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Collaboration Agreement - Tularik Inc. and Sumitomo Pharmaceuticals Ltd.

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COLLABORATION AGREEMENT

This Agreement is entered into as of the 31/st/ day of January, 1995 (the
"Effective Date") by and between Tularik Inc., a California corporation
("Tularik"), and Sumitomo Pharmaceuticals Co., Ltd. ("Sumitomo"), a corporation
organized under the laws of Japan.

Recitals

Whereas, Tularik has developed proprietary screening assays and other
proprietary technology useful in the identification of compounds which act
through regulation of the gene encoding Low Density Lipoprotein Receptor; and

Whereas, Sumitomo and Tularik both possess substantial libraries of natural
and synthetic compounds which have potential therapeutic pharmaceutical utility;
and

Whereas, Tularik and Sumitomo desire to establish a cooperative research
relationship where Tularik will screen both company's compound libraries using
the Tularik Assays (as hereinafter defined); and

Whereas, the parties wish to develop and market novel therapeutic products
based on compounds identified during such research;

Now, Therefore, in consideration of the foregoing and the covenants and
promises contained herein, the parties agree as follows:

Article 1
Definitions

As used herein, the following terms shall have the following meanings:

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

"Agreement" shall mean this Collaboration Agreement.

"Confidential Information" shall mean, subject to the limitations set forth
in Section 11.1 hereof, all information disclosed to one party by the other
party.

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

"Field" shall mean therapeutic treatment of human disease by means of
activation of LDL-R gene expression to effectively lower serum LDL-cholesterol.

[ * ] = 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 406 of the Securities Act of 1933, as amended.

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"IND" or "Investigational New Drug Application" shall mean an application
for regulatory approval by the FDA or its foreign equivalent in the Sumitomo
Territory to commence human clinical testing of a drug, as defined by the FDA or
the equivalent in the Sumitomo Territory.

"Lead Compound" shall mean a Program Compound selected by the Research
Committee, which is a single molecule which shows selective activity in an assay
in intact cells (EC50 less than or equal to 1 micromolar and in any other
assays to be agreed by the parties.

"License Agreement" shall mean the License Agreement to be entered into
between the parties in the form attached hereto as Appendix C.

"Low Density Lipoprotein Receptor" ("LDL-R") shall mean that sequence of
amino acids commonly characterized as Low Density Lipoprotein Receptor in the
scientific literature published as of the Effective Date.

"Preclinical Candidate" shall mean a compound which is or is derived from a
Lead Compound which is determined by the Research Committee to be appropriate
for pharmacology, toxicology, ADME, formulation and process development studies
for IND filing in the Sumitomo Territory.

"Product" shall mean any pharmaceutical product, including all
formulations, line extensions or modes of administration thereof, for use within
the Field, which contains a Preclinical Candidate as an active ingredient.

"Program" shall mean the research and development program described in
Appendix A hereto, as amended from time to time by the Research Committee in
accordance with Section 2.2(c).

"Program Compounds" shall mean any Sumitomo or Tularik Substances which
show activity in the screening conducted in the course of the Program, including
Tail End Compounds, and all derivatives, analogues or other improvements thereof
developed in the course of the Program.

"Program Know-How" shall mean all materials and information developed in
the course of the Program.

"Program Patents" shall mean any and all patents and patent applications,
both foreign and domestic, which have not been held invalid or unenforceable by
a court of competent jurisdiction from which no appeal has been or can be taken,
including without limitation, all substitutions, extensions, reissues, renewals,
supplementary protection certificates and inventors' certificates, which cover
inventions or discoveries made by either party or both parties in the course of
the Program or which pertain to Tail End Compounds.

"Program Technology" shall mean all Program Patents and Program Know-How.

"Research Committee" shall mean that committee formed pursuant to Section
2.2 hereof.

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"Research Term" shall have the meaning assigned in Section 2.3.

"Sumitomo Know-How" shall mean all materials and information that Sumitomo
owns, controls or has a license to (with a right to sublicense) (i) as of the
Effective Date or (ii) which arise outside of the Program from time to time
during the Research Term, which in each case are necessary or useful for the
conduct of the Program or the development, manufacture, use or sale of Products.

"Sumitomo Patents" shall mean any and all patents, (other than Program
Patents) both foreign and domestic, which have not been held invalid or
unenforceable by a court of competent jurisdiction from which no appeal has been
or can be taken, including without limitation all substitutions, extensions,
reissues, renewals, supplementary protection certificates and inventors'
certificates, (a) which (i) are issued as of the Effective Date, (ii)
subsequently issue from applications (including divisionals, continuations and
continuations-in-part) pending as of the Effective Date, or (iii) issue from any
such applications subsequently filed on inventions made as of the Effective
Date, (b) which Sumitomo owns, controls or has a license to (with the right to
sublicense), and (c) which would be infringed by the conduct of the Program or
the development, manufacture, use or sale of Products.

"Sumitomo Substances" shall mean those natural extracts, natural compounds
and synthetic compounds which Sumitomo owns or has the right to license or
sublicense as of the Effective Date or from time to time during the Program,
which Sumitomo actually provides to Tularik.

"Sumitomo Technology" shall mean, collectively, the Sumitomo Patents, the
Sumitomo Know-How and the Sumitomo Substances.

"Sumitomo Territory" shall mean Japan, China, Hong Kong, Indonesia,
Malaysia, Philippines, Korea, Taiwan and Thailand.

"Tail End Compound" shall mean a compound designated as such by the
Research Committee which is conceived by Tularik or Sumitomo during the Research
Term and which is first reduced to practice prior to the end of the first year
after completion or termination of the Research Term.

"Tularik Assays" shall mean those assays designed to discover Program
Compounds, which, as of the Effective Date and from time to time during the
Research Term, Tularik owns to which it has rights (with a right to sublicense),
as set forth and periodically updated on Appendix B hereto.

"Tularik Know-How" shall mean all materials and information that Tularik
owns, controls or to which it has a license (with a right to sublicense) (i) as
of the Effective Date or (ii) which arise outside the Program from time to time
during the Research Term, which are necessary or useful to the conduct of the
Program or the development, manufacture, use or sale of Products.

"Tularik Patents" shall mean any and all patents (other than Program
Patents), both foreign and domestic, which have not been held invalid or
unenforceable by a court of competent jurisdiction from which no appeal has been
or can be taken, including without limitation all substitutions, extensions,
reissues, renewals, supplementary protection certificates and inventors'

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certificates, (a) which (i) are issued as of the Effective Date, (ii)
subsequently issue from applications (including divisionals, continuations and
continuations-in-part) pending as of the Effective Date, or (iii) issue from any
such applications subsequently filed on inventions made as of the Effective
Date, (b) which Tularik owns, controls or has a license to (with the right to
sublicense) and (c) which would be infringed by the conduct of the Program or
the development, manufacture, use or sale of Products.

"Tularik Substances" shall mean those natural extracts, natural compounds
and synthetic compounds which Tularik owns or has the right to license or
sublicense as of the Effective Date or from time to time during the Program,
which Tularik actually provides to the Program.

"Tularik Technology" shall mean, collectively, the Tularik Patents, the
Tularik Know-How and the Tularik Assays.

"Tularik Territory" shall mean all the countries and territories of the
world other than the Sumitomo Territory.

Article 2
Program; Development

2.1 Program. Tularik and Sumitomo will conduct the Program under the
direction of the Research Committee as set forth in Appendix A hereto, as
amended from time to time by the Research Committee in accordance with Section
2.2(c).

2.2 Research Committee.

(a) Formation of Research Committee. The Research Committee shall
consist of an equal number of members from Sumitomo and Tularik, appointed and
substituted by each party as necessary from time to time. Each member shall
have appropriate technical credentials and knowledge and ongoing familiarity
with the Program. The Chairperson of the Research Committee shall be a Tularik
employee appointed by the Research Committee. All decisions of the Research
Committee shall be unanimous. To the extent that the members of the Research
Committee are unable to reach a unanimous decision on an issue relating to an
activity for which one party is primarily responsible under Appendix A, such
party's appointed members shall finally decide the disputed issue.

(b) Meetings of Research Committee. The Research Committee shall meet
[ * ] at such times as shall be mutually agreed upon by the parties.

(c) Responsibilities of the Research Committee. The Research
Committee shall carry out the following responsibilities during the Research
Term: (1) defining the yearly research and development objectives, (2)
determining which Sumitomo or Tularik Substances or Tail End Compounds have
shown sufficient activity in one or more Tularik Assay to be classified as a
Program Compound, (3) selecting the Lead Compounds, (4) coordinating activities
required to carry out the Program, (5) periodically revising the Program, (6)
monitoring progress of the Program, (7) delegating responsibility for the filing
and prosecution of Program Patents on inventions jointly discovered in the
course of the Program, (8) coordinating activities required to carry out further
development of Program Compounds, (9) allocating the

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responsibilities for tasks and costs for preclinical studies, [ * ] utilized in
both the Sumitomo Territory and Tularik Territory and (10) selecting the
Preclinical Candidates.

2.3 Term and Termination of Program. The Program shall be carried out for
a period of five years commencing on the Effective Date (the "Research Term");
provided, however, that Sumitomo may terminate the Program at any time after
three years after the Effective Date, upon one hundred twenty (120) days prior
written notice to Tularik. Anything to the contrary in the preceding sentence
notwithstanding, the Research Term shall be continued for the full five (5)
years if Sumitomo enters into the License Agreement.

2.4 Sumitomo Scientist. During the term of the Program, Tularik will
accommodate, at Sumitomo's request and expense, one visiting Sumitomo research
scientist, appointed and substituted by Sumitomo from time to time, to
facilitate collaboration between the parties within the Research Program.

2.5 Obligation to Inform. Each party hereby agrees to keep the other
fully informed on a reasonable basis of the progress of the Program.

2.6 Due Diligence. Each party shall devote the same degree of attention,
resources and diligence to its respective obligations under the Program as it
devotes to other compounds of its own development.

Article 3
Financial Support

3.1 Program Funding. Sumitomo shall support Tularik's costs in conducting
the Program. Tularik will provide Sumitomo regular reports of the costs it
incurs in conducting the Program. In order to assure such support Sumitomo,
subject to its right to terminate the Program as provided in Section 2.3, will
make payments in certain amounts and at certain times as follows:

Amount Due Date
------ --------

[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]
[ * ] [ * ]

The total amount of Sumitomo's payments in support of Tularik's costs for the
Program shall not exceed Fifteen Million Dollars ($15,000,000). Sumitomo and
Tularik may meet from time to time to review Tularik's costs.

3.2 Manner of Payment. Remittance of payments under Section 3.1 will be
within [ * ] of the Due Date by means of telegraphic transfer to Tularik's
account in a bank in the United States to be designated by Tularik.

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Article 4
Future Licenses

4.1 License Agreement.

(a) Sumitomo shall have the right to enter into the License Agreement
attached hereto as Appendix C [ * ].

(b) In the event that Sumitomo decides to develop a Tail End Compound
as a Preclinical Candidate, Sumitomo shall have the right to enter into the
License Agreement, with respect to such Preclinical Candidate within [ * ] after
the end of the Research Term; provided, however, that all rights to Tail End
Compounds shall revert to Tularik if Sumitomo does not enter into the License
Agreement within such [ * ] period.

(c) The License Agreement shall contain an Appendix A listing the
Preclinical Candidates and the patents and patent applications included in the
Tularik Technology and the Tularik-owned and jointly owned Program Technology
licensed thereunder.

4.2 Use Limitation. Each party agrees and acknowledges that use of the
Sumitomo Substances or the Tularik Substances, as the case may be, provided
pursuant to Article 2, is limited solely to those activities contemplated by the
Program, unless otherwise provided for in this Agreement, and are for research
use only and shall not be administered to humans in any manner or form, except
in accordance with the terms of this Agreement, subject to appropriate
Governmental Approval.

4.3 Nonuse of Technology Outside of the Field. Sumitomo covenants and
agrees that it will not use, directly or indirectly, the Tularik Technology,
Tularik's Confidential Information or Tularik's Program Technology for any
purpose other than developing, making, having made, using or selling Products in
the Sumitomo Territory under this Agreement. Tularik covenants and agrees that
it will not use, directly or indirectly, the Sumitomo Technology, Sumitomo's
Confidential Information or Sumitomo's Program Technology for any purpose other
than developing, making, having made, using or selling Products in the Tularik
Territory under this Agreement.

4.4 Use of a Party's Own Substances. Notwithstanding anything to the
contrary in Sections 4.2 or 4.3 above, each party shall retain the right to use
freely its own Sumitomo or Tularik Substances, as the case may be, which are not
classified as Lead Compounds.

4.5 Grant by Sumitomo to Tularik. Subject to the terms of this Agreement,
Sumitomo hereby grants Tularik the right and license, with the right to
sublicense, to develop, make, have made, use and sell Products under the
Sumitomo Technology and the Sumitomo-owned and jointly owned Program Technology.
The license granted herein shall be exclusive, even as to Sumitomo, throughout
the Tularik Territory.

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Article 5
Ownership; Patents

5.1 Ownership. Tularik acknowledges and agrees that Sumitomo is and shall
remain the sole owner of the Sumitomo Technology and the Sumitomo Substances and
that Tularik has no rights in or to any of them other than the license and
rights specifically granted herein. Sumitomo acknowledges and agrees that
Tularik is and shall remain the sole owner of the Tularik Technology and the
Tularik Substances and that Sumitomo has no rights in or to any of them other
than the rights specifically granted herein and the license to be granted
pursuant to the License Agreement. Each party shall be the sole owner of any
inventions or discoveries made, or materials or information created, solely by
it in the course of the Program, and the other party has no rights in or to any
such inventions, discoveries, materials or information other than those rights
specifically granted to such other party herein or in the License Agreement.
Inventions or discoveries made, and materials and information created, jointly
by the parties in the course of the Program shall be jointly owned.
Inventorship shall be determined in accordance with the U.S. patent laws.

5.2 Patents.

(a) Patent Prosecution.

(1) Tularik Patents and Sumitomo Patents shall be prosecuted and
maintained by Tularik and Sumitomo, respectively, at such party's option and its
own expense.

(2) Each party shall be responsible for filing, prosecuting and
maintaining those Program Patents covering inventions or discoveries made solely
by it throughout the world, shall consult with the other party as to the
selection of countries in which to file applications for such Program Patents in
the other's Territory and shall cooperate with the other as to the prosecution
of Program Patents in its own Territory. Each party shall be responsible for
bearing the cost of filing, prosecution and maintenance of Program Patents in
its own Territory regardless of which party owns the Program Patent. In the
event that any party decides not to proceed with prosecuting an application for
such a Program Patent, or to pay any annuity for such a Program Patent as it
becomes due, such party shall give the other [ * ] notice before any relevant
deadline, and the other party shall have the right to pursue, at its own
expense, prosecution of such patent application or maintenance of such patent.

(3) The Research Committee shall determine a responsible party or
parties for filing, prosecuting and maintaining patent applications for Program
Patents which cover inventions or discoveries jointly made by the parties as it
sees fit, provided that each party shall be responsible for bearing the cost of
application, prosecution and maintenance of such patent application and/or
patent in its own Territory. In the event that any party decides not to proceed
with prosecuting a patent application filed under this Section 5.2(a)(3) or to
pay any annuity for a jointly owned Program Patent as it becomes due in its own
Territory, such party shall give the other [ * ] notice before any relevant
deadline, and the other party shall have the right to pursue, at its own
expense, prosecution of such patent application or maintenance of such patent.

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(4) Each party specifically excludes any representation or
warranty, express or implied, that it will successfully obtain any Program
Patent.

(b) Perfection of Interest. Each party agrees to cooperate with the
other and take all reasonable additional actions and execute such agreements,
instruments, and documents as may be reasonably required to perfect the other's
ownership interest in accordance with the intent of this Agreement including,
without limitation, the execution of necessary and appropriate instruments of
assignment.

(c) Patent Marking. Each party shall mark, if necessary, all Products
manufactured, used or sold under the terms of this Agreement, or their
containers, in accordance with the applicable patent marking laws, as required.

5.3 Infringement of Patents by Third Parties. Infringement of Sumitomo
Patents, Tularik Patents or Program Patents by third parties as well
infringement of third party patents by Sumitomo shall be governed by the
provisions of the License Agreement.

Article 6
Publication; Publicity

6.1 Publication. Each party to this Agreement recognizes that the
publication of papers, including oral presentations and abstracts, regarding the
Program Know-How and the Program Patents, subject to reasonable controls to
protect Confidential Information, will be beneficial to both parties.
Accordingly, each party shall have the right to review and approve any paper
proposed for publication by the other party, including oral presentations and
abstracts, which utilizes data generated from the Program and/or includes
Program Know-How or Confidential Information of the other party. Before any
such paper is presented or submitted for publication, the party proposing
publication shall deliver a complete copy to the other party at least [ * ]
prior to presenting the paper to a publisher. The receiving party shall review
any such paper and give its comments to the publishing party within [ * ] of the
delivery of such paper to the receiving party. With respect to oral
presentation materials and abstracts, the parties shall make reasonable efforts
to expedite review of such materials and abstracts, and shall return such items
as soon as practicable to the publishing party with appropriate comments, if
any, but in no event later than [ * ] from the delivery date thereof to the
receiving party. The publishing party shall comply with the other party's
request to delete references to such other party's Confidential Information in
any such paper and agrees to withhold publication of same an additional [ * ] in
order to permit the parties to obtain patent protection, if either of the
parties deem it necessary, in accordance with the terms of this Agreement.

6.2 Publicity. Except as otherwise provided herein or required by law, no
party shall originate any publication, news release or other public
announcement, written or oral, whether in the public press, or stockholders'
reports, or otherwise, relating to the existence of or the performance under
this Agreement, without the prior written approval of the other party, which
approval shall not be unreasonably withheld, but in no case shall be withheld
for longer than [ * ].

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Article 7
Transactions with Third Parties

7.1 Reciprocal Arrangements with Third Parties. In the event that Tularik
enters in an arrangement with a third party outside the Sumitomo Territory to
utilize the Tularik Assays for the identification of compounds for use within
the Field, Tularik:

(i) shall [ * ];

(ii) shall [ * ];

(iii) may [ * ]; and

(iv) will, [ * ].

7.2 Exclusive Collaboration. Sumitomo and Tularik agree that they shall
collaborate on an exclusive basis hereunder within the Field during the term of
this Agreement with respect to the Sumitomo Territory.

Article 8
Representations And Warranties

Each party hereby represents and warrants:

8.1 Corporate Power. Such party is duly organized and validly existing
under the laws of the state or country of its incorporation and has full
corporate power and authority to enter into this Agreement and to carry out the
provisions hereof.

8.2 Due Authorization. Such party is duly authorized to execute and
deliver this Agreement and to perform its obligations hereunder.

8.3 Binding Agreement. This Agreement is a legal and valid obligation
binding upon it and is enforceable in accordance with its terms. The execution,
delivery and performance of this Agreement by such party does not conflict with
any agreement, instrument or understanding, oral or written, to which it is a
party or by which it may be bound, nor violate any law or regulation of any
court, governmental body or administrative or other agency having authority over
it.

8.4 Intellectual Property. Such party [ * ].

Article 9
Disclaimer Of Warranties

9.1 Tularik Disclaimer. THE TULARIK TECHNOLOGY, INCLUDING THE TULARIK
SUBSTANCES, PROVIDED HEREUNDER IS PROVIDED "AS IS" AND TULARIK EXPRESSLY
DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND,

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EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THE
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES OR ARISING FROM A COURSE OF
DEALING, USAGE OR TRADE PRACTICES, IN ALL CASES WITH RESPECT THERETO. Without
limiting the generality of the foregoing, Tularik expressly does not warrant (i)
the success of any study or test commenced pursuant to the Program, or (ii) the
safety or usefulness for any purpose of Tularik Technology or the Program Know-
How.

9.2 Sumitomo Disclaimer. THE SUMITOMO TECHNOLOGY, INCLUDING THE SUMITOMO
SUBSTANCES, PROVIDED HEREUNDER ARE PROVIDED "AS IS" AND SUMITOMO EXPRESSLY
DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES, IN ALL
CASES WITH RESPECT THERETO. Without limiting the generality of the foregoing,
Sumitomo expressly does not warrant the safety or usefulness for any purpose of
the Sumitomo Technology or the Program Know-How.

Article 10
Indemnification

10.1 Indemnification by Tularik. Subject to Section 10.2 below, Tularik
hereby agrees to indemnify, hold harmless and defend Sumitomo against any and
all expenses, costs or defense (including without limitation attorneys' fees,
witness fees, damages, judgments, fines and amounts paid in settlement) and any
amounts Sumitomo becomes legally obligated to pay because of any claim or claims
against it to the extent that such claim or claims (i) are due to the neglect or
negligence of Tularik or (ii) result from Tularik's activities under this
Agreement, except insofar as the claim or claims arise out of the possession,
manufacture, use, sale or administration of Products by Sumitomo or Sumitomo's
Affiliates or sublicensees.

10.2 Indemnification by Sumitomo. Sumitomo hereby agrees to indemnify,
hold harmless and defend Tularik against any and all expenses, costs of defense
(including without limitation attorneys' fees, witness fees, damages, judgments,
fines and amounts paid in settlement) and any amounts Tularik becomes legally
obligated to pay because of any claim or claims against it to the extent that
such claim or claims (i) are due to the neglect or negligence of Sumitomo or
(ii) result from Sumitomo's activities under this Agreement, except insofar as
the claim or claims arise out of the possession, manufacture, use, sale or
administration of the Products by Tularik or Tularik's Affiliates or
sublicensees.

Article 11
Confidentiality

11.1 Confidential Information; Exceptions. During the term of this
Agreement, and for a period of five (5) years after termination thereof, each
party will maintain all Confidential Information in trust and confidence and
will not disclose any Confidential Information to any third party or use any
Confidential Information for any unauthorized purpose; in particular, Sumitomo
shall not use the Tularik Know-How or the Tularik-owned Program Know-How, and
Tularik shall not use the Sumitomo Know-How or the Sumitomo-owned Program Know-
How, for the manufacture or sale of any products other than the Products, except
as expressly

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authorized by this Agreement. Each party may use such Confidential Information
only to the extent required to accomplish the purposes of this Agreement or to
the extent required by law, regulation or government or judicial order.
Confidential Information shall not be used for any purpose or in any manner that
would constitute a violation of any laws or regulations, including without
limitation the export control laws of the United States. Confidential
Information shall not be reproduced in any form except as required to accomplish
the intent of this Agreement. No Confidential Information shall be disclosed to
any employee, agent, consultant, Affiliate, or sublicensee who does not have a
need for such information. Each party will use at least the same standard of
care as it uses to protect proprietary or confidential information of its own to
ensure that such employees, agents, consultants and clinical investigators do
not disclose or make any unauthorized use of the Confidential Information. Each
party will promptly notify the other upon discovery of any unauthorized use or
disclosure of the Confidential Information.

Confidential Information shall not include any information which:

(a) is now, or hereafter becomes, through no act or failure to act on
the part of the receiving party, generally known or available;

(b) is known by the receiving party at the time of receiving such
information, as evidenced by its records;

(c) is hereafter furnished to the receiving party by a third party, as
a matter of right and without restriction on disclosure;

(d) is independently developed by the receiving party without any
breach of this Agreement; or

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

11.2 Financial Terms. The parties agree that the material financial 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 sublicensees, if necessary. In connection with any such disclosure,
each party agrees to use its best efforts to secure confidential treatment of
such information. Tularik shall have the further right to disclose the material
financial terms of the Agreement to any potential acquiror, merger partner, or
other bona fide potential financial partner, subject to a requirement of best
efforts to secure confidential treatment of such information.

Article 12
Import And Export Controls

12.1 United States Laws. The parties understand and acknowledge that each
of them is subject to regulation by agencies of the U.S. government, including
the U.S. Department of Commerce, which prohibit export, re-export or diversion
of certain products and technology to certain countries. Any and all
obligations of Sumitomo or Tularik to provide access to or license

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any technology pursuant to this Agreement, as well as any technical assistance
shall be subject in all respects to such United States laws and regulations as
shall from time to time govern the license and delivery of technology and
products abroad by persons subject to the jurisdiction of the United States,
including the Export Administration Act of 1979, as amended, any successor or
interim controlling legislation, and the Export Administration Regulations
issued by the Department of Commerce, International Trade Administration, Bureau
of Export Administration. Both parties also agree to comply with the
requirements of the U.S. Foreign Corrupt Practices Act (the "Act") and shall
refrain from making any payments to third parties which would cause Sumitomo or
Tularik to violate the Act.

12.2 Non-United States Laws. Sumitomo and Tularik shall each provide the
other party with such reasonable assistance as may be required for the party
requesting such assistance to comply with all non-United States laws,
ordinances, rules, regulations and the like of all governmental units or
agencies having jurisdiction pertaining to this Agreement, including without
limitation, obtaining all import, export and other permits, certificates,
licenses or the like required by such non-United States laws, ordinances, rules,
regulations and the like, necessary to permit the parties to perform hereunder
and to exercise their respective rights hereunder.

Article 13
Term; Termination

13.1 Term. Except as provided under Section 13.2 below, (a) the term of
this Agreement shall commence upon the Effective Date and shall expire on the
expiration date of the last to expire patent licensed by Sumitomo to Tularik
hereunder and (b) upon expiration of this Agreement, Tularik shall [ * ].

13.2 Termination on Material Breach. If either party materially breaches
the Agreement, including without limitation [ * ], and the breaching party has
not (i) cured the breach or (ii) initiated good faith efforts to cure such
breach to the reasonable satisfaction of the non-breaching party, within [ * ]
of notice of breach from the non-breaching party, the non-breaching party may
terminate this Agreement upon expiration of such [ * ] period.

13.3 Surviving Rights. The obligations and rights of the parties under
Sections 4.2, 4.3, 4.4 and Articles 5, 6 (for the period specified in Section
4.1(b)), 9, 10, 11 (for the period specified therein) and 12 shall survive
termination. Article 7 shall survive termination and shall continue so long as
the License Agreement shall be in effect.

13.4 Accrued Rights; Surviving Obligations. The termination,
relinquishment or expiration of the Agreement for any reason shall be without
prejudice to any rights which shall have accrued to the benefit of either party
prior to such termination, relinquishment or expiration, including any damages
arising from any breach hereunder. Such termination, relinquishment or
expiration shall not relieve either party from obligations which are expressly
indicated to survive termination or expiration of the Agreement.

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Article 14
Miscellaneous

14.1 Waiver. No waiver by either party hereto of any breach or default of
any of the covenants or agreements herein set forth shall be deemed a waiver as
to any subsequent or similar breach or default.

14.2 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 neither party shall assign any of its rights and
obligations hereunder except (i) as incident to the merger, consolidations,
reorganization, or acquisition of stock or assets affecting substantially all of
the assets or actual voting control of the assigning party, or (ii) to an
Affiliate; provided, however, that in no event shall either party's obligations
under the Program be assigned to an Affiliate without prior written consent of
the other party.

14.3 Notices. Any notice or other communication required or permitted to
be given to either party hereto shall be in writing and shall be deemed to have
been properly given and to be effective on the date of delivery if delivered in
person or by facsimile or five (5) days after mailing by registered or certified
mail, postage paid, to the other party at the following address:

In the case of Tularik: Tularik Inc.
270 E. Grand Ave.
S. San Francisco, CA 94080
Fax: (415) 615-4222
Attention: President

with a copy to: Cooley Godward Castro Huddleson & Tatum
Five Palo Alto Square
Palo Alto, CA 94306
Fax: (415) 857-0663
Attention: Brian C. Cunningham, Esq.

In the case of Sumitomo: Sumitomo Pharmaceuticals Co., Ltd..
2-8, Doshomachi 2-chome Chuo-ku
Osaka 541, Japan
Fax: (06) 202-7370
Attention: Corporate Planning Dept.

Either party may change its address for communications by a notice to the other
party in accordance with this section.

14.4 Headings. The headings of the several sections are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.

14.5 Amendment. No amendment or modification hereof shall be valid or
binding upon the parties unless made in writing and signed by both parties.

13
<PAGE>

14.6 Construction of Agreement and Choice of Law, Jurisdiction and
Venue.

(a) This Agreement and its terms and conditions shall be
governed exclusively by and construed according to the laws of California,
U.S.A., excluding its choice of law provisions and also excluding the United
Nations Convention on Contracts for the International Sale of Goods. The
official text of the Agreement and any Notices given or accounts or statements
required hereby shall be in English.

(b) All disputes which may arise between the parties hereto in
relation to the interpretation or administration of this Agreement shall be
first referred to the Research Committee for resolution. Any disputes which the
Research Committee shall be unable to resolve with a reasonable period of time
shall be resolved by the agreement of the Chief Executive Officers of the
respective parties or their delegates. Any disputes which cannot be resolved in
this manner shall be finally resolved in the courts in San Francisco, California
if the action is taken by Sumitomo and in the courts in Osaka, Japan if the
action is taken by Tularik.

14.7 Force Majeure. Any delays in performance by any party under this
Agreement (other than either party's failure to pay money to the other party,
unless such failure results solely from wire transfer failures beyond the
control of the paying party, or the like) 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, 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 occurrence.

14.8 Independent Contractors. In making and performing this Agreement,
Sumitomo and Tularik act and shall act at all times as independent contractors
and nothing contained in this Agreement shall be construed or implied to create
an agency, partnership or employer and employee relationship between Tularik and
Sumitomo. At no time shall one party make commitments or incur any charges or
expenses for or in the name of the other party.

14.9 Severability. If any term, condition or provision of this Agreement
is held to be unenforceable for any reason, it shall, if possible, be
interpreted rather than voided, in order to achieve the intent of the parties to
this Agreement to the extent possible. In any event, all other terms,
conditions and provisions of this Agreement shall be deemed valid and
enforceable to the full extent.

14.10 Cumulative Rights. The rights, powers and remedies hereunder shall
be in addition to, and not in limitation of, all rights, powers and remedies
provided at law or in equity, or under any other agreement between the parties.
All of such rights, powers and remedies shall be cumulative, and may be
exercised successively or cumulatively.

14.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall
constitute together the same document.

14.12 Entire Agreement. This Agreement and any and all Schedules and
Appendices referred to herein embodies the entire understanding of the parties
with respect to the subject

14
<PAGE>

matter hereof and shall supersede all previous communications, representations
or understandings, either oral or written, between the parties relating to the
subject matter hereof.

In Witness Whereof, both Sumitomo and Tularik have executed this Agreement,
in duplicate originals, by their respective officers hereunto duly authorized,
as of the day and year hereinabove written.

Tularik Inc. Sumitomo Pharmaceuticals Co., Ltd.

By:/s/ James M. Gower By: /s/ I. Shin
------------------------- ------------------------------
Title: President and Title: President
Chief Executive Officer

15
<PAGE>

Appendix A

RESEARCH PROGRAM

1. Sumitomo and Tularik will undertake a collaborative research program in
which Tularik will screen compounds to identify specific compounds having
promising activity for regulation of the gene encoding LDL-R using Tularik's
proprietary assay system.

2. Tularik will conduct and develop, under exclusive collaboration with Drs J.
Goldstein and M.S. Brown cell-based screening, biologically-based screening
and follow up assays; inhibition of [*]

3. Sumitomo will be primarily responsible for medicinal chemistry and
pharmacological studies.

4. Tularik will screen its proprietary chemical and natural products compounds
(at least 160,000) and Sumitomo's proprietary chemical and natural products
compounds (at least 20,000).

5. The following tasks will be shared by both parties:

. isolation and determination of structure of active compounds from natural
products;
. synthesis of derivatives of lead compounds for optimization;
. evaluation of in vivo activities and comparison with [*] inhibitors,
including for example [*];
. investigation of gene-specificity and any potential tissue specificity;
. characterization as an anti-hypercholesterolemic drug in an animal model;
and
. studies on mode of action, including for example potentiation of [*]
activity, etc.

6. Details will be discussed and determined in the Research Committee.
<PAGE>

Appendix B

TULARIK ASSAYS

<PAGE>

Appendix C

LICENSE AGREEMENT

<PAGE>

Appendix C

LICENSE AGREEMENT

between

TULARIK INC.

and

SUMITOMO PHARMACEUTICALS CO., LTD.

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
<S> <C>
Article 1
Definitions................................................................................. 1

Article 2
Grant....................................................................................... 2
2.1 Grant by Tularik to Sumitomo.................................................. 2

Article 3
Commercial Terms............................................................................ 3
3.1 Royalties..................................................................... 3
3.2 Royalty Term.................................................................. 3
3.3 Due Diligence................................................................. 4
3.4 Obligation to Inform.......................................................... 4
3.5 Manner and Time of Royalty Payments........................................... 4
3.6 Date and Place of Sale........................................................ 4
3.7 Further Development Activities................................................ 4

Article 4
Payments; Records; Audit.................................................................... 5
4.1 Payment; Reports.............................................................. 5
4.2 Exchange Rate; Manner and Place of Payment.................................... 5
4.3 Records and Audit............................................................. 5
4.4 Withholding of Taxes.......................................................... 5

Article 5
Ownership; Patents.......................................................................... 6
5.1 Ownership..................................................................... 6
5.2 Patents....................................................................... 6
5.3 Infringement of Patents by Third Parties...................................... 6
5.4 Infringement of Third Party Rights............................................ 7

Article 6
Publication; Publicity...................................................................... 8
6.1 Publication................................................................... 8
6.2 Publicity..................................................................... 8

Article 7
Representations And Warranties.............................................................. 8
7.1 Corporate Power............................................................... 8
7.2 Due Authorization............................................................. 8
7.3 Binding Agreement............................................................. 9
7.4 Intellectual Property......................................................... 9

Article 8
Disclaimer Of Warranties.................................................................... 9
8.1 Tularik Disclaimer............................................................ 9

Article 9
Indemnification............................................................................ 9
</TABLE>

i
<PAGE>

<TABLE>
<S> <C>
9.1 Indemnification by Tularik............................................ 9
9.2 Indemnification by Sumitomo........................................... 9

Article 10
Confidentiality....................................................................... 10
10.1 Confidential Information; Exceptions.................................. 10
10.2 Financial Terms....................................................... 11

Article 11
Import And Export Controls............................................................ 11
11.1 United States Laws.................................................... 11
11.2 Non-United States Laws................................................ 11

Article 12
Term; Termination..................................................................... 11
12.1 Term.................................................................. 11
12.2 Termination on Material Breach........................................ 12
12.3 Surviving Rights...................................................... 12
12.4 Accrued Rights; Surviving Obligations................................. 12

Article 13
Miscellaneous......................................................................... 12
13.1 Waiver................................................................ 12
13.2 Assignment............................................................ 12
13.3 Notices............................................................... 12
13.4 Headings.............................................................. 13
13.5 Amendment............................................................. 13
13.6 Construction of Agreement and Choice of Law, Jurisdiction and Venue... 13
13.7 Force Majeure......................................................... 14
13.8 Independent Contractors............................................... 14
13.9 Severability.......................................................... 14
13.10 Cumulative Rights..................................................... 14
13.11 Counterparts.......................................................... 14
13.12 Entire Agreement...................................................... 14

Appendix A: Preclinical Candidates
</TABLE>

ii
<PAGE>

LICENSE AGREEMENT

This Agreement is entered into as of the _____ day of _________, 1994 (the
"Effective Date") by and between Tularik Inc., a California corporation
("Tularik"), and Sumitomo Pharmaceuticals Co., Ltd. ("Sumitomo"), a corporation
organized under the laws of Japan.

Recitals

Whereas, Sumitomo and Tularik have entered into a Collaboration Agreement
dated as of __________, 1994 (the "Collaboration Agreement"); and

Whereas, the parties wish to develop and market novel therapeutic products
based on compounds identified pursuant to the Collaboration Agreement;

Now, Therefore, in consideration of the foregoing and the covenants and
promises contained herein, the parties agree as follows:

Article 1
Definitions

As used herein, the following terms shall have the following meanings:

"Agreement" shall mean this License Agreement.

"Confidential Information" shall mean, subject to the limitations set forth
in Section 11 hereof, all information disclosed to one party by the other party.

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

"Field" shall mean therapeutic treatment of human disease [ * ].

"Net Sales" shall mean, with respect to a Product, and on a country-by-
country basis, the gross invoice price of all quantities of such Product sold by
a party, its Affiliates or sublicensees to an independent third party after
deducting, if not already deducted in the amount invoiced (a) trade, quantity
and cash discounts actually taken, (b) returns, rebates and allowances, (c)
duties, sales and excise taxes and (d) transportation and insurance charges.
With respect to sales of

1.
<PAGE>

combination products, which shall consist of Products combined with one or more
additional active ingredients, the parties will agree on a method of allocation
in the event the situation arises. Sales among Sumitomo and its Affiliates or
sublicensees shall not be deemed Net Sales; provided, however, that any sales by
Sumitomo, its Affiliates or sublicensees to independent third parties shall be
deemed Net Sales.

"Preclinical Candidate" shall have the meaning given it in the
Collaboration Agreement.

"Product" shall mean any pharmaceutical product, including all
formulations, line extensions or modes of administration thereof, for use within
the Field, which contains an active ingredient which is or is derived from a
Preclinical Candidate listed in Appendix A to this Agreement.

"Sumitomo Territory" shall mean Japan, China, Hong Kong, Indonesia,
Malaysia, Philippines, Korea, Taiwan and Thailand.

Each of the following terms shall have the meaning given it, respectively,
in the Collaboration Agreement:

"Program", "Program Compounds", "Program Know-How", "Program Patents",
"Program Technology", "Research Committee", "Research Term", "Sumitomo Know-
How", "Sumitomo Patents", "Sumitomo Substances", "Sumitomo Technology", "Tularik
Assays", "Tularik Know-How", "Tularik Patents", "Tularik Substances", and
"Tularik Technology".

Article 2
Grant

2.1 Grant by Tularik to Sumitomo.

(a) Subject to the terms of this Agreement, Tularik hereby grants
Sumitomo the right and license, with the right to sublicense, to develop
Preclinical Candidates and to make, have made, use and sell Products under the
Tularik Technology and the Tularik-owned and jointly owned Program Technology.
The license granted herein shall be exclusive, even as to Tularik, throughout
the Sumitomo Territory.

(b) Sumitomo may [ * ] and Tularik shall cooperate reasonably with
Sumitomo in [ * ].

(c) Appendix A hereto shall list the Preclinical Candidates and the
patents and patent applications included in the Tularik Technology and the
Tularik-owned and jointly owned Program Technology licensed hereunder.

2.
<PAGE>

Article 3
Commercial Terms

3.1 Royalties.

(a) Royalty Payments. Sumitomo shall pay to Tularik a royalty of
[ * ] percent [ * ] on Net Sales [ * ].

(b) Third-Party Royalty Credit. In the event that Sumitomo is
required to make payments (including, without limitation, royalties, option fees
or license fees) to one or more third parties to obtain licenses or similar
rights to patent-protected technology necessary to make, use or sell a Product,
by reason of Sumitomo's use of Tularik Technology in such manufacture, use or
sale, Sumitomo may deduct [ * ] percent [ * ] of such payments actually made
from royalties payable to Tularik under this Section with respect to such
Product; provided, however, that in no event shall the royalties due to Tularik
be reduced by more than [ * ] percent [ * ] of the amount of royalties otherwise
owed in any given [ * ] period. Unused royalty credits may be carried over from
one royalty period to the next, subject to the latter [ * ] percent [ * ]
limitation set forth above.

3.2 Royalty Term.

(a) Non-Patented Products. In any country where the manufacture, use
or sale of a Product is not covered by a Program Patent or Tularik Patent,
royalties shall be payable in such country until the expiration of seven (7)
years from the date of first commercial sale of such Product in such country.

(b) Patented Products. In any country where the manufacture, use or
sale of a Product is covered by a Program Patent or Tularik Patent, royalties
shall be payable in such country until the later of (i) seven (7) years from the
first commercial sale of such Product in such country and (ii) the expiration of
the last to expire of such Program Patent or Tularik Patent.

3.3 Due Diligence. Sumitomo shall devote the same degree of attention,
resources and diligence to its respective obligations under the Program and its
efforts to develop, manufacture, market and sell one Product in the Sumitomo
Territory as it devotes to other compounds of its own development.

3.4 Obligation to Inform. Each party hereby agrees to keep the other
party fully informed on a reasonable basis of the development of all Preclinical
Candidates and Products, including but not limited to periodic written updates
on the progress of each filing with the FDA or its equivalent in its respective
territories.

3.5 Manner and Time of Royalty Payments. All royalty payments due
hereunder shall be made in accordance with the provisions of Article 4 hereof.

3.
<PAGE>

3.6 Date and Place of Sale. Products shall be considered sold when
invoiced by Sumitomo. The obligation to pay royalties on Net Sales of a Product
shall be imposed only once with respect to the same unit of such Product.

3.7 Further Development Activities.

(a) The parties will discuss from time to time as necessary
allocation of responsibility, including costs, for conducting preclinical
development of the Product, including the following tasks:

(i) [ * ]

(ii) [ * ]

(iii) [ * ]

(iv) [ * ]

(v) [ * ]

(vi) [ * ]

(b) Sumitomo shall be responsible for conducting or having conducted
clinical trials in the Sumitomo Territory.

Article 4
Payments; Records; Audit

4.1 Payment; Reports. All amounts payable to Tularik under this Agreement
shall be paid in U.S. Dollars within [ * ] of the end of each [ * ]. Each
payment of royalties shall be accompanied by a statement of the amount of Net
Sales during such period, the amount of aggregate Net Sales to date as of the
end of such period where necessary in determination of royalty rates, and the
amount of royalties due on such sales. Tularik hereby agrees that [ * ].

4.2 Exchange Rate; Manner and Place of Payment. Royalty payments and
reports for the sale of Products shall be made for each [ * ] period ending on
the last day of [ * ]. Exchange conversion for foreign sales into U.S. Dollars
shall be made as necessary at the rate of exchange on the last business day of
the relevant royalty period, established by the [ * ]. All payments owed under
this Agreement shall be made by telegraphic transfer.

4.3 Records and Audit. During the term of this Agreement and for a period
of three (3) years thereafter, Sumitomo shall keep complete and accurate records
pertaining to the sale or other disposition of the Products commercialized by
it, in sufficient detail to permit Tularik to confirm the accuracy of all
payments due hereunder. Tularik shall have the right to cause an independent,
certified public accountant to audit such records to confirm Sumitomo's Net
Sales and royalty payments; provided, however, that such auditor shall not
disclose Sumitomo's confidential information to Tularik, except to the extent
such disclosure is necessary to verify the amount of

4.
<PAGE>

royalties due under this Agreement. Such audits may be exercised once a year,
within three (3) years after the royalty period to which such records relate,
upon notice to Sumitomo and during normal business hours. Tularik shall bear the
full cost of such audit unless such audit discloses a variance of more than [ *
] from the amount of the Net Sales or royalties previously paid. In such case,
Sumitomo shall bear the full cost of such audit. The terms of this Section 4.3
shall survive any termination or expiration of this Agreement for a period of
three (3) years.

4.4 Withholding of Taxes. Any withholding of taxes levied by Japanese tax
authorities on the payments hereunder shall [ * ].

Article 5
Ownership; Patents

5.1 Ownership. Sumitomo acknowledges and agrees that Tularik is and shall
remain the sole owner of the Tularik Technology and the Tularik Substances and
that Sumitomo has no rights in or to any of them other than the license rights
specifically granted herein.

5.2 Patents. Provision is made in the Collaboration Agreement for the
filing, prosecution and maintenance of Program Patents and such matters shall be
governed thereby.

5.3 Infringement of Patents by Third Parties.

(a) Notice. Each party shall promptly notify the other in writing of
any alleged or threatened infringement of the Tularik Patents, the Sumitomo
Patents, or the Program Patents which may adversely impact the rights of the
parties hereunder, of which it becomes aware.

(b) Separately Owned Patents. Tularik shall have the right, but not
the obligation, to bring at its expense an appropriate action against any person
or entity directly or contributorily infringing a Tularik Patent or a Program
Patent owned solely by Tularik in the Sumitomo Territory. In such event,
Sumitomo hereby agrees to cooperate reasonably with Tularik in any such efforts.
Any recovery obtained by Tularik as a result of such action, whether obtained by
settlement or otherwise, shall be disbursed as follows: [ * ]. No settlement,
compromise or other disposition of any such action which compromises Sumitomo's
rights under this Agreement shall be entered into without Sumitomo's prior
consent, which shall not be unreasonably withheld. In the event Tularik fails
to institute an infringement suit or take other reasonable action in the
Territory to protect such relevant Tularik Patent or Program Patent owned solely
by Tularik, Sumitomo shall have the right, but not the obligation, within [ * ]
of notification to Tularik of such alleged infringement, to institute such suit
or take other appropriate action at its own expense in the name of Tularik or
Sumitomo, or both. [ * ]. In such event, Tularik shall cooperate reasonably
with Sumitomo. Any recovery obtained by Sumitomo as a result of such
proceeding, by settlement or otherwise, shall be disbursed as follows: [ * ].
No settlement, compromise or other disposition of any such proceeding which
concerns the validity of any Patent or Program Patent shall be entered into
without the Patent or Program Patent owner's prior consent, which shall not be
unreasonably withheld.

5.
<PAGE>

(c) Jointly Owned Patents. In the event that the parties become aware
of any alleged or threatened infringement of the jointly owned Program Patents
in either party's Territory, the party in whose Territory the infringement is
occurring shall have the right to bring, at such party's expense, an appropriate
action against any person or entity directly or contributorily infringing such
jointly owned Program Patent. In such event, the other party hereby agrees to
cooperate reasonably with the party bringing such action in any such efforts,
including if required to bring such action, the furnishing of a power of
attorney. In the event the party in whose Territory the infringement is
occurring fails to institute an infringement suit or take other reasonable
action to protect the relevant Program Patent, the other party shall have the
right, upon [ * ] of notification of the party in whose Territory the
infringement is occurring, to institute such suit or take other appropriate
action at its own expense in its own name, the joint owner's name, or both. In
such event, the party not bringing such action hereby agrees to cooperate
reasonably with the party bringing such action in any such effort, including if
required to bring such action, the furnishing of a power of attorney.
Regardless of which party brings the action, any recovery obtained by settlement
or otherwise shall be disbursed as follows: [ * ].

5.4 Infringement of Third Party Rights.

(a) Joint Strategy. In the event that any Product manufactured or
sold hereunder becomes the subject of a claim for patent, copyright or other
proprietary right infringement anywhere in the world, and irrespective of
whether Sumitomo or Tularik is charged with said infringement, and the venue of
such claim, the parties shall promptly confer to discuss the claim.

(b) Defense. The party responsible for marketing the Product which is
the subject of the infringement claim shall have the right, but not the
obligation, to assume the primary responsibility for the conduct of the defense
of any such claim. If the party responsible for marketing the Product decides
not to assume responsibility for the conduct of the defense, the other party
shall have the right, but not the obligation, to conduct the defense of the
claim. The party which decides to assume responsibility for such defense shall
bear all costs for the conduct thereof. In such event, the other party shall
have the right, but not the obligation, to participate in any such suit, at its
sole option and at its own expense. Each party shall reasonably cooperate with
the party conducting the defense of the claim, including if required to conduct
such defense, furnishing a power of attorney. Neither party shall enter into
any settlement that affects the other party's rights or interests without such
other party's written consent, which consent shall not be unreasonably withheld.

Article 6
Publication; Publicity

6.
<PAGE>

Confidential Information of the other party. Before any such paper is presented
or submitted for publication, the party proposing publication shall deliver a
complete copy to the other party at least [ * ] prior to presenting the paper to
a publisher. The receiving party shall review any such paper and give its
comments to the publishing party within [ * ] of the delivery of such paper to
the receiving party. With respect to oral presentation materials and abstracts,
the parties shall make reasonable efforts to expedite review of such materials
and abstracts, and shall return such items as soon as practicable to the
publishing party with appropriate comments, if any, but in no event later than
[ * ] from the delivery date thereof to the receiving party. The publishing
party shall comply with the other party's request to delete references to such
other party's Confidential Information in any such paper and agrees to withhold
publication of same an additional [ * ] in order to permit the parties to obtain
patent protection, if either of the parties deem it necessary, in accordance
with the terms of this Agreement.

Article 7
Representations And Warranties

Each party hereby represents and warrants:

7.1 Corporate Power. Such party is duly organized and validly existing
under the laws of the state or country of its incorporation and has full
corporate power and authority to enter into this Agreement and to carry out the
provisions hereof.

7.2 Due Authorization. Such party is duly authorized to execute and
deliver this Agreement and to perform its obligations hereunder.

7.3 Binding Agreement. This Agreement is a legal and valid obligation
binding upon it and is enforceable in accordance with its terms. The execution,
delivery and performance of this Agreement by such party does not conflict with
any agreement, instrument or understanding, oral or written, to which it is a
party or by which it may be bound, nor violate any law or regulation of any
court, governmental body or administrative or other agency having authority over
it.

7.4 Intellectual Property. Such party [ * ].

7.
<PAGE>

Article 8
Disclaimer Of Warranties

8.1 Tularik Disclaimer. THE TULARIK TECHNOLOGY LICENSED HEREUNDER IS
PROVIDED "AS IS" AND TULARIK EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY
KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTIES OF DESIGN,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT OF THE
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES OR ARISING FROM A COURSE OF
DEALING, USAGE OR TRADE PRACTICES, IN ALL CASES WITH RESPECT THERETO.

Article 9
Indemnification

9.1 Indemnification by Tularik. Subject to Section 9.2 below, Tularik
hereby agrees to indemnify, hold harmless and defend Sumitomo against any and
all expenses, costs or defense (including without limitation attorneys' fees,
witness fees, damages, judgments, fines and amounts paid in settlement) and any
amounts Sumitomo becomes legally obligated to pay because of any claim or claims
against it to the extent that such claim or claims (i) are due to the neglect
or negligence of Tularik or (ii) result from Tularik's activities under this
Agreement, except insofar as the claim or claims arise out of the possession,
manufacture, use, sale or administration of Preclinical Candidates or Products
by Sumitomo or Sumitomo's Affiliates or sublicensees.

9.2 Indemnification by Sumitomo. Sumitomo hereby agrees to indemnify,
hold harmless and defend Tularik against any and all expenses, costs of defense
(including without limitation attorneys' fees, witness fees, damages, judgments,
fines and amounts paid in settlement) and any amounts Tularik becomes legally
obligated to pay because of any claim or claims against it to the extent that
such claim or claims (i) are due to the neglect or negligence of Sumitomo or
(ii) result from Sumitomo's activities under this Agreement, except insofar as
the claim or claims arise out of the possession, manufacture, use, sale or
administration of the Preclinical Candidates or Products by Tularik or Tularik's
Affiliates or sublicensees.

Article 10
Confidentiality

10.1 Confidential Information; Exceptions. During the term of this
Agreement, and for a period of five (5) years after termination thereof, each
party will maintain all Confidential Information in trust and confidence and
will not disclose any Confidential Information to any third party or use any
Confidential Information for any unauthorized purpose; in particular, Sumitomo
shall not use the Tularik Know-How or the Tularik-owned Program Know-How, and
Tularik shall not use the Sumitomo Know-How or the Sumitomo-owned Program Know-
How, for the manufacture or sale of any products other than the Products, except
as expressly authorized by this Agreement. Each party may use such Confidential
Information only to the extent required to accomplish the purposes of this
Agreement or to the extent required by law, regulation or government or judicial
order. Confidential Information shall not be used for any purpose or in any
manner that would constitute a violation of any laws or regulations, including
without limitation the export control laws of the United States. Confidential
Information shall not be reproduced in any form except as required to accomplish
the intent of this Agreement. No Confidential Information shall be disclosed to
any employee, agent, consultant, Affiliate, or sublicensee who does not have a
need for such information. Each party will use at least the same standard of
care as it uses to protect proprietary or confidential information of its own to
ensure

8.
<PAGE>

that such employees, agents, consultants and clinical investigators do
not disclose or make any unauthorized use of the Confidential Information. Each
party will promptly notify the other upon discovery of any unauthorized use or
disclosure of the Confidential Information.

Confidential Information shall not include any information which:

(a) is now, or hereafter becomes, through no act or failure to act on
the part of the receiving party, generally known or available;

(b) is known by the receiving party at the time of receiving such
information, as evidenced by its records;

(c) is hereafter furnished to the receiving party by a third party, as
a matter of right and without restriction on disclosure;

(d) is independently developed by the receiving party without any
breach of this Agreement; or

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

10.2 Financial Terms. The parties agree that the material financial terms
of this Agreement will be considered Confidential Information of both parties.
Notwithstanding the foregoing, either party may disclose such terms to bona fide
potential sublicensees, if necessary. In connection with any such disclosure,
each party agrees to use its best efforts to secure confidential treatment of
such information. Each party shall have the further right to disclose the
material financial terms of the Agreement to any potential acquiror, merger
partner, or other bona fide potential financial partner, subject to a
requirement of best efforts to secure confidential treatment of such
information.

Article 11
Import And Export Controls

11.1 United States Laws. The parties understand and acknowledge that each
of them is subject to regulation by agencies of the U.S. government, including
the U.S. Department of Commerce, which prohibit export, re-export or diversion
of certain products and technology to certain countries. Any and all
obligations of Sumitomo or Tularik to provide access to or license any
technology pursuant to this Agreement, as well as any technical assistance shall
be subject in all respects to such United States laws and regulations as shall
from time to time govern the license and delivery of technology and products
abroad by persons subject to the jurisdiction of the United States, including
the Export Administration Act of 1979, as amended, any successor or interim
controlling legislation, and the Export Administration Regulations issued by the
Department of Commerce, International Trade Administration, Bureau of Export
Administration. Both parties also agree to comply with the requirements of the
U.S. Foreign Corrupt Practices Act (the "Act") and shall refrain from making any
payments to third parties which would cause Sumitomo or Tularik to violate the
Act.

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11.2 Non-United States Laws. Sumitomo and Tularik shall each provide the
other party with such reasonable assistance as may be required for the party
requesting such assistance to comply with all non-United States laws,
ordinances, rules, regulations and the like of all governmental units or
agencies having jurisdiction pertaining to this Agreement, including without
limitation, obtaining all import, export and other permits, certificates,
licenses or the like required by such non-United States laws, ordinances, rules,
regulations and the like, necessary to permit the parties to perform hereunder
and to exercise their respective rights hereunder.

Article 12
Term; Termination

12.1 Term. Except as provided under Section 12.2 below, (a) the term of
this Agreement shall commence upon the Effective Date and shall expire on the
expiration date of the last to expire royalty obligation, and (b) upon
expiration of this Agreement, Sumitomo shall have a fully paid, nonexclusive
license to use any Program Know-How then being used by Sumitomo and which is
owned by Tularik, for any purpose; provided, however, that [ * ].

12.2 Termination on Material Breach. If either party materially breaches
the Agreement, including without limitation [ * ], and the breaching party has
not (i) cured the breach or (ii) initiated good faith efforts to cure such
breach to the reasonable satisfaction of the non-breaching party, within [ * ]
of notice of breach from the non-breaching party, the non-breaching party may
terminate this Agreement upon expiration of such [ * ] period.

12.3 Surviving Rights. The obligations and rights of the parties under
Sections 4.3, 4.4 and 5.1 and Articles 6, 8, 9, 10 (for the period specified
therein) and 11 shall survive termination.

12.4 Accrued Rights; Surviving Obligations. The termination,
relinquishment or expiration of the Agreement for any reason shall be without
prejudice to any rights which shall have accrued to the benefit of either party
prior to such termination, relinquishment or expiration, including any damages
arising from any breach hereunder. Such termination, relinquishment or
expiration shall not relieve either party from obligations which are expressly
indicated to survive termination or expiration of the Agreement.

Article 13
Miscellaneous

13.1 Waiver. No waiver by either party hereto of any breach or default of
any of the covenants or agreements herein set forth shall be deemed a waiver as
to any subsequent or similar breach or default.

13.2 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 neither party shall assign any of its rights and
obligations hereunder except (i) as incident to the merger, consolidations,
reorganization, or acquisition of stock or assets affecting substantially all of
the assets or actual voting control of the assigning party, or (ii) to an
Affiliate; provided, however,

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that in no event shall either party's obligations under the Program be assigned
to an Affiliate without prior written consent of the other party.

13.3 Notices. Any notice or other communication required or permitted to
be given to either party hereto shall be in writing and shall be deemed to have
been properly given and to be effective on the date of delivery if delivered in
person or by facsimile or five (5) days after mailing by registered or certified
mail, postage paid, to the other party at the following address:

In the case of Tularik: Tularik Inc.
270 E. Grand Ave.
S. San Francisco, CA 94080
Fax: (415) 615-4222
Attention: President

with a copy to: Cooley Godward Castro Huddleson & Tatum
Five Palo Alto Square
Palo Alto, CA 94306
Fax: (415) 857-0663
Attention: Brian C. Cunningham, Esq.

In the case of Sumitomo: Sumitomo Pharmaceuticals Co., Ltd..
2-8, Doshomachi 2-chome Chuo-ku
Osaka 541, Japan
Fax: (06) 202-7370
Attention: Corporate Planning Dept.

Either party may change its address for communications by a notice to the other
party in accordance with this section.

13.4 Headings. The headings of the several sections are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.

13.5 Amendment. No amendment or modification hereof shall be valid or
binding upon the parties unless made in writing and signed by both parties.

13.6 Construction of Agreement and Choice of Law, Jurisdiction and Venue.

(a) This Agreement and its terms and conditions shall be governed
exclusively by and construed according to the laws of California, U.S.A.,
excluding its choice of law provisions and also excluding the United Nations
Convention on Contracts for the International Sale of Goods. The official text
of the Agreement and any Notices given or accounts or statements required hereby
shall be in English.

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resolve with a reasonable period of time shall be resolved by the agreement of
the Chief Executive Officers of the respective parties or their delegates. Any
disputes which cannot be resolved in this manner shall be finally resolved in
the courts in San Francisco, California if the action is taken by Sumitomo and
in the courts in Osaka, Japan if the action is taken by Tularik.

13.7 Force Majeure. Any delays in performance by any party under this
Agreement (other than either party's failure to pay money to the other party,
unless such failure results solely from wire transfer failures beyond the
control of the paying party, or the like) 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, 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 occurrence.

13.8 Independent Contractors. In making and performing this Agreement,
Sumitomo and Tularik act and shall act at all times as independent contractors
and nothing contained in this Agreement shall be construed or implied to create
an agency, partnership or employer and employee relationship between Tularik and
Sumitomo. At no time shall one party make commitments or incur any charges or
expenses for or in the name of the other party.

13.9 Severability. If any term, condition or provision of this Agreement
is held to be unenforceable for any reason, it shall, if possible, be
interpreted rather than voided, in order to achieve the intent of the parties to
this Agreement to the extent possible. In any event, all other terms,
conditions and provisions of this Agreement shall be deemed valid and
enforceable to the full extent.

13.10 Cumulative Rights. The rights, powers and remedies hereunder shall
be in addition to, and not in limitation of, all rights, powers and remedies
provided at law or in equity, or under any other agreement between the parties.
All of such rights, powers and remedies shall be cumulative, and may be
exercised successively or cumulatively.

13.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall
constitute together the same document.

13.12 Entire Agreement. This Agreement and any and all Schedules and
Appendices referred to herein embodies the entire understanding of the parties
with respect to the subject matter hereof and shall supersede all previous
communications, representations or understandings, either oral or written,
between the parties relating to the subject matter hereof.

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In Witness Whereof, both Sumitomo and Tularik have executed this Agreement,
in duplicate originals, by their respective officers hereunto duly authorized,
as of the day and year hereinabove written.

Tularik Inc. Sumitomo Pharmaceuticals Co., Ltd.

By:________________________________ By:_________________________________
Title: President and Title: President
Chief Executive Officer

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Appendix A

PRECLINICAL CANDIDATE