non-refundable.

      3.3 US FUNDS. Each payment pursuant to this Agreement shall be paid by
Pfizer in U.S. currency by wire transfer in immediately available funds to an



                                       11


account designated by Mitokor, or by other mutually acceptable means within
thirty (30) days after receipt and acceptance by Pfizer of the invoice from
Mitokor.

      3.4 RECORDS. Mitokor shall keep for three (3) years from the conclusion of
each year complete and accurate records of its expenditures of efforts from
payments received by it from Pfizer under Section 3.1. The records shall conform
to good accounting principles as applied to a similar company similarly
situated. Pfizer shall have the right at its own expense during the term of this
Agreement and during the subsequent three-year period to appoint an independent
certified public accountant reasonably acceptable to Mitokor to inspect said
records to verify the accuracy of such expenditures of efforts, pursuant to each
Research Plan. Upon reasonable notice by Pfizer, Mitokor shall make its records
available for inspection by the independent certified public accountant during
regular business hours at the place or places where such records are customarily
kept, to verify the accuracy of the expenditures of efforts. This right of
inspection shall not be exercised more than once in any calendar year and not
more than once with respect to records covering any specific period of time. All
information concerning such expenditures of efforts, and all information learned
in the course of any audit or inspection, shall be deemed to be Mitokor
Confidential Information, except to the extent that it is necessary for Pfizer
to reveal the information in order to enforce any rights it may have pursuant to
this Agreement or if disclosure is required by law. The failure of Pfizer to
request verification of any expenditures of efforts before or during the
three-year period shall be considered acceptance by Pfizer of the accuracy of
such expenditures of efforts, and Mitokor shall have no obligation to maintain
any records pertaining to such report or statement beyond such three-year
period. The findings of such inspection, if any, shall be binding on the
parties.



                                       12


4. TREATMENT OF CONFIDENTIAL INFORMATION

      4.1 CONFIDENTIALITY

            4.1.1 Pfizer and Mitokor each recognize that the other's
Confidential Information constitutes highly valuable, confidential information.
Subject to the terms and conditions of the License Agreement between the parties
of even date with this Agreement (the "License Agreement"), the obligations set
forth in Section 4.3 and the publication rights set forth in Section 4.2, Pfizer
and Mitokor each agree that during the term of this Agreement and for
[ * CON * ] ([ * CON * ]) years thereafter, it will keep confidential, and will
cause its Affiliates and sublicensees to keep confidential, all Mitokor
Confidential Information or Pfizer Confidential Information, as the case may be,
that is disclosed to it, or to any of its Affiliates or sublicensees pursuant to
this Agreement. Neither Pfizer nor Mitokor nor any of their respective
Affiliates or sublicensees shall use such Confidential Information of the other
party except as expressly permitted in this Agreement. For the purposes of this
Section 4, it is understood that Program Technology shall be deemed Confidential
Information of both parties.

            4.1.2 Pfizer and Mitokor each agree that any disclosure of the
other's Confidential Information to any officer, employee or agent of the other
party or of any of its Affiliates shall be made only if and to the extent
necessary to carry out its responsibilities under this Agreement and shall be
limited to the maximum extent possible consistent with such responsibilities.
Pfizer and Mitokor each agree not to disclose the other's Confidential
Information to any third parties under any circumstance without written
permission from the other party. Each party shall take such action, and shall
cause its Affiliates and sublicensees to take such action, to preserve the
confidentiality of each other's Confidential Information as it would customarily
take to preserve the confidentiality of its own Confidential Information. Each
party, upon the other's request, will return all the Confidential



                                       13


Information disclosed to it by the other party pursuant to this Agreement,
including all copies and extracts of documents, within sixty (60) days of the
request upon the termination of this Agreement except for one (1) copy which may
be kept for the purpose of complying with continuing obligations under this
Agreement.

            4.1.3 Mitokor and Pfizer each represent that all of its employees,
and any consultants to such party, participating in the Research Program who
shall have access to Program Technology, the Technology of the other (Pfizer
Technology or Mitokor Technology, as the case may be) or Confidential
Information of the other (Pfizer Confidential Information or Mitokor
Confidential Information, as the case may be) are bound by agreement to maintain
such information in confidence.

      4.2 PUBLICATION. Notwithstanding any matter set forth with particularity
in this Agreement to the contrary, results obtained in the course of the
Research Program may be submitted for publication following scientific review by
the Research Committee and subsequent written approval by Mitokor's and Pfizer's
managements, which approval shall not be unreasonably withheld. After receipt of
the proposed publication by both Pfizer's and Mitokor's managements written
approval or disapproval shall be provided within thirty (30) days for a
manuscript, and within fourteen (14) days for an abstract for presentation at,
or inclusion in the proceedings of a scientific meeting, and within fourteen
(14) days for presentation materials to be used at a scientific meeting.

      4.3 PUBLICITY. Except as required by law, and except for a mutually
approved press release to be issued upon the signing of this Agreement, neither
party may disclose the terms of this Agreement nor the research described in it
without the written consent of the other party, which consent shall not be
unreasonably withheld; provided, however, that Mitokor may disclose the terms,



                                       14


or provide copies, of this Agreement as necessary in the normal course of
business to bankers, investors and others in order to obtain financing.

      4.4 PERMITTED DISCLOSURE.

            4.4.1 DISCLOSURE REQUIRED BY LAW. If either party is requested to
disclose the Confidential Information in connection with a legal or
administrative proceeding or is otherwise required by law to disclose the
Confidential Information, such party will give the other party prompt notice of
such request. The disclosing party may seek an appropriate protective order or
other remedy or waive compliance with the provisions of this Agreement. If such
party seeks a protective order or other remedy, the other party will cooperate.
If such party fails to obtain a protective order or waive compliance with the
relevant provisions of this Agreement, the other party will disclose only that
portion of Confidential Information which its legal counsel determines it is
required to disclose.

            4.4.2 DISCLOSURE OF INVENTIONS. Each party shall promptly inform the
other about all inventions in the Area within the Program Technology that are
made in the course of carrying out the Research Program by employees of, or
consultants to, either of them solely, or jointly with employees of, or
consultants to the other.

      4.5 RESTRICTIONS ON TRANSFERRING MATERIALS. Mitokor and Pfizer recognize
that the biological, biochemical and chemical materials which are part of
Program Technology, represent valuable commercial assets. Therefore, throughout
the Contract Period and for [ * CON * ] ([ * CON * ]) years thereafter, Mitokor
and Pfizer agree not to transfer such materials to any third party, unless prior
written consent for any such transfer is obtained from the other party.

5. INTELLECTUAL PROPERTY RIGHTS. The following provisions relate to intellectual
property rights in the Program Technology.



                                       15


      5.1 OWNERSHIP. All Mitokor Confidential Information and Mitokor Technology
shall be owned by Mitokor. All Pfizer Confidential Information and Pfizer
Technology shall be owned by Pfizer. All Program Technology shall be jointly
owned by Mitokor and Pfizer except for the Cybrid Cell Lines which shall be
owned by Mitokor.

      5.2 GRANTS OF RESEARCH LICENSES.

            5.2.1 Mitokor and Pfizer each grants to the other a nonexclusive,
irrevocable, worldwide, royalty-free, perpetual license, including the right to
grant sublicenses to Affiliates, to make and use Confidential Information,
Program Technology and Patent Rights for all research purposes other than the
sale or manufacture for sale of products or processes; provided, however, that
this license does not include and the other party shall not acquire, by virtue
of this Section 5.2 , any rights in the following:

      (i) Cybrid Cell Lines ; or

      (ii) Pfizer's Compound Library; or

      (iii) any compounds active in HTS which Pfizer chooses, in its sole,
unfettered discretion, not to develop or otherwise include in the Program
Technology.

            5.2.2 Any Section in this Agreement to the contrary notwithstanding,
if Pfizer employs an HTS subsequent to the termination of this Agreement, to
identify a product lead, Pfizer shall develop such lead subject to all terms and
conditions of this Agreement and the License Agreement.

6. PROVISIONS CONCERNING THE FILING, PROSECUTION AND MAINTENANCE OF PATENT
RIGHTS. The following provisions relate to the filing, prosecution and
maintenance of Patent Rights during the term of this Agreement:



                                       16


      6.1 FILING, PROSECUTION AND MAINTENANCE BY MITOKOR. With respect to
Patent Rights in which Mitokor employees or consultants, alone or together
with Pfizer employees, or consultants are named as inventors, Mitokor shall
have the exclusive right and obligation:

            (a) to file applications for letters patent on patentable inventions
included in Patent Rights; provided, however, that Mitokor shall consult with
Pfizer regarding countries in which such patent applications should be filed and
shall file patent applications in those countries where Pfizer requests that
Mitokor file such applications; and, further provided, that Mitokor, at its
option and expense, may file in countries where Pfizer does not request that
Mitokor file such applications;

            (b) to take all reasonable steps to prosecute all pending and new
patent applications included within Patent Rights;

            (c) to respond to oppositions, nullity actions, re-examinations,
revocation actions, interference proceedings and similar proceedings filed by
third parties against the grant of letters patent for such applications;

            (d) to maintain in force any letters patent included in Patent
Rights by duly filing all necessary papers and paying any fees required by the
patent laws of the particular country in which such letters patent were granted;
and

            (e) to cooperate fully with, and take all necessary actions
requested by, Pfizer in connection with the preparation, prosecution and
maintenance of any letters patent included in Patent Rights.

      Mitokor shall notify Pfizer in a timely manner of any decision to not
pursue an action or to abandon a pending patent application or an issued patent
included in Patent Rights. Thereafter, Pfizer shall have the option, at its
expense, of taking such action or continuing to prosecute any such pending
patent application or of keeping the issued patent in force, or all of these.



                                       17


            6.1.1 COPIES OF DOCUMENTS. Mitokor and Pfizer shall provide to each
other copies of all patent applications that are part of Patent Rights prior to
filing, for the purpose of obtaining substantive comment of the other party's
patent counsel. Mitokor and Pfizer shall also provide to the other copies of all
material documents relating to prosecution of all such patent applications in a
timely manner and shall provide to the other every six (6) months a report
detailing the status of all patent applications that are a part of Patent
Rights.

            6.1.2 REIMBURSEMENT OF COSTS FOR FILING PROSECUTING AND MAINTAINING
PATENT RIGHTS. Within thirty (30) days of receipt of invoices from Mitokor,
Pfizer shall reimburse Mitokor for all the costs of filing, prosecuting,
responding to opposition and maintaining patent applications and patents in
countries where Pfizer consents to or requests that patent applications be
filed, prosecuted and maintained. Such reimbursement shall be in addition to
other funding payments under this Agreement and shall include such costs of all
activities described in 6.1 (a)-(e) above. However, Pfizer may, upon sixty (60)
days notice, request that Mitokor discontinue filing or prosecution of certain
patent applications in any country and discontinue reimbursing Mitokor for the
costs of filing, prosecuting, responding to opposition or maintaining such
patent application or patent in any country. Mitokor shall pay all costs in
those countries in which Pfizer requests that Mitokor not file, prosecute or
maintain patent applications and patents, but in which Mitokor, at its option,
elects to do so.

      6.2 FILING, PROSECUTION AND MAINTENANCE BY PFIZER. With respect to Patent
Rights in which Pfizer employees or consultants alone are named as inventors,
Pfizer shall have those rights and duties ascribed to Mitokor in Section 6.1.,
except that Pfizer will bear all related expenses.

      6.3 Neither party may disclaim a Valid Claim within Patent Rights without
the written consent of the other.



                                       18


7. ACQUISITION OF RIGHTS FROM THIRD PARTIES. During the Contract Period, Mitokor
and Pfizer shall each promptly notify each other of any appropriate
opportunities to acquire in any manner from third parties, technology or patents
or information which it elects to use in the course of performing the Research
Program. Mitokor and Pfizer shall decide if such rights should be acquired in
connection with the Research Program and, if so, whether by Mitokor, Pfizer or
both, it being understood that nothing herein shall obligate either party to
obtain such rights or, if it does acquire such rights, to make such rights
available for use in the Research Program. If acquired such rights shall become
part of the Confidential Information, Technology or Patent Rights, whichever is
appropriate, of the acquiring party or Program Technology, as the case may be.

8. OTHER AGREEMENTS. Concurrently with the execution of this Agreement, Mitokor
and Pfizer shall enter into the License Agreement of even date appended to and
made part of this Agreement as Exhibit C and the Stock Purchase Agreement
appended to and made a part of this Agreement as Exhibit D. This Agreement, the
Stock Purchase Agreement and the License Agreement are the sole agreements with
respect to the subject matter and supersede all other agreements and
understandings between the parties with respect to same.

9. TERM, TERMINATION AND DISENGAGEMENT.

      9.1 TERM. Unless sooner terminated, as provided below or extended, by
mutual agreement of the parties, this Agreement shall expire on November 3,
2001.

      9.2 EVENTS OF TERMINATION. The following events shall constitute events of
termination ("Events of Termination"):



                                       19


            (a) if any written representation or warranty by Mitokor or Pfizer,
or any of its officers, made under or in connection with this Agreement shall
prove to have been incorrect in any material respect when made;

            (b) Mitokor or Pfizer shall fail in any material respect to perform
or observe any term, covenant or understanding contained in this Agreement or in
any of the other documents or instruments delivered pursuant to, or concurrently
with, this Agreement, and any such failure shall remain unremedied for thirty
(30) days after written notice to the failing party.

      9.3 TERMINATION.

            9.3.1 UPON EVENT OF TERMINATION BY PFIZER OR MITOKOR. Upon the
occurrence of any Event of Termination, the party not responsible may, by
written notice to the other party, terminate this Agreement. 9.3.2 If Pfizer
terminates this Agreement pursuant to Section 9.3.1, the License Agreement shall
not terminate, but instead shall terminate or expire in accordance with its
terms. If Mitokor terminates this Agreement pursuant to Section 9.3.1, the
License Agreement shall terminate immediately.

      9.4 TERMINATION BY PFIZER. Between June 1 and August 1, 2000, Pfizer may
terminate this Agreement, with or without cause, by delivering written notice of
termination to Mitokor, for a termination effective November 3, 2000. Upon
Mitokor's receipt of such notice of termination by Pfizer, Mitokor may, at its
sole option, terminate all work under the Research Plan unless otherwise agreed
with Pfizer. If Pfizer terminates this Agreement pursuant to this Section, it
will make funding payments which would have otherwise been due through November
3, 2000 and Pfizer will retain all rights and obligations as set forth in the
License Agreement.

      9.5 Termination of this Agreement by either party, with or without cause,
will not terminate the licenses granted pursuant to Section 5.2.



                                       20


      9.6 Termination of this Agreement for any reason shall be without
prejudice to:

            (a) the rights and obligations of the parties provided in Sections
4, 5, 6, and 12 and any Sections which provide by its terms performance by
either party subsequent to termination;

            (b) Mitokor's right to receive all payments accrued under Section 3;
or

            (c) any other remedies which either party may otherwise have.

10. REPRESENTATIONS AND WARRANTIES. Mitokor and Pfizer each represents and
warrants as follows:

      10.1 It is a corporation duly organized, validly existing and is in good
standing under the laws of the States of California and Delaware, respectively,
is qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the conduct of its business or the ownership of its
properties requires such qualification; and it has all requisite power and
authority, corporate or otherwise, to conduct its business as now being
conducted, to own, lease and operate its properties and to execute, deliver and
perform this Agreement.

      10.2 The execution, delivery and performance by it of this Agreement have
been duly authorized by all necessary corporate action and do not and will not
(a) require any consent or approval of its stockholders beyond the approvals
already obtained, (b) violate any provision of any law, rule, regulations,
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to it or any provision of its certificate of
incorporation or by-laws or (c) result in a breach of or constitute a default
under any material agreement, mortgage, lease, license, permit or other
instrument or obligation to which it is a party or by which it or its properties
may be bound or affected.



                                       21


      10.3 This Agreement is a legal, valid and binding obligation of it
enforceable against it in accordance with its terms and conditions, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws, from time to time in effect,
affecting creditor's rights generally.

      10.4 It is not under any obligation to any person, or entity, contractual
or otherwise, that is conflicting or inconsistent in any respect with the terms
of this Agreement or that would impede the diligent and complete fulfillment of
its obligations.

      10.5 It has good and marketable title to or valid leases or licenses for,
all of its properties, rights and assets necessary for the fulfillment of its
responsibilities under the Research Program, subject to no claim of any third
party other than any relevant lessors or licensors.

11. COVENANTS OF MITOKOR AND PFIZER OTHER THAN REPORTING REQUIREMENTS.
Throughout the Contract Period, Mitokor and Pfizer each shall:

      11.1 maintain and preserve its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and qualify and remain
qualified as a foreign corporation in good standing in each jurisdiction in
which such qualification is from time to time necessary or desirable in view of
their business and operations or the ownership of their properties.

      11.2 comply in all material respects with the requirements of all
applicable laws, rules, regulations and orders of any government authority to
the extent necessary to conduct the Research Program, except for those laws,
rules, regulations, and orders it may be contesting in good faith.

12. INDEMNIFICATION. Pfizer and Mitokor will indemnify, defend and hold each
other harmless for any and all damages, settlements, costs, legal fees and other



                                       22


expenses incurred in connection with a claim by a third party against either
party based on any action or omission of the indemnifying party's agents,
employees, or officers related to its obligations under this Agreement;
provided, however, that the foregoing shall not apply (i) if the claim is found
to be based upon the negligence, recklessness or willful misconduct of the party
seeking indemnification; or (ii) if such party fails to give the other party
prompt notice of any claim it receives and such failure materially prejudices
the other party with respect to any claim or action to which its obligation
pursuant to this Section applies. Notwithstanding the foregoing, Pfizer hereby
expressly agrees to indemnify, defend and hold harmless Mitokor (and all
officers, directors, agents and Affiliates of Mitokor) for any and all claims
arising from clinical trials pursued by Pfizer or its Affiliates and/or
sublicensees, the sale of Licensed Products, the exercise of rights granted to
Pfizer under Section 5.2 or the License Agreement (including without limitation
product liability claims) and/or claims arising from Patent Rights, Pfizer
Patent Rights, Program Technology and Pfizer Technology except for intellectual
property claims with respect to Mitokor Patent Rights, or Mitokor Technology.
The indemnifying party, in its sole discretion, shall choose legal counsel,
shall control the defense of such claim or action and shall have the right to
settle same on such terms and conditions it deems advisable.

13. NOTICES. All notices shall be in writing mailed via certified mail, return
receipt requested, courier, or facsimile transmission addressed as follow, or to
such other address as may be designated from time to time:

         If to Pfizer:           Pfizer Central Research
                                 35 East 42nd Street
                                 New York, NY 10017
                                 Attention:  Dr. George Milne, President
                                 with copy to:  General Counsel



                                       23


         If to Mitokor:          MitoKor
                                 11494 Sorrento Valley Road
                                 San Diego, CA 92121
                                 Attention:  Dr. Walter Moos, CEO


Notices shall be deemed given as of the date received at the above specified
address.

14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

15. MISCELLANEOUS.

      15.1 BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective legal representatives, successors
and permitted assigns.

      15.2 HEADINGS. Paragraph headings are inserted for convenience of
reference only and do not form a part of this Agreement.

      15.3 COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original. Signatures may be
transmitted via facsimile, thereby constituting the valid signature and delivery
of this Agreement.

      15.4 AMENDMENT, WAIVER. This Agreement may be amended, modified,
superseded or canceled, and any of the terms may be waived, only by a written
instrument executed by each party or, in the case of waiver, by the party or
parties waiving compliance. The delay or failure of any party at any time or
times to require performance of any provisions shall in no manner affect the
rights at a later time to enforce the same. No waiver by any party of any
condition or of the



                                       24


breach of any term contained in this Agreement, whether by conduct, or
otherwise, in any one or more instances, shall be deemed to be, or considered
as, a further or continuing waiver of any such condition or of the breach of
such term or any other term of this Agreement.

      15.5 NO THIRD PARTY BENEFICIARIES. No third party including any employee
of any party to this Agreement, shall have or acquire any rights by reason of
this Agreement. Nothing contained in this Agreement shall be deemed to
constitute the parties partners with each other or any third party.

      15.6 ASSIGNMENT AND SUCCESSORS. This Agreement may not be assigned by
either party, except that each party may assign this Agreement and the rights
and interests of such party, in whole or in part, to any of its Affiliates, any
purchaser of all or substantially all of its assets or to any successor
corporation resulting from any merger or consolidation of such party with or
into such corporations.

      15.7 FORCE MAJEURE. Neither Pfizer nor Mitokor shall be liable for failure
of or delay in performing obligations set forth in this Agreement, and neither
shall be deemed in breach of its obligations, if such failure or delay is due to
natural disasters or any causes reasonably beyond the control of Pfizer or
Mitokor.

      15.8 SEVERABILITY. If any provision of this Agreement is or becomes
invalid or is ruled invalid by any court of competent jurisdiction or is deemed
unenforceable, it is the intention of the parties that the remainder of the
Agreement shall not be affected so long as the essential benefits of this
Agreement remain enforceable and obtainable.



                                       25


IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.

                                                        PFIZER INC




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


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


                                                            MITOKOR




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


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





                                    EXHIBIT A


                 MITOKOR PATENTS AND PATENT APPLICATIONS RELATED
                 TO DRUG DISCOVERY AND SCREENING OF THERAPEUTICS

                                                     
TITLE:         [ * CON * ]
- -----

COUNTRY        FILING DATE          DOCKET NO.1 (SERIAL NO.)  FAMILY HISTORY; STATUS
- -------        -----------          ------------------------  -----------------------------------------
U.S.A.         [ * CON * ]          401C1 ([ * CON * ])       [ * CON * ] ;  Pending


TITLE:         [ * CON * ]
- -----

COUNTRY        FILING DATE          DOCKET NO. (SERIAL NO.)   FAMILY HISTORY; STATUS
- -------        -----------          -----------------------   -----------------------------------------
U.S.A.         [ * CON * ]          401C2 ([ * CON * ])       [ * CON * ];  Pending


TITLE:         [ * CON * ]
- -----

COUNTRY        FILING DATE          DOCKET NO. (SERIAL NO.)   FAMILY HISTORY; STATUS
- -------        -----------          -----------------------   -----------------------------------------
PCT            [ * CON * ]          401PC ([ * CON * ])       [ * CON * ]; Converted,
                                                              Published [ * CON * ]







                                       2


(NATIONAL STAGE APPLICATIONS BASED ON 401PC):

                                      
Australia         401AU ([ * CON * ])       Natl. Stage of 401PC;  Pending
Brazil            401BR ([ * CON * ])       Natl. Stage of 401PC;  Pending
Canada            401CA ([ * CON * ])       Natl. Stage of 401PC;  Pending
China             401CN ([ * CON * ])       Natl. Stage of 401PC;  Pending
Europe            401EP ([ * CON * ])       Natl. Stage of 401PC;  Pending
Finland           401FI ([ * CON * ])       Natl. Stage of 401PC;  Pending
Japan             401JP ([ * CON * ])       Natl. Stage of 401PC;  Pending
Korea             401KR ([ * CON * ])       Natl. Stage of 401PC;  Pending
Mexico            401MX ([ * CON * ])       Natl. Stage of 401PC;  Pending
Norway            401NO ([ * CON * ])       Natl. Stage of 401PC;  Pending
New Zealand       401NZ ([ * CON * ])       Natl. Stage of 401PC;  Pending,
                                            Published in New Zealand Patent Office
                                            Journal [ * CON * ]
Singapore         401SG ([ * CON * ])       Natl. Stage of 401PC;  Pending
Vietnam           401VN ([ * CON * ])       Natl. Stage of 401PC;  Pending






                                                        
TITLE:            [ * CON * ]
- -----
COUNTRY           FILING DATE          DOCKET NO. (SERIAL NO.)   FAMILY HISTORY; STATUS
- -------           -----------          -----------------------   -----------------------------------------
U.S.A.            [ * CON * ]          409 ([ * CON * ])         Pending







                                       3

                                                        
TITLE:         [ * CON * ]
- -----
COUNTRY        FILING DATE          DOCKET NO. (SERIAL NO.)   FAMILY HISTORY; STATUS
- -------        -----------          -----------------------   -----------------------------------------
U.S.A.         [ * CON * ]          417 ([ * CON * ])         Pending


TITLE:         [ * CON * ]
- -----
COUNTRY        FILING DATE          DOCKET NO. (SERIAL NO.)   FAMILY HISTORY; STATUS
- -------        -----------          -----------------------   -----------------------------------------
U.S.A.         [ * CON * ]          418 ([ * CON * ])         Pending


TITLE:         [ * CON * ]
- -----
COUNTRY        FILING DATE          DOCKET NO. (SERIAL NO.)   FAMILY HISTORY; STATUS
- -------        -----------          -----------------------   -----------------------------------------
U.S.A.         [ * CON * ]          420 ([ * CON * ])         Pending


NOTES:
- -----





      1     For brevity's sake, only the Docket No. suffix is included; the full
            Docket No. includes the prefix 660088. For example, the first listed
            application's full Docket No. is 660088.401C1.
      2     USP = U.S. Patent No.




Confidential                                                              page 1


EXHIBIT B

RESEARCH PLAN

SUMMARY

o    It is proposed to enter a candidate-generating collaboration with Mitokor
     with a primary focus in the Neurodegeneration area.

o    The collaboration will place Pfizer at the leading edge of novel
     discoveries relating mitochondrial dysfunction to neuronal damage and
     validate a new class of therapeutic targets, which will contribute to
     meeting our Discovery productivity goals.

o    The collaboration will provide Pfizer with privileged access to new
     technology, targets and world-renowned scientists.

INTRODUCTION

Strong experimental evidence supports the role of oxidative toxicity in sporadic
Alzheimer's disease (AD) and Parkinson's disease (PD). A prominent source of the
chemical species responsible for this damage is the compromised mitochondrion.
Therefore, amelioration of mitochondrial dysfunction is a rational therapeutic
goal for both of these chronic, neurodegenerative diseases. Alzheimer's disease
(AD) is associated with disturbances in cytochrome C oxidase (complex IV in the
mitochondrial electron transport chain), while PD is associated with defects in
NADH ubiquinone oxidoreductase (Complex I) enzymatic activity. The exact genetic
mechanisms causing these enzymatic defects are not known. Disturbances in either
of these enzyme complexes results in disrupted intracellular calcium metabolism
and elevated reactive oxygen species (ROS), outcomes known to be neurotoxic.
Indeed, inhibitors of complex I, such as MPP+, induce PD symptoms in humans.
Thus, limiting mitochondrial dysfunction is a compelling therapeutic goal for AD
and PD.

In addition, mitochondria play a critical role in the execution of apoptosis and
perhaps necrosis, which, in turn may be responsible for the neuronal cell death,
observed in ischemia and peripheral neuropathies. Thus, limiting mitochondrial
dysfunction also provides an attractive target for abrogating neuronal loss in
these indications.

Finally, there is emerging evidence that mitochondrial dysfunction, and
associated increases in ROS, are a general feature of aging. Therefore,
compounds which limit mitochondrial dysfunction may have utility in other
diseases associated with aging, Indeed, preclinical data suggests that NIDDM and
cardiovascular pathologies may be improved by drug therapy which limits
mitochondrial dysfunction.

Mitokor has established an important new technology for characterizing
mitochondrial dysfunction termed cybrids (cytoplasmic hybrids). Cybrids are
human, neuron-derived, clonal cell lines depleted of native mtDNA, but
containing mtDNA from human donor cells. For





Confidential                                                              page 2


example, fusion of mitochondria isolated from Alzheimer's disease patients with
SH-SY5Y cells depleted of endogenous mtDNA, produces a cybrid line with
defective intracellular calcium metabolism, elevated ROS and increased
propensity to undergo apoptosis. Cybrids appear to represent a particularly
relevant system to study oxidative toxicity associated with AD, PD and
mitochondrial-induced apoptosis, and are a novel tool for screening compounds
meant to reverse the oxidative toxicity in neurodegeneration. Additionally, the
observation that AD and PD cybrids display these defects supports the hypothesis
that mitochondrial dysfunction plays a role in these two diseases.

In addition to the cybrids, Mitokor are also actively seeking novel targets
(differential display, proteomics and [ * CON * ]) which may play a role in
[ * CON * ] and/or the defects observed in the cybrid cells.

The major benefits from a collaboration with Mitokor are fourfold; 1) access to
cybrid technology 2) novel, proprietary targets associated with mitochondrial
dysfunction and apoptosis, 3) general expertise in measuring mitochondrial
function/dysfunction and 4) CAN-production.

RESEARCH PLAN

A.  INITIAL TARGET/SCREENING SEQUENCE

The research plan for the collaboration will follow a standard drug discovery
sequence beginning with an HTS (performed at Pfizer), followed by IN VITRO
selectivity assays, assessment of activity in whole cell assays (the cybrids)
and finish with IN VIVO experiments in rodents. We have outlined the screening
strategy below using the first proposed target. Novel targets that emerge during
the collaboration are expected to follow a similar sequence.

The initial HTS will be performed at Pfizer (Groton) with a novel proprietary
target provided by Mitokor and disclosed to us under confidentiality,
[ * CON * ] ([ * CON * ]). [ * CON * ] have been identified so far: [ * CON * ],
brain and other tissues, [ * CON * ], differentiated muscle and [ * CON * ],
other tissues. [ * CON * ], will be the first Molecular Target in the Research
Plan as of the Effective Date, and selectivity against [ * CON * ] will also be
studied. [ * CON * ] is believed to be a component of [ * CON * ] ([ * CON * ]).
The physiological function of [ * CON * ] is unclear, but may be implicated in
[ * CON * ], induction of [ * CON * ] and [ * CON * ] of the mitochondria.
[ * CON * ] is activated by a number of stimuli associated with [ * CON * ]
including increases in [ * CON * ] levels, decrease in mitochondrial [ * CON * ]
and elevated levels of [ * CON * ]. The [ * CON * ] results in mitochondrial
[ * CON * ], [ * CON * ] of the mitochondrial [ * CON * ] and loss of [ * CON *
] including [ * CON * ]. In some systems, the [ * CON * ] of [ * CON * ] from
mitochondria appears to be required for [ * CON * ] via subsequent activation of
[ * CON * ] followed by [ * CON * ] ([ * CON * ]). The HTS is a [ * CON * ]
assay using a proprietary [ * CON * ] developed by Mitokor and recombinant human
[ * CON * ] (provided by Mitokor). Preventing the [ * CON * ] of [ * CON * ] to
[ * CON * ] may [ * CON * ] the [ * CON * ] in a [ * CON * ] that [ * CON * ] of
the [ * CON * ]. Selectivity of hits for [ * CON * ] vs. other mitochondrial
[ * CON * ] (e.g., the [ * CON * ], [ * CON * ], [ * CON * ] - all functional
assays) and [ * CON * ] and [ * CON * ] will be assessed.





Confidential                                                              page 3


Compounds with the desired selectivity will be tested in AD cybrids at MitoKor.
AD cybrids display increased sensitivity to toxic insults such as the amyloid
beta (A(beta)) peptide, the predominant protein in the amyloid plaques of AD
brain. The ability of compounds to prevent A(beta)-induced mitochondrial
[ * CON * ] (measured with a [ * CON * ] to estimate mitochondrial [ * CON * ])
and the [ * CON * ] of [ * CON * ] that [ * CON * ] subsequent [ * CON * ] of
the [ * CON * ] will be assessed. Efficacious compounds in these assays will be
tested to insure that they do not interfere with normal mitochondrial function
(e.g., [ * CON * ], [ * CON * ] production). The final whole cell assay will
determine if active compounds can protect [ * CON * ] from [ * CON * ] from
[ * CON * ] and [ * CON * ].


Once a lead has fulfilled all IN VITRO criteria, it will be tested at MitoKor in
two IN VIVO models of neuronal mitochondrial dysfunction. In the first,
[ * CON * ] ([ * CON * ]), an [ * CON * ] inhibitor of mitochondrial [ * CON * ]
that is neurotoxic will be [ * CON * ] into the [ * CON * ]. Preferred compounds
will limit neuronal death after oral administration in this model. The second
model is [ * CON * ] of [ * CON * ] ([ * CON * ]), an inhibitor of [ * CON * ]
in the mitochondrial [ * CON * ]. [ * CON * ] increases [ * CON * ] production
and is particularly neurotoxic to the [ * CON * ], an area of the brain
[ * CON * ]. Preferred compounds will limit [ * CON * ] and [ * CON * ] in the
[ * CON * ] as well as decrease [ * CON * ] production and [ * CON * ]
accumulation in these animals.

Leads meant to limit [ * CON * ] will be tested in the following cell based
assays: [ * CON * ]- and [ * CON * ]-induced [ * CON * ] in [ * CON * ] and
[ * CON * ] cultures, respectively. Compounds that block [ * CON * ] in the
above models and meet our lead criteria will be tested for efficacy in
appropriate animal models e.g. [ * CON * ] for [ * CON * ] and [ * CON * ] for
[ * CON * ] (Pfizer Sandwich).

B.  FUTURE TARGETS

All future Molecular Targets will be added to the Research Plan by proposal and
discussion by either Mitokor or Pfizer at the Research Committee and the mutual
acceptance of the Molecular Target by the Research Committee and Pfizer's and
Mitokor's managements. Future targets will derive from two sources. First, there
is evidence from the literature that modulation of known mitochondrial proteins
can limit mitochondrial dysfunction. These potential targets include [ * CON * ]
([ * CON * ]), [ * CON * ], [ * CON * ] and [ * CON * ] ([ * CON * ]). Since
there are known [ * CON * ] for [ * CON * ] and [ * CON * ], one approach is to
validate these targets in the cybrids. Validation of one of these targets could
result in rapid application of chemistry staffing and "jump start" the
collaboration.

The second potential source is a genomic/proteomic target discovery effort at
Mitokor. Mitokor is using differential display, high density cDNA arrays and
quantitative PCR to identify genes and proteins whose expression is altered in
the cybrids vs. control cells. Thus far, they have been able to detect 2-15-fold
increases in mRNA for several relevant genes including those encoding
[ * CON * ] (e.g., [ * CON * ]) and [ * CON * ] proteins (e.g., [ * CON * ]).





Confidential                                                              page 4

Pfizer will have the ability to add to the Research Plan any potential target
mutually agreed by Mitokor within the field identified by this effort.

C.  DIVISION OF LABOR

The division of labor will be discussed and modified as needed during the term
of the Agreement by discussion of the Research Committee.


MITOKOR

o Molecular biologists to deliver quantities of all target proteins required for
  HTS ([ * CON * ])

o Molecular biologists to pursue novel targets ([ * CON * ])

o IN VITRO pharmacologists to perform selectivity assays and characterize leads
  in cybrids ([ * CON * ])

o TOTAL PROPOSED MITOKOR STAFFING: [ * CON * ]
  (SCIENTISTS/TECHNICIANS, RESPECTIVELY; [ * CON * ] TOTAL FTES)

PFIZER

o HTS ([ * CON * ])
o Chemistry (up to [ * CON * ])
o Drug Metabolism (up to [ * CON * ])
o IN VITRO [ * CON * ] assays, IN VIVO [ * CON * ] model (Sandwich,  up to
  [ * CON * ])

o TOTAL PROPOSED PFIZER STAFFING (MAXIMUM [ * CON * ])


CONCLUSION

[ * CON * ], perturbations in [ * CON * ] and [ * CON * ] are known regulators
of neuronal degeneration. Mitochondria play a major role in the generation or
execution of these processes and extensive preclinical evidence supports the
role of this organelle in the neurodegeneration observed in AD, PD, stroke and
peripheral neuropathies. Thus, amelioration of mitochondrial dysfunction is a
compelling therapeutic goal for these disorders. We feel that collaboration with
Mitokor is favored for five reasons. First, we believe the approach is valid,
i.e., there are solid experimental data which show that limiting
mitochondrial-mediated [ * CON * ] and [ * CON * ] will likely provide
neuroprotection in both AD, PD, stroke and peripheral neuropathies. Second,
Mitokor possess a proprietary technology, the cybrid, which links mitochondrial
dysfunction directly to AD and PD. Third, the approach is complementary with our
[ * CON * ] and [ * CON * ] programs. For example, it is believed that
[ * CON * ] also plays a role in [ * CON * ] via the combination of [ * CON * ]
with [ * CON * ] derived from mitochondria and resultant [ * CON * ] of
[ * CON * ], a [ * CON * ] and [ * CON * ]. As we will soon have





Confidential                                                              page 5


candidates that selectively inhibit [ * CON * ], limiting the production of
[ * CON * ] by mitochondria will [ * CON * ] the [ * CON * ] and combination
therapy may be synergistic. Fourth, Mitokor clearly possess the expertise to
both move forward in this area and identify novel, proprietary targets,
including novel [ * CON * ] targets which has been an important goal of the
Sandwich Neurodegeneration team and would become a front line project. Fifth, we
will be working with academic leaders in the mitochondrial field and will have
privileged access to validated targets and reagents for HTS as they emerge from
the research and enter into the collaboration.

In addition, Mitokor is working to provide surrogate markers of efficacy for
limiting mitochondrial function in AD clinical trials. They are currently
exploring the potential of measuring [ * CON * ] levels in human and animal
brains by [ * CON * ]. In a proof of concept study, Mitokor has shown that brain
(striatal) [ * CON * ] levels are elevated in Huntington's disease. Determining
if brain [ * CON * ] concentrations are elevated in AD and testing of prototype
compounds reduce these concentrations represent studies which may identify a
surrogate marker in a Phase II trial. Furthermore, since platelets are the
source of compromised mitochondrial function in the cybrids, a second potential
surrogate marker might be mitochondrial function in platelets from treated and
controls patients.

In conclusion, we find that limiting mitochondrial dysfunction is a compelling
therapeutic goal for AD, PD, stroke and peripheral neuropathies and that
collaboration with Mitokor represents a rapid and scientifically sound fashion
to pursue that goal.





Confidential                                                              page 6


Following are guidelines for the first [ * CON * ] months of the collaboration,
outlining the anticipated activities and division of labor between MitoKor and
Pfizer.


                                MITOKOR TIMELINES


                                   [ * CON * ]





 AMENDMENT NO. 1 TO COLLABORATIVE RESEARCH AGREEMENT BETWEEN MITOKOR AND PFIZER

This Amendment No. 1, effective as of November 4, 2001 (the "Amendment Effective
Date"), is by MitoKor and its Affiliates ("MitoKor") and Pfizer Inc and its
Affiliates ("Pfizer").

                                  I. BACKGROUND

1.1 WHEREAS MitoKor and Pfizer entered into a Collaborative Research and
Development Agreement ("Research Agreement") and a License and Royalty Agreement
("License Agreement") as of November 4, 1998, to discover and develop patentable
small molecules that affect mitochondrial biochemical targets useful in the
treatment, prevention or diagnosis of disease in human and animal health;

1.2 WHEREAS the Research Agreement expires on November 3, 2001;

1.3 WHEREAS MitoKor and Pfizer wish to extend the term of the Research Agreement
for a further six (6) months beyond the original expiration date (the "Extension
Period") and to provide for, during the Extension Period, funding payments to be
made by Pfizer to MitoKor and a revised Research Plan attached hereto;

1.4 WHEREAS MitoKor and Pfizer also wish to amend certain payment provisions in
the Research Agreement;

1.5 NOW THEREFORE, Pfizer and MitoKor hereby amend the Research Agreement as
follows:

                                  II AMENDMENTS

2.1 Section 9.1 of the Research Agreement is deleted in its entirety and
replaced with the following:

      9.1   TERM.

            9.1.1 Unless sooner terminated, as provided below or extended, by
            mutual agreement of the parties as provided in this Section 9.1,
            this Agreement shall expire on May 5, 2002.

            9.1.2 At Pfizer's sole discretion, the term of the Agreements may be
            further extended for up to an additional eighteen (18) months beyond
            May 5, 2002 on terms and conditions to be agreed upon at that time
            by the Parties.


                                                                     page 1 of 3



2.2 The following sections are added to Section 3 of the Research Agreement:

            3.1.3 During the Extension Period Pfizer will fund the research to
            be performed by MitoKor, pursuant to this Agreement, for a total
            amount of [ * CON * ] dollars ($[ * CON * ]). The sum of [ * CON * ]
            dollars ($[ * CON * ]) shall be paid on or before December 4, 2001.
            The sum of [ * CON * ] dollars ($[ * CON * ]) shall be paid on or
            about February 4, 2002, following MitoKor's invoice to Pfizer in
            such amount. It is understood that all payments pursuant to this
            Section are noncreditable and nonrefundable.

            3.1.4 The above amounts are expected to support the work performed
            [ * CON * ] ([ * CON * ]) FTEs for the Extension Period. The work
            performed shall be in accordance with the revised Research Plan,
            attached to and made part of this Research Agreement as Exhibit E.

2.3 Section 3.2.3 of the Research Agreement, which contemplates an Additional
Equity Stock purchase of MitoKor by Pfizer, is deleted in its entirety and is of
no further force and effect.

2.4 Section 3.2.2 of the Research Agreement is deleted in its entirety and
replaced with the following:

            3.2.2 MitoKor will provide to Pfizer [ * CON * ] ([ * CON * ]) HTS,
            reasonably acceptable to Pfizer.

2.5 Except as expressly set forth in this Amendment No. 1, all terms and
conditions of the Research Agreement, and the Licensing Agreement shall remain
in full force and effect.



                          Signatures begin on next page


                                                                     page 2 of 3



IN WITNESS WHEREOF, Pfizer and MitoKor have caused the Research Agreement to be
amended by duly authorized representatives of both Pfizer and MitoKor as of the
Amendment Effective Date:


Agreed:  Pfizer Inc                                   Agreed:  MitoKor

By:                                          By:
   -----------------------------                --------------------------------
Name:                                        Name:
     ---------------------------                  ------------------------------
Title:                                       Title:
      --------------------------                   -----------------------------
Date:                                        Date:
     ---------------------------                  ------------------------------


                                                                     page 3 of 3


Confidential


                            AMENDED RESEARCH PROTOCOL
                        Pfizer and MitoKor Collaboration

Subject: Extension of Collaboration with MitoKor for Inhibitors of
         Mitochondrial Dysfunction and Neuroprotective Agents

Date:    November 4, 2001 -  May 5, 2002


A.  INTRODUCTION

Strong experimental evidence supports the role of oxidative toxicity in sporadic
Alzheimer's disease (AD) and Parkinson's disease (PD). A prominent source of the
chemical species responsible for this damage is the compromised mitochondrion.
Therefore, amelioration of mitochondrial dysfunction is a rational therapeutic
goal for these diseases. Alzheimer's disease is associated with disturbances in
cytochrome C oxidase (complex IV in the mitochondrial electron transport chain),
while PD is associated with defects in NADH ubiquinone oxidoreductase (Complex
I) enzymatic activity. The exact genetic mechanisms causing these enzymatic
defects are not known. Disturbances in either of these enzyme complexes results
in disrupted intracellular calcium metabolism and elevated reactive oxygen
species (ROS), outcomes known to be toxic to neurons. Indeed, inhibitors of
complex I, such as MPP+, induce PD-like symptoms in humans. Therefore, limiting
mitochondrial dysfunction is a compelling therapeutic goal for AD and PD.
Finally, there is emerging evidence that mitochondrial dysfunction, and
associated increases in ROS, is a general feature of aging and compounds that
limit mitochondrial dysfunction may have utility in other age-related diseases.
Indeed, preclinical data suggests that NIDDM and cardiovascular pathologies may
be improved by drug therapy that limits mitochondrial dysfunction.

Thus the body of evidence that implicates mitochondrial dsyfunction and energy
metabolism in the pathophysiology of several diseases across therapeutic areas
is compelling. The collaboration with MitoKor provides a unique opportunity to
develop mitochondrial targets for therapeutic utility.

Over the past 3 years, our collaboration with MitoKor has yielded [ * CON * ]
novel targets ([ * CON * ]% of contracted deliverables), [ * CON * ]
([ * CON * ]), [ * CON * ] and [ * CON * ] ([ * CON * ]). HTS on [ * CON * ]
and [ * CON * ] have been completed.

The major benefits derived from a extension of the collaboration with MitoKor
are: 1) validation of novel, proprietary targets associated with mitochondrial
function for neurodegenerative diseases; 2) access to mitochondrial
function/dysfunction and energy metabolism scientific expertise along with
relevant assay development.

B.  RESEARCH PLAN

[ * CON * ]





Confidential


[ * CON * ] is believed to [ * CON * ] the mitochondrial [ * CON * ], a
[ * CON * ] activity that [ * CON * ], results in the [ * CON * ] of the
mitochondrial [ * CON * ] and [ * CON * ]. There are [ * CON * ] and [ * CON * ]
predominates in mammalian brain. The [ * CON * ] HTS completed in [ * CON * ].
Secondary characterization of [ * CON * ] HTS hits and analogs is complete.
There are [ * CON * ] attractive leads, [ * CON * ]. [ * CON * ] of these
compounds display neuroprotective activity in a variety of in vitro assays
utilizing primary cultured neurons or clonal human cells. The potency of the
compounds for these activities is in the [ * CON * ] range. These compounds have
no effect on [ * CON * ] or [ * CON * ]. Data presented at the [ * CON * ]
meeting appeared to clarify the molecular mechanism of the neuroprotective
activity displayed by the compounds, i.e., that these compounds act [ * CON * ]
to [ * CON * ] of [ * CON * ] by mitochondria isolated from rodent brain.
However, the link between the molecular mechanism, inhibition of [ * CON * ] and
the [ * CON * ] activity of the compounds has been [ * CON * ].

Because of the novelty of this target and the broad range of neuroprotective
activity of the HTS hits, the team wishes to extend the collaboration in order
to complete the confidence in mechanism experiments that will drive a decision
on the target. The team will construct a decision tree comprising a focused
series of experiments using available assays that will lead to a GO/NO GO
decision in 6 months.


[ * CON * ]

[ * CON * ] is responsible for the [ * CON * ] of [ * CON * ] of [ * CON * ] the
mitochondria that result in mitochondrial [ * CON * ], [ * CON * ] of the
mitochondrial [ * CON * ], inhibition of [ * CON * ] and [ * CON * ]. Since
large increases in intramitochondrial [ * CON * ] are known to be neurotoxic,
inhibition of [ * CON * ] is hypothesized to be [ * CON * ]. The HTS is
complete. Confirmed hits have been identified and re-testing will be
[ * CON * ]. A screening sequence utilizing isolated mitochondria and whole cell
assays has been established.

The next steps for this target are to confirm the activity and structure of the
HTS hits and determine if they display neuroprotective activity in primary
cultured neurons. In parallel, we will identify analogs of the HTS hits in our
file in order to assess if any preliminary SAR trends are apparent.


[ * CON * ]

Association of [ * CON * ] ([ * CON * ]) with [ * CON * ] is believed to
facilitate or provoke [ * CON * ] of the mitochondrial [ * CON * ] in both
neurons and cardiac tissue. This interaction is inhibited by association of [ *
CON * ] ([ * CON * ]) with [ * CON * ].

Initially this target was to be pursued by the [ * CON * ] therapeutic area in [
* CON * ] with the HTS based on an [ * CON * ] format sponsored by [ * CON * ]
group. In anticipation of this screen, MitoKor developed a [ * CON * ] assay.
However, due to [ * CON * ] in the [ * CON * ] group, this target will not be
pursued. Since this target is also relevant for Neurodegeneration, we propose
that the [ * CON * ] HTS be run in Groton. As "benchtop" development of the
screen at MitoKor is complete, transfer of the





Confidential


technology to the Groton New Leads group and implementation of the HTS should be
straightforward.


C.  DIVISION OF LABOR

MITOKOR

o     In vitro pharmacologists to drive the [ * CON * ] project to a GO/NO GO
      decision based on confidence in mechanism ([ * CON * ])
o     In vitro pharmacologists to characterize the hits derived from the
      [ * CON * ] HTS ([ * CON * ])
o     Management of collaboration ([ * CON * ])
o     TOTAL PROPOSED MITOKOR STAFFING OF [ * CON * ] FTEs ([ * CON * ] PhDs,
      [ * CON * ] ASSOCIATES)

PFIZER

o     Re-testing [ * CON * ] HTS hits ([ * CON * ])
o     [ * CON * ] ([ * CON * ])
o     Management of the collaboration ([ * CON * ])
o     TOTAL PROPOSED PFIZER STAFFING OF [ * CON * ] FTEs ([ * CON * ])


CONCLUSION

[ * CON * ] and perturbations in [ * CON * ] are known regulators of neuronal
cell death. Mitochondria play a major role in the generation or execution of
these processes and extensive preclinical evidence supports the role of this
organelle in the neurodegeneration observed in AD and PD. Thus, amelioration of
mitochondrial dysfunction is a compelling therapeutic goal for these disorders.
The goal of this renewal is to provide proof of mechanism for the hits
identified in the [ * CON * ] HTS, characterize the hits that emerged in the [ *
CON * ] HTS and run the [ * CON * ] HTS. Realization of these goals will provide
the Neurodegenerative disease therapeutic area with [ * CON * ] novel molecular
targets that will provide opportunities for developing compounds that are
intended to slow the progression of AD and PD.

EX-10.23

                                                                 Exhibit 10.23


    [CERTAIN MATERIAL (INDICATED BY A [*CON*]) HAS BEEN OMITTED FROM THIS
    DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED
MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]


                          LICENSE AND ROYALTY AGREEMENT

         This LICENSE AND ROYALTY AGREEMENT is entered into as of November 4,
1998 (the "Effective Date") by and between PFIZER INC and its Affiliates
("Pfizer"), a Delaware corporation, having an office at 235 East 42nd Street,
New York, New York 10017 and MITOKOR and its Affiliates ("Mitokor"), a
California corporation, having an office at 11494 Sorrento Valley Road, San
Diego, CA 92121;

         WHEREAS, Pfizer desires to obtain an exclusive license under Mitokor's
right, title and interest in the Patent Rights so that Pfizer can manufacture,
use, sell, offer for sale and import the Licensed Products; and

         WHEREAS, Mitokor is willing to grant such license;

         Therefore, in consideration of the mutual covenants and promises set
forth in this Agreement, the parties agree as follows:

1. DEFINITIONS.

         The capitalized terms used in this Agreement and not defined elsewhere
in it shall have the meanings specified for such terms in this Section 1 and in
the Research Agreement.

      1.1 "RESEARCH AGREEMENT" means the Collaborative Research and Development
Agreement between Pfizer and Mitokor effective November 4, 1998.

      1.2 "NET SALES" means the gross amount invoiced by Pfizer, its Affiliates,



                                       2


or any sublicensee of Pfizer for sales to a third party or parties of Licensed
Products, less normal and customary trade discounts actually allowed, rebates,
returns, credits, taxes the legal incidence of which is on the purchaser and
separately shown on Pfizer's or any sublicensee of Pfizer's invoices and
transportation, insurance and postage charges, if prepaid by Pfizer or any
sublicensee of Pfizer and billed on Pfizer's or any sublicensee of Pfizer's
invoices as a separate item.

      1.3 "LICENSED PRODUCT" means any Therapeutic Product the manufacture, use,
sale, offer for sale or import would infringe any Valid Claim within the Patent
Rights in the absence of a license.

2. GRANT OF LICENSES, TERM, RIGHTS AND OBLIGATIONS.

      2.1 LICENSE GRANTED TO PFIZER UNDER THE PATENT RIGHTS.

            Mitokor hereby grants to Pfizer an exclusive, worldwide license,
including the right to grant sublicenses, to manufacture, use, sell, offer for
sale and import Licensed Products under all Mitokor's right, title and interest
in the Patent Rights.

      2.2 LICENSE GRANTED TO MITOKOR UNDER THE PATENTS AND PROGRAM TECHNOLOGY.
Section 2.1 to the contrary notwithstanding:

            2.2.1 Pfizer hereby grants to Mitokor the exclusive, perpetual,
royalty free license, including the right to grant sublicenses, to manufacture,
use, sell, offer for sale and import Diagnostic Products and products sold
exclusively for research purposes under all Pfizer's right, title and interest
in the Patent Rights and Program Technology.

      2.3 TERM OF LICENSES. The term of the grant to Pfizer set forth in Section
2.1 shall commence on the Effective Date and shall terminate on the date of the



                                       3


last to expire of the Patent Rights. The term of the grant to Mitokor set forth
in Section 2.2. shall commence on the Effective Date and shall run perpetually
except in those countries of the world in which such term is limited by law.

      2.4 PAID-UP LICENSE. Pfizer shall have a paid-up license permitting
royalty free manufacture, use ,sale, offer for sale and import of Licensed
Products in each country after the expiration of Pfizer's last obligation to pay
royalties on Net Sales of each such Licensed Product in each such country.

      2.5 PFIZER OBLIGATIONS.

            2.5.1 Pfizer shall use reasonably diligent efforts to exploit
Licensed Products commercially employing similar effort to that applied to other
products similarly situated.

            2.5.2 If Pfizer grants a sublicense pursuant to this Section 2,
Pfizer shall guarantee that any sublicensee fulfills all of Pfizer's obligations
under this Agreement; provided, however, that Pfizer shall not be relieved of
its obligations pursuant to this Agreement.

      2.6 TECHNICAL ASSISTANCE.

            Mitokor shall provide to Pfizer or any sublicensee of Pfizer, at
Pfizer's request [ * CON * ], any agreed technical assistance reasonably
necessary to enable Pfizer or such sublicensee to manufacture, use, sell, offer
for sale or import each Licensed Product and to enjoy fully all the rights
granted to Pfizer pursuant to this Agreement; provided, however, that Mitokor is
reasonably capable of providing that assistance. Pfizer shall [ * CON * ]
providing such assistance.

3. MILESTONE PAYMENTS, ROYALTIES, ACCOUNTING , RECORDS.

      3.1 PATENT RIGHTS.

            3.1.1 Pfizer shall pay Mitokor a royalty based on the Net Sales
of each Licensed Product. Such royalty shall be paid with respect to each
country of


                                       4


the world from the date of the first commercial sale (the date of the invoice
of Pfizer or any sublicensee of Pfizer with respect to such sale) of such
Licensed Product in each such country until the expiration of the last Patent
Right to expire with respect to each such country and each such Licensed
Product.

            3.1.2 If the manufacture and sale of a Licensed Product takes place
in countries where there are no Patent Rights, Pfizer will pay to Mitokor a
royalty based on the Net Sales of each Licensed Product in each such country for
[ * CON * ] ([ * CON * ]) years after the first commercial sale of such Licensed
Product in such country.

      3.2 ADJUSTMENT TO ROYALTY RATES.

            3.2.1 Pfizer shall pay Mitokor a royalty for the sale of each
Licensed Product under Section 2.1 as set forth in Section 3.1; provided,
however, that if over a calendar year the average cost of goods (determined in
the same manner as Pfizer determines its cost of goods for any similar
pharmaceutical product for financial reporting purposes in the United States,
consistently applying U.S. generally accepted accounting principles, including
royalties payable to Mitokor, but not third parties) for a Licensed Product
exceeds [ * CON * ] percent ([ * CON * ]%) of Pfizer's direct price (determined
in the same manner as Pfizer determines its direct price to customers for any
similar pharmaceutical product consistently applying generally accepted
accounting principles) for such Licensed Product for such calendar year, the
otherwise applicable royalty rate set forth below shall be reduced by
[ * CON * ] percent ([ * CON * ]%) of the excess above [ * CON * ] percent
([ * CON * ]%) of the Average Net Sales Price; provided, however, that in no
event shall the applicable royalty rates be reduced by an aggregate of more
than [ * CON * ]percent ([ * CON * ]%). Notwithstanding the foregoing, the
adjustment in this Section 3.2 shall not apply with respect to royalties paid
on Net Sales occurring prior to the end of the [ * CON * ] full calendar year
after the first


                                       5


commercial sale of the Licensed Product in the United States. As used in this
Section 3.2, the "Average Net Sales Price" shall mean the average invoice price
of all Net Sales in which the Licensed Product was sold worldwide in full
commercial sales during the particular calendar year, it being understood that
such sales shall not include units distributed as samples, for use in clinical
trials or in any other manner other than a full commercial sale; and "average
cost of goods" shall mean the average cost of goods of the Licensed Product
units included in the calculation of Average Net Sales Price.

                  3.2.2 If Pfizer determines that the foregoing cost formula
entitles Pfizer to a reduced royalty, Pfizer shall, upon request and at a
reasonable place during normal business hours, present to Mitokor its
calculations, books and records of account demonstrating that its cost was
determined by generally acceptable accounting procedures consistently applied.

3.3 ROYALTY RATES. The royalty paid each year shall be based on increments of
worldwide Net Sales with respect to each of the Licensed Products according to
the following schedule:

         Annual Net Sales (MM)              Royalty Rate (%)
         ---------------------              ----------------
         $0-$[ * CON * ]MM                  [ * CON * ]%

         $[ * CON * ]-[ * CON * ]MM         [ * CON * ]%

         $>[ * CON * ]MM                    [ * CON * ]%


3.4. RENEGOTIATION OF ROYALTY RATES. The parties acknowledge that the royalty
rates set forth in Section 3.3 and the milestones in Section 3.8 are based on
the


                                       6


expectation that Licensed Products will be administered to human patients. If
Pfizer identifies or develops for animal patients with respect to a Licensed
Product which represents a commercial opportunity for Pfizer in the area of
animal health, the parties will negotiate, as mutually agreed, a new royalty
rate and milestone schedule for such Licensed Product to account for
development costs and changes in the cost of goods, selling price and
projected annual Net Sales. It is understood, however, that the royalty rate
specified in Section 3.3 and the milestones as per Section 3.8 shall be
modified only as Pfizer and Mitokor agree.

      3.5 PAYMENT DATES.

            Royalties shall be paid by Pfizer on Net Sales within sixty (60)
days after the end of each calendar quarter in which such Net Sales are made.
Such payments shall be accompanied by a statement showing the Net Sales of each
Licensed Product by Pfizer or any sublicensee of Pfizer in each country, the
applicable royalty rate for such Licensed Product, and a calculation of the
amount of royalty due, including any offsets.

      3.6 ACCOUNTING.

            The Net Sales used for computing the royalties payable to Mitokor by
Pfizer shall be computed and paid in US dollars by wire transfer in immediately
available funds to a U.S. account designated by Mitokor, or by other mutually
acceptable means. For purposes of determining the amount of royalties due, the
amount of Net Sales in any foreign currency shall be computed by (a) converting
such amount into U.S. dollars at the prevailing commercial rate of exchange for
purchasing dollars with such foreign currency as published in the Wall Street
Journal for the close of the last business day of the calendar quarter for which
the relevant royalty payment is to be made by Pfizer and (b) deducting the
amount of any governmental tax, duty, charge, or other fee actually paid in
respect of such conversion into, and remittance of U.S. dollars.



                                       7


      3.7 RECORDS.

            Pfizer shall keep for three (3) years from the date of each payment
of royalties complete and accurate records of sales by Pfizer of each Licensed
Product in sufficient detail to allow the accruing royalties to be determined
accurately. Mitokor shall have the right for a period of three (3) years after
receiving any report or statement with respect to royalties due and payable to
appoint at its expense an independent certified public accountant reasonably
acceptable to Pfizer to inspect the relevant records of Pfizer to verify such
report or statement. Pfizer shall make its records available for inspection by
such independent certified public accountant during regular business hours at
such place or places where such records are customarily kept, upon reasonable
notice from Mitokor, to verify the accuracy of the reports and payments. Such
inspection right shall not be exercised more than once in any calendar year nor
more than once with respect to sales in any given period. Mitokor agrees to hold
in strict confidence all information concerning royalty payments and reports,
and all information learned in the course of any audit or inspection, except to
the extent necessary for Mitokor to reveal such information in order to enforce
its rights under this Agreement or if disclosure is required by law. The failure
of Mitokor to request verification of any report or statement during said
three-year period shall be considered acceptance of the accuracy of such report,
and Pfizer shall have no obligation to maintain records pertaining to such
report or statement beyond said three-year period. The findings of each
inspection, if any, shall be binding on both parties.

      3.8 MILESTONE PAYMENTS. Pfizer shall pay Mitokor, within sixty (60) days
of the completion of each event set forth below ("Event"), the payment listed
opposite that Event. Payments shall be made in US dollars by wire transfer in



                                       8


immediately available funds to a U.S. bank account designated by Mitokor, or
other mutually acceptable means. Pfizer shall be obligated to make each payment
only once with respect to each Licensed Product affected by an Event; provided,
however, that such payment for such Event shall not be due with respect to any
subsequent Licensed Product directed to a Molecular Target and indication which
has previously been the subject of the same Event. [ * CON * ] payments made by
Pfizer pursuant to this Section 3.8 with respect to a Licensed Product shall be
credited against [ * CON * ] sums due to Mitokor pursuant to Section 3.3 of this
Agreement with respect to Net Sales of such Licensed Product; provided, however,
that the sums due pursuant to Section 3.3 in any calendar year with respect to
such Licensed Product shall not be reduced by virtue of this credit by more THAN
[ * CON * ] percent ([ * CON * ]%):

        EVENT                                           AMOUNT
        -----                                           ------

1. Submission of IND or initiation
   of human clinical testing in any country
   (whichever occurs first)                           $ [ * CON * ]

2. Commencement of Phase III clinical trials
   in any country                                     $ [ * CON * ]

3. NDA/PLA Submission in any country                  $ [ * CON * ]

4. NDA/PLA  Approval in any country                   $ [ * CON * ]


            For the purposes of the foregoing, "IND" shall mean an
            Investigational New Drug Application filed with the U.S. FDA, or a
            similar filing made with a counterpart health regulatory authority
            in another country; "NDA/PLA" shall mean a New Drug Application,
            Product License Application, or other application for authority to



                                       9


            market a Licensed Product filed with the U.S. FDA or a counterpart
            health regulatory agency in another country.

4. LEGAL ACTION.

      4.1 ACTUAL OR THREATENED DISCLOSURE OR INFRINGEMENT.

            When information comes to the attention of Pfizer to the effect that
any Patent Rights relating to a Licensed Product have been or are threatened to
be unlawfully infringed, Pfizer shall have the right at its expense to take such
action as it may deem necessary to prosecute or prevent such unlawful
infringement, including the right to bring or defend any suit, action or
proceeding involving any such infringement. Pfizer shall notify Mitokor promptly
of the receipt of any such information and of the commencement of any such suit,
action or proceeding. If Pfizer determines that it is necessary or desirable for
Mitokor to join any such suit, action or proceeding, Mitokor shall, at Pfizer's
expense, execute all papers and perform such other acts as may be reasonably
required to permit Pfizer to commence such action, suit or proceeding in which
case Pfizer shall hold Mitokor free, clear and harmless from any and all costs
and expenses of litigation, including attorneys fees. If Pfizer brings a suit,
it shall have the [ * CON * ], related to such suit or settlement, and
[ * CON * ] percent ([ * CON * ]%) of any funds that shall remain from said
recovery shall be paid to Mitokor and the balance of such funds shall be
retained by Pfizer. If Pfizer does not, within one hundred twenty (120) days
after giving notice to Mitokor of the above-described information, notify
Mitokor of Pfizer's intent to bring suit against any infringer, Mitokor shall
have the right to bring suit for such alleged infringement, but it shall not be
obligated to do so, and may join Pfizer as party plaintiff, if appropriate, in
which event Mitokor shall hold Pfizer free, clear and harmless from any and all
costs and expenses of such litigation, including attorney's fees, and any sums
recovered in any such suit or in its settlement shall belong to Mitokor.
However,



                                       10


[ * CON * ] percent ([ * CON * ]%) of any such sums received by Mitokor, after
deduction of all costs and expenses related to such suit or settlement,
including attorney's fees paid, shall be paid to Pfizer. Each party shall always
have the right to be represented by counsel of its own selection and at its own
expense in any suit instituted by the other for infringement under the terms of
this Section. If Pfizer lacks standing and Mitokor has standing to bring any
such suit, action or proceeding, then Mitokor shall do so at the request of
Pfizer and at Pfizer's expense.

      4.2 DEFENSE OF INFRINGEMENT CLAIMS.

            Mitokor will cooperate with Pfizer at Pfizer's expense in the
defense of any suit, action or proceeding against Pfizer or any sublicensee of
Pfizer alleging the infringement of the intellectual property rights of a third
party by reason of the use of Patent Rights in the manufacture, use or sale of
the Licensed Product. Pfizer shall give Mitokor prompt written notice of the
commencement of any such suit, action or proceeding or claim of infringement and
will furnish Mitokor a copy of each communication relating to the alleged
infringement. Mitokor shall give to Pfizer all authority (including the right to
exclusive control of the defense of any such suit, action or proceeding and the
exclusive right after consultation with Mitokor, to compromise, litigate, settle
or otherwise dispose of any such suit, action or proceeding), at Pfizer's
expense, including by providing information and assistance necessary to defend
or settle any such suit, action or proceeding; provided, however, Pfizer shall
obtain Mitokor's prior consent to such part of any settlement which contemplates
payment or other action by Mitokor or has a material adverse effect on Mitokor's
business. If the parties agree that Mitokor should institute or join any suit,
action or proceeding pursuant to this Section, Pfizer may, at Pfizer's expense,
join Mitokor as a defendant if necessary or desirable, and Mitokor shall execute
all documents and take all other actions,



                                       11


including giving testimony, which may reasonably be required in connection with
the prosecution of such suit, action or proceeding.

      4.3 HOLD HARMLESS.

            Mitokor agrees to defend, indemnify and hold harmless Pfizer and any
sublicensee of Pfizer, from and against any loss or expense arising from any
proven claim of a third party that the third party has been granted rights by
Mitokor and such rights are being infringed upon by reason of Pfizer or any
sublicensee of Pfizer exercising their rights granted to Pfizer by Mitokor
pursuant to this Agreement.

      4.4 THIRD PARTY LICENSES.

            If the manufacture, use or sale by Pfizer of a Licensed Product in
any country would, in the opinion of both Pfizer and Mitokor, infringe a patent
owned by a third party, Pfizer and Mitokor, upon mutual consent, shall attempt
to obtain a license under such patent at Pfizer's expense. If such license is
obtained under such patent, [ * CON * ] percent ([ * CON * ]%) of any payments
made by Pfizer to such third party shall be deductible from royalty payments due
from Pfizer to Mitokor pursuant to this Agreement; provided, however, that in no
event shall royalties payable to Mitokor be lower than [ * CON * ] of the
royalty due from the Net Sales of such Licensed Product as a result of all such
deductions. All such computations, payments, and adjustments shall be on a
country by country and patent by patent basis.

5. REPRESENTATION AND WARRANTY.

      5.1 Mitokor represents and warrants to Pfizer that it has the right to
grant the License granted pursuant to this Agreement, and that the License so
granted does not conflict with or violate the terms of any agreement between
Mitokor and any third party.



                                       12


6. TREATMENT OF CONFIDENTIAL INFORMATION.

      6.1 CONFIDENTIALITY.

            6.1.1 Pfizer and Mitokor each recognize that the other's
Confidential Information constitutes highly valuable, confidential information.
Subject to Pfizer's right and obligations pursuant to this Agreement, Pfizer and
Mitokor each agree that during the term of the Research Agreement and for [ *
CON * ] ([ * CON * ]) years thereafter, it will keep confidential, and will
cause its Affiliates and sublicensees to keep confidential, all Mitokor
Confidential Information or Pfizer Confidential Information, as the case may be,
that is disclosed to it or to any of its Affiliates and sublicensees pursuant to
this Agreement. Neither Pfizer, its Affiliates or sublicensees nor Mitokor shall
use Confidential Information of the other party except as expressly permitted
under this Agreement. For all purposes of this Section 6, it is understood that
Program Technology shall be deemed Confidential Information of both parties.

            6.1.2 Subject to Pfizer's rights and obligations pursuant to this
Agreement, Pfizer and Mitokor each agree that any disclosure of the other's
Confidential Information to any officer, employee or agent of the other party or
of any of its Affiliates and sublicensees shall be made only if and to the
extent necessary to carry out its responsibilities under this Agreement and
shall be limited to the maximum extent possible consistent with such
responsibilities. Subject to Pfizer's rights and obligations pursuant to this
Agreement, Pfizer and Mitokor each agree not to disclose the other's
Confidential Information to any third parties under any circumstance without
written permission from the other party. Each party shall take such action, and
shall cause its Affiliates and sublicensees to take such action, to preserve the
confidentiality of each other's



                                       13


Confidential Information as it would customarily take to preserve the
confidentiality of its own Confidential Information. Each party, upon the
other's request, will return all the Confidential Information disclosed to it by
the other party pursuant to this Agreement, including all copies and extracts of
documents, within sixty (60) days of the request upon the termination of this
Agreement except for one (1) copy which may be kept for the purpose of complying
with continuing obligations under this Agreement.

            6.1.3 Mitokor and Pfizer each represent that all of its employees,
and any consultants to such party, participating in the Research Program who
shall have access to Program Technology, the Technology of the other (Pfizer
Technology or Mitokor Technology, as the case may be) or Confidential
Information of the other (Pfizer Confidential Information or Mitokor
Confidential Information, as the case may be) are bound by agreement to maintain
such information in confidence.

      6.2 PUBLICITY. Except as required by law, and except for a mutually
approved press release to be issued upon the signing of this Agreement, neither
party may disclose the terms of this Agreement without the written consent of
the other party; provided, however, that Mitokor may disclose the terms, or
provide copies, of this Agreement as necessary in the normal course of business
to bankers, investors and others in order to obtain financing.

      6.3 DISCLOSURE REQUIRED BY LAW. If either party is requested to disclose
the Confidential Information in connection with a legal or administrative
proceeding or is otherwise required by law to disclose the Confidential
Information, such party will give the other party prompt notice of such request.
The disclosing party may seek an appropriate protective order or other remedy or
waive compliance with the provisions of this Agreement. If such party seeks a
protective order or other remedy, the other party will cooperate. If such party
fails to obtain a protective



                                       14


order or waive compliance with the relevant provisions of this Agreement, the
other party will disclose only that portion of Confidential Information which
its legal counsel determines it is required to disclose.

      6.4 DISCLOSURE OF INVENTIONS. Each party shall promptly inform the other
about all inventions in the Area within Program Technology that are conceived,
made or developed in the course of carrying out the Research Program by
employees of, consultants to, either of them solely, or jointly with employees
of, or consultants to the other.

7. PROVISIONS CONCERNING FILING, PROSECUTION AND MAINTENANCE OF PATENT RIGHTS.
The following provisions relate to the filing, prosecution and maintenance of
Patent Rights during the term of this Agreement:

      7.1 FILING, PROSECUTION AND MAINTENANCE BY MITOKOR. With respect to Patent
Rights in which Mitokor employees or consultants, alone or together with Pfizer
employees, or consultants are named as inventors, Mitokor shall have the
exclusive right and obligation :

            (a) to file applications for letters patent on patentable inventions
included in Patent Rights; provided, however, that Mitokor shall consult with
Pfizer regarding countries in which such patent applications should be filed and
shall file patent applications in those countries where Pfizer requests that
Mitokor file such applications; and, further provided, that Mitokor, at its
option and expense, may file in countries where Pfizer does not request that
Mitokor file such applications;

            (b) to take all reasonable steps to prosecute all pending and new
patent applications included within Patent Rights;

            (c) to respond to oppositions, nullity actions, re-examinations,
revocation actions, interference proceedings and similar proceedings filed by
third parties against the grant of letters patent for such applications;



                                       15


            (d) to maintain in force any letters patent included in Patent
Rights by duly filing all necessary papers and paying any fees required by the
patent laws of the particular country in which such letters patent were granted;
and

            (e) to cooperate fully with, and take all necessary actions
requested by, Pfizer in connection with the preparation, prosecution and
maintenance of any letters patent included in Patent Rights.

         Mitokor shall notify Pfizer in a timely manner of any decision to not
pursue an action or to abandon a pending patent application or an issued patent
included in Patent Rights. Thereafter, Pfizer shall have the option, at its
expense, of taking such action or continuing to prosecute any such pending
patent application or of keeping the issued patent in force, or all of these.

            7.1.1 COPIES OF DOCUMENTS. Mitokor and Pfizer shall provide to each
other copies of all patent applications that are part of Patent Rights prior to
filing, for the purpose of obtaining substantive comment of the other party's
patent counsel. Mitokor and Pfizer shall also provide to the other copies of all
material documents relating to prosecution of all such patent applications in a
timely manner and shall provide to the other every six (6) months a report
detailing the status of all patent applications that are a part of Patent
Rights.

            7.1.2 REIMBURSEMENT OF COSTS FOR FILING PROSECUTING AND MAINTAINING
PATENT RIGHTS. Within thirty (30) days of receipt of invoices from Mitokor,
Pfizer shall reimburse Mitokor for all the costs of filing, prosecuting,
responding to opposition and maintaining patent applications and patents in
countries where Pfizer consents to or requests that patent applications be
filed, prosecuted and maintained. Such reimbursement shall be in addition to
other funding payments under this Agreement and shall include such costs of all
activities described in 7.1 (a)-(e) above. However, Pfizer may, upon sixty (60)
days notice, request that Mitokor discontinue filing or prosecution of patent



                                       16


applications in any country and discontinue reimbursing Mitokor for the costs of
filing, prosecuting, responding to opposition or maintaining such patent
application or patent in any country. Mitokor shall pay all costs in those
countries in which Pfizer requests that Mitokor not file, prosecute or maintain
patent applications and patents, but in which Mitokor, at its option, elects to
do so.

            7.1.3 Patent Extensions. Pfizer shall have the right to file on
behalf of and as an agent for Mitokor all applications for, and take all actions
necessary to obtain patent extensions pursuant to 35 USC Section 156 and foreign
counterparts with respect to the Patent Rights to the extent that such
extensions are available by reason of a Licensed Product under the License
Agreement during the period the License Agreement is in effect. Mitokor agrees,
to sign, such further documents and take such further actions as may be
requested by Pfizer in this regard, at Pfizer's expense.

      7.2 FILING, PROSECUTION AND MAINTENANCE BY PFIZER. With respect to Patent
Rights in which Pfizer employees or consultants alone are named as inventors,
Pfizer shall have those rights and duties ascribed to Mitokor in Section 7.1.,
except that Pfizer will bear all related expenses.

      7.3 Neither party may disclaim a Valid Claim within Patent Rights without
the consent of the other.

8. OTHER AGREEMENTS.

         Concurrently with the execution of this Agreement, Mitokor and Pfizer
shall enter into the Research Agreement of even date and the Stock Purchase
Agreement. This Agreement, the Research Agreement, and the Stock Purchase
Agreement are the sole agreements with respect to the subject matter and
supersede all other agreements and understanding between the parties with
respect to same.



                                       17


9. TERMINATION AND DISENGAGEMENT.

      9.1 EVENTS OF TERMINATION. The following events shall constitute events of
termination ("Events of Termination"):

            (a) If any written representation or warranty by Mitokor or Pfizer,
or any of its officers, made under or in connection with this Agreement shall
prove to have been incorrect in any material respect when made;

            (b) Mitokor or Pfizer shall fail in any material respect to perform
or observe any term, covenant or understanding contained in this Agreement or in
any of the other documents or instruments delivered pursuant to, or concurrently
with, this Agreement, and any such failure shall remain unremedied for thirty
(30) days after written notice to the failing party.

      9.2 TERMINATION. Upon the occurrence of any Event of Termination, the
party not responsible may, by notice to the other party, terminate this
Agreement.

      9.3 Termination of this Agreement by either party, with or without cause,
will not terminate the licenses granted pursuant to Section 5.2 of the Research
Agreement.

      9.4 Termination of this Agreement for any reason shall be without
prejudice to:

            (a) the rights and obligations of the parties provided in Sections
6, 7 and 10;

            (b) Mitokor's right to receive all royalty, milestone or other
payments accrued hereunder; or

            (c) any other remedies which either party may otherwise have.

10. INDEMNIFICATION. Pfizer and Mitokor will indemnify, defend and hold each
other harmless for any and all damages, settlements, costs, legal fees and other



                                       18


expenses incurred in connection with a claim by a third party against either
party based on any action or omission of the indemnifying party's agents,
employees, or officers related to its obligations under this Agreement;
provided, however, that the foregoing shall not apply (i) if the claim is found
to be based upon the negligence, recklessness or willful misconduct of the party
seeking indemnification; or (ii) if such party fails to give the other party
prompt notice of any claim it receives and such failure materially prejudices
the other party with respect to any claim or action to which its obligation
pursuant to this Section applies. Notwithstanding the foregoing, Pfizer hereby
expressly agrees to indemnify, defend and hold harmless Mitokor (and all
officers, directors, agents and Affiliates of Mitokor) for any and all claims
arising from clinical trials pursued by Pfizer or its Affiliates and/or
sublicensees, the sale of products, the exercise of rights granted to Pfizer
under Section 5.2 of the Research Agreement or the License and Royalty Agreement
(including without limitation product liability claims) and/or claims and to
claims arising from Patent Rights, Pfizer Patent Rights, Program Technology and
Pfizer Technology except for intellectual property claims with respect to
Mitokor Patent Rights, or Mitokor Technology. The indemnifying party, in its
sole discretion, shall choose legal counsel, shall control the defense of such
claim or action and shall have the right to settle same on such terms and
conditions it deems advisable.

11. NOTICES AND REPORTS.

      11.1 All notices shall be in writing mailed via certified mail, return
receipt requested, courier, or facsimile transmission addressed as follows, or
to such other address as may be designated from time to time:

         If to Pfizer:             Pfizer Central Research
                                   235 East 42nd Street
                                   New York, NY 10017

                                   ATTENTION:  DR. GEORGE MILNE, PRESIDENT
                                   with copy to: General Counsel

         If to Mitokor:            MitoKor,
                                   11494 Sorrento Valley Road
                                   San Diego, CA 92121
                                   ATTENTION:  DR. WALTER MOOS, CEO


Notices shall be deemed given as of the date received at the above specified
address.

      11.2 Reports. Pfizer agrees to keep Mitokor informed with respect to
activities and progress toward further research, development and
commercialization of Licensed Products. Pfizer agrees to provide to Mitokor
every six months a summary of such activities and progress. In addition, Pfizer
will provide to Mitokor copies of any data regarding the Licensed Products
together with copies of any reports or summaries of such data. Mitokor agrees
that all such information will be deemed Pfizer Confidential Information.

12. GOVERNING LAW.

      This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.

13. MISCELLANEOUS.

      13.1 BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective legal representatives, successors
and permitted assigns.

      13.2 HEADINGS. Paragraph headings are inserted for convenience of
reference only and do not form a part of this Agreement.



                                       19


      13.3 COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original. Signatures may be
transmitted via facsimile, thereby constituting the valid signature and delivery
of this Agreement.

      13.4 AMENDMENT; WAIVER; ETC. This Agreement may be amended, modified,
superseded or canceled, and any of the terms may be waived, only by a written
instrument executed by each party or, in the case of waiver, by the party or
parties waiving compliance. The delay or failure of any party at any time or
times to require performance of any provisions shall in no manner affect the
rights at a later time to enforce the same. No waiver by any party of any
condition or of the breach of any term contained in this Agreement, whether by
conduct, or otherwise, in any one or more instances, shall be deemed to be, or
considered as, a further or continuing waiver of any such condition or of the
breach of such term or any other term of this Agreement.

      13.5 NO THIRD PARTY BENEFICIARIES. No third party including any employee
of any party to this Agreement, shall have or acquire any rights by reason of
this Agreement. Nothing contained in this Agreement shall be deemed to
constitute the parties as partners with each other or any third party.

      13.6 ASSIGNMENT AND SUCCESSORS. This Agreement may not be assigned by
either party, except that each party may assign this Agreement and the rights
and interests of such party, in whole or in part, to any of its Affiliates, any
purchaser of all or substantially all of its assets or to any successor
corporation resulting from any merger or consolidation of such party with or
into such corporations.

      13.7 FORCE MAJEURE. Neither Pfizer nor Mitokor shall be liable for failure
of or delay in performing obligations set forth in this Agreement, and neither
shall be deemed in breach of its obligations, if such failure or delay is due to
natural



                                       20


disasters or any causes reasonably beyond the control of Pfizer or Mitokor.

      13.8 SEVERABILITY. If any provision of this Agreement is or becomes
invalid or is ruled invalid by any court of competent jurisdiction or is deemed
unenforceable, it is the intention of the parties that the remainder of the
Agreement shall not be affected so long as the essential benefits of this
Agreement remains enforceable and obtainable.



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      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives.


             PFIZER INC                                    MITOKOR



By:                                           By:
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Title:                                        Title:
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