Sample Business Contracts


License Agreement - Tularik Inc. and Tularik Pharmaceutical Co.


                                LICENSE AGREEMENT

         This License Agreement (the "Agreement") is made and entered into as of
this 1st day of June, 2000 (the "Effective Date"), by and among Tularik Inc.
("Tularik"), a Delaware corporation, and Tularik Pharmaceutical Company (the
"Subsidiary"), a Delaware corporation and a wholly owned subsidiary of Tularik
as of the Effective Date. Each of Tularik and the Subsidiary are referenced
herein individually as a "Party" and together as the "Parties."

                                   Witnesseth

         Whereas, Tularik and Japan Tobacco Inc. ("JT") have entered into two
previous agreements to research, develop and commercialize certain
pharmaceutical products useful in the diagnosis, prevention and treatment of
human diseases;

         Whereas, Tularik and JT are entering into a Collaboration Agreement as
of even date herewith, pursuant to which they will develop and commercialize
products useful to treat or prevent diseases and conditions (the "Collaboration
Agreement);

         Whereas, Tularik has formed the Subsidiary to perform certain
obligations under the research program to be conducted pursuant to the
Collaboration Agreement, and is the beneficial owner of all issued and
outstanding shares of capital stock of the Subsidiary (the "Stock");

         Whereas, Tularik and JT are entering into an Option Agreement of even
date herewith whereby JT acquires an option to purchase the Subsidiary, either
directly or indirectly through an affiliate, at specified times, which sets
forth certain requirements for the voting of Tularik's shares of Stock and the
management of the Subsidiary during the time period prior to any exercise by JT
of such option (the "Option Agreement");

         Whereas, Tularik desires to grant certain licenses to the Subsidiary
under certain technology and related intellectual property rights that are
necessary or useful for the Subsidiary's performance of research pursuant to the
Collaboration Agreement, and for the Subsidiary's practice of such technology
outside the scope of the Collaboration Agreement in the event JT or its
affiliate purchases the Subsidiary as provided in the Option Agreement;

         Whereas, Tularik desires to obtain certain rights to improvements of
such technology owned or controlled by the Subsidiary to enable Tularik to
continue to practice and develop such technology; and

         Whereas, the Parties hereto desire to set forth the terms and
conditions governing such licenses and rights in this Agreement;

         Now, Therefore, in consideration of these premises and other terms and
conditions set forth herein, the Parties hereto agree as follows:

                                       1.
<PAGE>

                                   ARTICLE 1

                                  Definitions

         Capitalized terms used herein but not otherwise defined herein shall
have the respective meanings assigned to such terms in the Collaboration
Agreement and the Option Agreement.

         1.1 "Assignable Know-How" shall mean any and all know-how, compounds,
information, inventions, discoveries and technologies, whether or not
patentable, that are owned or controlled by the Subsidiary from the Effective
Date until the earlier to occur of [*] (such period of time, the "Assignment
Period"), either (i) the practice of which would infringe the Licensed Patents
or constitute a misappropriation of the Licensed Know-How, (ii) that are a
Research Compound Invention or Program Invention, or (iii) that are useful in
the discovery, development, manufacture, use, sale, offer for sale or import of
products in the Field; provided, however, that Assignable Know-How shall also
include any such know-how, information, inventions, discoveries and technologies
that relate to the composition or use of Targets that are owned or controlled by
the Subsidiary during the [*] The determination of whether know-how,
information, inventions, discoveries and technologies are owned or controlled by
the Subsidiary shall be made based upon the Subsidiary's rights in the absence
of this Agreement. Appendix A shall be amended from time to time to set forth
all Assignable Know-How. Assignable Know-How may be included in the Licensed
Know-How and excludes the Other Subsidiary Know-How.

         1.2 "Assignable Patents" shall mean any and all patents and patent
applications, both foreign and domestic, including without limitation all
substitutions, provisionals, continuations, continuations-in-part, divisionals,
extensions, reexaminations, reissues, renewals, supplementary protection
certificates and inventors' certificates, that are owned or controlled by the
Subsidiary during the Assignment Period, and (i) that claim inventions, the
practice of which would infringe the Licensed Patents or constitute a
misappropriation of the Licensed Know-How, (ii) are Research Compound Patents or
Program Patents, or (iii) that are useful in the discovery, development,
manufacture, use, sale, offer for sale or import of products in the Field;
provided, however, that Assignable Patents shall also include any such patents
and patent applications that relate to the composition or use of Targets that
are owned or controlled by the Subsidiary during the [*] The determination of
whether a patent or application is owned or controlled by the Subsidiary shall
be made based upon the Subsidiary's rights in the absence of this Agreement.
Appendix B shall be amended from time to time to set forth all Assignable
Patents.

         1.3 "Licensed Know-How" shall mean any and all Research Compound
Inventions, Know-How and Program Know-How owned or controlled by Tularik that
are necessary or useful for the performance of the Subsidiary Research
Activities, including without limitation Know-How and Program Know-How that are
licensed to Tularik by JT pursuant to the Collaboration Agreement, for [*]
Appendix C to this Agreement sets forth the Licensed Know-How, and shall be
amended from time to time to reflect all Licensed Know-How.

         1.4 "Licensed Patents" shall mean any and all Research Compound
Patents, Patent Rights and Program Patents owned or controlled by Tularik, that
are necessary or useful for the

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                       2.
<PAGE>

performance of the Subsidiary Research Activities. Licensed Patents shall
include Assignable Patents, to the extent such Assignable Patents are necessary
or useful for the performance of the Subsidiary Research Activities, as well as
the Patent Rights and Program Patents that are licensed to Tularik by JT
pursuant to the Collaboration Agreement, [*] Appendix D to this Agreement sets
forth the Licensed Patents, and shall be amended from time to time to reflect
all Licensed Patents.

         1.5 "Other Subsidiary Know-How" shall mean know-how, compounds,
information, inventions, discoveries and technologies, whether or not
patentable, that are owned or controlled by the Subsidiary during the Assignment
Period, and are necessary or useful for the practice of the Licensed Patents or
the Assignable Patents; provided, however, that Other Subsidiary Know-How shall
also include any such know-how, information, inventions, discoveries and
technologies [*] that are owned or controlled by the Subsidiary during the [*]
following the expiration of the Assignment Period. Other Subsidiary Know-How
excludes the Assignable Know-How and the Licensed Know-How.

         1.6 "Other Subsidiary Patents" shall mean patents and patent
applications, both foreign and domestic, including without limitation all
substitutions, provisionals, continuations, continuations-in-part, divisionals,
extensions, reexaminations, reissues, renewals, supplementary protection
certificates and inventors' certificates, that are owned or controlled by the
Subsidiary during the Assignment Period, and are necessary or useful for the
practice of the Licensed Patents or the Assignable Patents; provided, however,
that Other Subsidiary Patents shall also include any such patents and patent
applications [*] that are owned or controlled by the Subsidiary during the [*]
following expiration of the Assignment Period. Other Subsidiary Patents exclude
the Licensed Patents and Assignable Patents.

         1.7 "Subsidiary Collaboration Activities" shall mean the activities
designated under the Collaboration Agreement or otherwise by the RMC to be
performed by the Subsidiary pursuant to the Program during the Term but
following the Research Program Term.

         1.8 "Subsidiary Research Activities" shall mean the activities
designated under the Collaboration Agreement or otherwise by the RMC to be
performed by the Subsidiary pursuant to the Research Program during the Research
Program Term.

                                   ARTICLE 2

                 Licenses And Assignments; Technology Transfer

         2.1 License to Subsidiary Before Buy-Out. Subject to the terms and
conditions of this Agreement, Tularik hereby grants to the Subsidiary a
nonexclusive, royalty-free license, without the right to grant sublicenses,
under the Licensed Know-How, Licensed Patents, Assignable Know-How and
Assignable Patents solely to perform the Subsidiary Research Activities at its
principal place of business. Such license shall become effective as of the
Effective Date and continue in effect for the term of this Agreement [*]

         2.2 License to Subsidiary After Buy-Out. Subject to the terms and
conditions of this Agreement, Tularik hereby grants to the Subsidiary a
nonexclusive, worldwide, royalty-free

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                       3.
<PAGE>

license, under the Licensed Know-How and Licensed Patents (i) to perform the
Subsidiary Collaboration Activities and (ii) to discover, develop, make, use,
sell, offer for sale and import pharmaceutical products outside the scope of the
Collaboration Agreement. The Subsidiary may not grant sublicenses under the
foregoing licenses to a Third Party other than JT or its Affiliates [*] The
license granted by Tularik to the Subsidiary in this Section 2.2 shall not
become effective until the Closing Date, if any, and shall continue in effect
for the term of this Agreement.

         2.3 Assignment of Assignable Patents and Assignable Know-How;
Quitclaim. The Subsidiary hereby assigns to Tularik all of the Subsidiary's
right, title and interest in and to the Assignable Know-How and the Assignable
Patents. The Parties acknowledge that [*] The Subsidiary hereby waives and
quitclaims to Tularik any and all claims or actions, of any nature whatsoever,
that the Subsidiary may have for infringement of any proprietary rights assigned
to Tularik pursuant to this Section 2.3.

         2.4 License to Tularik. Subject to the terms and conditions of this
Agreement, the Subsidiary hereby grants to Tularik a nonexclusive, worldwide,
royalty-free license, with the right to grant sublicenses, under the Other
Subsidiary Know-How and Other Subsidiary Patents, to discover, develop, make,
use, sell, offer for sale or import pharmaceutical products either (i) the
manufacture, use or sale of which would infringe or misappropriate the Licensed
Know-How, Licensed Patents, Assignable Patents or Assignable Know-How or (ii)
that were discovered, developed, made, used, sold, offered for sale or imported
by means of the practice of the Licensed Know-How, Licensed Patents, Assignable
Know-How or Assignable Patents.

         2.5 Technology Transfer; Reports.

             (a) Promptly after the Effective Date, Tularik shall deliver to
the Subsidiary [*], including, without limitation, [*] that are necessary or
useful for the Subsidiary to perform the Subsidiary Research Activities, to the
extent such materials have not been transferred prior to the Effective Date.
Tularik agrees to provide to the Subsidiary competent and knowledgeable
assistance to facilitate the transfer to the Subsidiary of such tangible
materials.

             (b) The Subsidiary shall, upon request by Tularik, provide to
Tularik from time to time written reports summarizing its performance of the
Subsidiary Research Activities, and shall disclose to Tularik all Assignable
Patents and Assignable Know-How made by employees, agents or independent
contractors of the Subsidiary promptly after becoming aware that such
inventions, discoveries, materials, data or information has been made or
produced. The Subsidiary shall transfer to Tularik from time to time [*] that
are necessary or useful for Tularik to practice the rights granted to it
pursuant to this Agreement.

                                   ARTICLE 3

                 Prosecution And Enforcement Of Patent Rights

         3.1 Cooperation by the Subsidiary. The Subsidiary shall promptly
execute, upon each request by Tularik, assignment and other documents and
testify and take other acts as reasonably requested by Tularik to apply for and
obtain, in Tularik's name and for its benefit [*], any and all patents, trade
secrets or other intellectual property rights throughout the world related

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                       4.
<PAGE>

to the Assignable Patent Rights or the Assignable Know-How, and to transfer,
effect, confirm, perfect, record, preserve, protect and enforce all rights,
titles and interests assigned or licensed to Tularik pursuant to Sections 2.3 or
2.4.

         3.2  Prosecution and Maintenance of Patent Applications and Patents.

              (a) Except as otherwise provided in this Section 3.2, Tularik
shall have the sole and exclusive right, but not the obligation, to file and
prosecute all patent applications and to maintain all patents included in the
Assignable Patents, Licensed Patents and Other Subsidiary Patents, at [*]

              (b) Notwithstanding the foregoing, after the Closing Date, if any,
the following modifications to the Parties' rights and obligations set forth in
Section 3.2(a) shall apply:

                  (i) The Subsidiary shall file, prosecute and maintain patent
applications and patents included in the Other Subsidiary Patents, [*] If the
Subsidiary decides that it will not continue to prosecute a patent application
or maintain a patent included in the Other Subsidiary Patents, then it shall
promptly so notify Tularik, in which case Tularik [*] continue to prosecute such
application or maintain such patent.

                  (ii) Tularik shall provide the Subsidiary with an
opportunity to review and comment upon prosecution strategy for and consult with
Tularik on the content of all material documents and correspondence to be filed
with or sent to the U.S. Patent and Trademark Office (or any foreign equivalent
thereof) relating to the Assignable Patents. If Tularik decides that it will not
continue to prosecute a patent application or maintain a patent included in the
Assignable Patents, then Tularik shall promptly so notify the Subsidiary. If
Tularik provides any such notice, then the Subsidiary may, [*] continue to
prosecute such application or maintain such patent.

                                   ARTICLE 4

                   Representations, Warranties And Covenants

         4.1 General Representations. Each Party hereby represents to the other
Party that it is duly organized and validly existing under the laws of its state
of incorporation; that it has full corporate power and authority to enter into
this Agreement and to carry out the provisions hereof; that it is duly
authorized to execute and deliver this Agreement and to perform its obligations
hereunder; and that this Agreement is legally binding upon it and enforceable in
accordance with its terms.

         4.2 Intellectual Property; Infringement. Each Party represents and
warrants to such Party's best knowledge as of the Effective Date that the
practice of the licenses or other rights that such Party grants to the other
Party will not infringe intellectual property rights of any Third Party.

         4.3 Tularik. Tularik hereby represents, warrants and covenants that (i)
it shall not grant any sublicense under the Other Subsidiary Know-How or Other
Subsidiary Patents except

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                       5.
<PAGE>

as permitted hereunder; (ii) it is not, and shall not be, under any obligation
to grant any such license or to make any such assignment described in subsection
(i); (iii) assuming that it has received the full right, title and interest in
and to the Assignable Know-How and Assignable Patent Rights by operation of
Section 2.3 of this Agreement, it shall have the full right to license the
Assignable Know-How and Assignable Patent Rights as provided in this Agreement;
(iv) no outstanding liens, encumbrances, agreements or understandings of any
kind, either written, oral or implied, do or shall exist with respect to the
Licensed Know-How and Licensed Patents that are inconsistent with any provision
of this Agreement; (v) its execution, delivery and performance of this Agreement
does not and shall not conflict with, constitute a breach of, or in any material
way violate any arrangement, understanding or agreement to which it is, or shall
be, a party or by which it is, or shall be, bound; and (vi) it shall not
practice the Other Subsidiary Know-How and the Other Subsidiary Patents outside
the scope of the license granted to it pursuant to Section 2.4.

         4.4 Subsidiary. The Subsidiary hereby represents, warrants and
covenants that (i) it shall not grant any license under or make any assignment
of the Assignable Patent Rights, Assignable Know-How, Licensed Patent Rights or
Licensed Know-How except as permitted hereunder; (ii) it is not, and shall not
be, under any obligation to grant any such license or to make any such
assignment described in subsection (i); (iii) it has, and shall have, full
right, title and interest in and to, and shall have the full right to assign,
the Assignable Know-How and Assignable Patent Rights; (iv) no outstanding liens,
encumbrances, agreements or understandings of any kind, either written, oral or
implied, shall exist with respect to the Assignable Know-How, Assignable
Patents, Other Subsidiary Know-How, or Other Subsidiary Patents that are
inconsistent with any provision of this Agreement; (v) its execution, delivery
and performance of this Agreement does not and shall not conflict with,
constitute a breach of, or in any material way violate any arrangement,
understanding or agreement to which it is, or shall be, a party or by which it
is, or shall be, bound; and (vi) it shall not practice the Licensed Know-How,
Licensed Patents, Assignable Know-How and Assignable Patents outside the scope
of the licenses granted to it pursuant to Section 2.1 or 2.2, as applicable.

                                   ARTICLE 5

                                Confidentiality

         5.1 Confidential Information; Exceptions. Except to the extent
expressly authorized by this Agreement or otherwise agreed in writing by the
parties, each party agrees that, for the term of this Agreement and for [*]
after the first to occur of the termination date of the Collaboration Agreement
or the Closing Date, it shall keep confidential and shall not publish or
otherwise disclose and shall not use for any purpose other than as provided for
in this Agreement any Confidential Information furnished to it by the other
Party pursuant to this Agreement, except to the extent that the receiving Party
can demonstrate by competent proof that such Confidential Information: (a) was
already known to the receiving Party, other than under an obligation of
confidentiality, at the time of disclosure by the other Party; (b) was generally
available to the public or otherwise part of the public domain at the time of
its disclosure to the receiving Party; (c) became generally available to the
public or otherwise part of the public domain after its disclosure and other
than through any act or omission of the receiving Party in breach of this
Agreement; (d) was disclosed to the receiving Party, other than under an
obligation

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                       6.
<PAGE>

of confidentiality to a Third Party, by a Third Party who had no obligation to
the disclosing Party not to disclose such information to others; or (e) was
independently discovered or developed by the receiving Party without the use of
Confidential Information belonging to the disclosing Party.

         5.2 Permitted Disclosure. The Parties agree that the material terms of
the Agreement will be considered Confidential Information of both Parties.
Notwithstanding the foregoing, either Party may disclose such terms to bona fide
potential investors or acquirers or to investment banks, if necessary for
purposes of this Agreement, the Option Agreement and/or the Collaboration
Agreement, and may disclose other Confidential Information as required by law,
regulation or court order. In connection with any permitted disclosure of
Confidential Information pursuant to this Section 5.2, each Party agrees to use
all reasonable efforts to secure confidential treatment of, or a protective
order for, any such information. Neither Party shall make any public
announcement regarding the existence or terms of this Agreement without the
prior written consent of the other Party.

                                   ARTICLE 6

                                Indemnification

         6.1 Indemnification by the Subsidiary. The Subsidiary hereby agrees to
indemnify, hold harmless and defend Tularik, its Affiliates other than the
Subsidiary, employees, agents and independent contractors against any and all
expenses, costs of defense (including without limitation reasonable attorneys'
fees, witness fees, damages, judgments, fines and amounts paid in settlement)
and any amounts Tularik becomes legally obligated to pay because of any Third
Party claim or claims against it to the extent that such claim or claims result
from (i) the negligence, recklessness or willful misconduct of the Subsidiary,
its employees, agents, or independent contractors [*] (ii) the Subsidiary's
breach or alleged breach of any representation or warranty or any other
provision of this Agreement [*] or (iii) the manufacture, use or sale, [*] of
pharmaceutical products discovered, developed, made, used, sold, offered for
sale or imported by the Subsidiary, its Affiliates other than Tularik or its
permitted sublicensees following the Closing Date, except in each case to the
extent such claims arise from the negligence, recklessness or willful misconduct
of Tularik, its Affiliates other than the Subsidiary, employees or agents, or
from any breach of any representation or warranty in this Agreement or of any
other provision of this Agreement by Tularik; provided that Tularik provides the
Subsidiary with prompt notice of any such claim and the exclusive ability to
defend (with the reasonable cooperation of Tularik, its Affiliates other than
the Subsidiary, employees, agents and independent contractors) and settle any
such claim. [*]

         6.2 Indemnification by Tularik. Tularik hereby agrees to indemnify,
hold harmless and defend the Subsidiary, its Affiliates other than Tularik,
employees, agents and independent contractors against any and all expenses,
costs of defense (including without limitation reasonable attorneys' fees,
witness fees, damages, judgments, fines and amounts paid in settlement) and any
amounts the Subsidiary becomes legally obligated to pay because of any Third
Party claim or claims against it to the extent that such claim or claims arise
out of (i) the negligence, recklessness or willful misconduct of Tularik, its
employees or agents [*] (ii) Tularik's breach or alleged breach of any
representation or warranty or of any other provision of

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                       7.
<PAGE>

this Agreement by Tularik [*] or (iii) the manufacture, use or sale, prior to or
after the Closing Date, of pharmaceutical products discovered, developed, made,
used, sold, offered for sale or imported by Tularik, its Affiliates other than
the Subsidiary, or its sublicensees [*] except in each case to the extent such
claims arise from the negligence, recklessness or willful misconduct of the
Subsidiary, its Affiliates other than Tularik, employees or agents, or any
breach of any representation or warranty or of any other provision of this
Agreement by the Subsidiary; provided that the Subsidiary provides Tularik with
prompt notice of any such claim and the exclusive ability to defend (with the
reasonable cooperation of the Subsidiary, its Affiliates other than Tularik,
employees, agents and independent contractors) or settle any such claim. [*]

         6.3 Mechanics. In the event that the Parties cannot agree as to the
application of Sections 6.1 and 6.2 above to any particular loss or claim, the
Parties may conduct separate defenses of such claim. Each Party further reserves
the right to claim indemnity from the other in accordance with Sections 6.1 and
6.2 above upon resolution of the underlying claim, notwithstanding the
provisions of Sections 6.1 and 6.2 above requiring the indemnified Party to
tender to the indemnifying Party the exclusive ability to defend such claim or
suit.

                                   ARTICLE 7

                                     Term

         7.1 Term. The term of this Agreement shall commence upon the Effective
Date and shall continue in effect thereafter.

                                   ARTICLE 8

                                 Miscellaneous

         8.1 Notices. All notices hereunder shall be in writing and shall be
deemed given if delivered personally or by facsimile transmission (receipt
verified), telexed, mailed by registered or certified mail (return receipt
requested), postage prepaid, or sent by express courier service, to the Parties
at the following addresses (or at such other address for a Party as shall be
specified by like notice; provided, that notices of a change of address shall be
effective only upon receipt thereof).

             (a)  If to the Subsidiary, addressed to:
                        Tularik Pharmaceutical Company
                        Two Corporate Drive
                        South San Francisco, CA 94080
                        Attn: _________
                        Telephone:  (650) 825-7300
                        Facsimile:  (650) 825-7392

             (b)  If to Tularik Inc., addressed to:
                        Tularik Inc.
                        Two Corporate Drive
                        South San Francisco, CA 94080



[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.


                                       8.
<PAGE>

                            Attn: Secretary
                            Telephone: (650) 825-7300
                            Facsimile: (650) 825-7392


          With a copy to:
                            Cooley Godward LLP
                            Five Palo Alto Square
                            3000 El Camino Real
                            Palo Alto, CA 94306-2155
                            Attention: Judith A. Hasko, Esq.
                            Telephone: (650) 843-5000
                            Facsimile: (650) 857-0663


          (c)  Copies of all notices provided by either Party hereto shall also
be provided to JT and addressed to:

                            Japan Tobacco, Inc.
                            Pharmaceutical Division
                            JT Building, 2-1 Toranomon, 2-chome
                            Minato-ku, Tokyo 105, Japan
                            Attention: Vice President Business Development
                            Telephone: 011 81 3 3582 3111
                            Facsimile: 011 81 3 5572 1449


          With a copy to:
                            Neal N. Beaton, Esq.
                            Gilbert, Segall and Young LLP
                            430 Park Avenue
                            New York, NY 10022
                            Telephone: (212) 644-4010
                            Facsimile: (212) 644-4051


     8.2  Assignment. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their permitted successors and assigns;
provided, however, that no Party shall assign any of its rights and obligations
hereunder.

     8.3  Force Majeure. Any delays in performance by a Party under this
Agreement shall not be considered a breach of this Agreement if and to the
extent caused by occurrences beyond the reasonable control of the Party
affected, including but not limited to acts of God, embargoes, governmental
restrictions, strikes or other concerted acts of workers, fire, earthquake,
flood, explosion, riots, wars, civil disorder, rebellion or sabotage. The Party
suffering such occurrence shall immediately notify the other Party as soon as
practicable and any time for performance hereunder shall be extended by the
actual time of delay caused by the

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                       9.
<PAGE>

occurrence, provided that the Party affected by such event uses reasonable
efforts to overcome such delay.

     8.4  Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
shall constitute one and the same agreement.

     8.5  Headings. The section and paragraph headings contained herein are
for the purposes of convenience only and are not intended to define or limit the
contents of said sections or paragraphs.

     8.6  Governing Law and Language. This Agreement shall be governed by
California law, notwithstanding its conflicts of laws principles. The official
text of this Agreement and any Appendices hereto, or any notice given or
accounts or statements required by this Agreement shall be in English. In the
event of any dispute concerning the construction or meaning of this Agreement,
reference shall be made only to this Agreement as written in English and not to
any other translation into any other language.

     8.7  Arbitration. In the event of any controversy or claim arising out
of, relating to or in connection with any provision of this agreement, the
Parties shall try to settle their differences amicably between themselves. Any
unresolved disputes arising between the Parties arising out of, relating to, in
connection with or in any way connected with this Agreement or any term or
condition hereof, or performance by a Party of its obligations hereunder,
whether before or after termination or expiration of this Agreement, shall be
finally resolved by binding arbitration, except as otherwise provided in this
Agreement and except that any disputes regarding the validity, scope or
enforceability of patents shall be submitted to a court of competent
jurisdiction. The arbitration shall be held in San Francisco, California
according to the rules of the American Arbitration Association ("AAA"). The
arbitration will be conducted by a panel of three (3) arbitrators with
significant experience in the pharmaceutical industry appointed in accordance
with applicable AAA rules. Any arbitration herewith shall be conducted in the
English language to the maximum extent possible. Each Party shall bear its own
costs and attorney's and witness' fees. Judgment on the award so rendered shall
be final and may be entered in any court having jurisdiction thereof.

     8.8  Entire Agreement; Amendment. This Agreement, together with the Option
Agreement, and all Appendices hereto and thereto, sets forth the principal terms
of the arrangement between the Parties hereto and, except as otherwise set forth
herein, supersedes and terminates all prior agreements, including the
preliminary agreement, and understandings between the Parties. No subsequent
alteration, amendment, change or addition to this Agreement shall be binding
upon the Parties unless reduced to writing and signed by an authorized officer
of each Party.

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      10.
<PAGE>

     In Witness Whereof, the Parties hereto have executed this Agreement as of
the Effective Date.


Tularik Inc.


By: /s/ David Goeddel
    ---------------------------
    Chief Executive Officer


Tularik Pharmaceutical Company

By: /s/ William J. Rieflin
    ---------------------------

Name: Wm. J. Rieflin
      -------------------------

Title: Secretary
       ------------------------

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      11.
<PAGE>

                                   Appendix A

                              Assignable Know-How

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      12.
<PAGE>

                                  Appendix B

                              Assignable Patents

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      13.
<PAGE>

                                  Appendix C

                               Licensed Know-How

                                      [*]

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      14.
<PAGE>

                                  Appendix D

                               Licensed Patents

                                      [*]

[*] = Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Act of 1934, as amended.

                                      15.

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