RESEARCH, DEVELOPMENT AND MARKETING COLLABORATION AGREEMENT DATED AS OF JULY 31, 1997

RESEARCH, DEVELOPMENT AND MARKETING
COLLABORATION AGREEMENT

DATED AS OF JULY 31, 1997

BETWEEN

ONYX PHARMACEUTICALS, INC.

AND

▇▇▇▇▇▇-▇▇▇▇▇▇▇ COMPANY

TABLE OF CONTENTS

PAGE

ARTICLE 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE 2. RESEARCH PROGRAM. . . . . . . . . . . . . . . . . . . 6

2.1 Undertaking and Scope. . . . . . . . . . . . . . . . . . . 6
2.2 Personnel and Resources. . . . . . . . . . . . . . . . . . 7
2.3 Research Term. . . . . . . . . . . . . . . . . . . . . . . 7
2.4 Rights to Know-How and Patents for Research. . . . . . . . 7
2.5 Collaboration Expenses.. . . . . . . . . . . . . . . . . . 8

ARTICLE 3. COMMITTEES. . . . . . . . . . . . . . . . . . . . . . 8

3.1 Research Management Committee. . . . . . . . . . . . . . . 8
3.2 Meetings.. . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 SAB Attendance.. . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE 4. PATENTS, KNOW-HOW, RIGHTS AND INVENTIONS. . . . . . . 9

4.1 Rights to Inventions.. . . . . . . . . . . . . . . . . . . 9
4.2 Joint Inventions.. . . . . . . . . . . . . . . . . . . . . 9
4.3 Protection of Patent Rights. . . . . . . . . . . . . . . .10
4.4 Allegations of Infringement by Third Parties.. . . . . . .10

ARTICLE 5. DESIGNATION OF LEAD COMPOUNDS AND MARKETING RIGHTS. .11

5.1 Designation of Lead Compound.. . . . . . . . . . . . . . .11
5.2 Collaboration Product. . . . . . . . . . . . . . . . . . .11
5.3 Independent Development. . . . . . . . . . . . . . . . . .12
5.4 Warner's Re-engagement Option. . . . . . . . . . . . . . .12

ARTICLE 6. LICENSES AND ROYALTIES. . . . . . . . . . . . . . . .13

6.1 Grant by Onyx. . . . . . . . . . . . . . . . . . . . . . .13
6.2 Grant by Warner. . . . . . . . . . . . . . . . . . . . . .13
6.3 Royalties Payable by Warner. . . . . . . . . . . . . . . .13
6.4 Duration of Warner Royalty Obligation. . . . . . . . . . .14
6.5 Royalties Payable by Onyx. . . . . . . . . . . . . . . . .14
6.6 Duration of Onyx Royalty Obligation. . . . . . . . . . . .15
6.7 Third-Party Royalties. . . . . . . . . . . . . . . . . . .15
6.8 Currency of Payment. . . . . . . . . . . . . . . . . . . .16
6.9 Payment and Reporting. . . . . . . . . . . . . . . . . . .16
6.10 Records. . . . . . . . . . . . . . . . . . . . . . . . . .16
6.11 Taxes Withheld.. . . . . . . . . . . . . . . . . . . . . .17

TABLE OF CONTENTS
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6.12 Computation of Royalties.. . . . . . . . . . . . . . . . .17
6.13 Licenses to Affiliates.. . . . . . . . . . . . . . . . . .17
6.14 Restrictions on Payment. . . . . . . . . . . . . . . . . .17

ARTICLE 7. FDA . . . . . . . . . . . . . . . . . . . . . . . . .18

7.1 Side Effects.. . . . . . . . . . . . . . . . . . . . . . .18
7.2 Product Recall.. . . . . . . . . . . . . . . . . . . . . .18

ARTICLE 8. RESEARCH FUNDING FEES AND MILESTONES. . . . . . . . .18

8.1 License Fees.. . . . . . . . . . . . . . . . . . . . . . .18
8.2 Research Funding.. . . . . . . . . . . . . . . . . . . . .18
8.3 Milestones.. . . . . . . . . . . . . . . . . . . . . . . .19

ARTICLE 9. CONFIDENTIALITY . . . . . . . . . . . . . . . . . . .20

9.1 Confidentiality. . . . . . . . . . . . . . . . . . . . . .20
9.2 Publicity. . . . . . . . . . . . . . . . . . . . . . . . .21
9.3 Publication. . . . . . . . . . . . . . . . . . . . . . . .21

ARTICLE 10. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . .21

10.1 Legal Authority. . . . . . . . . . . . . . . . . . . . . .21
10.2 No Conflicts.. . . . . . . . . . . . . . . . . . . . . . .22
10.3 Others Bound.. . . . . . . . . . . . . . . . . . . . . . .22
10.4 Third Party Rights.. . . . . . . . . . . . . . . . . . . .22
10.5 Survival.. . . . . . . . . . . . . . . . . . . . . . . . .22
10.6 Disclaimer.. . . . . . . . . . . . . . . . . . . . . . . .22
10.7 Exclusivity. . . . . . . . . . . . . . . . . . . . . . . .22

Article 11. TERMINATION . . . . . . . . . . . . . . . . . . . . .23

11.1 Termination for Breach . . . . . . . . . . . . . . . . . .23
11.2 Effect of Bankruptcy . . . . . . . . . . . . . . . . . . .23
13.3 Key Personnel. . . . . . . . . . . . . . . . . . . . . . .23
11.3 Remedies . . . . . . . . . . . . . . . . . . . . . . . . .24
11.4 Voluntary Termination. . . . . . . . . . . . . . . . . . .24

ARTICLE 12. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . .24

12.1 Indemnification. . . . . . . . . . . . . . . . . . . . . .24
12.2 Assignment . . . . . . . . . . . . . . . . . . . . . . . .25
12.3 Non-Waiver . . . . . . . . . . . . . . . . . . . . . . . .25

ii.

TABLE OF CONTENTS
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12.4 Research Dispute Resolution. . . . . . . . . . . . . . . .25
12.5 Governing Law. . . . . . . . . . . . . . . . . . . . . . .25
12.6 Partial Invalidity . . . . . . . . . . . . . . . . . . . .25
12.7 Notice . . . . . . . . . . . . . . . . . . . . . . . . . .26
12.8 Vaccines and Diagnostics . . . . . . . . . . . . . . . . .26
12.9 Headings . . . . . . . . . . . . . . . . . . . . . . . . .27
12.10 No Implied Licenses or Warranties. . . . . . . . . . . . .27
12.11 Force Majeure. . . . . . . . . . . . . . . . . . . . . . .27
12.12 Survival . . . . . . . . . . . . . . . . . . . . . . . . .27
12.13 Entire Agreement . . . . . . . . . . . . . . . . . . . . .27
12.14 Amendments . . . . . . . . . . . . . . . . . . . . . . . .27
12.15 Independent Contractors. . . . . . . . . . . . . . . . . .28
12.16 Counterparts . . . . . . . . . . . . . . . . . . . . . . .28

iii.

RESEARCH, DEVELOPMENT AND MARKETING
COLLABORATION AGREEMENT

THIS RESEARCH, DEVELOPMENT AND MARKETING COLLABORATION AGREEMENT (the
"Agreement") is made and entered into effective as of July 31, 1997, by and
between ONYX PHARMACEUTICALS, INC., a California corporation located at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Onyx"), and ▇▇▇▇▇▇-▇▇▇▇▇▇▇ COMPANY,
a Delaware corporation located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ("Warner").

W I T N E S S E T H:

WHEREAS, Onyx and Warner each has certain expertise in the discovery and
development of agents acting in the field of inflammation; and

WHEREAS, Warner and Onyx each wish to enter into a collaborative effort to
share such expertise, to develop new expertise in the field of inflammation,
auto immunity and related pathological conditions, to research together
potential applications of such expertise as applied to specific protein targets
to identify potentially useful drug candidates and, if successful, to market
such drugs (the "Collaboration");

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises, covenants and conditions contained herein, Onyx and Warner agree as
follows:

ARTICLE 1

DEFINITIONS

The following capitalized terms shall have the meanings indicated for
purposes of this Agreement:

"1995 AGREEMENT" shall mean the Research, Development and Marketing
Collaboration Agreement between Onyx and Warner dated May 2, 1995, as amended.

"AFFILIATE" shall mean any corporation, association or other entity which
directly or indirectly controls, is controlled by or is under common control
with the party in question. As used herein the term "control" means possession
of the power to direct, or cause the direction of, the management and policies
of a corporation, association or other entity.

"COLLABORATION COMPOUND" shall mean any compound identified by either party
during the Research Term (or one year thereafter) as showing sufficient activity
against

targets in the Field identified by the Research Management Committee in assays
contributed to or developed under the Collaboration such that further research
on such compound for such target is pursued, and any analogs or derivatives of
such compounds whenever identified.

"COLLABORATION LEAD COMPOUND" shall mean any Collaboration Compound
selected by Warner for further development as provided in Section 5.1.

"COLLABORATION PRODUCT" shall mean any Collaboration Lead Compound for
which an IND or foreign equivalent application has been filed, as provided in
Section 5.2.

"COLLABORATION PRODUCT EXCLUSIVE PERIOD" shall have the meaning set forth
in Section 6.4(b).

"EFFECTIVE DATE" shall mean the date of this Agreement first written above.

"FDA" shall mean the United States Food and Drug Administration.

"FIELD" shall mean research, drug discovery and development of therapeutic
agents that regulate, treat or prevent inflammation, autoimmunity and/or other
pathological conditions via the agonism, antagonism or other biochemical
interaction with one or more of the following molecular targets: [**], including
[**] and other kinases implicated in septic shock, and ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Syndrome
Protein (WASP).

The parties may agree during the Research Term to expand the Field by
designating additional targets, and it is their intention to do so in the event
logical extensions of the Field are identified and may be accommodated within
the resource commitment of the parties. Such expansion will be in writing
signed by all members of the Research Development Committee. However, neither
party shall be obligated to agree to expand the Field.

For the avoidance of doubt, the parties agree that the Field will exclude:

(a)[**]

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(b) All molecular entities that are part of or that regulate [**].
This also includes [**]. This also includes [**]. This exclusion shall not
include [**].

(d) [**]

(e) [**]

(f) [**]

(g) [**]

(h) [**]

(i) [**] and

(j) [**].

[**] shall mean therapeutics where the active agent is [**] specifically
excludes [**].

"IND" shall mean an Investigational New Drug Application.

"INVENTION" shall mean any invention, idea, data, know-how or material that
is discovered or reduced to practice during the Term of this Agreement [**] and
that relates to the discovery, design, synthesis, delivery, development,
testing, use, manufacture or sale of agents acting in the Field.

"KNOW-HOW" shall mean Onyx Know-How and/or Warner Know-How, as the case may
be.

"MHW" shall mean the Ministry of Health and Welfare of Japan.

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"NDA" shall mean a New Drug Application.

"NET SALES" shall mean the gross amount invoiced by a party hereto or one
of its Affiliates to customers who are not Affiliates of the selling party for
all Products sold to such customers, less the following deductions calculated in
accordance with United States generally accepted accounting principles and
Warner's (or Onyx's, as the case may be) normal internal accounting standards
consistently applied: (i) trade, quantity and cash discounts or rebates; (ii)
credits, rebates, charge-back rebates, reimbursements or similar payments
granted or given to wholesalers and other distributors, buying groups,
healthcare insurance carriers, governmental agencies and other institutions,
provided that such provisions will not grant a preference or otherwise favor
other products of Warner or Onyx, as the case may be, if based on the fact that
a royalty may be payable hereunder; (iii) credits or allowances for rejection or
return of such Product previously sold; (iv) any tax, tariff, duty or other
governmental charge (other than an income tax) levied on the sale,
transportation or delivery of a Product and borne by the seller thereof; (v)
payments or rebates paid in connection with state or federal Medicare, Medicaid
or similar programs; (vi) any charge for freight or insurance; and (vii)
allowance for bad debt expense. Any such deductions, if not for amounts
actually incurred or allowed with respect to the specific Products sold, shall
be no greater than the pro rata amount allocable to such Product, based on the
invoices for similar pharmaceutical products sold by the selling party, of the
total amount of such deductions allowed or incurred for all such similar
products. In the event that the selling party recognizes revenue due to excess
balance sheet reserves associated with the net sales deductions described above,
the pro rata amount of such revenue allocable to the Product shall be deemed Net
Sales hereunder, at the time such revenue is recognized.

"ONYX KNOW-HOW" shall mean all technology, inventions, information, data,
know-how, compounds and materials that (i) are not Onyx Patents, (ii) Onyx owns
or otherwise has the right to license to Warner and (iii) relate to the
discovery, design, synthesis, delivery, development, testing, use, manufacture
or sale of agents with activity in the Field. Excluded from "Onyx Know-How" are
compounds and information relating to compounds that have been identified by
Onyx as candidates for cGLP/cGMP studies on or before the Effective Date, or are
hereafter so identified without material application of information provided by
Warner or developed by either party pursuant to the Collaboration.

"ONYX LEAD COMPOUND" shall mean a Collaboration Compound that Onyx obtains
the right to develop independently as provided in Section 5.3.

"ONYX PATENTS" shall mean all United States and foreign patents that are
owned by Onyx or that Onyx otherwise has the right to license to Warner and that
relate to the discovery, design, synthesis, delivery, development, testing, use,
manufacture or sale of

agents with activity in the Field, including, without limitation, all reissues,
extensions, substitutions, confirmations, registrations, revalidations,
additions, continuations, continuations-in-part, and divisions thereof.
Excluded from "Onyx Patents" are patents and patent applications that claim
compounds and information relating to compounds that have been identified by
Onyx as candidates for cGLP/cGMP studies on or before the Effective Date, or are
hereafter so identified without material application of information provided by
Warner or developed pursuant to the Collaboration.

"ONYX PRODUCT" shall have the meaning set forth in Section 5.3.

"ONYX PRODUCT EXCLUSIVE PERIOD" shall have the meaning set forth in Section
6.6(b).

"PATENTS" shall mean Onyx Patents and/or Warner Patents, as the case may
be.

"PRODUCTS" shall mean Collaboration Products and/or Onyx Products, as
applicable.

"RESEARCH MANAGEMENT COMMITTEE" shall mean that entity organized and acting
pursuant to Section 3.1.

"RESEARCH PLAN" shall have the meaning set forth in Section 2.1.

"RESEARCH TERM" shall have the meaning set forth in Section 2.3.

"TERM OF THIS AGREEMENT" shall mean the period from the Effective Date
until the expiration of all licenses granted pursuant to this Agreement or until
this Agreement is otherwise terminated pursuant to its terms.

"WARNER KNOW-HOW" shall mean all technology, inventions, information, data,
know-how, compounds and materials that (i) are not Warner Patents, (ii) Warner
owns or otherwise has the right to license to Onyx and (iii) relate to the
discovery, design, synthesis, delivery, development, testing, use, manufacture
or sale of agents with activity in the Field. Excluded from "Warner Know-How"
are (i) Warner's high-volume screening technology and (ii) compounds and
information relating to compounds that have been identified by Warner as
candidates for cGLP/cGMP studies on or before the Effective Date, or are
hereafter so identified without material application of information provided by
Onyx or developed by either party pursuant to the Collaboration.

"WARNER PATENTS" shall mean all United States and foreign patents that are
owned by Warner or that Warner otherwise has the right to license to Onyx and
that relate to the discovery, design, synthesis, delivery, development, testing,
use, manufacture or sale of agents with activity in the Field, including,
without limitation, all reissues, extensions,

substitutions, confirmations, registrations, revalidations, additions,
continuations, continuations-in-part, and divisions thereof. Excluded from
"Warner Patents" are patents and patent applications that claim (i) Warner's
high volume screen technology and (ii) compounds and information relating to
compounds that have been identified by Warner as candidates for cGLP/cGMP
studies on or before the Effective Date, or are hereafter so identified without
material application of information provided by Onyx or developed pursuant to
the Collaboration.

ARTICLE 2

RESEARCH PROGRAM

2.1 UNDERTAKING AND SCOPE. From time to time the Research Management
Committee will agree on the general direction of the research to be performed
hereunder. The correspondence and other material documenting such agreement are
collectively referred to herein as the "Research Plan." Each party agrees to
use its best efforts to perform the activities detailed in the Research Plan, in
a professional and timely manner. Onyx agrees to use its best efforts at its
cost (including the cost of any royalties or other amounts payable by Onyx to
third parties) to (i) develop and transfer to Warner [**] screening assays per
each year of the Research Term for specific targets in the Field selected by the
Research Management Committee, (ii) supply protein required to run such screens
and (iii) provide for the testing of substantially all of Onyx's compound
library in such screens. Onyx shall not knowingly provide or perform research
on any compounds the use of which would require a royalty or other payment to
any third party, unless the Research Management Committee agrees that such
compound should be provided and the parties agree in writing how such royalty or
other payment will be paid. Warner agrees to use its best efforts at its cost
(including the cost of any royalties or other amounts payable by Warner to third
parties) to (i) screen substantially all of its compound library with such
screens provided by Onyx and (ii) conduct medicinal chemistry and animal
pharmacology as the Research Management Committee deems appropriate. Promptly
after the Effective Date, Onyx and Warner will disclose to each other all
information possessed by it relevant to the Field and necessary or helpful to
perform the work described in the Research Plan. During the Research Term, or
[**] thereafter, the Research Management Committee and either party individually
may from time to time declare any compound that meets the definition therefor in
Article 1 to be a Collaboration Compound. Notwithstanding the foregoing,
neither party will be required to offer the other party any compounds or
information relating to compounds that have been identified as candidates for
cGLP/cGMP studies on or before the Effective Date, or are hereafter so
identified without material application of information provided by the other
party or developed pursuant to the Collaboration. Neither party shall be
required to screen under this Collaboration or to offer to the other party any
information regarding any compounds

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identified as having activity in pathways expressly excluded from the Field, if
so identified prior to being designated a "Collaboration Compound" hereunder.

2.2 PERSONNEL AND RESOURCES. Each party agrees to commit the personnel,
facilities, expertise and other resources needed to perform this Agreement in
accordance with its terms; provided, however, that neither party warrants that
the Collaboration shall achieve any of the research objectives contemplated by
them. During the Research Term, Warner and Onyx will each maintain at its cost
an average of [**] full-time equivalents ("FTEs") devoted to cooperative work
under the Research Plan. At the beginning of the first-year of the Research
Term, Onyx need maintain [**] such FTEs; with Onyx adding additional FTEs as
needed to reach [**] FTEs actively working on the research by [**]. The
scientific priorities and direction of such staff of both parties will be
determined by the Research Management Committee. Such staff will include, as
appropriate, scientists in the areas of [**].

2.3 RESEARCH TERM. Work under the Research Plan will commence as of the
date of this Agreement and, unless terminated earlier by either party
pursuant to the terms of this Agreement or extended by mutual agreement of
the parties, will terminate on the third anniversary hereafter (as
terminated, expired or extended, the "Research Term"). At least [**] prior
to the [**] anniversary of the Effective Date, Onyx will provide Warner a
written research proposal for continuation of the research project beyond
the initial Research Term. Promptly after Onyx provides such proposal, the
Research Management Committee will conduct a formal review of such proposal
and of the status and success of the parties' work on the Research Plan.
By the [**] anniversary of the Effective Date (the "Evaluation Date"),
Warner shall decide in its sole discretion whether to extend the collaborative
research under the research proposal beyond the initial three year term for
[**], or not to extend the collaborative research beyond such initial term,
in which case the Agreement shall terminate at the end of such initial three
year Research Term. If Warner does not elect in writing to extend the Research
Term beyond such initial three year term, then commencing on or promptly after
the Evaluation Date the work conducted by Onyx and Warner will be wound down
and ended in an orderly [**] phase out period, ending on the [**] anniversary
of the Evaluation Date, with Onyx continuing the research efforts using [**]
FTEs over such period. During such phase-out period, Warner will be obligated
to pay Onyx a total of [**] to support Onyx's research efforts using [**] FTEs
over such phase-out period, which amounts shall be paid [**] in advance over
such [**], commencing on the Evaluation Date, [**].

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2.4 RIGHTS TO KNOW-HOW AND PATENTS FOR RESEARCH. Each party hereby grants
and agrees to grant to the other a non-exclusive, royalty-free license to use
such party's Know-How and Patents that are conceived or reduced to practice
prior to the [**] anniversary of the end of the Research Term for (a) research
and development purposes in the Field and (b), beginning [**] after termination
of the Research Term, research and development outside of the Field; provided,
however, that the granting party may terminate such licenses granted by it
immediately upon its termination of this Agreement for cause. Notwithstanding
the foregoing, neither party is granted any interest in the other's compounds
(or analogs or derivatives thereof) except as specifically set forth in this
Agreement. In the event that one party does nonetheless conceive or reduce to
practice any invention that is comprised of the other party's compound (or
analog or derivative thereof) and if such invention is not in the Field, such
party will promptly assign its entire interest therein exclusively to the other
party without charge and will not be entitled to any milestones, royalties or
other consideration in connection therewith.

2.5 COLLABORATION EXPENSES. [**] the costs and expenses of work done
pursuant to the Collaboration at [**].

ARTICLE 3

COMMITTEES

3.1 RESEARCH MANAGEMENT COMMITTEE. Warner and Onyx will each appoint up
to 4 representatives to a research management committee (the "Research
Management Committee"), which will oversee the operational aspects of performing
the Research Plan. The Research Management Committee will assure that agendas
and minutes are prepared for each of its meetings. The personnel, facilities,
expertise and other resources of each party to be used in performance of the
Research Plan shall be established by the Research Management Committee. The
Research Management Committee will meet quarterly, or more frequently if
mutually agreed. Warner's and Onyx's initial representatives to the Research
Management Committee will be appointed by each of them promptly after the date
of this Agreement. All actions taken and decisions made by the Research
Management Committee shall be by unanimous agreement. A party may change any of
its appointments to the Research Management Committee at any time upon giving
written notice to the other party.

3.2 MEETINGS. The Research Management Committee may meet by telephone or
in person at such times as are agreeable to the members of each such committee.
Attendance at meetings shall be at the respective expense of the participating
parties. Warner and Onyx shall alternate the right to determine the location of
each meeting of the

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Research Management Committee, with Onyx determining the location of the first
meeting of such committee.

3.3 SAB ATTENDANCE. During the Term of this Agreement, Warner will be
entitled to have up to three (3) of its representatives attend all meetings of
Onyx's Scientific Advisory Board that relate directly to the Field and such
other general symposia that do not contain confidential information outside the
Field of Onyx or of any third party to which Onyx owes a duty of confidentiality
that would be breached by Warner's attendance. Onyx will provide Warner
reasonable advance notice of all such meetings and will provide Warner copies of
all written material given to the members of the Scientific Advisory Board in
connection with such meetings. Attendance at such meetings by Warner's
representatives will be at Warner's expense. As a condition of such attendance
and access to such written material, Warner will execute appropriate
confidentiality agreements with respect to information disclosed at such
meetings and in such written material. The Warner representatives provided for
herein shall not be in addition to the representatives provided for under
Section 2.4 of the 1995 Agreement, though different individuals from Warner may
attend different meetings depending on the subject matter.

ARTICLE 4

PATENTS, KNOW-HOW, RIGHTS AND INVENTIONS

4.1 RIGHTS TO INVENTIONS.

(a) Ownership of all Inventions and any other technology,
information, data, know-how, compounds and material developed, discovered or
made hereunder shall be determined in accordance with United States laws of
inventorship. The owner (the "Inventor") of any Invention shall have the right,
at its option and expense, to prepare, file and prosecute in its own name any
patent applications with respect to any Invention owned by it and to maintain
any patents issued. In connection therewith, the non-Inventor party agrees to
cooperate with the Inventor at the Inventor's expense in the preparation and
prosecution of all such patent applications and in the maintenance of any
patents issued. This obligation shall survive the expiration or termination of
this Agreement.

(b) The parties will co-own technology, inventions, information,
data, know-how, compounds and materials (whether or not patentable) that relate
to [**] and that are developed in connection with performance of the Research
Plan ("[**] Inventions"). The parties will cooperate in the joint filing of
patent applications claiming [**] Inventions. The parties will negotiate in
good faith regarding the collaborative commercial exploitation of the [**]
Inventions;

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provided, however, that each party will retain an undivided ownership interest
in the [**] Inventions and will be free to exploit the same without obligation
to the other party.

4.2 JOINT INVENTIONS. Inventions that are jointly invented by Onyx and
Warner will be jointly owned by them; however, [**] will have the rights and
responsibilities of the "Inventor" as described in this Article IV in respect of
any such patentable, jointly owned Inventions, and [**] shall have the rights
and responsibilities of a non-Inventor therein. [**] shall pay all expenses in
connection with its preparation, filing and prosecution of patent applications
that claim patentable, jointly owned Inventions. [**] shall from time to time
notify [**] of the amount of such expenses, and [**] shall promptly thereafter
pay [**] of its out-of-pocket expenses. As used in the preceding sentence
"out-of-pocket expenses" shall mean direct costs, excluding internal labor
costs. Onyx may elect in writing to disclaim all interest in any jointly
invented Invention, in which case (i) such Invention will be solely owned by
Warner, and Onyx will co-operate to assure Warner's sole ownership, (ii) Onyx
will have no further interest in such Invention, by ownership, license or
otherwise and (iii) [**] the date that Warner receives Onyx's written
disclaimer. Warner may elect in writing to disclaim all interest in any jointly
invented Inventions, in which case (i) such Invention will be solely owned by
Onyx, and Warner will co-operate to assure Onyx's sole ownership, (ii) Warner
will have no further interest in such Invention, by ownership, license or
otherwise and (iii) [**].

4.3 PROTECTION OF PATENT RIGHTS.

(a) The Inventor shall keep the other party currently informed of all
steps to be taken in the preparation, prosecution and maintenance of all of its
patents and patent applications which claim an Invention and shall furnish the
other party with copies of patents and applications, amendments thereto and
other related correspondence relating to such Invention to and from patent
offices and permit the other party to offer its comments thereon before the
Inventor makes a submission to a patent office which could materially affect the
scope or validity of the patent coverage that may result. The non-Inventor
party shall offer its comments promptly. Onyx and Warner shall each promptly
notify the other of any infringement and/or unauthorized use of an Invention
which comes to its attention.

(b) The non-Inventor party may request in writing that the Inventor
take specific, reasonable actions to (i) prepare, file or prosecute a patent
application with respect to an Invention, (ii) maintain any patents issued with
respect to an Invention, (iii)

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protect against abandonment of a patent or application which claims an Invention
or (iv) obtain a discontinuance of an infringement or unauthorized use of such
patent or application. If such actions are not undertaken within thirty days of
the Inventor's receipt of such written request and timely pursued thereafter,
the Inventor shall permit, and the non-Inventor party at its option and expense
may undertake, such actions. The party not undertaking such actions shall fully
cooperate with the other party and shall provide to the other party whatever
assignments and other documents that may be needed in connection therewith. The
party not undertaking such actions may require a suitable indemnity against all
damages, costs and expenses and impose such other reasonable conditions as such
party's advisors may require.

(c) If either party commences any actions or proceedings (legal or
otherwise) pursuant to this Section, it shall prosecute the same vigorously at
its expense and shall not abandon or compromise them or fail to exercise any
rights of appeal without giving the other party the right to take over their
conduct at its own expense. The party finally conducting legal actions or
proceedings against an alleged infringer or other party shall be entitled to any
damages or costs awarded against such infringer or other party.

4.4 ALLEGATIONS OF INFRINGEMENT BY THIRD PARTIES. In the event that
Warner or Onyx receives notice that any action by either of them under this
Agreement is alleged to be a violation of the patent or other intellectual
property rights of a third party, it shall notify the other party to this
Agreement, and they shall jointly determine an appropriate response and course
of action. The costs of such defense, and any damages, costs or expenses
resulting from such action, shall be paid [**] of all such costs relating to
allegations that it was aware of prior to the Effective Date. The Research
Management Committee will decide whether or not to continue any activity
following notice that such activity may be a violation of the patent or other
intellectual property rights of a third party.

ARTICLE 5

DESIGNATION OF LEAD COMPOUNDS AND MARKETING RIGHTS

5.1 DESIGNATION OF LEAD COMPOUND.

(a) From time to time, Warner may formally designate one or more
Collaboration Compounds for further development, and such designated compounds
shall be deemed Collaboration Lead Compounds. Such designation shall be made
under Warner's then current standards for declaring one of its own compounds a
"lead

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compound." Such designation generally indicates that Warner has identified such
compound as a candidate for cGLP/cGMP studies. Warner will pursue the research
and development of each Collaboration Lead Compound at its own expense and under
its sole direction. Warner will provide Onyx quarterly, written updates
regarding the status of each Collaboration Lead Compound.

(b) In the event Warner decides to pursue commercialization of a
Collaboration Product in Japan, [**]. If [**], and if [**], then it shall [**].

5.2 COLLABORATION PRODUCT. Each Collaboration Lead Compound shall be
referred to herein as a "Collaboration Product" from and after filing of an IND
in respect of such compound with the FDA or the filing of its equivalent in any
foreign country. The preparation, filing and prosecution of IND's, NDA's and
other regulatory filings required to be filed with the FDA and its foreign
equivalents in regard to any Collaboration Product will be at the sole expense
of, in the name of and under the direction of Warner. Warner does not warrant
that any regulatory filings will actually be filed or, if filed, will be
approved.

5.3 INDEPENDENT DEVELOPMENT. From time to time, Onyx may request Warner
in writing to undertake specific research and development regarding a
Collaboration Compound or to declare a Collaboration Compound to be a
Collaboration Lead Compound. Warner will notify Onyx within [**] of receiving
Onyx's written request if it determines before such date that it will not
undertake such specific research and development (or declare such Collaboration
Compound to be a Collaboration Lead Compound) within [**] of such request
("Warner's Notice to Decline"). If Warner does not so notify Onyx within such
[**] period, it will periodically review Onyx's request and if it determines not
to undertake such specific research and development (or declare such
Collaboration Compound to be a Collaboration Lead Compound) then it shall
promptly so notify Onyx (also, "Warner's Notice to Decline"). After either (i)
receipt of Warner's Notice to Decline, or (ii) if Warner does not so notify Onyx
and if Warner does not itself undertake the requested action within [**] of
Onyx's written request, then the date [**] after Warner's receipt of Onyx's
written request, then Onyx shall undertake continued research and development
(including the specific research and development requested by Onyx in its
request to Warner) of such Collaboration Compound independently (an "Onyx Lead
Compound"), at its sole cost and under its sole direction. Onyx may not utilize
the services of the personnel committed to the Collaboration pursuant to Section
2.2 in performance of research or development of

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an Onyx Lead Compound. Onyx may declare no more than [**] Onyx Lead Compounds
during the Term of this Agreement. Onyx will keep Warner currently informed of
all material information in its research and development of each Onyx Lead
Compound and will allow Warner to comment on the direction of such research and
development. Each Onyx Lead Compound is referred to herein as an "Onyx Product"
from and after filing of an IND in respect of such compound with the FDA or the
filing of its equivalent in any foreign country other than Japan. Onyx will
provide Warner a complete and accurate copy of the proposed filing, together
with any additional information that Warner may request regarding the relevant
Onyx Lead Compound, at least [**] prior to submitting such filing to the FDA or
its foreign equivalent. Onyx will be entitled to commercialize any Onyx Product
at its sole direction, alone or with another partner, subject to Section 5.4 and
the other terms of this Agreement.

5.4 WARNER'S RE-ENGAGEMENT OPTION. Warner may elect in writing to Onyx to
resume the research and development of an Onyx Lead Compound at its own cost and
under its sole direction at any time prior to [**] in respect of such compound.
In such event, such Onyx Lead Compound shall immediately become a Collaboration
Lead Compound for all purposes under this Agreement. Promptly after Warner
makes such election, Warner will pay Onyx [**] Onyx's costs incurred for
research and development of such Onyx Lead Compound. For purposes of this
Section, Onyx's cost for research and development will mean (i) Onyx's "Burdened
Cost" (as defined below) for each professional research and development FTE (not
including the personnel committed to the Collaboration pursuant to Section 2.2)
dedicated to the research and development of such Onyx Lead Compounds (with
appropriate adjustment for staff members not fully dedicated to such work or not
working a full year) and (ii) payments made to unaffiliated third parties, each
to the extent incurred in connection with the relevant compound on or after its
declaration as an Onyx Lead Compound and to the extent reasonably supported by
invoices, time sheets or other appropriate records. The "Burdened Cost" for
each Onyx FTE shall mean [**] for work performed during 1997, and will be
revised for work performed during each succeeding calendar year by the change in
the Consumer Price Index (as determined by the United States of America
Department of Labor) during the preceding calendar year (except that the
Burdened Cost for work performed during 1998 will be revised only by the change
in the Consumer Price Index from the Effective date to December 31, 1997).

ARTICLE 6

LICENSES AND ROYALTIES

6.1 GRANT BY ONYX. Onyx hereby grants and agrees to grant to Warner
exclusive, worldwide licenses under the Onyx Patents solely to make, have made,
use and sell (with the right to sublicense) each compound designated as a
Collaboration Lead

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Compound or as a Collaboration Product. Such licenses with respect to a
Collaboration Lead Compound are co-exclusive between Onyx and Warner. Such
licenses with respect to a Collaboration Product are exclusive even as to Onyx.

6.2 GRANT BY WARNER. Warner hereby grants and agrees to grant to Onyx
exclusive, worldwide licenses under the Warner Patents solely to make, have
made, use and sell (with the right to sublicense) each compound designated as an
Onyx Lead Compound or as an Onyx Product. Such licenses with respect to an Onyx
Lead Compound are co-exclusive between Onyx and Warner. Such licenses with
respect to an Onyx Product are exclusive even as to Warner.

6.3 ROYALTIES PAYABLE BY WARNER. In part consideration for all rights
granted to Warner and efforts undertaken by Onyx hereunder, Warner will pay Onyx
[**] of Net Sales as a royalty on worldwide sales of Collaboration Products. If
at the time of the first commercial sale of such Product in such country a
Patent exists that is necessary to sell such Product in such country, or if at
any time after such sale a composition of matter Patent necessary to sell such
Collaboration Product issues in such country, such [**] royalty shall be payable
in respect of sales in such country until the later of (a) the expiration of the
last such Patent to expire and (b) the date such [**] royalty would expire under
the provisions of the following sentence assuming that such Patent did not
exist. Subject to the terms of the preceding sentence, if in a particular
country there is never an issued Patent that is necessary to sell such Product
in such country, then such [**] royalty will be payable, for sales of such
Product in such country, until the earliest of (x) the later to occur of (i) the
[**] anniversary of such first sale in such country and (ii) expiration of the
last Patent necessary to make or use such Product in such country, which Patent
was in existence on the date of such first commercial sale, (y) the first
calendar quarter in which the sale in such country by any one entity (together
with its Affiliates), other than Warner or its Affiliates or licensees, of one
or more products containing the same active ingredient as such Product,
constitutes [**] or more of all units sold in such country containing such
active ingredient and (z) the first calendar quarter in which the sale in such
country by any entities (taken in the aggregate), other than Warner or its
Affiliates or licensees, of one or more products containing the same active
ingredient as the Product, constitutes [**] or more of all units sold in such
country containing such active ingredient (the period from first commercial sale
in each country until the earlier of (x), (y) and (z) above is referred to
herein as the "Collaboration Product Exclusive Period"). In the case of (y) and
(z) above, the [**] royalty will terminate as to Net Sales of Product sold on or
after the day following the end of the triggering calendar quarter. Warner will
pay Onyx [**] and [**] of Net Sales as a royalty on sales of Collaboration
Products in each country (except for Japan) for the [**], respectively,
following (a) such final Patent expiration (in the event that the required
Patent necessary to sell such Product in such country existed on the date of
first commercial sale or issued thereafter) or (b) the end of the Collaboration
Product Exclusive Period (if no such Patent existed or issued

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thereafter, and provided that the Collaboration Product Exclusive Period lasted
at least [**] years); provided, however, that no such royalty will be payable in
respect of Collaboration Products sold without the use of one or more trademarks
developed by Warner for such Product during the time that the [**] royalty was
applicable.

6.4 ROYALTIES PAYABLE BY ONYX. Onyx will pay Warner [**] of Net Sales as
a royalty on worldwide sales of Onyx Products. If at the time of the first
commercial sale of such Product in such country a Patent exists that is
necessary to sell such Product in such country, or if at any time after such
sale a composition of matter Patent necessary to sell such Collaboration Product
issues in such country, such [**] royalty shall be payable in respect of sales
in such country until the later of (a) the expiration of the last such Patent to
expire and (b) the date such [**] royalty would expire under the provisions of
the following sentence assuming that such Patent did not exist. Subject to the
terms of the preceding sentence, if in a particular country there is never an
issued Patent that is necessary to sell such Product in such country, then such
[**] royalty will be payable, for sales of such Product in such country, until
the earliest of (x) the later to occur of (i) the [**] anniversary of such first
sale in such country and (ii) expiration of the last Patent necessary to make or
use such Product in such country, which Patent was in existence on the date of
such first commercial sale, (y) the first calendar quarter in which the sale in
such country by any one entity (together with its Affiliates), other than Warner
or its Affiliates or licensees, of one or more products containing the same
active ingredient as the Product, constitutes [**] or more of all units sold in
such country containing such active ingredient and (z) the first calendar
quarter in which the sale in such country by any entities (taken in the
aggregate), other than Onyx or its Affiliates or licensees, of one or more
products containing the same active ingredient as the Product, constitutes [**]
or more of all units sold in such country containing such active ingredient (the
period from first commercial sale in each country until the earliest of (x), (y)
and (z) above is referred to herein as the "Onyx Product Exclusive Period"). In
the case of (y) and (z) above, the [**] royalty will terminate as to Net Sales
of Product sold on or after the day following the end of the triggering calendar
quarter. Onyx will pay Warner [**] of Net Sales as a royalty on sales of Onyx
Products in each country (except for Japan) for the [**], respectively,
following (a) such final Patent expiration (in the event that the required
Patent necessary to sell such Product in such country existed on the date of
first commercial sale or issued thereafter) or (b) the end of the Onyx Product
Exclusive Period (if no such Patent existed or issued thereafter, and provided
that the Onyx Product Exclusive Period lasted at least [**] years); provided,
however, that no such royalty will be payable in respect of an Onyx Product sold
without the use of one or more trademarks developed by Onyx for such Product
during the time that the [**] royalty was applicable.

6.5 THIRD-PARTY ROYALTIES. Warner understands and agrees that Onyx has
pre-exisiting royalty obligations to the third parties listed on Schedule 1 with
respect to certain in-licensed Onyx Patents. In the event that the use and sale
of Collaboration

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Products triggers such pre-existing third-party royalty obligations, [**]
responsible for payment of [**] of such third-party royalties, and [**] will pay
[**]. Until the expiration of Warner royalty obligation pursuant to Section
6.4, Onyx shall not modify the pre-existing royalty rates disclosed on Schedule
1 without the prior written consent of Warner.

6.6 CURRENCY OF PAYMENT. All payments to be made under this Agreement
shall be made in United States dollars in the United States to a bank account
designated by the party to be paid. Royalties earned shall first be determined
in the currency of the country in which they are earned and then converted to
its equivalent in United States currency. Such conversion shall be based on the
average buying rates of exchange for the currencies involved into the currency
of the United States quoted by Citibank (or its successor in interest) in New
York, New York at the close of business on each business day of the quarterly
period in which the royalties were earned.

6.7 PAYMENT AND REPORTING. The royalties due under Section 6.3 or Section
6.5 shall be paid quarterly, within 45 days after the close of each calendar
quarter immediately following each quarterly period in which such royalties are
earned, or earlier if practical. With each such quarterly payment, the payor
shall furnish the payee a royalty statement, setting forth on a
country-by-country basis the total number of units and Net Sales of each
royalty-bearing Product made, used and/or sold hereunder for the quarterly
period for which the royalties are due. In addition, the payor shall furnish
such a royalty statement on a country-by-country basis for the first quarter
during which payor makes sales of Product for which no royalty payment in
respect of such country is due hereunder, and shall state the basis for such
sales then being free of royalty obligations hereunder. The payor shall
thereafter have no further obligation to report the number of units or Net Sales
of such Product made, used and/or sold in such country.

6.8 RECORDS. The royalty paying party shall keep accurate books and
accounts of record in connection with the manufacture, use and/or sale by or for
it of the Products hereunder in sufficient detail to permit accurate
determination of all figures necessary for verification of royalty obligations
set forth in this Article VI. Such records shall be maintained for a period of
3 years from the end of each year in which sales occurred. The payee, at its
expense, through a certified public accountant, shall have the right to access
such books and records for the sole purpose of verifying the royalty statements;
such access shall be conducted after reasonable prior notice by the payee to the
payor during the payor's ordinary business hours and shall not be more frequent
than once during each calendar year. Said accountant shall not disclose to the
payee or any other party any information except that which should properly be
contained in a royalty report required under this Agreement. If such accounting
determines that a party's error resulted in the other party receiving at least
5% less than properly due in respect of any quarter, then the

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party in error will reimburse such amount and reimburse the other party for the
costs of such accounting (including the fees and expenses of the certified
public accountant).

6.9 TAXES WITHHELD. Any income or other tax that one party hereunder, its
Affiliates or sublicensees is required to withhold (the "Withholding Party") and
pay on behalf of the other party hereunder (the "Withheld Party") with respect
to the royalties payable under this Agreement shall be deducted from and offset
against said royalties prior to remittance to the Withheld Party; provided,
however, that in regard to any tax so deducted, the Withholding Party shall give
or cause to be given to the Withheld Party such assistance as may reasonably be
necessary to enable the Withheld Party to claim exemption therefrom or credit
therefor, and in each case shall furnish the Withheld Party proper evidence of
the taxes paid on its behalf.

6.10 COMPUTATION OF ROYALTIES. All sales of Onyx Products between Onyx and
any of its Affiliates and sublicensees shall be disregarded for purposes of
computing royalties under this Article VI, but in such instances royalties shall
be payable only upon sales to unlicensed third parties. Nothing herein
contained shall obligate Onyx to pay Warner more than one royalty on any unit of
an Onyx Product. All sales of Collaboration Products between Warner and any of
its Affiliates and sublicensees shall be disregarded for purposes of computing
royalties under this Article VI, but in such instances royalties shall be
payable only upon sales to unlicensed third parties. Nothing herein contained
shall obligate Warner to pay Onyx more than one royalty on any unit of a
Collaboration Product or a Warner Product.

6.11 LICENSES TO AFFILIATES. Each party shall, at the other party's
request, sign license and/or royalty agreements directly with the other party's
Affiliates and sublicensees in those situations where such agreements would not
decrease the amount of royalties which would be owed hereunder. Such agreements
shall contain the same language as contained herein with appropriate changes in
parties and territory. No such license and/or royalty agreement will relieve
Warner or Onyx, as the case may be, of its obligations hereunder, and such party
will guarantee the obligations of its Affiliate or sublicensee in any such
agreement. Royalties received directly from one party's Affiliates and
sublicensees shall be credited towards such party's royalty obligations under
Section 6.3 or 6.5 hereof, as applicable.

6.12 RESTRICTIONS ON PAYMENT. The obligation to pay royalties under this
Agreement shall be waived and excused to the extent that statutes, laws, codes
or government regulations in a particular country prevent such royalty payments
by the seller of Products; provided, however, that if legally permissible, the
seller of Products shall pay the royalties owed to the other party hereto by
depositing such amounts in a bank account in such country that has been
designated by the party owed such royalties.

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ARTICLE 7

FDA

7.1 SIDE EFFECTS. Each party shall promptly advise the other by telefax
or overnight delivery service addressed to the attention of its Vice President,
Medical Affairs (or, in Onyx's case, the party with similar responsibilities),
of any unexpected side effect, adverse reaction or injury which has been brought
to that party's attention at any place and which is alleged to have been caused
by a Collaboration Product or an Onyx Product. Warner, with respect to
Collaboration Products, and Onyx, with respect to Onyx Products, shall have all
rights and responsibility to report such side effect, adverse reaction or injury
to regulatory authorities and others as appropriate.

7.2 REGULATORY AND OTHER INQUIRIES. Upon being contacted by the FDA or
any drug regulatory agency for any regulatory purpose pertaining to this
Agreement or to a Collaboration Product, Onyx and Warner shall immediately
notify and consult with one another and Warner shall provide a response as it
deems appropriate. Warner shall have sole responsibility for responding to all
inquiries to Warner or Onyx regarding the benefits, side effects and other
characteristics of Collaboration Products, and Onyx shall have sole
responsibility for responding to all inquiries to Warner or Onyx regarding the
benefits, side effects and other characteristics of Onyx Products.

7.3 PRODUCT RECALL. Warner shall have the responsibility for, and make
the final determination regarding, any recall or other removal of the
Collaboration Product or any lot or lots thereof from the market and shall be
responsible for the cost and expense of notifying customers and the cost and
expense associated with return of the recalled Collaboration Product from a
customer. Onyx shall have the responsibility for, and make the final
determination regarding, any recall or other removal of the Onyx Product or any
lot or lots thereof from the market and shall be responsible for the cost and
expense of notifying customers and the cost and expense associated with return
of the recalled Onyx Product from a customer.

ARTICLE 8

RESEARCH FUNDING FEES AND MILESTONES

8.1 LICENSE FEES. Warner will pay Onyx a noncreditable license fee of
[**] payable [**] as specified below:

[**]

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[**]

As used herein, the [**] shall mean the date that is the earlier of (a) [**]
anniversary of the Effective Date, or (b) the date [**], but in no event shall
such date be earlier than [**].

8.2 RESEARCH FUNDING. Warner will pay Onyx the following amounts on the
following dates during the Research Term in consideration for work performed by
Onyx prior to the Effective Date and to provide support for Onyx's work under
the Research Plan:

Later of six month anniversary of the Effective Date
or January 1, 1998..................................... [ ** ]
Nine month anniversary of the Effective Date............. [ ** ]
Twelve month anniversary of the Effective Date........... [ ** ]
Fifteen month anniversary of the Effective Date.......... [ ** ]
Eighteen month anniversary of the Effective Date......... [ ** ]
Twenty-one month anniversary of the Effective Date....... [ ** ]
Twenty-four month anniversary of the Effective Date...... [ ** ]
Twenty-seven month anniversary of the Effective Date..... [ ** ]
Thirty month anniversary of the Effective Date........... [ ** ]
Thirty-three month anniversary of the Effective Date..... [ ** ]
-------
[ ** ]

8.3 MILESTONES.

(a) Warner will pay Onyx the following amounts with respect to the first
Collaboration Product to achieve each stated milestone:

Certification by the RMC that the first screening
assay has been completed and the hits analyzed........... [ ** ]

Commencement of Phase I clinical trials by or on
behalf of Warner anywhere in the world................... [ ** ]

Commencement of Phase II clinical trials by or on
behalf of Warner anywhere in the world................... [ ** ]

Commencement of Phase III clinical trials by or on
behalf of Warner anywhere in the world................... [ ** ]

The FDA's acceptance for filing of an NDA................ [ ** ]

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Acceptance for filing of an MAA applicable to any of
the following countries: (i) United Kingdom, (ii) Spain,
(iii) Italy, (iv) France and (v) Germany (each a
"Major European Country")................................ [ ** ]
country, up to
[ ** ] total

Approval by the FDA of an NDA............................ [ ** ]

Approval of an MAA applicable to a Major European
Country.................................................. [ ** ]
country, up to
[ ** ] total

Approval by the MHW of the Collaboration Product in
Japan (subject to Warner retaining rights in Japan under
section 5.1(b)).......................................... [ ** ]

[**]

(b) Warner will pay Onyx [**] upon the approval by the FDA of an NDA
for the second and each subsequent Collaboration Product so approved and [**]
upon the approval of an MAA applicable to each Major European Country, up to
[**], for the second and each subsequent Collaboration Product so approved,
provided each such Collaboration Product is a different chemical entity.

(c) Subject to Warner retaining rights in Japan under Section 5.1(b),
Warner will pay Onyx [**] upon the approval by the MHW of the second and each
subsequent Collaboration Product so approved in Japan, provided each such
Collaboration Product is a different chemical entity.

(d) Onyx will pay Warner [**] upon the approval by the FDA of an NDA
for each Onyx Product and [**] upon the approval of an MAA applicable to each
Major European Country, up to [**], and [**] upon approval by the
MHW in Japan.

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ARTICLE 9

CONFIDENTIALITY

9.1 CONFIDENTIALITY.

(a) Except as specifically permitted hereunder, each party hereby
agrees to hold in confidence and not use on behalf of itself or others all data,
samples, technical and economic information (including the economic terms
hereof), commercialization, clinical and research strategies and know-how
provided by the other party (the "Disclosing Party") during the Term of this
Agreement and all data, results and information developed pursuant to the
Collaboration and solely owned by the other party (collectively the
"Confidential Information"), except that the term "Confidential Information"
shall not include:

(i) information that is or becomes part of the public domain
through no fault of the non-Disclosing Party or its Affiliates;

(ii) information that is obtained after the date hereof by the
non-Disclosing Party or one of its Affiliates from any third party which is
lawfully in possession of such Confidential Information and not in violation of
any contractual or legal obligation to the Disclosing Party with respect to such
Confidential Information;

(iii) Information that is known to the non-Disclosing Party
or one or more of its Affiliates prior to disclosure by the Disclosing Party, as
evidenced by the non-Disclosing Party's written records; and

(iv) information that is necessary to be disclosed to any
governmental authorities or pursuant to any regulatory filings, provided that in
such case the non-Disclosing Party notifies the Disclosing Party reasonably in
advance of such disclosure and cooperates with the Disclosing Party to minimize
the scope or content of such disclosure.

(b) The obligations of this Section 9.1 shall survive the expiration
or termination of this Agreement.

9.2 PUBLICITY. All publicity, press releases and other announcements
relating to this Agreement or the transactions contemplated hereby shall be
reviewed in advance by, and subject to the approval of, both parties; provided,
however, that either party may (i) publicize the existence and general subject
matter of this Agreement without the other party's approval and (ii) disclose
the terms of this Agreement insofar as required to

21.

comply with applicable securities laws, provided that in the case of such
securities disclosures the disclosing party notifies the other party reasonably
in advance of such disclosure and cooperates to minimize the scope and content
of such disclosure.

9.3 PUBLICATION. The parties shall cooperate in appropriate publication
of the results of research and development work performed pursuant to this
Agreement, but subject to the predominating interest to obtain patent protection
for any patentable subject matter. To this end, it is agreed that prior to any
public disclosure, the party proposing disclosure shall send the other party a
copy of the information to be disclosed, and shall allow the other party [**]
from the date of receipt in which to determine whether the information to be
disclosed contains subject matter for which patent protection should be sought
prior to disclosure. If notification is not received during the [**] period,
the party proposing disclosure shall be free to proceed with the disclosure. If
due to a valid business reason or a belief by the nondisclosing party that the
disclosure contains subject matter for which a patentable invention should be
sought, then prior to the expiration of the [**] period, the nondisclosing
party shall so notify the disclosing party, who shall then delay public
disclosure of the information for an additional period of up to [**] to permit
the preparation and filing of a patent application on the subject matter to be
disclosed or other action to be taken. The party proposing disclosure shall
thereafter be free to publish or disclose the information. The determination of
authorship for any paper shall be in accordance with accepted scientific
practice. In no event may any publication or other disclosure contain a party's
Confidential Information without such party's prior written consent.

ARTICLE 10

REPRESENTATIONS AND WARRANTIES

10.1 LEGAL AUTHORITY. Each party represents and warrants to the other that
it has the legal power, authority and right to enter into this Agreement and to
perform its respective obligations set forth herein.

10.2 NO CONFLICTS. Each party represents and warrants that as of the date
of this Agreement it is not a party to any agreement or arrangement with any
third party or under any obligation or restriction, including pursuant to its
Certificate of Incorporation or By-Laws, which in any way limits or conflicts
with its ability to fulfill any of its obligations under this Agreement.

10.3 OTHERS BOUND. Each party represents and warrants that anyone
performing services under this Agreement on its behalf shall be bound by all of
the conditions of this Agreement, to the extent necessary to give full effect to
this Agreement.

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10.4 THIRD PARTY RIGHTS. Each party represents and warrants that to the
best of its knowledge its performance of the work under the Collaboration as
contemplated by this Agreement will not infringe the patent, trade secret or
other proprietary rights of any third party except insofar as any infringement
may relate to technology, data or information provided by the other party
hereunder.

10.5 SURVIVAL. The foregoing representations and warranties shall survive
the execution, delivery and performance of this Agreement, notwithstanding any
investigation by or on behalf of either party.

10.6 DISCLAIMER. Except as otherwise expressly stated herein, Warner
hereby disclaims any warranty expressed or implied as to any Onyx Product sold
or placed in commerce by or on behalf of Onyx. Except as otherwise expressly
stated herein, Onyx hereby disclaims any warranty expressed or implied as to any
Collaboration Product sold or placed in commerce by or on behalf of Warner.

10.7 EXCLUSIVITY. During the Research Term and [**] thereafter (i) neither
party will conduct any research or development in the Field except pursuant to
this Agreement, (ii) neither party will license (or otherwise permit access to)
any of its Patents or Know-How for research or development in the Field to (or
otherwise collaborate on research or development in the Field with) any other
person or entity and (iii) Onyx will not license (or otherwise permit access to)
any assay developed by it pursuant to the Collaboration to any other person or
entity. In respect of (i), above, each party shall have the right to conduct
its own research and development in the Field during [**] following the end of
the Research Term, provided that all results of such work discovered during such
period (including without limitation compounds and assays), and analogs and
derivatives of compounds identified during such period whenever identified, are
promptly disclosed to the other party and are covered by the licenses granted
under Sections 2.4, 6.1 and 6.2, as applicable.

ARTICLE 11

TERMINATION

11.1 TERMINATION FOR BREACH. In the event of a material breach of the
provisions of this Agreement described below, the breaching party shall have 30
days after receipt of written notice from the non-breaching party to cure such
breach.

(a) In the event of an uncured material breach of Article II, the
non-breaching party may terminate the Research Term.

(b) In the event of an uncured material breach of Section 6.3 by
Warner in respect of a Collaboration Product, Onyx may (i) terminate the
licenses granted by it

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pursuant to Section 6.1 in respect of such Product and (ii) require Warner to
grant it an exclusive (even as to Warner), worldwide license (with the right to
sublicense) under the Patents relating to such Product and owned or controlled
by Warner, to the extent necessary to make, use or sell such Product.

(c) In the event of an uncured material breach of Section 6.5 by Onyx
in respect of an Onyx Product, Warner may (i) terminate the licenses granted by
it pursuant to Section 6.2 in respect of such Product and (ii) require Onyx to
grant it an exclusive (even as to Onyx), worldwide license (with the right to
sublicense) under the Patents relating to such Product and owned or controlled
by Onyx, to the extent necessary to make, use or sell such Product.

11.2 EFFECT OF BANKRUPTCY. If either party files a voluntary petition in
bankruptcy, is adjudicated a bankrupt, makes a general assignment for the
benefit of creditors, admits in writing that it is insolvent or fails to
discharge within 15 days an involuntary petition in bankruptcy filed against it,
then the other party will have 60 days to determine whether or not the Research
Term shall immediately terminate.

11.3 KEY PERSONNEL.

(a) Promptly after the Effective Date, Onyx shall recruit and hire
an employee (the "Project Director") to have overall responsibility for the
success of the collaboration. Warner shall have the right to approve the
hiring of such Project Director prior to such hiring, which approval shall
not be unreasonably withheld or delayed. In the event that Onyx has not
hired such Project Director approved by Warner by the six month anniversary
of the Effective Date, then by notice delivered to Onyx during the [**]
period after such date, Warner may voluntarily terminate the Research Term,
effective immediately, if in its sole opinion it does not wish to continue
the Research Plan without such employee. Such termination shall terminate
all obligations to make any payments under Sections 8.1, 8.2 and 8.3, EXCEPT
THAT Warner shall remain obligated to make payment for any milestones under
Section 8.3(a) that were earned prior to the effective date of such
termination. If the first screening assay has been transferred by Onyx but
the hits have not yet been analyzed by Warner prior to the termination date,
then the first [**] milestone is still due to Onyx once the hits are analyzed
by Warner, which analysis shall be performed diligently. In addition, if
Warner and Onyx mutually agree to do so, then the work conducted by Onyx may
be wound down and ended in an orderly [**] phase out period after the date of
such termination, during which time Onyx will make best efforts to transfer
specified assays currently under development at Onyx, and Warner shall pay
Onyx a total of [**] to support such research efforts, in two equal quarterly
payments commencing upon such termination. Onyx agrees further to hire [**]
as a consultant on the project hereunder for [**] following the Effective
Date.

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(b) In the event that on or before the [**] anniversary of the
Effective Date [**] or the Project Director (i) is physically and mentally
capable of overseeing Onyx's work under the Research Plan but (ii) for any
reason fails to oversee such work, then Onyx shall immediately notify Warner
thereof and Onyx will have up to [**] after such failure to hire a replacement
for [**] or the Project Director, as applicable (the "Search Period"). By
notice delivered to Onyx during the [**] period after the end of the Search
Period, Warner may voluntarily terminate the Research Term, effective [**] after
the end of the Search Period, if in its sole opinion it does not wish to
continue the Research Plan with such replacement (or with [**] or the Project
Director if they become available again). Warner will be required to make any
license fee payments under Section 8.1 and research funding payments under
Section 8.2 that come due on or before the effective date of such termination,
and Onyx will continue to be obligated under the terms of Section 2.2 during
such period.

(c) In the event Warner terminates the Research Term under this
Section 11.3, then the term "Collaboration Compound" as used under this
Agreement shall, in addition to the definition provided in Article 1 hereof, be
deemed to cover any compound whose activity in the Field was initially
identified based on screening in assays transferred to Warner by Onyx under this
Agreement. Onyx and Warner will be released from the provisions of Section 10.7
immediately upon termination of the Research Term pursuant to this Section 11.3.

11.4 REMEDIES. In the event of any breach of any provision of this
Agreement, in addition to the termination rights set forth herein, each party
shall have all other rights and remedies at law or equity to enforce this
Agreement.

11.5 VOLUNTARY TERMINATION. Warner may terminate this Agreement by
providing written notice thereof to Onyx on the eighteen month anniversary of
the Effective Date. In such event, the Term of this Agreement will
automatically terminate. Notwithstanding the voluntary termination of the Term
of this Agreement, Warner will make all research payments to Onyx that are due
before the second anniversary of the Effective Date pursuant to Section 8.2
(payable on the dates that such payments are due). If Warner terminates the
Agreement under this Section 11.5, then: (i) Warner will grant Onyx an
exclusive (even as to Warner), world-wide, fully-paid, perpetual license under
Warner's Patents and Warner's Know-How discovered or reduced to practice prior
to the one year anniversary of the termination of the Term of this Agreement
that are necessary to make, use and sell any Collaboration Compound for
therapeutic or diagnostic use in the Field, (ii) the licenses granted under
Section 6.1 will terminate and (iii) the licenses granted to Warner under
Section 2.4 will terminate.

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ARTICLE 12

GENERAL PROVISIONS

12.1 INDEMNIFICATION. Each of Warner and Onyx agrees to indemnify and hold
harmless the other party and its Affiliates and their respective employees,
agents, officers, directors and permitted assigns (such party's "Indemnified
Group") from and against any claims, judgments, expenses (including reasonable
attorney's fees), damages and awards (collectively a "Claim") arising out of or
resulting from (i) its negligence or misconduct in regard to any Product, (ii) a
breach of any of its representations or warranties hereunder or (iii) the
manufacture, use or sale of a Collaboration Product (in the case of Warner) or
an Onyx Product (in the case of Onyx), except to the extent that such Claim
arises out of or results from the negligence or misconduct of a party seeking to
be indemnified and held harmless or the negligence or misconduct of a member of
such party's Indemnified Group. A condition of this obligation is that,
whenever an indemnified party has information from which it may reasonably
conclude an incident has occurred which could give rise to a Claim, such
indemnified party shall immediately give notice to the indemnifying party of all
pertinent data surrounding such incident and, in the event claim is made or suit
is brought, all indemnified parties shall assist the indemnifying party and
cooperate in the gathering of information with respect to the time, place and
circumstances and in obtaining the names and addresses of any injured parties
and available witnesses. No indemnified party shall, except at its own cost,
voluntarily make any payment or incur any expense in connection with any such
Claim or suit without the prior written consent of the indemnifying party. The
obligations set forth in this Section shall survive the expiration or
termination of this Agreement.

12.2 ASSIGNMENT. This Agreement shall not be assignable by either party
without the prior written consent of the other party, such consent not to be
unreasonably withheld. In no event will any assignment relieve the assigning
party of its obligations hereunder. This Agreement shall be binding upon and,
subject to the terms of the foregoing sentence, inure to the benefit of the
parties' successors, legal representatives and assigns. Notwithstanding the
foregoing, Warner may assign this Agreement to any of its wholly-owned
subsidiaries or any entity succeeding to a majority of its ▇▇▇▇▇-▇▇▇▇▇ business,
and either party may assign this Agreement to its successor in connection with
any merger, consolidation or sale of all or substantially all of its assets.

12.3 NON-WAIVER. The waiver by either of the parties of any breach of any
provision hereof by the other party shall not be construed to be a waiver of any
succeeding breach of such provision or a waiver of the provision itself.

12.4 RESEARCH DISPUTE RESOLUTION. The parties recognize that the
collaborative research program under the Research Plan may require the
resolution of certain issues or

26.

the negotiation of additional agreements in the future. In the event the
Research Management Committee is unable to resolve a dispute under the Research
Plan, either party may have the dispute referred to the President of Onyx and
the senior officer of Warner's pharmaceutical business for good faith
resolution.

12.5 GOVERNING LAW. This Agreement shall be construed and interpreted in
accordance with the laws of the State of New York, other than those provisions
governing conflicts of law.

12.6 PARTIAL INVALIDITY. If and to the extent that any court or tribunal
of competent jurisdiction holds any of the terms or provisions of this
Agreement, or the application thereof to any circumstances, to be invalid or
unenforceable in a final nonappealable order, the parties shall use their best
efforts to reform the portions of this Agreement declared invalid to realize the
intent of the parties as fully as practical, and the remainder of this Agreement
and the application of such invalid term or provision to circumstances other
than those as to which it is held invalid or unenforceable shall not be affected
thereby, and each of the remaining terms and provisions of this Agreement shall
remain valid and enforceable to the fullest extent of the law.

12.7 NOTICE. Any notice to be given to a party under or in connection with
this Agreement shall be in writing and shall be (i) personally delivered, (ii)
delivered by a nationally recognized overnight courier or (iii) delivered by
certified mail, postage prepaid, return receipt requested to the party at the
address set forth below for such party:

To Warner: To Onyx:

Senior Vice President, Research Hollings Renton
▇▇▇▇▇-▇▇▇▇▇ Pharmaceutical President & CEO
Research Division, Onyx Corporation
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

with a copy to: with a copy to:

President, ▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
United States and Mexico Cooley Godward LLP
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company 5 Palo Alto Square
201 ▇▇▇▇▇ Road ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇

27.

and a copy to:

Vice President and General Counsel
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇

or to such other address as to which the party has given notice thereof. Such
notices shall be deemed given upon receipt.

12.8 VACCINES AND DIAGNOSTICS. Pursuant to an Agreement, between Chiron
Corporation ("Chiron") and Onyx, dated April 24, 1992, Chiron has certain rights
to Vaccines and Diagnostics developed by Onyx. Warner and Onyx agree that,
notwithstanding any other term or provision of this Agreement to the contrary,
neither party shall license to the other any Patents or Know-How to make, use or
sell Vaccines or Diagnostics. Furthermore, each party hereto may make, use or
sell Vaccines and Diagnostics in the Field without obligation to the other
party, including as it relates to payment of milestones and royalties. As used
in this Section, (i) "Vaccines" shall mean [**], and (ii) "Diagnostics" shall
mean [**].

12.9 HEADINGS. The headings appearing herein have been inserted solely for
the convenience of the parties hereto and shall not affect the construction,
meaning or interpretation of this Agreement or any of its terms and conditions.

12.10 NO IMPLIED LICENSES OR WARRANTIES. No right or license under any
patent application, issued patent, know-how or other proprietary information is
granted or shall be granted by implication. All such rights or licenses are or
shall be granted only as expressly provided in the terms of this Agreement.
Neither party warrants the success of any clinical or other studies undertaken
by it.

12.11 FORCE MAJEURE. No failure or omission by the parties hereto in
the performance of any obligation of this Agreement shall be deemed a breach of
this Agreement nor shall it create any liability if the same shall arise from
any cause or causes beyond the reasonable control of the affected party,
including, but not limited to, the following, which for purposes of this
Agreement shall be regarded as beyond the control of the party in question: acts
of nature; acts or omissions of any government; any rules, regulations, or
orders issued by any governmental authority or by any officer, department,

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agency or instrumentality thereof; fire; storm; flood; earthquake; accident;
war; rebellion; insurrection; riot; invasion; strikes; and lockouts or the like;
provided that the party so affected shall use its best efforts to avoid or
remove such causes or nonperformance and shall continue performance hereunder
with the utmost dispatch whenever such causes are removed.

12.12 SURVIVAL. The representations and warranties contained in this
Agreement as well as those rights and/or obligations contained in the terms of
this Agreement which by their intent or meaning have validity beyond the term of
this Agreement shall survive the termination or expiration of this Agreement.

12.13 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding between the parties with respect to the subject matter contained
herein and supersedes any and all prior agreements, understandings and
arrangements whether oral or written between the parties relating to the subject
matter hereof. This Agreement will control in the event of any conflict between
this Agreement and the Research Plan.

12.14 AMENDMENTS. No amendment, change, modification or alteration of
the terms and conditions of this Agreement shall be binding upon either party
unless in writing and signed by the party to be charged.

12.15 INDEPENDENT CONTRACTORS. It is understood that both parties
hereto are independent contractors and engage in the operation of their own
respective businesses, and neither party hereto is to be considered the agent or
partner of the other party for any purpose whatsoever. Neither party has any
authority to enter into any contracts or assume any obligations for the other
party or make any warranties or representations on behalf of the other party.

12.16 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original and both of which together shall
constitute one and the same instrument.

29.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.

ONYX PHARMACEUTICALS, INC. ▇▇▇▇▇▇-▇▇▇▇▇▇▇ COMPANY

By: /s/ Hollings C. Renton By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------- --------------------------------

Name: Hollings C. Renton Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Ph.D.,
F.R.S.E.
------------------------------ ------------------------------
Title: President & CEO Title: Vice President and Chairman
----------------------------- ▇▇▇▇▇-▇▇▇▇▇ Pharmaceutical
Research
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Company
-----------------------------

30.

SCHEDULE 1

PRE-EXISTING THIRD-PARTY ROYALTY OBLIGATIONS

1) Research and Option Agreement Between the Research Foundation of State
University of New York and ONYX Pharmaceuticals dated January 1, 1996.

Royalty cap of [**] on net sales of products arising from research
sponsored by Onyx.

2) Option Agreement with the Babraham Institute dated September 25, 1995 and
extended on May 13, 1996.

Royalty of [**] of the end user price of a product arising from work
performed by ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇ for or in collaboration with Onyx.

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EXHIBIT 1

RESEARCH PLAN: ONYX/▇▇▇▇▇-▇▇▇▇▇ INFLAMMATION PROGRAM

The allocation of resources and prioritization of the projects within the Field
will be done on an ongoing basis by the project team consisting of both Onyx and
▇▇▇▇▇-▇▇▇▇▇ scientists, with quarterly review and approval by the Research
Management Committee. The scope of the program is outlined in the document
entitled "Inflammation Program - Research Plan" submitted by Onyx to ▇▇▇▇▇-▇▇▇▇▇
on January 9, 1997. Initial plans for the program are outlined below.

The goal of the project will be to move [**] per year into the programs as full
drug discovery projects as outlined below. The responsibilities of Onyx and
▇▇▇▇▇-▇▇▇▇▇ are as follows, with modifications to be made as the Research
Management Committee prioritizes available resources:

- Onyx will devise assays suitable for high volume screening, and transfer
those assays to ▇▇▇▇▇-▇▇▇▇▇, including all biological materials in
quantities needed to run the screen on the entire ▇▇▇▇▇-▇▇▇▇▇ compound
library.

- ▇▇▇▇▇-▇▇▇▇▇ will run each assay against the entire compound collection,
currently about 200,000 compounds, but anticipated to grow substantially
during the course of this collaboration. ▇▇▇▇▇-▇▇▇▇▇ will also run this
primary screening assay against all compounds newly synthesized for the
project. Onyx will screen its library if the research team decides it is
appropriate.

- Onyx will develop assays to determine the specificity of compounds for the
intended target, and cellular assays to establish that the compounds are
effecting the intended target in cells, and run these assays against
compounds, either from the compound library or newly synthesized, that have
proven to be active in the primary assay.

- ▇▇▇▇▇-▇▇▇▇▇ will undertake medicinal chemistry to devise novel compounds
with improved efficacy and specificity.

- ▇▇▇▇▇-▇▇▇▇▇ will develop cellular and in vivo models to test compounds for
efficacy, and run these models with compounds that have met criteria in the
primary and secondary assays. When appropriate, pharmacokinetics will be
tested before or in parallel with the in vivo testing.

- All development activities will be the responsibility of ▇▇▇▇▇-▇▇▇▇▇.

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In addition to the direct drug discovery activities, Onyx will undertake an
exploratory research program that will identify and validate new targets, and
bring a subset of these targets to the stage of the full discovery projects
described above. The Research Management Committee will designate which targets
enter the screening phase.

INITIAL TARGETS

The initial assays to be targeted are:

1) [**] Onyx has a cell-free enzymatic assay to screen for compounds
inhibiting [**] that will be transferred for screening at ▇▇▇▇▇-▇▇▇▇▇ as
soon as the agreement is concluded. The enzyme used in this assay is
comprised of the reconstituted individual components of the complex. The
assay can be initiated using [**] A [**] assay will serve as the
counterscreen for potential hits.

2) [**] Onyx is working closely with [**] to [**] and develop an assay using
proteins produced in vivo. A [**] assay will serve as a counterscreen.
Secondary in vitro assays could include [**] in a reconstituted cell
culture model.

3) [**] The constitutive activation of [**] affords a simple assay that is
ready to enter a screening mode. Cell based assays to confirm selectivity
could include (i) [**] or (ii) [**]

Each of the initial assays may be followed by additional assays to target other
aspects of the target. These could include:

- Assays for [**]

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- Identification of [**]

- Study of [**]

Other research areas on these targets could include:

- Characterization of [**]

- Working with collaborators, produce [**]

- Study interaction of [**] including [**] Also study of activation of [**]
These interactions may represent future targets for the screening assays.

- With a combination of external collaborators and in house efforts,
undertake production of protein and crystallography of targets, with and
without discovered compounds.

EXPLORATORY RESEARCH

Onyx will conduct a research program to discover new pathways and targets that
will be the basis of assays and screening programs in later years of the
collaboration. These research areas, outlined more fully in the proposal of
January 9, include:

- [**]

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RESEARCH, DEVELOPMENT AND MARKETING COLLABORATION AGREEMENT DATED AS OF JULY 31, 1997

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